Exhibit 99.1
LOCK-UP AGREEMENT
This Lock-Up Agreement (this "Agreement") is made and entered into as of
September____, 2005, among Mirant Corporation ("Mirant"), a Delaware
corporation; Mirant Americas Generation, LLC, a Delaware limited liability
company ("MAG"); the undersigned noteholder (the "Noteholder"); the Official
Committee of Unsecured Creditors of Mirant Americas Generation, LLC (the "MAG
Official Committee"); and the Ad Hoc Committee of Bondholders of Mirant Americas
Generation, LLC (the "MAG Ad Hoc Committee"). Mirant, MAG, the Noteholder, the
MAG Official Committee, and the MAG Ad Hoc Committee are collectively referred
to herein as the "Parties" and each individually as a "Party."
In consideration of the premises and the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1. Agreement by Noteholder.
(a) The Noteholder hereby agrees, so long as this Agreement remains in
effect and during the period commencing on the date of this
Agreement and continuing until the termination of this Agreement
as provided for in Section 5 hereof, to (i) not directly or
indirectly oppose (or encourage any other Person(1) or Entity to
oppose) approval of the Amended Disclosure Statement, and (ii) not
directly or indirectly oppose (or encourage any other Person or
Entity to oppose) confirmation of the Amended Plan; provided,
that, the obligations imposed on the Noteholder by this Section
1(a) shall apply to Noteholder solely in its capacity as a holder
of the MAG Long-term Notes.
(b) So long as this Agreement remains in effect and during the period
commencing on the date of this Agreement and continuing until the
termination of this Agreement as provided for in Section 5 hereof,
the Noteholder agrees to take commercially reasonable actions to
instruct, and hereby instructs, the MAG Indenture Trustee and the
MAG Ad Hoc Committee to (i) withdraw, prior to the commencement of
the hearing on the Amended Disclosure Statement, (A) the MAG
Indenture Trustee's and the MAG Ad Hoc Committee's objections to
the Xxxxx 00 Xxxxxxxxxx Xxxxxxxxx, (X) the MAG Ad Hoc Committee's
Impairment Appeal (C) the MAG Indenture Trustee's joinder in the
MAG Official Committee's Impairment Appeal, and (D) the MAG Ad Hoc
Committee's joinder in the MAG Official Committee's objection to
the Debtors' motion for approval of the Exit Commitment, and (ii)
not oppose (A) approval of the CEO Motion, (B) approval of the
Amended Disclosure Statement, or (C) confirmation of the Amended
Plan; provided, that, without limiting the MAG Ad Hoc Committee's
obligations under Section 4 hereof, the Noteholder shall not be
required (x) to
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(1) Any capitalized term used herein but not defined herein shall have the
meaning ascribed to such term in the term sheet attached hereto as
EXHIBIT A (the "Term Sheet").
indemnify or make any economic concession to the MAG Indenture
Trustee in connection with such instruction, (y) to the extent the
Noteholder has sold all or a portion of its MAG Long-term Notes,
to locate or obtain an instruction from any Person or Entity that
has purchased such MAG Long-term Notes, or (z) to the extent the
Noteholder has sold all or a portion of its MAG Long-term Notes,
to issue an instruction on behalf of a face amount of MAG
Long-term Notes greater than the face amount of MAG Long-term
Notes it then owns, after taking into account any of its sales of
MAG Long-term Notes.
(c) So long as this Agreement remains in effect and during the period
commencing on the date of this Agreement and continuing until the
termination of this Agreement as provided for in Section 5 hereof,
the Noteholder agrees to take commercially reasonable actions to
further instruct, and hereby further instructs, the MAG Indenture
Trustee:
(i) to consent to the inclusion in the master indenture and/or
supplemental indenture for the MAG Long-term Notes of the
covenants described in paragraph 2(a)(y)(2) below, and, to
the extent necessary, to enter into a supplemental
indenture memorializing the addition of such covenants to
the master indenture and/or the supplemental indenture;
provided, however, that this instruction is contingent upon
confirmation of a chapter 11 plan for the Debtors in
substantially the form of the Amended Plan no later than
January 31, 2006; and
(ii) not to object to findings by the Bankruptcy Court in a
confirmation order or otherwise determining that under the
Amended Plan the MAG Long-term Notes are not impaired,
including that all existing defaults are cured and that no
new defaults are created under the Amended Plan, including
without limitation any defaults under the following
sections of the master indenture: (a) section 501(3), (b)
section 801, and (c) section 802; and supplemental
indenture: (a) section 109, and (b) section 111;
provided, that, without limiting the MAG Ad Hoc Committee's
obligations under Section 4 hereof, the Noteholder shall not be
required (x) to indemnify or make any economic concession to the
MAG Indenture Trustee in connection with such instruction, (y) to
the extent the Noteholder has sold all or a portion of its MAG
Long-term Notes, to locate or obtain an instruction from any
Person or Entity that has purchased such MAG Long-term Notes, or
(z) to the extent the Noteholder has sold all or a portion of its
MAG Long-term Notes, to issue an instruction on behalf of a face
amount of MAG Long-term Notes greater than the face amount of MAG
Long-term Notes it then owns, after taking into account any of its
sales of MAG Long-term Notes.
