EXHIBIT (10)(b)
EXHIBIT (10)(b)
[EXECUTION COPY]
__________________________________________________________________
$220,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of November 30, 1992,
As Amended and Restated as of October 15, 1993
Among
CMS ENERGY CORPORATION
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A. and
UNION BANK
as Co-Agents
_________________________________________________________________
TABLE OF CONTENTS
Section Page
PRELIMINARY STATEMENT . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01.Certain Defined Terms . . . . . . . . . . . 2
1.02.Computation of Time Periods . . . . . . . . 21
1.03.Accounting Terms . . . . . . . . . . . . . 21
ARTICLE II
COMMITMENTS
2.01.The Commitments . . . . . . . . . . . . . . 22
2.02.Fees . . . . . . . . . . . . . . . . . 22
2.03.Reduction of the Commitments . . . . . . . 23
2.04.Computations of Outstandings . . . . . . . 23
ARTICLE III
ADVANCES
3.01.Advances . . . . . . . . . . . . . . . . . 24
3.02.Conversion of Advances . . . . . . . . . . 25
3.03.Interest Periods . . . . . . . . . . . . . 26
3.04.Other Terms Relating to the
Making and Conversion of Advances . . . . 26
3.05.Repayment of Advances . . . . . . . . . . . 29
ARTICLE IV
LETTERS OF CREDIT
4.01.LC Banks . . . . . . . . . . . . . . . . . 30
4.02.Letters of Credit . . . . . . . . . . . . . 31
4.03.LC Bank Fees . . . . . . . . . . . . . . . 32
4.04.Reimbursement to LC Banks . . . . . . . . . 32
4.05.Obligations Absolute . . . . . . . . . . . 33
4.06.Liability of LC Banks and the Lenders . . . 34
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
5.01.Payments and Computations . . . . . . . . . 35
5.02.Interest Rate Determination . . . . . . . . 37
5.03.Prepayments . . . . . . . . . . . . . . . . 37
5.04.Yield Protection . . . . . . . . . . . . . 38
(a)Increased Costs . . . . . . . . . . . 38
(b)Eurodollar Reserves . . . . . . . . . 38
(c)Breakage . . . . . . . . . . . . . . . 39
(d)Capital . . . . . . . . . . . . . . . 39
(e)Notices . . . . . . . . . . . . . . . 40
(f)Survival of Obligations . . . . . . . 40
5.05.Sharing of Payments, Etc . . . . . . . . . 41
5.06.Taxes . . . . . . . . . . . . . . . . . 41
ARTICLE VI
CONDITIONS PRECEDENT
6.01.Conditions Precedent to Commitment Closing 43
6.02.Conditions Precedent to Financial Closing . 45
6.03.Conditions Precedent to Each Extension of Credit46
6.04.Reliance on Certificates . . . . . . . . . 48
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01.Representations and Warranties of the Borrower48
ARTICLE VIII
COVENANTS OF THE BORROWER
8.01.Affirmative Covenants . . . . . . . . . . . 52
8.02.Negative Covenants . . . . . . . . . . . . 55
8.03.Reporting Obligations . . . . . . . . . . . 61
ARTICLE IX
DEFAULTS
9.01.Events of Default . . . . . . . . . . . . . 65
9.02.Remedies . . . . . . . . . . . . . . . . . 67
ARTICLE X
THE AGENTS
10.01.Authorization and Action . . . . . . . . . 68
10.02.Agents' Reliance, Etc. . . . . . . . . . . 69
10.03.Citibank, Union Bank and Affiliates . . . . 69
10.04.Lender Credit Decision . . . . . . . . . . 70
10.05.Indemnification . . . . . . . . . . . . . . 70
10.06.Successor Agents . . . . . . . . . . . . . 70
10.07.Lenders and Agents Bound by Collateral
Agency and Intercreditor Agreement
and Pledge Agreements . . . . . . . . . . . 71
ARTICLE XI
MISCELLANEOUS
11.01.Amendments, Etc. . . . . . . . . . . . . . 72
11.02.Notices, Etc. . . . . . . . . . . . . . . . 73
11.03.No Waiver of Remedies . . . . . . . . . . . 73
11.04.Costs, Expenses and Indemnification . . . . 73
11.05.Right of Set-Off . . . . . . . . . . . . . 75
11.06.Binding Effect . . . . . . . . . . . . . . 76
11.07.Assignments and Participation . . . . . . . 76
11.08.Confidentiality . . . . . . . . . . . . . . 81
11.09.Waiver of Jury Trial . . . . . . . . . . . 82
11.10.Governing Law . . . . . . . . . . . . . . . 82
11.11.Relation of the Parties; No Beneficiary . . 82
11.12.Effectiveness; Reference to and Effect on the
Loan Documents . . . . . . . . . . . . . 82
11.13.Execution in Counterparts . . . . . . . . . 83
11.14.Survival of Agreement . . . . . . . . . . . 83
Exhibits
EXHIBIT 3.01- Form of Notice of Borrowing
EXHIBIT 3.02- Form of Notice of Conversion
EXHIBIT 5.03- Form of Cash Collateral Agreement
EXHIBIT 6.02A- Form of Note
EXHIBIT 6.02C- Form of Opinion of Sidley & Austin, counsel for
the Loan Parties
EXHIBIT 6.02D- Form of Opinion of Porter & Travers, counsel to
the Agents
EXHIBIT 6.02E- Form of Opinion of Loomis, Ewert, Ederer,
Parsley, Davis & Gotting, P.C., special Michigan
counsel for the Loan Parties
EXHIBIT 11.07- Form of Lender Assignment
Schedules
SCHEDULE I Applicable Lending Offices
SCHEDULE IIPermitted Debt
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of November 30, 1992,
As Amended and Restated as of October 15, 1993
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made by and among:
(i) CMS Energy Corporation, a Michigan corporation (the
"Borrower"),
(ii) the banks (the "Banks") listed on the signature pages
hereof and the other Lenders (as hereinafter defined) from
time to time party hereto,
(iii) Citibank, N.A. ("Citibank") and Union Bank ("Union Bank"),
as co-agents (individually a "Co-Agent" and collectively
the "Co-Agents") for the Lenders hereunder,
(iv) Citibank, as documentation agent (the "Documentation
Agent") for the Lenders hereunder, and
(v) Union Bank, as operational agent (the "Operational Agent")
for the Lenders hereunder.
PRELIMINARY STATEMENTS
The Borrower, the Banks, the Co-Agents, the Documentation Agent and
the Operational Agent have entered into the Existing Agreement (as
hereinafter defined), under which the Banks have agreed to provide the
credit facilities described therein in the amounts and on the terms
therein set forth.
The Borrower has requested the that the Existing Agreement be
amended in order to enable the Borrower to cause letters of credit to be
issued for its account thereunder, and to provide the Borrower with
certain additional rights. The Banks have agreed to such amendments, and
have determined that such amendments could best be effected by amending
and restating the Existing Agreement in its entirety.
As is the case with the Existing Agreement, the parties hereto
acknowledge and agree that, upon the effectiveness of this amendment and
restatement of the Existing Agreement, neither Consumers (as hereinafter
defined) nor any of its Subsidiaries (as hereinafter defined) will be a
party to, or will in any way bound by any provision of, this Agreement or
any other Loan Document (as hereinafter defined), and that no Loan
Document will be enforceable against Consumers or any of its Subsidiaries
or their respective assets; provided, that the foregoing in no way limits
the rights and remedies of the Documentation Agent and the Lenders under
the Borrower Pledge Agreement (as hereinafter defined) with respect to the
Pledged Collateral thereunder (which includes the common stock of
Consumers), as the same shall continue to secure the Obligations (as
defined in the Borrower Pledge Agreement).
Accordingly, the parties hereto hereby agree that the Existing
Agreement is amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
applicable to the singular and plural forms of the terms defined):
"Act 144" means Act 144 of the Michigan Public Acts of 1909, as
amended (Michigan Compiled Laws Section 460.301 et seq.), and any
successor statute, together with the rules and regulations
thereunder, in each case as in effect from time to time.
"Advance" means an Advance by a Lender to the Borrower pursuant
to Section 3.01 (or deemed made pursuant to Section 4.04(d)), and
refers to a Base Rate Advance or a Eurodollar Rate Advance (each of
which shall be a "Type" of Advance). All Advances by a Lender of
the same Type, having the same Interest Period and made or
Converted on the same day shall be deemed to be a single Advance by
such Lender until repaid or next Converted.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to
all directors and officers of such Person), controlled by, or under
direct or indirect common control with such Person. A Person shall
be deemed to control another entity if such Person possesses,
directly or indirectly, the power to direct or cause the direction
of the management and policies of such entity, whether through the
ownership of voting securities, by contract, or otherwise.
"Agent" means, as the context may require, the Co-Agents, the
Operational Agent, the Documentation Agent or the Collateral Agent;
and "Agents" means any or all of the foregoing.
"Alternate Base Rate" means a fluctuating interest rate per
annum equal at all times to the highest of:
(a) the rate of interest announced publicly by Union Bank
in Los Angeles, California, from time to time, as the Union
Bank Reference Rate;
(b) 1/2 of one percent per annum above the latest
three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average being determined weekly by the
Operational Agent on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such
rates received by the Operational Agent from three New York
certificate of deposit dealers of recognized standing selected
by the Operational Agent, in either case adjusted to the
nearest 1/4 of one percent or, if there is no nearest 1/4 of
one percent, to the next higher 1/4 of one percent; and
(c) 1/2 of one percent per annum above the Federal Funds
Rate.
Each change in the Alternate Base Rate shall take effect
concurrently with any change in such base rate, moving average, or
Federal Funds Rate.
"Applicable Lending Office" means, with respect to each Lender,
(i) such Lender's Domestic Lending Office, in the case of a Base
Rate Advance, and (ii) such Lender's Eurodollar Lending Office, in
the case of a Eurodollar Rate Advance.
"Applicable Margin" means, on any date for a Base Rate Advance
or a Eurodollar Rate Advance, the percentage per annum set forth
below the column entitled "Base Rate" or "Eurodollar Rate", as
appropriate, opposite the period during which such date occurs:
Period Base Rate Eurodollar Rate
Prior to the Step-Down Date 1.00% 2.00%
From and after the Step- 0.25% 1.25%
Down Date
"Applicable Rate" means:
(i) in the case of each Base Rate Advance, a rate per
annum equal at all times to the sum of the Alternate Base Rate
in effect from time to time plus the Applicable Margin in
effect from time to time; and
(ii) in the case of each Eurodollar Rate Advance comprising
part of the same Borrowing, a rate per annum during each
Interest Period equal at all times to the sum of the Eurodollar
Rate for such Interest Period plus the Applicable Margin in
effect from time to time during such Interest Period.
"Available Commitment" means, for each Lender on any day, the
unused portion of such Lender's Commitment, computed after giving
effect to all Extensions of Credit or prepayments to be made on
such day and the application of proceeds therefrom, less such
Lender's Percentage of the Excess Debt Reduction.
"Available Commitments" means the aggregate of the Lenders'
Available Commitments hereunder.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 3.05(b)(i).
"Borrower Pledge Agreement" means the Amended and Restated
Stock Pledge Agreement, dated as of October 8, 1992, as amended and
restated as of November 30, 1992, from the Borrower to the
Collateral Agent (on behalf of the Lenders and the Noteholders).
"Borrowing" means a borrowing consisting of Advances of the
same Type, having the same Interest Period and made or Converted on
the same day by the Lenders, ratably in accordance with their
respective Percentages. Any Borrowing consisting of Advances of a
particular Type may be referred to as being a Borrowing of such
"Type". All Advances of the same Type, having the same Interest
Period and made or Converted on the same day shall be deemed a
single Borrowing hereunder until repaid or next Converted.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City, Los Angeles,
California, Chicago, Illinois and Detroit, Michigan, and, if the
applicable Business Day relates to any Eurodollar Rate Advance, on
which dealings are carried on in the London interbank market.
"Cash Collateral Agreement" means the Cash Collateral
Agreement, dated as of October 15, 1993, between the Borrower and
the Operational Agent, for the benefit of the Lenders,
substantially in the form of Exhibit 5.03.
"Collateral" means, collectively, the "Pledged Collateral"
under each of the Pledge Agreements.
"Collateral Agency and Intercreditor Agreement" means the
Collateral Agency and Intercreditor Agreement, dated as of
October 8, 1992, among NBD Bank, National Association (in its
capacity as Trustee for the Noteholders), the Borrower, the
Collateral Agent and the Operational Agent.
"Collateral Agent" has the meaning assigned to that term in the
Collateral Agency and Intercreditor Agreement.
"Collateral Release Date" means the first date (during the
absence of an Unmatured Default or Event of Default) by which both
of the following events shall have occurred:
(i) the Senior Notes shall (A) be rated the Required
Rating or higher by (1) any three of D&P, Fitch, Moody's and
S&P, or (2) both Moody's and S&P, and (B) not be watchlisted
for potential downgrade by any of the rating agencies utilized
to satisfy the condition set forth in clause (A), above; and
(ii) Consumers shall have a consolidated retained earnings
balance, as computed in accordance with generally accepted
accounting principles consistently applied, in excess of $18
million for each of the preceding three consecutive calendar
months.
"Commitment" means, for each Lender, the obligation of such
Lender to make Advances to the Borrower and to participate in
Extensions of Credit resulting from the issuance (or extension,
modification or amendment) of any Letter of Credit in an aggregate
amount no greater than the amount set forth opposite such Lender's
name on the signature pages hereof or, if such Lender has entered
into one or more Lender Assignments, set forth for such Lender in
the Register maintained by the Documentation Agent pursuant to
Section 11.07(c), in each such case as such amount may be reduced
from time to time pursuant to Section 2.03. "Commitments" means
the total of the Lenders' Commitments hereunder. The Commitments
shall in no event exceed $220 million.
"Commitment Closing" means the time at which each of the
conditions precedent enumerated in Section 6.01 shall have been
fulfilled to the satisfaction of the Lenders, the Co-Agents and the
Borrower. All transactions contemplated by the Commitment Closing
shall take place on or before November 30, 1992, at the offices of
Porter & Travers, 120 West 45th Street, New York, New York 10036,
at 10:00 A.M., or such other place or time as the parties hereto
may mutually agree.
"Confidential Information" has the meaning assigned to that
term in Section 11.08.
"Consolidated Capital" means, at any date of determination, the
sum of (a) Consolidated Debt, (b) consolidated equity of the common
stockholders of the Borrower and the Consolidated Subsidiaries, (c)
consolidated equity of the preference stockholders of the Borrower
and the Consolidated Subsidiaries and (d) consolidated equity of
the preferred stockholders of the Borrower and the Consolidated
Subsidiaries, in each case determined at such date in accordance
with generally accepted accounting principles; provided that,
solely for purposes of determining the Borrower's compliance with
the covenant contained in Section 8.01(i) for the fiscal year ended
December 31, 1992, there shall not be deducted from Consolidated
Capital any extraordinary write-offs (not to exceed $220 million)
taken by the Borrower for such fiscal year with respect to MCV cost
recovery issues; and provided further, that, solely for purposes of
determining the Borrower's compliance with the covenant contained
in Section 8.01(i) during the fiscal year ending December 31, 1993,
there shall not be deducted from Consolidated Capital any
write-offs (not to exceed $240 million) taken by the Borrower for
the fiscal year ended December 31, 1992 with respect to MCV cost
recovery issues.
"Consolidated Debt" means, at any date of determination, the
aggregate Debt of the Borrower and the Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally
accepted accounting principles, provided that, for purposes of this
definition, (i) Debt shall not include any obligation of the
Guarantor and the Consolidated Subsidiaries to the extent to which
the obligation to pay, whether for property, services or otherwise,
has not yet arisen and (ii) clause (v) of the definition of
"Support Obligations" shall only include any potential liquidated
damage payments provided for in respect of the obligations referred
to therein.
"Consolidated Subsidiary" means any Subsidiary whose accounts
are or are required to be consolidated with the accounts of the
Borrower in accordance with generally accepted accounting
principles.
"Consumers" means Consumers Power Company, a Michigan
corporation, all of whose common stock is on the date hereof owned
by the Borrower.
"Conversion", "Convert" or "Converted" refers to a conversion
of Advances of one Type into Advances of another Type, or to the
selection of a new, or the renewal of the same, Interest Period for
Advances, as the case may be, pursuant to Section 3.02. "D&P"
means Duff & Phelps, Inc. or any successor thereto.
"Debt" means, for any Person, any and all indebtedness,
liabilities and other monetary obligations of such Person (whether
for principal, interest, fees, costs, expenses or otherwise, and
whether contingent or otherwise) (i) for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments,
(ii) to pay the deferred purchase price of property or services
(except trade accounts payable arising in the ordinary course of
business which are not overdue), (iii) as lessee under leases which
shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, (iv) under
reimbursement or similar agreements with respect to letters of
credit issued thereunder, (v) under any interest rate swap, "cap",
"collar" or other hedging agreements, and (vi) to pay rent or other
amounts under leases entered into in connection with sale and
leaseback transactions involving assets of such Person being sold
in connection therewith, and including, without limitation, (x)
Guaranty Obligations and (y) any accumulated funding deficiency (as
defined in Section 412(a) of the Internal Revenue Code of 1986, as
amended) for a Plan.
"Default Rate" means a rate per annum equal at all times to the
higher of (i) 2% per annum above the higher, from time to time, of
(A) the Applicable Rate for Eurodollar Rate Advances immediately
prior to such Default Rate becoming applicable and (B) the
Applicable Rate in effect from time to time for Base Rate Advances,
and (ii) the highest rate per annum payable pursuant to the
Indenture with respect to any principal amount of the Senior Notes
that is not paid when due.
"Dollars" and the sign "$" each means lawful money of the
United States.
"Domestic Lending Office" means, with respect to any Lender,
the office or affiliate of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Lender Assignment pursuant to which it became a Lender, or such
other office or affiliate of such Lender as such Lender may from
time to time specify in writing to the Borrower and the Operational
Agent.
"Eligible Assignee" means (a) a commercial bank or trust
company organized under the laws of the United States, or any State
thereof; (b) a commercial bank organized under the laws of any
other country that is a member of the OECD, or a political
subdivision of any such country, provided that such bank is acting
through a branch or agency located in the United States; (c) the
central bank of any country that is a member of the OECD; and
(d) any other commercial bank or other financial institution
engaged generally in the business of extending credit or purchasing
debt instruments; provided, however, that (A) any such Person shall
also (i) have outstanding unsecured indebtedness that is rated A-
or better by S&P or A3 or better by Moody's (or an equivalent
rating by another nationally-recognized credit rating agency of
similar standing if neither of such corporations is then in the
business of rating unsecured indebtedness of entities engaged in
such businesses) or (ii) have combined capital and surplus (as
established in its most recent report of condition to its primary
regulator) of not less than $250,000,000 (or its equivalent in
foreign currency), (B) any Person described in clause (b), (c), or
(d), above, shall, on the date on which it is to become a Lender
hereunder, (i) be entitled to receive payments hereunder without
deduction or withholding of any United States Federal income taxes
(as contemplated by Section 5.06) and (ii) not be incurring any
losses, costs or expenses of the type for which such Person could
demand payment under Section 5.04(a) or (d) (except to the extent
that, in the absence of the making of an assignment to such Person,
the assigning Lender would have incurred an equal or greater amount
of such losses, costs or expenses and such losses, costs or
expenses would have been payable by the Borrower to such assigning
Lender hereunder), (C) any Person described in clauses (a), (b),
(c) and (d), above, which is not a Lender shall, in addition, be
acceptable to any LC Bank based upon its then-existing credit
criteria and (D) any Person described in clause (d), above, shall,
in addition, be acceptable to the Co-Agents.
"Enterprises" means CMS Enterprises Company, a Michigan
corporation, all of whose common stock is on the date hereof owned
by the Borrower.
"Enterprises Pledge Agreement" means the Amended and Restated
Stock Pledge Agreement, dated as of October 8, 1992, as amended and
restated as of November 30, 1992, from Enterprises to the
Collateral Agent (on behalf of the Lenders and the Noteholders).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) that is a "commonly
controlled entity" within the meaning of the regulations under
Section 414 of the Internal Revenue Code of 1986, as amended.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office or affiliate of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Lender Assignment pursuant to which it became a Lender (or, if no
such office or affiliate is specified, its Domestic Lending
Office), or such other office or affiliate of such Lender as such
Lender may from time to time specify in writing to the Borrower and
the Operational Agent.
"Eurodollar Rate" means, for each Interest Period for each
Eurodollar Rate Advance made as part of the same Borrowing, an
interest rate per annum equal to the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is
not such a multiple) of the rate per annum at which deposits in
U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurodollar Rate
Advance made as part of such Borrowing and for a period equal to
such Interest Period. The Eurodollar Rate for the Interest Period
for each Eurodollar Rate Advance made as part of the same Borrowing
shall be determined by the Operational Agent on the basis of
applicable rates furnished to and received by the Operational Agent
from the Reference Banks two Business Days before the first day of
such Interest Period, subject, however, to the provisions of
Sections 3.04(c) and 5.02.
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 3.05(b)(ii).
"Eurodollar Reserve Percentage" of any Lender for each Interest
Period for each Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period (or if more than
one such percentage shall be so applicable, the daily average of
such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under Regulation
D or other regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Event of Default" has the meaning specified in Section 9.01.
"Excess Debt Reduction" means, on any date of determination,
the excess of (i) the aggregate principal amount (or its
equivalent) of all Debt then outstanding pursuant to Section
8.02(b)(vi), over (ii) $130 million.
"Existing Agreement" means the Credit Agreement, dated as of
November 30, 1992, among the Borrower, the Banks, the Co-Agents,
the Documentation Agent and the Operational Agent, as in effect
immediately prior to the effectiveness of this Agreement.
"Extension of Credit" means (i) the making of a Borrowing,
(ii) the issuance of a Letter of Credit, or (iii) the amendment of
any Letter of Credit having the effect of extending the stated
termination date thereof, increasing the LC Outstandings
thereunder, or otherwise altering any of the material terms or
conditions thereof. For purposes of this Agreement, a Conversion
shall not constitute an Extension of Credit.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the
Operational Agent from three Federal funds brokers of recognized
standing selected by the Operational Agent.
"Fee Letter" has the meaning assigned to that term in Section
2.02(d).
"Financial Closing" means the time at which each of the
conditions precedent enumerated in Section 6.02 have been fulfilled
to the satisfaction of the Lenders, the Co-Agents and the Borrower.
All transactions contemplated by the Financial Closing shall take
place on or before November 30, 1992, at the offices of Porter &
Travers, 120 West 45th Street, New York, New York 10036, at 10:00
A.M., or such other time as the parties hereto may mutually agree.
"Fitch" means Fitch's Investors Services or any successor
thereto.
"Governmental Approval" means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or
regulatory body, required in connection with either (i) the
execution, delivery, or performance of any Loan Document by any
Loan Party, (ii) the grant and perfection of any Lien contemplated
by the Security Documents or (iii) the exercise by any Agent (on
behalf of the Lenders or the Noteholders) of any right or remedy
provided for under any Security Document.
"Guarantor" means Enterprises.
"Guaranty" means the Guaranty, dated as of November 30, 1992,
by Enterprises in favor of the Documentation Agent and the Lenders.
"Guaranty Obligations" means (i) direct or indirect guaranties
in respect of, and obligations to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, Debt of
any Person and (ii) other guaranty or similar obligations in
respect of the performance of others, including, without
limitation, Support Obligations.
"Hazardous Substance" means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau, or instrumentality of the
United States or of the State or locality in which the same is
located having or exercising jurisdiction over such waste,
substance or material.
"Indemnified Person" has the meaning assigned to that term in
Section 11.04(b).
"Indenture" means that certain Indenture, dated as of
September 15, 1992, between the Borrower and the Trustee, as
supplemented by the First Supplemental Indenture, dated as of
October 1, 1992, and the Second Supplemental Indenture, dated as of
October 1, 1992, as said Indenture may be further amended or
otherwise modified from time to time in accordance with its terms.
"Interest Period" has the meaning assigned to that term in
Section 3.03.
"LC Bank" means a Lender or other financial institution
designated by the Borrower, and acceptable to the Documentation
Agent and the Operational Agent, in accordance with Section
4.01(a), as the issuer of a Letter of Credit pursuant to an LC Bank
Agreement. It is understood and agreed that each Lender shall be
deemed to be acceptable to the Documentation Agent and the
Operational Agent for such purposes.
"LC Bank Agreement" means an agreement between an LC Bank and
the Borrower, in form and substance satisfactory to the
Documentation Agent and the Operational Agent, providing for the
issuance of one or more Letters of Credit, in form and substance
satisfactory to the Documentation Agent and the Operational Agent,
in support of a general corporate activity of the Borrower.
"LC Payment Notice" has the meaning assigned to that term in
Section 4.04(b).
"LC Outstandings" means, for any Letter of Credit on any date
of determination, the maximum amount available to be drawn under
such Letter of Credit (assuming the satisfaction of all conditions
for drawing enumerated therein).
"Lender Assignment" means an assignment and agreement entered
into by a Lender and an Eligible Assignee, and accepted by the
Documentation Agent, in substantially the form of Exhibit 11.07.
"Lenders" means the Banks listed on the signature pages hereof,
each Eligible Assignee that shall become a party hereto pursuant to
Section 11.07 and, if and to the extent so provided in Section
4.04(c), each LC Bank.
"Letter of Credit" means a letter of credit issued by an LC
Bank pursuant to Section 4.02, as such letter of credit may from
time to time be amended, modified or extended in accordance with
the terms of this Agreement and the LC Bank Agreement to which it
relates.
"Lien" has the meaning assigned to that term in Section
8.02(a).
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Collateral Agency and Intercreditor Agreement, the
Fee Letter, the Cash Collateral Agreement, the LC Bank Agreement(s)
and all other agreements, instruments and documents now or
hereafter executed and/or delivered pursuant hereto or thereto.
"Loan Party" means each of the Borrower and the Guarantor.
"Majority Lenders" means, on any date of determination, Lenders
that, collectively, on such date (i) have Percentages in the
aggregate of at least 66-2/3% and (ii) if the Commitments have been
terminated, hold at least 66-2/3% of the then aggregate unpaid
principal amount of the Advances owing to Lenders. Any
determination of those Lenders constituting the Majority Lenders
shall be made by the Co-Agents and shall be conclusive and binding
on all parties absent manifest error.
"MCV" means the Midland Cogeneration Venture Limited
Partnership.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Net Refinancing Proceeds" means the excess of (i) the gross
proceeds from any refinancing of the Senior Notes permitted by
Section 8.02(b)(iii) over (ii) the sum of (A) the aggregate
principal amount of the Senior Notes being refinanced and (B)
customary underwriting commissions, auditing and legal fees,
printing costs, rating agency fees and other customary and
reasonable fees and expenses incurred by the Borrower in connection
with such refinancing, but only to the extent that such excess
proceeds do not constitute permitted Debt under Section
8.02(b)(vi).
