EXHIBIT 4(f)(3)
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT, dated as of February 28, 2003 (this "Second
Amendment"), to the $3,850,000,000 Amended and Restated Credit Agreement, dated
as of October 10, 2002 (as heretofore amended, supplemented or otherwise
modified, the "Credit Agreement"), among CENTERPOINT ENERGY, INC., a Texas
corporation ("Borrower"), the banks and other financial institutions from time
to time parties thereto (the "Banks"), CITIBANK, N.A., as syndication agent (in
such capacity, the "Syndication Agent"), and JPMORGAN CHASE BANK, as
administrative agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks, the Syndication Agent, and
the Administrative Agent are parties to the Credit Agreement; and
WHEREAS, the Borrower has 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 Administrative 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 (Certain Defined Terms): (a)
Section 1.1 of the Credit Agreement is hereby amended by deleting, in their
entirety, the terms "Applicable Margin", "CAF Borrowing", "CAF Facility", "CAF
LIBOR Rate Loan", "CAF Loan", "CAF Loan Assignee", "CAF Loan Assignment and
Acceptance", "CAF Margin", "CAF Rate", "Competitive Bid", "Competitive Bid
Confirmation", "Competitive Bid Request", "Fixed Rate Loan", "Loan Documents"
and "Revolving Loan Maturity Date" 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:
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LIBOR RATE ABR MARGIN LIBOR RATE
DESIGNATED MARGIN FOR FOR REVOLVING MARGIN FOR ABR MARGIN FOR
RATING REVOLVING LOANS LOANS TERM LOANS TERM LOANS
- -----------------------------------------------------------------------------------------------
A-/A3 or higher 3.000% 2.000% 3.500% 2.500%
- -----------------------------------------------------------------------------------------------
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- -----------------------------------------------------------------------------------------------
LIBOR RATE ABR MARGIN LIBOR RATE
DESIGNATED MARGIN FOR FOR REVOLVING MARGIN FOR ABR MARGIN FOR
RATING REVOLVING LOANS LOANS TERM LOANS TERM LOANS
- -----------------------------------------------------------------------------------------------
BBB+/Baa1 or 3.500% 2.500% 4.000% 3.000%
BBB/Baa2 or
BBB-/Baa3
- -----------------------------------------------------------------------------------------------
BB+/Ba1 4.000% 3.000% 4.500% 3.500%
- -----------------------------------------------------------------------------------------------
BB/Ba2 or 4.500% 3.500% 5.000% 4.000%
lower (or
unrated)
- -----------------------------------------------------------------------------------------------
; provided, however, if the Texas Genco Stock has not been pledged to
the Administrative Agent, for the benefit of the Banks, on or prior to
the three-month anniversary of the Second Amendment Effective Date,
each of the foregoing rates shall increase by 0.250% on and after such
date until the earlier to occur of (i) the execution and delivery of
the Pledge Agreement by Utility Holding, LLC and the Borrower, and the
pledge of the Texas Genco Stock to the Administrative Agent, for the
benefit of the Banks, and (ii) the receipt by the Banks of the Net Cash
Proceeds from the Disposition of the Texas Genco Stock in accordance
with the terms of this Agreement.
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 Moody's; the determination of which row
of such table is applicable at any time is set forth in the definition
of "Designated Rating".
"CEHE Credit Agreement" means the $1,310,000,000 Credit
Agreement, dated as of November 12, 2002, among CenterPoint Electric,
as borrower, Credit Suisse First Boston, as administrative agent, and
the other financial institutions parties thereto, as amended, modified
or supplemented from time to time.
"CEHE Facility" means the credit facilities provided under the
CEHE Credit Agreement.
"Collateral" has the meaning specified in the Pledge
Agreement.
"Loan Documents" means this Agreement, any Notes, the Pledge
Agreement, the Warrant Agreement, the Registration Rights Agreement,
the Warrants issued under the Warrant Agreement and any document or
instrument executed in connection with the foregoing.
"Pledge Agreement" means the Pledge Agreement, substantially
in the form of Annex A to the Second Amendment, to be entered into
pursuant to the Second Amendment, as amended, modified or supplemented
from time to time.
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"Registration Rights Agreement" means the Registration Rights
Agreement, substantially in the form of Annex B to the Second
Amendment, to be entered into pursuant to the Second Amendment, as
amended, modified or supplemented from time to time.
"Revolving Loan Maturity Date" means June 30, 2005.
"RRI Option" means the option relating to the Texas Genco
Stock granted to Reliant Resources, Inc. pursuant to the Texas Genco
Option Agreement, dated as of December 31, 2000, between the Borrower
and Reliant Resources, Inc., as amended, modified or supplemented from
time to time.
