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Exhibit 10.2
RELIANT ENERGY, INC.,
as guarantor
PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING
AUTHORITY
EXEMPT FACILITIES REVENUE BONDS
(Reliant Energy Seward, LLC Project)
SERIES 2002A
SECOND SUPPLEMENTAL GUARANTEE
AGREEMENT
Dated as of December 1, 2006
to
GUARANTEE AGREEMENT
Dated as of December 22, 2004
The Bank of New York Trust
Company, N.A.,
as Trustee
GUARANTEE
AGREEMENT
SECOND SUPPLEMENTAL GUARANTEE AGREEMENT dated as of December 1,
2006 (this " Supplemental Guarantee Agreement ") to the
Guarantee Agreement dated as of December 22, 2004 (the "
Guarantee Agreement ") by and among Reliant Energy, Inc., a
Delaware corporation (the " Company "), the Subsidiary
Guarantors (as defined therein), and The Bank of New York Trust
Company, N.A., as trustee (the " Trustee ") (as successor to
J.P. Morgan Trust Company, National Association), relating to the
Pennsylvania Economic Development Financing Authority Exempt
Facilities Revenue Bonds (Reliant Energy Seward, LLC Project)
Series 2002A, as supplemented by the Supplemental Guarantee
Agreement dated as of September 21, 2006 among the Company, Reliant
Energy Power Supply, LLC and the Trustee. Capitalized terms
used in this Supplemental Guarantee Agreement, but not defined
herein, shall have the respective meanings given to such terms in
the Guarantee Agreement.
WITNESSETH:
WHEREAS, Section 9.02 of the Guarantee Agreement provides, among
other things, that the Company and the Trustee may amend or
supplement the Guarantee Agreement with the consent of the Holders
of at least a majority in aggregate principal amount of the Series
2002A Bonds then Outstanding; and
WHEREAS, the Company has solicited the consent of the Holders to
certain amendments to the Guarantee Agreement described in the
Second Amended and Restated Consent Solicitation Statement dated
November 8, 2006 (the " Consent Solicitation Statement ")
and which have been reflected herein (the " Amendments ");
and
WHEREAS, the Company has received and filed with the Trustee, in
the manner contemplated by the Guarantee Agreement, evidence of the
consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Series 2002A Bonds, consenting
to the Amendments to be effected in the form of this Supplemental
Guarantee Agreement; and
NOW, THEREFORE, in consideration of the mutual agreements herein
set forth, the parties hereto agree as follows:
1.
Amendments to the Guarantee Agreement .
The following amendments are made to the Guarantee Agreement
effective as of the date specified in Section 2 below:
(a)
In Section 1.01:
(1)
The definition of "Excluded Securities" is amended
in its entirety to read as follows:
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" Excluded Securities " means debt or equity securities
issued by any Subsidiary of the Company other than RERH Holdings,
LLC, IP Trust, IT Trust, Orion Power Holdings, Inc. and REMA (or
their successors); provided, however, that "Excluded Securities"
shall include beneficial interests in the IP Trust or the IT Trust
that are held by RERH Holdings, LLC or its Subsidiaries.
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(2)
The definition of "Excluded Subsidiaries" is amended
to delete the reference to "RE Retail Receivables, LLC."
(3)
The following definition is added:
(4)
The following definition is added:
(5)
The definition of "Permitted Liens" is
amended:
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(i)
to amend clause (24) in its entirety to read as
follows:
(ii)
to delete "and" at the end of clause
(33);
(iii)
to add the following new clause (34) after clause
(33):
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(34)
Liens on assets of RERH Holdings, LLC and its
Subsidiaries securing obligations of RERH Holdings, LLC or any of
its Subsidiaries under (a) Credit Facilities in an aggregate
principal amount not to exceed $300,000,000 plus all other
obligations due under such Credit Facilities and (b) any agreement
for or in support of the supply or sales of energy or products or
services related or incidental to the supply or sales of energy or
any activities related to the supply or sales of energy or products
or services related or incidental to the supply or sales of energy
of RERH Holdings, LLC or any of its Subsidiaries, including any
agreement providing for the reimbursement of guarantees or
collateral postings made on behalf of RERH Holdings, LLC or any of
its Subsidiaries; and
; and
(iv)
to renumber existing clause "(34)" as clause
"(35)."
(6)
The definition of "Permitted Prior Liens" is amended
to substitute "and (33)" with ", (33) and (34)."
(b)
Section 4.08(b) is amended:
(1)
to delete "and" at the end of clause
(18);
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(2)
to substitute "; and" for the period at the end of
clause (19); and
(3)
to add the following new clause (20) after clause
(19):
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(20)
restrictions on RERH Holdings, LLC or any of its
Subsidiaries contained in (a) the Working Capital Facility dated as
of September 24, 2006 among Reliant Energy Power Supply, LLC
("REPS"), the guarantors party thereto, and Merrill Lynch Capital
Corporation, (b) the Credit Sleeve and Reimbursement Agreement
dated as of September 24, 2006 among REPS, the guarantors party
thereto, Merrill Lynch Commodities, Inc., and Merrill Lynch &
Co., Inc., and (c) any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings of the agreements referred to in the preceding clauses
(a) and (b), 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 as reasonably
determined by the Company.