"Net Worth" means, with respect to any Person, the excess of
such Person's total assets over its total liabilities, total assets
and total liabilities each to be determined in accordance with
generally accepted accounting principles consistently applied.
"1991 Credit Agreement" means the Credit Agreement, dated as of
December 12, 1991, as amended, among the Borrower, the Lenders
named therein, Citibank and Union Bank, as Co-Agents, Citibank, as
Documentation Agent, and Union Bank, as Operational Agent.
"Nomeco" means NOMECO Oil & Gas Co., a Michigan corporation,
all of whose capital stock is on the date hereof owned by
Enterprises.
"Note" means a promissory note of the Borrower payable to the
order of a Lender, in substantially the form of Exhibit 6.02A.
"Noteholders" means, collectively, the owners of record from
time to time of the Senior Notes.
"Notice of Borrowing" has the meaning assigned to that term in
Section 3.01(a).
"OECD" means the Organization for Economic Cooperation and
Development.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
"Percentage" means, for any Lender on any date of
determination, the percentage obtained by dividing such Lender's
Commitment on such day by the total of the Commitments on such
date, and multiplying the quotient so obtained by 100%.
"Permitted Investments" means each of the following so long as
no such Permitted Investment shall have a final maturity later than
six months from the date of investment therein:
(i) direct obligations of the United States, or of any
agency thereof, or obligations guaranteed as to principal and
interest by the United States or any agency thereof;
(ii) certificates of deposit or bankers' acceptances
issued, or time deposits held, or investment contracts
guaranteed, by any Lender, any nationally-recognized securities
dealer or any other commercial bank, trust company, savings and
loan association or savings bank organized under the laws of
the United States, or any State thereof, or of any other
country which is a member of the OECD, or a political
subdivision of any such country, and in each case having
outstanding unsecured indebtedness that (on the date of
acquisition thereof) is rated AA- or better by S&P or Aa3 or
better by Moody's (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating unsecured bank indebtedness);
(iii) obligations with any Lender, any other bank or trust
company described in clause (ii), above, or any
nationally-recognized securities dealer, in respect of the
repurchase of obligations of the type described in clause (i),
above, provided that such repurchase obligations shall be fully
secured by obligations of the type described in said clause (i)
and the possession of such obligations shall be transferred to,
and segregated from other obligations owned by, such Lender,
such other bank or trust company or such securities dealer;
(iv) commercial paper rated (on the date of acquisition
thereof) A-1 or P-1 or better by S&P or Moody's, respectively
(or an equivalent rating by another nationally-recognized
credit rating agency of similar standing if neither of such
corporations is then in the business of rating commercial
paper); and
(v) any eurodollar certificate of deposit issued by any
Lender or any other commercial bank, trust company, savings and
loan association or savings bank organized under the laws of
the United States, or any State thereof, or of any country
which is a member of the OECD, or a political subdivision of
any such country, and in each case having outstanding unsecured
indebtedness that (on the date of acquisition thereof) is rated
AA- or better by S&P or Aa3 or better by Moody's (or an
equivalent rating by another nationally-recognized credit
rating agency of similar standing if neither of such
corporations is then in the business of rating unsecured bank
indebtedness).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means, with respect to any Person, an employee benefit
plan (other than a Multiemployer Plan) maintained for employees of
such Person or any ERISA Affiliate of such Person and covered by
Title IV of ERISA.
"Plan Termination Event" means, with respect to any Person,
(i) a Reportable Event described in Section 4043 of ERISA and the
regulations issued thereunder (other than a Reportable Event not
subject to the provision for 30-day notice to the PBGC under such
regulations), or (ii) the withdrawal of such Person or any of its
ERISA Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (iii) the filing of a notice of intent to terminate a Plan or
the treatment of a Plan under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate a Plan by the PBGC, or
(v) any other event or condition which is reasonably likely to
constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan.
"Pledge Agreements" means, collectively, the Borrower Pledge
Agreement and the Enterprises Pledge Agreement.
"Recipient" has the meaning assigned to that term in Section
11.08.
"Reference Banks" means Citibank, Union Bank and The
Toronto-Dominion Bank, or any additional or substitute Lenders as
may be selected from time to time to act as Reference Banks
hereunder by the Operational Agent, the Majority Lenders and the
Borrower.
"Register" has the meaning specified in Section 11.07(c).
"Request for Issuance" has the meaning assigned to that term in
Section 4.02(a).
"Required Lenders" means, on any date of determination, Lenders
that, collectively, on such date (i) hold at least 51% of the then
aggregate unpaid principal amount of the Advances owing to Lenders
and (ii) if no Advances are then outstanding, have Percentages in
the aggregate of at least 51%. Any determination of those Lenders
constituting the Required Lenders shall be made by the Co-Agents
and shall be conclusive and binding on all parties absent manifest
error.
"Required Rating" means, with respect to D&P, Fitch and S&P,
BBB- and, with respect to Moody's, Baa3.
"Restricted Subsidiary" means (i) Enterprises, (ii) any other
Subsidiary of the Borrower (other than Consumers and its
Subsidiaries) that, on a consolidated basis with any of its
Subsidiaries as of any date of determination, accounts for more
than 10% of the consolidated assets of the Borrower and its
Consolidated Subsidiaries, and (iii) any other Subsidiary of the
Borrower that is from time to time designated a Restricted
Subsidiary by the Borrower's Board of Directors, provided that (A)
no such Subsidiary may be so designated a Restricted Subsidiary if,
upon or immediately after giving effect to such designation, (1) an
Unmatured Default or Event of Default shall have occurred and be
continuing or (2) the Borrower and its Restricted Subsidiaries
would be prohibited by Section 8.02(b) from incurring any
additional Debt, (B) such designated Restricted Subsidiary must be
organized under the laws of the United States of America or any
State thereof, (C) more than 80% of the outstanding capital stock
having ordinary voting power of such designated Restricted
Subsidiary must be directly owned by B the Borrower or another
Restricted Subsidiary and (D) such designated Restricted Subsidiary
must be included in the consolidated financial statements of the
Borrower.
"S&P" means Standard & Poor's Corporation or any successor
thereto.
"Security Documents" means the Pledge Agreements, the Guaranty
and the Cash Collateral Agreement.
"Senior Note Debt" means, collectively, all principal
indebtedness of the Borrower to the Noteholders now or hereafter
existing under the Senior Notes, together with interest and
premiums, if any, thereon and other amounts payable in respect
thereof or in connection therewith in accordance with the terms of
the Senior Notes or the Indenture.
"Senior Notes" means the Series A Senior Deferred Coupon Notes
Due 1997 and the Series B Senior Deferred Coupon Notes Due 1999
issued by the Borrower pursuant to the Indenture.
"Step-Down Date" means the later to occur of (i) the first
anniversary of the date of the Financial Closing and (ii) the
Collateral Release Date.
"Subsidiary" means, with respect to any Person, any corporation
or unincorporated entity of which more than 50% of the outstanding
capital stock (or comparable interest) having ordinary voting power
(irrespective of whether at the time capital stock (or comparable
interest) of any other class or classes of such corporation or
entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by said
Person (whether directly or through one or more other
Subsidiaries). In the case of an unincorporated entity, a Person
shall be deemed to have more than 50% of interests having ordinary
voting power only if such Person's vote in respect of such
interests comprises more than 50% of the total voting power of all
such interests in the unincorporated entity.
"Support Obligations" means any obligation, contingent or
otherwise, of any Person guaranteeing or otherwise supporting any
Debt or other obligation of any other Person in any manner, whether
directly or indirectly, and including, without limitation, any
obligation of such Person, direct or indirect, (i) to purchase or
pay (or advance or supply funds for the purchase or payment of)
such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to
purchase property, securities or services for the purpose of
assuring the owner of such Debt of the payment of such Debt, (iii)
to maintain working capital, equity capital, available cash or
other financial statement condition of the primary obligor so as to
enable the primary obligor to pay such Debt, (iv) to provide equity
capital under or in respect of equity subscription arrangements, or
(v) to perform, or arrange for the performance of, any non-monetary
obligations or non-funded debt payment obligations (including,
without limitation, guaranties of capacity support payments under
power purchase or other similar arrangements) of the primary
obligor.
"Tax Sharing Agreement" means the Agreement for the Allocation
of Income Tax Liabilities and Benefits, dated as of January 1,
1990, by and among the Borrower, each of the members of the
Consolidated Group (as defined therein), and each of the
corporations that become members of the Consolidated Group.
"Termination Date" means the earlier to occur of (i) May 31,
1995 and (ii) the date of termination or reduction in whole of the
Commitments pursuant to Section 2.03 or 9.02.
"Trustee" has the meaning assigned to that term in the
Indenture.
"Type" has the meaning assigned to such term (i) in the
definition of "Advance" when used in such context and (ii) in the
definition of "Borrowing" when used in such context.
"Unmatured Default" means an event that, with the giving of
notice or lapse of time or both, would constitute an Event of
Default.
"Unsecured Notes" means any and all general unsecured term
notes issued by the Borrower from time to time. Proceeds from the
issuance of Unsecured Notes will be used for retirement of the
Borrower's higher cost debt securities and for general corporate
purposes.
"Unsecured Note Debt" means, collectively, all principal
indebtedness of the Borrower now or hereafter existing under the
Unsecured Notes, together with interest and premiums, if any,
thereon and other amounts payable in respect thereof or in
connection therewith in accordance with the terms of the Unsecured
Notes or the documentation pursuant to which the Unsecured Notes
are issued.
SECTION 1.02. Computation of Time Periods. Unless otherwise
indicated, each reference in this Agreement to a specific time of day is a
reference to New York City time. In the computation of periods of time
under this Agreement, any period of a specified number of days or months
shall be computed by including the first day or month occurring during
such period and excluding the last such day or month. In the case of a
period of time "from" a specified date "to" or "until" a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles consistent with those applied in
the preparation of the financial statements referred to in Section
7.01(e).
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make Advances to the
Borrower and to participate in the issuance of Letters of Credit (and the
LC Outstandings thereunder) during the period from the date of the
Financial Closing until the Termination Date in an aggregate outstanding
amount not to exceed on any day such Lender's Available Commitment (after
giving effect to all Extensions of Credit to be made on such day and the
application of the proceeds thereof). Within the limits hereinafter set
forth, the Borrower may request Extensions of Credit hereunder, prepay
Advances, or reduce or cancel Letters of Credit, and use the resulting
increase in the Available Commitments for further Extensions of Credit in
accordance with the terms hereof.
SECTION 2.02. Fees. (a) The Borrower agrees to pay to the
Operational Agent for the account of each Lender a commitment fee on the
average daily amount of such Lender's Available Commitment (without taking
into account such Lender's Percentage of the Excess Debt Reduction on any
date of determination) at the rate of 0.375% per annum, from the date
hereof, in the case of each Bank, and from the effective date specified in
the Lender Assignment pursuant to which it became a Lender, in the case of
each other Lender, until the Termination Date, payable quarterly in
arrears on the last day of each January, April, July and October,
commencing the first such date to occur following the date hereof, and on
the Termination Date.
(b)The Borrower agrees to pay to the Operational Agent for the
account of each Lender a participation fee equal to 1.00% of such Lender's
Commitment, such fee to be payable on the date of the Commitment Closing,
in the case of each Bank, and on the effective date specified in the
Lender Assignment pursuant to which it became a Lender, in the case of
each other Lender.
(c)The Borrower agrees to pay to the Operational Agent for the
account of each Lender a commission on the average daily aggregate amount
of the LC Outstandings from the date hereof until the Termination Date at
a rate per annum equal to the Applicable Margin with respect to Eurodollar
Rate Advances from time to time, payable quarterly in arrears on the last
day of each January, April, July and October, commencing on October 31,
1993, and on the Termination Date.
(d)In addition to the fees provided for in subsections (a), (b)
and (c), above, the Borrower shall pay to the Operational Agent, for the
account of the Co-Agents, such other fees as are provided for in that
certain letter agreement between the Borrower and the Co-Agents (the "Fee
Letter") entered into separately herefrom and dated November 30, 1992.
SECTION 2.03. Reduction of the Commitments. (a) The Borrower
may, upon at least five Business Days' notice to each Co-Agent, terminate
in whole or reduce ratably in part the unused portions of the Commitments;
provided that any such partial reduction shall be in the aggregate amount
of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b)On each date that the Borrower repurchases Senior Notes from
any Noteholder as the result of a Change in Control (as defined in the
Indenture), the Commitments of the Lenders shall automatically be ratably
reduced by an amount equal in the aggregate to the product of (i) the
Commitments on such date (after giving effect to all Extensions of Credit
to be made on such date and the application of the proceeds thereof) and
(ii) the percentage obtained by dividing (A) the aggregate principal
amount of such Senior Notes being repurchased by (B) the aggregate
principal amount of the Senior Note Debt then outstanding.
SECTION 2.04. Computations of Outstandings. Whenever reference is
made in this Agreement to the principal amount outstanding on any date
under this Agreement, such reference shall refer to the sum of (i) the
aggregate principal amount of all Advances outstanding on such date plus
(ii) the aggregate LC Outstandings of all Letters of Credit outstanding on
such date, in each case after giving effect to all Extensions of Credit to
be made on such date and the application of the proceeds thereof.
References to the unused portion of the Commitments shall refer to the
excess, if any, of the Commitments over the principal amount outstanding
hereunder; and references to the unused portion of any Lender's Commitment
shall refer to such Lender's Percentage of the unused Commitments.
ARTICLE III
ADVANCES
SECTION 3.01. Advances. (a) The Borrower may request a Borrowing
(other than a Conversion) by delivering a notice (a "Notice of Borrowing")
to the Operational Agent no later than 12:00 noon (New York City time) on
the fourth Business Day or, in the case of Base Rate Advances, on the
first Business Day, prior to the date of the proposed Borrowing. The
Operational Agent shall give each Lender prompt notice of each Notice of
Borrowing. Each Notice of Borrowing shall be in substantially the form of
Exhibit 3.01 and shall specify the requested (i) date of such Borrowing,
(ii) Type of Advances to be made in connection with such Borrowing and
(iii) Interest Period, if any, for such Advances. Each proposed Borrowing
shall conform to the requirements of Sections 3.03 and 3.04.
(b)Each Lender shall, before 12:00 noon (New York City time) on
the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Operational Agent at the Operational
Agent's address referred to in Section 11.02, in same day funds, such
Lender's Percentage of such Borrowing. After the Operational Agent's
receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article VI, the Operational Agent will make such funds
available to the Borrower at the Operational Agent's aforesaid address.
Notwithstanding the foregoing, unless the Operational Agent shall have
received notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Operational Agent such Lender's
Percentage of such Borrowing, the Operational Agent may assume that such
Lender has made such Percentage available to the Operational Agent on the
date of such Borrowing in accordance with the first sentence of this
subsection (b), and the Operational Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount.
(c)If and to the extent that any Lender (a "non-performing
Lender") shall not have made available to the Operational Agent, in
accordance with subsection (b), above, such Lender's Percentage of any
Borrowing, the non-performing Lender and the Borrower severally agree to
repay to the Operational Agent forthwith on demand corresponding amounts,
together with interest thereon for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Operational Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to Advances made in connection with such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. Within the
limits of each Lender's Available Commitment hereunder and subject to the
other terms and conditions set forth in this Agreement for the making of
Advances, the Borrower may request (and the Lenders shall honor) one or
more additional Borrowings from the performing Lenders to fund such
repayment to the Operational Agent. If a non-performing Lender shall
repay to the Operational Agent such corresponding amount in full (with
interest as above provided), (x) the Operational Agent shall apply such
corresponding amount and interest to the repayment to the Operational
Agent (or repayment of Advances made to fund such repayment to the
Operational Agent), and shall make any remainder available to the Borrower
and (y) such amount so repaid shall be deemed to constitute such Lender's
Advance, made as part of such Borrowing for purposes of this Agreement as
if funded concurrently with the other Advances made as part of such
Borrowing, and such Lender shall forthwith cease to be deemed a
non-performing Lender; if and so long as such non-performing Lender shall
not repay such amount, and unless and until an Eligible Assignee shall
have assumed and performed the obligations of such non-performing Lender,
all computations by the Operational Agent of Percentages, Commitments and
payments hereunder shall be made without regard to the Commitments, or
outstanding Advances, of such non-performing Lender, and any amounts paid
to the Operational Agent for the account of such non-performing Lender
shall be held by the Operational Agent in trust for such Lender in a
non-interest-bearing special purpose account. Nothing herein shall in any
way limit, waive or otherwise reduce any claims that any party hereto may
have against any non-performing Lender. The failure of any Lender to make
the Advance to be made by it as part of any Borrowing shall not relieve
any other Lender of its obligation, if any, hereunder to make its Advance
on the date of such Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other
Lender on the date of any Borrowing.
SECTION 3.02. Conversion of Advances. The Borrower may from time
to time Convert any Advance (or portion thereof) of any Type to one or
more Advances of the same or any other Type by delivering a notice of such
Conversion (a "Notice of Conversion") to the Operational Agent no later
than 12:00 noon (New York City time) on (x) the fourth Business Day prior
to the date of any proposed Conversion into a Eurodollar Rate Advance and
(y) the first Business Day prior to the date of any proposed Conversion
into a Base Rate Advance. The Operational Agent shall give each Lender
prompt notice of each Notice of Conversion. Each Notice of Conversion
shall be in substantially the form of Exhibit 3.02 and shall specify the
requested (i) date of such Conversion, (ii) Type of, and Interest Period,
if any, applicable to, the Advances (or portions thereof) proposed to be
Converted, (iii) Type of Advances to which such Advances (or portions
thereof) are proposed to be Converted, (iv) initial Interest Period, if
any, to be applicable to the Advances resulting from such Conversion and
(v) aggregate amount of Advances (or portions thereof) proposed to be
Converted. Each proposed Conversion shall be subject to the provisions of
Sections 3.03 and 3.04.
SECTION 3.03. Interest Periods. The period between the date of
each Eurodollar Rate Advance and the date of payment in full of such
Advance shall be divided into successive periods of months or days
("Interest Periods") for purposes of computing interest applicable
thereto. The initial Interest Period for each such Advance shall begin on
the day such Advance is made, and each subsequent Interest Period shall
begin on the last day of the immediately preceding Interest Period for
such Advance. The duration of each Interest Period shall be 1, 2, 3, or 6
months, as the Borrower may, in accordance with Section 3.01 or 3.02,
select; provided, however, that:
(i)the Borrower may not select any Interest Period that ends
after the Termination Date; and
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall occur on the next succeeding Business
Day, provided that if such extension would cause the last day of
such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next
preceding Business Day.
SECTION 3.04. Other Terms Relating to the Making and Conversion of
Advances. (a) Notwithstanding anything in Section 3.01 or 3.02 to the
contrary:
(i)each Borrowing (other than a Borrowing deemed made under
Section 4.04(d)) shall be in an aggregate amount not less than the
product of (A) $1,000,000 and (B) the number of Lenders existing at
the time of such Borrowing, or an integral multiple of $1,000,000
in excess thereof (or such lesser amount as shall be equal to the
total amount of the Available Commitments on such date, after
giving effect to all other Extensions of Credit to be made on such
date) and shall consist of Advances of the same Type, having the
same Interest Period and made or Converted on the same day by the
Lenders ratably according to their respective Percentages;
provided, however, that the initial Borrowing shall be in an
aggregate amount sufficient to repay in full all outstanding
principal, accrued interest and other amounts owing under the 1991
Credit Agreement as of the date of the Financial Closing;
(ii) the Borrower may request that more than one Borrowing be
made on the same day;
(iii) at no time shall more than ten different Borrowings
comprising Eurodollar Rate Advances be outstanding hereunder;
(iv) no Eurodollar Rate Advance may be Converted on a date
other than the last day of the Interest Period applicable to such
Advance unless the corresponding amounts, if any, payable to the
Lenders pursuant to Section 5.04(c) are paid contemporaneously with
such Conversion;
(v)if the Borrower shall either fail to give a timely Notice
of Conversion pursuant to Section 3.02 in respect of any Advances
or fail, in any Notice of Conversion that has been timely given, to
select the duration of any Interest Period for Advances to be
Converted into Eurodollar Rate Advances in accordance with Section
3.03, such Advances shall, on the last day of the then existing
Interest Period therefor, automatically Convert into, or remain as,
as the case may be, Base Rate Advances; and
(vi) if, on the date of any proposed Conversion, any Event of
Default or Unmatured Default shall have occurred and be continuing,
all Advances then outstanding shall, on such date, automatically
Convert into, or remain as, as the case may be, Base Rate Advances.
(b)If any Lender shall notify the Operational Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for such Lender or its
Applicable Lending Office to perform its obligations hereunder to make, or
to fund or maintain, Eurodollar Rate Advances hereunder, (i) to the extent
that any such notice shall be given at least three Business Days before
the date of any requested Borrowing, the right of the Borrower to select
Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing
from such Lender shall be forthwith suspended until the earlier to occur
of the date upon which (A) such Lender shall cease to be a party hereto
and (B) it is no longer unlawful for such Lender to make, fund or maintain
Eurodollar Rate Advances, and (ii) if the maintenance of Eurodollar Rate
Advances then outstanding through the last day of the Interest Period
therefor would cause such Lender to be in violation of such law,
regulation or assertion, the Borrower shall either prepay or Convert all
Eurodollar Rate Advances from such Lender within five days after such
notice. Promptly upon becoming aware that the circumstances that caused
such Lender to deliver such notice no longer exist, such Lender shall
deliver notice thereof to the Operational Agent (but the failure to do so
shall impose no liability upon such Lender). Promptly upon receipt of such
notice from such Lender (or upon such Lender's assigning all of its
Commitments, Advances, participation and other rights and obligations
hereunder to an Eligible Assignee), the Operational Agent shall deliver
notice thereof to the Borrower and the Lenders and such suspension shall
terminate.
(c)If (i) only one, or none, of the Reference Banks furnishes
timely information to the Operational Agent for determining the Eurodollar
Rate for Eurodollar Rate Advances to be made in connection with any
proposed Borrowing or (ii) the Majority Lenders shall, at least one
Business Day before the date of any requested Borrowing, notify the
Operational Agent that the Eurodollar Rate for Eurodollar Rate Advances to
be made in connection with such Borrowing will not adequately reflect the
cost to such Majority Lenders of making, funding or maintaining their
respective Eurodollar Rate Advances for such Borrowing, the right of the
Borrower to select Eurodollar Rate Advances for such Borrowing and any
subsequent Borrowing shall be suspended until the Operational Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Advance to be made or Converted in
connection with such Borrowing shall be a Base Rate Advance.
(d)If any Lender shall have delivered a notice to the Operational
Agent described in Section 3.04(b), or shall become a non-performing
Lender under Section 3.01(c) or Section 4.04(c), and if and so long as
such Lender shall not have withdrawn such notice or corrected such
non-performance in accordance with said Section 3.01(c) or Section
4.04(c), the Borrower or the Co-Agents may demand that such Lender assign
in accordance with Section 11.07, to one or more Eligible Assignees
designated by the Borrower or the Co-Agents, all (but not less than all)
of such Lender's Commitment, Advances, participation and other rights and
obligations hereunder; provided that any such demand by the Borrower
during the continuance of an Event of Default or Unmatured Default shall
be ineffective without the consent of the Majority Lenders. If, within 30
days following any such demand by the Co-Agents or the Borrower, any such
Eligible Assignee so designated shall fail to consummate such assignment
on terms reasonably satisfactory to such Lender, or the Borrower and the
Co-Agents shall have failed to designate any such Eligible Assignee, then
such demand by the Borrower or the Co-Agents shall become ineffective, it
being understood for purposes of this provision that such assignment shall
be conclusively deemed to be on terms reasonably satisfactory to such
Lender, and such Lender shall be compelled to consummate such assignment
forthwith, if such Eligible Assignee (i) shall agree to such assignment in
substantially the form of the Lender Assignment attached hereto as Exhibit
11.07 and (ii) shall tender payment to such Lender in an amount equal to
the full outstanding dollar amount accrued in favor of such Lender
hereunder (as computed in accordance with the records of the Operational
Agent).
(e)Each Notice of Borrowing and Notice of Conversion shall be
irrevocable and binding on the Borrower. In the case of any Borrowing
which the related Notice of Borrowing or Notice of Conversion specifies is
to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill, on or before the date specified in such
Notice of Borrowing or Notice of Conversion for such Borrowing, the
applicable conditions (if any) set forth in this Article III (other than
failure pursuant to the provisions of Section 3.04(b) or (c) hereof) or in
Article VI, including, without limitation, any such loss (including loss
of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender when such Advance, as
a result of such failure, is not made on such date.
SECTION 3.05. Repayment of Advances. (a) Principal. The Borrower
shall repay the principal amount of the Advances on the Termination Date.
(b) Interest. The Borrower shall pay interest on the unpaid principal
amount of each Advance owing to each Lender from the date of such Advance
until such principal amount shall be paid in full, at the Applicable Rate
for such Advance (except as otherwise provided in this subsection (b)),
payable as follows:
(i)Base Rate Advances. If such Advance is a Base Rate
Advance, interest thereon shall be payable quarterly in arrears on
the last day of each January, April, July and October, on the date
of any Conversion of such Base Rate Advance and on the date such
Base Rate Advance shall become due and payable or shall otherwise
be paid in full; provided that any amount of principal that is not
paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest, from the date on which such amount
is due until such amount is paid in full, payable on demand, at a
rate per annum equal at all times to the Default Rate.
(ii) Eurodollar Rate Advances. If such Advance is a Eurodollar
Rate Advance, interest thereon shall be payable on the last day of
such Interest Period and, if the Interest Period for such Advance
has a duration of more than three months, on that day of each third
month during such Interest Period that corresponds to the first day
of such Interest Period (or, if any such month does not have a
corresponding day, then on the last day of such month); provided
that any amount of principal that is not paid when due (whether at
stated maturity, by acceleration or otherwise) shall bear interest,
from the date on which such amount is due until such amount is paid
in full, payable on demand, at a rate per annum equal at all times
to the Default Rate.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. LC Banks. (a) Subject to the terms and conditions
hereof, the Borrower may from time to time identify and arrange for one or
more financial institutions to act as LC Banks hereunder. Any such
designation by the Borrower shall be notified to the Documentation Agent
and the Operational Agent at least five Business Days prior to the first
date upon which the Borrower proposes that such LC Bank issue its first
Letter of Credit, so as to provide adequate time for such proposed LC Bank
to be approved by such Agents hereunder. In that regard, the Borrower
agrees to use its best efforts to so identify and arrange for Lenders to
serve in such capacity, provided that nothing contained herein shall be
deemed to require any Lender to agree to act as an LC Bank, if it does not
so desire. Within two Business Days following the receipt of any such
designation of a proposed LC Bank (other than any Lender so designated),
the Documentation Agent and the Operational Agent shall notify the
Borrower as to whether such designee is acceptable to such Agents.
