RISK FACTORS
You should carefully consider the risk factors set forth below and the risk factors incorporated into this prospectus by
reference to our 2015 Form 10-K, our Form 10-Q for the quarter ended September 30, 2016, which we refer to as our "2016 Third Quarter 10-Q," as well as the other information
contained in and incorporated by reference into this prospectus before deciding to participate in this exchange offer. The selected risks described below and the risks that are incorporated into this
prospectus by reference to our 2015 Form 10-K and 2016 Third Quarter 10-Q are not our only risks. Additional risks and uncertainties not currently known to us or those we currently view to be
immaterial also may materially and adversely affect our business, financial condition or results of operations. Any of the following risks or any of the risks described in our 2015 Form 10-K
and 2016 Third Quarter 10-Q could materially and adversely affect our business, financial condition, operating results or cash flow. In such a case, the trading price of the notes could decline, or we
may not be able to make payments of interest and principal on the notes, and you may lose all or part of your original investment.
Risks related to the notes
Credit rating downgrades could adversely affect the trading price of the notes.
The trading price for the notes may be affected by our credit rating. Credit ratings are continually revised. Any downgrade in our credit rating
could adversely affect the trading prices of the notes or the trading markets for the notes to the extent the trading markets for the notes develop.
Despite current indebtedness levels, we may still be able to incur substantially more debt. This could
increase the risks associated with our already substantial leverage.
We may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the notes and other indentures
relating to outstanding indebtedness restrict our ability to do so, but we retain the ability to incur material amounts of additional indebtedness. If new indebtedness is added to our current
indebtedness levels, the related risks that we now face could increase. See "Description of Certain Other Indebtedness and Preferred Stock."
To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash
depends on many factors beyond our control.
Our ability to make payments on and to refinance our indebtedness, including these notes, and to fund planned capital expenditures depends on
our ability to generate cash in the future. This, to a significant extent, is subject to general economic, financial, competitive, legislative, tax, regulatory, environmental and other factors that
are beyond our control.
Based
on our current level of operations and anticipated cost savings and operating improvements, we believe our liquidity position and cash flows from operations will be adequate to
finance operating and
maintenance capital expenditures, to fund dividends to our common stockholders, and to fund other liquidity commitments (other than commitments of Genon and its subsidiaries). See "GenOn
may not be able to satisfy its cash commitments as they become due, which may adversely impact GenOn's and our financial condition and results of operations."
We
cannot assure you, however, that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized
on schedule or at all or that future borrowings will be available to us under our Senior Credit Facility in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund
our other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the notes on or before maturity. We cannot assure you that we will be able to refinance any of our
indebtedness on commercially reasonable terms or at all.
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In the event of a bankruptcy or insolvency, holders of our secured indebtedness and other secured obligations
will have a prior secured claim to any collateral securing such indebtedness or other obligations.
Holders of our secured indebtedness and other secured obligations will have a prior secured claim to any collateral securing such indebtedness
or other obligations. Holders of our secured indebtedness and the secured indebtedness of the guarantors will have claims that are prior to your claims as holders of the notes to the extent of the
value of the assets securing that other indebtedness. Our Senior Credit Facility is secured by first priority liens on certain of our assets and the assets of our subsidiary guarantors. We have
granted first and second priority liens to secure our obligations under certain long-term power and gas hedges as well as interest rate hedges. In the event of any distribution or payment of our
assets in any foreclosure, dissolution, winding-up, liquidation, reorganization, or other bankruptcy proceeding, holders of secured indebtedness will have prior claim to those of our assets that
constitute their collateral. Holders of the notes will participate ratably with all holders of our unsecured indebtedness that is deemed to be of the same class as the notes, and potentially with all
our other general creditors, based upon the respective amounts owed to each holder or creditor, in our remaining assets. In any of the foregoing events, we cannot assure you that there will be
sufficient assets to pay amounts due on the notes. As a result, holders of notes may receive less, ratably, than holders of secured indebtedness.
Your right to receive payments on these notes could be adversely affected if any of our non-guarantor
subsidiaries declare bankruptcy, liquidate or reorganize.
Some, but not all, of our subsidiaries will guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of our
non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are
made available for distribution to us. As of September 30, 2016, our non-guarantor subsidiaries had approximately $11,970 million in aggregate principal amount of non-current liabilities
and outstanding trade payables of approximately $330 million. In addition, the indenture governing the notes permits us, subject to certain covenant limitations, to provide credit support for
the obligations of the non-guarantor subsidiaries and such credit support may be effectively senior to our obligations under the notes. Further, the indenture governing the notes allows us to transfer
assets, including certain specified facilities, to the non-guarantor subsidiaries.
GenOn may not be able to satisfy its cash commitments as they become due, which may adversely impact GenOn's
and our financial condition and results of operations.
GenOn's financial position continues to be adversely affected by a sustained decline in natural gas prices and its resulting effect on wholesale
power prices. If these conditions persist, GenOn may not be able to satisfy its obligations under its senior unsecured notes maturing in June 2017 and in 2018 and its other long-term liquidity
requirements, including operating, maintenance and capital expenditures.
As
of September 30, 2016, $703 million of GenOn's senior notes outstanding are current within the GenOn consolidated balance sheet and are due on June 15, 2017.
Based on current projections, GenOn is not expected to have sufficient liquidity exclusive of cash subject to the restrictions under certain of its subsidiaries' operating leases to repay the senior
notes due in June 2017. As a result of these factors, there is no assurance GenOn will continue as a going concern.
Neither
NRG nor any of its subsidiaries (other than Genon and its subsidiaries) has an obligation to provide any financial support to GenOn other than under the secured intercompany
revolving credit agreement between NRG and GenOn and NRG Americas, Inc.
If
GenOn is unable to refinance these notes prior to their maturities and otherwise meet its liquidity requirments, there would be an adverse impact on GenOn's and our financial
position. Given current economic and market conditions, including the depressed commodity markets and volatile debt
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and
equity capital markets, GenOn may be unable to complete these refinancings on a timely basis or on satisfactory terms or at all. GenOn's failure to refinance its maturing senior notes or otherwise
meet its liquidity commitments may adversely impact GenOn's and our financial condition and results of operations.
We may not have access to the cash flow and other assets of our subsidiaries that may be needed to make
payment on the notes.
Much of our business is conducted through our subsidiaries. Although certain of our subsidiaries will guarantee the notes, some of our
subsidiaries will not become guarantors and thus will not be obligated to make funds available to us for payment on the notes. Our ability to make payments on the notes will be dependent on the
earnings and the distribution of funds from subsidiaries, some of which are non-guarantors. Our subsidiaries are permitted under the terms of the indenture to incur additional indebtedness that may
restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to us. In addition, certain debt instruments of certain of the subsidiaries,
which are non-guarantor subsidiaries restrict their ability to pay dividends, which limit their ability to make funds available to us. We cannot assure you that the agreements governing the current
and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund payments on the notes when due. Furthermore, certain of
our subsidiaries and affiliates are already subject to project financing. Such entities will not guarantee our obligations on the notes. The debt agreements of these subsidiaries and project
affiliates generally restrict their ability to pay dividends, make distributions or otherwise transfer funds to us.
We may not have the ability to raise the funds necessary to finance the change of control offer required by
the indenture governing the notes.
Upon the occurrence of certain specific kinds of change of control events, we will be required to offer to repurchase all outstanding notes at
101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase. However, it is possible that we will not have sufficient funds at the time of a change of
control to make the required repurchase of notes and/or that restrictions in our Senior Credit Facility or other senior indebtedness will not allow such repurchases. In addition, certain important
corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "Change of Control" under the
indenture. See "Description of the NotesRepurchase at the option of holdersChange of control triggering event."
Federal and state statutes allow courts, under specific circumstances, to void guarantees and require note
holders to return payments received from guarantors.
Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee can be voided, or claims in respect of
a guarantee can be subordinated to all other debts of that guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its
guarantee:
-
-
received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee; and
-
-
was insolvent or rendered insolvent by reason of such incurrence; or
-
-
was engaged in a business or transaction for which the guarantor's remaining assets constituted unreasonably small capital; or
-
-
intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.
