EXHIBIT G-15
AGREEMENT CONCERNING
REMAINING CREDIT SUPPORT ARRANGEMENTS
THIS AGREEMENT CONCERNING REMAINING CREDIT SUPPORT ARRANGEMENTS (the
"Agreement"), is entered into as of June __, 2002 (the "Effective Date"), by and
between Reliant Energy, Incorporated, a Texas corporation ("REI"), and Reliant
Resources, Inc., a Delaware corporation ("Resources"), as an Ancillary Agreement
pursuant to that certain Master Separation Agreement (the "Master Separation
Agreement") between REI and Resources, dated as of December 31, 2000.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Master Separation Agreement.
WHEREAS, the Board of Directors of REI has determined that it is in the
best interests of REI and its shareholders to separate REI's existing businesses
into two independent business groups;
WHEREAS, in order to effectuate the foregoing, REI and Resources have
entered into the Master Separation Agreement, which provides for, among other
things, the assumption by Resources of the Resources Liabilities, and the
execution and delivery of certain other agreements in order to facilitate and
provide for the separation of the Resources Group from the REI Group;
WHEREAS, Section 10.10 of the Master Separation Agreement requires REI and
each Subsidiary of REI to maintain in full force and effect, but only until the
Distribution Date, each guarantee, letter of credit, keepwell or support
agreement or other credit support document, instrument or other similar
arrangement issued for the benefit of any Person in the Resources Group by or on
behalf of REI or a Person in the REI Group that is outstanding as of the
Separation Date (the "Credit Support Arrangements");
WHEREAS, Section 10.10 of the Master Separation Agreement further provides
that Resources shall pay or cause the Person in the Resources Group for whose
benefit the Credit Support Arrangement is provided to pay, the underlying
obligation as and when the same shall become due and payable, to the end that
neither REI nor any Subsidiary of REI shall be required to make any payment by
reason of any Credit Support Arrangement and that all Credit Support
Arrangements shall be deemed Resources Liabilities, and Section 3.2 of the
Master Separation Agreement provides that Resources and the Appropriate Member
of the Resources Group shall indemnify the REI Indemnitees against, among other
things, any Resources Liability;
WHEREAS, notwithstanding Resources' efforts to attempt to obtain releases
for and otherwise replace the Credit Support Arrangements prior to the
Distribution Date, certain Credit Support Arrangements might still remain or be
discovered after the Distribution Date (the "Remaining Credit Support
Arrangements");
WHEREAS, REI and Resources are entering into this Agreement to provide for
the securing of Resources' indemnities with regard to the Remaining Credit
Support
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Arrangements and the administration of any claims against the REI Indemnitees
with regard to the Remaining Credit Support Arrangements.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties, intending to be legally bound,
agree as follows:
1. RELEASE OF REMAINING CREDIT SUPPORT ARRANGEMENTS. Commencing on the
Effective Date and at all times thereafter, Resources, at its sole
expense, shall continue its efforts pursuant to Section 10.10 of the
Master Separation Agreement, after becoming aware or being notified by
REI, to obtain the release of REI and/or the applicable REI Subsidiary or
Subsidiaries (collectively, the "Applicable REI Party") from all Remaining
Credit Support Arrangements.
2. KNOWN REMAINING CREDIT SUPPORT ARRANGEMENTS AT DISTRIBUTION DATE. On the
Distribution Date, Resources shall provide REI with the certificate of an
officer of Resources stating that, to the best of Resources' knowledge
after due investigation, there are no Remaining Credit Support
Arrangements, except for those Remaining Credit Support Arrangements that
are specifically identified in such certificate. On the Distribution Date,
Resources shall provide to the Applicable REI Party at Resources option a
letter or letters of credit, cash deposit or treasury bonds (each of the
foregoing items being referred to as "Collateral") with respect to each
such Remaining Credit Support Arrangement so identified in such
certificate, in accordance with the provisions of Section 5 hereof.
3. REMAINING CREDIT SUPPORT ARRANGEMENTS DISCOVERED AFTER DISTRIBUTION DATE.
In the event that, after the Distribution Date, either party becomes aware
of a Remaining Credit Support Arrangement not previously known, the
discovering party shall promptly notify the other party, and Resources
upon such notice shall continue its efforts pursuant to Section 10.10 of
the Master Separation Agreement to obtain the release or termination of
such Remaining Credit Support Arrangement. If such release or termination
is not obtained within fifteen days after receipt of the notice referred
to in the previous sentence, Resources shall provide to the Applicable REI
Party Collateral in accordance with the provisions of Section 5 hereof.
4. THIRD PARTY CLAIMS. Third Party Claims with regard to any Credit Support
Arrangements, including any Credit Support Arrangement believed to have
been previously terminated or released, shall be administered in
accordance with the provisions of the Master Separation Agreement.