(b)The aggregate amount of all LC Outstandings in respect of all
Letters of Credit outstanding on any date of determination shall not
exceed an amount equal to 50% of the then aggregate amount of the
Commitments.
SECTION 4.02. Letters of Credit. (a) Each Letter of Credit shall
be issued (or the stated maturity thereof extended or terms thereof
modified or amended) on not less than three Business Days' prior written
notice thereof to the Operational Agent (which shall promptly distribute
copies thereof to the Lenders) and the relevant LC Bank. Each such notice
(a "Request for Issuance") shall specify (i) the date (which shall be a
Business Day) of issuance of such Letter of Credit (or the date of
effectiveness of such extension, modification or amendment) and the stated
expiry date thereof (which shall be no later than the Termination Date),
(ii) the proposed stated amount of such Letter of Credit (which shall not
be less than $250,000) and (iii) such other information as shall
demonstrate compliance of such Letter of Credit with the requirements
specified therefor in this Agreement and the relevant LC Bank Agreement.
Each Request for Issuance shall be irrevocable unless modified or
rescinded by the Borrower not less than two days prior to the proposed
date of issuance (or effectiveness) specified therein. Not later than
12:00 noon (New York City time) on the proposed date of issuance (or
effectiveness) specified in such Request for Issuance, and upon
fulfillment of the applicable conditions precedent and the other
requirements set forth herein and in the relevant LC Bank Agreement, such
LC Bank shall issue (or extend, amend or modify) such Letter of Credit and
provide notice and a copy thereof to the Operational Agent, which shall
promptly furnish copies thereof to the Lenders.
(b)Each Lender severally agrees with such LC Bank to participate
in the Extension of Credit resulting from the issuance (or extension,
modification or amendment) of such Letter of Credit, in the manner and the
amount provided in Section 4.04(b), and the issuance of such Letter of
Credit shall be deemed to be a confirmation by such LC Bank and each
Lender of such participation in such amount.
SECTION 4.03. LC Bank Fees. The Borrower shall pay directly to
each LC Bank the letter of credit fees, if any, specified to be paid
pursuant to the terms of the LC Bank Agreement to which such LC Bank is a
party at the times, and in the manner, specified in such LC Bank
Agreement.
SECTION 4.04. Reimbursement to LC Banks. (a) The Borrower hereby
agrees to pay to the Operational Agent for the account of each LC Bank, on
demand made by such LC Bank to the Borrower and the Operational Agent, on
and after each date on which such LC Bank shall pay any amount under the
Letter of Credit issued by such LC Bank, a sum equal to the amount so paid
plus interest on such amount from the date so paid by such LC Bank until
repayment to such LC Bank in full at a fluctuating interest rate per annum
equal at all times to the interest rate hereunder for Base Rate Advances.
(b)If any LC Bank shall not have been reimbursed in full for any
payment made by such LC Bank under the Letter of Credit issued by such LC
Bank on the date of such payment, such LC Bank shall give the Operational
Agent and each Lender prompt notice thereof (an "LC Payment Notice") no
later than 12:00 noon (New York City time) on the Business Day immediately
succeeding the date of such payment by such LC Bank. Each Lender
severally agrees to purchase a participation in the reimbursement
obligation of the Borrower to such LC Bank under subsection (a), above, by
paying to the Operational Agent for the account of such LC Bank an amount
equal to such Lender's Percentage of such unreimbursed amount paid by such
LC Bank, plus interest on such amount at a rate per annum equal to the
Federal Funds Rate from the date of such payment by such LC Bank to the
date of payment to such LC Bank by such Lender. Each such payment by a
Lender shall be made not later than 3:00 P.M. (New York City time) on the
later to occur of (i) the Business Day immediately following the date of
such payment by such LC Bank and (ii) the Business Day on which such
Lender shall have received an LC Payment Notice from such LC Bank. Each
Lender's obligation to make each such payment to the Operational Agent for
the account of such LC Bank shall be several and shall not be affected by
the occurrence or continuance of an Unmatured Default or Event of Default
or the failure of any other Lender to make any payment under this Section
4.04. Each Lender further agrees that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
(c)The failure of any Lender to make any payment to the
Operational Agent for the account of an LC Bank in accordance with
subsection (b), above, shall not relieve any other Lender of its
obligation to make payment, but no Lender shall be responsible for the
failure of any other Lender. If any Lender (a "non-performing Lender")
shall fail to make any payment to the Operational Agent for the account of
an LC Bank in accordance with subsection (b), above, within five Business
Days after the LC Payment Notice relating thereto, then, for so long as
such failure shall continue, such LC Bank shall be deemed, for purposes of
Section 5.05 and Article IX hereof and the Security Documents, to be a
Lender hereunder owed an Advance in an amount equal to the outstanding
principal amount due and payable by such Lender to the Operational Agent
for the account of such LC Bank pursuant to subsection (b), above.
(d)Each participation purchased by a Lender under subsection (b),
above, shall constitute a Base Rate Advance deemed made by such Lender to
the Borrower on the date of such payment by the relevant LC Bank under the
Letter of Credit issued by such LC Bank (irrespective of the Borrower's
noncompliance, if any, with the conditions precedent for Advances
hereunder); and all such payments by the Lenders in respect of any one
such payment by such LC Bank shall constitute a single Borrowing
hereunder.
SECTION 4.05. Obligations Absolute. The payment obligations of
each Lender under Section 4.04(b) and of the Borrower under this Agreement
in respect of any payment under any Letter of Credit and any Advance made
under Section 4.04(d) shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(i)any lack of validity or enforceability of any Loan Document
or any other agreement or instrument relating thereto or to such
Letter of Credit;
(ii) any amendment or waiver of, or any consent to departure
from, all or any of the Loan Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any
beneficiary, or any transferee, of such Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), any LC Bank, or any other Person, whether in connection
with this Agreement, the transactions contemplated herein or by
such Letter of Credit, or any unrelated transaction;
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(v)payment in good faith by any LC Bank under the Letter of
Credit issued by such LC Bank against presentation of a draft or
certificate which does not comply with the terms of such Letter of
Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
SECTION 4.06. Liability of LC Banks and the Lenders. The Borrower
assumes all risks of the acts and omissions of any beneficiary or
transferee of any Letter of Credit. Neither the LC Bank that has issued
such Letter of Credit, the Lenders nor any of their respective officers,
directors, employees, agents or Affiliates shall be liable or responsible
for (a) the use that may be made of such Letter of Credit or any acts or
omissions of any beneficiary or transferee thereof in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or
of any endorsement thereon, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by such LC Bank against presentation of documents that do not
comply with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to
make payment under such Letter of Credit, except that the Borrower shall
have the right to bring suit against such LC Bank, and such LC Bank shall
be liable to the Borrower and any Lender, to the extent of any direct, as
opposed to consequential, damages suffered by the Borrower or such Lender
which the Borrower or such Lender proves were caused by such LC Bank's
wilful misconduct or gross negligence, including such LC Bank's wilful
failure to make timely payment under such Letter of Credit following the
presentation to it by the beneficiary thereof of a draft and accompanying
certificate(s) which strictly comply with the terms and conditions of such
Letter of Credit. In furtherance and not in limitation of the foregoing,
any LC Bank may accept sight drafts and accompanying certificates
presented under the Letter of Credit issued by such LC Bank that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Notwithstanding the foregoing, no Lender shall be obligated to indemnify
the Borrower for damages caused by any LC Bank's wilful misconduct or
gross negligence, and the obligation of the Borrower to reimburse the
Lenders hereunder shall be absolute and unconditional, notwithstanding the
gross negligence or wilful misconduct of any LC Bank.
ARTICLE V
PAYMENTS, COMPUTATIONS AND
YIELD PROTECTION
SECTION 5.01. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the other Loan Documents not later
than 11:00 A.M. (New York City time) on the day when due in U.S. Dollars
to the Operational Agent at its address referred to in Section 11.02 in
same day funds; any payment received after 2:00 P.M. (New York City time)
shall be deemed to have been received at the start of business on the next
succeeding Business Day, unless the Operational Agent shall have received
from, or on behalf of, the Borrower a Federal Reserve reference number
with respect to such payment before 3:00 P.M. (New York City time). The
Operational Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal, interest, fees or other
amounts payable to the Lenders, to the respective Lenders to which the
same are payable, for the account of their respective Applicable Lending
Offices, in each case to be applied in accordance with the terms of this
Agreement. If and to the extent that any distribution of any payment from
the Borrower required to be made to any Lender pursuant to the preceding
sentence shall not be made in full by the Operational Agent on the date
such payment was received by the Operational Agent, the Operational Agent
shall pay to such Lender, upon demand, interest on the unpaid amount of
such distribution, at a rate per annum equal to the Federal Funds Rate,
from the date of such payment by the Borrower to the Operational Agent to
the date of payment in full by the Operational Agent to such Lender of
such unpaid amount. Upon the Operational Agent's acceptance of a Lender
Assignment and recording of the information contained therein in the
Register pursuant to Section 11.07, from and after the effective date
specified in such Lender Assignment, the Operational Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Lender
Assignment shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b)The Borrower hereby authorizes the Operational Agent, each
Lender and each LC Bank, if and to the extent payment owed to the
Operational Agent, such Lender or such LC Bank, as the case may be, is not
made when due hereunder (or, in the case of a Lender, under the Note held
by such Lender), to charge from time to time against any or all of the
Borrower's accounts with the Operational Agent, such Lender or such LC
Bank, as the case may be, any amount so due.
(c)All computations of interest based on the Alternate Base Rate
and of fees payable pursuant to Section 2.02(a) shall be made by the
Operational Agent on the basis of a year of 365 or 366 days, as the case
may be. All other computations of interest and fees hereunder (including
computations of interest based on the Eurodollar Rate and the Federal
Funds Rate) shall be made by the Operational Agent on the basis of a year
of 360 days. In each such case, such computation shall be made for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
such determination by the Operational Agent or a Lender shall be
conclusive and binding for all purposes, absent manifest error.
(d)Whenever any payment hereunder or under any other Loan Document
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest and fees hereunder; provided, however, that if such extension
would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day and such reduction of
time shall in such case be included in the computation of payment of
interest hereunder.
(e)Unless the Operational Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Operational Agent may assume that the Borrower has made such payment in
full to the Operational Agent on such date, and the Operational Agent may,
in reliance upon such assumption, cause to be distributed to each Lender
on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such payment in full
to the Operational Agent, such Lender shall repay to the Operational Agent
forthwith on demand such amount distributed to such Lender, together with
interest thereon, for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the
Operational Agent, at the Federal Funds Rate.
(f)Any amount payable by the Borrower hereunder or under any of
the Notes that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall (to the fullest extent permitted by law)
bear interest, from the date when due until paid in full, at a rate per
annum equal at all times to the Default Rate payable on demand.
SECTION 5.02. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Operational Agent timely information for the
purpose of determining the Eurodollar Rate for each Interest Period. If
any one or more of the Reference Banks shall not furnish such timely
information to the Operational Agent for the purpose of determining any
such interest rate, the Operational Agent shall determine such interest
rate on the basis of timely information furnished by the remaining
Reference Banks, subject to Section 3.04(b).
(b)The Operational Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by the
Operational Agent for purposes of Section 3.05(b)(i) or (ii), and the
Eurodollar Rate, if any, furnished by each Reference Bank for the purpose
of determining the applicable interest rate under Section 3.05(b)(ii).
SECTION 5.03. Prepayments. The Borrower shall have no right to
prepay any principal amount of any Advances other than as provided in
subsections (a) and (b), below.
(a)The Borrower may, upon at least five Business Days' notice
to the Operational Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given,
the Borrower shall, prepay the outstanding principal amounts of
Advances made as part of the same Borrowing, in whole or ratably in
part, together with (i) accrued interest to the date of such
prepayment on the principal amount prepaid and (ii) in the case of
Eurodollar Rate Advances, any amount payable to the Lenders
pursuant to Section 5.04(c); provided, however, that each partial
prepayment shall be in an aggregate principal amount not less than
the product of (x) $1,000,000 and (y) the number of Lenders
existing at the time of such prepayment.
(b)On the date of any termination or optional or mandatory
reduction of the Commitments pursuant to Section 2.03, the Borrower
shall pay or prepay so much of the principal amount outstanding
under this Agreement as shall be necessary in order that such
aggregate principal amount outstanding will not exceed the
Commitments following such termination or reduction, together with
(i) accrued interest to the date of such prepayment on the
principal amount repaid and (ii) in the case of prepayments of
Eurodollar Rate Advances, any amount payable to the Lenders
pursuant to Section 5.04(c). Any prepayments required by this
subsection (b) shall be applied to outstanding Base Rate Advances
up to the full amount thereof before they are applied, first, to
outstanding Eurodollar Rate Advances and, second, as cash
collateral, pursuant to the Cash Collateral Agreement, to secure LC
Outstandings.
SECTION 5.04. Yield Protection. (a) Increased Costs. If, due to
either (i) the introduction of or any change in or in the interpretation
of any law or regulation after the date hereof, or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) issued or made after
the date hereof, there shall be reasonably incurred any increase in (A)
the cost to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances, or of participating in the issuance,
maintenance or funding of any Letter of Credit, or (B) the cost to any LC
Bank of issuing or maintaining any Letter of Credit, then the Borrower
shall from time to time, upon demand by such Lender or LC Bank, as the
case may be (with a copy of such demand to the Operational Agent), pay to
the Operational Agent for the account of such Lender or LC Bank, as the
case may be, additional amounts sufficient to compensate such Lender or LC
Bank, as the case may be, for such increased cost. A certificate as to
the amount of such increased cost and giving a reasonable explanation
thereof, submitted to the Borrower and the Operational Agent by such
Lender or such LC Bank, as the case may be, shall constitute such demand
and shall be conclusive and binding for all purposes, absent manifest
error.
(b)Eurodollar Reserves. The Borrower shall pay to the Operational
Agent for the account of each Lender, so long as such Lender shall be
required under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional interest
on the unpaid principal amount of each Eurodollar Rate Advance of such
Lender, from the date of such Advance until such principal amount is paid
in full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest Period
for such Advance from (ii) the rate obtained by dividing such Eurodollar
Rate by a percentage equal to 100% minus the Eurodollar Reserve Percentage
of such Lender for such Interest Period, payable on each date on which
interest is payable on such Advance. Such additional interest shall be
determined by such Lender and notified to the Borrower and the Operational
Agent. A certificate as to the amount of such additional interest,
submitted to the Borrower and the Operational Agent by such Lender, shall
be conclusive and binding for all purposes, absent manifest error.
(c)Breakage. If, due to any prepayment pursuant to Section 5.03,
an acceleration of maturity of the Advances pursuant to Section 9.01, or
any other reason, any Lender receives payments of principal of any
Eurodollar Rate Advance other than on the last day of the Interest Period
relating to such Advance, or if the Borrower shall Convert any Eurodollar
Rate Advances on any day other than the last day of the Interest Period
therefor, the Borrower shall, promptly after demand by such Lender (with a
copy of such demand to the Operational Agent), pay to the Operational
Agent for the account of such Lender any amounts required to compensate
such Lender for additional losses, costs, or expenses (including
anticipated lost profits) that such Lender may reasonably incur as a
result of such payment or Conversion, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Advance. For purposes of this subsection (c), a certificate
setting forth the amount of such additional losses, costs, or expenses and
giving a reasonable explanation thereof, submitted to the Borrower and the
Operational Agent by such Lender, shall constitute such demand and shall
be conclusive and binding for all purposes, absent manifest error.
(d)Capital. If any Lender or LC Bank determines that
(i) compliance with any law or regulation or any guideline or request from
any central bank or other governmental authority (whether or not having
the force of law) affects or would affect the amount of capital required
or expected to be maintained by such Lender or LC Bank, whether directly,
or indirectly as a result of commitments of any corporation controlling
such Lender or LC Bank (but without duplication), and (ii) the amount of
such capital is increased by or based upon (1) the existence of such
Lender's or LC Bank's commitment to lend or issue or participate in any
Letter of Credit hereunder, or (2) the participation in or issuance or
maintenance of any Letter of Credit or Advance and (3) other similar such
commitments, then, upon demand by such Lender or LC Bank, the Borrower
shall immediately pay to the Operational Agent for the account of such
Lender or LC Bank from time to time as specified by such Lender or LC Bank
additional amounts sufficient to compensate such Lender or LC Bank in the
light of such circumstances, to the extent that such Lender or LC Bank
reasonably determines such increase in capital to be allocable to the
transactions contemplated hereby. A certificate as to such amounts and
giving a reasonable explanation thereof (to the extent permitted by law),
submitted to the Borrower and the Operational Agent by such Lender or LC
Bank, shall be conclusive and binding for all purposes, absent manifest
error.
(e)Notices. Each Lender hereby agrees to use its best efforts to
notify the Borrower of the occurrence of any event referred to in
subsection (a), (b), (c) or (d) of this Section 5.04 promptly after
becoming aware of the occurrence thereof. The failure of any Lender to
provide such notice or to make demand for payment under said subsection
shall not constitute a waiver of such Lender's rights hereunder; provided
that, notwithstanding any provision to the contrary contained in this
Section 5.04, the Borrower shall not be required to reimburse any Lender
for any amounts or costs incurred under (i) subsection (a), (c) or (d),
above, more than 90 days prior to the date that such Lender notifies the
Borrower in writing thereof, and (ii) subsection (b), above, more than 180
days prior to the date that such Lender notifies the Borrower in writing
thereof, in each case unless, and to the extent that, any such amounts or
costs so incurred shall relate to the retroactive application of any event
notified to the Borrower which entitles such Lender to such compensation.
If any Lender shall subsequently determine that any amount demanded and
collected under this Section 5.04 was done so in error, such Lender will
promptly return such amount to the Borrower.
(f)Survival of Obligations. Subject to subsection (e), above, the
Borrower's obligations under this Section 5.04 shall survive the repayment
of all other amounts owing to the Lenders, the Agents and the LC Banks
under the Loan Documents and the termination of the Commitments. If and
to the extent that the obligations of the Borrower under this Section 5.04
are unenforceable for any reason, the Borrower agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible
under applicable law.
SECTION 5.05. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the Advances owing to
it (other than pursuant to Section 5.04) in excess of its ratable share of
payments obtained by all the Lenders on account of the Advances of such
Lenders, such Lender shall forthwith purchase from the other Lenders such
participation in the Advances owing to them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to
the proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 5.05 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. Notwithstanding the
foregoing, if any Lender shall obtain any such excess payment
involuntarily, such Lender may, in lieu of purchasing participations from
the other Lenders in accordance with this Section 5.05, on the date of
receipt of such excess payment, return such excess payment to the
Operational Agent for distribution in accordance with Section 5.01(a).
SECTION 5.06. Taxes. (a) All payments by the Borrower hereunder
and under the other Loan Documents shall be made in accordance with
Section 5.01, free and clear of and without deduction for all present or
future taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each
Lender, each LC Bank and each Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it by the jurisdiction under the
laws of which such Lender, LC Bank or Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its overall net income, and franchise taxes
imposed on it by the jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to any Lender, LC Bank or Agent, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 5.06) such Lender, LC Bank or Agent (as the
case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(b)In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or under any
other Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c)The Borrower will indemnify each Lender, LC Bank and Agent for
the full amount of Taxes and Other Taxes (including, without limitation,
any Taxes and any Other Taxes imposed by any jurisdiction on amounts
payable under this Section 5.06) paid by such Lender, LC Bank or Agent (as
the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender, LC
Bank or Agent (as the case may be) makes written demand therefor;
provided, that such Lender, LC Bank or Agent (as the case may be) shall
not be entitled to demand payment under this Section 5.06 for an amount if
such demand is not made within one year following the date upon which such
Lender, LC Bank or Agent (as the case may be) shall have been required to
pay such amount.
(d)Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Documentation Agent, at its address referred
to in Section 11.02, the original or a certified copy of a receipt
evidencing payment thereof.
(e)Each Bank represents and warrants that either (i) it is
organized under the laws of a jurisdiction within the United States or
(ii) it has delivered to the Borrower or the Operational Agent duly
completed copies of such form or forms prescribed by the Internal Revenue
Service indicating that such Bank is entitled to receive payments without
deduction or withholding of any United States federal income taxes, as
permitted by the Internal Revenue Code of 1986, as amended. Each other
Lender agrees that, on or prior to the date upon which it shall become a
party hereto, and upon the reasonable request from time to time of the
Borrower or the Operational Agent, such Lender will deliver to the
Borrower and the Operational Agent either (A) a statement that it is
organized under the laws of a jurisdiction within the United States or (B)
duly completed copies of such form or forms as may from time to time be
prescribed by the United States Internal Revenue Service, indicating that
such Lender is entitled to receive payments without deduction or
withholding of any United States federal income taxes, as permitted by the
Internal Revenue Code of 1986, as amended. Each Bank that has delivered,
and each other Lender that hereafter delivers, to the Borrower and the
Operational Agent the form or forms referred to in the two preceding
sentences further undertakes to deliver to the Borrower and the
Operational Agent further copies of such form or forms, or successor
applicable form or forms, as the case may be, as and when any previous
form filed by it hereunder shall expire or shall become incomplete or
inaccurate in any respect. Each Lender represents and warrants that each
such form supplied by it to the Operational Agent and the Borrower
pursuant to this subsection (e), and not superseded by another form
supplied by it, is or will be, as the case may be, complete and accurate.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to Commitment Closing. The
Commitments of the Lenders to make, or to participate in, as the case may
be, Extensions of Credit under Article III hereof shall not become
effective until the following conditions precedent shall have been
fulfilled:
(a)The Documentation Agent shall have received the following, each
dated the date of the Commitment Closing (unless otherwise specified
below), in form and substance satisfactory to the Lenders and in
sufficient copies for each Lender:
(i)Certified copies of the resolutions of the Board of
Directors of the Borrower authorizing the Borrower to enter into
this Agreement, the Notes and the other Loan Documents to which it
is, or is to be, a party, and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to this Agreement, the Notes and such Loan Documents.
(ii) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names, true signatures and
incumbency of (A) the officers of the Borrower authorized to sign
this Agreement, the Notes and the other Loan Documents to which it
is, or is to be, a party, and the other documents to be delivered
hereunder and thereunder and (B) the representatives of the
Borrower authorized to sign notices to be provided under this
Agreement and the other Loan Documents to which it is, or is to be,
a party, which representatives shall be acceptable to the
Co-Agents.
(iii) Copies of the Certificate of Incorporation (or comparable
charter document) and by-laws of the Borrower, together with all
amendments thereto, certified by the Secretary or an Assistant
Secretary of the Borrower.
(iv) An irrevocable notice from the Borrower requesting
termination of the "Commitments" under the 1991 Credit Agreement
effective automatically on such date upon the satisfaction (or
waiver) of the other conditions precedent set forth in this Section
6.01.
(v)Such other approvals, opinions and documents as any Lender,
through the Documentation Agent, may reasonably request as to the
legality, validity, binding effect or enforceability of this
Agreement and the other Loan Documents to which the Borrower is, or
is to be, a party, or the financial condition, results of
operations, properties or business, of the Borrower and its
Consolidated Subsidiaries.
(b)The following statements shall be true and the Documentation
Agent shall have received a certificate of a duly authorized officer of
the Borrower, dated the date of the Commitment Closing and in sufficient
copies for each Lender, stating that:
(i)the representations and warranties set forth in Section
7.01 of this Agreement are true and correct on and as of the date
of the Commitment Closing as though made on and as of such date,
and (ii) no event has occurred and is continuing that constitutes
an Unmatured Default or an Event of Default.
(c)The Borrower shall have paid all fees under or referenced in
Section 2.02 hereof, to the extent then due and payable.
(d)The Commitment Closing shall have occurred on or prior to
November 30, 1992. It is acknowledged that all conditions precedent set
forth in this Section 6.01 were fulfilled, and the Commitment Closing
occurred, on November 30, 1992.
SECTION 6.02. Conditions Precedent to Financial Closing. The
obligation of each Lender to make its initial Extension of Credit is
subject to the fulfillment of the conditions precedent that the
Documentation Agent shall have received, on or before the day of the
initial Extension of Credit, the following, each dated such day (except
where specified otherwise below), in form and substance satisfactory to
each Lender (except where otherwise specified below) and (except for the
Notes) in sufficient copies for each Lender:
(i)A Note, payable to the order of each Lender then party
hereto, duly executed by the Borrower.
(ii) The Security Documents duly executed by the respective
parties named therein as guarantors, grantors or pledgors, together
with evidence of the completion of all other actions as may be
necessary or, in the opinion of the Co-Agents and counsel for the
Co-Agents, desirable to perfect the security interests and liens
created by the Security Documents.
(iii) The Fee Letter, duly executed by the Borrower.
(iv) Certified copies of (A) the resolutions of the Board of
Directors of Enterprises authorizing Enterprises to enter into the
Loan Documents to which it is a party and (B) all other corporate
or similar action required to authorize the execution, delivery and
performance thereof on behalf of Enterprises.
(v)A certificate of the Secretary or Assistant Secretary of
Enterprises certifying the names and true signatures of (A) the
officers of Enterprises authorized to sign the Loan Documents to
which it is a party and all other documents to be delivered in
connection herewith or therewith on behalf of Enterprises and (B)
the representatives of Enterprises authorized to sign notices to be
provided under the Loan Documents to which it is a party, which
representatives shall be acceptable to the Co-Agents.
(vi) A certified copy of Schedule II hereto, in form and
substance reasonably satisfactory to the Co-Agents.
(vii) Favorable opinions of:
(A) Sidley & Austin, counsel for the Loan Parties, in
substantially the form of Exhibit 6.02C and as to such other
matters as the Majority Lenders, through the Documentation
Agent, may reasonably request;
(B) Porter & Travers, counsel to the Agents, in
substantially the form of Exhibit 6.02D and as to such other
matters as the Majority Lenders, through the Documentation
Agent, may reasonably request; and
(C) Loomis, Ewert, Ederer, Parsley, Davis & Gotting, P.C.,
special Michigan counsel for the Loan Parties, in substantially
the form of Exhibit 6.02E and as to such other matters as the
Majority Lenders, through the Documentation Agent, may
reasonably request.
It is acknowledged that all conditions precedent set forth in this
Section 6.02 (other than the execution and delivery of the Cash
Collateral Agreement) were fulfilled, and the Financial Closing
occurred, on November 30, 1992.
SECTION 6.03. Conditions Precedent to Each Extension of Credit.
