[EXECUTION COPY]
__________________________________________________________________________
$1,125,000,000
CREDIT AGREEMENT
Dated as of July 2, 1997,
Among
CMS ENERGY CORPORATION
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
THE CHASE MANHATTAN BANK
as Administrative Agent, Collateral Agent,
Documentation Agent and Syndication Agent
and
THE CO-AGENTS NAMED HEREIN
as Co-Agents
and
THE LEAD MANAGERS NAMED HEREIN
as Lead Managers
____________________________
CHASE SECURITIES INC.
as Arranger
__________________________________________________________________________
i
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01.Certain Defined Terms. . . . 2
SECTION 1.02.Computation of Time Periods;
Construction . . . . . . . 26
SECTION 1.03.Accounting Terms . . . . . . 27
ARTICLE II
COMMITMENTS
SECTION 2.01.The Commitments . . . . . . . . 27
SECTION 2.02.Fees. . . . . . . . . . . . . . 28
SECTION 2.03.Reduction of the Commitments. . 30
SECTION 2.04.Computations of Outstandings. . 31
SECTION 2.05.Extension of Termination Date . 31
ARTICLE III
LOANS
SECTION 3.01.Loans . . . . . . . . . . . . . 32
SECTION 3.02.Conversion of Loans . . . . . . 34
SECTION 3.03.Interest Periods. . . . . . . . 34
SECTION 3.04.Other Terms Relating to the Making
and Conversion of Loans . . . 35
SECTION 3.05.Repayment of Loans; Interest. . 38
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01.Issuing Banks . . . . . . . . . 39
SECTION 4.02.Letters of Credit . . . . . . . 39
SECTION 4.03.Issuing Bank Fees . . . . . . . 40
SECTION 4.04.Reimbursement to Issuing Banks. 40
SECTION 4.05.Obligations Absolute. . . . . . 41
SECTION 4.06.Liability of Issuing Banks and the
Lenders . . . . . . . . . . . 42
ARTICLE V
PAYMENTS, COMPUTATIONS AND
YIELD PROTECTION
SECTION 5.01.Payments and Computations . . . 43
SECTION 5.02.Interest Rate Determination . . 45
SECTION 5.03.Prepayments . . . . . . . . . . 45
SECTION 5.04.Yield Protection. . . . . . . . 46
SECTION 5.05.Sharing of Payments, Etc. . . . 48
SECTION 5.06.Taxes . . . . . . . . . . . . . 49
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01.Conditions Precedent to the Initial
Extension of Credit. . . . . . 51
SECTION 6.02.Conditions Precedent to Each
Extension of Credit . . . . . 53
SECTION 6.03.Conditions Precedent to Certain
Extensions of Credit. . . . . 54
SECTION 6.04.Reliance on Certificates. . . . 55
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of
the Borrower. . . . . . . . . . . 55
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants . . . . . . . 59
SECTION 8.02. Negative Covenants. . . . . . . . . 63
SECTION 8.03. Reporting Obligations . . . . . . . 68
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default . . . . . . . . . 71
SECTION 9.02. Remedies. . . . . . . . . . . . . . 73
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action. . . . . . 74
SECTION 10.02. Indemnification . . . . . . . . . . 76
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc.. . . . . . . . . . 77
SECTION 11.02. Notices, Etc. . . . . . . . . . . . 77
SECTION 11.03. No Waiver of Remedies . . . . . . . 78
SECTION 11.04. Costs, Expenses and
Indemnification . . . . . . . . . 78
SECTION 11.05. Right of Set-off. . . . . . . . . . 79
SECTION 11.06. Binding Effect. . . . . . . . . . . 80
SECTION 11.07. Assignments and Participation . . . 80
SECTION 11.08. Confidentiality . . . . . . . . . . 85
SECTION 11.09. Waiver of Jury Trial. . . . . . . . 86
SECTION 11.10. Governing Law; Submission to
Jurisdiction. . . . . . . . . . . . 86
SECTION 11.11. Relation of the Parties; No
Beneficiary . . . . . . . . . . . 86
SECTION 11.12. Existing Banks' Waiver,
Acknowledgment and Release. . . . 87
SECTION 11.13. Execution in Counterparts . . . . . 87
SECTION 11.14. Survival of Agreement . . . . . . . 87
iv
Exhibits
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Notice of Conversion
EXHIBIT C - Form of Cash Collateral Agreement
EXHIBIT D - Form of Opinion of Michael D. VanHemert, Esq., Counsel of
the Borrower
EXHIBIT E - Form of Opinion of McDermott, Will & Emery, counsel to the
Administrative Agent
EXHIBIT F - Form of Compliance Schedule
EXHIBIT G - Form of Lender Assignment
EXHIBIT H - Terms of Subordination (Junior Subordinated Debt)
EXHIBIT I - Terms of Subordination (Guaranty of Hybrid Preferred
