Document:

exv4w1

EXHIBIT 4.1

Execution Copy

 

Fourth Supplemental Indenture

Dated as of October 21, 2008

Supplement to the Amended and Restated Indenture

Dated as of April 22, 2005

 

PACIFIC GAS AND ELECTRIC COMPANY

Issuer

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II ESTABLISHMENT OF THE 8.25% SENIOR NOTES
	 	 	3	 
	SECTION 201 Establishment and Designation of the 8.25% Senior Notes
	 	 	3	 
	SECTION 202 Form of the 8.25% Senior Notes
	 	 	3	 
	SECTION 203 Principal Amount of the 8.25% Senior Notes
	 	 	4	 
	SECTION 204 Interest Rates; Stated Maturity of the 8.25% Senior Notes
	 	 	4	 
	SECTION 205 No Sinking Fund
	 	 	4	 
	SECTION 206 Paying Agent and Bond Registrar
	 	 	4	 
	SECTION 207 Global Securities; Appointment of Depositary for Global Securities
	 	 	4	 
	SECTION 208 Other Terms of the 8.25% Senior Notes
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III OPTIONAL REDEMPTION BY COMPANY
	 	 	5	 
	SECTION 301 Optional Redemption
	 	 	5	 
	SECTION 302 Calculation of Redemption Price
	 	 	5	 
	SECTION 303 Notice of Redemption
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV MISCELLANEOUS
	 	 	5	 
	SECTION 401 Application of Fourth Supplemental Indenture
	 	 	5	 
	SECTION 402 Effective Date of Fourth Supplemental Indenture
	 	 	6	 
	SECTION 403 Counterparts
	 	 	6	 
	 
	 	 	 	 
	EXHIBIT A
	 	 	 	 

 i

 

 

     FOURTH SUPPLEMENTAL INDENTURE, dated as of October 21, 2008 (this “Fourth Supplemental
Indenture”), by and between PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and
existing under the laws of the State of California (the “Company” or the “Issuer”), and THE BANK OF
NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under
the laws of the United States of America (formerly known as The Bank of New York Trust Company,
N.A.), as Trustee under the Base Indenture (as hereinafter defined) (the “Trustee”).

RECITALS OF THE COMPANY

     A. The Company and the Trustee are parties to that certain Amended and Restated Indenture,
dated as of April 22, 2005 (the “Base Indenture”), as supplemented by the First Supplemental
Indenture, dated as of March 13, 2007 (the “First Supplemental Indenture”), and as further
supplemented by the Second Supplemental Indenture, dated as of December 4, 2007 (the “Second
Supplemental Indenture”), the Third Supplemental Indenture, dated as of March 3, 2008 (the “Third
Supplemental Indenture”), and this Fourth Supplemental Indenture (this
“Fourth Supplemental Indenture,” and together with the Base Indenture, the First Supplemental
Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture, the
“Indenture”), which supplements, amends and restates that certain Indenture of Mortgage, dated as
of March 11, 2004, as supplemented by the First Supplemental Indenture thereto, dated as of March
23, 2004 and the Second Supplemental Indenture thereto, dated as of April 12, 2004, providing for
the issuance by the Company of an unlimited number of series of Bonds (as defined in the Base
Indenture) from time to time.

     B. Under the Base Indenture, the Company is authorized to establish one or more series of
Bonds at any time in accordance with and subject to the provisions of the Base Indenture, and the
terms of such series of Bonds may be described by a supplemental indenture executed by the Company
and the Trustee.

     C. The execution and delivery of this Fourth Supplemental Indenture has been authorized by a
Board Resolution (as defined in the Base Indenture).

     D. Concurrent with the execution hereof, the Company has caused its counsel to deliver to the
Trustee an Opinion of Counsel (as defined in the Base Indenture) pursuant to Section 13.03 of the
Base Indenture.

     E. The Company has done all things necessary to make this Fourth Supplemental Indenture a
valid agreement of the Company, in accordance with its terms.

     NOW, THEREFORE, the Company and the Trustee agree, for the benefit of each other and for the
equal and proportionate benefit of Holders of the 8.25% Senior Notes (as defined below) with
respect to all provisions herein applicable to such series of notes, as follows:

 

 

ARTICLE I

DEFINITIONS

     Unless the context otherwise requires, capitalized terms used but not defined herein have the
meaning set forth in the Indenture. The following additional terms are hereby established for
purposes of this Fourth Supplemental Indenture and shall have the meanings set forth in this Fourth
Supplemental Indenture only for purposes of this Fourth Supplemental Indenture:

     “8.25% Senior Notes” has the meaning set forth in Section 201 hereto.

