Exhibit 4.2
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RELIANT ENERGY, INC.,
as Issuer
6.75% SENIOR SECURED NOTES DUE 2014
--------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of December 22, 2004
To
SENIOR INDENTURE
Dated as of December 22, 2004
--------------------------------
Wilmington Trust Company,
as Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture Supplemental Indenture
Act Section Section
310(a)(1)................................................................... N.A.
(a)(2)................................................................. N.A.
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(a)(5)................................................................. N.A.
(b).................................................................... N.A.
(c).................................................................... N.A.
311(a)...................................................................... N.A.
(b).................................................................... N.A.
(c).................................................................... N.A.
312(a)...................................................................... N.A.
(b).................................................................... 14.03
(c).................................................................... 14.03
313(a)...................................................................... N.A.
(b)(1)................................................................ N.A.
(b)(2)................................................................. 10.06
(c).................................................................... 14.02
(d).................................................................... N.A.
314(a)...................................................................... 4.03;14.02; 14.05
(b).................................................................... 10.06
(c)(1)................................................................. 14.04
(c)(2)................................................................. 14.04
(c)(3)................................................................. N.A.
(d).................................................................... 10.06
(e).................................................................... 12.05
(f).................................................................... N.A.
315(a)...................................................................... N.A.
(b).................................................................... 14.02
(c).................................................................... N.A.
(d).................................................................... N.A.
(e).................................................................... 6.11
316(a) (last sentence)...................................................... N.A.
(a)(1)(A).............................................................. 6.05
(a)(1)(B).............................................................. 6.04
(a)(2)................................................................. N.A.
(b).................................................................... 6.07
(c).................................................................... N.A.
317(a)(1)................................................................... 6.08
(a)(2)................................................................. 6.09
(b).................................................................... N.A.
318(a)...................................................................... 14.01
(b).................................................................... N.A.
(c).................................................................... 14.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions................................................................................ 1
Section 1.02 Other Definitions.......................................................................... 32
Section 1.03 Incorporation by Reference of Trust Indenture Act.......................................... 33
Section 1.04 Rules of Construction...................................................................... 33
Section 1.05 Relationship with Base Indenture........................................................... 34
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating............................................................................ 34
Section 2.02 Execution and Authentication............................................................... 35
Section 2.03 Reserved................................................................................... 35
Section 2.04 Reserved................................................................................... 35
Section 2.05 Holder Lists............................................................................... 35
Section 2.06 Transfer and Exchange...................................................................... 35
Section 2.07 Reserved................................................................................... 39
Section 2.08 Reserved................................................................................... 39
Section 2.09 Reserved................................................................................... 39
Section 2.10 Reserved................................................................................... 39
Section 2.11 Reserved................................................................................... 39
Section 2.12 Reserved................................................................................... 39
Section 2.13 Issuance of Additional Notes............................................................... 40
Section 2.14 Designated Senior Debt..................................................................... 40
Section 2.15 Reserved................................................................................... 40
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee......................................................................... 40
Section 3.02 Selection of Notes to Be Redeemed or Purchased............................................. 40
Section 3.03 Notice of Redemption....................................................................... 41
Section 3.04 Effect of Notice of Redemption............................................................. 41
Section 3.05 Deposit of Redemption or Purchase Price.................................................... 42
Section 3.06 Notes Redeemed or Purchased in Part........................................................ 42
Section 3.07 Optional Redemption........................................................................ 42
Section 3.08 Mandatory Redemption....................................................................... 43
Section 3.09 Offer to Purchase by Application of Excess Proceeds........................................ 43
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes........................................................................... 45
Section 4.02 Maintenance of Office or Agency............................................................ 45
Section 4.03 Reports.................................................................................... 45
Section 4.04 Compliance Certificate..................................................................... 46
Section 4.05 Taxes...................................................................................... 47
Section 4.06 Stay, Extension and Usury Laws............................................................. 47
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Section 4.07 Restricted Payments........................................................................ 47
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries............................. 50
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock................................. 52
Section 4.10 Asset Sales................................................................................ 56
Section 4.11 Transactions with Affiliates............................................................... 58
Section 4.12 Liens...................................................................................... 59
Section 4.13 Line of Business........................................................................... 59
Section 4.14 Corporate Existence........................................................................ 59
Section 4.15 Offer to Repurchase Upon Change of Control................................................. 60
Section 4.16 Limitation on Sale and Leaseback Transactions.............................................. 61
Section 4.17 Payments for Consent....................................................................... 61
Section 4.18 Additional Note Guarantees................................................................. 62
Section 4.19 Changes in Covenants When Notes Rated Investment Grade..................................... 62
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.................................... 62
Section 4.21 Reserved................................................................................... 63
Section 4.22 Insurance.................................................................................. 63
Section 4.23 Subordination of Intercompany Indebtedness................................................. 63
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets................................................... 64
Section 5.02 Successor Corporation Substituted.......................................................... 65
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.......................................................................... 65
Section 6.02 Acceleration............................................................................... 67
Section 6.03 Reserved................................................................................... 67
Section 6.04 Waiver of Past Defaults.................................................................... 67
Section 6.05 Reserved................................................................................... 67
Section 6.06 Reserved................................................................................... 67
Section 6.07 Reserved................................................................................... 67
Section 6.08 Collection Suit by Trustee................................................................. 68
Section 6.09 Reserved................................................................................... 68
Section 6.10 Priorities................................................................................. 68
Section 6.11 Reserved................................................................................... 68
ARTICLE 7.
TRUSTEE'S COMPENSATION AND INDEMNITY
Section 7.01 Compensation and Indemnity................................................................. 68
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance................................... 69
Section 8.02 Legal Defeasance and Discharge............................................................. 69
Section 8.03 Covenant Defeasance........................................................................ 70
Section 8.04 Conditions to Legal or Covenant Defeasance................................................. 70
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions................................................................................. 72
Section 8.06 Repayment to Company....................................................................... 72
Section 8.07 Reinstatement.............................................................................. 72
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................ 73
Section 9.02 With Consent of Holders of Notes........................................................... 74
Section 9.03 Compliance with Trust Indenture Act........................................................ 75
Section 9.04 Revocation and Effect of Consents.......................................................... 75
Section 9.05 Notation on or Exchange of Notes........................................................... 75
Section 9.06 Trustee to Sign Amendments, etc............................................................ 76
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Security................................................................................... 76
Section 10.02 Collateral................................................................................. 76
Section 10.03 Further Assurances......................................................................... 77
Section 10.04 Collateral Trustee......................................................................... 78
Section 10.05 Security Documents and Guarantee........................................................... 78
Section 10.06 Release of Security Interests.............................................................. 79
Section 10.07 Environmental Indemnity.................................................................... 81
ARTICLE 11.
COLLATERAL SHARING
Section 11.01 Equal and Ratable Lien Sharing by Holders of Notes and
holders of other Parity Secured Debt....................................................... 82
Section 11.02 Reserved................................................................................... 82
Section 11.03 Enforcement of Security Interests.......................................................... 82
Section 11.04 Amendment and Supplement................................................................... 82
ARTICLE 12.
NOTE GUARANTEES
Section 12.01 Guarantee.................................................................................. 83
Section 12.02 Limitation on Guarantor Liability.......................................................... 84
Section 12.03 Execution and Delivery of Note Guarantee................................................... 84
Section 12.04 Guarantors May Consolidate, etc., on Certain Terms......................................... 85
Section 12.05 Releases................................................................................... 85
ARTICLE 13.
SATISFACTION AND DISCHARGE
Section 13.01 Satisfaction and Discharge................................................................. 86
Section 13.02 Application of Trust Money................................................................. 87
ARTICLE 14.
MISCELLANEOUS
Section 14.01 Trust Indenture Act Controls............................................................... 87
Section 14.02 Notices.................................................................................... 88
Section 14.03 Communication by Holders of Notes with Other Holders of Notes.............................. 89
Section 14.04 Certificate and Opinion as to Conditions Precedent......................................... 89
Section 14.05 Statements Required in Certificate or Opinion.............................................. 89
Section 14.06 Rules by Trustee and Agents................................................................ 89
Section 14.07 No Personal Liability of Directors, Officers, Employees and Stockholders................... 89
Section 14.08 Governing Law.............................................................................. 89
Section 14.09 No Adverse Interpretation of Other Agreements.............................................. 89
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Section 14.10 Successors................................................................................. 89
Section 14.11 Severability............................................................................... 89
Section 14.12 Counterpart Originals...................................................................... 89
Section 14.13 Table of Contents, Headings, etc........................................................... 90
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Note Guarantee
Exhibit C Form of Supplemental Indenture - Additional Subsidiary Guarantees
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FIRST SUPPLEMENTAL INDENTURE, dated as of December 22, 2004, by and
among Reliant Energy, Inc., a Delaware corporation (the "Company"), the
Guarantors (as defined herein) and Wilmington Trust Company, a Delaware banking
corporation, as trustee (the "Trustee").
The Company has heretofore executed and delivered to the Trustee a
Senior Indenture, dated as of December 22, 2004 (the "Base Indenture") providing
for the issuance from time to time of one or more series of the Company's
securities.
The Company and the Guarantors desire and have requested the Trustee
pursuant to Section 901(7) of the Base Indenture to join with them in the
execution and delivery of this Supplemental Indenture in order to supplement the
Base Indenture as and to the extent set forth herein to provide for the issuance
and the terms of the Notes (as defined below).
Section 901(7) of the Base Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee without the consent
of any Holders (as defined in the Base Indenture) to establish the form or terms
of Securities of any series as permitted by Sections 201 and 301 of the Base
Indenture.
The execution and delivery of this Supplemental Indenture has been duly
authorized by a Board Resolution of the Company and each of the Guarantors.
All conditions and requirements necessary to make this Supplemental
Indenture a valid, binding and legal instrument in accordance with its terms
have been performed and fulfilled by the parties hereto and the execution and
delivery thereof have been in all respects duly authorized by the parties
hereto.
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined herein) of the 6.75% Senior Secured Notes due 2014 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
For all purposes of the Supplemental Indenture, the following terms
shall have the respective meanings set forth in this Section.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with
or into, or becoming a Restricted Subsidiary of, such specified Person;
and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Act of Secured Debtholders" means, as to any matter, a direction in
writing delivered to the Collateral Trustee:
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(1) at any time when no Actionable Default Period is
continuing, by the Required Lenders; and
(2) at any time when an Actionable Default Period is
continuing, by or with the written consent of the Required Secured
Debtholders; provided, that (A) so long as no direction has been given
by or on behalf of the Required Secured Debtholders and subject in all
respects to any contrary direction at any time given by the Required
Secured Debtholders, the Collateral Trustee shall act in accordance
with instructions given to it from time to time by the Required Lenders
and (B) the Required Secured Debtholders may not countermand, in whole
or in part, a direction by the Required Lenders instructing the
Collateral Trustee to foreclose or otherwise enforce the Collateral
Trustee's liens or default remedies upon any Collateral.
"Actionable Default" means (1) the failure to pay any payment of
principal of or interest on any Series of Secured Debt outstanding in the amount
of $50.0 million or more resulting in an event of default under the applicable
Series of Secured Debt after payment is due, including payments that are due (or
if any required offer had been timely made would be due) in respect of any
mandatory offer to purchase Parity Secured Debt resulting in an event of default
under the applicable Series of Secured Debt, (2) the failure to pay in full,
when due and payable in full (whether at maturity, upon acceleration or
otherwise), either the Existing Notes, the Credit Agreement Debt or any other
Series of Secured Debt (including the Notes and the Xxxxxx Guarantees)
outstanding in the amount of $50.0 million or more, (3) the exercise by the
Collateral Trustee or any of its co-trustees or agents (including the Credit
Agreement Agent) of any right or power that is exercisable by it only upon
default to take sole and exclusive dominion or control over any deposits in a
deposit account, commodity contract in a commodity account or financial asset in
a securities account constituting any Shared Collateral or the delivery of any
instructions to the Collateral Trustee directing it to foreclose or otherwise
enforce, or to disburse the proceeds of enforcement of, any Lien upon any
Collateral, or (4) the occurrence of any Event of Default under the Existing
Indentures or the Credit Agreement arising from the commencement of any
bankruptcy case, receivership or other insolvency or liquidation proceeding by
or against the Company or any of its Subsidiaries or any similar default
provision at any time in effect under any indenture or agreement governing any
Series of Secured Debt.
"Actionable Default Period" means a period that commences on the date a
Notice of Actionable Default is delivered to the Collateral Trustee and
continues until the date (if ever) on which all notices of Actionable Default
are withdrawn or deemed withdrawn under the Collateral Trust Agreement.
"Additional Notes" means additional notes (other than the Initial
Notes) issued from time to time under this Supplemental Indenture in accordance
with Section 2.13 hereof, as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that a Person will be deemed to be an Affiliate
if the Company has knowledge that such Person beneficially owns 10% or more of
the Voting Stock of the Company; provided, further, that the Company shall only
be deemed to have knowledge of any Person beneficially owning 10% or more of the
Company's Voting Stock if such Person has filed a statement of beneficial
ownership pursuant to Sections 13(d) or 13(g) of the Exchange Act or has
provided written notice thereof to the Company. For purposes of this definition,
the terms "controlling," "controlled by" and "under common control with" have
correlative meanings. Notwithstanding the foregoing, no Person (other than the
Company or any Restricted Subsidiary of the
2
Company) in whom a Securitization Entity makes an Investment in connection with
a Qualified Securitization Transaction shall be deemed to be an Affiliate of the
Company solely by reason of such Investment.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets; provided that the sale, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole shall be governed by the provisions of
Section 4.15 and/or Section 5.01 and not the provisions of Section 4.10
hereof; and
(2) the issuance of Equity Interests in any of the Company's
Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed to
be an Asset Sale:
(1) any single transaction or series of related transactions
that involves assets having a Fair Market Value of less than $20.0
million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary
to the Company or to a Restricted Subsidiary of the Company;
(4) the sale or lease of products, services or accounts
receivable in the ordinary course of business and any sale or other
disposition of damaged, worn out or obsolete assets or assets no longer
used or useful in the Company's or any of its Restricted Subsidiaries'
business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) sales of accounts receivable, equipment and related assets
(including contract rights) of the type specified in the definition of
Qualified Securitization Transaction to a Securitization Entity;
(7) a Restricted Payment that is permitted by the provisions
of Section 4.07 hereof or a Permitted Investment;
(8) [Reserved];
(9) a disposition resulting from any condemnation or other
taking, or temporary or permanent requisition of, any property, any
interest therein or right appurtenant thereto, or any change of grade
affecting any property, in each case, as the result of the exercise of
any right of condemnation or eminent domain, including any sale or
other transfer to a Governmental Authority in lieu of, or in
anticipation of, any of the foregoing events; provided that if such
disposition involves assets having a Fair Market Value in excess of
$20.0 million, that any cash proceeds received in connection therewith
are treated as Net Proceeds of an Asset Sale;
3
(10)the disposition by Reliant Energy Wholesale Generation,
LLC of the substation at the Bighorn generating facility (and the
related real property assets) to be conveyed to Nevada Power Company
pursuant to the terms and provisions of that certain EPC Agreement
dated December 18, 2002 between Reliant Energy Wholesale Generation,
LLC (as successor by merger to Reliant Energy Bighorn, LLC) and Nevada
Power Company; and
(11) a disposition of assets (other than any assets securing
Secured Debt) in connection with a foreclosure, transfer or deed in
lieu of foreclosure or other exercise of remedial action.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP; provided,
however, that if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in
accordance with the definition of "Capital Lease Obligation."
"Base Indenture" means has the meaning set forth in the preamble to
this Supplemental Indenture, as amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership
interests; and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, but excluding from all
of the foregoing any debt securities convertible into Capital Stock,
whether or not such debt securities include any right of participation
with Capital Stock.
"Cash Collateral Account" means a deposit account at all times under
the sole dominion and control of the Collateral Trustee (acting on its own or
through its agent, sub-agent, or co-trustee including Bank of America, N.A., as
collateral agent under the Credit Agreement or a successor collateral agent
4
under the Credit Agreement) that is being held by the Collateral Trustee or such
agent, sub-agent or co-trustee for the benefit of the holders of Secured Debt.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality of the United States government (provided that the full
faith and credit of the United States is pledged in support of those
securities) having maturities of not more than one year from the date
of acquisition;
(3) deposit accounts with any lender party to the Credit
Agreement, Mellon Bank N.A., Xxxxx Fargo Bank, N.A., Wachovia Bank,
National Association, or any other bank that has a long-term debt
rating at the time of investment of A+ or better by S&P and A1 or
better by Xxxxx'x (an "Approved Bank");
(4) time deposits, certificates of deposit, acceptances or
prime commercial paper issued by an Approved Bank at the time acquired
or issued (as applicable and whichever is latest), in each case, having
a maturity of not more than one year from the date of acquisition;
(5) repurchase obligations for underlying securities of the
types described in clause (2) entered into with an Approved Bank at the
time acquired, issued or entered into (as applicable and whichever is
latest), in each case, having a maturity of not more than one year from
the date of acquisition and secured by securities of the type described
in clause (2), the market value of which (including accrued interest)
is not less than the amount of the applicable repurchase agreement;
(6) commercial paper with a rating at the time of investment
of A-1 by S&P and P-1 by Xxxxx'x and, in each case, maturing within one
year after the date of acquisition; and
(7) money market funds which invest primarily in Cash
Equivalents of the kinds described in clauses (1) through (6) of this
definition.
"CenterPoint" means CenterPoint Energy, Inc., a Texas corporation and
its successors.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Subsidiaries taken as a
whole to any "person" (as that term is used in Section 13(d) of the
Exchange Act, but excluding any employee benefit plan of the Company or
any of its Restricted Subsidiaries, and any person or entity acting in
its capacity as trustee, agent or other fiduciary or administrator of
any such plan);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company other than (A) the consolidation with,
merger into or transfer of all or part of the properties and assets of
any Restricted Subsidiary of the Company to the Company or any other
Restricted Subsidiary of the Company and (B) the merger of the Company
with an Affiliate solely for the purpose of reincorporating the Company
or reforming the Company in another jurisdiction;
5
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above) becomes the Beneficial Owner, directly
or indirectly, of more than 50% of the Voting Stock of the Company,
measured by voting power rather than number of shares;
(4) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors; or
(5) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company or such other Person is
converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of the Company
outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance).
"Choctaw Facility" means the nominally rated 822 MW combined cycle
facility and related assets owned by Reliant Energy Wholesale Generation, LLC
and located, in French Camp, Choctaw County, Mississippi.
"Collateral" means the Shared Collateral and the Separate Collateral.
"Collateral Trust Agreement" means the Collateral Trust Agreement dated
July 1, 2003, executed and delivered by the Company, the Guarantors and the
Collateral Trustee, as amended, modified, renewed, restated or replaced, in
whole or in part, from time to time in accordance with its terms.
"Collateral Trustee" means Wachovia Bank, National Association or one
of its affiliates, in its capacity as Collateral Trustee under the Collateral
Trust Agreement, together with its successors in such capacity.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(1) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale or the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the extinguishment
of any Indebtedness of such Person or any of its Restricted
Subsidiaries, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such Fixed Charges
were deducted in computing such Consolidated Net Income; plus
(4) depreciation, depletion, amortization (including
amortization of intangibles) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period) of such Person and its
Restricted
6
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing
such Consolidated Net Income; plus
(5) accruals for payments to CenterPoint as required under
Section 39.262 of the Texas Public Utility Regulatory Act to the extent
by which the Company's affiliated retail electric provider's price to
beat for providing retail electric service to residential and small
commercial customers in CenterPoint's Houston service territory during
2003 exceeds the market price of electricity, to the extent such
accruals were deducted in computing such Consolidated Net Income; plus
(6) charges associated with fees and expenses, including
professional fees, incurred prior to the Issue Date in connection with
the modification of or preparation in connection therewith of
Indebtedness of the Company that occurred prior to the Issue Date, to
the extent such charges were deducted in computing such Consolidated
Net Income; plus
(7) any fees payable pursuant to the Credit Agreement for
failure to reduce Indebtedness below certain levels, to the extent such
fees were deducted in computing such Consolidated Net Income; plus
(8) the upfront costs of any Hedging Obligations paid prior to
the Issue Date to the extent such costs were deducted in computing
Consolidated Net Income; plus
(9) cash received during such period related to xxxx-to-market
activities; less
(10)cash paid during such period related to xxxx-to-market
activities;
provided, however, that for purposes of this definition, any xxxx-to-market
earnings or losses shall be excluded from the calculation of Consolidated Cash
Flow to the extent taken into account in calculating Consolidated Net Income for
such period.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
similar distributions (including pursuant to other intercompany
payments) paid in cash to the specified Person or a Restricted
Subsidiary of the Person;
(2) for purposes of the provisions of Section 4.07 only, the
Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the cumulative effect of a change in accounting principles
shall be excluded; and
(4) any non-cash impairment charges incurred subsequent to the
Issue Date shall be excluded.
7
"Consolidated Net Worth" means, with respect to any specified Person
as of any date, the assets of such Person less the liabilities of such Person
all as determined on a consolidated basis in accordance with GAAP.
"Consolidated Senior Debt" means, as of any date, the sum, without
duplication, of:
(1) the amount that would be shown on a consolidated balance
sheet of the Company and its Restricted Subsidiaries prepared as of
such date in accordance with GAAP as the liability in respect of (A)
all Secured Debt, (B) all other Indebtedness of the Company or any
Guarantor that is secured by a Lien on any of their properties and (C)
all Indebtedness of any Excluded Subsidiary (other than intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries); provided, however, that Hedging Obligations will be
excluded for purposes of this definition; and
(2) to the extent not required to be reflected as a balance
sheet liability, the aggregate maximum possible contingent
reimbursement obligations of the Company and its Restricted
Subsidiaries on such day in respect of all letters of credit and other
extensions of credit that are then outstanding under any Credit
Facility, secured by a Lien upon any of their properties, or incurred
or Guaranteed by any Excluded Subsidiary.
"Consolidated Senior Leverage Ratio" means, as of any date, the ratio
of (1) the Consolidated Senior Debt outstanding on such date after giving effect
to all incurrences and repayments of Indebtedness made or to be made on such
date to (2) the Consolidated Cash Flow of the Company for the most recently
ended four full fiscal quarters for which internal financial statements are
available.