"Second Amendment" means the Second Amendment, dated as of
February 28, 2003, to this Agreement.
"Second Amendment Effective Date" means the date on which each
of the conditions precedent set forth in the Second Amendment shall
have been satisfied or waived.
"Specified Swap Agreement" means any Swap Agreement entered
into by the Borrower and any Bank or Affiliate thereof to hedge or
mitigate interest rate risks with respect to the Loans.
"Texas Genco" means Texas Genco Holdings, Inc.
"Texas Genco Entities" has the meaning specified in Section
8.2(c).
"Texas Genco Stock" means the Capital Stock of Texas Genco now
owned or hereafter acquired by Utility Holding, LLC, which, as of the
date hereof, constitutes at least 80% of the issued and outstanding
Capital Stock of Texas Genco.
"Utility Holding, LLC" means Utility Holding, LLC, a Delaware
limited liability company and the direct parent of Texas Genco.
"Warrant Agreement" means the Warrant Agreement, substantially
in the form of Annex C to the Second Amendment, to be entered into
pursuant to the Second Amendment, as amended, modified or supplemented
from time to time.
"Warrants" has the meaning specified in the Warrant
Agreement.";
(b) amending the definition of "Excluded Asset Sales" by (i)
deleting "and" immediately following clause (viii) therein and substituting in
lieu thereof a semicolon, (ii) adding "and" immediately following clause (ix)
therein and (iii) adding immediately following clause (ix) a new clause (x) as
follows:
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"(x) the sale or the remarketing of any Indebtedness for
Borrowed Money outstanding on the Closing Date if the refinancing,
refunding, remarketing, renewal or extension thereof would be permitted
pursuant to clause (a) of the definition of "Excluded Transactions"";
(c) amending the definition of "Excluded Transactions" by (i)
deleting each reference to "Indebtedness" therein and substituting in lieu
thereof "Indebtedness for Borrowed Money" and (ii) deleting clause (a) thereof
in its entirety and substituting in lieu thereof a new clause (a) as follows:
"(a) Indebtedness for Borrowed Money in respect of any
refinancing, refunding, remarketing, renewal or extension (on or prior
to the maturity thereof) of (without any increase in the principal
amount thereof plus any expenses (including any redemption premium,
penalty, broken funding, settlement and other costs) or any shortening
of the final maturity thereof) Indebtedness for Borrowed Money
outstanding on the Closing Date (and any refinancing, refunding,
remarketing, renewal or extension thereof) and additional Indebtedness
for Borrowed Money incurred by (x) Resources and/or its Subsidiaries in
an aggregate principal amount not to exceed $200,000,000 outstanding at
any time and (y) the Borrower and/or its Subsidiaries (including,
without limitation, Resources and its Subsidiaries) in an aggregate
principal amount not to exceed $250,000,000 outstanding at any time;";
and
(d) amending the definition of "Net Cash Proceeds" by deleting
clause (b) thereof in its entirety and substituting in lieu thereof a new clause
(b) as follows:
"(b) in connection with any issuance or sale of Capital Stock
or any incurrence of Indebtedness for Borrowed Money, the cash proceeds
received from such issuance or incurrence, net of (i) attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts,
escrow fees, reserves, related swap costs and commissions and other
customary fees and expenses actually incurred in connection therewith
and other similar payment obligations resulting therefrom (other than
the obligations under this Agreement) that are required to be paid
concurrently or otherwise as a result of such issuance or incurrence
and (ii) other amounts that are to be refinanced or otherwise paid with
all or part of the proceeds thereof".
3. Amendment to Section 2.3 of the Credit Agreement
(Repayment of Term Loans). Section 2.3 of the Credit Agreement is hereby amended
by deleting it in its entirety and substituting in lieu thereof the following
new Section 2.3:
"SECTION 2.3. Repayment of Term Loans. The Borrower shall
repay all outstanding Term Loans on the Termination Date, together with
accrued and unpaid interest thereon.".
4. Amendment to Article III of the Credit Agreement
(Amounts and Terms of the CAF Loans). Article III of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting in lieu thereof
the following new Article III:
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"ARTICLE III
[INTENTIONALLY OMITTED.]".