The obligation of each Lender or LC Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit) shall be
subject to the further conditions precedent that, on the date of such
Extension of Credit and after giving effect thereto:
(a)the following statements shall be true (and each of the
giving of the applicable notice or request with respect thereto and
the making of such Extension of Credit without prior correction by
the Borrower shall (to the extent that such correction has been
previously consented to by the Lenders and the LC Banks) constitute
a representation and warranty by the Borrower that, on the date of
such Extension of Credit, such statements are true):
(i) the representations and warranties contained in
Section 7.01 of this Agreement (other than those contained in
subsections (e)(i) and (e)(ii) thereof), in Section 4 of each
of the Pledge Agreements, in Section 7 of the Cash Collateral
Agreement and in Section 6 of the Guaranty (other than those
contained in subsections (f)(i) and (f)(ii) thereof) are
correct on and as of the date of such Extension of Credit,
before and after giving effect to such Extension of Credit and
to the application of the proceeds thereof, as though made on
and as of such date;
(ii) solely with respect to the initial Extension of
Credit, the representations and warranties contained in Section
7.01(e)(i) and (ii) hereof and in Section 6(f)(i) and (ii) of
the Guaranty are correct on and as of the date of such
Extension of Credit, before and after giving effect to such
Extension of Credit and the application of the proceeds
thereof, as though made on and as of such date;
(iii) with respect to each Extension of Credit other than
the initial Extension of Credit, since September 30, 1992,
except as disclosed in the Borrower's Current Reports on Form
8-K filed with the Securities and Exchange Commission on
March 31, 1993 and April 6, 1993, (A) there has been no
material adverse change in the Borrower's ability to perform
its obligations under this Agreement or any other Loan Document
to which it is or will be a party, or in the Guarantor's
ability to perform its obligations under the Guaranty, and (B)
there has been no order or decision issued by any Federal or
state regulatory authority which would reasonably be expected
to have a material adverse effect on the business, financial
condition or results of operations of the Borrower; and
(iv) no Unmatured Default or Event of Default has occurred
and is continuing, or would result from such Extension of
Credit or the application of the proceeds thereof; and
(b)the Documentation Agent shall have received such other
approvals, opinions and documents as any Lender or LC Bank, through
the Documentation Agent, may reasonably request as to the legality,
validity, binding effect or enforceability of the Loan Documents or
the financial condition, results of operations, properties or
business of the Borrower and its Consolidated Subsidiaries.
SECTION 6.04. Reliance on Certificates. The Lenders, the LC Banks
and each Agent shall be entitled to rely conclusively upon the
certificates delivered from time to time by officers of the Borrower and
the other Loan Parties as to the names, incumbency, authority and
signatures of the respective persons named therein until such time as the
Documentation Agent may receive a replacement certificate, in form
acceptable to the Documentation Agent, from an officer of such Person
identified to the Documentation Agent as having authority to deliver such
certificate, setting forth the names and true signatures of the officers
and other representatives of such Person thereafter authorized to act on
behalf of such Person.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a)The Borrower, each of its Restricted Subsidiaries and Consumers
is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation and is duly qualified to
do business in, and is in good standing in, all other jurisdictions where
the nature of its business or the nature of property owned or used by it
makes such qualification necessary.
(b)The execution, delivery and performance by the Borrower of each
Loan Document to which it is or will be a party (i) are within the
Borrower's corporate powers, (ii) have been duly authorized by all
necessary corporate action and (iii) do not and will not (A) require any
consent or approval of the stockholders of the Borrower, (B) violate any
provision of the charter or by-laws of the Borrower or of law, (C) violate
any legal restriction binding on or affecting the Borrower, (D) result in
a breach of, or constitute a default under, any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or
affected, or (E) result in or require the creation of any Lien (other than
pursuant to the Loan Documents) upon or with respect to any of its
properties.
(c)No Governmental Approval is required.
(d)This Agreement is, and each other Loan Document to which the
Borrower will be a party when executed and delivered hereunder will be,
legal, valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms; subject to the
qualification, however, that the enforcement of the rights and remedies
herein and therein is subject to bankruptcy and other similar laws of
general application affecting rights and remedies of creditors and the
application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
(e)(i) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 1991, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Consolidated Subsidiaries for the fiscal year then ended,
together with the report thereon of Arthur Andersen & Co. included in the
Borrower's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991 (as revised and amended pursuant to Forms 8 dated
April 29, 1992, July 15, 1992 and August 17, 1992), and the unaudited
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at September 30, 1992 and the related unaudited
consolidated statements of income, retained earnings and cash flows for
the 9-month period then ended, copies of each of which have been furnished
to each Lender, fairly present (subject, in the case of such balance
sheets and statements of income for the 9 months ended September 30, 1992,
to year-end adjustments) the financial condition of the Borrower and its
Consolidated Subsidiaries as at such dates and the results of operations
of the Borrower and its Consolidated Subsidiaries for the periods ended on
such dates, all in accordance with generally accepted accounting
principles consistently applied. (ii) Since September 30, 1992, except as
disclosed in the Borrower's Quarterly Report on Form 10-Q for the period
ended September 30, 1992, there has been no material adverse change in the
business, financial condition or results of operations of the Borrower and
its Subsidiaries, considered as a whole, or in the Borrower's ability to
perform its obligations under this Agreement or any other Loan Document to
which it is or will be a party. (iii) The Borrower has no material
liabilities or obligations except as reflected in the foregoing financial
statements and in Schedule II hereto, as evidenced by the Loan Documents
and as may be incurred, in accordance with the terms of this Agreement, in
the ordinary course of business (as presently conducted) following the
date of this Agreement.
(f)Except as disclosed in the Borrower's Quarterly Report on Form
10-Q for the period ended September 30, 1992, there are no pending or
threatened actions, suits or proceedings against or, to the knowledge of
the Borrower, affecting the Borrower or any of its Subsidiaries or the
properties of the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, that would, if adversely determined,
reasonably be expected to materially adversely affect the financial
condition, properties, business or operations of the Borrower and it
Subsidiaries, considered as a whole, or affect the legality, validity or
enforceability of this Agreement or any other Loan Document.
(g)All insurance required by Section 8.01(b) is in full force and
effect.
(h)No Plan Termination Event has occurred nor is reasonably
expected to occur with respect to any Plan of the Borrower or any of its
ERISA Affiliates which would result in a material liability to the
Borrower, except as disclosed and consented to by the Majority Lenders in
writing from time to time. Since the date of the most recent Schedule B
(Actuarial Information) to the annual report of the Borrower (Form 5500
Series), if any, there has been no material adverse change in the funding
status of the Plans referred therein and no "prohibited transaction" has
occurred with respect thereto which is reasonably expected to result in a
material liability to the Borrower. Neither the Borrower nor any of its
ERISA Affiliates has incurred nor reasonably expects to incur any material
withdrawal liability under ERISA to any Multiemployer Plan, except as
disclosed and consented to by the Majority Lenders in writing from time to
time.
(i)None of the material properties, business or operations of the
Borrower, Consumers or any Restricted Subsidiary are materially adversely
affected by any fire, explosion, accident, strike, lockout or other labor
disputes, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (except for any such circumstance, if any,
which is covered by insurance which coverage has been confirmed and not
disputed by the relevant insurer).
(j)The Borrower and its Subsidiaries have filed all tax returns
(Federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties, or, to the extent the
Borrower or any of its Subsidiaries is contesting in good faith an
assertion of liability based on such returns, has provided adequate
reserves for payment thereof in accordance with generally accepted
accounting principles.
(k)No extraordinary judicial, regulatory or other legal
constraints exist which limit or restrict Consumers' ability to declare or
pay cash dividends with respect to its capital stock.
(l)The Borrower owns 100% of the outstanding shares of common
stock of Consumers and Enterprises.
(m)Nomeco is a Subsidiary of Enterprises, and Enterprises owns
100% of the outstanding shares of common stock thereof, except for such
shares sold, transferred or otherwise disposed of after the Collateral
Release Date pursuant to any transaction permitted by Section 8(h)(iii) of
the Guaranty.
(n)The pro forma statements of sources and uses of funds
previously delivered by the Borrower to the Co-Agents are based upon
assumptions that the Borrower believes were reasonable at the time such
statements were delivered, and all other financial information previously
delivered by the Borrower to the Co-Agents are true and correct in all
material respects as at the dates and for the periods indicated therein.
(o)The executed and delivered Security Documents create valid,
perfected, first priority Liens in the Collateral described therein,
subject only to Liens permitted by Section 8.02(a), and all filings and
other actions necessary to perfect and protect such security interests
have been taken.
(p)The Borrower is not engaged in the business of extending credit
for the purpose of buying or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance or any drawing under any Letter of
Credit will be used to buy or carry any margin stock or to extend credit
to others for the purpose of buying or carrying any margin stock.
(q)The Borrower is not an investment company (within the meaning
of the Investment Company Act of 1940, as amended).
(r)No proceeds of any Extension of Credit or any drawing under any
Letter of Credit will be used (i) to acquire any equity security of a
class that is registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or (ii) in contravention of Act 144.
(s)The Borrower is not engaged in, and will not engage in, any of
the public utility activities that are the subject of Act 144.
(t)Following application of the proceeds of each Extension of
Credit, not more than 25 percent of the value of the assets of the
Borrower and its Subsidiaries on a consolidated basis will be margin stock
(within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants. So long as any Note shall
remain unpaid, any Letter of Credit shall remain outstanding or any Lender
shall have any Commitment:
(a)Payment of Taxes, Etc. The Borrower shall pay and discharge,
and each of its Subsidiaries shall pay and discharge, before the same
shall become delinquent, all taxes, assessments and governmental charges,
royalties or levies imposed upon it or upon its property except, in the
case of taxes, to the extent the Borrower or any Subsidiary, as the case
may be, is contesting the same in good faith and by appropriate
proceedings and has set aside adequate reserves for the payment thereof in
accordance with generally accepted accounting principles.
(b)Maintenance of Insurance. The Borrower shall maintain, and
each of its Restricted Subsidiaries and Consumers shall maintain,
insurance covering the Borrower, each of its Restricted Subsidiaries,
Consumers and their respective properties in effect at all times in such
amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general
geographical area in which the Borrower, its Restricted Subsidiaries and
Consumers operates, either with reputable insurance companies or, in whole
or in part, by establishing reserves of one or more insurance funds,
either alone or with other corporations or associations.
(c)Preservation of Existence, Etc. The Borrower shall preserve
and maintain, and each of its Restricted Subsidiaries and Consumers shall
preserve and maintain, its corporate existence, material rights (statutory
and otherwise) and franchises, and take such other action as may be
necessary or advisable to preserve and maintain its right to conduct its
business in the states where it shall be conducting its business.
(d)Compliance with Laws, Etc. The Borrower shall comply, and each
of its Restricted Subsidiaries and Consumers shall comply, in all material
respects with the requirements of all applicable laws, rules, regulations
and orders of any governmental authority, including without limitation any
such laws, rules, regulations and orders relating to zoning, environmental
protection, use and disposal of Hazardous Substances, land use,
construction and building restrictions, and employee safety and health
matters relating to business operations.
(e)Inspection Rights. Subject to the requirements of laws or
regulations applicable to the Borrower or its Subsidiaries, as the case
may be, and in effect at the time, at any time and from time to time upon
reasonable notice, the Borrower shall permit (i) the Co-Agents and their
respective agents and representatives to examine and make copies of and
abstracts from the records and books of account of, and the properties of,
the Borrower or any of its Subsidiaries and (ii) the Co-Agents, each of
the Lenders, and their respective agents and representatives to discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries
with the Borrower and its Subsidiaries and their respective officers,
directors and accountants, in each case, to the extent that any
out-of-pocket expenses are incurred in connection therewith at such time
as no Event of Default or Unmatured Default shall have occurred and be
continuing, at the expense of the Co-Agents, each of the Lenders, or their
respective agents and representatives, as the case may be.
(f)Keeping of Books. The Borrower shall keep, and each of its
Subsidiaries shall keep, proper records and books of account, in which
full and correct entries shall be made of all financial transactions of
the Borrower and its Subsidiaries and the assets and business of the
Borrower and its Subsidiaries, in accordance with generally accepted
accounting principles consistently applied.
(g)Maintenance of Properties, Etc. The Borrower shall maintain,
and each of its Restricted Subsidiaries shall maintain, in substantial
conformity with all laws and material contractual obligations, good and
marketable title to all of its properties which are used or useful in the
conduct of its business; provided, however, that the foregoing shall not
restrict the sale of any asset of the Borrower or any Restricted
Subsidiary to the extent not prohibited by Section 8.02(i). In addition,
the Borrower shall preserve, maintain, develop, and operate, and each of
its Subsidiaries shall preserve, maintain, develop and operate, in
substantial conformity with all laws and material contractual obligations,
all of its material properties which are used or useful in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.
(h)Use of Proceeds. The Borrower shall apply all proceeds of the
initial Extension of Credit to the repayment in full and termination of
all outstanding obligations under the 1991 Credit Agreement, whether for
principal, interest, fees, or otherwise (and, in furtherance thereof, the
Borrower hereby expressly and irrevocably authorizes the Operational Agent
to so apply such proceeds to such repayment), and use all subsequent
Extensions of Credit for general corporate purposes (subject to the terms
and conditions of this Agreement).
(i)Consolidated Leverage Ratio. The Borrower shall maintain a
ratio of Consolidated Debt to Consolidated Capital of 0.75 to 1 or less,
and cause Enterprises to maintain a ratio of Consolidated Debt to
Consolidated Capital of 0.55 to 1 or less.
(j)Performance of Indenture Covenants. The Borrower and its
Subsidiaries shall comply with all covenants and similar obligations set
forth in the Indenture and all other documents evidencing the Senior Note
Debt and any refinancings or restructurings thereof (it being understood
and agreed that all such covenants and obligations are hereby incorporated
herein by reference in favor of the Lenders and the Agents and that no
amendment, modification or waiver of any such covenant or obligation which
may be agreed to by the Trustee, any Noteholder or any other Person shall
be deemed to constitute an amendment, modification or waiver of such
covenant or obligation as so incorporated, except as otherwise agreed by
the Required Lenders).
(k)Further Assurances. The Borrower shall promptly execute and
deliver all further instruments and documents, and take all further
action, that may be necessary or that any Lender through the Documentation
Agent may reasonably request in order to give effect fully to the
interests and properties purported to be covered by the Security
Documents. In addition, the Borrower will use all reasonable efforts to
duly obtain or make Governmental Approvals required from time to time on
or prior to such date as the same may become legally required.
SECTION 8.02. Negative Covenants. So long as any Note shall
remain unpaid, any Letter of Credit shall remain outstanding or any Lender
shall have any Commitment, the Borrower shall not, without the written
consent of the Majority Lenders:
(a)Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Restricted Subsidiaries to create, incur, assume or
suffer to exist, any lien, security interest, or other charge or
encumbrance (including the lien or retained security title of a
conditional vendor) of any kind, or any other type of arrangement intended
or having the effect of conferring upon a creditor a preferential interest
upon or with respect to any of its properties of any character (including,
without limitation, capital stock of any of its directly-owned
Subsidiaries and accounts) (any of the foregoing being referred to herein
as a "Lien"), whether now owned or hereafter acquired, or sign or file, or
permit any of its Restricted Subsidiaries to sign or file, under the
Uniform Commercial Code of any jurisdiction a financing statement which
names the Borrower or any Restricted Subsidiary as debtor, sign, or permit
any of its Restricted Subsidiaries to sign, any security agreement
authorizing any secured party thereunder to file such financing statement,
or assign, or permit any of its Restricted Subsidiaries to assign,
accounts, excluding, however, from the operation of the foregoing
restrictions the Liens created under the Loan Documents and the following:
(i)Liens for taxes, assessments or governmental charges or
levies to the extent not past due;
(ii) pledges or deposits to secure (A) obligations under
workmen's compensation laws or similar legislation, (B) public or
statutory obligations of the Borrower or any of its Restricted
Subsidiaries, or (C) Support Obligations of the Borrower permitted
by Section 8.02(b)(vi), provided that the aggregate amount of
pledges or deposits securing such Support Obligations shall not
exceed $20 million at any one time outstanding;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's liens and other similar Liens
arising in the ordinary course of business securing obligations
which are not overdue or which have been fully bonded and are being
contested in good faith; and
(iv) purchase money Liens or purchase money security interests
upon or in property acquired or held by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business to
secure the purchase price of such property or to secure
indebtedness incurred solely for the purpose of financing the
acquisition of any such property to be subject to such Liens or
security interests, or Liens or security interests existing on any
such property at the time of acquisition, or extensions, renewals
or replacements of any of the foregoing for the same or a lesser
amount, provided that no such Lien or security interest shall
extend to or cover any property other than the property being
acquired and no such extension, renewal or replacement shall extend
to or cover property not theretofore subject to the Lien or
security interest being extended, renewed or replaced, and
provided, further, that the aggregate principal amount of the Debt
at any one time outstanding secured by Liens permitted by this
clause (iv) shall not exceed $10,000,000.
(b)Debt. Create, incur, assume or suffer to exist, or permit any
of its Restricted Subsidiaries to create, incur, assume or suffer to
exist, any Debt other than:
(i)Debt hereunder and under the other Loan Documents;
(ii) Guaranty Obligations (A) arising by reason of the
endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of the Borrower's or
such Restricted Subsidiary's business, and (B) in the form of
indemnities in respect of unfiled mechanics' liens and Liens
permitted under Section 8.02(a)(iii);
(iii) the Senior Note Debt and any refinancings thereof;
provided, however, that (A) any Net Refinancing Proceeds shall
immediately upon the receipt thereof by the Borrower be applied by
the Borrower pursuant to Section 2.03(a) and 5.03(a)(ii) to reduce
permanently the Commitments; (B) with respect to any debentures,
notes, bonds or other debt securities that are to be issued in
connection with any refinancing of the Senior Notes and that are to
be secured by the Collateral (as defined in the Collateral Agency
and Intercreditor Agreement), the Lenders shall, in accordance with
Section 11.01, have consented to the issuance of such debentures,
notes, bonds or other debt securities prior to the date of issuance
thereof; (C) any Trustee with respect to any of the debentures,
notes, bonds or other debt securities referred to in clause (B),
above, shall have agreed, in a writing in form and substance
satisfactory to the Documentation Agent, to be bound by the terms
and conditions of the Collateral Agency and Intercreditor
Agreement; and (D) in connection with any such refinancing, the
maturity thereof shall be no sooner than 91 days after the
then-scheduled Termination Date;
(iv) Debt set forth in Schedule II hereto;
(v)the Unsecured Note Debt (in addition to any Unsecured Note
Debt incurred by the Borrower pursuant to clause (iii), above, or
clause (vi), below) in an aggregate amount not to exceed $10
million at any one time outstanding; and
(vi) other Debt (up to $20 million of which may be secured by
pledges and deposits as provided in Section 8.02(a)(ii)) in an
aggregate amount not to exceed the sum of $130 million and the then
aggregate amount of the Available Commitments of the Lenders
(determined immediately prior to the incurrence of any such Debt)
at any one time outstanding.
(c)Lease Obligations. Create, incur, assume or suffer to exist,
or permit any of its Restricted Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee for the rental or hire of real
or personal property of any kind under leases or agreements to lease
(other than leases which constitute Debt) having an original term of one
year or more which would cause the aggregate direct or contingent
liabilities of the Borrower and its Restricted Subsidiaries in respect of
all such obligations payable in any period of 12 consecutive calendar
months to exceed $10,000,000.
(d)Investments in Other Persons. Upon the occurrence and during
the continuance of an Unmatured Default or an Event of Default, make, or
permit any of its Restricted Subsidiaries to make, any loan or advance to
any Person or purchase or otherwise acquire any capital stock, obligations
or other securities of, make any capital contribution to, or otherwise
invest in, any Person, other than Permitted Investments.
(e)Restricted Payments. Declare or pay, or permit any of its
Restricted Subsidiaries to declare or pay, directly or indirectly, any
dividend, payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any share of any class of
capital stock of the Borrower or any of its Restricted Subsidiaries (other
than (1) stock splits and dividends payable solely in nonconvertible
equity securities of the Borrower and (2) distributions made to the
Borrower or a Restricted Subsidiary), or purchase, redeem, retire, or
otherwise acquire for value, or permit any of its Restricted Subsidiaries
to purchase, redeem, retire, or otherwise acquire for value, any shares of
any class of capital stock of the Borrower or any of its Restricted
Subsidiaries or any warrants, rights, or options to acquire any such
shares, now or hereafter outstanding, or make, or permit any of its
Restricted Subsidiaries to make, any distribution of assets to any of its
shareholders (other than distributions to the Borrower or a Restricted
Subsidiary) (any such dividend, payment, distribution, purchase,
redemption, retirement or acquisition being hereinafter referred to as a
"Restricted Payment"), unless (i) no Unmatured Default or Event of Default
has occurred and is continuing or would occur as a result of such
Restricted Payment, and (ii) after giving effect thereto, the aggregate
amount of all such Restricted Payments made since September 30, 1992 shall
not have exceeded the sum of (A) $40,000,000, (B) 100% of Consolidated Net
Income (as defined in the Indenture) accrued during the period (treated as
one accounting period) from September 30, 1992 to the end of the most
recent fiscal quarter of the Borrower ending at least 45 days prior to the
date of such Restricted Payment (or, in case such amount shall be a
deficit, minus 100% of such deficit), and (C) the aggregate Net Proceeds
(as defined in the Indenture) received by the Borrower from any issuance
or sale of, or contribution with respect to, its capital stock subsequent
to the date of the Indenture; provided, however, that the foregoing shall
not prohibit (1) any purchase or redemption of capital stock of the
Borrower made by exchange for, or out of the proceeds of the substantially
concurrent sale of, capital stock of the Borrower (other than Redeemable
Stock or Exchangeable Stock (as such terms are defined in the Indenture)),
provided that such purchase or redemption shall be excluded from the
calculation of the amount of Restricted Payments permitted by this
subsection (e); (2) dividends or other distributions paid in respect of
any class of the Borrower's capital stock issued in respect of the
acquisition of any business or assets by the Borrower or a Restricted
Subsidiary where the dividends or other distributions with respect to such
capital stock are payable solely from the net earnings of such business or
assets; (3) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this subsection (e), provided that at the time of payment of such
dividend, no Unmatured Default or Event of Default shall have occurred and
be continuing (or result therefrom), and provided further that such
dividends shall be included (without duplication) in the calculation of
the amount of Restricted Payments permitted by this subsection (e); or (4)
payments made by the Borrower or any Restricted Subsidiary pursuant to the
Tax Sharing Agreement. For purposes of this subsection (e), the amount of
any Restricted Payment not in the form of cash shall be the fair market
value of such Restricted Payment as determined in good faith by the Board
of Directors of the Borrower, provided that if the value of the non-cash
portion of such Restricted Payment as determined by the Borrower's Board
of Directors is in excess of $25 million, such value shall be based on an
opinion from a nationally-recognized firm acceptable to the Co-Agents
experienced in the appraisal of similar types of property or transactions.
(f)Compliance with ERISA. (i) Permit to exist any "accumulated
funding deficiency" (as defined in Section 412(a) of the Internal Revenue
Code of 1986), (ii) terminate, or permit any ERISA Affiliate to terminate,
any Plan so as to result in any material (in the opinion of the Majority
Lenders) liability of the Borrower, any Restricted Subsidiary or Consumers
to the PBGC, or (iii) permit to exist any occurrence of any Reportable
Event (as defined in Title IV of ERISA), or any other event or condition,
which presents a material (in the opinion of the Majority Lenders) risk of
such a termination by the PBGC of any Plan and such a material liability
to the Borrower, any Restricted Subsidiary or Consumers.
(g)Transactions with Affiliates. Enter into, or permit any of its
Subsidiaries to enter into, any transaction with any of its Affiliates
unless such transaction is on terms no less favorable to the Borrower or
such Subsidiary than if the transaction had been negotiated in good faith
on an arm's-length basis with a non-Affiliate.
(h)Mergers, Etc. Merge with or into or consolidate with or into,
or permit any of its Restricted Subsidiaries, Consumers or Nomeco to merge
with or into or consolidate with or into, any other Person, except that
(1) any Restricted Subsidiary (other than Enterprises) may merge into any
other Restricted Subsidiary; (2) Nomeco may merge with or into Enterprises
or the Borrower; (3) after the Collateral Release Date, Nomeco may merge
with or into any other Person, provided that, in connection with such
merger, Enterprises shall have received fair consideration (as determined
by the Board of Directors of Enterprises or the Borrower); (4) any
Restricted Subsidiary may merge with or into the Borrower, and the
Borrower may merge with any other Person, provided that, immediately after
giving effect to any such merger, (A) no event shall occur and be
continuing which constitutes an Unmatured Default or an Event of Default,
(B) the Borrower is the surviving corporation, and (C) the Borrower shall
not be liable with respect to any Debt or allow its property to be subject
to any Lien which it could not become liable with respect to or allow its
property to become subject to under this Agreement or any other Loan
Document on the date of such transaction; and (5) subject to the terms of
the Borrower Pledge Agreement, Consumers may merge with any other Person,
provided that, immediately after giving effect thereto, (A) no event shall
occur and be continuing which constitutes an Unmatured Default or an Event
of Default, (B) Consumers is the surviving corporation, and (C) Consumers'
Net Worth shall be equal to or greater than its Net Worth immediately
prior to such merger.
(i)Sales, Etc., of Assets. Sell, lease, transfer, assign, or
otherwise dispose of all or any substantial part of its assets, or permit
any of its Restricted Subsidiaries to sell, lease, transfer, or otherwise
dispose of all or any substantial part of its assets, except (i) to give
effect to a transaction permitted by subsection (h), above, and (ii)
Enterprises may sell, lease, transfer, assign, or otherwise dispose of all
or any substantial part of its assets (A) to give effect to a sale,
transfer or other disposition of the common stock of Nomeco after the
Collateral Release Date pursuant to any transaction permitted by Section
8(h)(iii) of the Guaranty and (B) to any other Restricted Subsidiary (in
each case subject to compliance with Section 7(h) of the Guaranty
immediately after giving effect to any such transaction).
(j)Maintenance of Ownership of Subsidiaries. Except as permitted
under the Pledge Agreements, sell, transfer, assign or otherwise dispose
of any shares of capital stock of any of its Restricted Subsidiaries or
Consumers (other than preferred or preference stock of Consumers) or any
warrants, rights or options to acquire such capital stock, or permit any
Restricted Subsidiary or Consumers to issue, sell, transfer, assign or
otherwise dispose of any shares of its capital stock (other than preferred
or preference stock of Consumers) or the capital stock of any other
Restricted Subsidiary or any warrants, rights or options to acquire such
capital stock, except to give effect to a transaction permitted by
subsection (h), above, and Section 8(h)(iii) of the Guaranty.
(k)Amendment of Tax Sharing Agreement. Directly or indirectly,
amend, modify, supplement, waive compliance with, seek a waiver under, or
assent to noncompliance with, any term, provision or condition of the Tax
Sharing Agreement if the effect of such amendment, modification,
supplement, waiver or assent is to (i) reduce materially any amounts
otherwise payable to, or increase materially any amounts otherwise owing
or payable by, the Borrower thereunder, or (ii) change materially the
timing of any payments made by or to the Borrower thereunder.