In addition, for purposes of calculating the Consolidated Senior Leverage
Ratio:
(1) acquisitions that have been made by the Company or any of
its Restricted Subsidiaries, including through mergers or
consolidations, or any Person or any of its Restricted Subsidiaries
acquired by the Company or any of its Restricted Subsidiaries, and
including any related financing transactions and including increases in
ownership of Restricted Subsidiaries, during the four-quarter reference
period or subsequent to such reference period and on or prior to the
date on which the event for which the calculation of the Consolidated
Senior Leverage Ratio is made ("Leverage Ratio Calculation Date") will
be given pro forma effect in accordance with Regulation S-X under the
Securities Act as if they had occurred on the first day of the
four-quarter reference period; and
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Leverage Ratio Calculation Date, shall be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the Issue Date;
or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such
nomination or election.
8
"Credit Agreement" means the Second Amended and Restated Credit
Agreement, dated as of December 22, 2004, among the Company, the other Loan
Parties named therein, the Lenders named therein, Bank of America, N.A., as
Administrative Agent, Collateral Agent and as an L/C Issuer, Barclays Bank, PLC
and Deutsche Bank Securities Inc., as Co-Syndication Agents, Barclays Bank, PLC
and Deutsche Bank AG, New York Branch, as L/C Issuers, Xxxxxxx Sachs Credit
Partners, L.P. and Xxxxxxx Xxxxx Capital Corporation, as Co-Documentation
Agents, Deutsche Bank Securities Inc., Barclays Capital and Banc of America
Securities LLC, as Joint Lead Arrangers for the Revolving Credit Facility,
Deutsche Bank Securities Inc., Barclays Capital, Banc of America Securities LLC,
Xxxxxxx Sachs Credit Partners, L.P. and Xxxxxxx Xxxxx Capital Corporation, as
Joint Bookrunners for the Revolving Credit Facility, Deutsche Bank Securities
Inc., Barclays Capital and Banc of America Securities LLC, as Joint Lead
Arrangers for the Term Loan Facility, and Deutsche Bank Securities Inc.,
Barclays Capital, Banc of America Securities LLC, Xxxxxxx Sachs Credit Partners,
L.P. and Xxxxxxx Xxxxx Capital Corporation, as Joint Bookrunners for the Term
Loan Facility, providing for up to $1.3 billion of term borrowings and $1.7
billion of revolving credit borrowings, $1.35 billion of which is available for
the issuance of letters of credit, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as the same may be amended, modified, restated, renewed, extended,
refinanced, or replaced, in each case, in whole or in part; provided, that a
refinancing or replacement of any such agreement will only be deemed a "Credit
Agreement" if so designated by the Company.
"Credit Agreement Agent" means Bank of America, N.A., as administrative
agent and collateral agent under the Credit Agreement, together with any
successor or replacement agent in such capacity.
"Credit Agreement Debt" means Indebtedness of the Company (and
guarantees thereof by any Guarantor) under the Credit Agreement. For purposes
only of the provisions of Section 4.10 hereof, the aggregate amount of Credit
Agreement Debt shall be the sum of the outstanding principal amount of any
loans, the aggregate face amount of any outstanding letters of credit, the
aggregate amount of any unreimbursed drawings under any letters of credit and
all unused commitments under the Credit Agreement that have not terminated.
"Credit Agreement Documents" means the Credit Agreement and the
Security Documents.
"Credit Agreement Obligations" means Credit Agreement Debt and all
Obligations in respect thereof under the Credit Agreement Documents.
"Credit Facility" or "Credit Facilities" means, one or more debt
facilities (including, without limitation, the Credit Agreement) or commercial
paper facilities, in each case, with banks or other institutional lenders
(including PEDFA) providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced (including by means of sales of debt
securities to institutional investors), in each case, in whole or in part from
time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend.
9
"Description of Notes" means the section titled "Description of Notes"
in the Prospectus Supplement, dated December 14, 2004, related to the issuance
and sale of the Initial Notes.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case, at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale shall not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with the provisions of Section 4.07 hereof. The amount of
Disqualified Stock deemed to be outstanding at any time for purposes of this
Supplemental Indenture shall be equal to the maximum amount that the Company and
its Restricted Subsidiaries may become obligated to pay upon the maturity of, or
pursuant to any mandatory redemption provisions of, such Disqualified Stock,
exclusive of accrued dividends.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, judgments, Governmental Authorizations,
or any other requirements of Governmental Authorities relating to (i)
environmental matters, including those relating to any Hazardous Materials
Activity; (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials; or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
in any manner applicable to the Company or any of its Restricted Subsidiaries or
any Facility.
"Equally and Ratably" means, in reference to sharing of any Liens on
Shared Collateral or proceeds thereof as among the holders of Note Obligations,
the holders of Credit Agreement Obligations and the holders of other Parity
Secured Obligations in respect of any other Series of Secured Debt, after
allowing for the payment priorities in the Order of Application, that such Liens
or proceeds:
(1) shall be allocated and distributed to the Trustee for
account of the Holders of Notes, to the Credit Agreement Agent for
account of the holders of Credit Agreement Debt and to the Secured Debt
Representative for each other Series of Secured Debt for account of the
holders of such Series of Secured Debt, ratably in proportion to the
principal, interest, fees and premium (if any) outstanding, when the
allocation or distribution is made, on the Notes, Credit Agreement Debt
(including Hedging Obligations and amounts payable to a lender in
connection with a bank account or any other banking services, in each
case, that are required by the Credit Agreement to be secured on an
equal and ratable basis with the Credit Agreement Debt) and all other
Series of
10
Secured Debt (allocated proportionately to the Secured Debt
Representative for each other Series of Secured Debt if there is more
than one), respectively; and thereafter
(2) shall be allocated and distributed (if any remain after
payment in full of all of the principal, interest, fees and premium (if
any) outstanding on the Notes, Credit Agreement Debt, including the
Hedging Obligations and other amounts payable to a lender referred to
in clause (1), and each other Series of Secured Debt) to the Trustee
for account of the holders of any remaining Note Obligations, to the
Credit Agreement Agent for account of the holders of any remaining
Credit Agreement Obligations and to the Secured Debt Representative for
each other Series of Secured Debt for account of the holders of any
remaining Parity Secured Obligations in respect of such Series of
Secured Debt, ratably in proportion to the aggregate unpaid amount of
such remaining Note Obligations, Credit Agreement Obligations and other
remaining Parity Secured Obligations, respectively, that are due and
demanded prior to the date such distribution is made.
For this purpose:
(1) Unfunded commitments to extend credit shall not be counted
as outstanding debt;
(2) Obligations of the Company or any Guarantor in respect of
outstanding letters of credit, bank guarantees, bankers' acceptances or
other similar instruments shall be counted as outstanding debt (whether
or not contingent), except that if any such instrument thereafter
expires without being funded, an equitable adjustment shall be made in
any future distribution so that the aggregate amount distributed is
distributed Equally and Ratably as if such instrument had never been
outstanding (but all distributions shall be final and non-refundable
when made);
(3) During the pendency of any Actionable Default, and subject
to the Order of Application, if any payment or distribution is made in
cash to holders of Credit Agreement Obligations or any other holders of
Parity Secured Obligations from or on account of Separate Collateral by
reason of enforcement of Liens or realization in a bankruptcy case,
receivership or other insolvency or liquidation proceeding, then any
concurrent or subsequent payment or distribution that is to be made in
cash to such holders from or on account of Shared Collateral by reason
of any such enforcement or realization shall be reduced, and any
concurrent or subsequent payment or distribution that is to be made in
cash to the remaining holders of Parity Secured Obligations from or on
account of Shared Collateral by reason of any such enforcement or
realization shall be increased, to the extent necessary to cause the
aggregate amount of all payments and distributions made in cash to all
holders of Parity Secured Obligations (whether made from or on account
of Separate Collateral or from or on account of Shared Collateral) by
reason of any such enforcement or realization to be distributed Equally
and Ratably as fully as if the Separate Collateral had been Shared
Collateral; and
(4) All amounts apportioned and distributed to the Credit
Agreement Agent or the Secured Debt Representative for any other Series
of Secured Debt may be allocated, apportioned and distributed by it in
accordance with the applicable provisions of the Credit Agreement or
the indenture or agreement governing such other Series of Secured Debt,
including to give effect to any payment priorities provided for therein
as among the holders of Obligations outstanding thereunder.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
11
"Equity Offering" means a public or private sale for cash of Capital
Stock (other than Disqualified Stock).
"Excluded Orion Power Subsidiaries" means Orion Power Capital LLC and
each of its Subsidiaries for so long as each such Person has not guaranteed or
otherwise provided direct credit support for any other Indebtedness of the
Company or any of its other Restricted Subsidiaries.
"Excluded Proceeds" means any Net Proceeds of Asset Sales that are
designated by the Board of Directors of the Company as "Excluded Proceeds;"
provided, that not more than $300.0 million of such Net Proceeds from Asset
Sales may be designated as "Excluded Proceeds" during any single calendar year.
"Excluded Property" consists of:
(1) [Reserved];
(2) Capital Stock of Subsidiaries and intercompany notes that satisfy
the requirements of the defined term "Excluded Securities," provided that
property that is received by the Company or any of its Subsidiaries as proceeds
from the sale, exchange or other disposition of any Excluded Securities and
other proceeds of Excluded Securities (except proceeds from the foreclosure,
collection or other enforcement of Liens upon Excluded Securities) will not
constitute Excluded Property and will be part of the Shared Collateral, to the
extent such property otherwise constitutes Shared Collateral under the Security
Documents, unless the proceeds are themselves Excluded Securities; and
(3) Separate Cash Deposits.
"Excluded Securities" means debt or equity securities issued by any
Subsidiary of the Company other than Reliant Energy Retail Holdings, LLC, Orion
Power Holdings, Inc. and REMA (or their successors).
"Excluded Subsidiaries" means each of the Excluded Orion Power
Subsidiaries, the Miscellaneous Orion Subsidiaries, Reliant Energy Mid-Atlantic
Power Holdings, LLC and its Subsidiaries, Reliant Energy Channelview, L.P.,
Reliant Energy Channelview (Delaware) LLC, Reliant Energy Channelview (Texas)
LLC, Reliant Energy Services Channelview LLC, Reliant Energy Services Canada,
Ltd., RE Retail Receivables, LLC, CapTrades GP, LLC and CapTrades, LP, in each
case, only if and for as long as it has not guaranteed or otherwise provided
direct credit support for any Indebtedness of the Company or any of its other
Restricted Subsidiaries.
"Existing 2010 Notes Indenture" means the indenture between the
Company, the Guarantors and the Wilmington Trust Company, dated as of July 1,
2003, governing the Existing 2010 Notes.
"Existing 2013 Notes Indenture" means the indenture between the
Company, the Guarantors and the Wilmington Trust Company, dated as of July 1,
2003, governing the Existing 2013 Notes.
"Existing 2010 Notes" means the $550.0 million in aggregate principal
amount of the Company's 9.25% Senior Secured Notes due 2010, issued pursuant to
the Existing 2010 Notes Indenture on July 1, 2003, and any related exchange
notes.
12
"Existing 2013 Notes" means the $550.0 million in aggregate principal
amount of the Company's 9.50% Senior Secured Notes due 2013, issued pursuant to
the Existing 2013 Notes Indenture on July 1, 2003, and any related exchange
notes.
"Existing Convertible Notes" means the Company's 5.00% Convertible
Senior Subordinated Notes due 2010 in the aggregate principal amount of up to
$275,000,000 issued pursuant to the Existing Convertible Notes Indenture on June
24, 2003.
"Existing Convertible Notes Indenture" means that certain indenture,
dated as of June 24, 2003, by and between the Company and Wilmington Trust
Company, as trustee, governing the Existing Convertible Notes.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the Issue Date, until such amounts are
repaid; provided, however, that in no event will any Indebtedness that qualifies
for categorization as Permitted Debt under clauses (1) through (5) of the
definition of Permitted Debt be considered to be Existing Indebtedness.
"Existing Indentures" means the Existing 2010 Notes Indenture and the
Existing 2013 Notes Indenture.
"Existing Notes" means the Existing 2010 Notes and the Existing 2013
Notes.
"Facility" means any real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or heretofore owned,
leased, operated or used by the Company or any of its Restricted Subsidiaries or
any of their respective predecessors or Affiliates.
"Fair Market Value" means the value that would be paid by a willing
buyer to a willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the chief financial officer or
Board of Directors of the Company (unless otherwise provided in this
Supplemental Indenture).
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person for such period. In the event that the specified Person or any of its
Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases,
redeems, defeases or otherwise discharges any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee, repayment,
repurchase, redemption, defeasance or other discharge of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person
or any of its Restricted Subsidiaries, including through mergers or
consolidations, or any Person or any of its Restricted Subsidiaries
acquired by the specified Person or any of its Restricted Subsidiaries,
and including any related financing transactions and including
increases in ownership of Restricted Subsidiaries, during the
four-quarter reference period or subsequent to such reference period
and
13
on or prior to the Calculation Date shall be given pro forma effect in
accordance with Regulation S-X under the Securities Act as if they had
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period will be calculated on
a pro forma basis;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Calculation Date, shall be excluded;
(3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
(and ownership interests therein) disposed of prior to the Calculation
Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the
Calculation Date; and
(4) if any Indebtedness that is being incurred on the
Calculation Date bears a floating rate of interest, the interest
expense on such Indebtedness shall be calculated as if the rate in
effect on the Calculation Date had been the applicable rate for the
entire period (taking into account any Hedging Obligations applicable
to such Indebtedness, but only for such period of time as equals the
then remaining term of such Hedging Obligations as of the Calculation
Date).
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued
determined in accordance with GAAP, including, without limitation,
amortization of debt issuance costs incurred on or after the Issue Date
(but excluding (A) amortization of debt issuance costs incurred prior
to the Issue Date and (B) charges associated with fees and expenses,
including professional fees, incurred prior to the Issue Date in
connection with the modification of or preparation in connection
therewith of Indebtedness of the Company that occurred prior to the
Issue Date) and original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt created
after the Issue Date, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations with respect to interest rates and net
of interest income; plus
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest accruing on Indebtedness of another Person
that is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
(4) the product of (A) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividends on
Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted
Subsidiary of the Company, times (B) a fraction, the numerator of which
is one and the denominator of which is one minus the then
14
current combined federal, state and local statutory tax rate of such
Person, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP; minus
(5) any charges associated with upfront payments with respect
to interest rate xxxxxx made prior to the Issue Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the Global
Notes substantially in the form of Exhibit A hereto issued in accordance with
Section 2.01 hereof.
"Global Note Legend" means the legend set forth in Section 2.06(f),
which is required to be placed on all Global Notes issued under this
Supplemental Indenture.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of, or pertaining to,
government.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Guarantors" means each of:
(1) the entities listed on Schedule I hereto; and
(2) any other Restricted Subsidiary of the Company that
executes a Note Guarantee in accordance with the provisions of this
Supplemental Indenture,
and their respective successors and assigns.
"Hazardous Materials" means any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any Governmental
Authority or which may or could pose a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, release, threatened release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition
15
or handling of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.
"Hedging Obligations" means, with respect to any specified Person, the
net obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to
floating or from floating to fixed), interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed to manage
interest rate risk; and
(3) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses or trade payables),
whether or not contingent (without duplication):
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit or reimbursement agreements in respect
thereof;
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or Attributable
Debt in respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the
purchase price of any property or services due more than six months
after such property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person. If
obligations of a Securitization Entity are Indebtedness, for the purposes of
calculating the amount of Indebtedness of a Securitization Entity outstanding as
of any date, the face or notional amount of any interest in receivables or
equipment that is outstanding as of such date shall be deemed to be Indebtedness
but any such interests held by Affiliates of such Securitization Entity shall be
excluded for purposes of such calculation.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
16
(2) the principal amount of and premium (if any) on the
Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of other Persons secured by a
Lien on the assets of the specified Person, the lesser of:
(a) the Fair Market Value of such asset at such date
of determination, and
(b) the amount of such Indebtedness of such other
Persons.
"Indemnified Liabilities" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
xxxxx any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on Environmental Laws, on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of the Company or any of its
Restricted Subsidiaries.
"Indenture" means the Base Indenture, as supplemented by this
Supplemental Indenture, governing the Notes, in each case, as amended,
supplemented or otherwise modified from time to time in accordance with its
respective terms.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $750.0 million aggregate principal
amount of Notes issued under this Supplemental Indenture on the Issue Date.
"Intercreditor Confirmation" means the agreement of any holder of
Parity Secured Debt or other Parity Secured Obligations to the provisions
described in the Order of Application and definition of the term "Equally and
Ratably," as set forth in any Secured Debt Document for the benefit of, and
enforceable as a third party beneficiary by, each present and future holder of
Parity Secured Obligations and each present and future Secured Debt
Representative.
"Investment Grade Rating" means a rating equal to or higher than Baa3
(or the equivalent) by Xxxxx'x or BBB- (or the equivalent) by S&P.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or similar obligations), advances or capital
contributions (excluding payroll, commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. "Investment"
shall exclude extensions of trade credit by the Company and its Restricted
Subsidiaries in the ordinary course of business and Permitted PEDFA Bond
Indebtedness. If the Company or any Subsidiary of the Company
17
sells or otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the Fair Market Value of the Company's Investments in such
Subsidiary that were not sold or disposed of. The acquisition by the Company or
any Subsidiary of the Company of a Person that holds an Investment in a third
Person will be deemed to be an Investment by the Company or such Subsidiary in
such third Person in an amount equal to the Fair Market Value of the Investments
held by the acquired Person in such third Person. Except as otherwise provided
in this Supplemental Indenture, the amount of an Investment shall be its Fair
Market Value at the time the Investment is made and without giving effect to
subsequent changes in value.
"Issue Date" means December 22, 2004.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement and any lease
that constitutes a security interest.
"Miscellaneous Orion Subsidiaries" means, collectively, Beaver River,
LLC, Eddystone Power, LLC, Free State Electric, LLC, Grane Creek, LLC, Liberty
Member, LLC, Liberty MidAtlantic, LLC, MidAtlantic Liberty, LLC, Midwest Ash
Disposal, Inc., OPD Group, Inc., OPOS MidAtlantic, Inc., Orion Power Atlantic,
Inc., Orion Power Atlantic LLC, Orion Power Atlantic, Ltd., Orion Power
Development Company, Inc., Orion Power Marketing and Supply, Inc., Orion Power
Operating Services, Inc., Orion Power Operating Services Astoria, Inc. and Orion
Power Operating Services Midwest, Inc.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (or loss), together with any related provision
for taxes on such gain (or loss), realized in connection with:
(a) any Asset Sale;
(b) the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (or loss), together with any
related provision for taxes on such extraordinary gain (or loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts reserved for adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP.
18
"Non-Recourse" means, with respect to any specified Person and the
Indebtedness of such Person:
(1) neither the Company nor any of its Restricted Subsidiaries
(A) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness) for the
Indebtedness of such Person other than a pledge of the Equity Interests
of such Person, (B) is directly or indirectly liable as a guarantor or
otherwise of the Indebtedness of such Person, or (C) constitutes the
lender with respect to the Indebtedness of such Person; and
(2) in the case of an Unrestricted Subsidiary, no default on
the Indebtedness of such Person (including any rights that the holders
of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or
both any holder of Indebtedness of the Company or any of its Restricted
Subsidiaries to declare a default on such Indebtedness of the Company
or any of its Restricted Subsidiaries or cause the payment of such
Indebtedness of the Company or any of its Restricted Subsidiaries to be
accelerated or payable prior to its stated maturity.
"Note Documents" means the Notes and the Indenture, the Existing Notes
and the related Existing Indentures, the Note Guarantees, each Intercreditor
Confirmation and the Security Documents.
"Note Guarantee" means the Guarantee by each Guarantor of the
Company's payment Obligations under the Indenture and on the Notes, executed
pursuant to the provisions of this Supplemental Indenture.
"Note Obligations" means:
(1) Notes issued on the Issue Date and the Existing Notes; or
(2) Notes issued by the Company after the Issue Date under
this Supplemental Indenture that constitute Sharing Eligible Debt and
all related exchange notes,
together with the Note Guarantees and all other Obligations (including all
Obligations owing to the Trustee) of any Obligor under the Note Documents.
"Notes" has the meaning assigned to it in the preamble to this
Supplemental Indenture. The Initial Notes and the Additional Notes shall be
treated as a single class for all purposes under this Supplemental Indenture.
Unless the context otherwise requires, all references to the Notes shall include
the Initial Notes and any Additional Notes.
"Notice of Actionable Default" means a written notice given to the
Collateral Trustee by the Required Secured Debtholders or any Secured Debt
Representative, stating that an Actionable Default has occurred and is
continuing.
"Obligations" means any principal, interest, premium, fees,
indemnifications, reimbursements, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Obligor" means the Company, the Guarantors and each other Subsidiary
of the Company that has granted the Collateral Trustee a Lien upon any property
as security for any Note Obligation.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any
19
Assistant Treasurer, the Controller, the Secretary, Assistant Secretary, or any
Vice-President of such Person.
"Order of Application" has the meaning assigned to it in the
Collateral Trust Agreement.
"Parity Secured Debt" means:
(1) the Notes issued on the Issue Date;
(2) the Existing Notes;
(3) Credit Agreement Debt outstanding or committed on the
Issue Date; and
(4) Sharing Eligible Debt (including the Xxxxxx Guarantees)
that is designated by the Company, in an Officer's Certificate
delivered to the Collateral Trustee on or before the date of incurrence
of such Indebtedness, as entitled to share Equally and Ratably in the
benefits and proceeds of all Liens held by the Collateral Trustee in
Shared Collateral.
"Parity Secured Obligations" means, collectively, the Note Obligations,
the Credit Agreement Obligations and all Obligations in respect of each other
Series of Secured Debt.
"Participant" means, with respect to the Depositary, a Person who has
an account with the Depositary.
"PEDFA" means Pennsylvania Economic Development Financing Authority and
its successors.
"Permitted Business" means the business of providing services and
products in the energy market and any businesses incidental or reasonably
related thereto.