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In
addition, any payment by that guarantor pursuant to its guarantee can be voided and required to be returned to the guarantor, or to a fund for the benefit of the creditors of the
guarantor.
The
measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has
occurred. Generally, however, a guarantor will be considered insolvent if:
-
-
the sum of its debts, including contingent liabilities, are greater than the fair saleable value of all of its assets; or
-
-
if the present fair saleable value of its assets are less than the amount that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and mature; or
-
-
it cannot pay its debts as they become due.
On
the basis of historical financial information, recent operating history and other factors, we believe that each guarantor, after giving effect to its guarantee of the notes, will not
be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. We cannot assure
you, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.
Your ability to transfer the notes may be limited by the absence of an active trading market, and there is no
assurance that any active trading market will develop for the notes.
The Exchange Notes will be registered under the Securities Act, but will constitute a new issue of securities for which there is no established
trading market. We do not intend to have the notes listed on a national securities exchange or included in any automated quotation system.
The
liquidity of any market for the notes will depend upon the number of holders of the notes, our performance, the market for similar securities, the interest in securities dealers
making a market in the notes and other factors. Therefore, we cannot assure you that an active market for the notes or exchange notes will develop or, if developed, that it will continue. If an active
market does not develop or is not maintained, the price and liquidity of the notes will be adversely affected.
Historically,
the market for non investment-grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. We cannot
assure you that the market, if any, for the notes will be free from similar disruptions or that any such disruptions may not adversely affect the prices at which you may sell your notes.
We
offered the Old Notes in reliance upon an exemption from registration under the Securities Act and applicable state securities laws. Therefore, the Old Notes may be transferred or
resold only in a transaction registered under or exempt from the Securities Act and applicable state securities laws. We are conducting the exchange offer pursuant to an effective registration
statement, whereby we are offering to exchange the Old Notes for nearly identical notes that you will be able to trade without registration under the Securities Act provided you are not one of our
affiliates. We cannot assure you that this exchange offer will be conducted in a timely fashion. Moreover, we cannot assure you that an active or liquid trading market for the Exchange Notes will
develop. See "Exchange Offer."
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Risks related to the exchange offer
Holders of Old Notes who fail to exchange their Old Notes in the exchange offer will continue to be subject
to restrictions on transfer.
If you do not exchange your Old Notes for Exchange Notes in the exchange offer, you will continue to be subject to the restrictions on transfer
applicable to the Old Notes. The restrictions on transfer of your Old Notes arise because we issued the Old Notes under exemptions
from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, you may only offer or sell the Old Notes if they are
registered under the Securities Act and applicable state securities laws, or offered and sold under an exemption from these requirements. We do not plan to register the Old Notes under the Securities
Act. For further information regarding the consequences of tendering your Old Notes in the exchange offer, see the discussion under the caption "Exchange OfferConsequences of failure to
exchange."
You must comply with the exchange offer procedures to receive Exchange Notes.
Delivery of Exchange Notes in exchange for Old Notes tendered and accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of the following:
-
-
certificates for outstanding notes or a book-entry confirmation of a book-entry transfer of outstanding notes into the exchange agent's account
at DTC, New York, New York as a depository, including an agent's message, as defined in this prospectus, if the tendering holder does not deliver a letter of transmittal;
-
-
a complete and signed letter of transmittal, or facsimile copy, with any required signature guarantees, or, in the case of a book-entry
transfer, an agent's message in place of the letter of transmittal; and
-
-
any other documents required by the letter of transmittal.
Therefore,
holders of Old Notes who would like to tender Old Notes in exchange for Exchange Notes should allow enough time for the necessary documents to be timely received by the
exchange agent. We are not required to notify you of defects or irregularities in tenders of Old Notes for exchange. Exchange Notes that are not tendered or that are tendered but we do not accept for
exchange will, following consummation of the exchange offer, continue to be subject to the existing transfer restrictions under the Securities Act and, upon consummation of the exchange offer, certain
registration and other rights under the Registration Rights Agreement will terminate. See "Exchange
OfferProcedures for tendering Old Notes through brokers and banks" and "Exchange OfferConsequences of failure to exchange."
Some holders who exchange their Old Notes may be deemed to be underwriters, and these holders will be
required to comply with the registration and prospectus delivery requirements in connection with any resale transaction.
If you exchange your Old Notes in the exchange offer for the purpose of participating in a distribution of the Exchange Notes, you may be deemed
to have received restricted securities and, if so will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.
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An active trading market may not develop for the Exchange Notes.
The Exchange Notes have no established trading market and will not be listed on any securities exchange. The initial purchasers are not
obligated to make a market in the Exchange Notes. The liquidity of any market for the exchange notes will depend upon various factors, including:
-
-
the number of holders of the exchange notes;
-
-
the interest of securities dealers in making a market for the Exchange Notes;
-
-
the overall market for high yield securities;
-
-
our financial performance or prospects; and
-
-
the prospects for companies in our industry generally.
Accordingly,
we cannot assure you that a market or liquidity will develop for the Exchange Notes.
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DESCRIPTION OF THE NOTES
In this description, "NRG" refers only to NRG Energy, Inc. and not to any of its
subsidiaries.
NRG
issued the Old Notes under an indenture among NRG, the Guarantors named therein and Delaware Trust Company (successor in interest to Law Debenture Trust Company of New York), as
trustee. The terms of the Exchange Notes offered in exchange for the Old Notes will be substantially identical to the terms of the Old Notes, except that the Exchange Notes are registered under the
Securities Act, and the transfer restrictions, registration rights and related additional interest terms
applicable to the Old Notes (as described under "Exchange OfferPurpose of the exchange offer") will not apply to the Exchange Notes. As a result, we refer to the Exchange Notes and the
Old Notes collectively as the "notes" for purposes of the following summary.
The
statements under this caption relating to the indenture and the notes are summaries and are not a complete description thereof, and where reference is made to particular provisions,
such provisions, including the definitions of certain terms, are qualified in their entirety by reference to all of the provisions of the indenture and the notes and those terms made part of the
indenture by the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The definitions of certain capitalized terms used in the following summary are set forth under the caption
"Certain definitions." Certain defined terms used in this description but not defined below under "Certain definitions" have the meanings assigned to them in the indenture
and the registration rights agreement. Copies of the indenture are available upon request from the Company. We urge you to read these documents carefully because they, and not the following
description, govern your rights as a holder.
The
registered holder of a note is treated as the owner of it for all purposes. Only registered holders of the notes have rights under the indenture.
Brief Description of the Notes
The notes:
-
-
will be general unsecured obligations of NRG;
-
-
will be
pari passu
in right of payment with all existing and future unsecured senior
Indebtedness of NRG;
-
-
will be senior in right of payment to any future subordinated Indebtedness of NRG; and
-
-
will be unconditionally guaranteed on a joint and several basis by the Guarantors.
However,
the notes will be effectively subordinated to all borrowings under the Credit Agreement, which is secured by substantially all of the assets of NRG and the Guarantors, and any
other secured Indebtedness (including any Hedging Obligations secured by liens on assets of NRG or its subsidiaries) of NRG or the Guarantors, in each case to the extent of the value of the assets
that secure the Credit Agreement or other secured Indebtedness. See "Risk FactorsRisks Related to the NotesIn the event of a bankruptcy or insolvency, holders of NRG's
secured indebtedness and other secured obligations will have a prior secured claim to any collateral securing such indebtedness or other obligations."
The Subsidiary Guarantees
The notes will initially be guaranteed by each Subsidiary of NRG that is a guarantor of any obligations under NRG's Credit Agreement. Each
Subsidiary Guarantee of the notes:
-
-
will be a general unsecured obligation of the Guarantor;
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-
-
will be
pari passu
in right of payment with all unsecured senior Indebtedness of that
Guarantor; and
-
-
will be senior in right of payment to any future subordinated Indebtedness of that Guarantor.
However,
each Guarantor's guarantee of the notes will be effectively subordinated to such Guarantor's guarantee under the Credit Agreement and any other secured Indebtedness of such
Guarantor (including any Hedging Obligations secured by junior liens on assets of such Guarantor), in each case to the extent of the value of the assets of such Guarantor that secure the Credit
Agreement or other secured Indebtedness.