(d) The Noteholder hereby agrees, so long as this Agreement remains in
effect and during the period commencing on the date of this
Agreement and continuing until the termination of this Agreement
as provided for in Section 5 hereof, not to sell or transfer any
of the MAG Long-term Notes it owns to any Person or Entity who
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does not first agree in writing to be bound by this Agreement by
executing an acknowledgment substantially in the form of the
acknowledgment attached hereto as EXHIBIT B (and any sale or
transfer not in compliance with the foregoing shall be null and
void); provided, that such restriction on transfer shall apply
only to MAG Long-term Notes owned by the Noteholder, including any
MAG Long-term Notes acquired by the Noteholder after the date of
this Agreement. For the avoidance of doubt, nothing in this
Agreement shall limit the Noteholder's ability to sell or transfer
any other securities.
2. Agreement by Mirant.
(a) Provided that:
(i) Mirant receives executed lock-up agreements ("Lock-up
Agreements"), each of which shall be substantially in the
form of this Agreement, from the holders of MAG Long-term
Notes in a minimum aggregate face amount to be mutually
agreed among Mirant, the MAG Official Committee, and
counsel to the MAG Ad Hoc Committee; and
(ii) the MAG Indenture Trustee and the MAG Ad Hoc Committee
withdraw their objections to the March 25 Disclosure
Statement (as it is to be amended) and any related actions;
and
(iii) the MAG Indenture Trustee, in conjunction with the MAG
Official Committee's and the MAG Ad Hoc Committee's
withdrawal of the Impairment Appeal, withdraws its joinder
to the MAG Official Committee's Impairment Appeal and any
related actions; and
(iv) the MAG Ad Hoc Committee withdraws its (A) Impairment
Appeal, and (B) joinder to the MAG Official Committee's
objection to the Debtors' motion for approval of the Exit
Commitment and any related actions; and
(v) the MAG Indenture Trustee and the MAG Ad Hoc Committee
agree not to oppose (A) approval of (I) the CEO Motion, or
(II) the Amended Disclosure Statement, or (B) confirmation
of the Amended Plan,
then Mirant shall file, by 5 p.m. (eastern time) on the date that
is three (3) business days prior to the hearing on the Amended
Disclosure Statement, but in no event later than October 17, 2005,
(x) a Form 8-K with the Securities and Exchange Commission
disclosing that the condition set forth in Section 2(a)(i) hereof
and paragraph 10(b) of the Term Sheet has been satisfied, and (y)
with the Bankruptcy Court, the Amended Disclosure Statement and
the Amended Plan, which shall provide for the following treatment
of MAG Debtor Class 6 - Long-term Note Claims thereunder:
(1) payment in Cash on the Effective Date of the Amended Plan
of all unpaid interest accrued at the contractual rate
through the Effective Date
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(including "interest on interest" as contemplated by
Section 503 of the MAG Indenture governing the MAG
Long-term Notes), compounded semi-annually on the date of
each scheduled payment, and "Additional Interest," as
defined in Section 2(e) of the MAG Registration Rights
Agreement, during the period while MAG was not a timely SEC
filer); and
(2) provision of (I) a new covenant enforceable by the MAG
Indenture Trustee that would provide that any payments from
MAG to New Mirant at a time when MAG or its subsidiaries
owe debt to New Mirant (or any of its non-MAG
subsidiaries), shall be treated as a repayment of such
debt, rather than as a dividend until all such debt is
repaid, and (II) a new debt incurrence test enforceable by
the MAG Indenture Trustee that would limit the ability of
MAG and its subsidiaries to incur additional debt (other
than "Permitted Debt"), unless the consolidated ratio of
net debt to EBITDA for MAG and its subsidiaries was 6.75:1
or less. For purposes of the covenant, all terms shall be
as defined in the Exit Commitment; provided, that
"Permitted Debt" would include (a) all debt at MAG and its
subsidiaries as of the Effective Date, (b) debt at MIRMA as
permitted by the MIRMA Leases, (c) debt arising under or
permitted by the Exit Facility (excluding (x) "Subordinated
Debt" as defined in the Exit Commitment, and (y)
intercompany loans not made in the ordinary course of
business), (d) an amount up to $200 million at MAG, and (e)
the refinancing of any of the foregoing debt; provided,
that with respect to the refinancing of the MAG Long-term
Notes maturing in 2011, subsidiaries of MAG may only incur
up to $250 million of debt (in addition to any unused
portion of the $250 million additional debt basket provided
for in the Exit Facility).