"Permitted ERCOT Assets" means (1) electric generating assets together
with assets related thereto (including any assets related to the operation and
fuel supply of such electric generating assets) which assets support REI's
and/or its Restricted Subsidiaries' retail business in the State of Texas and
(2) all (but not less than all) of the Capital Stock of any Person that owns
solely Permitted ERCOT Assets (whether directly or through one or more wholly
owned Subsidiaries) described in clause (1) above.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents and, in the case of the
Excluded Subsidiaries only, cash equivalents or other liquid
investments permitted under any Credit Facility to which it is a party;
(3) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of
the Company; or
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of
its assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company;
20
(4) [Reserved];
(5) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the provisions of Section 4.10 hereof;
(6) any acquisition of assets or Capital Stock solely in
exchange for the issuance of Equity Interests (other than Disqualified
Stock) of the Company;
(7) any Investments received in compromise or resolution of
(A) Obligations of trade creditors or customers that were incurred in
the ordinary course of business of the Company or any of its Restricted
Subsidiaries, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade
creditor or customer; or (B) litigation, arbitration or other disputes
with Persons who are not Affiliates;
(8) Investments represented by Hedging Obligations;
(9) loans or advances to employees made in the ordinary course
of business up to an aggregate principal amount not to exceed $10.0
million at any one time;
(10) any Investment acquired by the Company or any of its
Restricted Subsidiaries on account of any claim against, or interest
in, any other Person (A) acquired in good faith in connection with or
as a result of a bankruptcy, workout, reorganization or
recapitalization of such other Person or (B) as a result of a bona fide
foreclosure by the Company or any of its Restricted Subsidiaries with
respect to any claim against any other Person;
(11) repurchases of the Notes or pari passu Indebtedness;
(12) any Investment by the Company or a Restricted Subsidiary
of the Company in a Securitization Entity or any Investment by a
Securitization Entity in any other Person in connection with a
Qualified Securitization Transaction;
(13) payment of consolidated taxes pursuant to the Tax Sharing
Agreement, dated as of October 1, 2002, among the Company and its
Subsidiaries named therein, as amended, supplemented or modified from
time to time and any other tax allocation agreements among the Company
and its Subsidiaries;
(14) receivables owing to the Company or a Restricted
Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as the Company or such Restricted Subsidiary deems
reasonable under the circumstances; and
(15) other Investments in any Person having an aggregate Fair
Market Value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (15)
that are at the time outstanding not to exceed $125.0 million.
"Permitted Liens" means:
21
(1) Liens held by the Collateral Trustee Equally and Ratably
securing all Indebtedness that is Parity Secured Debt and Equally and
Ratably securing all other Parity Secured Obligations;
(2) Permitted Separate Liens;
(3) [Reserved];
(4) [Reserved];
(5) Liens on assets of REMA and its Subsidiaries securing
Indebtedness of REMA and its Subsidiaries permitted to be incurred
pursuant to clause (5) of the definition of Permitted Debt, including
cash collateral for letters of credit issued thereunder and Liens
encumbering assets of REMA and/or any of its Subsidiaries securing
obligations under, or in connection with, or which constitute,
Qualifying Credit Support (as defined in the participation agreements
to which REMA is a party);
(6) Liens on assets of the Xxxxxx Subsidiary securing
Permitted PEDFA Bond Indebtedness incurred by the Xxxxxx Subsidiary and
that is Non-Recourse to the Company and all of its other Restricted
Subsidiaries (other than an unsecured Guarantee, if any, provided by
the Company);
(7) [Reserved];
(8) [Reserved];
(9) Liens on assets of a Restricted Subsidiary in existence on
the date on which such Person becomes a Restricted Subsidiary; provided
that on the date on which such Person becomes a Restricted Subsidiary,
after giving effect to the incurrence of such Liens, the Consolidated
Senior Leverage Ratio would not exceed 3.0 to 1.0;
(10) Liens securing Indebtedness (including Capital Lease
Obligations) permitted to be incurred pursuant to clause (11) of the
definition of Permitted Debt, covering only the assets acquired with or
financed by such Indebtedness;
(11) Liens securing obligations under sale leaseback
transactions permitted by the provisions of Section 4.16 hereof;
(12) Liens in favor of the Company or the Guarantors;
(13) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision as
is required in conformity with GAAP has been made therefor;
(14) Liens imposed by law, such as carriers', warehousemen's,
landlord's and mechanics' Liens, in each case, incurred in the ordinary
course of business;
(15) survey exceptions, encumbrances, easements or
reservations, including those for licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines, other utilities, mineral
reservations and rights and leases, zoning restrictions and other
restrictions as to the use
22
of real property or other exceptions to title that were not incurred in
connection with Indebtedness and that (A) exist on the Issue Date and
are recorded on such date, (B) are permitted under the terms of the
Security Documents or (C) do not in the aggregate materially adversely
affect the value of said properties or materially impair their use in
the operation of the business of such Person;
(16) Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred under this Supplemental Indenture if such
Permitted Refinancing Indebtedness is incurred by the same obligor on
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded (except as provided in clause (4) of the
definition of Permitted Refinancing Indebtedness); provided, however,
that:
(a) the new Lien shall be limited to all or part of
the same categories of property and assets that secured or,
under the written agreements pursuant to which the original
Lien arose, could secure the original Lien (plus improvements
and accessions to, such property or proceeds or distributions
thereof), except, if Permitted PEDFA Bond Indebtedness is
Sharing Eligible Debt, it may be secured by Liens held by the
Collateral Trustee on the Shared Collateral; and
(b) the Indebtedness secured by the new Lien is not
increased to any amount greater than the sum of (i) the
outstanding principal amount or, if greater, committed amount
of the Permitted Refinancing Indebtedness and (ii) an amount
necessary to pay any fees and expenses, including premiums,
related to such refinancings, refunding, extension, renewal or
replacement and (iii) any protective advances with respect to
the property and assets that secure such Permitted Refinancing
Indebtedness;
(17) Liens on assets transferred to a Securitization Entity or
on assets of a Securitization Entity, in either case incurred in
connection with a Qualified Securitization Transaction;
(18) financing statements (including precautionary statements)
filed in connection with a Capital Lease Obligation or an operating
lease, in each case, not prohibited hereunder; provided that no such
financing statement extends to, covers or refers to as collateral, any
property or assets of the Company or a Restricted Subsidiary, other
than the property or assets which are subject to such Capital Lease
Obligation or such operating lease;
(19) Liens arising out of or in connection with any judgment
that does not constitute an Event of Default or in connection with any
litigation or other legal proceeding as to which an appeal to contest
or review is timely commenced in good faith by appropriate proceedings
and as to which adequate reserves have been established in accordance
with GAAP; provided that any right to levy, seizure, attachment,
sequestration, foreclosure or garnishment of any property and assets of
the Company or a Restricted Subsidiary thereof arising out of or in
connection with any such Lien has been and continues to be enjoined or
effectively stayed;
(20) inchoate statutory Liens arising under ERISA;
(21) Liens (A) on cash and short-term investments (i)
deposited by the Company or any of its Subsidiaries in margin accounts
with or on behalf of futures contract brokers or paid over to other
counterparties or (ii) pledged or deposited as collateral to a contract
counterparty or issuer of surety bonds by the Company or any of its
Subsidiaries, in the case of clause (i) or (ii), to secure obligations
with respect to (a) contracts for commercial and trading activities in
the ordinary course of business and contracts (including without
limitation, physical delivery, option
23
(whether cash or financial), exchange, swap and futures contracts) for
the purchase, transmission, distribution, sale, lease or hedge of any
energy-related commodity or service or (b) interest rate, commodity
price, or currency rate management contracts or derivatives and (B)
encumbering assets other than accounts or receivables arising out of
contracts or agreements relating to the generation, distribution or
transmission of energy; provided that all such agreements or contracts
are entered into in the ordinary course of business;
(22) Liens arising by virtue of any statutory or common law
provision relating to banker's liens, rights of set off or similar
rights, contractual rights of setoff or netting arrangements entered
into in the ordinary course of business and similar rights with respect
to deposit accounts, commodity accounts and/or securities accounts;
(23) Liens arising under Section 9.343 of the Texas Uniform
Commercial Code or similar statutes of states other than Texas;
(24) Liens created under the Security Agreement dated as of
March 28, 2003 among Reliant Energy Retail Services, LLC ("RERS"),
StarEn Power, LLC ("StarEn") and Reliant Energy Solutions, LLC
("Solutions"), as debtors, and Texas Xxxxx, X.X. as secured party
securing up to $250.0 million of obligations owing to Texas Xxxxx, X.X.
under the Master Power Purchase and Sale Agreement dated as of October
1, 2002 between Texas Xxxxx, X.X and Solutions, as the same may be
amended, amended and restated, supplemented or otherwise modified,
renewed or replaced from time to time, and the related Guaranty dated
as of October 1, 2002 by Reliant Energy Retail Holdings, LLC, RERS,
StarEn and Solutions in favor of Texas Xxxxx, X.X., as the same may be
amended, amended and restated, supplemented or otherwise modified,
renewed or replaced from time to time, provided that such Liens are
subject always to the terms of the Texas Genco Intercreditor Agreement,
as such agreement may be amended, amended and restated, supplemented or
otherwise modified, renewed or replaced from time to time;
(25) pledges and deposits to secure the payment of worker's
compensation, unemployment insurance, social security benefits or
obligations under similar laws, or to secure the payment or performance
of statutory or public obligations (including environmental, municipal
and public utility commission obligations and requirements),
reimbursement or indemnity obligations arising out of surety,
performance, or other similar bonds, and other obligations of a like
nature, in each case incurred in the ordinary course of business;
(26) [Reserved];
(27) Liens granted by a Person in favor of a commercial
trading counterparty pursuant to a netting agreement, which Liens
encumber rights under agreements that are subject to such netting
agreement and which Liens secure such Person's obligations to such
counterparty under such netting agreement; provided, that any such
agreements and netting agreements are entered into in the ordinary
course of business; and provided, further, that the Liens are incurred
in the ordinary course of business and when granted, do not secure
obligations which are past due;
(28) Liens on proceeds from the issuance of Xxxxxx Tax-Exempt
Bonds or Permitted PEDFA Bond Indebtedness and Liens on Indebtedness of
the Company held by a Xxxxxx Subsidiary securing the Xxxxxx Tax-Exempt
Bonds or Permitted PEDFA Bond Indebtedness;
(29) Liens on assets of the Excluded Subsidiaries existing on
the Issue Date;
24
(30) Liens on assets of REMA and its Subsidiaries created in
connection with the sale-leaseback of REMA's interests in the Keystone,
Conemaugh and Shawville generating facilities consummated in August
2000;
(31) Liens on certain of Reliant Energy Choctaw County, LLC's
switchyard equipment at the Choctaw Facility granted to Entergy in
connection with an Operating and Maintenance Agreement;
(32) Liens created in connection with the indemnity and
contribution obligations in favor of underwriters or note purchasers in
connection with the Xxxxxx Tax-Exempt Bonds;
(33) Liens on assets of Reliant Energy Solutions, LLC created
in connection with Delivery Order No. DABT39-97-C-4046 dated September
1997 and issued by the Directorate of Contracting, Contract Support
Division, Ft. Sill, Oklahoma; and
(34) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company securing
obligations that do not exceed $25.0 million in the aggregate at any
one time outstanding.
"Permitted PEDFA Bond Indebtedness" means Indebtedness incurred by the
Company and/or the Xxxxxx Subsidiary and/or guaranteed by the Company and/or the
Guarantors in tax-exempt industrial development bond financings that are not
supported by letters of credit outstanding under the Credit Agreement, the
proceeds of which are used:
(1) to build the Xxxxxx Facility;
(2) to reimburse the Company, its Restricted Subsidiaries or
the Xxxxxx Subsidiary for amounts advanced or incurred, or for
Indebtedness incurred to fund such construction costs, prior to the
date of incurrence of such Indebtedness; or
(3) to refund or defease the Xxxxxx Tax-Exempt Bonds or
refinance Indebtedness evidenced by or in support of the Xxxxxx
Tax-Exempt Bonds.
"Permitted Prior Liens" means (1) Liens described in clauses (9), (10),
(11), (13), (14), (15), (18), (21), (22), (23,) (24), (25), (27), (31), (32) and
(33) of the definition of "Permitted Liens," (2) Liens refinancing or replacing
any of the Liens contemplated in clause (1) of this definition and (3) Liens
that arise by operation of law and are not voluntarily granted, to the extent
entitled by law to priority over the security interests created by the Security
Documents.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses, costs and
fees and premiums incurred in connection therewith);
25
(2) except for Permitted PEDFA Bond Indebtedness, such
Permitted Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness is subordinated in
right of payment to, the Notes on terms at least as favorable to the
Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded, as reasonably determined by the Company or such Restricted
Subsidiary;
(4) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded, except
that Permitted PEDFA Bond Indebtedness may be (A) incurred by the
Company and/or guaranteed by the Company if the assets of the Xxxxxx
Subsidiary (other than Investments in the Company pledged to secure
such Permitted PEDFA Bond Indebtedness and proceeds from the issuance
of Permitted PEDFA Bond Indebtedness that secures Permitted PEDFA Bond
Indebtedness) remain free of all Liens securing Indebtedness, except
Liens held by the Collateral Trustee as security for Secured
Obligations or (B) guaranteed by the Company on an unsecured basis if
such Indebtedness is otherwise Non-Recourse to the Company and its
other Restricted Subsidiaries (other than the Xxxxxx Subsidiary ) and
is secured solely by Liens on the assets of the Xxxxxx Subsidiary
and/or the Equity Interests of the Xxxxxx Subsidiary ; provided,
further, that in the case of Indebtedness of an Excluded Orion Power
Subsidiary that is being refinanced, replaced or refunded, such
Indebtedness may be incurred at another Excluded Orion Power Subsidiary
or at Orion Power Holdings, Inc; and
(5) if incurred by the Company, such Indebtedness may be
guaranteed by the Guarantors.
"Permitted Separate Liens" means Liens that are granted or maintained
by the Company and the Restricted Subsidiaries upon Excluded Property as
security for Obligations under Credit Facilities; provided that Permitted
Separate Liens on Excluded Securities are limited as follows:
(1) Liens that are attached to any Excluded Securities on the
Issue Date and were granted by the Security Documents to secure
Indebtedness outstanding or committed under the Credit Agreement on the
Issue Date and Obligations in respect thereof may be maintained and, at
the option of the Company, may also secure Obligations under other
Credit Facilities constituting Parity Secured Debt;
(2) Liens attaching to other Excluded Securities issued by a
Restricted Subsidiary that is a Guarantor may be granted and maintained
to secure only Credit Agreement Obligations and, at the option of the
Company, Obligations under other Credit Facilities constituting Parity
Secured Debt; and
(3) Liens attaching to Excluded Securities issued by an
Unrestricted Subsidiary may be granted and maintained to secure any
Indebtedness of such Unrestricted Subsidiary.
"Purchase Money Note" means a promissory note of a Securitization
Entity evidencing amounts owed to the Company or any Restricted Subsidiary of
the Company in connection with a Qualified Securitization Transaction to a
Securitization Entity, which note shall be repaid from cash available to the
26
Securitization Entity other than amounts required to be established as reserves
pursuant to agreements, amounts paid to investors in respect of interest and
principal and amounts paid in connection with the purchase of newly generated
receivables or newly acquired equipment.
"Qualified Securitization Transaction" means any transaction or series
of transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to:
(1) a Securitization Entity (in the case of a transfer by the
Company or any of its Restricted Subsidiaries); and
(2) any other Person (in the case of a transfer by a
Securitization Entity), or may grant a security interest in any
accounts receivable or equipment (whether now existing or arising or
acquired in the future) of the Company or any of its Restricted
Subsidiaries, and any assets related thereto, including, without
limitation, all collateral securing such accounts receivable and
equipment, all contracts and contract rights and all guarantees or
other obligations in respect of such accounts receivable and equipment,
proceeds of such accounts receivable and equipment and other assets
(including contract rights) which are customarily transferred or in
respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts
receivable and equipment.
"REMA" means Reliant Energy Mid-Atlantic Power Holdings, LLC.
"REMA Lease" means, collectively, the obligations of REMA as facility
lessee under the Facility Lease Agreements, each dated as of August 24, 2000 and
each between REMA and, respectively, Conemaugh Lessor Genco, LLC, Keystone
Lessor Genco, LLC, and Shawville Lessor Genco, LLC, and under the related
participation agreements and other documents executed in connection therewith,
in each case, as amended through the Issue Date.
"Required Lenders" means, at any time in respect of any action or
matter, (1) the number or percentage of holders of Credit Agreement Obligations
whose consent is required under the Credit Agreement to take such action or bind
the holders of Credit Agreement Obligations to such matter or (2) the Credit
Agreement Agent acting upon authorization under the Credit Agreement or under
the authorization or consent of the number or percentage of holders referred to
in clause (1).
"Required Secured Debtholders" means, at any time, the holders of a
majority in aggregate outstanding principal amount of all Secured Debt then
outstanding and unfunded letters of credit or credit commitments which, if
funded, would constitute outstanding Secured Debt, voting together as a single
class. For this purpose only, Secured Debt registered in the name of, or
beneficially owned by, the Company or any of its Subsidiaries shall be deemed
not to be outstanding.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group.
"Secured Debt" means the Parity Secured Debt.
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"Secured Debt Documents" means, collectively, the Credit Agreement
Documents, the Note Documents and the indenture, agreement and other documents
governing each other Series of Secured Debt and all agreements binding on any
Obligor related thereto.
"Secured Debt Representative" means:
(1) in the case of the Notes, the Trustee;
(2) in the case of the Existing Notes, the applicable trustee;
(3) in the case of Credit Agreement Debt, the Credit Agreement
Agent;
(4) in the case of any other Series of Secured Debt, the
trustee, agent or representative of the holders of such Series of
Secured Debt who maintains, or on whose behalf is maintained, the
transfer register for or who acts as administrative agent for such
Series of Secured Debt and is appointed as Secured Debt Representative
(for purposes related to the administration of the Security Documents)
pursuant to the indenture or agreement governing such Series of Secured
Debt; or
(5) in the case of the Xxxxxx Guarantees, the trustees under
the indentures governing the Xxxxxx Notes.
"Secured Obligations" means the Parity Secured Obligations.
"Securitization Entity" means RE Retail Receivables, LLC, and any
Person in which the Company or any Restricted Subsidiary of the Company makes an
Investment and to which the Company or any Restricted Subsidiary of the Company
transfers accounts receivable or equipment (and related assets, including
contract rights) which engages in no activities other than in connection with
the financing, sale, or purchase of accounts receivable or equipment or related
assets (including contract rights) and which is designated by the Board of
Directors of the Company (as provided below) as a Securitization Entity:
(1) no portion of the Indebtedness or any other Obligations
(contingent or otherwise) of which:
(a) is guaranteed by the Company or any Restricted
Subsidiary of the Company (excluding guarantees of Obligations
(other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings;
(b) is recourse to or obligates the Company or any
Restricted Subsidiary of the Company in any way other than
pursuant to Standard Securitization Undertakings; or
(c) subjects any property or asset of the Company or
any Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization
Undertakings;
(2) with which neither the Company nor any Restricted
Subsidiary of the Company has any material contract, agreement,
arrangement or understanding (except in connection with a Purchase
Money Note or Qualified Securitization Transaction) other than on terms
no less favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons that are not
Affiliates of the Company, as determined by the Company, other
28
than amounts payable in the ordinary course of business in connection
with servicing receivables and other assets of such entity; and
(3) to which neither the Company nor any Restricted Subsidiary
of the Company has any obligation to maintain or preserve such entity's
financial condition or cause such entity to achieve certain levels of
operating results.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution of the Company giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
foregoing conditions.
"Security Documents" means the Collateral Trust Agreement, and all
security agreements, pledge agreements, control agreements, collateral
assignments, mortgages, deed of trust or other grants or transfers for security
or agreements related thereto executed and delivered by the Company or any
Guarantor creating (or purporting to create) a Lien upon Collateral in favor of
the Collateral Trustee to secure Secured Obligations, in each case, as amended,
modified, renewed, restated or replaced, in whole or in part, from time to time.
"Separate Cash Deposits" means cash collateral deposits required by the
Credit Agreement to secure letter of credit exposure after default or to provide
for mandatory prepayments after outstanding loans are repaid.
"Separate Collateral" means Capital Stock of Subsidiaries and
intercompany notes that satisfy the requirements of the defined term "Excluded
Securities."
"Series of Secured Debt" means, severally, the Notes, the Existing 2010
Notes, the Existing 2013 Notes, the Xxxxxx Guarantees, the Credit Agreement Debt
and each other issue or series of Parity Secured Debt.
"Xxxxxx Facility" means the 520 MW coal facility and related assets
owned by the Xxxxxx Subsidiary, or its successors, and located, or to be
located, in New Xxxxxxxx, Indiana County, Pennsylvania.
"Xxxxxx Guarantees" means, collectively, the Xxxxxx Note Parent
Guarantees and the Xxxxxx Note Subsidiary Guarantees.
"Xxxxxx Note Parent Guarantees" means the guarantee of the Xxxxxx Notes
by the Company.
"Xxxxxx Note Subsidiary Guarantees" means the guarantee of the Xxxxxx
Note Parent Guarantees by the Guarantors.
"Xxxxxx Notes" means up to $500.0 million in aggregate principal amount
of Permitted PEDFA Bond Indebtedness resulting from (1) the conversion to
long-term interest rate mode and reoffering on December 22, 2004 of up to $400.0
million in aggregate principal amount of Xxxxxx Tax-Exempt Bonds or (2) the
issuance on December 22, 2004 of $100.0 million in aggregate principal amount of
Xxxxxx Series 2004A Bonds.
"Xxxxxx Series 2004A Bonds" means the Pennsylvania Economic Development
Financing Authority Exempt Facilities Revenue Bonds (Reliant Energy Xxxxxx, LLC
Project), Series 2004A.
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"Xxxxxx Subsidiary" means Reliant Energy Xxxxxx, LLC, a Delaware
limited liability company.