5. Amendment to Section 4.2 of the Credit Agreement
(Fees). Section 4.2 of the Credit Agreement is hereby amended by:
(a) deleting paragraph (b) thereof in its entirety and
substituting in lieu thereof a new paragraph (b) as follows:
"(b) The Borrower agrees to pay to the Administrative
Agent on October 9, 2003 for the account of each Bank a fee in the
amount of 0.75% of the amount of the sum of (x) such Bank's Revolving
Commitment (whether used or unused) and (y) the aggregate principal
amount of such Bank's Term Loans outstanding on such date."; and
(b) deleting paragraph (c) thereof in its entirety and
substituting in lieu thereof a new paragraph (c) as follows:
"(c) The Borrower agrees to pay to the Administrative
Agent for the account of the Banks a fee in the aggregate amount of
$61,436,170.21 (the "Additional Fee") to be allocated to each Bank
based upon the sum of such Bank's Revolving Commitment, and the
aggregate amount of such Bank's Term Loans, outstanding on the Second
Amendment Effective Date, payable on the Second Amendment Effective
Date.".
6. Amendment to Section 5.7 of the Credit Agreement
(Mandatory Repayments and Prepayments and Commitment Reductions). Section 5.7 of
the Credit Agreement is hereby amended by deleting it in its entirety and
substituting in lieu thereof the following new Section 5.7:
"SECTION 5.7 Mandatory Repayments and Prepayments and
Commitment Reductions. (a) If any Capital Stock or Indebtedness for
Borrowed Money shall be issued or incurred by the Borrower or any of
its Subsidiaries after the Closing Date (other than Excluded
Transactions and as provided in Section 5.7(c), an amount equal to 100%
of the Net Cash Proceeds thereof shall be applied within one (1)
Business Day after the receipt thereof toward the prepayment of the
Term Loans and the reduction of the Revolving Commitments as set forth
in Section 5.7(e).
(b) If the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale (other than (x) an
Excluded Asset Sale, (y) any Asset Sale yielding Net Cash Proceeds of
$30,000,000 or less, provided that the aggregate amount of Net Cash
Proceeds from all Asset Sales excluded by this clause (y) shall not
exceed $100,000,000 and (z) as provided in paragraphs (c) and (d)
below) or Recovery Event then, unless a Reinvestment Notice shall be
delivered in respect thereof, within one (1) Business Day after the
receipt thereof, the Borrower shall, or shall cause the applicable
Subsidiary to, apply such Net Cash Proceeds toward the prepayment of
the Term Loans and the reduction of the Revolving Commitments as set
forth in Section 5.7(e); provided
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that, notwithstanding the foregoing, (i) the aggregate Net Cash
Proceeds of Asset Sales that may be excluded from the foregoing
pursuant to a Reinvestment Notice shall not exceed $120,000,000 and
(ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments as set forth in
Section 5.7(e).
(c) If the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Disposition of (i) any of the Texas
Genco Stock or (ii) any material portion or all or substantially all of
the Properties of any Texas Genco Entity, within one (1) Business Day
after the receipt thereof, the Borrower shall, or shall cause the
applicable Subsidiary to, apply, subject, in the case of clause (ii)
only, to the terms of any Indebtedness incurred by Texas Genco and/or
its Subsidiaries in accordance with Section 8.2(h), such Net Cash
Proceeds toward the prepayment of the Term Loans and the reduction of
the Revolving Commitments as set forth in Section 5.7(e); provided
that, in the case of a Disposition described in clause (ii) above, the
amount of such application may be reduced proportionally to the
minority interest of shareholders of Texas Genco other than the
Borrower and its Subsidiaries to the extent required by virtue of
fiduciary obligations to such shareholders under applicable law.
(d) If the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from the sale or contribution of assets to a
Securitization Subsidiary, together with the issuance of Securitization
Securities, within one (1) Business Day after receipt thereof, the
Borrower shall, or shall cause the applicable Subsidiary to, apply such
Net Cash Proceeds toward the prepayment of the Term Loans and the
reduction of the Revolving Commitments as set forth in Section 5.7(e);
provided that, notwithstanding the foregoing, any such Net Cash
Proceeds shall be applied, to the extent required under the CEHE Credit
Agreement prior to any application pursuant to this Section 5.7(d), to
repay the obligations under the CEHE Facility pursuant to the terms of
the CEHE Credit Agreement.