(b) Except for the modifications described in Sections 2(a)(y)(1) and
2(a)(y)(2) hereof, Mirant hereby agrees that it shall not modify
the treatment of MAG Debtor Class 6 - MAG Long-term Note Claims
under the Amended Disclosure Statement or the Amended Plan in any
material respect. Furthermore, subject to the substantial
consummation of the Amended Plan, MAG hereby agrees, as issuer of
the MAG-Long-term Notes and for purposes of this paragraph, solely
with respect thereto, to comply with the indemnification and hold
harmless obligations to the MAG Indenture Trustee consistent with
the Master Indenture dated as of May 1, 2001 by and between Mirant
Americas Generation, LLC (f/k/a Mirant Americas Generation, Inc.)
and Xxxxx Fargo Bank, National Association, as successor trustee
to Bankers Trust Company, and that such obligations will survive
the confirmation and effectiveness of the Amended Plan.
3. Further Agreement by the Parties. The Parties agree and acknowledge that
(i) the identity of the Noteholder, and (ii) the amount of MAG Long-term
Notes committed by the Noteholder pursuant to this Agreement and set
forth on the signature page hereto are highly confidential information
and may not be disclosed by any Party to any Person or Entity other than
(A) Mirant and its counsel, (B) the MAG Official Committee and its
counsel, or (C) counsel to the MAG Ad
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Hoc Committee, without the prior written consent of Noteholder; provided,
that, (x) the Debtors may disclose the identity of the Noteholder in a
document filed with the Bankruptcy Court so long as such document is
filed under seal, and (y) the Parties may disclose the identity of the
Noteholder if ordered by the Bankruptcy Court or other court of competent
jurisdiction or such disclosure is otherwise required by law or such
confidential information otherwise becomes available to the public other
than as a result of a breach of this Agreement; provided, further, that
(a) in the event the Debtors disclose the identity of the Noteholder in a
document filed with the Bankruptcy Court under seal, the Debtors must
notify counsel to the MAG Ad Hoc Committee and counsel to the MAG
Official Committee prior to filing the document, and (b) in the event a
Party is ordered by the Bankruptcy Court or other court of competent
jurisdiction or is otherwise required by law to disclose the identity of
the Noteholder, such Party will (I) immediately notify counsel to the MAG
Ad Hoc Committee and counsel to the MAG Official Committee, of such order
or requirement as soon as practicable so that the Noteholder may seek an
appropriate protective order, and (II) use commercially reasonable
efforts to cooperate with counsel to the MAG Ad Hoc Committee and counsel
to the MAG Official Committee in connection with their efforts to seek a
protective order.
4. Agreement by MAG Ad Hoc Committee. The MAG Ad Hoc Committee hereby agrees
to use reasonable efforts (which efforts may be satisfied through its
representatives) to (i) poll the members of the MAG Ad Hoc Committee to
determine whether such members know of any holders of MAG Long-term Notes
(other than the members of the MAG Official Committee) who have not
executed Lock-up Agreements, and contact and encourage such noteholders
to execute the Lock-up Agreements, and (ii) contact any holders of MAG
Long-term Notes (other than the members of the MAG Ad Hoc Committee) who
have contacted the MAG Ad Hoc Committee within the preceding twelve (12)
months to discuss joining the MAG Ad Hoc Committee, and encourage such
noteholders to execute the Lock-up Agreements.
5. Termination of Agreement; Withdrawal.
(a) The Parties may terminate their respective obligations hereunder,
and the Noteholder may rescind, withdraw or revoke any action
taken by the Noteholder pursuant to this Agreement, upon the (i)
material breach by any Party of its obligations under this
Agreement, and (ii) the failure by Mirant to file, by 5 p.m.