     “Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the 8.25% Senior Notes
that would be used, at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to the remaining term of
the 8.25% Senior Notes.

     “Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of the
Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and
lowest of the Reference Treasury Dealer Quotations or (2) if the Company obtains fewer than four
Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so
received.

     “Primary Treasury Dealer” means a primary U.S. Government Securities dealer in the United
States.

     “Quotation Agent” means the Reference Treasury Dealer appointed by the Company.

     “Redemption Price” has the meaning set forth in Section 301 hereto.

     “Reference Treasury Dealer” means (1) each of Banc of America Securities LLC, Citigroup
Capital Markets Inc. and Deutsche Bank Securities Inc. and their respective successors, unless any
of them ceases to be a Primary Treasury Dealer, in which case the Company shall substitute another
Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by that Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third Business Day preceding such Redemption Date. For purposes of this definition
only, “Business Day” means any day that is not a day on which banking institutions in New York City
are authorized or required by law or regulation to close.

2

 

     “Remaining Scheduled Payments” means, with respect to each of the 8.25% Senior Notes that the
Company is redeeming pursuant to Section 301 hereto, the remaining scheduled payments of principal
and interest that would be due after the applicable Redemption Date if such 8.25% Senior Notes were
not redeemed. However, if the Redemption Date is not a scheduled Interest Payment Date with
respect to such 8.25% Senior Notes, the amount of the next succeeding scheduled interest payment on
such 8.25% Senior Notes will be reduced by the amount of interest accrued on such 8.25% Senior
Notes to the Redemption Date.

     “U.S. Government Securities” means securities which are (a) direct obligations of the United
States of America for the payment on which its full faith and credit is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a full faith and credit
obligation of the United States of America, and which in the case of (a) and (b) are not callable
or redeemable at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S. Government Security or
a specific payment of interest on or principal of any such U.S. Government Security held by such
custodian for the account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in respect of the U.S.
Government Security evidenced by such depository receipt.

 

     The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this
Fourth Supplemental Indenture as a whole and not to any particular Article, Section or other
subdivision.

ARTICLE II

ESTABLISHMENT OF THE 8.25% SENIOR NOTES 

     SECTION 201 Establishment and Designation of the 8.25% Senior Notes.

     Pursuant to the terms hereof and Section 3.01 of the Indenture, the Company hereby establishes
a twenty-fifth series of Bonds designated as the “8.25% Senior Notes due October 15, 2018” (the
“8.25% Senior Notes”). The 8.25% Senior Notes may be reopened, from time to time, for issuances of
additional Bonds of such series, and any additional Bonds issued and comprising 8.25% Senior Notes
shall have identical terms as the 8.25% Senior Notes, except that the issue price, issue date and,
in some cases, the first Interest Payment Date may differ.

     SECTION 202 Form of the 8.25% Senior Notes.

     The 8.25% Senior Notes shall be issued in the form of one or more Global Bonds in
substantially the form set forth in Exhibit B hereto.

3

 

     SECTION 203 Principal Amount of the8.25% Senior Notes.

     The 8.25% Senior Notes shall be issued in an initial aggregate principal amount of
$600,000,000.

     SECTION 204 Interest Rates; Stated Maturity of the 8.25% Senior Notes.

     The 8.25% Senior Notes shall bear interest at the rate of 8.25% per annum and shall have a
Stated Maturity of October 15, 2018.

     SECTION 205 No Sinking Fund.

     No sinking fund is provided for the 8.25% Senior Notes.

     SECTION 206 Paying Agent and Bond Registrar.

     The Trustee is hereby appointed as initial Paying Agent and initial Bond Registrar for the
8.25% Senior Notes. The Place of Payment of the 8.25% Senior Notes shall be the Corporate Trust
Office of the Trustee.

     SECTION 207 Global Securities; Appointment of Depositary for Global Securities.

     The 8.25% Senior Notes shall be issued in the form of one or more permanent Global Bonds as
provided in Section 3.13 of the Indenture and deposited with, or on behalf of, the Depositary, or
with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated
by the Trustee.

     The Company hereby initially appoints The Depository Trust Company (“DTC”) to act as the
Depositary with respect to all 8.25% Senior Notes, and the 8.25% Senior Notes shall initially be
registered in the name of Cede & Co., as the nominee of DTC.

     The Trustee is hereby authorized and requested to execute and deliver a Letter of
Representations to DTC relating to the 8.25% Senior Notes and, in connection with any successor
nominee for DTC or any successor Depositary, enter into comparable arrangements, and shall have the
same rights with respect to its actions thereunder as it has with respect to its actions under the
Indenture.