(e) Amounts to be applied in connection with prepayments
and Commitment reductions made pursuant to this Section 5.7 shall be
applied, first, to the prepayment of the Term Loans in accordance with
Section 5.2(b) and, second, to reduce permanently the Revolving
Commitments. Any such reduction of the Revolving Commitments shall be
accompanied by prepayment of the Revolving Loans to the extent, if any,
that the Total Aggregate Extensions of Credit exceed the amount of the
Total Revolving Commitments as so reduced, provided that the Borrower
shall be obligated, first, to prepay the Revolving Loans in the amount
of such excess, and, second, to cash collateralize the Letters of
Credit to the extent that the aggregate amount of the L/C Obligations
exceeds such Total Revolving Commitments after prepayment of all
Revolving Loans. The application of any prepayment pursuant to this
Section 5.7 shall be made, first, to ABR Loans and, second, to LIBOR
Rate Loans. Each prepayment of the Loans under this Section 5.7 shall
be accompanied by accrued interest to the date of such prepayment on
the amount prepaid.".
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7. Amendment to Section 6.2 of the Credit Agreement
(Conditions Precedent to Each Borrowing). Section 6.2 of the Credit Agreement is
hereby amended by adding immediately following "this Agreement" in paragraph (b)
thereof "and in the other Loan Documents".
8. Amendment to Section 7.1 of the Credit Agreement
(Representations and Warranties of the Borrower). Section 7.1 of the Credit
Agreement is hereby amended by:
(a) deleting the second sentence in paragraph (g) thereof in
its entirety and substituting in lieu thereof the following:
"The proceeds of the Revolving Loans will be used by the Borrower (i)
to refinance certain obligations under, or for which credit support is
provided by, the Existing Credit Facilities, (ii) to support commercial
paper issued by the Borrower, and (iii) for other general corporate
purposes.";
(b) adding immediately following "under this Agreement" in
clause (i) in paragraph (k) thereof "or under any other Loan Document";
(c) deleting paragraph (m) in its entirety and substituting in
lieu thereof the following new paragraph (m) as follows:
"(m) Financial Statements. The pro forma consolidated
financial statements of the Borrower as of and for the nine months
ended September 30, 2002 filed with the SEC on November 14, 2002 with
the Borrower's 10-Q dated November 14, 2002, copies of which have been
delivered to the Banks, present fairly in all material respects the
consolidated financial condition and results of operations of the
Borrower and its Consolidated Subsidiaries as of such date and for the
period then ended, in conformity with, as applicable, GAAP and the
regulations promulgated under the Securities Act and, except as
otherwise stated therein, consistently applied (in the case of such
unaudited statements, subject to year-end adjustments and the exclusion
of detailed footnotes).";
(d) adding immediately following "this Agreement" in the first
sentence in paragraph (n) thereof "or the other Loan Documents"; and
(e) adding immediately following paragraph (s) thereof a new
paragraph (t) as follows:
"(t) Pledge Agreement. Upon execution thereof, the Pledge
Agreement will be effective to create in favor of the Administrative
Agent, for the benefit of the Banks, a legal, valid and enforceable
security interest in the Collateral as described therein and proceeds
thereof. In the case of the Pledged Stock described in the Pledge
Agreement, when stock certificates representing such Pledged Stock are
delivered to the Administrative Agent, or if such Pledged Stock is
uncertificated, when financing
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statements in appropriate form are filed with the appropriate office in
the State of Delaware, upon execution thereof, the Pledge Agreement
shall constitute a fully perfected Lien on, and security in, all right,
title and interest of Utility Holding, LLC in the Pledged Stock, as
security for the Credit Agreement Obligations (as defined in the Pledge
Agreement), prior and superior in right to any other Person other than
the RRI Option.".