The
operations of NRG are largely conducted through its subsidiaries and, therefore, NRG depends on the cash flow of its subsidiaries to meet its obligations, including its obligations
under the notes. Not all of NRG's subsidiaries will guarantee the notes. The notes will be effectively subordinated in right of payment to all Indebtedness and other liabilities and commitments
(including trade payables, lease obligations, indebtedness for borrowed money and Hedging Obligations) of these non-guarantor subsidiaries. Any right of NRG to receive assets of any of its
subsidiaries upon the subsidiary's liquidation or reorganization (and the consequent right of the holders of notes to participate in those assets) will be effectively subordinated to the claims of
that subsidiary's creditors, except to the extent that NRG is itself recognized as a creditor of the subsidiary, in which case its claims would still be subordinate in right of payment to any security
in the assets of the subsidiary and any indebtedness of the subsidiary senior to that held by NRG. The Guarantors accounted for approximately 62% and 68% of NRG's revenues from wholly owned operations
for the nine months ended September 30, 2016 and the year ended December 31, 2015, respectively. The Guarantors held approximately 32% of NRG's consolidated assets as of
September 30, 2016. As of September 30, 2016, NRG's non guarantor subsidiaries had approximately $11,970 million in aggregate principal amount of non-current liabilities and
outstanding trade payables of approximately $330 million.
Principal, Maturity and Interest
NRG will issue notes in this offering having an aggregate principal amount of $1.0 billion. NRG may issue additional notes of the same
series under the indenture from time to time after this offering;
provided
that any such additional notes that are not fungible with the notes we are
currently offering for United States federal income tax purposes will be issued with a different CUSIP Number than the CUSIP Number issued with respect to the notes we are currently offering. Any
issuance of additional notes is subject to the covenants in the indenture. The notes offered hereby and any additional notes of the same series subsequently issued under the indenture will be treated
as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. In addition, we may issue an unlimited amount of debt
securities in one or more additional series under the indenture, subject to the covenants in the indenture. The
notes will not be treated as a single class with any such other debt securities of different series for any purpose under the indenture.
NRG
will issue notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The notes will mature on May 15, 2026.
Interest
will accrue at the rate of 7.250% per annum, and will be payable semi-annually in arrears on May 15 and November 15 of each year. NRG will make each interest
payment to the holders of record on the immediately preceding May 1 and November 1.
Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day months.
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Methods of Receiving Payments on the Notes
If a holder of notes has given wire transfer instructions to NRG, NRG will pay or cause to be paid all principal, interest and premium on that
holder's notes in accordance with those instructions. All other payments on notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless
NRG elects to make interest payments by check mailed to the holders of the notes at their addresses set forth in the register of holders.
Paying Agent and Registrar for the Notes
The trustee will initially act as paying agent and registrar. NRG may change the paying agent or registrar without prior notice to the holders
of the notes, and NRG or any of its Subsidiaries may act as paying agent or registrar.
Transfer and Exchange
A holder may transfer or exchange notes in accordance with the provisions of the indenture. The registrar and the trustee may require a holder,
among other things, to furnish appropriate endorsements and transfer documents in connection with a transfer of notes. Holders of the notes will be required to pay all taxes due on transfer. NRG is
not required to transfer or exchange any note selected for redemption. Also, NRG is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be
redeemed.
Subsidiary Guarantees
NRG's payment obligations under the notes will be guaranteed on an unconditional basis by each of the Guarantors. These Subsidiary Guarantees
will be joint and several obligations of the Guarantors. The obligations of each Guarantor under its Subsidiary Guarantee will be limited as necessary to prevent that Subsidiary Guarantee from
constituting a fraudulent conveyance under applicable law. See "Risk FactorsRisks Related to the NotesFederal and state statutes allow courts, under specific circumstances,
to void guarantees and require holders of the notes to return payments received from guarantors."
The
Subsidiary Guarantee of a Guarantor of the notes will be released automatically:
(1) in
connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person
that is not (either before or after giving effect to such transaction) NRG or a Subsidiary of NRG;
(2) in
connection with any sale or other disposition of Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction)
NRG or a Subsidiary of NRG, if following such sale or other disposition, that Guarantor is not a direct or indirect Subsidiary of NRG;
(3) upon
defeasance or satisfaction and discharge of the notes as provided below under the captions "Legal Defeasance and Covenant Defeasance" and
"Satisfaction and Discharge";
(4) upon
a dissolution of a Guarantor that is permitted under the indenture; or
(5) otherwise
with respect to the Guarantee of any Guarantor:
(a) upon
the prior consent of holders of at least a majority in aggregate principal amount of the notes then outstanding;
(b) if
NRG has Indebtedness outstanding under the Credit Agreement (as amended, restated, modified, renewed, refunded, replaced or refinanced from time to time) at that
time, upon the consent of the requisite lenders under the Credit Agreement to the release of such
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Guarantor's
Guarantee of all Obligations under the Credit Agreement, or, if there is no Indebtedness of NRG outstanding under the Credit Agreement at that time, upon the requisite consent of the
holders of all other Indebtedness of NRG that is guaranteed by such Guarantor at that time outstanding to the release of such Guarantor's Guarantee of all Obligations with respect to all other
Indebtedness that is guaranteed by such Guarantor at that time outstanding; or
(c) if
NRG has Indebtedness outstanding under the Credit Agreement (as amended, restated, modified, renewed, refunded, replaced or refinanced from time to time) at that
time, upon the release of such Guarantor's Guarantee of all Obligations of NRG under the Credit Agreement, or, if there is no Indebtedness of NRG outstanding under the Credit Agreement at that time,
upon the release of such
Guarantor's Guarantee of all Obligations with respect to all other Indebtedness of NRG at that time outstanding.
Optional Redemption
At any time prior to May 15, 2019, NRG may on any one or more occasions redeem up to 35% of the aggregate principal amount of the notes,
upon not less than 15 nor more than 60 days' prior notice, at a redemption price equal to 107.250% of the principal amount of the notes redeemed, plus accrued and unpaid interest (including
Special Interest), if any, to the redemption date, with an amount equal to the net cash proceeds of one or more Equity Offerings, subject to the rights of holders of the notes on the relevant record
date to receive interest due on the relevant interest payment date;
provided
that:
(1) at
least 65% of the aggregate principal amount of the notes issued in this offering (excluding notes held by NRG and its Subsidiaries) remains outstanding immediately
after the occurrence of such redemption; and
(2) the
redemption occurs within 90 days of the date of the closing of such Equity Offering.
At
any time prior to May 15, 2021, NRG may on any one or more occasions redeem all or a part of the notes, upon not less than 15 nor more than 60 days' prior notice, at a
redemption price equal to 100% of the principal amount of notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest (including Special Interest), if any, to, the redemption
date, subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date.
Except
pursuant to the preceding paragraphs, the notes will not be redeemable at NRG's option prior to May 15, 2021.
On
or after May 15, 2021, NRG may on any one or more occasions redeem all or a part of the notes upon not less than 15 nor more than 60 days' prior notice, at the
redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest (including Special Interest), if any, on the notes redeemed, to the applicable
redemption date, if redeemed during the 12-month period beginning on May 15 of the years indicated below, subject to the rights of holders of notes on the relevant record date to receive
interest on the relevant interest payment date.
|
|
|
|
|
Year
|
|
Percentage
|
|
2021
|
|
|
103.625
|
%
|
2022
|
|
|
102.417
|
%
|
2023
|
|
|
101.208
|
%
|
2024 and thereafter
|
|
|
100.00
|
%
|
NRG
is not prohibited, however, from acquiring the notes in market transactions by means other than a redemption, whether pursuant to a tender offer or otherwise, assuming such action
does not otherwise violate the indenture.
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Mandatory Redemption
NRG will not be required to make mandatory redemption or sinking fund payments with respect to the notes.
Repurchase at the Option of Holders
Change of Control Triggering Event
If a Change of Control Triggering Event occurs, each holder of notes will have the right to require NRG to repurchase all or any part (equal to
$2,000 or an integral multiple of $1,000 in excess thereof) of that holder's notes pursuant to a Change of Control Offer on the terms set forth in the indenture.