Securities)
Schedules
SCHEDULE I Applicable Lending Offices
SCHEDULE II Certain Debt
CREDIT AGREEMENT
Dated as of July 2, 1997
THIS 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) The Chase Manhattan Bank ("Chase"), as administrative agent (the
"Administrative Agent"), documentation agent (the "Documentation
Agent"), collateral agent (the "Collateral Agent") and
syndication agent (the "Syndication Agent") for the Lenders
hereunder, and
(iv) the Co-Agents (the "Co-Agents") and Lead Managers (the "Lead
Managers") listed on the signature pages hereof.
PRELIMINARY STATEMENTS
The Borrower has requested the Banks to provide the credit facilities
hereinafter described in the amounts and on the terms and conditions set
forth herein. The Banks have so agreed on the terms and conditions set
forth herein, and the Agents have agreed to act as agents for the Lenders
on such terms and conditions.
The parties hereto acknowledge and agree that neither Consumers (as
hereinafter defined) nor any of its Subsidiaries (as hereinafter defined)
will be a party to, or will in any way be 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.
Accordingly, the parties hereto agree 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:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ABR Loan" means a Loan that bears interest as provided in Section
3.05(c)(i).
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"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 Administrative Agent,
the Documentation Agent, the Collateral Agent, the Syndication Agent or
any Co-Agent; and "Agents" means any or all of the foregoing.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate
or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Base
CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Lending Office" means, with respect to each Lender,
(i) such Lender's Domestic Lending Office, in the case of an ABR Loan,
and (ii) such Lender's Eurodollar Lending Office, in the case of a
Eurodollar Rate Loan.
"Applicable Margin" means, on any date of determination:
(a) with respect to any Revolving Loans, (i) 0.25% per annum
in the case of ABR Loans and (ii) 1.25% per annum in the case of
Eurodollar Rate Loans, and
(b) with respect to Term Loans, (i) from the Closing Date
until the third anniversary of the Closing Date, (A) 0.25% per annum
in the case of ABR Loans and (B) 1.25% per annum in the case of
Eurodollar Rate Loans, and (ii) from the third anniversary of the
Closing Date, (i) 0.50% per annum in the case of ABR Loans and (ii)
1.50% per annum in the case of Eurodollar Rate Loans.
Notwithstanding the foregoing, each of the foregoing Applicable Margins
shall be (i) increased by 0.50% per annum in the event that, and at all
times during which, the Index Debt shall be rated BB- (or its
equivalent) or lower by any two of S&P, Fitch, Moody's and D&P,
provided that one of such two rating agencies is S&P or Moody's, (ii)
decreased by 0.25% per annum in the event that, and at all times during
which, the Index Debt shall be rated BBB- (or its equivalent) or higher
by any two of S&P, Fitch, Moody's and D&P, provided that one of such
two rating agencies is S&P or Moody's, and (iii) increased by 0.125%
per annum in the event that, and at all times during which, all or any
portion of the principal amount of a Revolving 364-Day Loan is
outstanding. The Applicable Margins shall be increased or decreased in
accordance with this definition upon any change in the applicable
ratings of the Index Debt, and such increased or decreased Applicable
Margins shall be effective from the date of announcement of any such
new ratings. The Borrower agrees to notify the Administrative Agent
promptly after each change in any rating of the Index Debt. In the
event that the Borrower has no Index Debt outstanding or the Index Debt
is no longer rated by any two of S&P, Fitch, Moody's and D&P and by one
of Moody's or S&P, the Applicable Margins will be such amount or
amounts as may be mutually agreed by the Borrower and all the Lenders,
provided that until such amount or amounts are so agreed, the
Applicable Margins shall be the Applicable Margins in effect
immediately prior to the date on which the Index Debt is no longer
outstanding or so rated (as the case may be).