     None of the Company, the Trustee, any Paying Agent or any Bond Registrar will have any
responsibility or liability for any aspect of Depositary records relating to, or payments made on
account of, beneficial ownership interests in a Global Bond or for maintaining, supervising or
reviewing any Depositary records relating to such beneficial ownership interests, or for transfers
of beneficial interests in the Bonds or any transactions between the Depositary and beneficial
owners.

     SECTION 208 Other Terms of the 8.25% Senior Notes.

     The other terms of the 8.25% Senior Notes shall be as expressly set forth herein and in
Exhibit B.

4

 

ARTICLE III

OPTIONAL REDEMPTION BY COMPANY

     SECTION 301 Optional Redemption.

     Optional Redemption of 8.25% Senior Notes. Subject to the terms and conditions of the
Indenture, the 8.25% Senior Notes are redeemable at the option of the Company in whole or in part
at any time at a redemption price equal to the greater of:

          (a) 100% of the principal amount of the 8.25% Senior Notes to be redeemed; or

          (b) as determined by the Quotation Agent, the sum of the present values of the Remaining
Scheduled Payments of principal and interest on the 8.25% Senior Notes to be redeemed (not
including any portion of payments of interest accrued as of the Redemption Date) discounted to the
Redemption Date on a semi-annual basis at the Adjusted Treasury Rate, plus 50 basis points;
plus, in either of the above cases, accrued and unpaid interest thereon to but not including the
Redemption Date (the “Redemption Price”). The Redemption Price shall be calculated assuming a
360-day year consisting of twelve 30-day months.

     SECTION 302 Calculation of Redemption Price. The Company shall calculate the
Redemption Price for any redemption of Senior Notes pursuant to Section 301 and notify the Trustee
of such Redemption Price before it sends the amount of the Redemption Price to the Trustee or any
Paying Agent.

     SECTION 303 Notice of Redemption. Notice of any redemption pursuant to Section 301
shall be given in the manner and at the time set forth in Section 6.04 of the Indenture; provided,
however, that such notice need not state the dollar amount of the Redemption Price if such dollar
amount has not been determined as of the date such notice is being given to the Holders of the
8.25% Senior Notes being redeemed.

ARTICLE IV

MISCELLANEOUS

     SECTION 401 Application of Fourth Supplemental Indenture.

     Except as provided herein, each and every term and condition contained in this Fourth
Supplemental Indenture that modifies, amends or supplements the terms and conditions of the
Indenture shall apply only to 8.25% Senior Notes established hereby and not to any other series of
Bonds established under the Indenture. Except as specifically amended and supplemented by, or to
the extent inconsistent with, this Fourth Supplemental Indenture, the Indenture shall remain in
full force and effect and is hereby ratified and confirmed.

5

 

     SECTION 402 Effective Date of Fourth Supplemental Indenture.

     This Fourth Supplemental Indenture shall be effective upon the execution and delivery hereof
by each of the parties hereto.

     SECTION 403 Counterparts.

     This Fourth Supplemental Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

6

 

     IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be
duly executed by their respective officers hereunto duly authorized, all as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	PACIFIC GAS AND ELECTRIC COMPANY,	 	 
	 	 	      as Issuer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher P. Johns	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Christopher P. Johns	 	 
	 

	 	Title:
	 	Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK MELLON TRUST 

  COMPANY, N.A.,	 	 
	 	 	      as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Josephine Libunao	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Josephine Libunao	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature page to Fourth Supplemental Indenture

 

EXHIBIT A

FORM OF 8.25% SENIOR NOTES DUE OCTOBER 15, 2018

     THIS SENIOR NOTE IS A BOND AND A GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. UNLESS AND UNTIL
IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN DEFINITIVE FORM, THIS SENIOR NOTE MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE
OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

     UNLESS THIS SENIOR NOTE CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR NOTE CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     THE FOLLOWING SUMMARY OF TERMS IS SUBJECT TO THE INFORMATION SET FORTH ON THE REVERSE HEREOF:

	 	 	 	 	 
	PRINCIPAL AMOUNT :

	 	ORIGINAL ISSUE DATE:
	 	INTEREST RATE: 8.25% per annum
	$600,000,000
	 	 	 	 
	 

	 	October 21, 2008	 	 
	 
	 	 	 	 
	MATURITY DATE:

	 	INTEREST PAYMENT DATES:
	 	THIS SENIOR NOTE IS A:
	 

	 	 	 	þ Global Book-Entry Bond
	October 15, 2018

	 	April 15 and October
15, commencing April
15, 2009
	 	o Certificated Bond
	 
	 	 	 	 
	REGISTERED OWNER: Cede & Co., as
	 	 	 	 
	nominee of The Depository Trust
Company
	 	 	 	 

A-1

 