In
the Change of Control Offer, NRG will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of the notes, plus accrued and unpaid interest
(including Special Interest), if any, on the notes to the date of purchase, subject to the rights of holders of the notes on the relevant record date to receive interest due on the relevant interest
payment date. Within 30 days following any Change of Control Triggering Event, NRG will mail a notice to each holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date
such notice is mailed, pursuant to the procedures required by the indenture and described in such notice. NRG will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the
extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indenture, NRG will comply with the applicable securities laws and regulations
and will not be deemed to have breached its obligations under the Change of Control provisions of the indenture by virtue of such compliance.
On
the Change of Control Payment Date, NRG will, to the extent lawful:
(1) accept
for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
(2) deposit
with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and
(3) deliver
or cause to be delivered to the trustee the notes properly accepted together with an officers' certificate stating the aggregate principal amount of notes or
portions of notes being purchased by NRG.
The
paying agent will promptly mail to each holder of notes properly tendered the Change of Control Payment for the notes, and the trustee will promptly authenticate and mail (or cause
to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each new note will be in a principal
amount of $2,000 or an integral multiple of $1,000 in excess thereof. NRG will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The
provisions described above that require NRG to make a Change of Control Offer following a Change of Control Triggering Event will be applicable whether or not any other provisions of
the indenture are applicable.
Except
as described above with respect to a Change of Control Triggering Event, the indenture does not contain provisions that permit the holders of the notes to require that NRG
repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.
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NRG
will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if (1) a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by NRG and purchases all notes properly tendered and not withdrawn under
the Change of Control Offer, or (2) notice of redemption has been given pursuant to the indenture as described above under the caption "Optional Redemption," unless and until there
is a default in payment of the applicable redemption price. A Change in Control Offer may be made in advance of a Change of Control Triggering Event, with the obligation to pay and the timing of
payment conditioned upon the occurrence of a Change of Control Triggering Event, if a definitive agreement to effect a Change of Control is in place at the time the Change of Control Offer is made.
The
definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the
properties or assets of NRG and its Subsidiaries taken as a whole. There is a limited body of case law interpreting the phrase "substantially all," and there is no precise established definition of
the phrase under applicable law. Accordingly, the ability of a holder of notes to require NRG to repurchase its notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the assets of NRG and its Subsidiaries taken as a whole to another Person or group may be uncertain.
Selection and Notice
If less than all of the notes are to be redeemed at any time, the trustee for the notes will select notes for redemption on a pro rata basis
unless otherwise required by law or applicable stock exchange requirements.
No
notes of $2,000 or less can be redeemed in part. Notices of redemption will be mailed by first class mail at least 15 but not more than 60 days before the redemption date to
each holder of notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection
with a defeasance of the notes or a satisfaction and discharge of the indenture. Any redemption notice may, in NRG's discretion, be subject to the satisfaction of one or more conditions precedent.
If
any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. A new
note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of notes upon cancellation of the original note. Notes called for redemption
become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.
Certain Covenants
Liens
NRG will not, and will not permit any Guarantor, to create or permit to exist any Lien upon any Principal Property owned by NRG or any Guarantor
or upon any Equity Interests
issued by, or Indebtedness of, any direct or indirect Subsidiary of NRG, to secure any Indebtedness of NRG or any Guarantor without providing for the notes to be equally and ratably secured with (or
prior to) any and all such Indebtedness and any other Indebtedness similarly entitled to be equally and ratably secured for so long as such Indebtedness is so secured;
provided, however
, that this
restriction will not apply to, or prevent the creation or existence of:
(1) Liens
securing Indebtedness of NRG or any Guarantor under one or more Credit Facilities in an aggregate principal amount, measured as of the date of creation of any such
Lien and the date of incurrence of any such Indebtedness, not exceeding the greatest of (a) 30% of
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Total
Assets, (b) $10.0 billion and (c) such amount as would not cause the Secured Leverage Ratio to exceed 3.5 to 1.0;
(2) Existing
Liens;
(3) Liens
securing Indebtedness of any Person that (a) is acquired by NRG or any of its Subsidiaries after the date of the indenture, (b) is merged or
amalgamated with or into NRG or any of its Subsidiaries after the date of the indenture or (c) becomes consolidated in the financial statements of NRG or any of its Subsidiaries after the date
of the indenture in accordance with GAAP;
provided, however
, that in each case contemplated by this clause (3), such Indebtedness was not
incurred in contemplation of such acquisition, merger, amalgamation or consolidation and is only secured by Liens on the Equity Interests and assets of, the Person (and Subsidiaries of the Person)
acquired by, or merged or amalgamated with or into, or consolidated in the financial statements of, NRG or any of its Subsidiaries;
(4) Liens
securing Indebtedness of NRG or any Guarantor incurred to finance (whether prior to or within 365 days after) the acquisition, construction or improvement
of assets (whether through the direct purchase of assets or through the purchase of the Equity Interests of any Person owning such assets or through an acquisition of any such Person by merger);
provided,
however
, that such Indebtedness is only secured by Liens on the Equity Interests and assets acquired, constructed or improved in such
financing;
(5) Liens
in favor of NRG or any of its Subsidiaries;
(6) Liens
securing Hedging Obligations;
provided
that such agreements were not entered into for speculative purposes (as
determined by NRG in its reasonable discretion acting in good faith);
(7) Liens
relating to current or future escrow arrangements securing Indebtedness of NRG or any Guarantor;
(8) Liens
to secure Environmental CapEx Debt or Necessary CapEx Debt that encumber only the assets purchased, installed or otherwise acquired with the proceeds of such
Environmental CapEx Debt or Necessary CapEx Debt;
(9) Liens
encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of NRG or any Guarantor, including rights
of offset and set-off;
(10) Refinancing
Liens;
(11) Liens
on the stock or assets of Project Subsidiaries securing Project Debt or tax equity financing of one or more Project Subsidiaries; and
(12) other
Liens, in addition to those permitted in clauses (1) through (11) above, securing Indebtedness having an aggregate principal amount, measured as of
the date of creation of any such Lien and the date of incurrence of any such Indebtedness, not to exceed the greater of (i) 2% of Total Assets and (ii) $500.0 million.
Liens
securing Indebtedness under the Credit Agreement existing on the date of the indenture will be deemed to have been incurred on such date in reliance on the exception provided by
clause (1) above.
If
NRG or any Guarantor proposes to create or permit to exist any Lien upon any Principal Property owned by NRG or any Guarantor or upon any Equity Interests or Indebtedness of any
direct or indirect Subsidiary of NRG to secure any Indebtedness, other than as permitted by clauses (1) through (12) of the previous paragraph, NRG will give prior written notice thereof
to the trustee, who will give notice to the holders of notes, and NRG will further agree, prior to or simultaneously with the
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creation
of such Lien, effectively to secure all the notes equally and ratably with (or prior to) such other Indebtedness, for so long as such other Indebtedness is so secured.
Merger, Consolidation or Sale of Assets
NRG may not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not NRG is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of NRG and its Subsidiaries taken as a whole, in one or more
related transactions, to another Person; unless:
(1) either:
(a) NRG is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than NRG) or to which
such sale, assignment, transfer, conveyance or other disposition has been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any
state of the United States or the District of Columbia;
provided
that if the Person is a partnership or limited liability company, then a corporation
wholly-owned by such Person organized or existing under the laws of the United States, any state of the United States or the District of Columbia that does not and will not have any material assets or
operations shall become a co-issuer of the notes pursuant to a supplemental indenture duly executed by the trustee;
(2) the
Person formed by or surviving any such consolidation or merger (if other than NRG) or the Person to which such sale, assignment, transfer, conveyance or other
disposition has been made assumes all the obligations of NRG under the notes and the indenture pursuant to a supplemental indenture or other documents and agreements reasonably satisfactory to the
trustee; and
(3) immediately
after such transaction, no Default or Event of Default exists.
In
addition, NRG may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person.
This
"Merger, Consolidation or Sale of Assets" covenant will not apply to (1) a merger of NRG with an Affiliate solely for the purpose of reincorporating NRG in another
jurisdiction or forming a direct or
indirect holding company of NRG; and (2) any sale, transfer, assignment, conveyance, lease or other disposition of assets between or among NRG and its Subsidiaries, including by way of merger
or consolidation.