(eastern time) on the date that is three (3) business days prior
to the hearing on the Amended Disclosure Statement, but in no
event later than October 17, 2005, the Amended Disclosure
Statement and the Amended Plan, each providing for (A) the
treatment of MAG Debtor Class 6 - Long-term Note Claims set forth
in Sections 2(a)(y)(1) and 2(a)(y)(2) hereof, (B) the treatment of
MAG Debtor Class 5 - Unsecured Claims set forth in paragraph 10(a)
of the Term Sheet, (C) the issuance of MAI Series A Preferred
Shares as set forth in paragraph 10(d) of the Term Sheet, (D) the
reimbursement of the fees of (x) the Old Indenture Trustee as set
forth in paragraph 10(c) of the Term Sheet, and (y) counsel to the
MAG Ad Hoc Committee as set forth in paragraph 10(e) of the Term
Sheet, and (E) the agreement of the Debtors set forth in paragraph
10(f) of the Term Sheet; provided, that Mirant may, with the prior
written consent of the MAG Official Committee, modify the
treatment of MAG Debtor Class 5 - Unsecured Claims set forth in
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paragraph 10(a) of the Term Sheet if such modification is
materially economically consistent with the treatment set forth in
the Term Sheet.
(b) The Parties may terminate their respective obligations hereunder
upon
(i) the failure by the Bankruptcy Court to confirm, by 5 p.m.
(eastern time) on January 31, 2006, the Amended Plan,
providing for (A) the treatment of MAG Debtor Class 6 -
Long-term Note Claims set forth in Sections 2(a)(y)(1) and
2(a)(y)(2) hereof, (B) the treatment of MAG Debtor Class 5
- Unsecured Claims set forth in paragraph 10(a) of the Term
Sheet, (C) the issuance of MAI Series A Preferred Shares as
set forth in paragraph 10(d) of the Term Sheet, (D) the
reimbursement of the fees of (x) the Old Indenture Trustee
as set forth in paragraph 10(c) of the Term Sheet, and (y)
counsel to the MAG Ad Hoc Committee as set forth in
paragraph 10(e) of the Term Sheet, and (E) the agreement of
the Debtors set forth in paragraph 10(f) of the Term Sheet;
provided, that Mirant may, with the prior written consent
of the MAG Official Committee, modify the treatment of MAG
Debtor Class 5 - Unsecured Claims set forth in paragraph
10(a) of the Term Sheet if such modification is materially
economically consistent with the treatment set forth in the
Term Sheet; and
(ii) the failure of the Effective Date to occur by 5 p.m.
(eastern time) on March 31, 2006, with respect to the
Amended Plan, providing for (A) the treatment of MAG Debtor
Class 6 - Long-term Note Claims set forth in Sections
2(a)(y)(1) and 2(a)(y)(2) hereof, (B) the treatment of MAG
Debtor Class 5 - Unsecured Claims set forth in paragraph
10(a) of the Term Sheet, (C) the issuance of MAI Series A
Preferred Shares as set forth in paragraph 10(d) of the
Term Sheet, (D) the reimbursement of the fees of (x) the
Old Indenture Trustee as set forth in paragraph 10(c) of
the Term Sheet, and (y) counsel to the MAG Ad Hoc Committee
as set forth in paragraph 10(e) of the Term Sheet, and (E)
the agreement of the Debtors set forth in paragraph 10(f)
of the Term Sheet; provided, that Mirant may, with the
prior written consent of the MAG Official Committee, modify
the treatment of MAG Debtor Class 5 - Unsecured Claims set
forth in paragraph 10(a) of the Term Sheet if such
modification is materially economically consistent with the
treatment set forth in the Term Sheet. For purposes of
clarification, following a termination of this Agreement
pursuant to Section 5(b)(i) hereof, the Noteholder, the MAG
Official Committee and the MAG Ad Hoc Committee shall have
the right to oppose (I) confirmation of the Amended Plan,
and (II) approval of the disclosure statement relating to
any other plan of reorganization proposed by the Debtors,
and confirmation of any such plan, in each case on any and
all grounds including, without limitation, the grounds set
forth in the Impairment Appeal.
