EXHIBIT 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
FIRST AMENDMENT (this "Amendment"), dated as of July 12, 2002,
to the $1,800,000,000 Senior B Credit Agreement, dated as of July 13, 2001 (as
heretofore amended, supplemented or otherwise modified, the "Credit Agreement"),
among HOUSTON INDUSTRIES FINANCECO LP, a Delaware limited partnership (the
"Borrower"), RELIANT ENERGY, INCORPORATED, a Texas corporation ("Reliant
Energy"), the several banks and other financial institutions (the "Banks") and
agents from time to time parties thereto and JPMORGAN CHASE BANK (f/k/a The
Chase Manhattan Bank), as administrative agent for the Banks (in such capacity,
the "Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower, Reliant Energy, the Banks and the Agent
are parties to the Credit Agreement; and
WHEREAS, the Borrower and Reliant Energy have requested that
the Banks agree to extend the Termination Date and amend certain other
provisions contained in the Credit Agreement, and the Banks and the Agent are
agreeable to such request upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein which are defined in the Credit Agreement are used herein as
therein defined.
2. Amendment to Section 1.1 of the Credit Agreement (Certain
Defined Terms). Section 1.1 of the Credit Agreement is hereby amended by
deleting, in their entirety, the terms "Applicable Margin", "Consolidated
Capitalization", "Designated Rating", "Rating Agencies", "Termination Date" and
"Usage Fee" appearing therein and inserting the following new definitions in the
appropriate alphabetical order:
""Applicable Margin" means the rate per annum set forth below
opposite the Designated Rating from time to time in effect during the
period for which payment is due, with respect to any Committed Loan:
=====================================================================================
Applicable Margin for Applicable Margin for ABR
Designated Rating LIBOR Rate Loans Loans
-------------------------------------------------------------------------------------
BBB+/Baa1 and higher 1.500% 0.500%
-------------------------------------------------------------------------------------
BBB/Baa2 1.650% 0.650%
-------------------------------------------------------------------------------------
BBB-/Baa3 2.000% 1.000%
-------------------------------------------------------------------------------------
BB+/Ba1 or lower or unrated 2.500% 1.500%
=====================================================================================
In each row in the table set forth above, the first indicated rating
corresponds to that assigned by S&P and the second indicated rating
corresponds to that assigned by Xxxxx'x; the determination of which row
of such table is applicable at any time is set forth in the definition
of "Designated Rating".
"Consolidated Capitalization" means, as of any date of
determination, the sum of (a) Consolidated Shareholders' Equity, (b)
Consolidated Indebtedness for Borrowed Money and, without duplication,
(c) Mandatory Payment Preferred Stock; provided that for the purpose of
calculating compliance with Section 8.4(b), Consolidated Capitalization
shall be determined excluding any adjustment, non-cash charge to net
income or other non-cash charges or writeoffs resulting thereto from
application of SFAS No. 142.
"Designated Rating" means (a) at any time that the Long Term
Debt Rating is assigned by both S&P and Xxxxx'x and such ratings are
equivalent, such rating shall be the Designated Rating, (b) if clause
(a) does not apply, (i) at any time that the Long Term Debt Rating is
issued by only one of S&P or Xxxxx'x, the rating of such debt issued by
such Rating Agency shall be the Designated Rating, and (ii) at any time
that such debt is rated by both S&P and Xxxxx'x, the lower of such
ratings and (c) if neither (a) nor (b) apply, if the Long Term Debt
Rating is not assigned by either S&P or Xxxxx'x, the rating assigned to
the senior unsecured debt of Reliant Energy shall be the Designated
Rating in accordance with clauses (a) and (b) above. Any change in the
calculation of the Facility Fees or the Applicable Margin with respect
to the Borrower that is caused by a change in the Designated Rating
will become effective on the date of the change in the Designated
Rating. If the rating system of any Rating Agency shall change, or if
either S&P or Xxxxx'x shall cease to be in the business of rating
corporate debt obligations, Borrower and the Agent shall negotiate in
good faith if necessary to amend this definition to reflect such
changed rating system or the unavailability of ratings from such Rating
Agencies and, pending the effectiveness of any such amendment, the
Designated Rating shall be determined by reference to the rating most
recently in effect prior to such change or cessation.
"Master Separation Agreement" means the master separation
agreement, dated as of December 31, 2000, entered into between Reliant
Energy and Unregco providing for, among other things, the Spin-off, as
amended, modified or supplemented from time to time.