PACIFIC GAS AND ELECTRIC COMPANY

8.25% SENIOR NOTES DUE OCTOBER 15, 2018

(Fixed Rate)

			
	 	 	 
	No. R-[ ___]

CUSIP No: 694308 GN1
	 	Principal Amount: $[ ___]

     PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of
the State of California (herein called the “Company,” which term includes any successor Person
pursuant to the applicable provisions of the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., as nominee for The Depository Trust Company, or
registered assigns, the Principal Amount stated above on the Maturity Date stated above, and to pay
interest thereon from and including the Original Issue Date stated above or, in the case of a 8.25%
Senior Note Due October 15, 2018 issued upon the registration of transfer or exchange, from and
including the most recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on the Interest Payment Dates set forth above and on the Maturity
Date stated above, commencing October 15, 2009 at the rate of 8.25% per annum until the principal
hereof is paid or made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this 8.25% Senior Note Due October 15, 2018 (this “Senior Note,” and together
with all other 8.25% Senior Notes Due October 15, 2018 (the “Senior Notes”) (or one or more
Predecessor Bonds) is registered at the close of business on the Regular Record Date for such
interest, which shall be the 15th day preceding such Interest Payment Date; provided, however,
that interest payable at the Maturity Date or on a Redemption Date will be paid to the Person to
whom principal is payable. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Senior Note (or one or more Predecessor Bonds) is registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Senior Notes not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of the Indenture and any securities exchange, if any, on which
the Senior Notes may be listed, and upon such notice as may be required by any such exchange, all
as more fully provided in said Indenture.

     Payments of interest on this Senior Note will include interest accrued to but excluding the
respective Interest Payment Dates. Interest payments for this Senior Note shall be computed and
paid on the basis of the 360-day year of twelve 30-day months and will accrue from October 21, 2008
or from the most recent Interest Payment Date to which interest has been paid or duly provided for.
In the event that any date on which interest is payable on this Senior Note (other than the
Maturity Date) is not a Business Day then payment of the interest payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or payment in respect
of any such delay) with the same force and effect as if made on the date the

A-2

 

payment was originally payable. If the Maturity Date falls on a day that is not a Business
Day, the payment of principal, premium, if any, and interest may be made on the next succeeding
Business Day, and no interest on such payment shall accrue for the period from and after maturity.

     Payment of principal of, premium, if any, and interest on Senior Notes shall be made in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts. Payments of principal of, premium, if any, and interest on
the Senior Notes represented by a Global Bond shall be made by wire transfer of immediately
available funds to the Holder of such Global Bond, provided that, in the case of payments of
principal and premium, if any, such Global Bond is first surrendered to the Paying Agent. If any
of the Senior Notes are no longer represented by a Global Bond, (i) payments of principal, premium,
if any, and interest due on the Maturity Date or earlier redemption of such Senior Notes shall be
made at the office of the Paying Agent upon surrender of such Senior Notes to the Paying Agent, and
(ii) payments of interest shall be made, at the option of the Company, subject to such surrender
where applicable, (A) by check mailed to the address of the Person entitled thereto as such address
shall appear in the Bond Register or (B) by wire transfer to registered Holders of at least
$10,000,000 in principal amount of Senior Notes at such place and to such account at a banking
institution in the United States as such Holders may designate in writing to the Trustee at least
sixteen (16) days prior to the date for payment.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SENIOR NOTE SET FORTH ON THE
REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET
FORTH AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

A-3

 

     In Witness Whereof, the Company has caused this instrument to be duly executed.

     Dated: October 21, 2008

	 	 	 	 	 
	 	PACIFIC GAS AND ELECTRIC COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	Christopher P. Johns 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Nicholas M. Bijur 	 
	 	 	Title:  	Assistant Treasurer 	 

A-4

 

	 	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     This Senior Note is one of the Bonds of the series designated as Bonds of the Twenty-Fifth
Series referred to in the within-mentioned Indenture.