5. COLLATERAL.
(a) Where Resources is required to provide Collateral pursuant to this
Agreement, such Collateral shall be held by the Applicable REI Party
and be in an amount equal to the maximum potential liability the
Applicable
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REI Party has under the applicable Remaining Credit Support
Arrangement, provided in the event that Resources elects to provide
Collateral in the form of treasury bonds or in cases where the
maximum potential liability is denominated in a currency other than
U.S. Dollars, the Collateral shall be in an amount reasonably
acceptable to REI in excess of the maximum potential liability. In
cases where the Remaining Credit Support Arrangement provides for a
maximum limit for the Applicable REI Party's liability and there is
an open transaction secured by such Remaining Credit Support
Arrangement, the Applicable REI Party's maximum potential liability
shall be deemed to be such maximum limit. In cases where the
Remaining Credit Support Arrangement does not provide for such
maximum limit and there is an open transaction secured by such
Remaining Credit Support Arrangement, the Applicable REI Party's
maximum potential liability shall be deemed to be the reasonably
anticipated exposure of the Applicable REI Party at the time
Resources is required to provide the Collateral; provided that the
amount of the Collateral shall be reviewed from time to time and any
excess will be returned to, and any shortfalls will be replenished
by, Resources within three business days of notice of such excess or
shortfall. In cases where there is no open transaction secured by
the Remaining Credit Support Arrangement (regardless of whether or
not such Remaining Credit Support Arrangement provides for a maximum
limit for liability of the Applicable REI Party) Resources shall not
be required to provide Collateral if Resources provides an officer's
certificate to the foregoing fact, together with its written
undertaking to take no action, including engaging in further
transactions with the beneficiary of the applicable Remaining Credit
Support Arrangement, that could increase the Applicable REI Party's
exposure under such Remaining Credit Support Arrangement.
(b) Where Resources is required to provide Collateral pursuant to this
Agreement and chooses to provide a letter of credit, such letter of
credit shall be issued for the benefit of the Applicable REI Party
at Resources' sole expense by a financial institution reasonably
acceptable, and in a form reasonably satisfactory, to REI. Resources
shall maintain such letter of credit in full force and effect for so
long as the Applicable REI Party remains subject to any potential
liability under such Remaining Credit Support Arrangement; provided
that such letter of credit may be for a term as short as 90 days
with provisions allowing for draw if the letter of credit has not
been renewed 10 days prior to its stated expiration. The form of
letter of credit will contain the following drawing conditions:
"[Beneficiary] has complied with the provisions of Section 3.5 of
the Master Separation Agreement, has suffered a loss of $_____ due
to liability of Beneficiary under [describe Remaining Credit Support
Arrangement] and such loss has not been reimbursed by Resources
after demand under the Master Separation Agreement."
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6. AMENDMENTS. This Agreement shall not be supplemented, amended or modified
in any manner whatsoever (including by course of dealing or performance or
usage of trade) except in writing signed by the parties.
7. RESOLUTION OF DISPUTES. If a dispute, claim or controversy results from or
arises out of or in connection with this Agreement, the parties agree to
use the procedures set forth in Article IX of the Master Separation
Agreement, in lieu of other available remedies, to resolve the same.
8. SUCCESSORS AND ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and
permitted assigns. No party shall assign this Agreement or any rights
herein without the prior written consent of the other party, which may be
withheld for any or no reason.
9. NOTICES. Unless expressly provided herein, all notices, claims,
certificates, requests, demands and other communications hereunder shall
be in writing and shall be deemed to be duly given (i) when personally
delivered or (ii) if mailed registered or certified mail, postage prepaid,
return receipt requested, on the date the return receipt is executed or
the letter is refused by the addressee or its agent or (iii) if sent by
overnight courier which delivers only upon the signed receipt of the
addressee, on the date the receipt acknowledgment is executed or refused
by the addressee or its agent or (iv) if sent by facsimile or other
generally accepted means of electronic transmission, on the date
confirmation of transmission is received (provided that a copy of any
notice delivered pursuant to this clause (iv) shall also be sent pursuant
to clause (ii) or (iii)), addressed to the attention of the addressee's
General Counsel with a copy to the addressee's Treasurer at the address of
its principal executive office or to such other address or facsimile
number for a party as it shall have specified in writing.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
11. TIME OF ESSENCE. In all instances where either party is required hereunder
to pay any sum or do any act a particular time or within any indicated
period, it is understood that time is of the essence.
12. SEVERABILITY. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable
law. If any portion of this Agreement is declared invalid for any reason,
such declaration shall have no effect upon the remaining portions of this
Agreement, which shall continue in full force and effect as if this
Agreement had been executed with the invalid portions thereof deleted.
13. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
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14. RIGHTS OF THE PARTIES. Nothing expressed or implied in this Agreement is
intended or will be construed to confer upon or give any person or entity,
other than the parties and to the extent provided herein their respective
Subsidiaries, any rights or remedies under or by reason of this Agreement
or any transaction contemplated thereby.
15. RESERVATION OF RIGHTS. The waiver by either party of any of its rights or
remedies afforded hereunder or at law is without prejudice and shall not
operate to waive any other rights or remedies which that party shall have
available to it, nor shall such waiver operate to waive the party's rights
to any remedies due to a future breach, whether of a similar or different
nature. The failure or delay of a party in exercising any rights granted
to it hereunder shall not constitute a waiver of any such right and that
party may exercise that right at any time. Any single or partial exercise
of any particular right by a party shall not exhaust the same or
constitute a waiver of any other right.
16. ENTIRE AGREEMENT. All understandings, representations, warranties and
agreements, if any, heretofore existing between the parties regarding the
subject matter hereof are merged into this Agreement and the applicable
provisions of the Master Separation Agreement, which fully and completely
express the agreement of the parties with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement Concerning
Remaining Credit Support Arrangements as of the date first above written.
RELIANT ENERGY, INCORPORATED
By:
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Name:
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Title:
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RELIANT RESOURCES, INC.
By:
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Name:
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Title:
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