Additional Subsidiary Guarantees
If,
(1) NRG
or any of its Subsidiaries acquires or creates another Subsidiary after the issue date and such Subsidiary Guarantees any Obligations of NRG under the Credit
Agreement (as amended, restated, modified, renewed, refunded, replaced or refinanced from time to time), or
(2) any
Subsidiary that does not currently Guarantee any Obligations of NRG under the Credit Agreement (as amended, restated, modified, renewed, refunded, replaced or
refinanced from time to time) subsequently Guarantees any Obligations of NRG under the Credit Agreement, or
(3) if
there is no Indebtedness of NRG outstanding under the Credit Agreement (as amended, restated, modified, renewed, refunded, replaced or refinanced from time to time)
at that time, any Subsidiary of NRG (including any newly acquired or created Subsidiary) Guarantees any Obligations with respect to any other Indebtedness of NRG, then such newly acquired or created
Subsidiary or Subsidiary that subsequently Guarantees obligations under the Credit Agreement or other Indebtedness of NRG, as the case may be, will become a Guarantor of the notes and
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execute
a supplemental indenture and deliver an opinion of counsel satisfactory to the trustee within 60 business days of the date on which it was acquired or created or guaranteed other Indebtedness
of NRG, as the case may be.
Reports
Whether or not required by the Commission's rules and regulations, so long as any notes are outstanding, NRG will furnish to the holders of
notes or cause the trustee to furnish to the holders of notes, within the time periods (including any extensions thereof) specified in the Commission's rules and regulations:
(1) all
quarterly and annual reports that would be required to be filed with the Commission on Forms 10-Q and 10-K if NRG were required to file such reports; and
(2) all
current reports that would be required to be filed with the Commission on Form 8-K if NRG were required to file such reports.
All
such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will
include a report on NRG's consolidated financial statements by NRG's independent registered public accounting firm. In addition, NRG will file a copy of each of the reports referred to in
clauses (1) and (2) above with the Commission for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the Commission
will not accept such a filing). To the extent such filings are made, the reports will be deemed to be furnished to the trustee and holders of notes.
If
NRG is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, NRG will nevertheless continue filing the reports specified in the preceding
paragraph with the Commission within the time periods specified above unless the Commission will not accept such a filing. NRG agrees that it will not take any action for the purpose of causing the
Commission not to accept any such filings. If, notwithstanding the foregoing, the Commission will not accept NRG's filings for any reason, NRG will post the reports referred to in the preceding
paragraph on its website within the time periods that would apply if NRG were required to file those reports with the Commission.
In
addition, NRG and the Guarantors agree that, for so long as any notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs
with the Commission, they will furnish to the holders of the notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
Events of Default and Remedies
Each of the following is an Event of Default with respect to the notes:
(1) default
for 30 days in the payment when due of interest on the notes;
(2) default
in payment when due of the principal of, or premium, if any, on the notes;
(3) failure
by NRG or any Guarantor for 45 days after written notice given by the trustee or the holders of at least 25% in principal amount of the notes that are
then outstanding, to comply with any of the other agreements in the indenture;
(4) default
under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by
NRG or
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any
Guarantor (or the payment of which is guaranteed by NRG or any Guarantor) whether such Indebtedness or guarantee now exists, or is created after the issue date, if that default:
(a) is
caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "
Payment Default
"); or
(b) results
in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, exceeds the greater of (i) 1% of Total Assets and (ii) $200.0 million;
provided
that this clause (4) shall not apply to (i) secured Indebtedness that becomes due as a result of the voluntary sale or transfer
of the property or assets securing such Indebtedness to a Person that is not an Affiliate of NRG; (ii) Non-Recourse Debt of NRG Peaker Finance Company LLC; and (iii) Non-Recourse
Debt of NRG or any of its Subsidiaries (except to the extent that NRG or any Guarantors that are not parties to such Non-Recourse Debt become directly or indirectly liable, including pursuant to any
contingent obligation, for any such Non-Recourse Debt and such liability, individually or in the aggregate, exceeds the greater of (i) 1% of Total Assets and (ii) $200.0 million);
(5) one
or more judgments for the payment of money in an aggregate amount in excess of the greater of (i) 1% of Total Assets and (ii) $200.0 million
(excluding therefrom any amount reasonably expected to be covered by insurance) shall be rendered against NRG or any Guarantor or Guarantors or any combination thereof and the same shall not have been
paid, discharged or stayed for a period of 60 days after such judgment became final and non-appealable;
(6) except
as permitted by the indenture, any Subsidiary Guarantee shall be held in any final and non-appealable judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor (or any group of Guarantors) that constitutes a Significant Subsidiary, or any Person acting on behalf of any Guarantor (or any
group of Guarantors) that constitutes a Significant Subsidiary, shall deny or disaffirm its or their obligations under its or their Subsidiary Guarantee(s); and
(7) certain
events of bankruptcy or insolvency described in the indenture with respect to NRG or any Guarantor that is a Significant Subsidiary or any group of Guarantors
that, taken together, would constitute a Significant Subsidiary.
In
the case of an Event of Default with respect to the notes arising from certain events of bankruptcy or insolvency with respect to NRG, any Guarantor or any group of Guarantors that,
taken together, would constitute a Significant Subsidiary, all such notes that are outstanding will become due and payable immediately without further action or notice. If any other Event of Default
occurs and is continuing, the trustee or the holders of at least 25% in principal amount of such notes that are outstanding may declare all the notes to be due and payable immediately.
Subject
to certain limitations, holders of a majority in principal amount of the notes that are then outstanding may direct the trustee in its exercise of any trust or power. The trustee
may withhold from holders of the notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating
to the payment of principal or interest.
Subject
to the provisions of the indenture relating to the duties of the trustee, in case an Event of Default occurs and is continuing under the indenture, the trustee will be under no
obligation to exercise any of the rights or powers under the indenture at the request or direction of any holders of
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the
notes unless such holders have offered to the trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium
(if any) or interest when due, no holder of a note may pursue any remedy with respect to the indenture unless:
(1) such
holder has previously given the trustee notice that an Event of Default is continuing;
(2) holders
of at least 25% in aggregate principal amount of the notes that are then outstanding have requested the trustee to pursue the remedy;
(3) such
holders have offered the trustee reasonable security or indemnity against any loss, liability or expense;
(4) the
trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and
(5) holders
of a majority in aggregate principal amount of the notes that are then outstanding have not given the trustee a direction inconsistent with such request within
such 60-day period.
The
holders of a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may, on behalf of the holders of the notes, rescind an acceleration or
waive any existing Default or Event of Default and its consequences under the indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, such notes.
NRG
is required to deliver to the trustee annually a statement regarding compliance with the indenture. Upon becoming aware of any Default or Event of Default, NRG is required to deliver
to the trustee a statement specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of NRG or any Guarantor, as such, will have any liability for any obligations of NRG
or the Guarantors under the notes, the indenture or the Subsidiary Guarantees, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by
accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the
federal securities laws.
Legal Defeasance and Covenant Defeasance
NRG may, at its option and at any time, elect to have all of its obligations discharged with respect to the notes that are outstanding and all
obligations of the Guarantors of such notes discharged with respect to their Subsidiary Guarantees ("
Legal Defeasance
") except for:
(1) the
rights of holders of the notes that are then outstanding to receive payments in respect of the principal of, or interest or premium on such notes when such payments
are due from the trust referred to below;
(2) NRG's
obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of
an office or agency for payment and money for security payments held in trust;
(3) the
rights, powers, trusts, duties and immunities of the trustee for the notes, and NRG's and the Guarantors' obligations in connection therewith; and
(4) the
Legal Defeasance provisions of the indenture governing such notes.
In
addition, NRG may, at its option and at any time, elect to have the obligations of NRG and the Guarantors released with respect to certain covenants (including its obligation to make
Change of Control Offers) that are described in the indenture ("
Covenant Defeasance
") and thereafter any
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omission
to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default and Remedies" will no longer constitute an Event of Default with respect to the notes.