9. Amendment to Section 8.2 of the Credit Agreement
(Negative Covenants of the Borrower). Section 8.2 of the Credit Agreement is
hereby amended by:
(a) amending paragraph (a) thereof by deleting the ratio
"4.75:1.00" in clause (i) therein and substituting in lieu thereof "3.75:1.00";
(b) amending paragraph (b) thereof by (i) deleting the
proviso in clause (iv) thereof in its entirety, (ii) deleting clause (vii)
thereof in its entirety and substituting in lieu thereof a new clause (vii) as
follows:
"(vii) Liens securing Indebtedness of (x) Texas Genco and/or
its Subsidiaries; provided that such Liens shall be limited to the
Property of Texas Genco and/or its Subsidiaries and (y) Resources
and/or its Subsidiaries; provided that such Liens shall be limited to
the Property of Resources and/or its Subsidiaries;",
(iii) deleting the "and" immediately following clause (xviii) thereof, (iv)
deleting the period at the end of clause (xix) thereof and substituting in lieu
thereof a semicolon and (v) adding at the end thereof immediately following
clause (xix) new clauses (xx) and (xxi) as follows:
"(xx) Liens in favor of or for the benefit of the Banks or
their Affiliates in the Collateral pursuant to the Pledge Agreement to
secure obligations under Specified Swap Agreements; and
(xxi) Liens created pursuant to the Pledge Agreement.";
(c) amending paragraph (c) thereof by (i) deleting ", or
the Capital Stock of any Significant Subsidiary of the Borrower," in clause
(iii) therein and (ii) deleting the first proviso therein in its entirety and
substituting in lieu thereof the following:
"provided, however, that nothing contained in this Section 8.2(c) shall
prohibit (A) a merger involving Texas Genco or any of its Subsidiaries
(collectively, the "Texas Genco Entities") or any other Subsidiary of
the Borrower (including mergers to reincorporate or change the domicile
of such Texas Genco Entity or other Subsidiary of the Borrower, as the
case may be) if, in the case of any Texas Genco Entity, Texas Genco is
the surviving entity thereof or, in the case of any other Subsidiary of
the Borrower, the Borrower or a Wholly-Owned Significant Subsidiary of
the Borrower is the surviving entity thereof; (B) the liquidation,
winding up or dissolution of a Texas Genco Entity or any other
Significant Subsidiary of the Borrower if all of the Properties of such
Texas Genco Entity
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or such other Significant Subsidiary, as the case may be, are conveyed,
transferred or distributed to, in the case of any Texas Genco Entity,
Texas Genco or, in the case of any other Significant Subsidiary, the
Borrower or a Wholly-Owned Significant Subsidiary of the Borrower; (C)
the Disposition of any material portion or all or substantially all (or
any lesser portion) of the Properties of any Texas Genco Entity or any
other Significant Subsidiary, in the case of any Texas Genco Entity, to
any other Person (so long as the Borrower complies with Section
5.7(c)), or, in the case of any other Significant Subsidiary, to the
Borrower or a Wholly-Owned Significant Subsidiary of the Borrower; or
(D) the transfer of assets in connection with the issuance of
Securitization Securities;";
(d) deleting paragraph (e) thereof in its entirety and
substituting in lieu thereof the following:
"(e) Sale of Significant Subsidiary Stock. And will not
permit any Subsidiary to sell, assign, transfer or otherwise dispose of
any of the Capital Stock of any Significant Subsidiary. Notwithstanding
the foregoing provisions or Section 8.2(c) or this Section 8.2(e), (x)
the Borrower or any Significant Subsidiary may sell, assign, transfer
or otherwise dispose of (i) any of the Capital Stock of any Significant
Subsidiary to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower that constitutes a Significant Subsidiary after giving effect
to such transaction, (ii) the Capital Stock pursuant to the Genco
Transaction, which was consummated prior to the Second Amendment
Effective Date and (iii) the Texas Genco Stock; provided that (A) the
Borrower complies with Section 5.7(c) and (B) if any Disposition of the
Texas Genco Stock is effectuated by exercise of the RRI Option, such
Disposition shall be made only in cash and (y) any Significant
Subsidiary shall have the right to issue, sell, assign, transfer or
otherwise dispose of for value its preference or preferred stock in one
or more bona fide transactions to any Person; provided that immediately
before and after giving effect to any such Disposition (other than
pursuant to the RRI Option) described in the foregoing clauses (x) and
(y), no Event of Default or Default shall have occurred and be
continuing.";
(e) amending paragraph (f) thereof by (i) deleting the
dollar amount "$0.16" in clause (c) thereof and substituting in lieu thereof
"$0.10" and (ii) adding at the end thereof immediately before the period the
following:
", provided that such amount shall be limited during any such fiscal
quarter ending after December 31, 2003, to the lesser of (i) $0.10 per
share of common Capital Stock of the Borrower and (ii) an aggregate
amount not to exceed the product of (x) 50% of consolidated net income
of the Borrower and its Subsidiaries, determined in accordance with
GAAP, for the 12 months ended on the last day of the prior quarter and
(y) 25%, in the event that the aggregate Term Loans outstanding shall
not have been repaid during the period from the Second Amendment
Effective Date through December 31, 2003 in an aggregate amount equal
to at least $400,000,000, with at least $200,000,000 of such prepayment
being made with the proceeds of the issuance during the period from the
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Second Amendment Effective Date through December 31, 2003 by the
Borrower of its Capital Stock or securities linked thereto.";
(f) amending paragraph (g) thereof by adding immediately
following "Wholly-Owned Subsidiary of the Borrower" in clause (b) therein "and
Texas Genco and its Subsidiaries"; and
(g) adding at the end thereof immediately following
paragraph (g) thereof new paragraphs (h), (i), (j), (k) and (l) as follows:
"(h) Texas Genco Indebtedness. Permit Texas Genco or its
Subsidiaries to create, incur, assume or permit to exist any
Indebtedness for Borrowed Money, except Indebtedness in an aggregate
principal amount not to exceed $250,000,000 at any one time
outstanding.