     Dated: October 21, 2008

	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., As
Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signatory	 	 

A-5

 

Reverse of Senior Note

     This 8.25% Senior Note Due October 15, 2018 is one of a duly authorized issue of Bonds of the
Company, issued and issuable in one or more series under an Amended and Restated Indenture, dated
as of April 22, 2005 (the “Base Indenture”), as supplemented by a First Supplemental Indenture,
dated as of March 13, 2007 (the “First Supplemental Indenture”), as further supplemented by a
Second Supplemental Indenture, dated as of December 4, 2007 (the “Second Supplemental Indenture”),
a Third Supplemental Indenture, dated as of March 3, 2008 (the “Fourth Supplemental Indenture”),
and a Fourth Supplemental Indenture, dated as of October 21, 2008 (the “Fourth Supplemental
Indenture,” and together with the Base Indenture, the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture and
with all additional indentures supplemental thereto, and any constituent instruments establishing
the terms of particular Bonds, being herein called the “Indenture”), between the Company and The
Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as
Trustee (herein called the “Trustee,” which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a description of the respective
rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of
Bonds thereunder and of the terms and conditions upon which Bonds are, and are to be, authenticated
and delivered. This Senior Note is a Bond within the meaning of the Indenture and is one of the
Bonds of the twenty-fifth series designated as the 8.25% Senior Note Due October 15, 2018
established by the Company under the Indenture. The acceptance of this Senior Note shall be deemed
to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of
the Indenture.

     Subject to the terms and conditions of the Indenture, the Senior Notes are redeemable at the
option of the Company (“Optional Redemption”), in whole or in part, prior to Maturity, at a
Redemption Price equal to the greater of:

     (a) 100% of the principal amount of the Senior Notes to be redeemed; or

     (b) as determined by the Quotation Agent, the sum of the present values of the
Remaining Scheduled Payments of principal and interest on the Senior Notes to be redeemed
(not including any portion of payments of interest accrued as of the Redemption Date)
discounted to the Redemption Date on a semi-annual basis at the Adjusted Treasury Rate, plus
50 basis points,

plus, in either of the above cases, accrued and unpaid interest thereon to but not including the
Redemption Date.

     Interest installments whose Stated Maturity is on or prior to such Redemption Date will be
payable to Holders of such Senior Notes, or one or more Predecessor Bonds, of record at the close
of business on the relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.

     In the case of an Optional Redemption, notice of redemption will be in writing and mailed
first-class postage-prepaid not less than 30 days nor more than 60 days prior to the

A-6

 

Redemption Date to each Holder of Senior Notes to be redeemed at the Holder’s registered
address; provided, however, that such notice need not state the dollar amount of the Redemption
Price if such dollar amount has not been determined as of the date such notice is being given to
the Holders of the Senior Notes being redeemed. If money sufficient to pay the Redemption Price of
all Senior Notes (or portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent or the Trustee on or prior to the Redemption Date, from and after such Redemption Date
such Senior Notes or portions thereof shall cease to bear interest. Senior Notes in denominations
larger than $1,000 in principal amount may be redeemed in part but only in integral multiples of
$1,000.

     In the event of redemption of this Senior Note in part only, a new Senior Note or Senior Notes
of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the surrender hereof.

     As provided in the Indenture and subject to certain limitations therein set forth, this Senior
Note or any portion of the principal amount hereof will be deemed to have been paid for all
purposes of the Indenture and to be no longer Outstanding thereunder, and the Company’s entire
indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an
amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which
when due, without regard to any reinvestment thereof, will provide moneys which, together with
money, if any, deposited with or held by the Trustee or such Paying Agent, will be sufficient to
pay when due the principal of and premium, if any, and interest on this Senior Note when due.

     If an Event of Default shall occur and be continuing, the Trustee or the Holders of not less
than 33% in aggregate principal amount of the Outstanding Bonds, considered as one class, may
declare the principal amount of all Bonds then Outstanding to be due and payable immediately by
notice in writing to the Company (and to the Trustee if given by Holders); provided, however, that
with respect to certain Events of Default relating to bankruptcy, insolvency and similar events,
the principal amount of all Bonds then Outstanding shall be due and payable immediately without
further action by the Trustee or the Holders.

     The Indenture permits, with certain exceptions as therein provided, the Company and the
Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of, the Indenture with the
consent of the Holders of not less than a majority in aggregate principal amount of the Bonds at
the time Outstanding, considered as one class; provided, however, that if there shall be Bonds of
more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall
directly affect the rights of the Holders of Bonds of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Bonds of all series so directly affected, considered as one class, shall be required;
and provided, further, that if the Bonds of any series shall have been issued in more than one
Tranche and if a proposed supplemental indenture shall directly affect the rights of the Holders of
Bonds of one or more, but less than all, of such Tranches, then the consent only of the Holders of
a majority in aggregate principal amount of the Outstanding Bonds of all Tranches so directly
affected, considered as one class, shall be required; and provided, further, that the

A-7

 

Indenture permits the Company and the Trustee to enter into one or more supplemental
indentures for certain purposes without the consent of any Holders of Bonds. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal amount of Bonds, on
behalf of the Holders of all such Bonds, to waive certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Senior Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any
Senior Note issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

     As provided in and subject to the provisions of the Indenture, the Holder of this Senior Note
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of Default, the Holders of
at least 33% in aggregate principal amount of the Bonds at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from
the Holders of at least a majority in aggregate principal amount of Bonds at the time Outstanding a
direction inconsistent with such written request, and shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Senior Note for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the respective due dates
expressed herein.