In
order to exercise either Legal Defeasance or Covenant Defeasance:
(1) NRG
must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a
combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of
independent public accountants to pay the principal of, or interest and premium on such notes that are then outstanding on the Stated Maturity or on the applicable redemption date, as the case may be,
and NRG must specify whether such notes are being defeased to maturity or to a particular redemption date;
(2) in
the case of Legal Defeasance, NRG has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that (a) NRG has received
from, or there has been published by, the Internal Revenue Service a ruling or (b) since the issue date, there has been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such opinion of counsel will confirm that, the holders of the notes that are then outstanding will not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not
occurred;
(3) in
the case of Covenant Defeasance, NRG has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the holders of the notes
that are then outstanding will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no
Default or Event of Default with respect to the notes has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit);
(5) such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than
the indenture) to which NRG or any of its Subsidiaries is a party or by which NRG or any of its Subsidiaries is bound;
(6) NRG
must deliver to the trustee an officers' certificate stating that the deposit was not made by NRG with the intent of preferring the holders of the notes over the
other creditors of NRG with the intent of defeating, hindering, delaying or defrauding creditors of NRG or others; and
(7) NRG
must deliver to the trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the indenture or the notes outstanding thereunder may be amended or supplemented, with
respect to the notes, by entering into one or more
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supplemental
indentures with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, the notes), and, with respect to the notes, any existing default or compliance with any provision of the indenture or the notes outstanding
thereunder may be waived with the consent of the holders of a majority in principal amount of the notes that are then outstanding (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, the notes).
Without
the consent of each holder of the notes affected thereby, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):
(1) reduce
the principal amount of the notes whose holders must consent to an amendment, supplement or waiver;
(2) reduce
the principal of or change the fixed maturity of any such note or alter the provisions with respect to the redemption of such notes (other than provisions
relating to the covenants described above under the caption "Repurchase at the Option of Holders" and provisions relating to the number of days of notice to be given in the event of a
redemption);
(3) reduce
the rate of or change the time for payment of interest on any such note;
(4) waive
a Default or Event of Default in the payment of principal of, or interest or premium on the notes (except a rescission of acceleration of the notes by the holders
of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration);
(5) make
any such note payable in currency other than that stated in such notes;
(6) make
any change in the provisions of the indenture relating to waivers of past Defaults or the rights of holders of the notes to receive payments of principal of, or
interest or premium on the notes;
(7) waive
a redemption payment with respect to any such note (other than a payment required by one of the covenants described above under the caption
"Repurchase at the Option of Holders"); or
(8) make
any change in the preceding amendment and waiver provisions.
Notwithstanding
the preceding, without the consent of any holder of the notes, NRG, the Guarantors and the trustee may amend or supplement the indenture or the notes:
(1) to
cure any ambiguity, mistake, defect or inconsistency;
(2) to
provide for uncertificated notes in addition to or in place of certificated notes;
(3) to
provide for the assumption of NRG's obligations to holders of notes in the case of a merger or consolidation or sale of all or substantially all of NRG's assets;
(4) to
make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under any indenture of
any such holder;
(5) to
comply with requirements of the Commission in order to effect or maintain the qualification of any indenture under the Trust Indenture Act;
(6) to
conform the text of the indenture or the notes to any provision of this "Description of the Notes";
(7) to
evidence and provide for the acceptance and appointment under the indenture of a successor trustee pursuant to the requirements thereof;
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(8) to
provide for the issuance of additional notes of the same series or to provide for the issuance of other series of debt securities, in each case, in accordance with
the limitations set forth in the indenture as of the date hereof; or
(9) to
allow any Guarantor to execute a supplemental indenture and/or a Subsidiary Guarantee with respect to the notes.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, when:
(1) either:
(a) all
such notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited
in trust and thereafter repaid to NRG, have been delivered to the trustee for such notes for cancellation; or
(b) all
such notes that have not been delivered to the trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise
or will become due and payable within one year and NRG or any Guarantor has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the
holders of notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without
consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the notes not delivered to the trustee for cancellation for principal, premium and accrued interest to
the date of maturity or redemption;
(2) no
Default or Event of Default under such indenture has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from
the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which NRG or any Guarantor is
a party or by which NRG or any Guarantor is bound;
(3) NRG
or any Guarantor has paid or caused to be paid all sums payable by it under the indenture; and
(4) NRG
has delivered irrevocable instructions to the trustee under the indenture to apply the deposited money toward the payment of the notes at maturity or the redemption
date, as the case may be.
In
addition, NRG must deliver an officers' certificate and an opinion of counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of NRG or any Guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions;
however
, if it acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission for permission to
continue (if such indenture has been qualified under the Trust Indenture Act) or resign.
The
holders of a majority in principal amount of the notes that are outstanding will have the right to direct the time, method and place of conducting any proceeding for exercising any
remedy available
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to
the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default occurs and is continuing, the trustee will be required, in the exercise of its power, to use the
degree of care of a prudent man in the conduct of his own affairs. Subject to the provisions of the indenture, the trustee will be under no obligation to exercise any of its rights or powers under the
indenture at the request of any holder of notes, unless such holder has offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.
Additional Information
Anyone who receives this prospectus may obtain a copy of the indenture and the registration rights agreement without charge by writing to NRG
Energy, Inc., 804 Carnegie Center, Princeton, NJ 08540, Attention: Investor Relations.
Certain Definitions
Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is provided.
"
Affiliate
" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise;
provided
that
beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"
Applicable Laws
" means, as to any Person, any law, rule, regulation, ordinance or treaty, or any determination, ruling or other directive
by or from a court, arbitrator or other governmental authority, including the Electric Reliability Council of Texas, or any other entity succeeding thereto, in each case applicable to or binding on
such Person or any of its property or assets or to which such Person or any of its property or assets is subject.
"
Applicable Premium
" means, with respect to any note on any redemption date, the greater of:
(1) 1.0%
of the principal amount of such note; or
(2) the
excess (if any) of:
(a) the
present value at such redemption date of (i) the redemption price of such note at May 15, 2021 (such redemption price being set forth in the table
appearing above under the caption "Optional Redemption")
plus
(ii) all required interest payments due on the note through
May 15, 2021 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b) the
principal amount of the note.
"
Beneficial Owner
" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"
Board of Directors
" means:
(1) with
respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
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(2) with
respect to a partnership, the Board of Directors of the general partner of the partnership;
(3) with
respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and
(4) with
respect to any other Person, the board or committee of such Person serving a similar function.
"
Capital Lease Obligation
" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
"
Capital Stock
" means:
(1) in
the case of a corporation, corporate stock;
(2) in
the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in
the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
(4) any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing
Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
"
Change of Control
" means the occurrence of any of the following:
(1) the
direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the properties or assets of NRG and its Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d) of the Exchange Act, but excluding any
employee benefit plan of NRG or any of its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of such plan);
(2) the
adoption of a plan relating to the liquidation or dissolution of NRG; or
(3) the
consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than
a corporation owned directly or indirectly by the stockholders of NRG in substantially the same proportion as their ownership of stock of NRG prior to such transaction, becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the Voting Stock of NRG, measured by voting power rather than number of shares.
"
Change of Control Offer
" has the meaning assigned to it in the indenture governing the notes.
"
Change of Control Triggering Event
" means (i) a Change of Control has occurred and (ii) the notes are downgraded by either
S&P or Moody's on any date during the period commencing 60 days prior to the consummation of such Change of Control and ending 60 days following consummation of such Change of Control.