"Xxxxxx Tax-Exempt Bonds" means (1) the Pennsylvania Economic
Development Financing Authority Exempt Facilities Revenue Bonds (Reliant Energy
Xxxxxx, LLC Project), Series 2001A, in the original aggregate principal amount
of $150,000,000, (2) the Pennsylvania Economic Development Financing Authority
Exempt Facilities Revenue Bonds (Reliant Energy Xxxxxx, LLC Project), Series
2002A, in the original aggregate principal amount of $75,000,000, (3) the
Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue
Bonds (Reliant Energy Xxxxxx, LLC Project), Series 2002B, in the original
aggregate principal amount of $75,000,000, (4) the Pennsylvania Economic
Development Financing Authority Exempt Facilities Revenue Bonds (Reliant Energy
Xxxxxx, LLC Project), Series 2003A, in the original aggregate principal amount
of $100,000,000 and (5) any bonds issued by PEDFA on or after the Issue Date as
permitted under the Credit Agreement as in effect on the Issue Date and
supported by letters of credit outstanding under the Credit Agreement.
"Sharing Eligible Debt" means:
(1) Indebtedness incurred pursuant to clause (1) of the
definition of Permitted Debt;
(2) Indebtedness incurred under clause (21) of the definition
of Permitted Debt;
(3) the Existing Notes and the Notes issued on the Issue Date;
(4) Permitted Refinancing Indebtedness incurred by the Company
or, if it constitutes Permitted PEDFA Bond Indebtedness, Indebtedness
incurred by the Company and/or the Xxxxxx Subsidiary and/or guaranteed
by the Company and/or the Guarantors, the net proceeds of which are
used to refinance, extend, renew, replace, defease or refund
Indebtedness evidenced by or in support of the Xxxxxx Tax-Exempt Bonds;
provided, that, in the case of Permitted PEDFA Bond Indebtedness, the
assets of the Xxxxxx Subsidiary (other than Investments in the Company
pledged to secure such Permitted PEDFA Bond Indebtedness and proceeds
from the issuance of Permitted PEDFA Bond Indebtedness that secures
Permitted PEDFA Bond Indebtedness) shall remain free of all Liens
securing Indebtedness, except Permitted Prior Liens and Liens held by
the Collateral Trustee as security for the Parity Secured Debt;
(5) [Reserved];
(6) [Reserved];
(7) Permitted Refinancing Indebtedness, the net proceeds of
which are used to refinance Parity Secured Debt; and
(8) any other Indebtedness incurred by the Company if (A) when
it was incurred, the incurrence of such Indebtedness by the Company was
permitted by this Supplemental Indenture and (B) on the day such
Indebtedness was incurred, after giving effect to such incurrence and
the application of the proceeds from, and the creation of Liens to
secure, such Indebtedness, the Consolidated Senior Leverage Ratio was
not greater than 3.0 to 1.0;
provided that each category of Indebtedness described above:
(1) must be guaranteed by any of the Restricted Subsidiaries
that, on the date of incurrence of such Indebtedness, is obligated as a
Guarantor under a Note Guarantee of the Notes;
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(2) must not be subordinated in right of payment or in respect
of the application of the proceeds of the Collateral Trustee's Liens on
the Collateral to any other Indebtedness of the Company or any
Guarantor (whether or not such other Indebtedness is part of the same
series of Indebtedness), except in accordance with the Order of
Application; and
(3) is governed by an indenture or agreement that appoints a
Secured Debt Representative and includes an Intercreditor Confirmation.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation was in effect on
July 1, 2003; provided that clause (3) of such definition will be disregarded.
"Specified Junior Securities" means subordinated debt securities
issued by the Company that:
(1) are subordinated in right of payment in full to the Notes;
(2) have a final maturity date occurring at least 91 days
after the final maturity date of the Notes and have a Weighted Average
Life to Maturity at least 91 days longer than the Weighted Average Life
to Maturity of the Notes;
(3) are not guaranteed by any Subsidiary of the Company except
for any guarantee by a Guarantor that is contractually subordinated in
right of payment to the prior payment in full in cash to the Note
Guarantees of the Notes; and
(4) are not convertible into any other securities except
Equity Interests of the Company (other than Disqualified Stock).
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company, which are substantially similar to those in existence
on the Issue Date or are otherwise reasonably customary in an accounts
receivable or equipment securitization transaction, in each case, as determined
by the Company.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the Issue Date, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Supplemental Indenture" means this First Supplemental Indenture,
dated as of the Issue Date, by and among the Company, the Guarantors and the
Trustee, governing the Notes, as amended, supplemented or otherwise modified
from time to time in accordance with the Base Indenture and the terms hereof.
"Texas Genco" means Texas Genco Holdings, Inc., a Texas corporation
and a 100% owner of Texas Xxxxx, XX, a Texas limited partnership.
"Texas Genco Intercreditor Agreement" means the Intercreditor Agreement
dated as of July 1, 2003 among Texas Xxxxx, X.X., Bank of America, N.A. and the
Collateral Trustee.
"Unrestricted Subsidiary" means (i) RE Retail Receivables, LLC, but
only to the extent that it continues to be a Securitization Entity, and (ii) any
Subsidiary of the Company or any successor to any of
31
them that is designated by the Board of Directors of the Company as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent
that such Subsidiary:
(1) has no Indebtedness other than Indebtedness that is
Non-Recourse to the Company and its Restricted Subsidiaries;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company; and
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (A) to subscribe for additional Equity Interests or (B) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
preceding conditions and was permitted by the provisions of Section 4.07 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Supplemental Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under the provisions of Section 4.09
hereof, the Company shall be in default of such Section. The Board of Directors
of the Company may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation will be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (1) such Indebtedness is permitted to be incurred
under the provisions of Section 4.09 hereof, calculated on a pro forma basis as
if such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence following
such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (A) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (B) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
Section 1.02 Other Definitions.
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Defined in
Term Section
---- -------
"Affiliate Transaction"............................................................. 4.11
"Asset Sale Offer".................................................................. 4.10
"Change of Control Offer"........................................................... 4.15
"Change of Control Payment"......................................................... 4.15
"Change of Control Payment Date".................................................... 4.15
"Covenant Defeasance"............................................................... 8.03
"Event of Default".................................................................. 6.01
"Excess Proceeds"................................................................... 4.10
"incur"............................................................................. 4.09
"Indemnitee"........................................................................ 10.07
"Legal Defeasance".................................................................. 8.02
"Offer Amount"...................................................................... 3.09
"Offer Period"...................................................................... 3.09
"Permitted Debt".................................................................... 4.09
"Purchase Date"..................................................................... 3.09
"Restricted Payments"............................................................... 4.07
"Shared Collateral"................................................................. 10.02
"Termination Date".................................................................. 4.23
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Supplemental Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this
Supplemental Indenture.
The following TIA terms used in this Supplemental Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.
All other terms used in this Supplemental Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
under the TIA have the meanings so assigned to them. All other capitalized terms
used herein and not otherwise defined shall have the meanings provided in the
Base Indenture.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
33
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
(7) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time; and
(8) references to sections of the Indenture refer to sections
of this Supplemental Indenture.
Section 1.05 Relationship with Base Indenture.
The terms and provisions contained in the Base Indenture shall
constitute, and are hereby expressly made, a part of this Supplemental Indenture
and the Company, the Guarantors and the Trustee, by their execution and delivery
of this Supplemental Indenture, expressly agree to such terms and provisions and
to be bound thereby. However, to the extent any provision of the Base Indenture
conflicts with the express provisions of this Supplemental Indenture, the
provisions of this Supplemental Indenture shall govern and be controlling.
The Trustee accepts the amendment of the Base Indenture effected by
this Supplemental Indenture and agrees to execute the trust created by the Base
Indenture as hereby amended, but only upon the terms and conditions set forth in
the Indenture, including the terms and provisions defining and limiting the
liabilities and responsibilities of the Trustee in the performance of the trust
created by the Base Indenture, and without limiting the generality of the
foregoing, the Trustee shall not be responsible in any manner whatsoever for or
with respect to any of the recitals or statements contained herein, all of which
recitals or statements are made solely by the Company and the Guarantors, or for
or with respect to (1) the validity or sufficiency of this Supplemental
Indenture or any of the terms or provisions hereof, (2) the proper authorization
hereof by the Company and the Guarantors, (3) the due execution hereof by the
Company and the Guarantors or (4) the consequences (direct or indirect and
whether deliberate or inadvertent) of any amendment herein provided for, and the
Trustee makes no representation with respect to any such matters.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes shall be issued in registered global form
without interest coupons. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. The Company shall furnish any such notations, legends or endorsements
to the Trustee in writing. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $2,000 and integral
multiples of $1,000 in excess of $2,000.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of the Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Supplemental
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Note conflicts with the express
provisions of the Base Indenture, the provisions of the Note shall govern and be
controlling and to the extent any provision of
34
the Note conflicts with the express provisions of this Supplemental Indenture,
the provisions of this Supplemental Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend
thereon). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon). Each
Global Note shall represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time as reflected in the records of the
Trustee and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. The Trustee's records shall be noted to
reflect the amount of any increase or decrease in the aggregate principal amount
of outstanding Notes represented thereby, in accordance with instructions given
by the Holder thereof as required by Section 2.06 hereof.
Section 2.02 Execution and Authentication.
One Officer must sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Supplemental Indenture.
The Trustee shall, upon receipt of a Company Order, authenticate Notes
for original issue under this Supplemental Indenture, including any Additional
Notes issued pursuant to Section 2.13 hereof. The aggregate principal amount of
Notes outstanding at any time may not exceed the aggregate principal amount of
Notes authorized for issuance by the Company pursuant to one or more Company
Orders, except as provided in Section 306 of the Base Indenture.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Supplemental Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders, the
Company or an Affiliate of the Company.
Section 2.03 Reserved.
Section 2.04 Reserved.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Securities Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
35
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes shall be exchanged
by the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary;
(2) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee; or
(3) there has occurred and is continuing a Default or Event of
Default with respect to the Notes.
Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes shall be issued in such names and in any approved
denominations as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 304
and 306 of the Base Indenture. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.06 hereof or Section 304 or 306 of the Base Indenture, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) and (d) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Supplemental Indenture and the Applicable Procedures. Transfers of beneficial
interests in the Global Notes also will require compliance with either
subparagraph (1) or (2) below, as applicable, as well as one or more of the
other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in a
Global Note. No written orders or instructions shall be required to be
delivered to the Securities Registrar to effect the transfers described
in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Securities Registrar both:
(A) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be
transferred or exchanged; and
(B) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase.
36
Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this
Supplemental Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(g) hereof.
(c) Transfer or Exchange of Beneficial Interests in Global Notes for
Definitive Notes.
(1) If any holder of a beneficial interest in a Global Note
proposes to exchange such beneficial interest for a Definitive Note or
to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of
the conditions set forth in Section 2.06(b)(2) hereof, the Trustee
shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and
the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note
in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(1)
shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
requests through instructions to the Securities Registrar from or
through the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests
in Global Notes.
A Holder of a Definitive Note may exchange such Note for a
beneficial interest in a Global Note or transfer such Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Definitive Note and increase or cause to be increased the aggregate
principal amount of one of the Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to the previous paragraph at a
time when a Global Note has not yet been issued, the Company shall
issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Global
Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
A Holder of Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of a Definitive Note.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Securities Registrar shall register
the transfer or exchange of Definitive Notes. Prior to such registration of
transfer or exchange, the requesting Holder must present or surrender to the
Securities Registrar the Definitive Notes duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Securities Registrar
duly executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting Holder must provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(f) Legends. A legend in substantially the following form will appear
on the face of all Global Notes issued under this Supplemental Indenture unless
specifically stated otherwise in the applicable provisions of this Supplemental
Indenture.
37
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE SUPPLEMENTAL
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE SUPPLEMENTAL INDENTURE, (2) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE SUPPLEMENTAL INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO
THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.09 OF THE BASE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF RELIANT ENERGY, INC.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(g) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 309 of the Base
Indenture. At any time prior to such cancellation, if any beneficial interest in
a Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
will be reduced accordingly and a notation will be made on the records
maintained by the Trustee or by the Depositary at the direction of the Trustee
to reflect such reduction; and if the beneficial interest is being exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note will be
increased accordingly and a notation will be made on the records maintained by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(h) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon receipt of an Authentication Order in
accordance with Section 2.02 or at the Securities Registrar's request.
(2) No service charge shall be made to a Holder of a Global
Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in
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connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to
Sections 3.06, 3.09, 4.10, 4.15 and 9.05 hereof and Section 304 of the
Base Indenture).
(3) The Securities Registrar shall not be required to register
the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Supplemental
Indenture, as the Global Notes or Definitive Notes surrendered upon
such registration of transfer or exchange.
(5) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to exchange any
Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(7) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Securities Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
Section 2.07 Reserved.
Section 2.08 Reserved.
Section 2.09 Reserved.
Section 2.10 Reserved.
Section 2.11 Reserved.
Section 2.12 Reserved.
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Section 2.13 Issuance of Additional Notes.
The Company shall be entitled, upon delivery of an Officer's
Certificate, Opinion of Counsel and Company Order, subject to its compliance
with Sections 4.09 and 4.12 hereof, to issue Additional Notes under this
Supplemental Indenture which shall have identical terms as the Initial Notes
issued on the Issue Date, other than with respect to the date of issuance and
issue price. The Initial Notes issued on the Issue Date and any Additional Notes
issued shall be treated as a single class for all purposes under this
Supplemental Indenture.
With respect to any Additional Notes, the Company shall set forth in a
resolution of its Board of Directors and an Officer's Certificate, a copy of
each which shall be delivered to the Trustee, the following information:
(a) the aggregate principal amount of such Additional Notes to
be authenticated and delivered pursuant to this Supplemental Indenture;
and
(b) the issue price, the issue date and the CUSIP number of
such Additional Notes.
Section 2.14 Designated Senior Debt.
For purposes of the Existing Convertible Notes Indenture, Notes issued
under this Supplemental Indenture will be deemed to be "Designated Senior Debt,"
as such term is defined in the Existing Convertible Notes Indenture.
Section 2.15 Reserved.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days (45 days in the case of a partial redemption) but not more than 60
days before a redemption date, an Officer's Certificate setting forth:
(1) the clause of this Supplemental Indenture pursuant to
which the redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select Notes for redemption or purchase on a pro rata basis among
all outstanding Notes or, if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed.
40
In the event of partial redemption by lot, the particular Notes to be
redeemed or purchased shall be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption by the Trustee from
the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in
excess of $2,000; except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not a multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Supplemental Indenture that apply to Notes called
for redemption also apply to portions of Notes called for redemption.
Section 3.03 Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to
a redemption date if the notice is issued in connection with a defeasance of the
Notes or a satisfaction and discharge of this Supplemental Indenture pursuant to
Article 8 or 13 of this Supplemental Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Supplemental Indenture pursuant to which the Notes called for
redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officer's Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
41
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or Purchase Date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption or purchase price of, accrued interest, and premium, if any, on
all Notes to be redeemed or purchased on that date. Promptly after the Company's
written request, the Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption or purchase price of,
accrued interest, and premium, if any, on, all Notes to be redeemed or
purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or Purchase Date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company shall issue and, upon receipt of an Company Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to December 15, 2007, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Supplemental Indenture at a redemption price of 106.750% of
the principal amount, plus accrued and unpaid interest to the redemption date,
with the net cash proceeds of one or more Equity Offerings of the Company;
provided that:
(1) at least 65% of the aggregate principal amount of Notes
issued under this Supplemental Indenture remains outstanding
immediately after the occurrence of such redemption (excluding Notes
held by the Company and its Subsidiaries); and
(2) the redemption occurs within 75 days of the date of the
closing of such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Company's option prior to December 15, 2009.
42
(c) On or after December 15, 2009, the Company may redeem all or a part
of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest on the Notes redeemed, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
December 15 of the years indicated below, subject to the rights of Holders on
the relevant record date to receive interest on the relevant interest payment
date:
Year Percentage
---- ----------
2009............................................................................. 103.375%
2010............................................................................. 102.250%
2011............................................................................. 101.125%
2012 and thereafter.............................................................. 100.000%
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an Asset Sale Offer, it shall follow the procedures
specified below.
The Asset Sale Offer shall be made to all Holders of Notes and all
holders of other Parity Secured Debt (other than Credit Agreement Debt)
containing provisions similar to those set forth in this Supplemental Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets. The Asset Sale Offer shall remain open for a period of at least 20
Business Days following its commencement and not more than 30 Business Days,
except to the extent that a longer period is required by applicable law (the
"Offer Period"). No later than three Business Days after the termination of the
Offer Period (the "Purchase Date"), the Company shall apply a portion of the
Excess Proceeds as calculated pursuant to the second sentence of Section 4.10(d)
hereof (the "Offer Amount") to the purchase of Notes and such other Parity
Secured Debt (on a pro rata basis, if applicable) or, if less than the Offer
Amount has been tendered, all Notes and other Indebtedness tendered in response
to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The notice
will contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the
terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer will remain open;
43
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in denominations
of $2,000, or integral multiples of $1,000 in excess of $2,000;
(6) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Company,
a Depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
(7) that Holders shall be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and other
Parity Secured Debt surrendered in connection with the Asset Sale Offer
exceeds the Offer Amount, the Company shall select the Notes and other
Parity Secured Debt to be purchased on a pro rata basis based on the
principal amount of Notes and such other Parity Secured Debt
surrendered (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $2,000, or integral
multiples of $1,000 in excess of $2,000, will be purchased); and
(9) that Holders whose Notes were purchased only in part will
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officer's Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on or as soon as
practicable after the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
44
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest will be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee or Securities Registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and the Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 1002 of
the Base Indenture.
Section 4.03 Reports.
(a) Whether or not required by the SEC's rules and regulations, so long
as any Notes are outstanding, the Company shall furnish to Holders, within the
time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to
be filed with the SEC on Forms 10-Q and 10-K if the Company were
required to file such reports; and
(2) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
45
All such reports shall be prepared in all material respects in
accordance with all of the rules and regulations applicable to such reports.
Each annual report on Form 10-K will include a report on the Company's
consolidated financial statements by the Company's certified independent
accountants. In addition, the Company shall file a copy of each of the reports
referred to in clauses (1) and (2) above with the SEC for public availability
within the time periods specified in the rules and regulations applicable to
such reports (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
reasonable request.
If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company shall
nevertheless continue filing the reports specified in clauses (1) and (2) of
this Section 4.03(a) with the SEC within the time periods specified above unless
the SEC will not accept such a filing. The Company agrees that it shall not take
any action for the purpose of causing the SEC not to accept any such filings.
If, notwithstanding the foregoing, the SEC will not accept the Company's filings
for any reason, the Company shall post the reports referred to in the preceding
paragraph on its website within the time periods that would apply if the Company
were required to file those reports with the SEC. The Company shall at all times
comply with TIA Section 314(a).
(b) In addition, the Company and the Guarantors agree that, for so long
as any Notes remain outstanding, at any time they are not required to file the
reports required by the preceding paragraphs with the Commission, they shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officer's Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under the Indenture and the Security Documents, and further stating,
as to each such Officer signing such certificate, that to the best of his or her
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in the Indenture and the Security Documents and is not in
default in the performance or observance of any of the terms, provisions and
conditions of the Indenture or the Security Documents (or, if a Default or Event
of Default has occurred, describing all such Defaults or Events of Default of
which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. The
Company's fiscal year ends December 31st.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof in so far as such provisions
relate to financial and accounting matters or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
46
(c) So long as any of the Notes are outstanding, the Company shall
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officer's Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that they shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of the Indenture; and the
Company and each of the Guarantors (to the extent that they may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenant
that they shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Company or of any Guarantor that is contractually
subordinated to the Notes or any Note Guarantee (excluding any
intercompany Indebtedness, intercompany receivables or intercompany
advances between or among any of the Company and any of its Restricted
Subsidiaries and Permitted PEDFA Bond Indebtedness), except a payment
of interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such
Restricted Payment:
47
(1) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment;
and
(2) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a) hereof; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after July 1, 2003 (excluding Restricted
Payments permitted by clauses (2) through (12) of paragraph (b) below),
is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the
beginning of the first full fiscal quarter since July 1, 2003
to the end of the Company's most recently ended fiscal quarter
for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such
deficit), plus
(B) 100% of the aggregate net cash proceeds received
by the Company since July 1, 2003 as a contribution to its
common equity capital or surplus or from the issue or sale of
Equity Interests of the Company (other than Disqualified
Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable
debt securities of the Company that have been converted into
or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company), plus
(C) to the extent that any Restricted Investment that
was made after July 1, 2003 is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash
return with respect to such Restricted Investment (less the
cost of disposition, if any) and (ii) the initial amount of
such Restricted Investment, plus
(D) 50% of any cash received by the Company or a
Restricted Subsidiary of the Company after July 1, 2003 from
an Unrestricted Subsidiary of the Company, to the extent that
such cash was not otherwise included in Consolidated Net
Income of the Company for such period and did not result in an
increase in the amount available for future Permitted
Investments, plus
(E) to the extent that any Unrestricted Subsidiary of
the Company is redesignated as a Restricted Subsidiary after
July 1, 2003, the Fair Market Value of the Company's
Investment in such Subsidiary as of the date of such
redesignation.