     No reference herein to the Indenture and no provision of this Senior Note or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of and any premium and interest on this Senior Note at the times, place and rate, and
in the coin or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Senior Note is registrable in the Bond Register, upon surrender of this Senior
Note for registration of transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Senior Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or
the Bond Registrar, as the case may be, duly executed by the Holder hereof or such Holder’s
attorney duly authorized in writing, and thereupon one or more new Senior Notes of like tenor, of
authorized denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

     The Senior Notes are issuable only in registered form without coupons in denominations of
$1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Senior Notes are exchangeable for a like aggregate principal amount
of Senior Notes and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

A-8

 

     The Company shall not be required to execute or to provide for the registration of the
transfer of or the exchange of (A) any Senior Note of this series during a period of 15 days
immediately preceding the date notice is to be given identifying the serial numbers of the Senior
Notes called for redemption, or (B) any Senior Note selected for redemption in whole or in part,
except the unredeemed portion of any Senior Note being redeemed in part.

     Prior to due presentment of this Senior Note for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior
Note is registered as the owner hereof for all purposes, whether or not this Senior Note is
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

     This Senior Note shall be governed by, and construed and enforced in accordance with, the laws
of the State of California without regard to the principles of conflicts of laws thereunder, except
to the extent that the Trust Indenture Act shall be applicable.

     As provided in the Indenture, no recourse shall be had for the payment of the principal of,
premium, if any, or interest with respect to this Senior Note, or any part thereof, or for any
claim based hereon or otherwise in respect hereof, or of the indebtedness represented hereby, or
upon any obligation, covenant or agreement under the Indenture, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the Company or of any
predecessor or successor corporation (either directly or through the Company or a predecessor or
successor corporation), whether by virtue of any constitutional provision, statute or rule of law
or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and
understood that the Indenture and all the Bonds are solely corporate obligations and that any such
personal liability is hereby expressly waived and released as a condition of, and as part of the
consideration for, the execution of the Indenture and the issuance of this Senior Note.

     All terms used in this Senior Note which are not defined herein shall have the meanings
assigned to them in the Indenture.

A-9

 

ASSIGNMENT FORM

To assign this Senior Note, fill in the form below: (I) or (we) assign and transfer this Senior
Note to

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

	 	 	 
	and irrevocably appoint
	 	 
	 

	 	 
	to transfer this Senior Note on the books of the Company. The agent may substitute another to act
for him.

 

 

Date:                     

	 	 	 	 	 
	 

	 	Your signature:	 	 
	 

	 	 	 	 
	 	 	(Sign exactly as your name appears on the face of this Senior
Note)
	 
	 	 	 	 
	 

	 	Tax Identification No.:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	SIGNATURE GUARANTEE:
	 
	 	 	 	 
	 	 	                                                            
	 
	 	 	 	 
	 	 	Signatures must be guaranteed by an “eligible guarantor
institution” meeting the requirements of the Bond Registrar,
which requirements include membership or participation in the
Securities Transfer Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be determined by
the Bond Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

A-10EX-10.1

EXHIBIT 10.1

AMENDMENT NO. 1

TO

EMPLOYMENT AGREEMENT

     THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this “Amendment”), made this 22nd day of
October, 2008 to that certain Employment Agreement (the “Agreement”) dated as of October 5, 2004,
by and between Covanta Projects, Inc., a Delaware corporation (the “Employer”), Covanta Energy
Corporation, a Delaware corporation (the “Company”), Covanta Holding Corporation, a Delaware
corporation (the “Parent Company”) and                                         , an individual (“Executive”) is effective as
of January 1, 2009.

Background

     The Company is a Delaware corporation engaged in the business of owning and operating
energy-from-waste facilities and independent power generation facilities. Executive serves as the
                     Officer of the Company and as the                      Officer of the Parent Company
pursuant to the terms of the Agreement.

     The American Jobs Creation Act of 2004 added Section 409A to the Internal Revenue Code of
1986, as amended. Section 409A adds certain restrictions on nonqualified deferred compensation
arrangements and imposes significant adverse tax consequences on service providers for failures to
comply with its requirements. The Internal Revenue Service has allowed service providers and
service recipients to amend the terms of their nonqualified deferred compensation arrangements so
that they comply with the requirements of Section 409A, provided that such amendments are adopted
before January 1, 2009.