(c)
The following Subsection (c) is added to Section
4.08:
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(c)
Promptly following the last day of each month and so
long as such payment is permitted under the terms of the agreements
referred to in Section 4.08(b)(20), the Company shall cause RERH
Holdings, LLC to pay cash dividends or distributions to the Company
in an amount equal to (i) the amount which is permitted under the
terms of the agreements referred to in Section 4.08(b)(20) on such
day minus (ii)(A) amounts reasonably estimated by the Company to be
due and payable by RERH Holdings, LLC and its Subsidiaries on or
before the 20th day of the month next occurring plus (B) the lesser
of (1) $100,000,000 and (2) the amount permitted under the Credit
Agreement on the date the agreements referred to in Section
4.08(b)(20) become effective.
(d)
In Section 4.09(b):
(1)
Subsection (b)(1) of Section 4.09 is amended in its
entirety to read as follows:
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(1)
the incurrence (A) by the Company and the guarantee
by the Guarantors of additional Indebtedness and letters of credit
under Credit Facilities, (B) by Securitization Entities of
Indebtedness in Qualified Securitization Transactions, and (C) by
RERH Holdings, LLC and its Subsidiaries of additional Indebtedness
and letters of credit under Credit Facilities (including
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guarantees of such Indebtedness) (provided,
however, that (I) the aggregate principal amount of Indebtedness
incurred under this clause (C) at any one time outstanding shall
not exceed $310,000,000, and (II) the proceeds of Indebtedness
incurred under this clause (C) shall be used only for the repayment
of Indebtedness and other Obligations of RERH Holdings, LLC and its
Subsidiaries or to finance working capital needs of RERH Holdings,
LLC and its Subsidiaries, including the payment of sales, general
and administrative, and operations and maintenance expenses
(including capital expenditures) and all other expenses in the
ordinary course of business of RERH Holdings, LLC and its
Subsidiaries) 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 $2.5 billion;
(2)
The following paragraph is added to the end of the
section:
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Notwithstanding anything in this Section 4.09(b) to the
contrary, the aggregate principal amount of Indebtedness of RERH
Holdings, LLC and its Subsidiaries at any one time outstanding,
other than Indebtedness incurred pursuant to clause (14) of this
Section 4.09(b), may not exceed $310,000,000.
(e)
Section 4.10 is amended in its entirety to read as
follows:
Section 4.10 Asset Sale Offers .
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(a)
Within five Business Days after the receipt of any
Net Proceeds from an Asset Sale of the Equity Interests of RERH
Holdings, LLC (and its successors), of all or substantially all of
the assets of RERH Holdings, LLC and its Subsidiaries (and their
successors), or of all or substantially all of the assets of the
Company and its Subsidiaries (other than RERH Holdings, LLC and its
Subsidiaries (and their successors)), the Company shall make an
Asset Sale Offer to all Holders of each Series of Bonds and all
holders of other Indebtedness (including the 2014 Notes, the
Existing 2010 Notes, and the Existing 2013 Notes) that is pari
passu with the Seward Guarantees (other than Credit Agreement Debt)
(and so long as this Guarantee Agreement is Equally and Ratably
secured with such other pari passu Indebtedness) containing
provisions similar to those set forth in this Guarantee Agreement
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 each Series
of
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Bonds and such other pari passu Indebtedness that
may be purchased (or repaid, prepaid or redeemed) equal to the
aggregate of such Net Proceeds multiplied by a fraction, the
numerator of which consists of (A) the aggregate principal amount
then outstanding on each Series of Bonds 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 such Net
Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Net Proceeds for any purpose not otherwise
prohibited by this Guarantee Agreement. If the aggregate
principal amount of each Series of Bonds and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount
of such Net Proceeds, the Company shall select the Series of Bonds
and such other pari passu Indebtedness to be purchased on a pro
rata basis based on the principal amount of Series of Bonds and
such other pari passu Indebtedness tendered.
(b)
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.
(c)
The Asset Sale Offer shall be made to all holders of
each Series of Bonds and all holders of other Parity Secured Debt
(other than Credit Agreement Debt) containing provisions similar to
those set forth in this Guarantee Agreement 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 Net
Proceeds as calculated pursuant to the first sentence of Section
4.10(a) 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 Series of
Bonds and other Indebtedness tendered in response to the Asset Sale
Offer. Payment for any bond in a Series of Bonds (each a
"Bond") so purchased shall be made in the same manner as interest
payments are made.
(d)
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 Bond is registered at the close of business on such record
date, and no additional interest will be payable to Holders who
tender Bonds pursuant to the Asset Sale Offer.
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(e)
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 Bonds pursuant to the Asset Sale Offer. The notice,
which will govern the terms of the Asset Sale Offer, will
state:
(i)
that the Asset Sale Offer is being made pursuant to
Section 4.10 hereof and the length of time the Asset Sale Offer
will remain open;
(ii)
the Offer Amount, the purchase price and the
Purchase Date;
(iii)
that any Bond not tendered or accepted for payment
will continue to accrue interest;
(iv)
that, unless the Company defaults in making such
payment, any Bond accepted for payment pursuant to the Asset Sale
Offer shall cease to accr
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