SECTION 8.03. Reporting Obligations. So long as any Note shall
remain unpaid, any Letter of Credit shall remain outstanding or any Lender
shall have any Commitment, the Borrower will, unless the Majority Lenders
shall otherwise consent in writing, furnish to each Lender, the following:
(a)as soon as possible and in any event within five days after
the Borrower knows or should have reason to know of the occurrence
of each Unmatured Default or Event of Default continuing on the
date of such statement, a statement of the chief financial officer
or chief accounting officer of the Borrower setting forth details
of such Unmatured Default or Event of Default and the action that
the Borrower proposes to take with respect thereto;
(b)as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of
the Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarter and consolidated
statements of income and retained earnings and of cash flows of the
Borrower and its Subsidiaries for the period commencing at the end
of the previous fiscal year and ending with the end of such quarter
(which requirement shall be deemed satisfied by the delivery of the
Borrower's quarterly report on Form 10-Q for such quarter), all in
reasonable detail and duly certified (subject to year-end audit
adjustments) by the chief financial officer or chief accounting
officer of the Borrower as having been prepared in accordance with
generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to
in Section 7.01(e), together with (A) a schedule in form
satisfactory to the Majority Lenders of the computations used by
the Borrower in determining compliance with the covenant contained
in Section 8.01(i), and (B) a certificate of said officer stating
that no Unmatured Default or Event of Default has occurred and is
continuing or, if an Unmatured Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof
and the action that the Borrower proposes to take with respect
thereto;
(c)as soon as available and in any event within 120 days after
the end of each fiscal year of the Borrower and its Subsidiaries, a
copy of the Annual Report on Form 10-K (or any successor form) for
the Borrower and its Subsidiaries for such year, including therein
a consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such fiscal year and consolidated statements of
income and retained earnings and of cash flows of the Borrower and
its Subsidiaries for such fiscal year, accompanied by a report
thereon of Arthur Andersen & Co. or another nationally-recognized
independent public accounting firm, together with a schedule in
form satisfactory to the Majority Lenders of the computations used
by such accounting firm in determining, as of the end such fiscal
year, compliance with the covenant contained in Section 8.01(i);
(d)as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of
the Borrower, a balance sheet of the Borrower as at the end of such
quarter and statements of income and retained earnings and of cash
flows of the Borrower for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, all
in reasonable detail and duly certified (subject to year-end audit
adjustments) by the chief financial officer or chief accounting
officer of the Borrower as having been prepared in accordance with
generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to
in Section 7.01(e);
(e)as soon as available and in any event within 120 days after
the end of each fiscal year of the Borrower, a balance sheet of the
Borrower as at the end of such fiscal year and statements of income
and retained earnings and of cash flows of the Borrower for such
fiscal year, all in reasonable detail and duly certified (subject
to year-end audit adjustments) by the chief financial officer or
chief accounting officer of the Borrower as having been prepared in
accordance with generally accepted accounting principles consistent
with those applied in the preparation of the financial statements
referred to in Section 7.01(e);
(f)as soon as possible and in any event (A) within 30 days
after the Borrower knows or has reason to know that any Plan
Termination Event described in clause (i) of the definition of Plan
Termination Event with respect to any Plan of the Borrower or any
ERISA Affiliate of the Borrower has occurred and could reasonably
be expected to result in a material liability to the Borrower and
(B) within 10 days after the Borrower knows or has reason to know
that any other Plan Termination Event with respect to any Plan of
the Borrower or any ERISA Affiliate of the Borrower has occurred
and could reasonably be expected to result in a material liability
to the Borrower, a statement of the chief financial officer or
chief accounting officer of the Borrower describing such Plan
Termination Event and the action, if any, which the Borrower
proposes to take with respect thereto;
(g)promptly after receipt thereof by the Borrower or any of
its ERISA Affiliates from the PBGC copies of each notice received
by the Borrower or any such ERISA Affiliate of the PBGC's intention
to terminate any Plan or to have a trustee appointed to administer
any Plan;
(h)promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule
B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Plan (if any) to which the Borrower is a
contributing employer;
(i)promptly after receipt thereof by the Borrower or any of
its ERISA Affiliates from a Multiemployer Plan sponsor, a copy of
each notice received by the Borrower or any of its ERISA Affiliates
concerning the imposition or amount of withdrawal liability in an
aggregate principal amount of at least $250,000 pursuant to Section
4202 of ERISA in respect of which the Borrower is reasonably
expected to be liable;
(j)promptly after the Borrower becomes aware of the occurrence
thereof, notice of all actions, suits, proceedings or other events
of the type described in Section 7.01(f);
(k)promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the
Borrower sends to its public security holders (if any), and copies
of all regular, periodic and special reports, and all registration
statements and periodic or special reports, if any, which the
Borrower files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with
any national securities exchange;
(l)as soon as possible and in any event within five days after
the occurrence of any material default under any material agreement
to which the Borrower or any of its Subsidiaries is a party, which
default would materially adversely affect the financial condition,
business, results of operations or property of the Borrower and its
Subsidiaries, considered as a whole, any of which is continuing on
the date of such certificate, a certificate of the chief financial
officer of the Borrower setting forth the details of such material
default and the action which the Borrower or any such Subsidiary
proposes to take with respect thereto;
(m)promptly upon their becoming available, copies of each
report or statement required to be provided to the Trustee or any
Noteholder pursuant to the Indenture, to the extent such reports or
statements are not otherwise required to be delivered pursuant to
this Section 8.03; and
(n)promptly after requested, such other information respecting
the business, properties, condition or operations, financial or
otherwise, of the Borrower and its Subsidiaries as any Agent or the
Majority Lenders may from time to time reasonably request in
writing.
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default. If any of the following events
(each an "Event of Default") shall occur and be continuing after the
applicable grace period and notice requirement (if any), the Co-Agents and
the Lenders shall be entitled to exercise the remedies set forth in
Section 9.02:
(a)The Borrower shall fail to pay any principal of, or interest
on, any Note when due; or
(b)Any representation or warranty made by or on behalf of any Loan
Party in any Loan Document or certificate or other writing delivered
pursuant thereto shall prove to have been incorrect in any material
respect when made or deemed made; or
(c)The Borrower or any of its Subsidiaries shall fail to perform
or observe any term or covenant on its part to be performed or observed
contained in Section 8.01(c), (h), (i) or (j) or in Section 8.02 hereof,
or the Guarantor shall fail to perform or observe any term or covenant on
its part to be performed or observed contained in Sections 7(h), 7(j) or 8
of the Guaranty (and the Borrower, each Lender and each Agent hereby
agrees that an Event of Default under this subsection (c) shall be given
effect as if the defaulting Subsidiary were a party to this Agreement); or
(d)The Borrower or any of its Subsidiaries shall fail to perform
or observe any other term or covenant on its part to be performed or
observed contained in any Loan Document and any such failure shall remain
unremedied, after written notice thereof shall have been given to the
Borrower by the Documentation Agent, for a period of 10 days (and the
Borrower, each Lender and each Agent hereby agrees that an Event of
Default under this subsection (d) shall be given effect as if the
defaulting Subsidiary were a party to this Agreement); or
(e)Any Loan Party, any Restricted Subsidiary or Consumers shall
fail to pay any of its Debt (including any interest or premium thereon but
excluding Debt evidenced by the Notes) (i) aggregating, in the case of
each Loan Party and each Restricted Subsidiary, $3,000,000 or more or, in
the case of Consumers, $10,000,000 or more, or (ii) arising under the
Indenture or any Senior Note, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure
shall continue after the applicable grace period, if any, specified in any
agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity
of such Debt; or any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; unless in each such case
the obligee under or holder of such Debt shall have waived in writing such
circumstance so that such circumstance is no longer continuing; or
(f)(i) Any Loan Party, any Restricted Subsidiary or Consumers
shall generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make an
assignment for the benefit of creditors; or (ii) any proceeding shall be
instituted by or against any Loan Party, any Restricted Subsidiary or
Consumers seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of its debts under any law relating to
bankruptcy, insolvency, or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of
its property and, in the case of a proceeding instituted against any Loan
Party, either such proceeding shall remain undismissed or unstayed for a
period of 60 days or any of the actions sought in such proceeding
(including without limitation the entry of an order for relief against
such Loan Party, a Restricted Subsidiary or Consumers or the appointment
of a receiver, trustee, custodian or other similar official for such Loan
Party, such Restricted Subsidiary or Consumers or any of its property)
shall occur; or (iii) any Loan Party, any Restricted Subsidiary or
Consumers shall take any corporate or other action to authorize any of the
actions set forth above in this subsection (f); or
(g)Any judgment or order for the payment of money in excess of
$3,000,000 shall be rendered against any Loan Party or its properties and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
10 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h)Any material provision of any Loan Document, after execution
hereof or delivery thereof under Article VI, shall for any reason other
than the express terms hereof or thereof cease to be valid and binding on
any party thereto; or any Loan Party shall so assert in writing; or
(i)The Security Documents after delivery under Article VI hereof
shall for any reason, except to the extent permitted by the terms thereof
or due to any failure by any Agent to take any action on its part to be
performed under applicable law in order to maintain such perfection, cease
to create valid and perfected first priority Liens (to the extent
purported to be granted by such documents) in any of the Collateral; or
(j)At any time any LC Bank shall have been served with or
otherwise subjected to a court order, injunction, or other process or
decree issued or granted at the instance of the Borrower restraining or
seeking to restrain such LC Bank from paying any amount under any Letter
of Credit issued by it and either (i) there has been a drawing under such
Letter of Credit which such LC Bank would otherwise be obligated to pay or
(ii) the stated expiration date or any reduction of the stated amount of
such Letter of Credit has occurred but the right of the beneficiary to
draw thereunder has been extended in connection with the pendency of the
related court action or proceeding.
SECTION 9.02. Remedies. If any Event of Default has occurred and
is continuing, then the Co-Agents shall at the request, or may with the
consent, of the Required Lenders, upon notice to the Borrower (i) declare
the Commitments and the obligation of each Lender to make Advances (other
than Advances under Section 4.04 hereof) and of any LC Bank to issue a
Letter of Credit to be terminated, whereupon the same shall forthwith
terminate, (ii) declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower, (iii) provide from the
proceeds of any Collateral for cash collateralization of LC Outstandings,
and (iv) exercise in respect of any and all collateral, in addition to the
other rights and remedies provided for herein and in the Security
Documents or otherwise available to the Co-Agents or the Lenders, all the
rights and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of New York and in effect in any
other jurisdiction in which collateral is located at that time; provided,
however, that in the event of an actual or deemed entry of an order for
relief with respect to the Borrower under the Federal Bankruptcy Code, (A)
the Commitments and the obligation of each Lender to make Advances and of
any LC Bank to issue any Letter of Credit shall automatically be
terminated and (B) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower. Notwithstanding anything to the contrary
contained herein, no notice given or declaration made by the Co-Agents
pursuant to this Section 9.02 shall affect (i) the obligation of any LC
Bank to make any payment under any Letter of Credit issued by such LC Bank
in accordance with the terms of such Letter of Credit or (ii) the
participatory interest of each Lender in each such payment.
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action. Each Lender and LC Bank
hereby appoints and authorizes each of the Agents to take such action as
agent on its behalf and to exercise such powers under this Agreement and
the Collateral Agency and Intercreditor Agreement as are delegated to such
Agents by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. The Operational Agent is hereby expressly
authorized on behalf of each Lender and each LC Bank, without hereby
limiting any implied authority, to receive on behalf of each of the
Lenders any payment of principal of, or interest on, the Notes and all
other amounts accrued thereunder or hereunder paid to the Operational
Agent, and promptly to distribute in accordance with Section 5.01(a) to
each Lender its proper share of all payments so received. Each Agent is
hereby expressly authorized on behalf of each Lender and each LC Bank,
without hereby limiting any implied authority, to distribute to each
Lender copies of all notices, agreements and other materials as provided
for in this Agreement and any other Loan Document received by such Agent.
As to any matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of the Notes) or the
Collateral Agency and Intercreditor Agreement, the Agents shall not be
required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders, all LC
Banks and all holders of Notes; provided, however, that the Agents shall
not be required to take any action that exposes any Agent to personal
liability or that is contrary to this Agreement or applicable law. Each
Agent agrees to give to each Lender prompt notice of each notice given to
it by the Borrower pursuant to the terms of this Agreement.
SECTION 10.02. Agents' Reliance, Etc. Neither any Agent nor any
of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection
with any Loan Document, except for its or their own gross negligence or
wilful misconduct. Without limitation of the generality of the foregoing:
(i) each Agent may treat the payee of any Note as the holder thereof until
the Documentation Agent receives and accepts a Lender Assignment entered
into by the Lender which is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 11.07; (ii) each
Agent may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts;
(iii) the Agents make no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with any Loan Document; (iv) no
Agent shall have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of any Loan
Document on the part of the Borrower or to inspect any property (including
the books and records) of the Borrower; (v) no Agent shall be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document; and (vi) no Agent
shall incur liability under or in respect of any Loan Document by acting
upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, cable, telex, telecopy or other
teletransmission) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 10.03. Citibank, Union Bank and Affiliates. With respect
to its Commitment and the Note issued to it, each of Citibank and Union
Bank shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not an Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include Citibank and Union Bank each in its individual
capacity. Citibank and Union Bank and their respective Affiliates may
accept deposits from, lend money to, act as trustee under indentures of,
and generally engage in any kind of business with, the Borrower, any of
its Subsidiaries, its Affiliates and any Person who may do business with
or own securities of the Borrower or any such Subsidiary or Affiliate, all
as if Citibank and Union Bank were not an Agent and without any duty to
account therefor to the Lenders.
SECTION 10.0E. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agents or any
other Lender and based on the financial information referred to in Section
7.01(e) and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 10.05. Indemnification. The Lenders agree to indemnify
the Agents (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Notes then held by
each of them (or if no Notes are at the time outstanding or if any Notes
are held by Persons which are not Lenders, ratably according to the
respective Percentages of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agents in
any way relating to or arising out of this Agreement or any action taken
or omitted by the Agents under this Agreement, provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agents' gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agents promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agents in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights
or responsibilities under, this Agreement to the extent that the Agents
are entitled to reimbursement for such expenses pursuant to Section 11.04
but are not reimbursed for such expenses by the Borrower.
SECTION 10.06. Successor Agents. Each Agent (other than the
Collateral Agent, whose resignation and removal is governed by Section
6(k) of the Collateral Agency and Intercreditor Agreement) may resign at
any time by giving written notice thereof to the Lenders and the Borrower
and may be removed at any time with or without cause by the Majority
Lenders, with any such resignation or removal to become effective only
upon the appointment of a successor Agent in such capacity, pursuant to
this Section 10.06. Upon any such resignation or removal, the Majority
Lenders shall have the right to appoint a successor Agent in such capacity
which shall be a Lender or another commercial bank or trust company
reasonably acceptable to the Borrower organized under the laws of the
United States, or of any State thereof. If no successor Agent shall have
been so appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent in such capacity, which shall be a Lender or shall be another
commercial bank or trust company organized under the laws of the United
States or of any State thereof reasonably acceptable to the Borrower.
Upon the acceptance of any appointment as an Agent hereunder by a
successor Agent and the execution and delivery by the Borrower and the
successor Agent of an agreement relating to the fees to be paid to the
successor Agent under Section 2.02(c) hereof in connection with its acting
as an Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as an Agent, the provisions of this
Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Agent in such capacity under this
Agreement.
SECTION 10.07. Lenders, LC Banks and Agents Bound by Collateral
Agency and Intercreditor Agreement and Pledge Agreements. The Borrower,
the Lenders, each LC Bank and the Agents hereby agree and acknowledge that
(a) this Agreement constitutes a "Replacement Facility" under the
Collateral Agency and Intercreditor Agreement and the Pledge Agreements
and (b) the obligations of the Borrower now or hereafter existing under
this Agreement, the Notes and the other Loan Documents, whether for
principal, interest, fees, expenses or otherwise, constitute "Bank Debt"
under the Collateral Agency and Intercreditor Agreement and that such
obligations are subject to the provisions thereof. In furtherance of the
foregoing, (i) each Lender and LC Bank agrees to be bound by the terms and
conditions of the Collateral Agency and Intercreditor Agreement and of
each of the Pledge Agreements and that it shall constitute a "Lender" for
all purposes thereunder, (ii) each of the Operational Agent, the
Documentation Agent and the Co-Agents agrees to be bound by the terms and
conditions thereof and that it shall constitute a "Co-Agent" or "Agent",
as the case may be, for all purposes thereunder and (iii) each 1991 Lender
agrees that the Borrower Pledge Agreement and the Enterprises Pledge
Agreement (as such terms are defined in the 1991 Credit Agreement) were,
immediately prior to the effectiveness of this Agreement, amended and
restated in the forms of Exhibits 6.02F and 6.02G hereto, respectively.
Any capitalized terms contained in the Collateral Agency and Intercreditor
Agreement or in either Pledge Agreement and not otherwise defined therein,
or defined by reference to the 1991 Credit Agreement, shall have the
meaning specified in this Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. Subject to Sections 2(h) and 10
of the Collateral Agency and Intercreditor Agreement, no amendment or
waiver of any provision of any Loan Document, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Lenders, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all
the Lenders, do any of the following: (i) waive, modify or eliminate any
of the conditions specified in Article VI, (ii) increase the Commitments
of the Lenders that may be maintained hereunder or subject the Lenders to
any additional obligations, (iii) reduce the principal of, or interest on,
the Notes, any Applicable Margin or any fees or other amounts payable
hereunder (other than fees payable to the Operational Agent pursuant to
Section 2.02(c)), (iv) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts
payable hereunder (other than fees payable to the Operational Agent
pursuant to Section 2.02(c)), (v) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, or the number of
Lenders which shall be required for the Lenders or any of them to take any
action hereunder, (vi) amend any Loan Document in a manner intended to
prefer one or more Lenders over any other Lenders, (vii) amend Section
2.03(b) or this Section 11.01, or (viii) release any collateral or change
any provision of any Security Document providing for the release of
collateral; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by each Agent in addition to the
Lenders required above to take such action, affect the rights or duties of
any Agent under this Agreement or any Note. Any request from the Borrower
for any amendment, waiver or consent under this Section 11.01 shall be
addressed to the Documentation Agent.
SECTION 11.02. Notices, Etc. All notices and other communications
provided for hereunder and under the other Loan Documents shall be in
writing (including telegraphic, facsimile, telex or cable communication)
and mailed, telegraphed, telecopied, telexed, cabled or delivered, (i) if
to the Borrower, at its address at Fairlane Plaza South, 330 Town Center
Drive, Suite 1100, Dearborn, Michigan 48126, Attention: Rodger A.
Kershner, Esq., with a copy to Doris F. Galvin, Director of Treasury and
Assistant Treasurer, 212 West Michigan Avenue, Jackson, Michigan 49201;
(ii) if to any Bank, at its Domestic Lending Office specified opposite its
name on Schedule I hereto; (iii) if to any LC Bank, at its address
specified in the LC Bank Agreement to which it is a party; (iv) if to any
Lender other than a Bank, at its Domestic Lending Office specified in the
Lender Assignment pursuant to which it became a Lender; (v) if to the
Operational Agent, at its address at 445 South Figueroa Street, 15th
Floor, Los Angeles, California 90071, Attention: Utilities Department
Head; and (vi) if to the Documentation Agent, at its address at 399 Park
Avenue, New York, New York 10043, Attention: Utilities Department Head;
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed, telecopied, telexed or
cabled, be effective five days after when deposited in the mails, or when
delivered to the telegraph company, telecopied, confirmed by telex
answerback or delivered to the cable company, respectively, except that
notices and communications to any Agent pursuant to Article II, III, or X
shall not be effective until received by such Agent.
SECTION 11.03. No Waiver of Remedies. No failure on the part of
the Borrower, any Lender, any LC Bank or any Agent to exercise, and no
delay in exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 11.04. Costs, Expenses and Indemnification. (a) The
Borrower agrees to pay on demand (i) all reasonable costs and expenses of
each Agent (including, without limitation, reasonable fees and expenses of
counsel to the Agents and of special Michigan counsel to the Lenders) in
connection with (A) the preparation, negotiation, execution and delivery
of the Loan Documents and (B) the care and custody of any and all
collateral, and any proposed modification, amendment, or consent relating
to any Loan Document, and (ii) all reasonable costs and expenses of each
Agent and, on and after the date upon which the Notes become or are
declared to be due and payable pursuant to Section 9.02 or an Event of
Default specified in Section 9.01(a) shall have occurred and be
continuing, each Lender (including, without limitation, reasonable fees
and expenses of counsel to the Agents, special Michigan counsel to the
Lenders and, from and after such date, counsel for each Lender (including
the allocated costs and expenses of in-house counsel)) in connection with
the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement, the Notes and the other documents to be
delivered hereunder.
(b)The Borrower hereby agrees to indemnify and hold each Lender,
each Agent, each LC Bank and their respective officers, directors,
employees, professional advisors and affiliates (each, an "Indemnified
Person") harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable attorney's fees and
expenses, whether or not such Indemnified Person is named as a party to
any proceeding or is otherwise subjected to judicial or legal process
arising from any such proceeding) which any of them may incur or which may
be claimed against any of them by any Person:
(i)by reason of or in connection with the execution, delivery
or performance of any of the Loan Documents or any transaction
contemplated thereby, or the use by the Borrower of the proceeds of
any Extension of Credit;
(ii) in connection with any documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of any of the Loan Documents; or
(iii) in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation, release
or ownership of any Hazardous Substance (i) at, upon or under any
property of the Borrower or any of its Affiliates or (ii) by or on
behalf of the Borrower or any of its Affiliates at any time and in
any place;
provided, however, that nothing contained in this subsection (b) shall
constitute a relinquishment or waiver of the Borrower's rights to any
independent claim that the Borrower may have against any Indemnified
Person for such Indemnified Person's gross negligence or wilful
misconduct, but no Lender shall be liable for any such conduct on the part
of any Agent or any other Lender, and no Agent shall be liable for any
such conduct on the part of any Lender.
(c)The Borrower's other obligations under this Section 11.04 shall
survive the repayment of all amounts owing to the Lenders, the LC Banks
and the Agents under the Loan Documents and the termination of the
Commitments. If and to the extent that the obligations of the Borrower
under this Section 11.04 are unenforceable for any reason, the Borrower
agrees to make the maximum contribution to the payment and satisfaction
thereof which is permissible under applicable law.
SECTION 11.05. Right of Set-off. (a) Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 9.02 to
authorize the Co-Agents to declare the Notes due and payable pursuant to
the provisions of Section 9.02, each Lender and LC Bank is hereby
authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender or LC Bank to or for the
credit or the account of the Borrower, against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement
and the Note held by such Lender or the LC Bank Agreement to which such LC
Bank is a party, as the case may be, irrespective of whether or not such
Lender or LC Bank shall have made any demand under this Agreement or such
Note or such LC Bank Agreement and although such obligations may be
unmatured. Each Lender and LC Bank agrees to notify promptly the Borrower
after any such set-off and application made by such Lender or LC Bank,
provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender and
LC Bank under this Section 11.05 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which
such Lender and LC Bank may have.
(b)The Borrower agrees that it shall have no right of off-set,
deduction or counterclaim in respect of its obligations hereunder, and
that the obligations of the Lenders hereunder are several and not joint.
Nothing contained herein shall constitute a relinquishment or waiver of
the Borrower's rights to any independent claim that the Borrower may have
against any Agent or any Lender for such Agent's or such Lender's, as the
case may be, gross negligence or wilful misconduct, but no Lender shall be
liable for any such conduct on the part of any Agent or any other Lender,
and no Agent shall be liable for any such conduct on the part of any
Lender.
SECTION 11.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agents
and when the Documentation Agent shall have been notified by each Bank
that such Bank has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agents and each Lender and their
respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lenders.
SECTION 11.07. Assignments and Participation. (a) Each Lender may
assign to one or more banks or other entities all or a portion of its
rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitment, the
Advances owing to it and the Note or Notes held by it); provided, however,
that (i) each such assignment shall be of a constant, and not a varying,
percentage of all of the assigning Lender's rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date
of the Lender Assignment with respect to such assignment) shall in no
event be less than the lesser of the amount of such Lender's Commitment
and $10,000,000 and shall be an integral multiple of $5,000,000, (iii)
each such assignment shall be to an Eligible Assignee, and (iv) the
parties to each such assignment shall execute and deliver to the
Documentation Agent (with a copy to the Operational Agent), for its
acceptance and recording in the Register, a Lender Assignment, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $2,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Lender
Assignment, which effective date shall be at least five Business Days
after the execution thereof, (A) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Lender Assignment, have the rights and
obligations of a Lender hereunder and (B) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it to an Eligible Assignee pursuant to such Lender Assignment,
relinquish its rights and be released from its obligations under this
Agreement (and, in the case of a Lender Assignment covering all or the
remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto); provided,
however, that the limitation set forth in clause (iii), above, shall not
apply if an Event of Default shall have occurred and be continuing and the
Co-Agents shall have declared all Advances to be immediately due and
payable hereunder. The Documentation Agent agrees to give prompt notice to
the Lenders and the Borrower of any assignment or participation of its
rights and obligations as a Bank hereunder. Notwithstanding anything to
the contrary contained in this Agreement, any Lender may at any time
assign all or any portion of the Advances owing to it to any Affiliate of
such Lender. The assigning Lender shall promptly notify the Borrower of
any such assignment. No such assignment, other than to an Eligible
Assignee, shall release the assigning Lender from its obligations
hereunder.
(b)By executing and delivering a Lender Assignment, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as
provided in such Lender Assignment, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection
with any Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan Document or
any other instrument or document furnished pursuant thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
the performance or observance by the Borrower of any of its obligations
under any Loan Document or any other instrument or document furnished
pursuant thereto; (iii) such assignee confirms that it has received a copy
of each Loan Document, together with copies of the financial statements
referred to in Section 7.01(e) and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to
enter into such Lender Assignment; (iv) such assignee will, independently
and without reliance upon the Agents, such assigning Lender or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents; (v) such assignee
confirms that it is an Eligible Assignee (unless an Event of Default shall
have occurred and be continuing and the Co-Agents shall have declared all
Advances to be immediately due and payable hereunder, in which case no
such confirmation is necessary); (vi) such assignee appoints and
authorizes each Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to each
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
the Loan Documents are required to be performed by it as a Lender.
(c)The Documentation Agent shall maintain at its address referred
to in Section 11.02 a copy of each Lender Assignment delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Advances owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agents and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(d)Upon its receipt of a Lender Assignment executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the
Documentation Agent shall, if such Lender Assignment has been completed
and is in substantially the form of Exhibit 11.07, (i) accept such Lender
Assignment, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Documentation Agent in exchange
for the surrendered Note or Notes a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to
such Lender Assignment and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in
an amount equal to the Commitment retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Lender Assignment and shall otherwise be in
substantially the form of Exhibit 6.02A.