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"
Consolidated Cash Flow
" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such
period plus, without duplication:
(1) an
amount equal to any extraordinary loss (including any loss on the extinguishment or conversion of Indebtedness or any net loss on the disposition of assets), to the
extent such losses were deducted in computing such Consolidated Net Income;
plus
(2) provision
for taxes based on income or profits of such Person and its Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing
such Consolidated Net Income;
plus
(3) the
Fixed Charges of such Person and its Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income;
plus
(4) any
expenses or charges related to any equity offering, investment, acquisition, disposition, recapitalization or Indebtedness permitted to be incurred by the indenture
including a refinancing thereof (whether or not successful), including such fees, expenses or charges related to the offering of the notes and the Credit Agreement, and deducted in computing
Consolidated Net Income;
plus
(5) any
professional and underwriting fees related to any equity offering, investment, acquisition, recapitalization or Indebtedness permitted to be incurred under the
indenture and, in each case, deducted in such period in computing Consolidated Net Income;
plus
(6) the
amount of any minority interest expense deducted in calculating Consolidated Net Income (less the amount of any cash dividends paid to the holders of such minority
interests);
plus
(7) any
non-cash gain or loss attributable to mark to market adjustments in connection with Hedging Obligations;
plus
(8) without
duplication, any writeoffs, writedowns or other non-cash charges reducing Consolidated Net Income for such period, excluding any such charge that represents an
accrual or reserve for a cash expenditure for a future period;
plus
(9) all
items classified as extraordinary, unusual or nonrecurring non-cash losses or charges (including, without limitation, severance, relocation and other restructuring
costs), and related tax effects according to GAAP to the extent such non-cash charges or losses were deducted in computing such Consolidated Net Income;
plus
(10) depreciation,
depletion, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash charges and expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period) of such Person and its Subsidiaries for such period to the extent that such depreciation, depletion, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income;
minus
(11) non-cash
items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business; in each case, on a
consolidated basis and determined in accordance with GAAP (including, without limitation, any increase in amortization or depreciation or other non-cash charges resulting from the application of
purchase accounting in relation to any acquisition that is consummated after the issue date;
minus
(12) interest
income for such period.
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"
Consolidated Net Income
" means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and
its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP;
provided
that:
(1) the
Net Income of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of
dividends or similar distributions (including pursuant to other intercompany payments but excluding concurrent cash distributions) paid in cash to the specified Person or a Subsidiary of the Person;
(2) the
cumulative effect of a change in accounting principles will be excluded;
(3) any
net after-tax non-recurring or unusual gains, losses (less all fees and expenses relating thereto) or other charges or revenue or expenses (including, without
limitation, relating to severance, relocation and one-time compensation charges) shall be excluded;
(4) any
non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors or
employees shall be excluded, whether under FASB 123R or otherwise;
(5) any
net after-tax income (loss) from disposed or discontinued operations and any net after-tax gains or losses on disposal of disposed or discontinued operations shall
be excluded;
(6) any
gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions shall be excluded; and
(7) any
impairment charge or asset write-off pursuant to Financial Accounting Statement No. 142 and No. 144 or any successor pronouncement shall be
excluded.
"
continuing
" means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.
"
Credit Agreement
" means the Amended and Restated Credit Agreement, dated July 1, 2011, among NRG, the lenders party thereto,
Citicorp North America, Inc., as administrative agent and collateral agent, and various other parties acting as joint bookrunner, joint lead arranger or in various agency capacities, as
described in this prospectus under the heading "Description of Certain Other Indebtedness and Preferred Stock", as the same may be amended, restated, modified, renewed, refunded, replaced or
refinanced from time to time.
"
Credit Facilities
" means (i) one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper
facilities, in each case with banks or other institutional lenders or other counterparties providing for revolving credit loans, term loans, credit-linked deposits (or similar deposits) receivables
financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, (ii) debt
securities sold to institutional investors and/or (iii) Hedging Obligations with any counterparties, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced
(including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
"
Default
" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
"
Environmental CapEx Debt
" means Indebtedness of NRG or any of its Subsidiaries incurred for the purpose of financing capital expenditures
to the extent deemed reasonably necessary, as determined by NRG or any of its Subsidiaries, as applicable, in good faith and pursuant to prudent judgment, to comply with applicable Environmental Laws.
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"
Environmental Laws
" means all former, current and future federal, state, local and foreign laws (including common law), treaties,
regulations, rules, ordinances and codes, and legally binding decrees, judgments, directives and orders (including consent orders), in each case, relating to protection of the environment, natural
resources, occupational health and safety or the presence, release of, or exposure to, hazardous materials, substances or wastes, or the generation, manufacture, processing, distribution, use,
treatment, storage, disposal, transport, recycling or handling of, or the arrangement for such activities with respect to, hazardous materials, substances or wastes.
"
Equity Interests
" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock).
"
Existing Liens
" means Liens on the property or assets of NRG and/or any of its Subsidiaries existing on the date of the indenture
securing Indebtedness of NRG or any of its Subsidiaries (other than Liens incurred pursuant to clause (1) of the covenant described above under the caption "Liens").
"
Fixed Charges
" means, with respect to any specified Person for any period, the sum, without duplication, of:
(1) the
consolidated interest expense of such Person and its Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease
Obligations, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates;
plus
(2) the
consolidated interest of such Person and its Subsidiaries that was capitalized during such period;
plus
(3) any
interest accruing on Indebtedness of another Person that is Guaranteed by such Person or one of its Subsidiaries or secured by a Lien on assets of such Person or one
of its Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus
(4) the
product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any of its Subsidiaries,
other than dividends on Equity Interests payable in Equity Interests of NRG or to NRG or a Subsidiary of NRG, times (b) a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP;
minus
(5) interest
income for such period.
"
GAAP
" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in effect from time to time;
provided, however
, that if any operating lease
would be recharacterized as a capital lease due to changes in the accounting treatment of such operating leases under GAAP since the issue date, then solely with respect to the accounting treatment of
any such lease, GAAP shall be interpreted as it was in effect on the issue date.
"
Government Securities
" means direct obligations of, or obligations guaranteed by, the United States of America (including any agency or
instrumentality thereof) for the payment of which obligations or guarantees the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the
issuer's option.
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"
Guarantee
" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise);
provided
that standard contractual indemnities
which do not relate to Indebtedness shall not be considered a Guarantee.
"
Guarantors
" means each of:
(1) NRG's
Subsidiaries that Guarantee the notes on the date of the indenture, until such time as they are released pursuant to the provisions of the indenture; and
(2) any
other Subsidiary that executes a Subsidiary Guarantee in accordance with the provisions of the indenture,
and
their respective successors and assigns.
"
Hedging Obligations
" means, with respect to any specified Person, the obligations of such Person under:
(1) currency
exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or
commodity collar agreements; and
(2) (i)
agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates, commodity prices or commodity transportation or
transmission pricing or availability; (ii) any netting arrangements, power purchase and sale agreements, fuel purchase and sale agreements, swaps, options and other agreements, in each case,
that fluctuate in value with fluctuations in energy, power or gas prices; and (iii) agreements or arrangements for commercial or trading activities with respect to the purchase, transmission,
distribution, sale, lease or hedge of any energy related commodity or service.
"
Indebtedness
" means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade
payables, except as provided in clause (5) below, and surety bonds), whether or not contingent:
(1) in
respect of borrowed money;
(2) evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in
respect of banker's acceptances;
(4) representing
Capital Lease Obligations in respect of sale and leaseback transactions;
(5) representing
the balance of deferred and unpaid purchase price of any property or services with a scheduled due date more than six months after such property is acquired
or such services are completed; or
(6) representing
the net amount owing under any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP.
In
addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the
specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness
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of
any other Person;
provided
that the amount of such Indebtedness shall be deemed not to exceed the lesser of the amount secured by such Lien and the
value of the Person's property securing such Lien.
"
issue date
" means May 23, 2016.
"
Lien
" means, with respect to any asset:
(1) any
mortgage, deed of trust, deed to secure debt, lien (statutory or otherwise), pledge, hypothecation, encumbrance, restriction, collateral assignment, charge or
security interest in, on or of such asset;
(2) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the
same economic effect as any of the foregoing) relating to such asset; and
(3) in
the case of Equity Interests or debt securities, any purchase option, call or similar right of a third party with respect to such Equity Interests or debt securities.
"
Moody's
" means Moody's Investors Service, Inc. or any successor entity.
"
Necessary CapEx Debt
" means Indebtedness of NRG or any of its Subsidiaries incurred for the purpose of financing capital expenditures
(other than capital expenditures financed by Environmental CapEx Debt) that are required by Applicable Law or are undertaken for health and safety reasons. The term "Necessary CapEx Debt" does not
include any Indebtedness incurred for the purpose of financing capital expenditures undertaken primarily to increase the efficiency of, expand or re-power any power generation facility.
"
Net Income
" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and
before any reduction in respect of preferred stock dividends or accretion, excluding, however:
(1) any
gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with the disposition of any securities by such Person or any
of its Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Subsidiaries; and
(2) any
extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss.
"
Non
-
Recourse Debt
" means Indebtedness as to which neither NRG nor any of its Subsidiaries
is liable as a guarantor or otherwise.