"Rating Agencies" means S&P and Xxxxx'x.
"Termination Date" means (a) initially October 10, 2002,
unless the Majority Banks direct in writing on or prior to September 5,
2002 that such Termination Date shall be September 10, 2002, in which
case the Termination Date shall automatically be deemed to be September
10, 2002, or (b) any earlier date on which (i) the Commitments have
been terminated in accordance with this Agreement or (ii) all unpaid
principal amounts of Loans hereunder have become due and payable in
accordance with this Agreement.".
3. Amendment to Section 2.1 of the
Credit Agreement (The
Committed Loans). Section 2.1 of the
Credit Agreement is hereby amended by
adding at the end of paragraph (b) thereof the following:
"At a reasonable time at least one week prior to
September 5, 2002, the Agent shall inquire as to
whether requisite Banks intend to send the written
direction referred to in the definition of Termination
Date and shall notify the Borrower and the Banks if the
requisite number of such directives have been
received.".
4. Amendment to Section 4.2 of the Credit Agreement (Fees).
Section 4.2 of the Credit Agreement is hereby amended by:
(a) deleting the table in paragraph (a) thereof in its
entirety, and inserting in lieu thereof the following table:
"Designated Rating Facility Fee Rate
------------------ -----------------
BBB+/Baa1 or higher 0.250%
BBB/Baa2 0.350%
BBB-/Baa3 0.500%
BB+/Ba1 or lower or unrated 0.500%"; and
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(b) deleting paragraph (b) thereof in its entirety and
substituting in lieu thereof the following:
"(b) [INTENTIONALLY OMITTED.]"; and
(c) amending paragraph (c) thereof by (i) deleting the phrase
"and Usage Fees" and (ii) deleting the reference to "Sections 4.2(a) and 4.2(b)"
and substituting in lieu thereof "Section 4.2(a)".
5. Amendment to Section 4.4(a) of the Credit Agreement (ABR
Loans). Section 4.4(a) of the Credit Agreement is hereby amended by adding
immediately after "ABR" in clause (i) therein "plus the Applicable Margin".
6. Amendment to Section 8.4(b) of the Credit Agreement
(Financial Ratios). Section 8.4(b) of the Credit Agreement is hereby amended by
deleting the ratio "0.65:1.00" and substituting in lieu thereof "0.68:1.00".
7. Amendment to Section 8.4(g) of the Credit Agreement
(Certain Investments, Loans, Advances, Guarantees and Acquisitions). Section
8.4(g) of the Credit Agreement is hereby amended by adding at the end thereof
the following:
"Notwithstanding the foregoing, Reliant Energy and
its Subsidiaries shall not (x) make any future investments in,
loans to, advances to and Guarantees of any obligations in
Unregco or any of its Subsidiaries, (y) purchase or otherwise
acquire (in one transaction or a series of related
transactions) any assets of Unregco or any of its Subsidiaries
other than, in the case of this clause (y), any such
transactions contemplated by the Master Separation Agreement
and other agreements and arrangements in respect of the
relationship between Reliant Energy and Unregco described in
Reliant Energy's filings with the SEC or (z) enter into any
other transaction constituting a Reliant Energy Investment
with Unregco and its Subsidiaries other than, in the case of
this clause (z), the transactions contemplated by the Master
Separation Agreement and other agreements and arrangements in
respect of the relationship between Reliant Energy and Unregco
described in Reliant Energy's filings with the SEC or other
arrangements among Reliant Energy, Unregco and their
respective Subsidiaries in the ordinary course of business
consistent with recent past practices or otherwise at prices
and on terms and conditions not less favorable to Reliant
Energy or its Subsidiaries (other than Unregco and its
Subsidiaries) than could be obtained on an arm's length basis
from unrelated third parties.".
8. Amendment to Section 11.1 of the Credit Agreement
(Amendments and Waivers). Section 11.1 of the Credit Agreement is hereby amended
by (a) deleting "or" at the end of clause (iii) thereof and substituting in lieu
thereof a semicolon, (b) deleting the period at the end of clause (iv) thereof
and substituting in lieu thereof ", or" and (c) adding at the end thereof
immediately after clause (iv) a new clause (v) as follows:
"(v) amend, modify or waive the last paragraph of
Section 8.4(g) without the written consent of the
Supermajority Banks.".