     Certain payments contemplated under the terms of the Agreement may be considered to be
nonqualified deferred compensation for purposes of Section 409A. The parties wish to amend the
Agreement with the intention of ensuring that Executive does not incur any adverse tax consequences
associated with Section 409A.

Agreement

     NOW, THEREFORE, in consideration of the facts, mutual promises and covenants contained herein
and intending to be legally bound hereby, the parties agree to amend the Agreement effective
January 1, 2009 in the following particulars:

1. The definition of “Good Reason” set forth in Section 1 is hereby deleted in its entirety and
replaced with the following:

     “Good Reason” shall mean the resignation of Executive from employment with the Company
following the occurrence of one or more of the events set forth in clauses (a) through (f)
below without the prior written consent of Executive, provided that, in connection with any
event or events specified in clauses (a) through (e) below, (i) Executive delivers written
notice to the Company of his intention to resign from employment due to one or more of such
events, which notice specifies in reasonable

 

 

detail the circumstances claimed to provide the basis for such resignation, and (ii)
such event or events are not cured by the Company within fifteen (15) days (or such longer
reasonable period of time as is necessary to cure such event so long as the Company is
diligently pursuing such cure (but in no event in excess of forty (40) days) following
delivery of such written notice:

          (a) any reduction in Executive’s annual rate of Base Compensation other than a
reduction in connection with a Board-approved redesign of the then current salary or bonus
structure that affects all senior-level executives of the Company similarly;

          (b) any reduction in Executive’s annual rate of Base Compensation that exceeds ten
percent (10%) of Executive’s highest annual Base Compensation for any Employment Year
(measuring a change in the Target Bonus by the change in the dollar amount equivalent
represented by the Target Bonus and not by amounts actually paid);

          (c) any removal by the Company of Executive from his position indicated in Section 2.1
or the assignment to Executive of duties and responsibilities materially inconsistent and
adverse with the duties indicated in Section 2.1, except in connection with termination of
Executive’s employment for Cause or Disability;

          (d) a relocation of Executive’s principal business location to a location that is fifty
(50) miles or more from the Company’s current principal business office located at 40 Lane
Road, Fairfield, New Jersey;

          (e) the Employer’s, the Company’s or the Parent Company’s failure to comply with any of
the material terms of this Agreement; or

          (f) the occurrence of a Change of Control pursuant to which the Company, the Parent
Company or a successor company, as the case may be, does not agree, as of the date of such
Change of Control, to assume this Agreement if the remainder of the Term of Employment is at
least three (3) years or to renew this Agreement with Executive for at least three (3)
years.

Notwithstanding the foregoing, to be effective, Executive’s resignation for Good Reason must
be submitted by the earlier of (A) thirty (30) days following the occurrence of one or more
of the events set forth in clauses (a) through (f) above, and (B) October 5, 2009.

2. Section 6.2 — Termination Without Cause, For Good Reason, Death or Disability is hereby deleted
in its entirety and replaced with the following paragraph:

     6.2 Termination Without Cause, For Good Reason, Death or Disability. In
addition to the provisions of Section 6.1, above, if during the Term of Employment,
Executive’s employment is terminated by the Company Without Cause, by Executive for Good
Reason or as a result of Executive’s death or Disability and such termination of employment
constitutes a “separation from service” (as described in Treas. Reg. § 1.409A-1(h)),
Executive (or his estate in the event of Executive’s death) shall be entitled to the
following: (i) an amount equal to the product of (x) Executive’s then current annual Base
Salary plus Executive’s Average Bonus and (y) the number of years in the

2

 

Post-Employment Period, to be paid to Executive as provided in Section 6.3 hereof; (ii)
an amount equal to the Pro Rata Bonus, to be paid to Executive at the time that cash bonuses
are paid to other senior-level executives of the Company for such Employment Year; and (iii)
the continuation of medical, dental and life insurance coverage (at the rates and on the
coverage terms available to other senior-level executives) for the duration of the
Post-Employment Period.