(i) Pledge of Texas Genco Stock. Fail to use its best
efforts to obtain all necessary approvals, including by the SEC, to
pledge and, upon receipt of such approvals, fail to cause Utility
Holding, LLC to pledge, to the Administrative Agent, for the benefit of
the Banks, all of the Texas Genco Stock pursuant to the Pledge
Agreement, including without limitation, delivery to the Administrative
Agent of each document (including any original stock certificates
together with undated stock powers executed in blank and any Uniform
Commercial Code financing statements) in form and substance reasonably
satisfactory to it, necessary, or in the reasonable opinion of the
Administrative Agent, desirable to perfect the Liens created by the
Pledge Agreement, in proper form for filing, registration or
recordation, and reasonably satisfactory legal opinions or other
documents and certificates reasonably requested by the Administrative
Agent.
(j) Issuance of Warrants. Fail to use its best efforts to
obtain all necessary approvals, including by the SEC, to issue and,
upon receipt of such approvals, fail to (i) issue, to the Banks, the
Warrants required to be issued pursuant to the Warrant Agreement or
(ii) enter into the Registration Rights Agreement; provided, however,
that if on or prior to the three-month anniversary of the Second
Amendment Effective Date, the Borrower has not obtained SEC approval to
issue the Warrants, the Borrower shall, prior to such anniversary,
enter into an agreement, in form and substance reasonably satisfactory
to the Majority Banks, to provide, for the benefit of the Banks, the
equivalent value of the Warrants over the same time period during which
the Warrants would have been exercisable. Concurrently with the
execution and delivery of the Warrant Agreement and the Registration
Rights Agreement, the Borrower shall deliver to the Administrative
Agent reasonably satisfactory legal opinions or other documents and
certificates reasonably requested by the Administrative Agent.
(k) Liens on Texas Genco Stock. And will not permit any
of its Subsidiaries to, pledge, mortgage, hypothecate or grant a Lien
upon, or permit any mortgage, pledge,
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security interest or other Lien upon, the Texas Genco Stock other than
under the Loan Documents or the RRI Option.
(l) Resources Indebtedness. And will not permit any of
its Subsidiaries or Affiliates (other than Resources and its
Subsidiaries), to directly or indirectly pay, contribute, loan or
otherwise transfer funds to Resources for the purpose of repaying the
principal on Resource's existing $350 million loan facility or any
refinancing thereof unless (i) such payment, contribution, loan or
advance is made with the proceeds of a capital markets offering (to the
extent permitted under this Agreement), or (ii) at the time of such
payment, contribution, loan or advance, the Borrower, on a consolidated
basis, does not reasonably require or foresee that it will require such
funds in order for the Borrower and its Subsidiaries and Affiliates to
operate their businesses consistent with past practices and to meet
their ongoing obligations to third parties. Prior to the Borrower, its
Subsidiaries, or its Affiliates (other than Resources and its
Subsidiaries) making any payment, contribution, loan or other transfer
of funds to Resources pursuant to clause (ii) above, the Borrower shall
give the Banks written notice of its intent to make such transfer. Any
Bank may, within five Business Days of receipt of such notice, request
that the Borrower provide to the Banks a certificate summarizing how
the Borrower reached the conclusion required to make such transfer
pursuant to clause (ii) above. The Borrower will not permit a transfer
pursuant to clause (ii) above to occur until (x) the sixth Business Day
following the Borrower's giving to the Banks of notice of such
transfer, if no Bank requests from the Borrower the certificate
described above, or (y) the fifth Business Day following the Borrower's
delivery of the certificate described above, if a Bank does request
such certificate.".
10. Amendment to Section 9.1 of the Credit Agreement
(Events of Default). Section 9.1 of the Credit Agreement is hereby amended by:
(a) adding immediately following the reference to "Section 7.1
" in paragraph (c) thereof ", in any other Loan Document";
(b) adding immediately following the parenthetical in
paragraph (e) thereof "or under any other Loan Document"; and
(c) (i) deleting the period at the end of paragraph (k)
thereof and substituting in lieu thereof "; or" and (ii) adding at the end
thereof immediately following paragraph (k) a new paragraph (l) as follows:
"(l) (i) On or after the date of execution thereof, the Pledge
Agreement shall cease, for any reason (other than in accordance with
its terms), to be in full force and effect or the Borrower or any
Affiliate of the Borrower shall so assert (other than in accordance
with its terms), or (ii) any Lien created by the Pledge Agreement shall
cease to be enforceable and of the same effect and priority purported
to be created thereby (other than in accordance with its terms).".