(e)Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations
under the Loan Documents (including, without limitation, all or a portion
of its Commitment, the Advances owing to it and the Note or Notes held by
it); provided, however, that (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of this Agreement, and (iv) the Borrower, the Agents and
the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement.
(f)Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 11.07, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided that,
prior to any such disclosure, the assignee or participant or proposed
assignee or participant shall agree, in accordance with the terms of
Section 11.08, to preserve the confidentiality of any Confidential
Information received by it from such Lender.
(g)If any Lender (or any bank or other entity to which such Lender
has sold a participation) shall make any demand for payment under Section
5.04(a) or (d), then within 30 days after any such demand (if, but only
if, such demanded payment has been made by the Borrower) or notice, the
Borrower may, with the approval of the Agents (which approval shall not be
unreasonably withheld) and provided that no Event of Default or Unmatured
Default shall then have occurred and be continuing, demand that such
Lender assign in accordance with this Section 11.07 to one or more
Eligible Assignees designated by the Borrower all (but not less than all)
of such Lender's Commitment and the Advances owing to it within the period
ending on the later to occur of such 30th day and the last day of the
longest of the then current Interest Periods for such Advances. If any
such Eligible Assignee designated by the Borrower shall fail to consummate
such assignment on terms acceptable to such Lender, or if the Borrower
shall fail to designate any such Eligible Assignees for all or part of
such Lender's Commitment or Advances, then such demand by the Borrower
shall become ineffective; it being understood for purposes of this
subsection (g) that such assignment shall be conclusively deemed to be on
terms acceptable to such Lender, and such Lender shall be compelled to
consummate such assignment to an Eligible Assignee designated by the
Borrower, if such Eligible Assignee (i) shall agree to such assignment by
entering into a Lender Assignment with such Lender and (ii) shall offer
compensation to such Lender in an amount equal to all amounts then owing
by the Borrower to such Lender hereunder and under the Note made by the
Borrower to such Lender, whether for principal, interest, fees, costs or
expenses (other than the demanded payment referred to above and payable by
the Borrower as a condition to the Borrower's right to demand such
assignment), or otherwise. In addition, in the case of any amount
demanded for payment by any Lender (or such a participant) pursuant to
Section 5.04(a) or (d), the Borrower may, in the case of any such Lender,
with the approval of the Agents (which approval shall not be unreasonably
withheld) and provided that no Event of Default or Unmatured Default shall
then have occurred and be continuing, terminate all (but not less than
all) such Lender's Commitment and prepay all (but not less than all) such
Lender's Advances not so assigned, together with all interest accrued
thereon to the date of such prepayment and all fees, costs and expenses
and other amounts then owing by the Borrower to such Lender hereunder and
under the Note made by the Borrower to such Lender, at any time from and
after such later occurring day in accordance with Sections 2.03 and 5.03
hereof (but without the requirement stated therein for ratable treatment
of the other Lenders), if and only if, after giving effect to such
termination and prepayment, the sum of the aggregate principal amount of
the Advances of all Lenders then outstanding does not exceed the then
remaining Commitments of the Lenders. Notwithstanding anything set forth
above in this subsection (g) to the contrary, the Borrower shall not be
entitled to compel the assignment by any Lender demanding payment under
Section 5.04(a) of its Commitment and Advances or terminate and prepay the
Commitment and Advances of such Lender if, prior to or promptly following
any such demand by the Borrower, such Lender shall have changed or shall
change, as the case may be, its Applicable Lending Office for its
Eurodollar Rate Advances so as to eliminate the further incurrence of such
increased cost. In furtherance of the foregoing, any such Lender
demanding payment or giving notice as provided above agrees to use
reasonable efforts to so change its Applicable Lending Office if, to do
so, would not result in the incurrence by such Lender of additional costs
or expenses which it deems material or, in the sole judgment of such
Lender, be inadvisable for regulatory, competitive or internal management
reasons.
(h)Anything in this Section 11.07 to the contrary notwithstanding,
any Lender may assign and pledge all or any portion of its Commitment and
the Advances owing to it to any Federal Reserve Bank (and its transferees)
as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
SECTION 11.08. Confidentiality. In connection with the
negotiation and administration of this Agreement and the other Loan
Documents, the Loan Parties have furnished and will from time to time
furnish to the Agents and the Lenders (each, a "Recipient") written
information which is identified to the Recipient when delivered as
confidential (such information, other than any such information which
(i) was publicly available, or otherwise known to the Recipient, at the
time of disclosure, (ii) subsequently becomes publicly available other
than through any act or omission by the Recipient or (iii) otherwise
subsequently becomes known to the Recipient other than through a Person
whom the Recipient knows to be acting in violation of his or its
obligations to such Loan Party, being hereinafter referred to as
"Confidential Information"). The Recipient will not knowingly disclose
any such Confidential Information to any third party (other than to those
persons who have a confidential relationship with the Recipient), and will
take all reasonable steps to restrict access to such information in a
manner designed to maintain the confidential nature of such information,
in each case until such time as the same ceases to be Confidential
Information or as such Loan Party may otherwise instruct. It is
understood, however, that the foregoing will not restrict the Recipient's
ability to freely exchange such Confidential Information with prospective
participants in or assignees of the Recipient's position herein, but the
Recipient's ability to so exchange Confidential Information shall be
conditioned upon any such prospective participant's entering into an
agreement as to confidentiality similar to this Section 11.08. It is
further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information if and to the extent that such
disclosure may be required (i) by a regulatory agency or otherwise in
connection with an examination of the Recipient's records by appropriate
authorities, (ii) pursuant to court order, subpoena or other legal process
or (iii) otherwise, as required by law; in the event of any required
disclosure under clause (ii) or (iii), above, the Recipient agrees to use
reasonable efforts to inform the Borrower as promptly as practicable to
the extent not prohibited by law.
SECTION 11.09. Waiver of Jury Trial. THE BORROWER, THE AGENTS,
THE LC BANKS AND THE LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OTHER
INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
SECTION 11.10. Governing Law. This Agreement and the Notes shall
be governed by, and construed in accordance with, the laws of the State of
New York. The Borrower, the Lenders, the LC Banks and the Agents each
(i) irrevocably submits to the jurisdiction of any New York State court or
Federal court sitting in New York City in any action arising out of any
Loan Document, (ii) agrees that all claims in such action may be decided
in such court, (iii) waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum and (iv) consents to the service
of process by mail. A final judgment in any such action shall be
conclusive and may be enforced in other jurisdictions. Nothing herein
shall affect the right of any party to serve legal process in any manner
permitted by law or affect its right to bring any action in any other
court.
SECTION 11.11. Relation of the Parties; No Beneficiary. No term,
provision or requirement, whether express or implied, of any Loan
Document, or actions taken or to be taken by any party thereunder, shall
be construed to create a partnership, association, or joint venture
between such parties or any of them. No term or provision of the Loan
Documents shall be construed to confer a benefit upon, or grant a right or
privilege to, any Person other than the parties hereto and, in the case of
the Pledge Agreements and the Collateral Agency and Intercreditor
Agreement, the Noteholders.
SECTION 11.12. Effectiveness; Reference to and Effect on the Loan
Documents. (a) This Amended and Restated Credit Agreement shall become
effective as of the date first above written when and if (i) the consent
attached hereto shall have been executed and delivered by Enterprises,
(ii) counterparts of this Agreement shall have been executed by the each
of the Lenders, the Agents and the Borrower and (iii) the Documentation
Agent shall have received (A) an opinion of counsel for the Loan Parties,
in form, scope and substance satisfactory to the Co-Agents, (B) the Cash
Collateral Agreement, duly executed by the Borrower, and (C) a certificate
of a duly authorized officer of the Borrower (the statements in which
shall be true) as to the statements contained in Section 6.03(a)(i), (iii)
and (iv) (assuming, solely for purposes of such certificate, that this
amendment and restatement constitutes an Extension of Credit).
(b)Upon the effectiveness of this Agreement, on and after the date
hereof each reference in the other Loan Documents to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit
Agreement, as amended and restated hereby.
(c)Except as specifically amended above, the Credit Agreement and
the Notes, and all other Loan Documents, are and shall continue to be in
full force and effect and are hereby in all respects ratified and
confirmed. Without limiting the generality of the foregoing, the Security
Documents and all of the Collateral described therein do and shall
continue to secure the payment of all obligations of the Borrower under
the Credit Agreement, the Notes and the other Loan Documents, in each case
as amended and restated hereby.
(d)The execution, delivery and effectiveness of this Agreement
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Agents under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 11.13. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and
the same Agreement.
SECTION 11.14. Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the certificates
pursuant hereto shall be considered to have been relied upon by the Agents
and the Lenders and shall survive the making by the Lenders of the
Extensions of Credit and the execution and delivery to the Lenders of the
Notes evidencing the Extensions of Credit and shall continue in full force
and effect so long as any Note or any amount due hereunder is outstanding
and unpaid or any Commitment of any Lender has not been terminated.
84
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as
of the date first above written.
CMS ENERGY CORPORATION
By /s/ A M Wright
______________________________
Senior Vice President and
Chief Financial Officer
CITIBANK, N.A.,
as Co-Agent and Documentation
Agent
By /s/ Anita J. Brickell
______________________________
Vice President
UNION BANK,
as Co-Agent and Operational Agent
By /s/ PSaggan
______________________________
Vice President
Commitment Bank
- ---------- ----
$28,000,000.00 CITIBANK, N.A.
By /s/ Anita J. Brickell
______________________________
Vice President
Commitment Bank
- ---------- ----
$28,000,000.00 UNION BANK
By /s/ John M. Edmonston
______________________________
Vice President
Commitment Bank
- ---------- ----
$25,000,000.00 BARCLAYS BANK PLC
By /s/ John P Bock
______________________________
Title: Associate Director
Commitment Bank
- ---------- ----
$25,000,000.00 THE CHASE MANHATTAN BANK, N.A.
By /s/ Richard W. Cortwright, Jr.
______________________________
Title: V P
Commitment Bank
- ---------- ----
$25,000,000.00 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Christine S. Frank
______________________________
Title: Vice President
Commitment Bank
- ---------- ----
$23,000,000.00 THE LONG-TERM CREDIT BANK
OF JAPAN, LTD.
By /s/ Brady S. Sadek
______________________________
Title: Vice President &
Deputy General Manager
Commitment Bank
- ---------- ----
$18,000,000.00 MICHIGAN NATIONAL BANK
By /s/ Mark Aben
______________________________
Title: Vice President
Commitment Bank
- ---------- ----
$18,000,000.00 THE TORONTO-DOMINION BANK
By /s/ Debbie A. Greene
______________________________
Title:
Debbie A. Greene
Mgr. Cr. Admin.
Commitment Bank
- ---------- ----
$15,000,000.00 CANADIAN IMPERIAL BANK OF
COMMERCE
By /s/ Margaret E. McTigue
______________________________
Title: Authorized Signatory
Commitment Bank
- ---------- ----
$15,000,000.00 NATIONAL WESTMINSTER BANK PLC
By /s/ Karen N. Grafe
______________________________
Title: Vice President
EXHIBIT 3.01
FORM OF NOTICE OF BORROWING
Union Bank, as Operational
Agent for the Lenders parties
to the Credit Agreement
referred to below
Attention: Paula Maguire Reese
Assistant Vice President
[Date]
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Amended
and Restated Credit Agreement, dated as of November 30, 1992, as amended
and restated as of October 15, 1993 (as so amended and restated and as it
amy be further amended, modified or supplemented from time to time, the
"Credit Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined), among the Borrower, the
Lenders named therein, the Co-Agents, the Documentation Agent and the
Operational Agent, and hereby gives you notice, irrevocably, pursuant to
Section 3.01 of the Credit Agreement that the undersigned hereby requests
a Borrowing under the Credit Agreement, and in that connection sets forth
below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 3.01(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
____________, 19___.
(ii)The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii)The aggregate amount of the Proposed Borrowing is
$___________.
1[(iv) The initial Interest Period for each Advance made as part
of the Proposed Borrowing is ____ months.]
The undersigned hereby acknowledges that the delivery of this
Notice of Borrowing shall constitute a representation and warranty by the
Borrower that, on the date of the Proposed Borrowing, the statements
contained in Section 5.03(a) [(other than clause (ii) thereof)]2 [(other
than clause (iii) thereof)]3 of the Credit Agreement are true.
Very truly yours,
CMS ENERGY CORPORATION
By ____________________________
Title:
____________________
1 To be included for a Proposed Borrowing comprised of Eurodollar Rate
Advances.
2 To be included for all Extensions of Credit other than the initial
Extension of Credit.
3 To be included for the initial Extension of Credit.
EXHIBIT 3.02
FORM OF NOTICE OF CONVERSION
Union Bank, as Operational
Agent for the Lenders parties
to the Credit Agreement
referred to below
Attention: Paula Maguire Reese
Assistant Vice President
[Date]
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Amended
and Restated Credit Agreement, dated as of November 30, 1992 as amended
and restated as of October 15, 1993 (as so amended and restated and as it
may be further amended, modified or supplemented from time to time, the
"Credit Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined), among the Borrower, the
Lenders named therein, the Co-Agents, the Documentation Agent and the
Operational Agent, and hereby gives you notice, irrevocably, pursuant to
Section 3.02 of the Credit Agreement that the undersigned hereby requests
a Conversion under the Credit Agreement, and in that connection sets forth
below the information relating to such Conversion (the "Proposed
Conversion") as required by Section 3.02 of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is
____________________, _____.
(ii)The Type of Advances comprising the Proposed Conversion is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii)The aggregate amount of the Proposed Conversion is
$_________________.
(iv)The Type of Advances to which such Advances are proposed
to be Converted is [Base Rate Advances] [Eurodollar Rate Advances].
(v) The Interest Period for each Advance made as part of the
Proposed Conversion is ____ month(s).*
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Conversion:
(A) The Borrower's request for the Proposed Conversion is made
in compliance with Sections 3.02, 3.03 and 3.04 of the Credit
Agreement; and
(B) No Unmatured Default or Event of Default has occurred and
is continuing.
Very truly yours,
CMS ENERGY CORPORATION
By ______________________________
Title:
_____________________________
* Delete for Base Rate Advances
EXHIBIT 5.03
FORM OF CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT, dated as of October ___, 1993, made
by CMS ENERGY CORPORATION, a Michigan corporation (the "Pledgor"), to
Union Bank ("Union Bank"), as operational agent (the "Operational Agent")
for the lenders (the "Lenders") parties to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
----------------------
(1) Citibank, N.A. and Union Bank, as Co-Agents, and the
Lenders have entered into a Credit Agreement, dated as of November 30,
1992, as amended and restated as of October 15, 1993 (said Agreement, as
so amended and restated and as it may hereafter be amended or otherwise
modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as
therein defined), with the Pledgor.
(2) Pursuant to Section 5.03(b) of the Credit Agreement, any
prepayments required by such subsection are to be applied to outstanding
Base Rate Advances up to the full amount thereof before they are applied,
first, to outstanding Eurodollar Rate Advances and, second, as cash
collateral, pursuant to this Agreement, to secure LC Outstandings.
(3) The cash collateral referenced in preliminary statement
(2), above, shall be deposited by the Operational Agent in a special
non-interest-bearing cash collateral account (the "Account") with the
Operational Agent at its office at 445 South Figueroa Street, 15th Floor,
Los Angeles, California 90071, Account No. 2200411911 (or at such other
office of the Operational Agent as the Operational Agent may, from time to
time, notify the Pledgor), in the name of the Pledgor but under the sole
control and dominion of the Operational Agent and subject to the terms of
this Agreement.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Pledgor hereby agrees with the Operational Agent
for its benefit and the ratable benefit of the Lenders as follows:
SECTION 1. Pledge and Assignment. The Pledgor hereby pledges
and assigns to the Operational Agent for its benefit and the ratable
benefit of the Lenders, and grants to the Operational Agent for its
benefit and the ratable benefit of the Lenders a security interest in, the
following collateral (the "Collateral"):
(i) the Account, all funds held therein and all certificates
and instruments, if any, from time to time representing or evidencing
the Account;
(ii)all Investments (as hereinafter defined) from time to
time, and all certificates and instruments, if any, from time to time
representing or evidencing the Investments;
(iii)all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Operational Agent for or on behalf of
the Pledgor in substitution for or in addition to any or all of the
then existing Collateral;
(iv)all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Collateral; and
(v) all proceeds of any and all of the foregoing Collateral.
SECTION 2. Security for Obligations. This Agreement secures
the payment of all reimbursement obligations of the Borrower now or
hereafter existing with respect to LC Outstandings, and all obligations of
the Pledgor now or hereafter existing under this Agreement (all such
obligations of the Borrower and the Pledgor being the "Obligations").
Without limiting the generality of the foregoing, this Agreement secures
the payment of all amounts which constitute part of the Obligations and
would be owed by the Borrower to the Operational Agent or the Lenders
under the Credit Agreement and the Notes but for the fact that they are
unenforceable or not allowable due to of the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower. The
Obligations secured by this Agreement are subject to the terms of the
Collateral Agency and Intercreditor Agreement.
SECTION 3. Delivery of Collateral. All certificates or
instruments, if any, representing or evidencing the Collateral shall be
delivered to and held by or on behalf of the Operational Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Operational Agent.
The Operational Agent shall have the right, at any time upon the
occurrence and during the continuance of an Event of Default or an
Unmatured Default, in its discretion and without notice to the Pledgor, to
transfer to or to register in the name of the Operational Agent or any of
its nominees any or all of the Collateral. In addition, the Operational
Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
SECTION 4. Maintaining the Account. So long as any Lender has
any Commitment or any Note shall remain unpaid:
(a) The Pledgor will maintain the Account with the Operational
Agent.
(b) It shall be a term and condition of the Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Account and except as otherwise provided by
the provisions of Section 6 and Section 13, that no amount (including
interest on the Account, if any) shall be paid or released to or for
the account of, or withdrawn by or for the account of, the Pledgor or
any other Person (other than the Operational Agent and the Lenders)
from the Account.
The Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of
any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 5. Investing of Amounts in the Account. If requested
by the Pledgor, the Operational Agent will, subject to the provisions of
Section 6 and Section 13, from time to time (a) invest amounts on deposit
in the Account in such Permitted Investments as the Pledgor may select and
the Operational Agent may approve and (b) invest interest paid on the
Permitted Investments referred to in clause (a), above, and reinvest other
proceeds of any such Permitted Investments which may mature or be sold, in
each case in such Permitted Investments as the Pledgor may select and the
Operational Agent may approve (the Permitted Investments referred to in
clauses (a) and (b), above, being collectively "Investments"). Interest
and proceeds that are not invested or reinvested in Investments as
provided above shall be deposited and held in the Account.
SECTION 6. Release of Amounts. So long as no Event of Default
or Unmatured Default shall have occurred and be continuing, the
Operational Agent will pay and release to the Pledgor or at its order,
upon the request of the Pledgor, (a) amounts of credit balance of the
Account and of principal of any other Collateral when matured or sold to
the extent that (i) the sum of the credit balance of the Account plus the
aggregate outstanding principal amount of all other Collateral exceeds
(ii) the aggregate amount of LC Outstandings in respect of all Letters of
Credit and all other amounts owing by the Pledgor hereunder, (b) all
amounts in the Account if the Commitments exceed the aggregate amount of
LC Outstandings in respect of all Letters of Credit and all other amounts
owing by the Pledgor hereunder and (c) all interest and earnings on the
Investments deposited and held in the Account.
SECTION 7. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The Pledgor is the legal and beneficial owner of the
Collateral free and clear of any lien, security interest, option or other
charge or encumbrance except for the security interest created by this
Agreement.
(b) The pledge and assignment of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in theCollateral, securing the payment of the Obligations.
(c) No consent of any other Person and no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge
and assignment by the Pledgor of the Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the
Pledgor, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest) or (iii) for the exercise by the Operational Agent of its rights
and remedies hereunder.
(d) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
(e) The Pledgor has, independently and without reliance upon
the Operational Agent or any Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.
SECTION 8. Further Assurances. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor
will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that
the Operational Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or
to enable the Operational Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.
SECTION 9. Transfers and Other Liens. The Pledgor agrees that
it will not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, or (ii) create or permit to exist any lien, security interest,
option or other charge or encumbrance upon or with respect to any of the
Collateral, except for the security interest under this Agreement.
SECTION 10. Operational Agent Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Operational Agent the Pledgor's
attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time
upon the occurrence and during the continuance of an Event of Default or
Unmatured Default or otherwise to the extent that the Operational Agent
shall reasonably deem any action to be necessary in order to maintain its
security interest in the Collateral, in the Operational Agent's
discretion, to take any action and to execute any instrument which the
Operational Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive,
indorse and collect all instruments made payable to the Pledgor
representing any interest payment, dividend or other distribution in
respect of the Collateral or any part thereof and to give full discharge
for the same.
SECTION 11. Operational Agent May Perform. If the Pledgor
fails to perform any agreement contained herein, the Operational Agent may
itself perform, or cause performance of, such agreement, and the expenses
of the Operational Agent incurred in connection therewith shall be payable
by the Pledgor under Section 14.
SECTION 12. The Operational Agent's Duties. The powers
conferred on the Operational Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Operational Agent shall have no duty as to any Collateral,
as to ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Operational Agent or any Lender has or is
deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Operational Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Operational Agent accords its own
property.
SECTION 13. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Operational Agent may, without notice to the Pledgor
except as required by law and at any time or from time to time,
charge, set-off and otherwise apply all or any part of the Account
against the Obligations or any part thereof.
(b) The Operational Agent may also exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code in effect
in the State of New York at that time (the "Code") (whether or not
the Code applies to the affected Collateral), and may also, without
notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of
the Operational Agent's offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as the Operational
Agent may deem commercially reasonable. The Pledgor agrees that, to
the extent notice of sale shall be required by law, at least ten
days' notice to the Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall
constitute reasonable notification. The Operational Agent shall not
be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Operational Agent may adjourn any public
or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(c) Any cash held by the Operational Agent as Collateral and
all cash proceeds received by the Operational Agent in respect of any
sale of, collection from, or other realization upon all or any part
of the Collateral may, in the discretion of the Operational Agent, be
held by the Operational Agent as collateral for, and/or then or at
any time thereafter be applied (after payment of any amounts payable
to the Operational Agent pursuant to Section 14) in whole or in part
by the Operational Agent for the ratable benefit of the Lenders
against, all or any part of the Obligations in such order as the
Operational Agent shall elect. Any surplus of such cash or cash
proceeds held by the Operational Agent and remaining after payment in
full of all the Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
SECTION 14. Expenses. The Pledgor will upon demand pay to the
Operational Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts and
agents, which the Operational Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of the
Operational Agent or the Lenders hereunder or (iv) the failure by the
Pledgor to perform or observe any of the provisions hereof.
SECTION 15. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the
Pledgor herefrom shall in any event be effective unless the same shall be
in writing and signed by the Operational Agent, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, facsimile, telex or cable communication) and mailed,
telegraphed, telecopied, telexed, cabled or delivered, if to the Pledgor,
at its address at Fairlane Plaza South, 330 Town Center Drive, Suite 1100,
Dearborn, Michigan 48126, Attention: Rodger A. Kershner, Esq., with a copy
to Doris F. Galvin, Vice President, 212 West Michigan Avenue, Jackson,
Michigan 49201, and if to the Operational Agent, at its address specified
in the Credit Agreement, or, as to either party, at such other address as
shall be designated by such party in a written notice to the other party.
All such notices and communications shall, when mailed, telegraphed,
telecopied, telexed or cabled, be effective five days after when deposited
in the mails, or when delivered to the telegraph company, telecopied,
confirmed by telex answerback or delivered to the cable company,
respectively.
SECTION 17. Continuing Security Interest; Assignments under
Credit Agreement. This Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect
until the later of (x) the payment in full of the Obligations and all
other amounts payable under this Agreement and (y) the expiration or
termination of the Commitments, (ii) be binding upon the Pledgor, its
successors and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Operational Agent, the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), any Lender may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and any Note held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise,
subject, however, to the provisions of Article X (concerning the Agents)
and Section 11.07 of the Credit Agreement. Upon the later of the payment
in full of the Obligations and all other amounts payable under this
Agreement and the expiration or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Pledgor. Upon any such termination, the
Operational Agent will, at the Pledgor's expense, return to the Pledgor
such of the Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such
termination.
SECTION 18. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York, except to the extent that perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral
are governed by the laws of a jurisdiction other than the State of New
York. Unless otherwise defined herein or in the Credit Agreement, terms
defined in Article 9 of the Code are used herein as therein defined.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
CMS ENERGY CORPORATION
By _______________________________
Title:
ACCEPTED AND AGREED:
UNION BANK, as Operational Agent
By ___________________________________
Vice President
EXHIBIT 6.02A
FORM OF PROMISSORY NOTE
U.S.$__________ Dated: __________, 19__
FOR VALUE RECEIVED, the undersigned, CMS ENERGY CORPORATION, a
Michigan corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order
of ____________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal sum of U.S.$[amount of the Lender's Commitment in figures] or,
if less, the aggregate principal amount of all Advances (as defined below)
made by the Lender to the Borrower pursuant to the Credit Agreement
outstanding on the Termination Date (as defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates, and payable at such times,
as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Union Bank, as Operational Agent, at its
offices at 445 South Figueroa Street, 15th Floor, Los Angeles, California
90071, in same day funds. Each Advance made by the Lender to the Borrower
pursuant to the Credit Agreement, and all payments made on account of the
principal amount thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of
this Promissory Note, provided that the failure to so record any Advance
or any payment on account thereof shall not affect the payment obligations
of the Borrower hereunder or under the Credit Agreement.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement, dated as of
November 30, 1992 (as amended, modified or supplemented from time to time,
the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined), among the Borrower,
the Lender and certain other Lenders parties thereto, the Co-Agents, the
Documentation Agent and the Operational Agent, and the Security Documents
referred to therein and entered into pursuant thereto. The Credit
Agreement, among other things, (i) provides for the making of advances
(the "Advances") by the Lender to the Borrower from time to time in an
aggregate amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such
Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.
The obligations evidenced by this Promissory Note are subject to
the terms of the Collateral Agency and Intercreditor Agreement.
CMS ENERGY CORPORATION
By _______________________________
Senior Vice President and
Chief Financial Officer
ADVANCES AND PAYMENTS OF PRINCIPAL
__________________________________________________________________________
Amount of
Amount Principal Unpaid
of Paid or Principal Notation
Date Advance Prepaid Balance Made By
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
EXHIBIT 6.02C
FORM OF OPINION OF COUNSEL FOR THE LOAN PARTIES
[Date of Initial Extension of Credit]
To each of the Lenders parties
to the Credit Agreement referred
to below, and to Citibank, N.A.
and Union Bank, as Agents under
the Credit Agreement
CMS Energy Corporation
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 5.02(vii)(A)
of the Credit Agreement, dated as of November 30, 1992 (the "Credit
Agreement"), among CMS Energy Corporation (the "Borrower"), the Banks
parties thereto and the other Lenders from time to time parties thereto,
Citibank, N.A. and Union Bank, as Co-Agents, Citibank, N.A., as
Documentation Agent, and Union Bank, as Operational Agent. Capitalized
terms not defined herein have the meanings ascribed thereto in the Credit
Agreement and the other Loan Documents (as defined in the Credit
Agreement). Certain other terms, as noted herein, are used as defined in
the Uniform Commercial Code as presently in effect in the State of New
York (the "UCC").