(b) The provisions of Section 4.07(a) hereof shall not prohibit:
(1) the payment of any dividend within 60 days after the date
of declaration of the dividend, if at the date of declaration the
dividend payment would have complied with the provisions of this
Supplemental Indenture;
(2) so long as no Default has occurred and is continuing or
would be caused thereby, the making of any Restricted Payment in
exchange for, or out of the net cash proceeds of, the
48
substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, Equity Interests of the Company (other than
Disqualified Stock) or of the substantially concurrent contribution of
common equity capital or surplus to the Company, provided that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (3)(B) of Section 4.07(a) hereof;
(3) the defeasance, redemption, repurchase or other
acquisition of Indebtedness of the Company or any Guarantor that is
subordinated to the Notes or to any Note Guarantee with the net cash
proceeds from a substantially concurrent incurrence of Permitted
Refinancing Indebtedness;
(4) the payment of any dividend (or, in the case of any
partnership or limited liability company, any similar distribution) by
a Restricted Subsidiary of the Company to the holders of its Equity
Interests on a pro rata basis;
(5) so long as no Default has occurred and is continuing or
would be caused thereby, (A) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the
Company or any Restricted Subsidiary of the Company in connection with
any management equity subscription agreement, stock option agreement,
shareholders' agreement, severance agreement, employee benefit plan or
agreement or similar agreement or (B) the repurchase for value of any
Equity Interests of the Company in the open market to satisfy stock
options issued by the Company that are outstanding; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests after the Issue Date may not exceed $25.0
million in any calendar year (or the pro rata portion thereof for the
calendar year 2004);
(6) the repurchase of Equity Interests deemed to occur upon
the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options;
(7) the purchase by the Company of fractional shares upon
conversion of any securities of the Company into Equity Interests of
the Company;
(8) the declaration and payment of dividends (A) to holders of
any class or series of Disqualified Stock of the Company or any
Restricted Subsidiary of the Company issued on or after the Issue Date
in accordance with the Fixed Charge Coverage test set forth in Section
4.09(a) hereof;
(9) upon the occurrence of a Change of Control and after the
completion of the offer to repurchase the Notes pursuant to the
provisions of Section 4.15 hereof (including the purchase of all Notes
tendered), any purchase, defeasance, retirement, redemption or other
acquisition of Capital Stock or Indebtedness that is contractually
subordinated to the Notes or any Note Guarantee required under the
terms of such Capital Stock or Indebtedness as a result of such Change
of Control;
(10) the transactions with any Person (including any Affiliate
of the Company) set forth in clauses (1) and (4) of Section 4.11(b)
hereof and the funding of any obligations in connection therewith;
49
(11) the issuance of Equity Interests of the Company (other
than Disqualified Stock) for other Equity Interests of the Company in
connection with any rights offering and payments for the redemption of
fractional shares in connection with any rights offering; and
(12) so long as no Default has occurred and is continuing or
would be caused thereby, additional Restricted Payments in an aggregate
amount not to exceed $100.0 million since July 1, 2003.
The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
For purposes of determining compliance with this Section 4.07, in the
event that a Restricted Payment meets the criteria of more than one of the types
of Restricted Payments described in the above clauses, the Company, in its sole
discretion, may order and classify, and from time to time may reorder and
reclassify, such Restricted Payment if it would have been permitted at the time
such Restricted Payment was made and at the time of any such reclassification.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof shall not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements as in effect on the Issue Date and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those
agreements, provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or
refinancings are not materially more restrictive, taken as a whole,
with respect to such dividend and other payment restrictions than those
contained in those agreements on the Issue Date as reasonably
determined by the Company or such Restricted Subsidiary;
(2) this Supplemental Indenture, the Notes, the Note
Guarantees and the Xxxxxx Guarantees;
(3) applicable law, rule, regulation or order;
(4) [Reserved];
50
(5) Indebtedness incurred by REMA pursuant to clause (4) of
Section 4.09(b) hereof;
(6) Indebtedness incurred by the Xxxxxx Subsidiary consisting
of Permitted PEDFA Bond Indebtedness or Indebtedness evidenced by or in
support of the Xxxxxx Tax-Exempt Bonds pursuant to clause (5) of
Section 4.09(b) hereof;
(7) [Reserved];
(8) [Reserved];
(9) customary non-assignment provisions in contracts,
agreements, leases, permits and licenses entered into or issued in the
ordinary course of business;
(10) purchase money obligations for property acquired in the
ordinary course of business and Capital Lease Obligations that impose
restrictions on the property purchased or leased of the nature
described in clause (3) of Section 4.08(a) hereof;
(11) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending the sale or other disposition;
(12) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced, as reasonably determined by the Company
or such Restricted Subsidiary;
(13) Permitted Liens that limit the right of the debtor to
dispose of the assets subject to such Liens;
(14) provisions limiting or prohibiting the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements entered into (i) in the ordinary course of
business or (ii) with the approval of the Company's or the Restricted
Subsidiary's Board of Directors or chief financial officer, which
limitation or prohibition is applicable only to the assets that are the
subject of such agreements;
(15) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
(16) any Purchase Money Note or other Indebtedness or any
contractual requirements of a Securitization Entity in connection with
a Qualified Securitization Transaction; provided that such restrictions
apply only to such Securitization Entity;
(17) restrictions or conditions contained in any trading,
netting, operating, construction, service, supply, purchase, sale or
similar agreement to which the Company or any Restricted Subsidiary of
the Company is a party entered into in the ordinary course of business;
provided that such agreement prohibits the encumbrance of solely the
property or assets of the Company or such Restricted Subsidiary that
are the subject of such agreement, the payment rights arising
thereunder and/or the proceeds thereof and not to any other asset or
property of the Company or such Restricted Subsidiary or the assets or
property of any other Restricted Subsidiary;
51
(18) Indebtedness of a Restricted Subsidiary of the Company
existing at the time it became a Restricted Subsidiary if such
restriction was not created in connection with or in anticipation of
the transaction or series of transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by
the Company; and
(19) with respect to clause (3) of Section 4.08(a) hereof
only, restrictions encumbering property at the time such property was
acquired by the Company or any of its Restricted Subsidiaries, so long
as such restrictions relate solely to the property so acquired and were
not created in connection with or in anticipation of such acquisition.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur
Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least 2.0 to
1, determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock or preferred stock had been issued, as the case may be, at
the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence (A) by the Company and the guarantee by the
Guarantors of additional Indebtedness and letters of credit under
Credit Facilities and (B) by Securitization Entities of Indebtedness in
Qualified Securitization Transactions in an aggregate principal amount
at any one time outstanding under this clause (1) (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and its Restricted Subsidiaries
thereunder), including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to
this clause (1), not to exceed the greater of:
(a) $3.0 billion; or
(b) $3.73 billion less the sum, without duplication,
of:
(i) the aggregate amount of all repayments,
optional or mandatory, of the principal of any term
Indebtedness under a Credit Facility (other than
repayments under Credit Facilities of Excluded
Subsidiaries, REMA and its Subsidiaries or the Xxxxxx
Subsidiary ) that have been made by the Company or
any of its Restricted Subsidiaries since the Issue
Date;
(ii) the aggregate amount, without
duplication, of all commitment reductions with
respect to any revolving credit borrowings under a
Credit Facility that have been made by the Company or
any of its Restricted Subsidiaries (other
52
than Credit Facilities of Excluded Subsidiaries, REMA
and its Subsidiaries or the Xxxxxx Subsidiary) since
the Issue Date; and
(iii) the aggregate principal amount of
Indebtedness incurred pursuant to clause (5) of this
Section 4.09(b) (including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to such clause
(5)) that is at the time outstanding;
(2) [Reserved];
(3) [Reserved];
(4) the incurrence by REMA and its Subsidiaries of additional
Indebtedness and letters of credit under Credit Facilities of REMA or
any of its Subsidiaries in an aggregate principal amount at any one
time outstanding under this clause (4) (with letters of credit being
deemed to have a principal amount equal to the maximum potential
liability of REMA and its Subsidiaries thereunder), including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (4), not to
exceed $60.0 million;
(5) the incurrence by the Company and/or the Xxxxxx Subsidiary
of (A) Permitted PEDFA Bond Indebtedness (including the Xxxxxx Notes)
and/or the guarantee thereof by the Company and/or the Guarantors
(including the Xxxxxx Guarantees) or (B) Indebtedness evidenced by or
in support of the Xxxxxx Tax-Exempt Bonds, in an aggregate principal
amount at any one time outstanding under this clause (5), including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (5), without
duplication, not to exceed $600.0 million less the aggregate amount of
all repayments, optional or mandatory, of the principal of any
Indebtedness incurred pursuant to this clause (5) that have been made
by the Company and/or the Guarantors and/or the Xxxxxx Subsidiary since
the Issue Date;
(6) [Reserved];
(7) [Reserved];
(8) the issuance of Specified Junior Securities by the
Company, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this
clause (8); provided that at least 50% of the net proceeds of such
issuance (other than proceeds that are used by the Company or any
Guarantor to acquire Permitted ERCOT Assets) are applied to the
repayment of term Indebtedness under the Company's Credit Facilities;
provided, further, that if there is any change in the terms of such
Specified Junior Securities that results in such securities no longer
meeting all of the requirements of the definition of "Specified Junior
Securities," then such change will be deemed to constitute an
incurrence of Indebtedness by the Company that was not permitted by
this clause (8);
(9) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness, including the Existing
Convertible Notes, the Existing Notes, Reliant Energy Channelview's
Indebtedness, Orion Power Holdings, Inc.'s Senior Notes due 2010 and
Indebtedness under the REMA Lease, and including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (9);
53
(10) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees
issued on the Issue Date and the incurrence by any Restricted
Subsidiary of the Company of any other Note Guarantee of the Notes,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(10);
(11) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price or cost of design, construction, installation or improvement of
property, plant or equipment used in the business of the Company or any
of its Restricted Subsidiaries, in an aggregate principal amount,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(11), not to exceed $100.0 million at any one time outstanding;
(12) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
to be incurred under Section 4.09(a) hereof or clauses (1), (4), (5),
(8), (9), (10), (11), (12) or (21) of this Section 4.09(b);
(13) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on
such Indebtedness and (i) the payee is not the Company or a Guarantor
or (ii) such Indebtedness constitutes Excluded Securities, such
Indebtedness (except Permitted PEDFA Bond Indebtedness) must be
expressly subordinated to the prior payment in full in cash of all
Obligations then due with respect to the Notes, in the case of the
Company, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary of the Company and
(ii) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary of the
Company (except transfers to the Collateral Trustee to secure Secured
Obligations) shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as
the case may be, that was not permitted by this clause (13);
(14) the incurrence by any Guarantor of any Guarantee of
Parity Secured Debt or any other Obligation that guarantees, secures or
supports, Equally and Ratably, all of the Parity Secured Debt and
Parity Secured Obligations;
(15) the issuance by any of the Company's Restricted
Subsidiaries to the Company or to any of its Restricted Subsidiaries of
shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity
Interests that results in any such preferred stock being held by a
Person other than the Company or a Restricted Subsidiary of the
Company; and
54
(b) any sale or other transfer of any such preferred
stock to a Person that is not either the Company or a Restricted
Subsidiary of the Company,
shall be deemed, in each case, to constitute an issuance of such preferred stock
by the Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (15);
(16) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations in the ordinary course of business
and not for speculative purposes;
(17) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of workers' compensation
claims, self-insurance obligations, bankers' acceptances, performance
and surety bonds provided by the Company or a Restricted Subsidiary in
the ordinary course of business;
(18) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds, so long as such
Indebtedness is covered within five business days;
(19) the incurrence of Indebtedness arising from agreements of
the Company or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or Equity Interests of a Subsidiary; provided that the maximum
aggregate liability in respect of all such Indebtedness shall at no
time exceed the gross proceeds (including non-cash proceeds) actually
received by the Company and/or such Restricted Subsidiary in connection
with such disposition;
(20) the Guarantee by the Company or any Guarantor of
Indebtedness that was permitted to be incurred by Section 4.09(a)
hereof or clauses (8), (11) or (21) of this Section 4.09(b); and
(21) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding
pursuant to this clause (21), including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (21), not to exceed $500.0 million
(which may, but need not, be incurred under a Credit Facility).
The Company shall not, and shall not permit any Guarantor to, incur any
Indebtedness (including Permitted Debt) that is contractually subordinated in
right of payment to any other Indebtedness of the Company or that Guarantor
(except Permitted PEDFA Bond Indebtedness) unless such Indebtedness is also
contractually subordinated in right of payment to the Notes or the applicable
Note Guarantee on substantially identical terms; provided, however, that no
Indebtedness of the Company shall be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the Company solely by virtue of
being unsecured or by virtue of being secured on a junior basis.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (21) of
Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section
4.09(a) hereof, the Company shall be permitted to classify such item of
Indebtedness on the date of its incurrence, or later reclassify from time to
time all or a portion of such item of Indebtedness, in any manner that complies
with this Section 4.09. Indebtedness under Credit Facilities outstanding on the
Issue Date shall initially be deemed to have been incurred on such date in
reliance on the exception
55
provided by clauses (1), (4) and (9) of Section 4.09(b) hereof, as applicable,
and all Permitted PEDFA Bond Indebtedness and other Indebtedness evidenced by or
in support of the Xxxxxx Tax-Exempt Bonds outstanding on the Issue Date shall
initially be deemed to have been incurred on such date in reliance on the
exception provided by clause (5) of Section 4.09(b) hereof. The accrual of
interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock shall not be deemed to
be an incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this Section 4.09; provided, in each such case, that the amount
thereof is included in Fixed Charges of the Company as accrued. Notwithstanding
any other provision of this Section 4.09, the maximum amount of Indebtedness
that the Company or any Restricted Subsidiary may incur pursuant to this Section
4.09 shall not be deemed to be exceeded solely as a result of fluctuations in
exchange rates or currency values.
Section 4.10 Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets or Equity Interests issued
or sold or otherwise disposed of (as reasonably determined by the
Company or such Restricted Subsidiary); and
(2) at least 75% of the consideration therefor received in the
Asset Sale by the Company or such Restricted Subsidiary is in the form
of cash or Cash Equivalents. For purposes of this provision, each of
the following shall be deemed to be cash:
(a) any liabilities, as shown on the Company's most
recent consolidated balance sheet, of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated to the Notes or any Note Guarantee) that
are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability;
(b) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such
transferee that are converted (by sale or other disposition) by the
Company or such Restricted Subsidiary into cash, to the extent of the
cash received in that conversion within 60 days; and
(c) reasonable reserves for indemnity obligations and
purchase price adjustments funded in cash or held back by the
purchaser.
(b) Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, other than Excluded Proceeds, the Company (or the applicable Restricted
Subsidiary, as the case may be) may apply such Net Proceeds:
(1) in the case of a sale of assets of a Restricted Subsidiary
of a Company that is not a Guarantor, to repay Indebtedness of that
Restricted Subsidiary, or, in the case of a sale of assets of an
Excluded Orion Power Subsidiary, to repay Indebtedness of Orion Power
Holdings, Inc. and, in each case, correspondingly reduce commitments
with respect thereto;
56
(2) in the case of a sale of assets pledged to secure
Indebtedness (including Capital Lease Obligations), other than Secured
Debt, to repay the Indebtedness secured by those assets; or
(3) in the case of any Asset Sale:
(A) to acquire all or substantially all of the assets
of, or all or a majority of the Voting Stock of, a Person
engaged in a Permitted Business provided that such Person
becomes a Guarantor;
(B) to make a capital expenditure; or
(C) to acquire other assets that are not classified
as current assets under GAAP and that are used or useful in a
Permitted Business.
(c) If any Net Proceeds from any sale of Shared Collateral or Excluded
Securities or from any issuance of Equity Securities that constitute an Asset
Sale are required pursuant to the terms of any of the Secured Debt Documents to
be deposited into a cash collateral or similar account, then such Net Proceeds
shall be deposited into a Cash Collateral Account as part of the Shared
Collateral. As to any other Net Proceeds, pending final application of such Net
Proceeds in accordance with this Section 4.10, the Company may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by this Supplemental Indenture.
(d) Any Net Proceeds from Asset Sales (other than Excluded Proceeds)
that are not applied or invested as provided in Section 4.10(b) hereof shall
constitute "Excess Proceeds," except that if any portion of any Net Proceeds
from an Asset Sale (other than Excluded Proceeds) is required at any time
pursuant to any Secured Debt Document to be applied to the mandatory prepayment,
redemption, repurchase or purchase of Parity Secured Debt or to provide cash
collateral for letters of credit issued under Parity Secured Debt, then all of
the Net Proceeds from that Asset Sale (other than Excluded Proceeds) will be
deemed to be "Excess Proceeds" at that time. When the aggregate amount of Excess
Proceeds exceeds $25.0 million, within five days thereof, the Company shall make
an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness (including the Existing 2010 Notes and the Existing 2013 Notes)
that is pari passu with the Notes (other than Credit Agreement Debt and the
Xxxxxx Guarantees)(and so long as the Notes are secured, Equally and Ratably
secured with the Notes) containing provisions similar to those set forth in this
Supplemental Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets, to purchase (or repay, prepay or redeem, as
applicable) an aggregate principal amount of Notes and such other pari passu
Indebtedness that may be purchased (or repaid, prepaid or redeemed) equal to the
aggregate Excess Proceeds multiplied by a fraction, the numerator of which
consists of (A) the aggregate principal amount then outstanding on the Notes and
all such other pari passu Indebtedness containing such provisions (not including
Credit Agreement Debt) and the denominator of which is (B) the sum of (i) such
aggregate amount in the preceding clause (A) and (ii) the Credit Agreement Debt
then outstanding (an "Asset Sale Offer"). The offer price in any Asset Sale
Offer will be equal to 100% of principal amount plus accrued and unpaid interest
to the date of purchase, and shall be payable in cash. If any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use such
Excess Proceeds for any purpose not otherwise prohibited by this Supplemental
Indenture. If the aggregate principal amount of Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Company shall select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal amount
of Notes and such other pari passu Indebtedness tendered. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(e) [Reserved].
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(f) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Sections 3.09 or 4.10 of this Supplemental Indenture, the Company shall comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under those provisions of this Supplemental
Indenture by virtue of such conflict.
Section 4.11 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less
favorable (as reasonably determined by the Company) to the Company or
the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $25.0 million, a resolution of the
Board of Directors set forth in an Officer's Certificate
certifying that such Affiliate Transaction complies with this
Section 4.11(a) and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the
Board of Directors; and
(B) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $35.0 million, an opinion as to the
fairness to the Company or such Restricted Subsidiary of such
Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of
national standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of Section
4.11(a) hereof:
(1) any employment agreement or director's engagement
agreement, employee benefit plan, officer and director indemnification
agreement or any similar arrangement entered into by the Company or any
of its Restricted Subsidiaries in the ordinary course of business or
approved by the relevant Board of Directors;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries;
(3) transactions with a Person that is an Affiliate of the
Company solely because the Company owns, directly or through a
Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(4) payment of reasonable directors' fees to Persons who are
not otherwise Affiliates of the Company;
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(5) any issuance of Equity Interests (other than Disqualified
Stock) of the Company to Affiliates of the Company;
(6) Restricted Payments that do not violate the provisions of
Section 4.07 hereof;
(7) transactions effected as part of a Qualified
Securitization Transaction;
(8) loans or advances to employees in the ordinary course of
business not to exceed $10.0 million in the aggregate outstanding at
any one time;
(9) any agreement, instrument or arrangement as in effect as
of the Issue Date or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in
any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any
material respect than the original agreement as in effect on the Issue
Date as determined by the Company;
(10) any pro rata distribution (including a rights offering)
to all holders of a class of Equity Interests or Indebtedness of the
Company or any of its Restricted Subsidiaries, including Persons who
are Affiliates of the Company or any of its Restricted Subsidiaries;
and
(11) any transaction involving sales of electric capacity,
energy, ancillary services, transmission services and products, steam,
emissions credits, fuel, fuel transportation and fuel storage in the
ordinary course of business on terms that are no less favorable (as
reasonably determined by the Company) to the Company or the relevant
Restricted Subsidiary of the Company than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person.
Section 4.12 Liens.
The Company shall not and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind on any asset
now owned or hereafter acquired, except Permitted Liens.
Section 4.13 Line of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Subsidiaries
taken as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any
of its
59
Subsidiaries, if (a) the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Company and its Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the
Notes and (b) if a Subsidiary is to be dissolved, such Subsidiary has
no assets.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) of
each Holder's Notes at a purchase price equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest on the Notes repurchased, if
any, to the date of purchase (the "Change of Control Payment"). Within thirty
days following any Change of Control, the Company shall mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Notes tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which date will
be no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to
the Change of Control Offer will cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant
to a Change of Control Offer shall be required to surrender the Notes,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his election
to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be
equal to $2,000 in principal amount or an integral multiple of $1,000
in excess of $2,000.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Section 4.15 of this Supplemental Indenture, the Company shall
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.15 by virtue of
such conflict.
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(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officer's Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
No Notes of $2,000 or less can be repurchased in part. The Paying Agent
shall promptly mail to each Holder of Notes properly tendered the Change of
Control Payment for such Notes, and the Trustee upon receipt of an Company Order
shall promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 hereof and purchases all Notes properly tendered and not withdrawn
under the Change of Control Offer or (2) notice of redemption has been given
pursuant to Section 3.07 hereof unless and until there is a default in payment
of the applicable redemption price.
Section 4.16 Limitation on Sale and Leaseback Transactions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(1) the Company or that Restricted Subsidiary, as applicable,
could have incurred Indebtedness in an amount equal to the Attributable
Debt relating to such sale and leaseback transaction under the
provisions of Section 4.09 hereof;
(2) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the Fair Market Value of the property
that is the subject of that sale and leaseback transaction; and
(3) if such sale and leaseback transaction constitutes an
Asset Sale, the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, the provisions of Section 4.10
hereof.
The preceding restrictions shall not apply to a sale and leaseback
transaction entered into between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries of the Company.
Section 4.17 Payments for Consent.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any monetary
consideration to or for the benefit of any Holder for or as an inducement to any
consent under or waiver or amendment of any of the terms or provisions of the
61
Indenture, the Notes or the Note Guarantees unless such consideration is offered
to be paid and is paid to all Holders that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.18 Additional Note Guarantees.
If after the Issue Date the Company or any of its Restricted
Subsidiaries acquires or creates another Domestic Subsidiary that is required to
become a guarantor of any borrowings under the Credit Agreement or any other
Indebtedness of the Company, or any Excluded Subsidiary ceases to be an Excluded
Subsidiary, then that Domestic Subsidiary or former Excluded Subsidiary shall
become a Guarantor and (A) execute a Note Guarantee substantially in the form as
Exhibit B hereto, a supplemental indenture substantially in the form as Exhibit
C hereto and a joinder agreement to the Security Documents in form and substance
reasonably satisfactory to the Trustee providing that such Subsidiary shall
become a Guarantor under this Supplemental Indenture and a party as grantor to
the Security Documents and (B) deliver an Opinion of Counsel satisfactory to the
Trustee, in each case, within 30 Business Days of the date on which it was
required to become a guarantor of any borrowings under the Credit Agreement or
any other Indebtedness of the Company, or any Excluded Subsidiary ceases to be
an Excluded Subsidiary.