"
Obligations
" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
"
Person
" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company or government or other entity.
"
Principal Property
" means any building, structure or other facility, and all related property, plant or equipment or other long-term
assets used or useful in the ownership, development, construction or operation of such building, structure or other facility owned or leased by NRG or any Guarantor and having a net book value in
excess of 2.0% of Total Assets, except any such building, structure or other facility (or related property, plant or equipment) that in the opinion of the Board of Directors is not of material
importance to the business conducted by NRG and its consolidated Subsidiaries, taken as a whole.
"
Pro Forma Cost Savings
" means, without duplication, with respect to any period, reductions in costs and related adjustments that have
been actually realized or are projected by NRG's Chief
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Financial
Officer in good faith to result from reasonably identifiable and factually supportable actions or events, but only if such reductions in costs and related adjustments are so projected by NRG
to be realized during the consecutive four-quarter period commencing after the transaction giving rise to such calculation.
"
Project Debt
" means Indebtedness of one or more Project Subsidiaries incurred for the purpose of holding, constructing or acquiring power
generation facilities or related or ancillary assets or properties;
provided
that NRG is not liable with respect to such Indebtedness except to the
extent of a non-recourse pledge of equity interests in one or more Project Subsidiaries.
"
Project Subsidiary
" means any Subsidiary of NRG held for the purpose of holding, constructing or acquiring power generation facilities or
related or ancillary assets or properties and any Subsidiary of NRG whose assets consist primarily of equity interests in one or more other Project Subsidiaries;
provided
that a Subsidiary will cease to
be a Project Subsidiary if it Guarantees any Indebtedness of NRG other than obligations of NRG related to
Project Debt of one or more Project Subsidiaries.
"
Refinancing Liens
" means Liens granted in connection with amending, extending, modifying, renewing, replacing, refunding or refinancing
in whole or in part any Indebtedness secured by Liens described in clauses (2) through (10) of the covenant described above under the caption "Liens";
provided
that Refinancing Liens do
not (a) extend to property or assets other than property or assets of the type that were subject to the
original Lien or (b) secure Indebtedness having a principal amount in excess of the amount of Indebtedness being extended, renewed, replaced or refinanced, plus the amount of any fees and
expenses (including premiums) related to any such extension, renewal, replacement or refinancing.
"
S&P
" means Standard & Poor's Ratings Group or any successor entity.
"
Secured Leverage Ratio
" means, as of any date of determination (for purposes of this definition, the "
Calculation
Date
"), the ratio of (a) the Total Secured Debt as of such date to (b) the Consolidated Cash Flow of NRG for the four most recent full fiscal quarters ending
immediately prior to such date for which financial statements are publicly available. For purposes of making the computation referred to above:
(1) investments
and acquisitions that have been made by NRG or any of its Subsidiaries, including through mergers or consolidations, or any Person or any of its Subsidiaries
acquired by NRG or any of its Subsidiaries, and including any related financing transactions and including increases in ownership of Subsidiaries, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (in accordance with Regulation S-X under the Securities Act, but including all Pro
Forma Cost Savings) as if they had occurred on the first day of the four-quarter reference period;
(2) the
Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein)
disposed of prior to the Calculation Date, will be excluded;
(3) any
Person that is a Subsidiary on the Calculation Date will be deemed to have been a Subsidiary at all times during such four-quarter period; and
(4) any
Person that is not a Subsidiary on the Calculation Date will be deemed not to have been a Subsidiary at any time during such four-quarter period.
"
Significant Subsidiary
" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of the indenture.
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"
Stated Maturity
" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the
documentation governing such Indebtedness as of the date of the indenture, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.
"
Subsidiary
" means, with respect to any specified Person:
(1) any
corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or
a combination thereof); and
(2) any
partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).
"
Subsidiary Guarantee
" means the Guarantee by each Guarantor of NRG's obligations under the indenture and on the notes, executed pursuant
to the provisions of the indenture.
"
Total Assets
" means the total consolidated assets of NRG and its Subsidiaries determined on a consolidated basis in accordance with GAAP,
as shown on the most recent balance sheet of NRG.
"
Total Secured Debt
" means, as of any date of determination, the aggregate principal amount of Indebtedness of NRG and the Guarantors
outstanding on such date that is secured by a Lien on any property or assets of NRG or any of the Guarantors (including Capital Stock of Subsidiaries of NRG or Indebtedness of Subsidiaries of NRG);
provided
that (i) Total Secured Debt will include only the amount of payments that NRG or any of the Guarantors would be required to make, on the
date Total Secured Debt is being determined, in the event of any early termination or similar event on such date of determination and (ii) for the avoidance of doubt, Total Secured Debt will
not include the undrawn amount of any outstanding letters of credit.
"
Treasury Rate
" means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities
with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the
redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to
May 15, 2021;
provided
,
however
, that if the period from the redemption date to May 15,
2021 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
"
Voting Stock
" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of
the Board of Directors of such Person.
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BOOK-ENTRY, DELIVERY AND FORM
The Exchange Notes will be initially represented by one or more global notes in fully registered form without interest coupons (the "Global
Notes"). The Global Notes will be deposited with the trustee, as custodian for DTC, in New York, New York, and registered in the name of DTC or its nominee, in each case for the credit to an account
of a direct or indirect participant in DTC as described below. We expect that, pursuant to procedures established by DTC, (i) upon the issuance of the Global Notes, DTC or its custodian will
credit, on its internal system, the principal amount at maturity of the individual beneficial interests represented by such Global Notes to the respective accounts of persons who have accounts with
such depositary ("participants") and (ii) ownership of beneficial interests in the Global Notes will be shown on, and the transfer of such ownership will be effected only through, records
maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). Such accounts initially
will be designated by or on behalf of the initial purchasers and ownership of beneficial interests in the Global Notes will be limited to participants or persons who hold interests through
participants. Holders may hold their interests in the Global Notes directly through
DTC if they are participants in such system, or indirectly through organizations that are participants in such system.
So
long as DTC or its nominee is the registered owner or holder of the notes, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes
represented by such Global Notes for all purposes under the indenture. No beneficial owner of an interest in the Global Notes will be able to transfer that interest except in accordance with DTC's
procedures, in addition to those provided for under the indenture with respect to the notes.
Payments
of the principal of, premium (if any), and interest on, the Global Notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of the
Issuer, the trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global
Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.
We
expect that DTC or its nominee, upon receipt of any payment of principal of, premium (if any), and interest on the Global Notes, will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC or its nominee. We also expect that payments by participants
to owners of beneficial interests in the Global Notes held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the
accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.
Transfers
between participants in DTC will be effected in the ordinary way through DTC's same-day funds system in accordance with DTC rules and will be settled in same-day funds.
DTC
has advised us that it will take any action permitted to be taken by a holder of notes (including the presentation of notes for exchange as described below) only at the direction of
one or more participants to whose account the DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant
or participants has or have given such direction. However, if there is an event of default under the indenture governing the notes, DTC will exchange the global notes for Certificated Notes (as
defined below), which it will distribute to its participants.
DTC
has advised us as follows: DTC is a limited-purpose trust company organized under New York banking law, a "banking organization" within the meaning of the New York banking law, a
member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York
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Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for issues of U.S. and non-U.S.
equity, corporate and municipal debt issues that participants deposit with DTC. DTC also facilitates the post-trade settlement among participants of sales and other securities transactions in
deposited securities through electronic computerized book-entry transfers and pledges between participants' accounts. This eliminates the need for physical movement of securities certificates.
Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to the DTC system is also available to
indirect participants such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
Although
DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, it is under no obligation to perform such
procedures, and such procedures may be discontinued at any time. None of us, the trustee or any paying agent will have any responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures governing their operations.
Certificated Securities
A Global Note is exchangeable for certificated notes in fully registered form without interest coupons ("Certificated Securities") only in the
following limited circumstances:
-
-
DTC notifies us that it is unwilling or unable to continue as depositary for the Global Notes and we fail to appoint a successor depositary
within 90 days of such notice, or
-
-
there shall have occurred and be continuing an event of default with respect to the notes under the indenture and DTC shall have requested the
issuance of Certificated Securities.
The
laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer the notes is and will be
limited to such extent.
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