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11. Amendment to Section 9.2 of the Credit Agreement
(Cancellation/Acceleration). Section 9.2 of the Credit Agreement is hereby
amended by:
(a) adding immediately following "under this Agreement" in
clause (ii) in paragraph (a) thereof "or any other Loan Document"; and
(b) adding immediately following each reference to "under this
Agreement" in clause (ii) in paragraph (b) thereof "or any other Loan Document".
12. Amendment to Section 11.1 of the Credit Agreement
(Amendments and Waivers). Section 11.1 of the Credit Agreement is hereby amended
by:
(a) adding immediately following "expiration date of any
Bank's Commitments," in clause (i) therein "or amend or modify the definition of
Initial Repayment Date or Subsequent Repayment Date (each as defined in the
Warrant Agreement), or modify the Warrant Agreement to have the effect thereof,
in each case to postpone such date,"; and
(b) adding immediately following "and the other Loan
Documents," in clause (ii) therein "or release all or substantially all of the
Collateral (other than in accordance with the terms of the Pledge Agreement),".
13. Amendment to Section 11.6 of the Credit Agreement
(Effectiveness, Successors and Assigns, Participations; Assignments). Section
11.6 of the Credit Agreement is hereby amended by deleting the first sentence in
paragraph (g) thereof and substituting in lieu thereof the following:
"Each of the Banks and the Administrative Agent agrees to
exercise its best efforts to keep, and to cause any third party
recipient of the Information (as defined below) to keep, any
Information confidential from anyone other than Persons employed or
retained by such party who are or are expected to become engaged in
evaluating, approving, structuring or administering the transactions
contemplated hereunder; provided that nothing shall prevent any Bank or
the Administrative Agent from disclosing such Information (i) to any
other Bank or any Affiliate of any Bank, (ii) pursuant to subpoena or
upon the order of any court or administrative agency, (iii) upon the
request or demand of any Governmental Authority having jurisdiction
over such Bank, (iv) if such Information has been publicly disclosed,
(v) to the extent reasonably required in connection with any litigation
to which either the Administrative Agent, any Bank, the Borrower or
their respective Affiliates may be a party, (vi) to the extent
reasonably required in connection with the exercise of any remedy
hereunder, (vii) to the Administrative Agent's or such Bank's, as the
case may be, legal counsel, independent auditors and other professional
advisors, or (viii) to any actual or proposed Participant or Purchasing
Bank (each, a "Transferee") that has agreed in writing to be bound by
the provisions of this Section 11.6(g). For purposes of this Section,
"Information" means all information received from the Borrower relating
to the Borrower or its business, other than any such information (i)
with respect to "structure" or "tax aspects" of the credit and
13
lending transactions provided for in this Agreement, as such terms are
used in Sections 6011, 6111 or 6112 of the Code, and the regulations
promulgated thereunder, or (ii) that is available to the Administrative
Agent or any Bank on a nonconfidential basis prior to disclosure by the
Borrower. For avoidance of doubt, the Borrower, the Administrative
Agent and the Banks agree that the Borrower, the Administrative Agent
and the Banks (and each of their Affiliates, their directors, officers,
agent, attorneys, employees and representatives) are permitted to
disclose to any and all Persons, without limitation of any kind, the
"structure" and "tax aspects" of the credit and lending transactions
provided for in this Agreement, as such terms are used in Sections
6011, 6111 or 6112 of the Code, and the regulations promulgated
thereunder, and all materials of any kind (including opinions or other
tax analyses) that are provided to the Administrative Agent and the
Banks related to such structure and tax aspects. The preceding sentence
and clause (i) in the definition of "Information" above are set forth
herein solely to come within certain "safe harbor" provisions set forth
in certain temporary regulations promulgated under Sections 6011, 6111
and 6112 of the Code.".
14. Amendment to Credit Agreement. The Credit Agreement
is hereby amended by deleting all references to CAF Loans and all other related
definitions deleted pursuant to Section 2 of this Second Amendment (other than
"Applicable Margin", "Loan Documents" and "Revolving Loan Maturity Date").
15. Amendment to Exhibit 11.6(i)(c) to the Credit
Agreement (Form of CAF Note). Exhibit 11.6(i)(c) to the Credit Agreement and all
references thereto are hereby deleted in their entirety.