9. Amendment to Exhibit L to the Credit Agreement (Form of
Regco $1.8 Billion Credit Agreement). Exhibit L to the Credit Agreement (the
"Regco Credit Agreement") is hereby amended in the manner set forth on Exhibit
A.
10. Confirmation and Reaffirmation of Loan Documents. Each
Loan Party does hereby (a) consent and acknowledge and agree to the transactions
described in this Amendment and (b) after giving effect to this Amendment, (i)
confirms, reaffirms and restates the representations and warranties (except for
those representations or warranties or parts thereof that, by their terms,
expressly relate solely to a specific date) made by it in each Loan Document to
which it is a party, (ii) ratifies and confirms each Loan Document to which it
is a party and (iii) confirms and agrees that each such Loan Document is, and
shall continue to be in full force and effect, with
3
(to the extent applicable) the collateral described therein securing and
continuing to secure, the payment of all obligations of such Loan Party referred
to therein; provided that each reference to the Credit Agreement therein and in
each of the other Loan Documents shall be deemed to be a reference to the Credit
Agreement after giving effect to this Amendment.
11. Conditions to Effectiveness. This Amendment shall become
effective as of the date set forth above upon satisfaction of the following
conditions precedent:
(a) The Agent shall have received counterparts of this
Amendment executed by the Borrower, Reliant Energy and each of the
Banks;
(b) The Agent shall have received an amendment fee for the
account of each Bank in an amount equal to 0.125% of such Bank's
Commitment;
(c) All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with this Amendment
shall be in form and substance reasonably satisfactory to the Agent;
(d) The Agent shall have received all fees and expenses
required to be paid in connection with the Credit Agreement; and
(e) The Agent shall have received satisfactory legal opinions
and other documents and certificates reasonably requested by the Agent.
12. Reference to and Effect on the Loan Documents; Limited
Effect. On and after the date hereof and the satisfaction of the conditions
contained in Section 11 of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby. The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Bank or the Agent under any of the
Loan Documents, nor constitute a waiver of any provisions of any of the Loan
Documents. Except as expressly amended herein, all of the provisions and
covenants of the Credit Agreement and the other Loan Documents are and shall
continue to remain in full force and effect in accordance with the terms thereof
and are hereby in all respects ratified and confirmed.
13. Representations and Warranties. Each of the Borrower and
Reliant Energy, as of the date hereof and after giving effect to the amendment
contained herein, hereby confirms, reaffirms and restates the representations
and warranties (except for those representations or warranties or parts thereof
that, by their terms, expressly relate solely to a specific date) made by it in
Article VII of the Credit Agreement and otherwise in the Loan Documents to which
it is a party; provided that each reference to the Credit Agreement therein
shall be deemed to be a reference to the Credit Agreement after giving effect to
this Amendment.
14. Counterparts. This Amendment may be executed by one or
more of the parties hereto in any number of separate counterparts (which may
include counterparts delivered by facsimile transmission) and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Any executed counterpart delivered by facsimile transmission shall
be effective as an original for all purposes hereof. The execution and delivery
of this Amendment by any Bank shall be binding upon each of its successors and
assigns (including Transferees of its Commitments and Loans in whole or in part
prior to effectiveness hereof) and binding in respect of all of its Commitments
and Loans, including any acquired subsequent to its execution and delivery
hereof and prior to the effectiveness hereof.
15. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their duly authorized officers as of
the date first written above.
HOUSTON INDUSTRIES
FINANCECO LP
By: HOUSTON INDUSTRIES
FINANCECO GP, LLC,
its General Partner
By: /s/ XXXX XXXXXXXX
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Treasurer
RELIANT ENERGY, INCORPORATED
By: /s/ XXXX XXXXXXXX
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Treasurer
JPMORGAN CHASE BANK, as
Agent and as a Bank
By: /s/ XXXXXX XXXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Signature Page
Senior B Credit Agreement Amendment
ABN AMRO BANK N.V.
By: /s/ XXXXXX X. XXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By: /s/ XXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President
Signature Page
Senior B Credit Agreement Amendment
BANK OF AMERICA, N.A.
By: /s/ XXXXXXX X. XXXXX
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Principal
Signature Page
Senior B Credit Agreement Amendment
BARCLAYS BANK PLC
By: /s/ XXXX XXXXXXX
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
Signature Page
Senior B Credit Agreement Amendment
CITIBANK, N.A.