6. Representations and Warranties.
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(a) Each Party represents and warrants that the execution and delivery
of this Agreement and the implementation of the obligations
contemplated hereby have been duly and validly authorized by all
required actions on the part of such Party and no other
proceedings on the part of such Party are necessary to authorize
this Agreement or to carry out the obligations contemplated
hereby. This Agreement has been duly and validly executed and
delivered by such Party and, assuming this Agreement has been duly
authorized, executed and delivered by the other Parties hereto,
constitutes a valid and binding agreement of such Party.
(b) The Noteholder represents and warrants that (i) it owns the MAG
Long-term Notes specified underneath the Noteholder's signature
line on the signature page hereto, and (ii) the aggregate face
amount of MAG Long-term Notes the Noteholder owns as of the date
of this Agreement does not exceed the aggregate face amount of MAG
Long-term Notes specified underneath the Noteholder's signature
line on the signature page hereto. The Noteholder also represents
and warrants that it does not own or control any MAG Long-term
Notes other than the aggregate face amount of MAG Long-term Notes
specified underneath the Noteholder's signature line on the
signature page hereto.
(c) The Noteholder represents and warrants that it has not entered
into any agreements that restrict its rights or remedies as a
holder of the MAG Long-term Notes in a manner that would affect
its ability to carry out its obligations hereunder.
7. Acknowledgment. This Agreement is not and shall not be deemed to be a
solicitation for approval or acceptance of the Amended Plan.
8. Amendments. This Agreement may not be modified, amended or supplemented
without the prior written consent of the Parties.
9. Reservation of Rights. Except as expressly provided in this Agreement,
nothing herein is intended to, or does, in any manner, waive, limit,
impair or restrict the ability of any of the Parties to protect and
preserve its rights, remedies and interests, including without
limitation, the claims of Noteholder against the Debtors. If the
transactions contemplated herein are not consummated, or if this
Agreement is terminated for any reason, the Parties fully reserve any and
all of their rights.
10. Governing Law: Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without regard to any conflicts of law provision which would require the
application of the law of any other jurisdiction. By its execution and
delivery of this Agreement, each of the Parties hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or
proceeding against it with respect to any matter under or arising out of
or in connection with this Agreement or for recognition or enforcement of
any judgment rendered in any such action, suit or proceeding, may be
brought in the United States District Court for the Northern District of
Texas. By execution and delivery of this Agreement, each of the Parties
irrevocably accepts and submits itself to the nonexclusive
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jurisdiction of such court, generally and unconditionally, with respect
to any such action, suit or proceeding.
11. Specific Performance. It is understood and agreed by each of the Parties
that money damages would not be a sufficient remedy for any breach of
this Agreement by any Party and each non-breaching Party shall be
entitled to specific performance and injunctive or other equitable relief
as a remedy of any such breach.
12. Headings. The headings of the sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
13. Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of the Parties and their respective successors, permitted
assigns, heirs, executors, administrators and representatives.
14. Prior Negotiations: Conflicts. This Agreement and the Term Sheet
supersede all prior negotiations with respect to the subject matter
hereof. In the event that any provision of this Agreement conflicts with
any provision of the Term Sheet, the terms of this Agreement shall
supercede the terms of the Term Sheet.
15. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
16. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties and no other
person or entity shall be a third-party beneficiary hereof.
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IN WITNESS WHEREOF, EACH OF THE PARTIES HAS CAUSED THIS AGREEMENT TO BE
EXECUTED AND DELIVERED BY ITS DULY AUTHORIZED OFFICER AS OF THE DATE FIRST ABOVE
WRITTEN.
MIRANT CORPORATION THE OFFICIAL COMMITTEE OF
UNSECURED CREDITORS OF
--------------------------------- MIRANT AMERICAS GENERATION,
By: LLC
Its:
-------------------------------
By:
LEGAL NAME OF NOTEHOLDER: THE AD HOC COMMITTEE OF
BONDHOLDERS OF MIRANT
AMERICAS GENERATION, LLC
---------------------------------
By: -------------------------------
Its: By:
Its:
Face Amount of MAG Long-term Notes held
by Noteholder:
8.3% Senior Notes due 2011:_____________
8.5% Senior Notes due 2021:_____________
9.125% Senior Notes due 2031:___________
MIRANT AMERICAS GENERATION, LLC
---------------------------------
By:
Its:
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EXHIBIT A
(Term Sheet attached)
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EXHIBIT B
Form of Acknowledgment
[Purchaser] hereby agrees to be bound by the terms of the Lock-Up
Agreement attached as Exhibit [ ] to the 8-K filed by Mirant Corporation on [ ].
[Date]
[PURCHASER]
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By:
Its:
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