16. Conditions to Effectiveness. This Second Amendment
shall become effective as of the date set forth above upon satisfaction of the
following conditions precedent (the "Second Amendment Effective Date"):
(a) The Administrative Agent shall have received
counterparts of this Second Amendment executed by the Borrower and each of the
Banks;
(b) The Administrative Agent shall have received copies
of an amendment to the Texas Genco Option Agreement, dated as of December 31,
2000, between the Borrower and Reliant Resources, Inc., permitting the pledge of
the Texas Genco Stock and permitting the exercise of voting rights and
foreclosure remedies, upon the occurrence and during the continuation of an
Event of Default, for the Texas Genco Stock;
(c) The Administrative Agent shall have received, for the
benefit of the Banks, the Additional Fee;
(d) The Administrative Agent shall have received all fees
and expenses required to be paid pursuant to the Credit Agreement;
(e) The Administrative Agent shall have received
satisfactory legal opinions and other documents and certificates reasonably
requested by the Administrative Agent; and
14
(f) All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with this Second
Amendment shall be in form and substance reasonably satisfactory to the
Administrative Agent.
17. 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 16 of this Second 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 Second Amendment shall not, except as expressly provided herein, operate as
a waiver of any right, power or remedy of any Bank or the Administrative 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.
18. Representations and Warranties. The Borrower, 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, in which case such
representations and warranties shall be true and correct in all material
respects as of such 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 Second Amendment.
19. Counterparts. This Second 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 Second 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.
20. GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed and delivered by their duly authorized officers as of
the date first written above.
CENTERPOINT ENERGY, INC.
By: /s/ MARC KILBRIDE
-----------------------------
Name: Marc Kilbride
Title: Vice President and Treasurer
JPMORGAN CHASE BANK, as Administrative
Agent and as a Bank
By: /s/ WILLIAM T. STROUT
-----------------------------
Name: William T. Strout
Title: Managing Director
CITIBANK, N.A., as Syndication Agent and as a
Bank
By: /s/ SANDIP SEN
-----------------------------
Name: Sandip Sen
Title: Managing Director
Signature Page
Second Amendment to
CenterPoint Credit Agreement
ABN AMRO BANK N.V.
By: /s/ JOHN J. MACK
-----------------------------
Name: John J. Mack
Title: Senior Vice President
By: /s/ THOMAS J. STERR
-----------------------------
Name: Thomas J. Sterr
Title: Vice President
Signature Page
Second Amendment to
CenterPoint Credit Agreement
BANK HAPOALIM, B.M
By: /s/ MARC BOSC
-----------------------------
Name: Marc Bosc
Title: Vice President
By: /s/ LEHROY HACKEN
-----------------------------
Name: Lehroy Hacken
Title: Vice President
Signature Page
Second Amendment to
CenterPoint Credit Agreement
BANK ONE, N.A.
By: /s/ MADELEINE N. PEMBER
-----------------------------
Name: Madeleine N. Pember
Title: Director
Signature Page
Second Amendment to
CenterPoint Credit Agreement
BANK OF AMERICA, N.A.
By: /s/ RICHARD L. STEIN
-----------------------------
Name: Richard L. Stein
Title: Principal
Signature Page
Second Amendment to
CenterPoint Credit Agreement
THE BANK OF NOVA SCOTIA
By: /s/ DENIS P. O'MEARA
-----------------------------
Name: Denis P. O'Meara
Title: Managing Director
Signature Page
Second Amendment to
CenterPoint Credit Agreement
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ D. BARNELL
-----------------------------
Name: D. Barnell
Title: Vice President
By: /s/ J. MEARNS
-----------------------------
Name: J. Mearns
Title: VP & Manager
Signature Page
Second Amendment to
CenterPoint Credit Agreement
BARCLAYS BANK PLC
By: /s/ SYDNEY G. DENNIS
-----------------------------
Name: Sydney G. Dennis
Title: Director
Signature Page
Second Amendment to
CenterPoint Credit Agreement
BAYERISCHE LANDESBANK
GIROZENTRALE
By: /s/ DIETMAN RIEG
-----------------------------
Name: Dietman Rieg
Title: First Vice President
By: /s/ JAMES H. BOYLE
-----------------------------
Name: James H. Boyle
Title: Vice President
Signature Page
Second Amendment to
CenterPoint Credit Agreement
WESTLB AG, New York Branch
By: /s/ SALVATORE BATTINELLI
--------------------------
Name: Salvatore Battinelli
Title: Managing Director
By: /s/ RICHARD J. PEARSE
--------------------------
Name: Richard J. Pearse
Title: Executive Director