3. Section 6.3 — Terms of Payments is hereby deleted in its entirety and replaced by the following:

     6.3 Terms of Payments. The amounts due to Executive pursuant to Section 6.2(i)
hereof shall be paid by the Company as follows:

          (a) fifty percent (50%) of the aggregate amount due to Executive shall be paid to
Executive on the effective date of Executive’s separation from service from the Company;

          (b) fifty percent (50%) of the aggregate amount due to Executive shall be paid on a
monthly basis to Executive over the duration of the Post-Employment Period; and

          (c) each payment under Section 6.3(a) hereof and each monthly installment under Section
6.3(b) hereof is designated as a “separate payment” for purposes of Treas. Reg. §
1.409A-2(b)(iii);

provided, however, that all payments provided to Executive pursuant to this Section 6 shall
be contingent upon, and shall not commence prior to, Executive’s execution and delivery of a
general release and waiver, substantially in the form provided on Exhibit C attached hereto,
within sixty (60) days of Executive’s separation from service. The continuation of benefits
provided to Executive pursuant to Section 6.2(iii) shall commence immediately upon
Executive’s separation from service and all such payments that would otherwise have been
made during such 60-day period shall be made on the date that such release is executed and
delivered and all required waiting periods have been satisfied. If Executive fails to
execute and deliver such general release and waiver within sixty (60) days of Executive’s
separation from service, the payments shall be forfeited and the continuation of benefits
provided to Executive pursuant to this Section 6 shall cease and future benefits shall be
forfeited. Notwithstanding any of the foregoing terms, in the event, and at the moment,
that Executive violates any of his duties or obligations set forth in Sections 8.1, 8.2, 8.3
or 8.4 of this Agreement that continue after the termination of his employment, the terms of
Sections 6.2(ii), 6.2(iii) and 6.3(b) will be of no force or effect and the Company’s
obligations under those subsections to make severance payments or provide continued employee
benefits will immediately cease.

Notwithstanding the foregoing, if Executive is a “specified employee” of a public
corporation (as described in Treas. Reg. § 1.409A-1(i)), then to the extent a separate
payment described in this Section 6.3 does not fall within the “short-term deferral”
exclusion (as described in Treas. Reg. § 1.409A-1(b)(4)) or the exclusion for separation

3

 

pay due to involuntary separation from service (as described in Treas. Reg. §
1.409A-1(b)(9)(iii)), and such separate payment would be paid during the first six months
following Executive’s separation from service, such payment shall instead be paid on the
first business day following the end of the six-month period following Executive’s
separation from service.

4. New Section 11.12 is hereby inserted:

     11.12 Section 409A Compliance. The Agreement (as amended) is intended to
comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
the regulations thereunder to the extent such section is applicable. If any ambiguity
exists in the Agreement (as amended), the Agreement shall be interpreted to be consistent
with this purpose. Notwithstanding anything to the contrary in this Agreement and
consistent with the intention to comply with Section 409A of the Code: (a) (i) the amount of
Executive’s expenses eligible for reimbursement during a taxable year pursuant to Section
5.1 and the continuation of medical, dental and life insurance coverages under Section
6.2(iii) (collectively, “Reimbursable Expenses”) may not affect Executive’s expenses
eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible
Reimbursable Expenses must be made on or before the last day of Executive’s taxable year
following the taxable year in which the expense was incurred; and (iii) Executive’s right to
reimbursement or continuation of benefits for Reimbursable Expenses shall not be subject to
liquidation or exchange for another benefit; and (b) Executive shall not be entitled to
reimbursement of outplacement services pursuant to Section 6.5 commencing on the date that
is two years after the effective date of Executive’s separation from service. Neither
Executive nor any creditor or beneficiary of Executive shall have the right to subject any
deferred compensation (within the meaning of Section 409A) payable under this Agreement or
under any other plan, policy, arrangement or agreement of or with the Company or any
affiliate to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment.

5. This Amendment, together with the Agreement, contains the entire understanding among the parties
hereto with respect to the subject matter hereof, and supersedes all prior agreements and
understandings, inducements or conditions, express or implied, oral or written, except as expressly
herein contained. The express terms hereof control and supersede any course of performance or
usage of the trade inconsistent with any of the terms hereof. The Agreement, as amended by this
Amendment, may not be modified or amended other than by an agreement in writing. Notwithstanding
the foregoing, nothing herein shall limit the application of any generally applicable Company
policy, practice, plan or the terms of any manual or handbook applicable to the Company’s employees
generally.

6. This Amendment and the Agreement shall be governed by and construed and in accordance with the
internal laws of the State of Delaware without regard to conflicts of laws provisions thereof.

7. This Agreement, as amended by this Amendment, may be amended, modified, superseded, canceled,
renewed, or extended and the terms or covenants of this Agreement may

4

 

be waived, only by a written instrument executed by all of the parties hereto, or in the case of a
waiver, by the party waiving compliance.

8. This Amendment may be executed in any number of counterparts, each of which shall constitute an
original and all of which taken together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

	 	 	 	 	 	 	 
	 	 	EMPLOYER:	 	 
	 
	 	 	 	 	 	 
	 	 	Covanta Projects, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	Covanta Energy Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PARENT COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	Covanta Holding Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 
	 

	 	 	 	, Individually	 	 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]