We have acted as counsel for the Borrower and the Guarantor in
connection with the preparation, execution and deliver of, and the initial
Extension of Credit made under, the Credit Agreement and the other Loan
Documents.
In that capacity, we have examined:
(a) The Credit Agreement;
(b) The Notes;
(c) The Borrower Pledge Agreement;
(d) The Enterprises Pledge Agreement;
(e) The Guaranty;
(f) The Collateral Agency and Intercreditor Agreement;
(g) Certificates representing the Pledged Shares and undated
stock powers duly executed by the appropriate Pledgor with
respect thereto;
(h) The Articles of Incorporation of the Borrower and all
amendments thereto (the "Borrower Charter");
(i) The by-laws of the Borrower and all amendments thereto
(the "Borrower By-laws");
(j) The Articles of Incorporation of Enterprises and all
amendments thereto (the "Enterprises Charter"); and
(k) The by-laws of Enterprises and all amendments thereto (the
"Enterprises By-laws").
In addition, we have examined the originals, or copies certified
to our satisfaction, of such other corporate records of the Borrower and
of Enterprises, certificates of public officials and of officers of the
Borrower and of Enterprises, and agreements, instruments and other
documents, as we have deemed necessary as a basis for the opinions
expressed below. As to various questions of fact material to such
opinions, we have, when relevant facts were not independently established
by us, relied upon the representations of the Borrower and Enterprises in
the Loan Documents, and upon certificates of the Borrower and Enterprises
of their respective officers or of public officials.
We have assumed (i) the due execution and delivery, pursuant to
due authorization, of each document referred to in clauses (a) through (f)
above by all parties to such document (other than the Loan Parties),
(ii) the authenticity of all such documents submitted to us as originals,
(iii) the genuineness of all signatures (other than those of the Loan
Parties), and (iv) the conformity to the originals of all such documents
submitted to us as copies.
Based upon the foregoing and upon such investigation as we have
deemed necessary, we are of the following opinion:
1. Each of the Borrower and Enterprises is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Michigan.
2. The execution, delivery and performance by the Borrower of
the Credit Agreement, the Notes and the other Loan Documents to which
it is, or is to be, a party, and the performance by the Borrower of
the Collateral Agency and Intercreditor Agreement, are within the
corporate power and authority of the Borrower, have been duly
authorized by all necessary corporate action, and do not contravene
(a) the Borrower Charter or the Borrower By-laws, (b) any provision
of applicable law or (c) any legal or contractual restriction of
which we have knowledge, after due inquiry, binding on the Borrower
or its properties; and such execution, delivery and performance do
not result in or require the creation or imposition of any mortgage,
deed of trust, pledge, or Lien upon or with respect to any of its
properties (other than under the Security Documents). The Credit
Agreement, the Notes and the Borrower Pledge Agreement have been duly
executed and delivered on behalf of the Borrower.
3. The execution, delivery and performance by Enterprises of
the Guaranty and the Enterprises Pledge Agreement are within the
corporate power and authority of Enterprises, have been duly
authorized by all necessary corporate action, and do not contravene
(a) the Enterprises Charter or the Enterprises By-laws, (b) any
provision of applicable law or (c) any legal or contractual
restriction of which we have knowledge, after due inquiry, binding on
Enterprises or its properties; and such execution, delivery and
performance do not result in or require the creation or imposition of
any mortgage, deed or trust, pledge, or Lien upon or with respect to
any of its properties (other than under the Security Documents). The
Guaranty and the Enterprises Pledge Agreement have been duly executed
and delivered on behalf of Enterprises.
4. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for (a) the valid execution, delivery and
performance by (i) the Borrower of the Credit Agreement and the other
Loan Documents to which it is, or is to be, a party, or
(ii) Enterprises of the Guaranty and the Enterprises Pledge
Agreement, or (b) the creation of any Lien purported to be granted or
created pursuant to any Security Document or the exercise by the
Collateral Agent (on behalf of the Lenders and the Noteholders) or
any Agent (on behalf of the Lenders) of any right or remedy in
respect of any Pledged collateral under the Pledge Agreements, except
for such authorizations, approvals and filings as have been duly
obtained or made and which are in full force and effect on the date
hereof and not subject to appeal.
5. The Credit Agreement, the Notes, the Borrower Pledge
Agreement and the Collateral Agency and Intercreditor Agreement
constitute legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective
terms.
6. The Guaranty and the Enterprises Pledge Agreement
constitute legal, valid and binding obligations of Enterprises,
enforceable against Enterprises in accordance with their respective
terms.
7. Except as disclosed in the Borrower's Quarterly Report on
Form 10-Q for the period ended September 30, 1992, we are not aware,
after due inquiry, of any pending or threatened action or proceeding
against the Borrower or its properties before any court, governmental
agency or arbitrator, that could, if adversely determined, reasonably
be expected to materially adversely affect the financial condition,
properties, business or operations of the Borrower, the legality,
validity or enforceability of the Creditor Agreement or any other
Loan Document to which the Borrower is, or is to be, a party, or the
validity, enforceability, perfection or priority of any Lien
purported to be granted by or under any Security Document to which
the Borrower is, or is to be, a party.
8. Except as disclosed in the Borrower's Quarterly Report on
Form 10-Q for the period ended September 30, 1992, we are not aware,
after due inquiry, of any pending or threatened action or proceeding
against Enterprises or its properties before any court, governmental
agency or arbitrator, that could, if adversely determined, reasonably
be expected to materially adversely affect the financial condition,
properties, business or operations of Enterprises, the legality,
validity or enforceability of the Guaranty or the Enterprises Pledge
Agreement, or the validity, enforceability, perfection or priority of
any Lien purported to be granted by or under the Enterprises Pledge
Agreement.
9. The Pledged Shares (as defined in the Borrower Pledge
Agreement) have been duly authorized and validly issued, are fully
paid and non-assessable, and constitute 100% of the issued and
outstanding shares of common stock of Consumers and Enterprises.
10. The Pledged Shares (as defined in the Enterprises Pledge
Agreement) have been duly authorized and validly issued, are fully
paid and non-assessable, and constitute 100% of the issued and
outstanding shares of common stock of Nomeco.
11. When the Collateral Agent takes delivery in the State of
New York of the certificates representing the Pledged Shares (as
defined in the Borrower Pledge Agreement) and stock powers duly
executed by the Borrower with respect thereto, and for so long as the
Collateral Agent shall maintain possession of such certificates in
such State, the Borrower Pledge Agreement creates a valid security
interest in favor of the Collateral Agent for the benefit of the
Lenders and the Noteholders in all Pledged Collateral (as defined
therein) in which the Borrower has rights to the extent that the UCC
is applicable thereto, as security for the payment of the Obligations
(as defined therein) and the Collateral Agent shall have a perfected
security interest in all right, title and interest of the Borrower in
such Pledged Shares, prior to other security interest and prior to
any other adverse claims (as defined in Section 8-302(2) of the UCC),
if any, to the extent that such Pledged Shares continue to constitute
certificated securities (as defined in Section 8-102(1)(a) of the
UCC).
12. When the Collateral Agent takes deliver in the State of
New York of the certificates representing the Pledged Shares (as
defined in the Enterprises Pledge Agreement) and stock powers duly
executed by Enterprises with respect thereto, and for so long as the
Collateral Agent shall maintain possession of such certificates in
such State, the Enterprises Pledge Agreement creates a valid security
interest in favor of the Collateral Agent for the benefit of the
Lenders and the Noteholders in all Pledged Collateral (as defined
therein) in which Enterprises has rights to the extent that the UCC
is applicable thereto, as security for the payment of the Obligations
(as defined therein) and the Collateral Agent shall have a perfected
security interest in all right, title and interest of Enterprises in
such Pledged Shares, prior to other security interests and prior to
any other adverse claims (as defined in Section 8-302(2) of the UCC),
if any, to the extent that such Pledged Shares continue to constitute
certificated securities (as defined in Section 8-102(1)(a) of the
UCC).
Due inquiry with respect to the forgoing opinions consisted of
interviewing certain officers of the Borrower and Enterprises and
reviewing such records and documents of the Borrower and Enterprises as we
deemed appropriate to render such opinions.
The opinions set forth in paragraphs 5, 6, 11 and 12, above, are
subject to the following qualifications:
(a) In connection with the opinions expressed in paragraphs 5,
6, 11 and 12, the enforceability of the security interests described
therein, the enforceability of the Borrower's obligations under the
Credit Agreement, the Notes and the other Loan Documents to which it
is, or is to be, a party, and the enforceability of Enterprises'
obligations under the Guaranty and the Enterprises Pledge Agreement,
are or, in the case of any Loan Document executed and delivered by
the Borrower after the date hereof, will be, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally. We further
note that certain of the rights and remedies set forth in the
Security Documents are or may be unenforceable under the laws of the
State of New York, but the inclusion of such provisions does not
affect the validity of such Security Documents, and such security
Documents contain adequate provisions, if properly invoked, for the
enforcement under New York law of the security interests granted
therein.
(b) In connection with the opinions expressed in paragraphs 5,
6, 11 and 12, as to the enforceability of the security interests
described therein, the enforceability of the Borrower's obligations
under the Credit Agreement, the Notes and the other Loan Documents to
which it is, or is to be, a party, and the enforceability of
Enterprises' obligations under the Guaranty and the Enterprises
Pledge Agreement, are subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law). Such principles of equity are of
general application and, in applying such principles, a court, among
other things, might not allow a contracting party to exercise
remedies in respect of a default deemed immaterial, or might decline
to order an obligor to perform covenants. Such principles would
include an expectation that parties act with reasonableness and in
good faith, and might be applied, for example, to provisions which
purport to grant a party with the authority to exercise sole
discretion or make conclusive determinations.
(c) We note further that, in addition to the application of
equitable principles described above, courts have imposed an
obligation or contracting parties to act reasonably and in good faith
in the exercise of their contractual rights and remedies, and may
also apply public policy considerations in limiting the right of
parties seeking to obtain indemnification under circumstances where
the conduct of such parties in the circumstances in question is
determined to have constituted negligence.
(d) In connection with the opinions expressed in paragraphs 11
and 12, above, and as to cash proceeds of "Pledged Collateral", we
point out that in the case of proceeds, continuation of the
perfection of the security interests therein of the Collateral Agent
is limited to the extent set forth in Section 9-306 of the UCC.
(e) In connection with the opinions expressed in paragraphs 11
and 12, above, we have assumed that, at the time that the Collateral
Agent takes delivery of the certificates representing the Pledged
Shares, the Collateral Agent, on behalf of itself, each Lender and
each Noteholder, has taken possession of such certificates in good
faith (on the part of the Collateral Agent, each Lender and each
Noteholder) in the absence of notice (to the Collateral Agent, any
Lender or any Noteholder) of any adverse claim (as defined in Section
8-302(2) of the UCC) with respect thereto.
(f) With respect to the opinions set forth in paragraphs 11
and 12, above, we have assumed that none of the pledgors has granted
or permitted, nor does there otherwise exist, any execution or
attachment on any of the Collateral or any other Lien therein or
thereon which does not require steps for perfection under the UCC of
any jurisdiction to be enforceable against third parties.
(g) We express no opinion herein as to:
(i) any Loan Party's rights in or title to any Pledged
Collateral, or the authenticity or enforceability thereof;
(ii)the priority of the security interest created or
purported to be created by any Security Document in any of the
Pledged Collateral as against any claim or lien in favor of the
United States of America or any agency or instrumentality
thereof, including, without limitation, any Federal tax lien
created under the Internal Revenue Code of 1986 or lien created
under Title IV of ERISA;
(iii) the effect of the law of any jurisdiction (other
than the State of New York), wherein any Lender may be located
which limits rates of interest that may be charged or collected
by such Lender;
(iv)the compliance with, or applicability of, Federal or
state securities laws insofar s they may apply to the pledge or
enforcement of the Pledged Shares or other securities (as
defined in Section 8-102(1)(c) of the UCC) under the Pledge
Agreements:
(v) the priority of any security interests, except to the
extent specifically addressed by paragraphs 11 and 12;
(vi)the priority of security interests in any Pledged
Collateral relative to any claim (including for taxes) in favor
of any state or of its respective agencies, authorities,
municipalities or political subdivisions, which claim (or any
lien therefore) is given priority under any law of any state; or
(vii) the priority of security interests in any Pledged
Collateral as against any lien creditor (as such term is defined
in Article 9 of the UCC), to the extent that the security
interests therein purport to secure any advances or other
extensions of credit other than Advances made pursuant to
existing Commitments under the Credit Agreement.
(h) In addition, the opinions set forth in paragraphs 11 and
12, above, are subject to the limitations with respect to purchasers
of instruments of securities imposed by Sections 9-308, 9-309 and
8-301 of the UCC.
Our opinions expressed herein are limited to the laws of the
States of New York and Michigan and the Federal laws of the United States
of America. As to matters of Michigan law involved in the opinions
expressed herein, we have consulted with Rodger A. Kershner, Esq.,
Assistant General Counsel to the Borrower and Vice President and General
Counsel to Enterprises, who is licensed to practice law in the State of
Michigan. Mr. Kershner has confirmed to us that, insofar as matters of
Michigan law are involved in the opinions expressed herein, such opinions
are, in his opinion, correct. We believe that you and we are justified in
relying on Mr. Kershner's opinion for such purposes.
Except as otherwise specified herein, this opinion is being
delivered solely for the benefit of the parties to whom it is addressed.
Accordingly, it may not be quoted, filed with any governmental authority
or otherwise circulated or utilized for any other purpose without our
prior written consent.
Very truly yours,
EXHIBIT 6.02D
FORM OF OPINION OF COUNSEL TO THE AGENTS
[Date of Initial Extension of Credit]
To the Banks listed on Schedule A
hereto, and to Citibank, N.A. and
Union Bank, as Agents
CMS Energy Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to Citibank, N.A. and
Union Bank, individually and as Agents, in connection with the execution
and delivery of, and the making of the initial Extension of Credit on this
date under, the Credit Agreement, dated as of November 30, 1992 (the
"Credit Agreement"), among CMS Energy Corporation, the Banks parties
thereto and the other Lenders from time to time parties thereto, Citibank,
N.A. and Union Bank, as Co-Agents, Citibank, N.A., as Documentation Agent,
and Union Bank, as Operational Agent. Terms defined in the Credit
Agreement are used herein as therein defined.
In this connection, we have examined an executed counterpart of
the Credit Agreement, together with the other Loan Documents and other
documents listed on Schedule B hereto.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as
originals, the genuineness of all signatures, the due authority of the
parties executing such documents and the conformity to the originals of
all such documents submitted to us as copies. We have further assumed
that you have evaluated, and are satisfied with, the creditworthiness of
the Borrower and the Guarantor and the business and financial terms
evidenced by the Loan Documents. We have relied, as to factual matters,
on the documents we have examined.
Our opinions expressed below are limited to the law of the State
of New York and the Federal law of the United States, and we do not
express any opinions concerning any other law.
Based upon and subject to the foregoing and upon such
investigation as we have deemed necessary, and while we have not
independently considered the matters covered by the opinions listed on
Schedule B hereto to the extent necessary to enable us to express the
conclusions stated therein, we are of the opinion that (a) the Credit
Agreement, the Notes and the Guaranty are in substantially acceptable
legal form, and (b) the other Loan Documents and the opinions and other
documents listed on Schedule B hereto are substantially responsive to the
requirements of the corresponding subsections of Sections 5.01 and 5.02 of
the Credit Agreement pursuant to which the same have been delivered. In
connection with our review of the opinion of Loomis, Ewert, Ederer,
Parsley, Davis & Gotting, P.C., special Michigan counsel for the Loan
Parties, listed as item ___ on Schedule B hereto, we have relied upon the
opinion of Dickinson, Wright, Moon, Van Dusen & Freeman, special Michigan
counsel to the Lenders, a copy of which is attached as Exhibit A hereto.
Very truly yours
Schedule A
List of Banks
-------------
Schedule B
List of Documents Examined
--------------------------
EXHIBIT 6.02E
FORM OF OPINION OF SPECIAL MICHIGAN COUNSEL
FOR THE LOAN PARTIES
[Date of Initial Extension of Credit]
To each of the Lenders parties
to the Credit Agreement referred
to below, and to Citibank, N.A.
and Union Bank, as Agents under
the Credit Agreement
CMS Energy Corporation
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 5.02(vii)(C)
of the Credit Agreement, dated as of November 30, 1992 (the "Credit
Agreement"), among CMS Energy Corporation (the "Borrower"), the Banks
parties thereto and the other Lenders from time to time parties thereto,
Citibank, N.A. and Union Bank, as Co-Agents, Citibank, N.A., as
Documentation Agent, and Union Bank, as Operational Agent. Capitalized
terms not defined herein have the meanings ascribed thereto in the Credit
Agreement and the Security Documents (as defined in the Credit Agreement).
We have acted as special Michigan counsel for the Loan Parties
in connection with the preparation, execution and delivery of, and the
initial Extension of Credit made under, the Credit Agreement and the other
Loan Documents.
In that capacity, we have examined:
(a) The Credit Agreement;
(b) The Notes;
(c) The Borrower Pledge Agreement;
(d) The Enterprises Pledge Agreement;
(e) The Guaranty; and
(f) The Collateral Agency and Intercreditor Agreement.
In addition, we have examined the originals, or copies certified
to our satisfaction, of such other corporate records of the Borrower and
Enterprises, certificates of public officials and of officers of the
Borrower and Enterprises, and agreements, instruments and other documents
as we have deemed necessary as a basis for the opinions expressed below.
As to various questions of fact material to such opinions, we have, when
relevant facts were not independently established by us, relied upon the
representations of the Borrower and Enterprises in the Loan Documents, and
upon certificates of the Borrower and Enterprises or their respective
officers or of public officials.
We have assumed (i) the due execution and delivery, pursuant to
due authorization, of each document referred to in clauses (a) through (f)
above by all parties to such document, (ii) the authenticity of all such
documents submitted to us as originals, (iii) the genuineness of all
signatures and (iv) the conformity to the originals of all such documents
submitted to us as copies. In addition, it is our understanding that the
Credit Agreement, the Notes and the other Loan Documents will be delivered
in the State of New York, payments pursuant to the Notes will be made in a
state other than the State of Michigan, and the principal place of
business of the Collateral Agent is located in the State of New York.
Our opinions expressed herein are limited to the laws of the
State of Michigan.
Based upon the foregoing and upon such investigation as we have
deemed necessary, we are of the following opinion:
1. In any action or proceeding arising out of or relating to
the Credit Agreement, the Notes or any other Loan Document to which
the Borrower or Enterprises is, or is to be, a party in any Michigan
state court or any Federal court sitting in the State of Michigan,
such court would recognize and give effect to the provisions of the
Credit Agreement, the Notes or such other Loan Document, as the case
may be, wherein the parties thereto agree that the Credit Agreement,
the Notes or such other Loan Document, as the case may be, shall be
governed by, and construed in accordance with, the laws of the State
of New York, except in the case of those provisions set forth in the
Credit Agreement, the Notes and the other Loan Documents the
enforcement of which would contravene a fundamental policy of the
State of Michigan. In the course of our review of the Credit
Agreement, the Notes and the other Loan Documents, nothing has come
to our attention to indicate that any of such provisions would do so.
2. No authorization or approval or other action by, and no
notice to or filing with, any Michigan governmental authority or
regulatory body (including, without limitation, the Michigan Public
Service Commission) is required for (a) the valid execution, delivery
and performance by (i) the Borrower of the Credit Agreement and the
other Loan Documents to which it is, or is to be, a party, or
(ii) Enterprises of the Guaranty and the Enterprises Pledge
Agreement, or (b) the creation of any Lien purported to be granted or
created pursuant to any Security Document or the exercise by the
Collateral Agent (on behalf of the Lenders and the Noteholders) of
any right or remedy in respect of any Pledged collateral under the
Pledge Agreements.
Very truly yours,
EXHIBIT 11.07
FORM OF LENDER ASSIGNMENT
Dated ____________, 19___
Reference is made to the Amended and Restated Credit Agreement,
dated as of November 30, 1992, as amended and restated as of October 15,
1993 (said Agreement, as so amended and restated and as it may hereafter
be amended or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein
being used herein as therein defined), among the Borrower, the Lenders,
the Co-Agents, the Documentation Agent and the Operational Agent.
Pursuant to the Credit Agreement, ____________ (the "Assignor") has
committed to make advances ("Advances") to the Borrower, which Advances
are evidenced by a promissory note (the "Note") issued by the Borrower to
the Assignor.
The Assignor and ____________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that interest
in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under
the Credit Agreement (the "Assigned Interest"), including, without
limitation, such interest in the Assignor's Commitment, the Advances owing
to the Assignor and the Note held by the Assignor. After giving effect to
such sale and assignment, the Assignee's Commitment and the amount of the
Advances owing to the Assignee will be as set forth in Section 2 of
Schedule 1. The effective date of this sale and assignment shall be the
date specified on Schedule 1 hereto (the "Effective Date").
2. On ____________, 19___, the Assignee will pay to the
Assignor, in same day funds, at such address and account as the Assignor
shall advise the Assignee, $_________, and the sale and assignment
contemplated hereby shall thereupon become effective as of the Effective
Date. From and after the Effective Date, the Assignor agrees that the
Assignee shall be entitled to all rights, powers and privileges of the
Assignor under the Credit Agreement and the Note to the extent of the
Assigned Interest, including without limitation (i) the right to receive
all payments in respect of the Assigned Interest for the period from and
after the Effective Date, whether on account of principal, interest, fees,
indemnities in respect of claims arising after the Effective Date,
increased costs, additional amounts or otherwise, (ii) the right to vote
and to instruct the Agents under the Credit Agreement according to its
Percentage based on the Assigned Interest, (iii) the right to set-off and
to appropriate and apply deposits of the Borrower as set forth in the
Credit Agreement and (iv) the right to receive notices, requests, demands
and other communications. The Assignor agrees that it will promptly remit
to the Assignee any amount received by it in respect of the Assigned
Interest (whether from the Borrower, any Agent or otherwise) in the same
funds in which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection
with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement
or any other instrument or document furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance
or observance by the Borrower of any of its obligations under the Credit
Agreement or any other instrument or document furnished pursuant thereto.
Except as specified in this Section 3, the assignment of the Assigned
Interest contemplated hereby shall be without recourse to the Assignor.
4. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements
referred to in Section 6.01(e)(i) thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and purchase the Assigned
Interest, (ii) agrees that it will independently and without reliance upon
the Assignor and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement, (iii) confirms
that it satisfies the requirements of an Eligible Assignee, (iv) appoints
and authorizes each Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Documents as are delegated to each
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto, (v) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Lender and (vi) agrees
and acknowledges that (a) the Credit Agreement constitutes a "Replacement
Facility" under the Collateral Agency and Intercreditor Agreement and the
Pledge Agreements and (b) the obligations of the Borrower how or hereafter
existing under the Credit Agreement, the Notes and the other Loan
Documents, whether for principal, interest, fees, expenses or otherwise,
constitute "Bank Debt" under the Collateral Agency and Intercreditor
Agreement and that such obligations are subject to the provisions thereof.
In furtherance of the provisions of clause (vi), above, the Assignee
agrees to be bound by the terms and conditions of the Collateral Agency
and Intercreditor Agreement and of each of the Pledge Agreements and that
it shall constitute a "Lender" for all purposes thereunder.
5. This Assignment may be executed in any number of
counterparts and by different parties in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.
6. This Assignment shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made
on Schedule 1 hereto.
Schedule 1
to
Assignment Agreement
Dated ________, 19__
Section 1.
Percentage Interest: _____%
Section 2.
Assignee's Commitment: $____
Aggregate Outstanding
Principal Amount of
Advances owing to the Assignee:$____
Section 3.
Effective Date: ________, 19__
[NAME OF ASSIGNOR]
By:____________________
Title:
[NAME OF ASSIGNEE]
By:____________________
Title:
Schedule I
CMS ENERGY CORPORATION
Amended and Restated Credit Agreement, dated as of November 30, 1992,
as amended and restated as of October 15, 1993,
among CMS Energy Corporation, the Banks named therein,
Citibank, N.A. and Union Bank, as Co-Agents,
Citibank, N.A., as Documentation Agent, and
Union Bank, as Operational Agent
Name of Bank Domestic Lending Office Eurodollar
Lending Office
- ------------ ----------------------- ---------------
Barclays 75 Wall Street -Same-
Bank PLC New York, New York 10265
Telephone: 212.412.3571
Telecopier: 212.412.5002
Telex: 12-6946 BARCLADOM
Canadian Imperial 200 Galleria Parkway, N.W. -Same-
Bank of Commerce Suite 650
Atlanta, Georgia 30339
Telephone: 404.916.7031
Telecopier: 404.955.1185
Telex: 54-2413
Attention: Clare Coyne
Senior Associate
The Chase 1 Chase Manhattan Plaza -Same-
Manhattan 3rd Floor
Bank, N.A. Global Power Group
New York, New York 10081
Telephone: 212.552.7518
Telecopier: 212.552.1687
Attention: Mr. Richard Cortright
Citibank, N.A. 399 Park Avenue, 4th Floor -Same-
New York, New York 10043
Telephone: 212.559.2027
Telecopier:212.832.9859
Attention: Mr. Joseph W. Casson
The First National The First National Bank -Same-
Bank of Chicago of Chicago
One First National Plaza
Chicago, Illinois 60670
Telephone: 312.732.5443
Telecopier: 312.732.3055
Attention: Mr. Michael Murphy
The Long-Term 190 South LaSalle Street -Same-
Credit Bank of Suite 800
Japan, Ltd., Chicago, Illinois 60603
Chicago Branch Telephone: 312.704.1700
Telecopier: 312.704.8505
Michigan National 124 West Allegan -Same-
Bank Michigan National Tower
Commercial Loan Department 98-03
Lansing, Michigan 48933
Telephone: 517.377.3368
Telecopier: 517.377.3102
Attention: Mr. Mark Aben
National 175 Water Street -Same-
Westminster New York, New York
Bank PLC Telephone: 212.602.4149
Telecopier: 212.602.4118
Attention: Robert Passarello
The Toronto- Houston Agency -Same-
Dominion Bank Suite 1700
909 Fannin
Houston, Texas 77010
Telephone: 713.653.8245
Telecopier: 713.951.9921
Attention: Ms. Debbie A. Greene
Union Bank 445 South Figueroa Street -Same-
Los Angeles, California 90071
Telephone: 213.236.5809
Telecopier: 213.236.4096
Attention: John M. Edmonston
SCHEDULE II
INDEBTEDNESS OF CMS ENERGY
As of August 30, 1993
I.CMS GENERATION
A. CMS Energy Guaranty to Comerica in connection with letters of
credit entered into by CMS Generation Filer City, Inc. required
to cover debt service reserve, for Series A ($4,300,000) and
Series B ($585,000) debt originally dated as of August 29, 1990.