Section 4.19 Changes in Covenants When Notes Rated Investment Grade.
If on any date following the Issue Date:
(a) the rating assigned to the Notes by either S&P or Xxxxx'x is an
Investment Grade Rating, and
(b) no Default or Event of Default shall have occurred and be
continuing,
then, beginning on that day and subject to the provisions of the
following paragraph, the provisions of Sections 4.07, 4.08, 4.09, 4.10, 4.11,
4.20 and clause (4) of Section 5.01 hereof shall be suspended.
Notwithstanding the foregoing, if the ratings assigned by both such
rating agencies with respect to the Notes should subsequently decline to below
an Investment Grade Rating, the provisions of Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.20 and clause (4) of Section 5.01 hereof shall be reinstituted as of and
from the date of such rating decline. The provisions of Section 4.07 hereof
shall be interpreted as if they had been in effect since July 1, 2003 except
that no default will be deemed to have occurred solely by reason of a Restricted
Payment made or declared (and later made) in accordance with the provisions of
Section 4.07(b)(1) while the provisions of such Section were suspended.
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated shall be deemed to
be an Investment made as of the time of the designation and shall reduce the
amount available for Restricted Payments under Section 4.07(a) hereof or under
the definition of Permitted Investments, as determined by the Company. That
designation shall only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary.
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Section 4.21 Reserved.
Section 4.22 Insurance.
The Company and the Guarantors shall maintain with financially sound
and reputable insurance companies, insurance on their property and assets
(including the Shared Collateral) in at least such amounts, with such
deductibles and against at least such risks as is customary for companies of the
same or similar size engaged in the same or similar businesses as those of the
Company and the Guarantors and furnish to the Collateral Trustee, upon written
request, full information as to its property and liability insurance carriers.
Holders of Note Obligations, as a class, will be named as an additional insured
on all liability insurance policies of the Company and its Restricted
Subsidiaries and the Collateral Trustee will be named as loss payee on all
property and casualty insurance policies of each such person.
Section 4.23 Subordination of Intercompany Indebtedness.
(a) Each of the Company and the Guarantors hereby agrees that any
intercompany Indebtedness or other intercompany receivables, intercompany
payables or intercompany advances directly or indirectly made by or owed to the
Company or such Guarantor by any Guarantor or the Company, as applicable, of
whatever nature at any time outstanding shall be subordinate and subject in
right of payment to the prior indefeasible payment in full in cash of the Note
Obligations. Each of the Company and the Guarantors hereby agrees that it shall
not become obligated or otherwise liable for any intercompany Indebtedness, or
other intercompany receivable, intercompany payable or intercompany advance that
is owed to any Person other than the Company or any Guarantor, unless such
Person agrees that such Indebtedness, receivable, payable or advance (as
applicable) is completely subordinated to the Note Obligations and subject in
right of payment to the prior indefeasible payment in full in cash of the Note
Obligations, and that no payment on any such Indebtedness, receivable, payable
or advance shall be made by the Company or any Guarantor until the earliest to
occur of: (i) satisfaction and discharge of this Supplemental Indenture pursuant
to Article 13 hereof, (ii) Legal Defeasance or Covenant Defeasance or (iii)
payment in full in cash of the Notes and all other Note Obligations that are
outstanding, due and payable at the time the Notes are paid in full in cash (for
purposes of this Section 4.23, only, collectively the "Termination Date");
except: intercompany receivables, intercompany payables, intercompany advances
and intercompany Indebtedness made to, or on behalf of, any Person, other than
the Company or any Guarantor, permitted pursuant to the terms hereof may be paid
or repaid, in each case so long as no Event of Default shall have occurred and
be continuing; provided, however, that the foregoing shall not apply to any
intercompany Indebtedness or other intercompany receivable, intercompany payable
or intercompany advance with a Person, other than the Company or any Guarantor,
where such Person is expressly prohibited from agreeing to the foregoing
subordination pursuant to the terms and provisions of the definitive credit
documentation with respect to Indebtedness of such Person for borrowed money
listed on Schedule 7.3(k) to the Credit Agreement.
(b) In the event that any payment on any such intercompany
Indebtedness, receivable, payable or advance shall be received by the Company or
any Guarantor other than as permitted by Section 4.23(a) before the Termination
Date, the Company or such Guarantor, as applicable, shall receive such payments
and hold the same in trust for, segregate the same from its own assets and shall
immediately pay over to, the Collateral Trustee for the benefit of the holders
of Parity Secured Debt all such sums to the extent necessary so that the holders
of Parity Secured Debt shall have been indefeasibly paid in full, in cash, all
Note Obligations owed or which may become owing.
ARTICLE 5.
SUCCESSORS
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Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either:
(A) the Company is the surviving corporation; or
(B) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other
disposition has been made is either (i) a corporation
organized or existing under the laws of the United States, any
state of the United States or the District of Columbia or (ii)
is a partnership or limited liability company organized or
existing under the laws of the United States, any state
thereof or the District of Columbia that has at least one
Restricted Subsidiary that is a corporation organized or
existing under the laws of the United States, any state
thereof or the District of Columbia which corporation becomes
a co-issuer of the Notes pursuant to a supplemental indenture
duly and validly executed by the Trustee;
(2) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made
assumes all the obligations of the Company under the Notes, the
Indenture and the Security Documents pursuant to a supplemental
indenture reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default or Event of
Default exists; and
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition has been
made:
(A) would have Consolidated Net Worth immediately
after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding
the transaction; and
(B) would, on the date of such transaction after
giving pro forma effect thereto and to any related financing
transactions as if the same had occurred at the beginning of
the applicable four-quarter period, either (i) have a pro
forma Fixed Charge Coverage Ratio that is at least equal to
the actual Fixed Charge Coverage Ratio of the Company as of
such date or (ii) be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.09(a).
In addition, the Company shall not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person.
Notwithstanding the foregoing:
(1) any Restricted Subsidiary of the Company may consolidate
with, merge into or transfer all or part of its properties and assets
to the Company or any other Restricted Subsidiary of the Company; and
64
(2) the Company may merge with an Affiliate solely for the
purpose of reincorporating the Company or re-forming in another
jurisdiction.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Restricted Subsidiaries taken as a whole in a transaction
that is subject to, and that complies with the provisions of, Section 5.01
hereof, the successor corporation formed by such consolidation or into or with
which the Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of the Indenture referring to
the "Company" shall refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under the
Indenture with the same effect as if such successor Person had been named as the
Company herein; provided, however, that the predecessor Company shall not be
relieved from the obligation to pay the principal of, interest, premium on the
Notes except in the case of a sale of all of the Company's assets in a
transaction that is subject to, and that complies with the provisions of,
Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) the Company defaults for 30 days in the payment when due
of interest on the Notes;
(2) the Company defaults in the payment when due (at maturity,
upon redemption or otherwise) of the principal of, or premium, if any,
on the Notes;
(3) the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Sections 4.10, 4.15 or 5.01 hereof for 30
days after notice to the Company from the Trustee or the Holders of at
least 25% in the aggregate principal amount of Notes then outstanding;
(4) the Company or any of its Restricted Subsidiaries fails to
observe or perform any other covenant, representation, warranty or
other agreement in the Indenture, the Notes or the Security Documents
for 60 days after notice to the Company from the Trustee or the Holders
of at least 25% in aggregate principal amount of Notes then
outstanding;
(5) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries other than (A) Reliant Energy Channelview, L.P.
and its Subsidiaries so long as, taken together, they would not
constitute a Significant Subsidiary and (B) Reliant Energy Retail
Holdings, LLC or its successor or any Subsidiary thereof in connection
with a Qualified Securitization Transaction (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after
the Issue Date, if that default:
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(a) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness after the expiration
of the grace period provided in such Indebtedness on the date of such
default (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has
been so accelerated, aggregates $50.0 million or more;
(6) failure by the Company or any of its Restricted
Subsidiaries to pay final and non-appealable judgments aggregating in
excess of $50.0 million, which are not covered by indemnities or
third-party insurance, which judgments are not paid, discharged,
vacated or stayed for a period of 60 days;
(7) the repudiation by the Company or any of its Restricted
Subsidiaries of any of its obligations under any of the Security
Documents or the unenforceability of any of the Security Documents
against the Company or any of its Restricted Subsidiaries for any
reason if such unenforceability is applicable to Collateral having an
aggregate Fair Market Value of $50.0 million or more;
(8) any Security Document or any Lien purported to be granted
thereby on assets having a Fair Market Value in excess of $50.0 million
is held in any judicial proceeding to be unenforceable or invalid, in
whole or in part, or ceases for any reason within the control of the
Company or any of its Restricted Subsidiaries (other than pursuant to a
release that is delivered or becomes effective as set forth in this
Supplemental Indenture) to be fully enforceable and perfected;
(9) except as permitted by this Supplemental Indenture, any
Note Guarantee of a Significant Subsidiary is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to
be in full force and effect or any Guarantor that is a Significant
Subsidiary, or any Person acting on behalf of any Guarantor that is a
Significant Subsidiary, denies or disaffirms its obligations under its
Note Guarantee;
(10) the Company or any of its Restricted Subsidiaries that is
a Significant Subsidiary or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary pursuant to
or within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case,
(c) consents to the appointment of a custodian of it
or for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become
due; or
(11) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
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(a) is for relief against the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;
(b) appoints a custodian of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of the property
of the Company or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(c) orders the liquidation of the Company or any of
its Restricted Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days;
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (10) or (11) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
Section 6.03 Reserved.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by written notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase); provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of the Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
Section 6.05 Reserved.
Section 6.06 Reserved.
Section 6.07 Reserved.
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Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09 Reserved.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6 or
receives any money pursuant to the Collateral Trust Agreement, it shall pay out
the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.01 hereof and Section 607 of the Base Indenture,
including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Reserved.
ARTICLE 7.
TRUSTEE'S COMPENSATION AND INDEMNITY
Section 7.01 Compensation and Indemnity.
(a) The Company and Guarantors, jointly and severally, shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Supplemental Indenture and services hereunder. The Trustee's compensation will
not be limited by any law on compensation of a trustee of an express trust. The
Company and Guarantors, jointly and severally, shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services. Such
expenses will include the reasonable compensation, disbursements and expenses of
the Trustee's agents and counsel.
(b) The Company and the Guarantors, jointly and severally, shall
indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Supplemental Indenture, the Note
Documents or the Collateral Trust Agreement including the costs and expenses of
enforcing this Supplemental Indenture, the Note
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Documents or the Collateral Trust Agreement against the Company and the
Guarantors (including this Section 7.01) and defending itself against any claim
(whether asserted by the Company, the Guarantors or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith or willful
misconduct. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company or any of the Guarantors of their obligations hereunder. The
Company or such Guarantor shall defend the claim and the Trustee shall cooperate
in the defense. The Trustee may have separate counsel and the Company and / or
Guarantors shall pay the reasonable fees and expenses of such counsel. Neither
the Company nor any Guarantor need pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.01 will survive the satisfaction and discharge of this Supplemental
Indenture.
(d) To secure the Company's and Guarantors' payment obligations in this
Section 7.01, the Trustee will have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Supplemental Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(10) or (11) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee shall comply with the provisions of TIAss.313(b)(2) to
the extent applicable.
(g) The Company's and Guarantors' obligations under this Section 7.01
shall survive the resignation or removal of the Trustee, any termination of this
Supplemental Indenture, including any termination or rejection of this
Supplemental Indenture in any insolvency or similar proceeding and the repayment
of all the Notes.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officer's Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) on the date the conditions set
forth in Section 8.04 hereof are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the
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Company and the Guarantors shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes (including the Note
Guarantees), which will thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of the Indenture referred
to in clauses (1) and (2) below, and to have satisfied all their other
obligations under such Notes, the Note Guarantees and this Supplemental
Indenture and, to the extent applicable, the Base Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which will survive
until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium, if
any, and on such Notes when such payments are due from the trust
referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and under the Base Indenture, and the Company's and
the Guarantors' obligations in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from each of their obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19,
4.20, 4.22, 4.23 hereof and clause (4) of Section 5.01 hereof with respect to
the outstanding Notes on and after the date the conditions set forth in Section
8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes
will thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and Note
Guarantees, the Company and the Guarantors may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of the
Indenture and such Notes and Note Guarantees shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(9)
hereof shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
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(a) In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be
sufficient, in the opinion of a nationally recognized investment bank,
appraisal firm or firm of independent public accountants to pay the
principal of, or interest and premium, if any, on the outstanding Notes
on the Stated Maturity or on the applicable redemption date, as the
case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the
Company has delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Issue Date, there has been a change in the
applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Holders shall not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof, the
Company has delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(4) no Default or Event of Default has occurred and is
continuing on the date of such deposit (other than a Default or Event
of Default resulting from or cured by the borrowing of funds to be
applied to such deposit);
(5) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under any
material agreement or instrument (other than the Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company; and
(7) the Company must deliver to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
(b) Upon the occurrence of a Legal Defeasance or a Covenant Defeasance,
the Trustee shall send written notice of such Legal Defeasance or Covenant
Defeasance to both the Collateral Trustee and the Company.
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Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and the Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
shall deliver or pay to the Company from time to time upon the written request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(1) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on its written request or (if then held by the Company) will be
discharged from such trust; and the Holder of such Note will thereafter be
permitted to look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, will thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which will not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under the
Indenture and the Notes and the Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any
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Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Article Nine of the Base Indenture and Section 9.02 of
this Supplemental Indenture, the Company, the Guarantors and the Trustee may
amend or supplement this Supplemental Indenture, the Note Guarantees or the
Notes without the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article 2
hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;
(3) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to
the Company or such Guarantor pursuant to Article 5 or Article 12
hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders, including the addition of
guarantees, or that does not adversely affect the legal rights under
this Supplemental Indenture of any such Holder;
(5) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Supplemental Indenture under the
TIA;
(6) to make, complete or confirm any grant of Collateral
permitted or required by the Security Documents, the Collateral Trust
Agreement or this Supplemental Indenture or, with the consent of the
Credit Agreement Agent, any release of Collateral that becomes
effective as set forth in the Security Documents, the Collateral Trust
Agreement or this Supplemental Indenture;
(7) to conform the text of this Supplemental Indenture, the
Notes or the Note Guarantees to any provision of the Description of
Notes to the extent that such provision in the Description of Notes was
intended to be a verbatim recitation of a provision of this
Supplemental Indenture, the Notes or the Note Guarantees;
(8) to reflect any waiver or termination of any right arising
under the provisions of Section 11.01 hereof that otherwise would be
enforceable by any holder of any Series of Secured Debt other than the
Notes at any time issued under this Supplemental Indenture, if such
waiver or termination is set forth or provided in the indenture or
agreement governing or giving rise to such Series of Secured Debt, but
no waiver or amendment pursuant to this clause (8) shall adversely
affect the rights of any Holder;
(9) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Supplemental
Indenture as of the Issue Date; or
(10) to allow any Person to execute a supplemental indenture
and/or a Note Guarantee with respect to the Notes to become a
Guarantor.
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Upon the request of the Company authorizing the execution of any such
amended or supplemental indenture, and upon receipt by the Trustee of the
documents described in Section 903 of the Base Indenture and Section 9.06
hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Supplemental Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental indenture that
affects its own rights, duties or immunities under the Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
(a) Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Supplemental Indenture (including, without
limitation, Section 3.09, 4.10 and 4.15 hereof), the Note Guarantees and the
Notes with the consent of the Holders of at least a majority in principal
aggregate amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Supplemental Indenture, the Note
Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal aggregate amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes).
Section 101 of the Base Indenture shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02.
Upon the written request of the Company and upon the filing with the
Trustee of evidence satisfactory to the Trustee of the consent of the Holders of
Notes as aforesaid, and upon receipt by the Trustee of the documents described
in Section 603 of the Base Indenture and Section 9.06 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture directly affects the Trustee's own
rights, duties or immunities under the Indenture or otherwise, in which case the
Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental indenture.
It is not necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment or waiver, but it
is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver.
Subject to Section 6.04 hereof and Section 508 of the Base Indenture,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Supplemental Indenture or the Notes. However, without the
consent of each Holder affected, an amendment or waiver under this Section 9.02
may not (with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver hereunder or under the
Base Indenture as to the Notes;
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(2) reduce the principal of or change the fixed maturity of
any Note or alter any of the provisions with respect to the redemption
of the Notes (except as provided above with respect to Sections 3.09,
4.10 and 4.15 hereof);
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of, or interest or premium on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment
default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in
the Notes;
(6) make any change in the provisions of this Supplemental
Indenture relating to waivers of past Defaults or the rights of Holders
of Notes to receive payments of principal of, or interest or premium on
the Notes;
(7) waive a redemption payment with respect to any Note (other
than a payment required by the provisions of Sections 3.09, 4.10 and
4.15 hereof); or
(8) make any change in Section 6.04 hereof, Section 508 of the
Base Indenture, as to the Notes, or in the foregoing amendment and
waiver provisions.
(b) Notwithstanding any other provision of the Indenture, no amendment
or supplement to the provisions of Article XI hereof may be made in a manner
which conflicts with the provisions of Section 11.04 hereof.
(c) Other than as expressly provided in this Section 9.02(a)(8) above,
the Base Indenture may only be amended, supplemented or otherwise modified as
and to the extent provided in the Base Indenture.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Supplemental Indenture or the
Notes will be set forth in a amended or supplemental Indenture that complies
with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee
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shall, upon receipt of an Company Order, authenticate new Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. In
executing any amended or supplemental indenture, the Trustee will be entitled to
receive and (subject to Section 602 of the Base Indenture) will be fully
protected in relying upon an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental Indenture is
authorized or permitted by the Indenture.
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Security.
The punctual payment of (i) the principal of, premium, if any, and
interest on the Notes and all other Parity Secured Obligations, when due,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, (ii) interest on overdue principal of, premium, if any,
and interest on, the Notes and all other Parity Secured Obligations, (iii) the
performance of all other obligations of the Company to the Holders or the
Trustee under the Indenture and the Notes, according to the terms hereunder or
thereunder, and (iv) the performance of all other obligations of the Company
under the Secured Debt Documents are secured Equally and Ratably by liens upon
the Company's rights in the Shared Collateral. The payment of the Note
Guarantees of each Guarantor and all other Obligations of such Guarantor, when
due, and the performance of all other Obligations of such Guarantor under the
Secured Debt Documents are secured Equally and Ratably by Liens upon such
Guarantor's rights in the Shared Collateral.
Section 10.02 Collateral.
(a) The Notes are secured, together with the Credit Agreement Debt, all
other Parity Secured Debt of the Company and all other Parity Secured
Obligations of the Company, Equally and Ratably by security interests granted to
the Collateral Trustee in all of the assets of the Company that secure Credit
Agreement Obligations, except Excluded Property. Each Note Guarantee is secured,
together with each Guarantor's guarantee of the Credit Agreement Debt, all other
guarantees of Parity Secured Debt of each Guarantor and all other Parity Secured
Obligations of each Guarantor, Equally and Ratably by security interests granted
to the Collateral Trustee in all assets of each Guarantor that secure its
guarantee of the Credit Agreement Obligations except Excluded Property. As
provided in and limited by the Security Documents, such security interests are
junior in priority to Permitted Prior Liens.
(b) The assets securing Credit Agreement Obligations and guarantees of
Credit Agreement Obligations, excluding Excluded Property, consist of
substantially all of the operating assets of the Company and the Guarantors
owned as of the Issue Date or at any time thereafter acquired, subject to
Permitted Liens ("Shared Collateral"), including, without limitation, as of the
Issue Date:
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(1) mortgages on 13 electric generating plants with a net
generating capacity of approximately 8,455 megawatts and related rights
of way;
(2) the outstanding Capital Stock of Reliant Energy Retail
Holdings, LLC, which through its Subsidiaries is engaged in the retail
energy business;
(3) the outstanding Capital Stock of Orion Power Holdings,
Inc., which through its Subsidiaries owns and operates 10 electric
generating plants with a net generating capacity of approximately 5,400
megawatts located in New York, Pennsylvania, Ohio and West Virginia;
(4) the outstanding Capital Stock of REMA, which owns or
leases, together with its subsidiaries, 19 electric generating plants
with a net generating capacity of approximately 3,732 megawatts located
in Pennsylvania, New Jersey and Maryland; and
(5) substantially all of the inventory, equipment, accounts,
general intangibles and other personal property of the Guarantors,
except Excluded Securities.
The Shared Collateral does not include any of the assets of the
Excluded Subsidiaries and does not include the Orion Intercompany Notes.
The Shared Collateral also does not include certain assets that are
subject to various contractual or legal restrictions on liens or were otherwise
permitted by the holders of the Credit Agreement Obligations to be excluded from
the Liens securing the Credit Agreement Obligations, including (1) certain
receivables and related accounts of certain Guarantors that are in the retail
energy business, which are subject to a receivables securitization program and
are owned by a Securitization Entity, and (2) proceeds from the issuance of
Xxxxxx Tax-Exempt Bonds or Permitted PEDFA Bond Indebtedness (including the
Xxxxxx Notes) that secure the Xxxxxx Tax-Exempt Bonds or Permitted PEDFA Bond
Indebtedness.
Section 10.03 Further Assurances.
(a) The Company and each Guarantor shall do or cause to be done all
acts and things which may be required, or which the Collateral Trustee from time
to time may reasonably request, to assure and confirm that the Collateral
Trustee holds Equally and Ratably, for the benefit of the Trustee and the
Holders of the Notes and holders of the other Parity Secured Debt duly created,
enforceable and perfected Liens (subject to Permitted Prior Liens) upon all
property, whether real, personal (including after-acquired personal property) or
mixed, of the Company and the Guarantors that is subject to any Lien securing
any other Series of Secured Debt, except Permitted Separate Liens upon Excluded
Property.