By: /s/ XXXXXX XXX
-----------------------------------
Name: Xxxxxx Xxx
Title: Managing Director
Signature Page
Senior B Credit Agreement Amendment
COMMERZBANK AG
New York and Grand Cayman Branches
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
Manager
By: /s/ W. XXXXX XXXXXXX
-----------------------------------
Name: W. Xxxxx Xxxxxxx
Title: Vice President
Signature Page
Senior B Credit Agreement Amendment
CREDIT SUISSE FIRST BOSTON
By: /s/ XXXXX X. XXXXX /s/ XXXXX X. XXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxx Xxxxx X. Xxxxxx
Title: Director Associate
Signature Page
Senior B Credit Agreement Amendment
DEUTSCHE BANK AG
NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By: /s/ XXXX X. XXXXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
By: /s/ XXXX XXXXXXXX
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
Signature Page
Senior B Credit Agreement Amendment
WACHOVIA BANK, NATIONAL ASSOCIATION
(f/k/a First Union National Bank)
By: /s/ XXXXXXX XXXXXXX
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
Signature Page
Senior B Credit Agreement Amendment
ROYAL BANK OF CANADA
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Manager
EXHIBIT A
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein which are defined in the Regco Credit Agreement are used
herein as therein defined.
2. Amendment to Section 1.01 of the Regco Credit Agreement
(Certain Defined Terms). Section 1.01 of the Regco Credit Agreement is hereby
amended by (a) deleting, in their entirety, the terms "Applicable Margin",
"Designated Rating", "Termination Date" and "Usage Fee" appearing therein and
inserting the following new definitions in the appropriate alphabetical order:
""Applicable Margin" means the rate per annum set forth below
opposite the Designated Rating from time to time in effect during the
period for which payment is due, with respect to any Committed Loan:
=================================================================================================
Applicable Margin for Applicable Margin for
Designated Rating Facility Fees LIBOR Rate Loans ABR Loans
-------------------------------------------------------------------------------------------------
BBB+/Baa1 and higher 0.250% 1.500% 0.500%
-------------------------------------------------------------------------------------------------
BBB/Baa2 0.350% 1.650% 0.650%
-------------------------------------------------------------------------------------------------
BBB-/Baa3 0.500% 2.000% 1.000%
-------------------------------------------------------------------------------------------------
BB+/Ba1 or lower or
unrated 0.500% 2.500% 1.500%
=================================================================================================
In each row in the table set forth above, the first indicated rating
corresponds to that assigned by S&P and the second indicated rating
corresponds to that assigned by Xxxxx'x; the determination of which row
of such table is applicable at any time is set forth in the definition
of "Designated Rating".
"Designated Rating" means (a) at any time that the Long Term
Debt Rating is assigned by both S&P and Xxxxx'x and such ratings are
equivalent, such rating shall be the Designated Rating, (b) if clause
(a) does not apply, (i) at any time that the Long Term Debt Rating is
issued by only one of S&P or Xxxxx'x, the rating of such debt issued by
such Rating Agency shall be the Designated Rating, and (ii) at any time
that such debt is rated by S&P and Xxxxx'x, the lower of such ratings
and (c) if neither (a) nor (b) apply, if the Long Term Debt Rating is
not assigned by either S&P or Xxxxx'x, the rating assigned to the
senior unsecured debt of Reliant Energy shall be the Designated Rating
in accordance with clauses (a) and (b) above. Any change in the
calculation of the Facility Fees or the Applicable Margin with respect
to Borrower that is caused by a change in the Designated Rating will
become effective on the date of the change in the Designated Rating. If
the rating system of any Rating Agency shall change, or if either S&P
or Xxxxx'x shall cease to be in the business of rating corporate debt
obligations, Borrower and the Agent shall negotiate in good faith if
necessary to amend this definition to reflect such changed rating
system or the unavailability of ratings from such Rating Agencies and,
pending the effectiveness of any such amendment, the Designated Rating
shall be determined by reference to the rating most recently in effect
prior to such change or cessation.
"Master Separation Agreement" means the master separation
agreement, dated as of December 31, 2000, entered into between Reliant
Energy and Unregco providing for, among other things, the Spin-off, as
amended, modified or supplemented from time to time.
"Spin-off" shall have the meaning specified in Schedule 2
attached hereto.