Beneficiary - Prudential Insurance Company.
B. CMS Energy Guaranty to Chase Manhattan in connection with Letter
of Credit Reimbursement Agreement entered into by CMS Generation
Grayling Company for equity and project cost overrun funding
dated as of August 23, 1991. Beneficiary - Barclays Bank
(outstanding Letter of Credit as of October 22, 1992 was
$10,000,000).
C. CMS Energy Parent Guaranty of CMS Generation Filer City Inc.'s
working capital loan obligation dated September 5, 1990
(estimated potential exposure up to $500,000).
D. CMS Energy Guaranty to Chase Manhattan in connection with the
letter of credit reimbursement by CMS Generation San Nicolas
Company for equity and project costs/fundings as required, as of
April 16, 1993 (outstanding as of August 30, 1993 was
$2,400,000).
E. CMS Energy Guaranty to Chase Manhattan in connection with the
letter of credit reimbursement by CMS Generation S.A. (Hidronor
Project) for $68,431,964 dated as of July 14, 1993 (outstanding
as of August 30, 1993 was $59,431,964).
II.CMS ENTERPRISES CO.
A. CMS Energy Guaranty of gas purchases of CMS Gas Marketing to
PG&E resources Company dated April 5, 1993 for an amount not to
exceed $200,000.
B. CMS Energy Guaranty to NBD guaranteeing payment of construction
completion costs, if any, in connection with Antrim CO2 removal
plant. (Total construction costs estimated to be $12.3MM, CMS
Share 60%).
C. CMS Energy Guaranty of CMS Gas Marketing Company transportation
obligations to Great Lakes Gas Transmission Company dated
October 31, 1990.
D. CMS Energy Guaranty for transportation service between ANR and
CMS Gas Marketing Company dated as of June 2, 1988.
E. CMS Energy Guaranty to Comerica in connection with a letter of
credit entered into by CMS Saginaw Bay Company required for cash
distributions from the partnership; dated as of February 6,
1992. Beneficiary - Mellon Bank, NA (outstanding Letter of
Credit as of August 30, 1993 was $1,028,000).
F. CMS Energy Guaranty to Union Oil Company for purchases of
natural gas, dated July 16, 1992 (estimated potential exposure
up to $600,000).
G. Master Lease Agreement, dated as of November 1, 1988, and
Supplement No. 2 thereto, dated October 1, 1991, between CMS
Enterprises and Meridian Leasing Corporation (outstanding as of
August 30, 1993 was $473,410.40).
H. Master Lease Agreement dated as of August 1, 1988 between CMS
Enterprises and BLC Corp., as supplemental (outstanding lease
obligations as of August 30, 1993 were $57,338.64).
I. Letter Agreement, dated as of August 29, 1990, among CMS
Enterprises and Comerica for the Filer City Project (outstanding
Letter of Credit as of August 30, 1993 was $4,649,324).
J. CMS Enterprises' letter agreement dated November 14, 1990
indemnifying Barclays Bank from expenses incurred in connection
with bond documentation submitted to the Michigan Strategic Fund
in connection with the Cadillac project.
III.CMS CAPITAL CORP.
Master Lease Agreement, dated as of December 27, 1989, and Supplement
No. 1 thereto, dated as of January 19, 1990, as amended, between CMS
Capital Corp. and Meridian Leasing; sublease to CMS Energy dated
June 29, 1990 (outstanding lease obligations as of August 30, 1993
were $4,125,554.00).
IV.MCV-RELATED AGREEMENTS
Pursuant to the terms of the Unwind Agreement among CMS Energy,
Midland Group, Ltd., Consumers Power Company ("Consumers Power"), CMS
Midland, Inc. ("CMS Midland"), MEC Development Corp. ("MDC"), and CMS
Midland Holdings Company ("CMS Holdings") made as of December 10,
1991, (1) Consumers Power assumed and agreed to discharge all
obligations of CMS Energy under the agreement described in Section
V.A. below, and (2) CMS Midland and CMS Holdings assumed and agreed
to discharge all obligations of CMS Energy under the agreements
described in Sections V.B. through and including V.G. below.
A. Amended and Restated Investor Partners Tax Indemnification
Agreement dated as of June 1, 1990 (CMS Holdings). CMS Holdings
agrees to indemnify the Investor Partners for certain tax
matters, including adverse tax consequences of the failure by
MDC to dispose of all MCV and Owner Trust Notes and Bonds by
December 31, 1992, backed by a CMS Energy Guaranty.
B. Stand-by Working Capital Facility dated as of June 14, 1990 (CMS
Energy as Participating Partner Affiliate). Under certain
circumstances CMS Energy agrees to provide MCV with, in an
aggregate amount not to exceed $5,261,000, for a working capital
loan ($5.2MM represents CMS Energy's interest of the total loan
commitment).
C. Parent Guaranty dated as of June 1, 1990 (CMS Energy as
Guarantor, as Parent of CMS Holdings). CMS Energy guarantees
both the payment and performance by CMS Holdings of its
obligations under the Investor Partners Tax Indemnification
Agreement and the First Midland Partnership Agreement and the
performance by First Midland Partnership of certain obligations
under the Participation Agreement and the Tax Indemnification
Agreement (estimated potential exposure up to $7,700,000).
D. Stipulated AGE Release Amount Payment between CMS Energy,
Consumers Power and Dow Chemical Company dated as of June 1,
1990. If Dow exercises its right to acquire the Alternate
Generating Equipment (AGE) under the Back-up SEPA (Steam and
Electric Purchase Agreement): (a) Consumers Power will pay the
amount, up to $85 million, by which Dow's cost of obtaining the
AGE exceeds the present value of the Dow Note under the Back-up
SEPA. (b) CMS Energy will pay the amount by which Dow's cost to
acquire the AGE (excluding the cost of discharging
non-consensual liens) exceeds $85 million or the Fair Market
Value of the AGE.
E. (1) Environmental Agreement by CMS Energy to United States
Trust Company of New York, Meridian Trust Company and the
Bondholders dated as of June 1, 1990. CMS Energy agrees
to indemnify the Debt for costs relating to certain
environmental matters.
(2) Environmental Agreement by CMS Energy to The Connecticut
National Bank dated as of June 1, 1990. CMS Energy agrees
to indemnify the Equity for costs relating to certain
environmental matters.
(3) Indemnity Agreement by CMS Energy to MCV dated as of
June 1, 1990. CMS Energy agrees to indemnify MCV for
costs relating to certain environmental matters.
F. Obligations of CMS Energy pursuant to the Expense Reimbursement
Agreement dated June 14, 1990, to reimburse First Midland
Limited Partnership for certain expenses.
G. Engagement Agreements with Morgan Stanley with respect to
private placement of sale leaseback debt and Salomon Brothers
and Drexel with respect to placement of lease equity. CMS
Energy indemnifies the investment bankers with respect to
expenses and liabilities arising in connection with these
transactions.
H. CMS Energy Indemnification of Stone & Webster in connection with
Feasibility Study and Gas Assurance Report prepared by Stone &
Webster.
I. Customary indemnification and contribution obligations in favor
of underwriters provided in connection with the offering and
sale of the MCV Bonds under (i) Senior Underwriting Agreement
dated November 1, 1991; (ii) Subordinated Underwriting Agreement
dated November 22, 1991; and (iii) Placement Agency Agreement
dated as of October 9, 1991.
CONSENT
The undersigned, as Guarantor and Pledgor under the Guaranty,
dated as of November 30, 1992, and under the Pledge Agreement, dated as of
October 8, 1992, as amended and restated as of November 30, 1992, in favor
of the Documentation Agent and the Collateral Agent, respectively, for the
benefit of the parties to the Existing Agreement referred to in the
foregoing Amended and Restated Credit Agreement, hereby consents to said
Amended and Restated Credit Agreement and hereby confirms and agrees that
(i) each of the Guaranty and the Pledge Agreement is, and shall continue
to be, in full force and effect and is hereby confirmed and ratified in
all respects except that, on and after the effective date of said Amended
and Restated Credit Agreement, each reference in the Guaranty and the
Pledge Agreement to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Amended and Restated Credit Agreement, and (ii) the
Pledge Agreement and all of the Collateral described therein do,
and shall continue to, secure the payment of all of the Obligations (as
defined therein).
CMS ENTERPRISES COMPANY
By /s/ MRWalicki
_____________________________
Title: Vice President-Finance
[EXECUTION COPY]
CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT, dated as of October 15, 1993, made by
CMS ENERGY CORPORATION, a Michigan corporation (the "Pledgor"), to Union
Bank ("Union Bank"), as operational agent (the "Operational Agent") for
the lenders (the "Lenders") parties to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
(1) Citibank, N.A. and Union Bank, as Co-Agents, and the
Lenders have entered into a Credit Agreement, dated as of November 30,
1992, as amended and restated as of October 15, 1993 (said Agreement, as
so amended and restated and as it may hereafter be amended or otherwise
modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as
therein defined), with the Pledgor.
(2) Pursuant to Section 5.03(b) of the Credit Agreement, any
prepayments required by such subsection are to be applied to outstanding
Base Rate Advances up to the full amount thereof before they are applied,
first, to outstanding Eurodollar Rate Advances and, second, as cash
collateral, pursuant to this Agreement, to secure LC Outstandings.
(3) The cash collateral referenced in preliminary statement
(2), above, shall be deposited by the Operational Agent in a special
non-interest-bearing cash collateral account (the "Account") with the
Operational Agent at its office at 445 South Figueroa Street, 15th Floor,
Los Angeles, California 90071, Account No. 2200411911 (or at such other
office of the Operational Agent as the Operational Agent may, from time to
time, notify the Pledgor), in the name of the Pledgor but under the sole
control and dominion of the Operational Agent and subject to the terms of
this Agreement.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Pledgor hereby agrees with the Operational Agent
for its benefit and the ratable benefit of the Lenders as follows:
SECTION 1. Pledge and Assignment. The Pledgor hereby pledges
and assigns to the Operational Agent for its benefit and the ratable
benefit of the Lenders, and grants to the Operational Agent for its
benefit and the ratable benefit of the Lenders a security interest in, the
following collateral (the "Collateral"):
(i) the Account, all funds held therein and all
certificates and instruments, if any, from time to time
representing or evidencing the Account;
(ii)all Investments (as hereinafter defined) from time to
time, and all certificates and instruments, if any, from time to
time representing or evidencing the Investments;
(iii) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Operational
Agent for or on behalf of the Pledgor in substitution for or in
addition to any or all of the then existing Collateral;
(iv)all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
then existing Collateral; and
(v) all proceeds of any and all of the foregoing
Collateral.
SECTION 2. Security for Obligations. This Agreement secures
the payment of all reimbursement obligations of the Borrower now or
hereafter existing with respect to LC Outstandings, and all obligations of
the Pledgor now or hereafter existing under this Agreement (all such
obligations of the Borrower and the Pledgor being the "Obligations").
Without limiting the generality of the foregoing, this Agreement secures
the payment of all amounts which constitute part of the Obligations and
would be owed by the Borrower to the Operational Agent or the Lenders
under the Credit Agreement and the Notes but for the fact that they are
unenforceable or not allowable due to of the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower. The
Obligations secured by this Agreement are subject to the terms of the
Collateral Agency and Intercreditor Agreement.
SECTION 3. Delivery of Collateral. All certificates or
instruments, if any, representing or evidencing the Collateral shall be
delivered to and held by or on behalf of the Operational Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Operational Agent.
The Operational Agent shall have the right, at any time upon the
occurrence and during the continuance of an Event of Default or an
Unmatured Default, in its discretion and without notice to the Pledgor, to
transfer to or to register in the name of the Operational Agent or any of
its nominees any or all of the Collateral. In addition, the Operational
Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
SECTION 4. Maintaining the Account. So long as any Lender has
any Commitment or any Note shall remain unpaid:
(a) The Pledgor will maintain the Account with the
Operational Agent.
(b) It shall be a term and condition of the Account,
notwithstanding any term or condition to the contrary in any
other agreement relating to the Account and except as otherwise
provided by the provisions of Section 6 and Section 13, that no
amount (including interest on the Account, if any) shall be paid
or released to or for the account of, or withdrawn by or for the
account of, the Pledgor or any other Person (other than the
Operational Agent and the Lenders) from the Account.
The Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of
any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 5. Investing of Amounts in the Account. If requested
by the Pledgor, the Operational Agent will, subject to the provisions of
Section 6 and Section 13, from time to time (a) invest amounts on deposit
in the Account in such Permitted Investments as the Pledgor may select and
the Operational Agent may approve and (b) invest interest paid on the
Permitted Investments referred to in clause (a), above, and reinvest other
proceeds of any such Permitted Investments which may mature or be sold, in
each case in such Permitted Investments as the Pledgor may select and the
Operational Agent may approve (the Permitted Investments referred to in
clauses (a) and (b), above, being collectively "Investments"). Interest
and proceeds that are not invested or reinvested in Investments as
provided above shall be deposited and held in the Account.
SECTION 6. Release of Amounts. So long as no Event of Default
or Unmatured Default shall have occurred and be continuing, the
Operational Agent will pay and release to the Pledgor or at its order,
upon the request of the Pledgor, (a) amounts of credit balance of the
Account and of principal of any other Collateral when matured or sold to
the extent that (i) the sum of the credit balance of the Account plus the
aggregate outstanding principal amount of all other Collateral exceeds
(ii) the aggregate amount of LC Outstandings in respect of all Letters of
Credit and all other amounts owing by the Pledgor hereunder, (b) all
amounts in the Account if the Commitments exceed the aggregate amount of
LC Outstandings in respect of all Letters of Credit and all other amounts
owing by the Pledgor hereunder and (c) all interest and earnings on the
Investments deposited and held in the Account.
SECTION 7. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The Pledgor is the legal and beneficial owner of the
Collateral free and clear of any lien, security interest, option or other
charge or encumbrance except for the security interest created by this
Agreement.
(b) The pledge and assignment of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Obligations.
(c) No consent of any other Person and no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge
and assignment by the Pledgor of the Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the
Pledgor, (ii) for the perfection or maintenance of the security interest
created hereby (including the first priority nature of such security
interest) or (iii) for the exercise by the Operational Agent of its rights
and remedies hereunder.
(d) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
(e) The Pledgor has, independently and without reliance upon
the Operational Agent or any Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.
SECTION 8. Further Assurances. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor
will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that
the Operational Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or
to enable the Operational Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.
SECTION 9. Transfers and Other Liens. The Pledgor agrees that
it will not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, or (ii) create or permit to exist any lien, security interest,
option or other charge or encumbrance upon or with respect to any of the
Collateral, except for the security interest under this Agreement.
SECTION 10. Operational Agent Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Operational Agent the Pledgor's
attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time
upon the occurrence and during the continuance of an Event of Default or
Unmatured Default or otherwise to the extent that the Operational Agent
shall reasonably deem any action to be necessary in order to maintain its
security interest in the Collateral, in the Operational Agent's
discretion, to take any action and to execute any instrument which the
Operational Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive,
indorse and collect all instruments made payable to the Pledgor
representing any interest payment, dividend or other distribution in
respect of the Collateral or any part thereof and to give full discharge
for the same.
SECTION 11. Operational Agent May Perform. If the Pledgor
fails to perform any agreement contained herein, the Operational Agent may
itself perform, or cause performance of, such agreement, and the expenses
of the Operational Agent incurred in connection therewith shall be payable
by the Pledgor under Section 14.
SECTION 12. The Operational Agent's Duties. The powers
conferred on the Operational Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Operational Agent shall have no duty as to any Collateral,
as to ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Operational Agent or any Lender has or is
deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Operational Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Operational Agent accords its own
property.
SECTION 13. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Operational Agent may, without notice to the
Pledgor except as required by law and at any time or from time
to time, charge, set-off and otherwise apply all or any part of
the Account against the Obligations or any part thereof.
(b) The Operational Agent may also exercise in respect of
the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of New York at that time
(the "Code") (whether or not the Code applies to the affected
Collateral), and may also, without notice except as specified
below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Operational
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Operational Agent may
deem commercially reasonable. The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten
days' notice to the Pledgor of the time and place of any public
sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Operational Agent
shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. The Operational Agent may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to
which it was so adjourned.
(c) Any cash held by the Operational Agent as Collateral
and all cash proceeds received by the Operational Agent in
respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of
the Operational Agent, be held by the Operational Agent as
collateral for, and/or then or at any time thereafter be applied
(after payment of any amounts payable to the Operational Agent
pursuant to Section 14) in whole or in part by the Operational
Agent for the ratable benefit of the Lenders against, all or any
part of the Obligations in such order as the Operational Agent
shall elect. Any surplus of such cash or cash proceeds held by
the Operational Agent and remaining after payment in full of all
the Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
SECTION 14. Expenses. The Pledgor will upon demand pay to the
Operational Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts and
agents, which the Operational Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of the
Operational Agent or the Lenders hereunder or (iv) the failure by the
Pledgor to perform or observe any of the provisions hereof.
SECTION 15. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the
Pledgor herefrom shall in any event be effective unless the same shall be
in writing and signed by the Operational Agent, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, facsimile, telex or cable communication) and mailed,
telegraphed, telecopied, telexed, cabled or delivered, if to the Pledgor,
at its address at Fairlane Plaza South, 330 Town Center Drive, Suite 1100,
Dearborn, Michigan 48126, Attention: Rodger A. Kershner, Esq., with a
copy to Doris F. Galvin, Vice President, 212 West Michigan Avenue,
Jackson, Michigan 49201, and if to the Operational Agent, at its address
specified in the Credit Agreement, or, as to either party, at such other
address as shall be designated by such party in a written notice to the
other party. All such notices and communications shall, when mailed,
telegraphed, telecopied, telexed or cabled, be effective five days after
when deposited in the mails, or when delivered to the telegraph company,
telecopied, confirmed by telex answerback or delivered to the cable
company, respectively.
SECTION 17. Continuing Security Interest; Assignments under
Credit Agreement. This Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect
until the later of (x) the payment in full of the Obligations and all
other amounts payable under this Agreement and (y) the expiration or
termination of the Commitments, (ii) be binding upon the Pledgor, its
successors and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Operational Agent, the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), any Lender may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and any Note held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise,
subject, however, to the provisions of Article X (concerning the Agents)
and Section 11.07 of the Credit Agreement. Upon the later of the payment
in full of the Obligations and all other amounts payable under this
Agreement and the expiration or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Pledgor. Upon any such termination, the
Operational Agent will, at the Pledgor's expense, return to the Pledgor
such of the Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such
termination.
SECTION 18. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York, except to the extent that perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral
are governed by the laws of a jurisdiction other than the State of New
York. Unless otherwise defined herein or in the Credit Agreement, terms
defined in Article 9 of the Code are used herein as therein defined.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
CMS ENERGY CORPORATION
By /s/ A. M. Wright
------------------------------
Title: Senior Vice President
and Chief Financial
Officer
ACCEPTED AND AGREED:
UNION BANK, as Operational Agent
By /s/ P Saggan
-------------------------------
Vice President
CMS Energy Corporation
Officer's Certificate
I, Alan M. Wright, Senior Vice President and Chief Financial
Officer of CMS Energy Corporation, a Michigan corporation (the
"Borrower"), DO HEREBY CERTIFY, in connection with the Amended and
Restated Credit Agreement, dated as of November 30, 1992, as amended and
restated as of October 15, 1993 (the "Credit Agreement", the terms defined
therein being used herein as therein defined), among the Borrower, the
Lenders named therein, Citibank, N.A. and Union Bank, as Co-Agents,
Citibank, N.A., as Documentation Agent, and Union Bank, as Operational
Agent, that:
1. The representations and warranties contained in Section
7.01 of the Credit Agreement (other than those contained
in subsections (e)(i) and (d)(ii) thereof), in Section 4
of each of the Pledge Agreements, in Section 7 of the Cash
Collateral Agreement and in Section 6 of the Guaranty
(other than those contained in subsections (f)(i) and
(f)(ii) thereof) are correct on and as of the date hereof.
2. Since September 30, 1992, except as disclosed in the
Borrower's Current Reports on Form 8-K filed with the
Securities and Exchange Commission on March 31, 1993 and
April 6, 1993, (A) there has been no material adverse
change in the Borrower's ability to perform its
obligations under the Credit Agreement or any other Loan
Document to which it is or will be a party, or in the
Guarantor's ability to perform its obligations under the
Guaranty, and (B) there has been no order or decision
issued by any Federal or state regulatory authority which
would reasonably be expected to have a material adverse
effect on the business, financial condition or results of
operations of the Borrower.
3. No Unmatured Default or Event of Default has occurred and
is continuing.
Date: October 15, 1993
CMS ENERGY CORPORATION
By /s/ A M Wright
______________________________
Senior Vice President and
Chief Financial Officer
CMS ENERGY
Rodger A. Kershner
Assistant General Counsel
October 15, 1993
To each of the Lenders parties
to the Credit Agreement referred
to below, and to Citibank, N.A.
and Union Bank, as agents under
the Credit Agreement
CMS Energy Corporation
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 11.12(a)(iii)(A)
of the Amended and Restated Credit Agreement, dated as of November 30,
1992, as amended and restated as of the date hereof (the "Credit
Agreement"), among CMS Energy Corporation (the "Borrower"), the Banks
parties thereto and the other Lenders from time to time parties thereto,
Citibank, N.A. and Union Bank, as Co-Agents, Citibank, N.A., as
Documentation Agent, and Union Bank, as Operational Agent. Capitalized
terms not defined herein have the meanings ascribed thereto in the Credit
Agreement and the other Loan Documents (as defined in the Credit
Agreement).
I am Assistant General Counsel to the Borrower and have acted as such
in connection with the preparation, execution and delivery of the Credit
Agreement and the other Loan Documents. In connection with the opinions
expressed below, I have examined, or have arranged for the examination by
an attorney or attorneys under my general supervision, of:
(a) The Credit Agreement;
(b) The Cash Collateral Agreement;
(c) The other Loan Documents;
(d) The Articles of Incorporation of the Borrower and all amendments
thereto (the "Charter"); and
(e) The by-law of the Borrower and all amendments thereto (the
"By-Laws").
In Addition, I, or an attorney or attorneys under my general
supervision, have examined and relied upon the originals, or copies
certified to my or their satisfaction, of such other corporate records of
the Borrower, certificates of public officials and of officers of the
Borrower, and agreements, instruments and documents as I have deemed
necessary as a basis for the opinions hereinafter expressed. As to
questions of fact material to such opinions, I or such attorneys have,
when relevant facts were not independently established by me or by them,
relied upon certificates of the Borrower or its officers or of public
officials. I have assumed the due execution and deliver, pursuant to due
authorization, of the Credit Agreement and the other Loan Documents by all
parties thereto other than the Loan Parties.
Based upon and subject to the foregoing and the further
qualifications set forth below, I am of the opinion that:
1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State
of Michigan.
2. The execution, delivery and performance by the Borrower of
the Credit Agreement and the Cash Collateral Agreement are
within the corporate power and authority of the Borrower,
have been duly authorized by all necessary corporate
action, and do not contravene (i) the Borrower Charter or
the Borrower By-laws, (ii) any provision of applicable law
or (iii) any legal or contractual restriction binding on
the Borrower or its properties; and such execution,
delivery and performance do not result in or require the
creation or imposition of any mortgage, deed of trust,
pledge, or Lien upon or with respect to any of its
properties (other than under the Security Documents). The
Credit Agreement and the Cash Collateral Agreement have
been duly executed and delivered on behalf of the
Borrower.
3. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for (a) the valid execution,
delivery and performance by the Borrower of the Credit
Agreement and the Cash Collateral Agreement or (b) the
creation of any Lien purported to be granted or created
pursuant to the Cash Collateral Agreement or the exercise
by the Operational Agent (on behalf of the Lenders) of any
right or remedy in respect of any Collateral under the
Cash Collateral Agreement, except for such authorizations,
approvals and filings as have been duly obtained or made
and which are in full force and effect on the date hereof
and not subject to appeal.
4. In any action or proceeding arising out of or relating to
the Credit Agreement or the Cash Collateral Agreement in
any court of the State of Michigan, or in any Federal
court sitting in the State of Michigan, such court would
recognize and give effect to the provisions of Section
11.10 of the Credit Agreement and Section 18 of the Cash
Collateral Agreement wherein the Borrower, the Agents and
the Lenders agree that the Credit Agreement and the Cash
Collateral Agreement, respectively, shall be governed by,
and construed in accordance with, the laws of the State of
New York. However, if a court were to hold that the
Credit Agreement or the Cash Collateral Agreement is
governed by, and is to be construed in accordance with,
the laws of the State of Michigan, the Credit Agreement
and the Cash Collateral Agreement would be, under the laws
of the State of Michigan, the legal, valid and binding
obligations of the Borrower, enforceable against the
Borrower (in all other respects) in accordance with their
respective terms.
5. Except as disclosed in the Borrower's Quarterly Report on
Form 10-Q for the period ended September 30, 1992, there
are no pending or threatened actions or proceedings
against the Borrower or its properties before any court,
governmental agency or arbitrator, that could, if
adversely determined, reasonably be expected to materially
adversely affect the financial condition, properties,
business or operations of the Borrower, the legality,
validity or enforceability of the Credit Agreement or any
other Loan Document to which the Borrower is, or is to be,
a party, or the validity, enforceability, perfection or
priority of any Lien purported to be granted by or under
any Security Document to which the Borrower is, or is to
be, a party.
6. The Cash Collateral Agreement creates a valid security
interest in the Collateral described therein, securing
payment of the Obligations (as defined therein).
The opinions set forth in paragraphs 4 and 6, above, are subject to
the following qualifications:
(a) The enforceability of the security interests described therein
and the enforceability of the Borrower's obligations under the
Credit Agreement and the Cash Collateral Agreement are subject
to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally, (ii) to general principles of
equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law) and (iii) applicable
securities laws to the extent such opinions relate to the
enforceability of rights to indemnification, although such
limitations or enforceability and the exercise of remedies in my
judgment do not make the remedies provided for therein, taken as
a whole, inadequate for the substantial realization of the
benefits afforded thereby.
(b) In connection with the opinion expressed in paragraph 6, above,
I point out that in the case of proceeds, continuation of the
perfection of the security interest therein of the Operational
Agent is limited to the extent set forth in Section 9-306 of the
Uniform Commercial Code as in effect in the State of Michigan.
I am a member of the bar of the State of Michigan and I express no
opinion as to the laws of any jurisdiction other than the State of
Michigan and the Federal law of the United States of America.
Very truly yours,
/s/ Rodger Kershner