(b) If the Company or any of the Guarantors at any time owns or
acquires any property that is subject to a Lien securing any Parity Secured Debt
(except Permitted Separate Liens upon Excluded Property), but is not subject to
a valid, enforceable perfected Lien (subject to Permitted Prior Liens) in favor
of the Collateral Trustee as security Equally and Ratably for all of the Parity
Secured Obligations, then the Company shall, or shall cause such Guarantor if
and to the extent required under the Credit Agreement or any other Credit
Facility of the Company to, concurrently:
(1) execute and deliver to the Collateral Trustee a security
document upon substantially the same terms as the Security Documents
delivered in connection with the issuance of the Notes or other terms
reasonably satisfactory to the Company or such Guarantor and the
Collateral Trustee acting at the direction of the Credit Agreement
Agent, granting a Lien upon such property
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to the Collateral Trustee for the benefit of the holders of Parity
Secured Obligations, Equally and Ratably;
(2) cause the Lien granted in such security document to be
duly perfected in any manner permitted by law and cause each other Lien
that secures Indebtedness upon such property to be (A) released, unless
it is a Permitted Lien, or (B) subordinated to the Collateral Trustee's
Liens if it is not a Permitted Prior Lien; and
(3) deliver to the Trustee and the Collateral Trustee any
opinion of counsel delivered to or for the benefit of any Series of
Secured Debt relating to such Security Document or the Lien granted
therein.
(c) Upon the written request of the Collateral Trustee at any time and
from time to time, the Company and each Guarantor shall promptly execute,
acknowledge and deliver such Security Documents, instruments, certificates,
notices and other documents and take such other actions as shall be required or
which the Collateral Trustee may reasonably request to grant, perfect or
maintain the priority of (subject to Permitted Prior Liens) the Liens and
benefits intended to be conferred as contemplated by the Secured Debt Documents
and the Security Documents for the benefit of the holders of the Parity Secured
Obligations.
Section 10.04 Collateral Trustee.
(a) The Company has appointed Wachovia Bank, National Association or
one of its affiliates to serve as the Collateral Trustee for the benefit of the
holders of:
(1) the Notes;
(2) the Existing Notes;
(3) the Credit Agreement Debt;
(4) the Xxxxxx Guarantees;
(5) any and all future Parity Secured Debt; and
(6) all other Secured Obligations outstanding from time to
time.
(b) The Collateral Trustee (directly or through co-trustees, agents or
sub-agents) holds, and is entitled to enforce, all Liens on the Collateral.
(c) Except as provided in the Collateral Trust Agreement or the
Security Documents or as directed by an Act of Secured Debtholders, the
Collateral Trustee is not obligated:
(1) to act upon directions purported to be delivered to it by
any other Person;
(2) to foreclose upon or otherwise enforce any Lien; or
(3) to take any other action whatsoever with regard to any or
all of the Security Documents, the Liens created thereby or the
Collateral.
Section 10.05 Security Documents and Guarantee.
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(a) Each Holder of the Notes, by acceptance of the Notes, hereby
authorizes the Trustee and the Collateral Trustee, as applicable, on behalf of
and for the benefit of the Holders, to be the agent for and representative of
the Holders with respect to the Note Guarantees, the Shared Collateral and the
Security Documents.
(b) Anything contained in any of the Note Documents to the contrary
notwithstanding, each Holder hereby agrees that no Holder or the Trustee shall
have any right individually to realize upon any of the Shared Collateral, it
being understood and agreed that all powers, rights and remedies of the Trustee
hereunder may be exercised solely by the Trustee in accordance with the terms
hereof and all powers, rights and remedies in respect of the Shared Collateral
under the Security Documents may be exercised solely by the Collateral Trustee.
Section 10.06 Release of Security Interests.
(a) The Shared Collateral will be released from the Collateral
Trustee's Liens:
(1) in whole, at any time when no Actionable Default Period is
continuing, if neither the Company nor any Guarantor has any
Indebtedness secured by Liens, except for the Liens described in
clauses (10), (11), (17) and (28) of the definition of "Permitted
Liens;"
(2) as to any or all Shared Collateral at any time when no
Actionable Default Period is continuing, if (A) consent to the release
of Shared Collateral has been given by an Act of Secured Debtholders
and (B) such release has become effective in accordance with the terms
of the consent;
(3) as to any or all Shared Collateral at any time when an
Actionable Default Period is continuing, if (A) consent to the release
of such Shared Collateral has been given by an Act of Secured
Debtholders and by the Required Lenders and (B) such release has become
effective in accordance with the terms of the consent;
(4) as to (A) deposits in any Cash Collateral Account that are
to be applied to fund any mandatory prepayment or purchase offer
(including an Asset Sale Offer) that becomes required as to any Secured
Debt as a result of a sale of assets, concurrently with such
application, so long as effective provision is made for apportionment
of such funding to all holders of Secured Debt entitled to participate
in such mandatory prepayment or purchase offer in accordance with their
respective entitlements under the Secured Debt Documents; and (B)
deposits in any Cash Collateral Account that constitute proceeds from
an asset sale that are permitted under the Secured Debt Documents to be
reinvested or otherwise are not required under the Secured Debt
Documents to be reinvested or otherwise are not required to be applied
to a mandatory prepayment or purchase offer in respect of any Secured
Debt, concurrently with such reinvestment in assets constituting
Collateral or other permitted use under the Secured Debt Documents;
(5) as to assets of the Xxxxxx Subsidiary, concurrently with
the incurrence by the Xxxxxx Subsidiary of Permitted PEDFA Bond
Indebtedness that (A) is Non-Recourse to the Company and all of its
other Restricted Subsidiaries (other than an unsecured Guarantee, if
any provided by the Company); and (B) is secured solely by Liens on
such assets; or
(6) in accordance with the provisions of the Security
Documents as in effect from time to time.
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(b) The Collateral Trustee's Liens upon Shared Collateral will no
longer secure the Note Obligations and the right of the holders of Note
Obligations to the benefits and proceeds of the Collateral Trustee's Liens on
Shared Collateral will terminate and be discharged at the Company's written
request:
(1) upon satisfaction and discharge of this Supplemental
Indenture pursuant to Article 13 hereof;
(2) upon Legal Defeasance or Covenant Defeasance; or
(3) upon payment in full in cash of the Notes and all other
Note Obligations that are outstanding, due and payable at the time the
Notes are paid in full in cash.
(c) Any release of all or substantially all Shared Collateral owned by
any Guarantor will become effective only if all Liens on Excluded Securities
issued by such Guarantor have previously been or are concurrently released.
(d) The Company shall otherwise comply with the provisions of TIA
Section 314(b).
(e) To the extent applicable, the Company shall cause TIA Section
313(b), relating to reports, and TIA Section 314(d), relating to the release of
property or securities or relating to the substitution therefor of any property
or securities to be subjected to the Lien of the Security Documents, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person will be an independent engineer, appraiser or other expert selected
by the Company and reasonably satisfactory to the Trustee. Notwithstanding
anything to the contrary in this paragraph, the Company shall not be required to
comply with all or any portion of TIA Section 314(d) (1) with respect to
releases of Collateral pursuant to Section 10.06(g) and (2) if it determines, in
good faith based on advice of counsel, that under the terms of Section 314(d)
and/or any interpretation or guidance as to the meaning thereof of the
Commission and its staff, including "no action" letters or exemptive orders, all
or any portion of TIA Section 314(d) is inapplicable to one or a series of
released Collateral.
(f) To the extent applicable, the Company shall furnish to the Trustee,
prior to each proposed release of Collateral pursuant to the Security Documents:
(1) all documents required by TIAss.314(d); and
(2) an Opinion of Counsel to the effect that such accompanying
documents constitute all documents required by TIA Section 314(d).
If any Collateral is released in accordance with the Indenture or any
Security Document and if the Company has delivered the certificates and
documents required by the Security Documents and this Section 10.06, the
Trustee, upon receipt of such certificates and Opinion of Counsel, shall notify
the Collateral Trustee of the receipt of such documents.
(g) Notwithstanding anything herein to the contrary, so long as no
Event of Default shall have occurred and be continuing:
(1) the Company may, without any prior release or consent by
the Trustee, conduct the following ordinary course activities in
respect of the Collateral subject to the lien of the Security Documents
which do not individually or in the aggregate adversely affect the
value of such Collateral:
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(a) cash payments (including for the scheduled
repayment of Indebtedness) in the ordinary
course of business;
(b) sales or other dispositions of inventory in
the ordinary course of business;
(c) collections, sales or other dispositions of
accounts receivable in the ordinary course
of business; and
(d) sales or other dispositions in the ordinary
course of business of any property the use
of which is no longer necessary or desirable
in the proper conduct of the business of the
Company and its Subsidiaries and is not
material to the conduct of the business of
the Company and its Subsidiaries; and
(2) the fair value of any Collateral released in accordance
with clause (1) of this Section 10.06(g) need not be considered in
determining whether the aggregate fair value of Collateral released in
any calendar year meets or exceeds the 10% threshold specified in TIA
Section 314(d);
provided, however, that the Company's right to rely on this Section 10.06(g)
will be conditioned upon the Company's delivering to the Trustee, within 30
calendar days following the end of each six-month period beginning on January 1
and July 1 of any year, an Officer's Certificate to the effect that all releases
during such six-month period in respect of which the Company did not comply with
TIA Section 314(d) in reliance on this Section 10.06(g) were made in the
ordinary course of business.
Section 10.07 Environmental Indemnity.
(a) Each of the Company and the Guarantors jointly and severally agrees
to defend (subject to Indemnitees' selection of counsel), indemnify, pay and
hold harmless the Trustee and each Holder and each of their respective
Affiliates and each and all of the directors, officers, partners, trustees,
employees, attorneys and agents, and (in each case) their respective heirs,
representatives, successors and assigns (each of the foregoing, an "Indemnitee")
from and against any and all Indemnified Liabilities; provided, no Indemnitee
shall be entitled to indemnification hereunder with respect to any Indemnified
Liability to the extent such Indemnified Liability is found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
directly and primarily from the gross negligence or willful misconduct of such
Indemnitee.
(b) All amounts due under Section 10.07(a) hereof shall be payable not
later than 10 days after written demand therefor.
(c) To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in Section 10.07(a) hereof may be unenforceable in whole
or in part because they are violative of any law or public policy, each of the
Company and Guarantors shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them.
(d) Neither the Company nor any Guarantor shall ever assert any claim
against any Indemnitee, on any theory of liability, for any lost profits or
special, indirect or consequential damages or (to the fullest extent lawful) any
punitive damages arising out of, in connection with, or as a result of, the
Indenture or any other Note Document or any agreement or instrument or
transaction contemplated hereby or relating in any respect to any Indemnified
Liability, and each of the Company and Guarantors hereby forever waives,
releases and agrees not to xxx upon any claim for any such lost profits or
special,
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indirect, consequential or (to the fullest extent lawful) punitive damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
(e) The agreements in this Section 10.07 shall survive repayment of the
Notes and all other amounts payable hereunder and the resignation and removal of
the Trustee or collateral agent.
ARTICLE 11.
COLLATERAL SHARING
Section 11.01 Equal and Ratable Lien Sharing by Holders of Notes and holders of
other Parity Secured Debt.
(a) Notwithstanding (1) anything to the contrary contained in the
Secured Debt Documents, (2) the time of incurrence of any Series of Secured
Debt, (3) the order or method of attachment or perfection of any Liens securing
any Series of Secured Debt, (4) the time or order of filing or recording of
financing statements, mortgages or other documents filed or recorded to perfect
any Lien upon any Shared Collateral, (5) the time of taking possession or
control over any Shared Collateral or (6) the rules for determining priority
under any law governing relative priorities of Liens:
(1) all Liens at any time granted by the Company or any of its
Subsidiaries in the Shared Collateral to secure any of the Parity
Secured Debt shall secure, Equally and Ratably, all liabilities of the
Company or such Subsidiary under or in respect of the Parity Secured
Debt and other Parity Secured Obligations; and
(2) all proceeds of all Liens at any time granted by the
Company or any its Subsidiaries in the Shared Collateral to secure any
of the Parity Secured Debt shall be allocated and distributed Equally
and Ratably on account of all liabilities of the Company or such
Subsidiary under or in respect of the Parity Secured Debt and other
Parity Secured Obligations.
Each Holder of the Notes, by acceptance of the Notes, agrees to the
provisions described in the Order of Application and the definition of the term
"Equally and Ratably."
(b) The provisions of Section 11.01(a) hereof are intended for the
benefit of, and will be enforceable as a third party beneficiary by, each
present and future holder of Secured Obligations and each present and future
Secured Debt Representative.
(c) It is understood that Shared Collateral may be released pursuant to
the provisions of Section 10.06 hereof.
Section 11.02 Reserved.
Section 11.03 Enforcement of Security Interests.
The enforcement of the Collateral Trustee's Liens in the Shared
Collateral shall be governed by the Collateral Trust Agreement.
Section 11.04 Amendment and Supplement.
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(a) No amendment or supplement to the provisions of Section 11.01
hereof that adversely affects the right of any Holder of Notes to share in the
Shared Collateral Equally and Ratably will:
(1) be effective unless set forth in a writing signed by the
Trustee with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, any Notes); or
(2) be effective without the written consent of the Company.
No waiver of the provisions of this Article 11.01 will in any event be
effective unless set forth in a writing signed and consented to, as required for
an amendment under this Section 11.04, by the party to be bound thereby.
(b) Any amendment or supplement to the provisions of the Security
Documents will be effective only in accordance with the provisions of Section
9.01 of the Collateral Trust Agreement.
ARTICLE 12.
NOTE GUARANTEES
Section 12.01 Guarantee.
(a) Subject to this Article 12, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium, if any, and interest on the
Notes shall be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee
hereunder or thereunder shall be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same shall be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note
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Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and the Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
Section 12.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 12, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.
Section 12.03 Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 12.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit B hereto shall be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Supplemental Indenture shall be executed on behalf of such Guarantor by one of
its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 12.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Supplemental Indenture or on
the Note Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee
will be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Note Guarantee set forth
in this Supplemental Indenture on behalf of the Guarantors.
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In the event that the Company creates or acquires any Domestic
Subsidiary after the Issue Date, if required by Section 4.18 hereof, the Company
shall cause such Domestic Subsidiary to comply with the provisions of Section
4.18 hereof and this Article 12, to the extent applicable.
Section 12.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 12.05, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor, unless:
(1) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
(2) either:
(a) subject to Section 12.05 hereof, the Person
acquiring the property in any such sale or disposition or the Person
formed by or surviving any such consolidation or merger assumes all the
obligations of that Guarantor under this Supplemental Indenture, its
Note Guarantee and all Security Documents delivered by that Guarantor
pursuant to a supplemental indenture; or
(b) the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of
this Supplemental Indenture, including without limitation, Section 4.10
hereof, and the Collateral Trust Agreement.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Supplemental Indenture to be performed by
the Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued will in all respects have the same
legal rank and benefit under this Supplemental Indenture as the Note Guarantees
theretofore and thereafter issued in accordance with the terms of this
Supplemental Indenture as though all of such Note Guarantees had been issued on
the Issue Date.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Supplemental Indenture or
in any of the Notes will prevent any consolidation or merger of a Guarantor with
or into the Company or another Guarantor, or will prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety to
the Company or another Guarantor.
Section 12.05 Releases.
(a) The Note Guarantee of a Guarantor shall be released automatically
and all security interests granted by that Guarantor or granted in such
Guarantor's Capital Stock to the Collateral Trustee shall be released with
respect to the Note Obligations:
(1) in connection with any sale or other disposition of all of
the assets or Capital Stock of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before
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or after giving effect to such transaction) the Company or a Restricted
Subsidiary of the Company, if the Net Proceeds of the sale or
disposition are applied in accordance with the applicable provisions of
this Supplemental Indenture, including without limitation, Section 4.10
hereof, and the Collateral Trust Agreement without limiting any other
rights of the Company hereunder;
(2) if the Company designates any Restricted Subsidiary that
is a Guarantor to be an Unrestricted Subsidiary in accordance with the
applicable provisions of this Supplemental Indenture;
(3) upon a dissolution of that Guarantor that is permitted
under Section 4.14 hereof; or
(4) upon written request of the Company, if that Guarantor has
been or will be concurrently released from its guarantee of all other
Indebtedness of the Company; provided that all Liens on the Excluded
Securities issued by such Guarantor securing any such Indebtedness have
been or are concurrently released.
(b) The Note Guarantee of a Guarantor shall be released with respect to
the Notes automatically upon Legal Defeasance, Covenant Defeasance or
satisfaction and discharge of this Supplemental Indenture pursuant to Article 13
hereof.
(c) Upon delivery by the Company to the Trustee of an Officer's
Certificate and an Opinion of Counsel to the effect that the action or event
giving rise to the applicable release has occurred or was made by the Company in
accordance with the provisions of this Supplemental Indenture and the Collateral
Trust Agreement, as applicable, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.
(d) Any Guarantor not released from its obligations under its Note
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under the Indenture as
provided in this Article 12.
ARTICLE 13.
SATISFACTION AND DISCHARGE
Section 13.01 Satisfaction and Discharge.
This Supplemental Indenture will be discharged and will cease to be of
further effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated, except
lost, stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has been deposited in trust and
thereafter repaid to the Company, have been delivered to the Trustee
for cancellation; or
(b) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason of the
mailing of a notice of redemption or otherwise or will become due and
payable within one year and the Company or any Guarantor has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust solely for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient without consideration of
any reinvestment of interest, to pay
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and discharge the entire indebtedness on the Notes not delivered to the
Trustee for cancellation for principal, premium, if any, and accrued
interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of the deposit or will occur as a result of the
deposit and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company
or any Guarantor is a party or by which the Company or any Guarantor is
bound;
(3) the Company or any Guarantor has paid or caused to be paid
all sums payable by it under this Supplemental Indenture; and
(4) the Company has delivered irrevocable instructions to the
Trustee under this Supplemental Indenture to apply the deposited money
toward the payment of the Notes at maturity or the redemption date, as
the case may be.
In addition, the Company must deliver an Officer's Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Supplemental
Indenture, if money has been deposited with the Trustee pursuant to subclause
(b) of clause (1) of this Section, the provisions of Section 13.02 and Section
8.06 will survive. In addition, nothing in this Section 13.01 will be deemed to
discharge those provisions of Section 7.01 hereof and Section 607 of the Base
Indenture, that, by their terms, survive the satisfaction and discharge of this
Supplemental Indenture. Further, the Shared Collateral will be released with
respect to the Note Obligations with respect to the Notes only, pursuant to the
provisions of Section 10.06, upon a discharge of this Supplemental Indenture in
accordance with the provisions described in that Section.
Section 13.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 13.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and the Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal, premium, if any, and interest for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 13.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Supplemental Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 13.01; provided that if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 14.
MISCELLANEOUS
Section 14.01 Trust Indenture Act Controls.
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If any provision of this Supplemental Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties will
control.
Section 14.02 Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
Reliant Energy, Inc.
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
If to the Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Administration
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Securities Registrar. Any notice or communication will also be so mailed
to any Person described in TIA Section 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Holder or any defect in it
will not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
88
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 14.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under the Indenture or the Notes. The
Company, the Trustee, the Securities Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 14.04 Reserved.
Section 14.05 Reserved.
Section 14.06 Reserved.
Section 14.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, will have any liability for any obligations
of the Company or the Guarantors under the Notes, this Supplemental Indenture,
the Note Guarantees, the Security Documents or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. The waiver may
not be effective to waive liabilities under the federal securities laws.
Section 14.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS SUPPLEMENTAL INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 14.09 No Adverse Interpretation of Other Agreements.
This Supplemental Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Supplemental Indenture.
Section 14.10 Successors.
All agreements of the Company in the Indenture and the Notes will bind
its successors. All agreements of the Trustee in the Indenture will bind its
successors. All agreements of each Guarantor in this Supplemental Indenture will
bind its successors, except as otherwise provided in Section 12.05.
Section 14.11 Severability.
In case any provision in the Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 14.12 Counterpart Originals.
89
The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy will be an original, but all of them together
represent the same agreement.
Section 14.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Supplemental Indenture have been inserted for
convenience of reference only, are not to be considered a part of this
Supplemental Indenture and will in no way modify or restrict any of the terms or
provisions hereof.
[Signatures on following pages]
90
SIGNATURES
Dated as of December 22, 2004
RELIANT ENERGY, INC.,
as Issuer
By: ________________________________
Name:
Title:
GUARANTORS:
RELIANT ENERGY ASSET MANAGEMENT, LLC
RELIANT ENERGY AURORA DEVELOPMENT, LLC
RELIANT ENERGY AURORA HOLDING, LLC
RELIANT ENERGY AURORA I, LP
RELIANT ENERGY XXXXXX XX, LP
RELIANT ENERGY AURORA, LP
RELIANT ENERGY BROADBAND, INC.
RELIANT ENERGY CALIFORNIA HOLDINGS, LLC
RELIANT ENERGY CAPITAL (EUROPE), INC.
RELIANT ENERGY COMMUNICATIONS, INC.
RELIANT ENERGY COOLWATER, INC.
RELIANT ENERGY CORPORATE SERVICES, LLC
RELIANT ENERGY DEER PARK, INC.
ENERGY ELLWOOD, INC.
RELIANT ENERGY ETIWANDA, INC.
RELIANT ENERGY EUROPE, INC.
RELIANT ENERGY FLORIDA, LLC
RELIANT ENERGY FLORIDA HOLDINGS, LLC
RELIANT ENERGY KEY/CON FUELS, LLC
RELIANT ENERGY MANDALAY, INC.
RELIANT ENERGY NET VENTURES, INC.
RELIANT ENERGY NORTHEAST GENERATION, INC.
RELIANT ENERGY NORTHEAST HOLDINGS, INC.
RELIANT ENERGY ORMOND BEACH, INC.
RELIANT ENERGY POWER GENERATION, INC.
RELIANT ENERGY POWER OPERATIONS I, INC.
RELIANT ENERGY POWER OPERATIONS II, INC.
RELIANT ENERGY RENEWABLES, INC.
RELIANT ENERGY RETAIL HOLDINGS, LLC
RELIANT ENERGY RETAIL SERVICES, LLC
ENERGY SABINE (TEXAS), INC.
RELIANT ENERGY SERVICES DESERT BASIN, LLC
RELIANT ENERGY SERVICES INTERNATIONAL, INC.
RELIANT ENERGY SERVICES MID-STREAM, LLC
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RELIANT ENERGY SERVICES, INC.