"Supermajority Banks" means, at any time, Banks having at
least 65% of the aggregate Commitments or, if the Commitments have been
terminated, 65% of the aggregate Commitments in effect immediately
prior to such termination.
"Termination Date" means (a) initially October 10, 2002,
unless the Majority Banks direct in writing on or prior to September 5,
2002 that such Termination Date shall be September 10, 2002, in which
case the Termination Date shall automatically be deemed to be September
10, 2002, or (b) any earlier date on which (i) the Commitments have
been terminated in accordance with this Agreement or (ii) all unpaid
principal amounts of Loans hereunder have become due and payable in
accordance with this Agreement."; and
(b) amending the definition of "Consolidated EBITDA" by
deleting "for any period" and substituting in lieu thereof "means, for
any twelve-month period ending on the date of determination".
3. Amendment to Section 2.01 of the Credit Agreement (The
Committed Loans). Section 2.01 of the Credit Agreement is hereby amended by
adding at the end of paragraph (a) thereof the following:
"At a reasonable time at least one week prior to
September 5, 2002, the Agent shall inquire as to
whether requisite Banks intend to send the written
direction referred to in the definition of
Termination Date and shall notify the Borrower and
the Banks if the requisite number of such directives
have been received.".
4. Amendment to Section 4.02 of the Regco Credit Agreement
(Fees). Section 4.02 of the Regco Credit Agreement is hereby amended by:
(a) deleting paragraph (b) thereof in its entirety and
substituting in lieu thereof the following:
"(b) [INTENTIONALLY OMITTED.]"; and
(b) amending paragraph (c) thereof by (i) deleting the phrase
"and Usage Fees"; and (ii) by deleting "Sections 4.02(a) and 4.02(b)" and
substituting in lieu thereof "Section 4.02(a)".
5. Amendment to Section 4.04(a) of the Credit Agreement (ABR
Loans). Section 4.04(a) of the Credit Agreement is hereby amended by adding
immediately after "ABR" in clause (i) therein "plus the Applicable Margin".
6. Amendment to Section 8.02(a) of the Regco Credit Agreement
(Financial Ratio). Section 8.02(a) of the Regco Credit Agreement is hereby
amended by deleting the ratio "4.50:1.00" and substituting in lieu thereof the
ratio "4.75:1.00".
7. Amendment to Section 8.02(g) of the Credit Agreement
(Certain Investments, Loans, Advances, Guarantees and Acquisitions). Section
8.02(g) of the Regco Credit Agreement is hereby amended by adding at the end
thereof the following:
"Notwithstanding the foregoing, Borrower and its
Subsidiaries shall not (x) make any future investments in,
loans to, advances to and Guarantees of any obligations in
Unregco or any of its Subsidiaries or purchase or otherwise
acquire (in one transaction or a series of related
transactions) any assets of Unregco or any of its
Subsidiaries, (y) purchase or otherwise acquire (in one
transaction or a series of related transactions) any assets of
Unregco or any of its Subsidiaries other than, in the case of
this clause (y), any such transactions contemplated by the
Master Separation Agreement and other agreements and
arrangements in respect of the relationship between Reliant
Energy and Unregco described in Reliant Energy's filings with
the SEC or (z) enter into any other transaction constituting
an Investment with Unregco and its Subsidiaries other than, in
the case of this clause (z), the transactions contemplated by
the Master Separation Agreement and other agreements and
arrangements in respect of the relationship between Reliant
Energy and Unregco described in Reliant Energy's filings with
the SEC or other arrangements among Borrower, Unregco and
their respective Subsidiaries in the ordinary course of
business consistent with recent past practices or otherwise at
prices and on terms and conditions not less favorable to
Borrower or its Subsidiaries (other than Unregco and its
Subsidiaries) than could be obtained on an arm's length basis
from unrelated third parties.".
8. Amendment to Section 11.01 of the Credit Agreement
(Amendments and Waivers). Section 11.01 of the Credit Agreement is hereby
amended by (a) deleting "or" at the end of clause (ii) thereof and substituting
in lieu thereof a comma, (b) deleting the period at the end of clause (iii)
thereof and substituting in lieu thereof ", or" and (c) adding at the end
thereof immediately after clause (iii) a new clause (iv) as follows:
"(iv) amend, modify or waive the last paragraph of
Section 8.02(g) without the written consent of the
Supermajority Banks.".