RELIANT ENERGY XXXXXX, LLC
RELIANT ENERGY SHELBY COUNTY II, LP
RELIANT ENERGY SHELBY COUNTY, LP
RELIANT ENERGY SHELBY DEVELOPMENT CORP.
RELIANT ENERGY SHELBY HOLDING CORP.
RELIANT ENERGY SHELBY I, LP
RELIANT ENERGY XXXXXX XX, LP
RELIANT ENERGY SOLUTIONS, LLC
RELIANT ENERGY SOLUTIONS HOLDINGS, LLC
RELIANT ENERGY TEXAS RENEWABLES GP, LLC
RELIANT ENERGY TEXAS RENEWABLES, LP
RELIANT ENERGY TRADING EXCHANGE, INC.
RELIANT ENERGY VENTURES, INC.
RELIANT ENERGY WHOLESALE GENERATION, LLC
RELIANT ENERGY WHOLESALE SERVICE COMPANY
RELIANT RESOURCES INTERNATIONAL SERVICES, INC.
STAREN POWER, LLC
TEXAS STAR ENERGY COMPANY
By: _______________________________
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Treasurer of the
corporations and limited liability
companies, and of the general
partners of the limited
partnerships, listed above
RELIANT ENERGY CAPTRADES HOLDING CORP.
RELIANT ENERGY ELECTRIC SOLUTIONS, LLC
RELIANT ENERGY RENEWABLES HOLDINGS II, LLC
RELIANT ENERGY SABINE (DELAWARE), INC.
RELIANT ENERGY SOLUTIONS EAST, LLC
By: _________________________________
Name: Xxxxxx Xxxxxxxxxx
Title: Attorney-in-fact
Attest:
_________________________________
Name:
Title:
92
WILMINGTON TRUST COMPANY,
as Trustee
By: ____________________________________
Name:
Title:
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SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Supplemental
Indenture as of the Issue Date:
Reliant Energy Asset Management, LLC a Delaware limited liability company
Reliant Energy Aurora Development, LLC, a Delaware limited liability company
Reliant Energy Aurora Holding, LLC, a Delaware limited liability company
Reliant Energy Aurora I, LP, a Delaware limited partnership
Reliant Energy Xxxxxx XX, LP, a Delaware limited partnership
Reliant Energy Aurora, LP, a Delaware limited partnership
Reliant Energy Broadband, Inc., a Delaware corporation
Reliant Energy California Holdings, LLC, a Delaware limited liability company
Reliant Energy Capital (Europe), Inc., a Delaware corporation
Reliant Energy CapTrades Holding Corp., a Delaware corporation
Reliant Energy Communications, Inc., a Delaware corporation
Reliant Energy Coolwater, Inc., a Delaware corporation
Reliant Energy Corporate Services, LLC, a Delaware limited liability company
Reliant Energy Deer Park, Inc., a Delaware corporation
Reliant Energy Electric Solutions, LLC, a Delaware limited liability company
Reliant Energy Ellwood, Inc., a Delaware corporation
Reliant Energy Etiwanda, Inc., a Delaware corporation
Reliant Energy Europe, Inc., a Delaware corporation
Reliant Energy Florida, LLC, a Delaware limited liability company
Reliant Energy Florida Holdings, LLC, a Delaware limited liability company
Reliant Energy Key/Con Fuels, LLC, a Delaware limited liability company
Reliant Energy Mandalay, Inc., a Delaware corporation
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Reliant Energy Net Ventures, Inc., a Delaware corporation
Reliant Energy Northeast Generation, Inc., a Delaware corporation
Reliant Energy Northeast Holdings, Inc., a Delaware corporation
Reliant Energy Ormond Beach, Inc., a Delaware corporation
Reliant Energy Power Generation, Inc., a Delaware corporation
Reliant Energy Power Operations I, Inc., a Delaware corporation
Reliant Energy Power Operations II, Inc., a Delaware corporation
Reliant Energy Renewables, Inc., a Delaware corporation
Reliant Energy Renewables Holdings II, LLC, a Delaware limited liability company
Reliant Energy Retail Holdings, LLC, a Delaware limited liability company
Reliant Energy Retail Services, LLC, a Delaware limited liability company
Reliant Energy Sabine (Delaware), Inc., a Delaware corporation
Reliant Energy Sabine (Texas), Inc., a Delaware corporation
Reliant Energy Services Desert Basin, LLC, a Delaware limited liability company
Reliant Energy Services International, Inc., a Delaware corporation
Reliant Energy Services Mid-Stream, LLC, a Delaware limited liability company
Reliant Energy Services, Inc., a Delaware corporation
Reliant Energy Xxxxxx, LLC, a Delaware limited liability company
Reliant Energy Shelby County II, LP, a Delaware limited partnership
Reliant Energy Shelby County, LP, a Delaware limited partnership
Reliant Energy Shelby Development Corp., a Delaware corporation
Reliant Energy Shelby Holding Corp., a Delaware corporation
Reliant Energy Shelby I, LP, a Delaware limited partnership
Reliant Energy Xxxxxx XX, LP, a Delaware limited partnership
Reliant Energy Solutions, LLC, a Delaware limited liability company
Reliant Energy Solutions East, LLC, a Delaware limited liability company
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Reliant Energy Solutions Holdings, LLC, a Delaware limited liability company
Reliant Energy Texas Renewables GP, LLC, a Delaware limited liability company
Reliant Energy Texas Renewables, LP, a Delaware limited partnership
Reliant Energy Trading Exchange, Inc., a Delaware corporation
Reliant Energy Ventures, Inc., a Delaware corporation
Reliant Energy Wholesale Generation, LLC, a Delaware limited liability company
Reliant Energy Wholesale Service Company, a Delaware corporation
Reliant Resources International Services, Inc., a Delaware corporation
StarEn Power, LLC, a Delaware limited liability company
Texas Star Energy Company, a Delaware corporation
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EXHIBIT A
[Face of Note]
CUSIP/CINS __________
6.75% Senior Secured Notes due 2014
No. ___ $____________
RELIANT ENERGY, INC.
promises to pay to [CEDE & CO.]
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on December 15, 2014.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Dated: ________________
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.
RELIANT ENERGY, INC.
By: ______________________________
Name:
Title:
Date of Authentication: December 22, 2004
This Note is one of the Securities of
a series designated therein referred to
in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________
Authorized Signatory
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[Back of Note]
6.75% Senior Secured Notes due 2014
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Supplemental Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Supplemental Indenture referred to below unless otherwise indicated.
(1) Interest. Reliant Energy, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of
this Note at 6.75% per annum from December 22, 2004 until maturity. The
Company shall pay interest semi-annually in arrears on June 15 and
December 15 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an "Interest Payment Date").
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date
of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date
shall be June 15, 2005. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a
rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
(2) Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons who are registered
Holders of Notes at the close of business on the June 1 or December 1
next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 307 of the Base Indenture with
respect to defaulted interest. The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the
Company maintained for such purpose within the City and State of New
York, or, at the option of the Company, payment of interest and may be
made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal
of and interest and premium, if any, on, all Global Notes and all other
Notes the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be
in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
(3) Paying Agent and Securities Registrar. Initially,
Wilmington Trust Company, the Trustee under the Indenture, will act as
Paying Agent and the Securities Registrar. The Company may change any
Paying Agent or the Securities Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
(4) Indenture. This Note is one of a duly authenticated series
of securities of the Company issued and to be issued in one or more
series under a Senior Indenture (the "Base Indenture"), dated as of
December 22, 2004, between the Company and the Trustee, as amended by a
First Supplemental Indenture (the "Supplemental Indenture" and,
together with the Base Indenture, the "Indenture"), dated as of
December 22, 2004, among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those
made part
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of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act
for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Base Indenture, the
provisions of this Note shall govern and be controlling and to the
extent any provision of this Note conflicts with the express provisions
of the Supplemental Indenture, the provisions of the Supplemental
Indenture shall govern and be controlling. The Notes are secured
obligations of the Company. The Company shall be entitled to issue
Additional Notes pursuant to Section 2.13 of the Supplemental
Indenture.
(5) Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to December
15, 2009. Thereafter, the Company shall have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest
thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on December 15 of the years indicated
below, subject to the rights of Holders on the relevant record date to
receive interest on the relevant interest payment date:
Year Percentage
---- ----------
2009............................................................................. 103.375%
2010............................................................................. 102.250%
2011............................................................................. 101.125%
2012 and thereafter.............................................................. 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to December 15, 2007, the Company may on
one or more occasions redeem up to 35% of the aggregate principal
amount of Notes issued under the Supplemental Indenture at a redemption
price of 106.750% of the principal amount, plus accrued and unpaid
interest to the redemption date with the net proceeds of one or more
Equity Offerings of the Company; provided that at least 65% in
aggregate principal amount of the Notes issued under the Supplemental
Indenture remains outstanding immediately after the occurrence of such
redemption and that such redemption occurs within 75 days of the date
of the closing of such Equity Offering.
(6) No Mandatory Redemption. The Company shall not be required to
make mandatory redemption or sinking fund payments with respect to the
Notes.
(7) Collateral and Security. Subject to the terms of the
Indenture, the Notes are secured, together with the Credit Agreement
Debt, all other Parity Secured Debt of the Company and all other Parity
Secured Obligations of the Company, Equally and Ratably by security
interests granted to the Collateral Trustee in all of the assets of the
Company that secure Credit Agreement Obligations, except Excluded
Property. Subject to the terms of the Indenture, each Note Guarantee is
secured, together with each Guarantor's guarantee of the Credit
Agreement Debt, all other guarantees of Parity Secured Debt of each
Guarantor and all other Parity Secured Obligations of each Guarantor,
Equally and Ratably by security interests granted to the Collateral
Trustee in all assets of each Guarantor that secure its guarantee of
the Credit Agreement Obligations except Excluded Property.
(8) Repurchase at Option of Holder.
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(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $2,000 or integral multiples of $1,000 in excess of
$2,000) of each Holder's Notes at a purchase price equal to 101% of the
aggregate principal amount of notes repurchased plus accrued and unpaid
interest to the date of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Company shall mail
a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, within five days of each date on which the aggregate amount of
Excess Proceeds exceeds $25 million, the Company shall commence an
offer to all Holders of Notes and all holders of other Indebtedness
that is pari passu with the Notes (other than Credit Agreement Debt)
containing provisions similar to those set forth in the Supplemental
Indenture with respect to offers to purchase (or repay, prepay or
redeem, as applicable) an aggregate principal amount of Notes and such
other pari passu Indebtedness that may be purchased (or repaid, prepaid
or redeemed) equal to the aggregate Excess Proceeds multiplied by a
fraction, the numerator of which consists of (A) the aggregate
principal amount then outstanding on the Notes and all such pari passu
Indebtedness containing such provisions (not including Credit Agreement
Debt) and the denominator of which is (B) the sum of (i) such aggregate
amount in the preceding clause (A) and (ii) the Credit Agreement Debt
then outstanding (an "Asset Sale Offer") pursuant to Section 3.09 of
the Supplemental Indenture to purchase the maximum principal amount of
Notes and other pari passu Indebtedness that may be purchased out of
the Excess Proceeds at an offer price in cash in an amount equal to
100% of the principal amount thereof plus accrued and unpaid interest
to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Supplemental Indenture. To the extent that
the aggregate amount of Notes and other pari passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness surrendered by
holders thereof exceeds the amount of Excess Proceeds, the Company
shall select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis. Holders of Notes that are the subject of
an offer to purchase will receive an Asset Sale Offer from the Company
prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
(9) Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to
each Holder whose Notes are to be redeemed at its registered address.
Notes in denominations larger than $2,000 may be redeemed in part but
only in whole multiples of $1,000 in excess of $2,000, unless all of
the Notes held by a Holder are to be redeemed. On and after the
redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
(10) Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $2,000 and integral
multiples of $1,000 in excess of $2,000. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Supplemental
Indenture. The Securities Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any
taxes and fees required by law or permitted by the Supplemental
Indenture. The Company need not exchange or register the transfer of
any Note or portion of a Note selected for redemption, except for the
unredeemed portion of any Note being redeemed in part. Also, the
Company need not exchange or register the transfer of any Notes for a
period of 15 days before a
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selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
(11) Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
(12) Amendment, Supplement and Waiver. The Base Indenture may be
amended as provided therein. Subject to certain exceptions, the
Supplemental Indenture, the Note Guarantees or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority
in principal amount of the then outstanding Notes, and any existing
default or compliance with any provision of the Supplemental Indenture,
the Note Guarantees or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding
Notes. Without the consent of any Holder of a Note, the Supplemental
Indenture, the Note Guarantees or the Notes may be amended or
supplemented (i) to cure any ambiguity, defect or inconsistency, (ii)
to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 (including
the related definitions) of the Supplemental Indenture in a manner that
does not materially adversely affect any Holder, (iii) to provide for
the assumption of the Company's or any Guarantor's obligations to
Holders of the Notes by a successor to the Company or such Guarantor
pursuant to Article 5 or 12 of the Supplemental Indenture, (iv) to make
any change that would provide any additional rights or benefits to the
Holders, including the addition of guarantees, or that does not
adversely affect the legal rights under the Supplemental Indenture of
any such Holder, (v) to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under
the Trust Indenture Act, (vi) to make, complete or confirm any grant of
Collateral permitted or required by the Security Documents, the
Collateral Trust Agreement or the Supplemental Indenture or, with the
consent of the Credit Agreement Agent, any release of Collateral that
becomes effective as set forth in the Security Documents, the
Collateral Trust Agreement or the Supplemental Indenture, (vii) to
conform the text of the Supplemental Indenture, the Notes or the Note
Guarantees to any provision of the Description of Notes to the extent
that such provision in the Description of Notes was intended to be a
verbatim recitation of a provision of the Supplemental Indenture, the
Notes or the Note Guarantees, (viii) to reflect any waiver or
termination of any right arising under the provisions described in
Section 11.01 of the Supplemental Indenture that otherwise would be
enforceable by any holder of any Series of Secured Debt other than the
Notes, at any time issued under the Supplemental Indenture, if such
waiver or termination is set forth or provided in the indenture or
agreement governing or giving rise to such Series of Secured Debt (only
to extent the waiver or amendment will not adversely affect the rights
of the Holders of the Notes), (ix) to provide for the Issuance of
Additional Notes in accordance with the limitations set forth in the
Supplemental Indenture and (x) to allow any Person to execute a
supplemental indenture and/or Note Guarantee with respect to the Notes
to become a Guarantor.
(13) Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest on the Notes; (ii)
default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon
redemption or otherwise, (iii) failure by the Company or any of its
Restricted Subsidiaries for 30 days after to notice to the Company from
the Trustee or the Holders of at least 25% in the aggregate principal
amount of Notes then outstanding to comply with the provisions of
Section 4.10, 4.15 or 5.01 of the Supplemental Indenture; (iv) failure
by the Company or any of its Restricted Subsidiaries for 60 days after
notice to the Company from the Trustee or the Holders of at least 25%
in aggregate principal amount of Notes then outstanding to comply with
any other covenants, representations, warranties or other agreement in
the Indenture, the Notes or the Security Documents; (v) default under
certain other agreements relating to Indebtedness of the
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Company and its Restricted Subsidiaries (other than those enumerated in
Section 6.01(5) of the Supplemental Indenture) which default (i) is a
Payment Default or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated,
aggregates $50.0 million or more; (vi) failure by the Company or any
Restricted Subsidiaries to pay final and non-appealable judgments
aggregating in excess of $50.0 million, which are not covered by
indemnities or third-party insurance, which judgments are not paid,
discharged, vacated or stayed for a period of 60 days; (vii) the
repudiation by the Company or any of its Restricted Subsidiaries of any
of its obligations under any of the Security Documents or the
unenforceability of any of the Security Documents against the Company
or any of its Restricted Subsidiaries for any reason if such
unenforceability is applicable to Collateral having an aggregate Fair
Market Value of $50.0 million or more; (viii) any Security Document or
any Lien purported to be granted thereby on assets having a Fair Market
Value in excess of $50.0 million is held in any judicial proceeding to
be unenforceable or invalid, in whole or in part, or ceases for any
reason within the control of the Company or any of its Restricted
Subsidiaries (other than pursuant to a release that is delivered or
becomes effective as set forth in this Supplemental Indenture) to be
fully enforceable and perfected; (ix) except as permitted by this
Supplemental Indenture, any Note Guarantee of a Significant Subsidiary
is held in any judicial proceeding to be unenforceable or invalid or
ceases for any reason to be in full force and effect or any Guarantor
that is a Significant Subsidiary, or any Person acting on behalf of any
Guarantor that is a Significant Subsidiary, denies or disaffirms its
obligations under its Note Guarantee; and (x) certain events of
bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event
of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or
notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if and so long as a committee of its
Responsible Officers in good faith determines that withholding notice
is in the best interests of the Holders. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to
the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes
(including in connection with an offer to purchase). The Company is
required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
(14) Trustee Dealings with Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not the Trustee.
However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the
SEC for permission to continue as trustee or resign. Any Agent may do
the same with like rights and duties. The Trustee is also subject to
Sections 611 and 612 of the Base Indenture.
A-6
(15) No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such,
will have any liability for any obligations of the Company or the
Guarantors under the Notes, the Indenture, the Note Guarantees, the
Security Documents or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. The
waiver may not be effective to waive liabilities under the federal
securities laws.
(16) Authentication. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(17) Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(18) CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the
Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
(19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE SUPPLEMENTAL INDENTURE, THE NOTES
AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Base Indenture, the Supplemental Indenture
and other Note Documents. Requests may be made to:
Reliant Energy, Inc.
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _____________
Your Signature: ________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: ______________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Supplemental Indenture, check the
appropriate box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Supplemental Indenture,
state the amount you elect to have purchased:
$_______________
Date: _______________
Your Signature: ________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.: ________________
Signature Guarantee*: ______________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
B-1
EXHIBIT B
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed on a senior basis, to the extent set forth in the Indenture and
subject to the provisions in the senior indenture (the "Base Indenture"), dated
as of December 22, 2004, between Reliant Energy, Inc., (the "Company") and
Wilmington Trust Company, as trustee (the "Trustee"), as amended by the First
Supplemental Indenture (the "Supplemental Indenture" and, together with the Base
Indenture, the "Indenture"), dated as of December 22, 2004, among the Company,
the Guarantors listed on Schedule I thereto and the Trustee, (a) the due and
punctual payment of the principal of, premium, if any, and interest on the Notes
(as defined in the Supplemental Indenture), whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal of and interest on the Notes, if any, if lawful, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The Obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and
the Indenture are expressly set forth in Article 12 of the Supplemental
Indenture and reference is hereby made to the Indenture for the precise terms of
the Note Guarantee. Each Holder of a Note, by accepting the same, agrees to and
shall be bound by such provisions and appoints the Trustee attorney-in-fact of
such Holder for such purpose.
[NAME OF GUARANTOR(S)]
By: _________________________________
Name:
Title:
X-0
XXXXXXX X
XXXX XX XXXXXXXXXXXX XXXXXXXXX
ADDITIONAL SUBSIDIARY GUARANTEES
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture for Additional
Guarantees"), dated as of ________________, 2004, among __________________ (the
"Guaranteeing Subsidiary"), a subsidiary of Reliant Energy, Inc. (or its
permitted successor), a __________ corporation (the "Company"), the Company, the
other Guarantors (as defined in the Indenture referred to herein) and Wilmington
Trust Company, as trustee under the indentures referred to below (the
"Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a senior indenture (the "Base Indenture"), dated as of December 22,
2004, between the Company and the Trustee, as amended by a first supplemental
indenture (the "Supplemental Indenture" and, together with the Base Indenture,
the "Indenture"), dated as of December 22, 2004, among the Company, the
Guarantors named therein and the Trustee, providing for the original issuance of
an aggregate principal amount of $750.0 million of 6.75% Senior Secured Notes
due 2014 (the "Initial Notes"), and, subject to the terms of the Supplemental
Indenture, future unlimited issuances of 6.75% Senior Secured Notes due 2014
(the "Additional Notes," and together with the Initial Notes, the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture
(the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Supplemental Indenture, the
Trustee, the Company and the other Guarantors are authorized to execute and
deliver this Supplemental Indenture for Additional Guarantees.
NOW THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary, the Trustee, the Company and the other Guarantors
mutually covenant and agree for the equal and ratable benefit of the Holders of
the Notes as follows:
1. Capitalized Terms. Unless otherwise defined in this Supplemental
Indenture for Additional Guarantees, capitalized terms used herein without
definition shall have the meanings assigned to them in the Supplemental
Indenture.
2. Agreement to be Bound; Guarantee. The Guaranteeing Subsidiary hereby
becomes a party to the Supplemental Indenture as a Guarantor and as such will
have all of the rights and be subject to all of the Obligations and agreements
of a Guarantor under the Indenture. The Guaranteeing Subsidiary hereby agrees to
be bound by all of the provisions of the Supplemental Indenture applicable to a
Guarantor and to perform all of the Obligations and agreements of a Guarantor
under the Supplemental Indenture. In furtherance of the foregoing, the
Guaranteeing Subsidiary shall be deemed a Guarantor for purposes of Article 12
of the Supplemental Indenture, including, without limitation, Section 12.02
thereof.
3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL
D-1
INDENTURE FOR ADDITIONAL GUARANTEES BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
4. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture for Additional Guarantees. Each signed copy shall be an
original, but all of them together represent the same agreement.
5. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
6. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture for Additional Guarantees or for or in respect of the recitals
contained herein, all of which recitals are made solely by the Guaranteeing
Subsidiary and the Company.
7. Ratification of Indenture; Supplemental Indenture for Additional
Guarantees Part of Indenture. Except as expressly amended hereby, the Indenture
is in all respects ratified and confirmed and all the terms, conditions and
provisions thereof shall remain in full force and effect. This Supplemental
Indenture for Additional Guarantees shall form a part of the Indenture for all
purposes, and every Holder of Notes heretofore or hereafter authenticated and
delivered shall by bound hereby.
D-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture for Additional Guarantees to be duly executed and attested, all as of
the date first above written.
Dated: ______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
[COMPANY]
By: _______________________________
Name:
Title:
[EXISTING GUARANTORS]
By: _______________________________
Name:
Title:
[TRUSTEE],
as Trustee
By: _______________________________
Authorized Signatory
D-3