"Applicable Rate" means:
(i) in the case of each ABR Loan, 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 Loan 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.
"Arranger" means Chase Securities Inc.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well capitalized" and within supervisory subgroup
"B" (or a comparable successor risk classification) within the meaning
of 12 C.F.R. Part 327 (or any successor provision) to the Federal
Deposit Insurance Corporation for insurance by such Corporation of time
deposits made in Dollars at the offices of such member in the United
States; provided that if, as a result of any change in law, rule or
regulation, it is no longer possible to determine the Assessment Rate
as aforesaid, then the Assessment Rate shall be such annual rate as
shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Available Commitment" means, for each Lender on any day with
respect to any Tranche, the unused portion of such Lender's Commitment
under such Tranche, computed after giving effect to all Extensions of
Credit or prepayments to be made on such day and the application of
proceeds therefrom under such Tranche. "Available Commitments" means,
with respect to any Tranche, the aggregate of the Lenders' Available
Commitments under such Tranche.
"Base CD Rate" means the sum of (i) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (ii) the Assessment
Rate.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" means a borrowing under any Tranche consisting of Loans
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 Loans of a
particular Type may be referred to as being a Borrowing of such "Type".
All Loans of the same Type under any Tranche, 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 and Detroit, Michigan,
and, if the applicable Business Day relates to any Eurodollar Rate
Loan, on which dealings are carried on in the London interbank market.
"Cash Collateral Agreement" means the Cash Collateral Agreement,
dated as of the date hereof, between the Borrower and the Collateral
Agent, for the benefit of the Lenders, substantially in the form of
Exhibit C.
"Cash Dividend Income" means, for any period, the amount of all cash
dividends received by the Borrower from its Subsidiaries during such
period that are paid out of the net income (without giving effect to
any extraordinary gains in excess of $5,000,000) of such Subsidiaries
during such period.
Closing Date means the date upon which each of the conditions
precedent enumerated in Section 6.01 has been fulfilled to the
satisfaction of the Lenders, the Administrative Agent and the Borrower.
All transactions contemplated by the Closing Date shall take place on
or before July 2, 1997, at the offices of McDermott, Will & Emery, 50
Rockefeller Plaza, New York, New York 10020, at 10:00 A.M., or such
other time as the parties hereto may mutually agree.
"Collateral" means the "Collateral" under the Cash Collateral
Agreement.
"Collateral Release Date" means the first date (during the absence
of any Default or Event of Default) by which both of the following
events shall have occurred:
(i) the long-term secured debt of Consumers shall be rated
BBB- (or its equivalent) or higher by any two of S&P, Fitch, Moody's
and D&P, provided that one of such two rating agencies is S&P or
Moody's; and
(ii) the Borrower shall have maintained a ratio of Consolidated
Debt to Consolidated Capital of less than 0.64:1.0 for three
consecutive calendar months.
"Commitment" means, for each Lender, such Lender's Revolving 364-Day
Commitment, Revolving 3-Year Commitment or Term Commitment, or any
combination thereof (as the context may require). "Commitments" means
the total of the Lenders' Commitments under any Tranche or any
combination thereof (as the context may require). The aggregate
Commitments under all of the Tranches shall in no event exceed
$1,125,000,000.
"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 the case of clauses (b) through (d) above, determined
at such date in accordance with GAAP; provided, however, that (i)
Consolidated Capital shall include Project Finance Equity of the
Borrower and the Consolidated Subsidiaries in any Consolidated
Subsidiary only to the extent of the Borrower's Ownership Interest in
such Consolidated Subsidiary, (ii) the consolidated equity of the
preferred stockholders of the Borrower and the Consolidated
Subsidiaries shall include the aggregate amount of all Hybrid Preferred
Securities and (iii) for purposes of this definition only, the
consolidated equity of the stockholders of the Borrower and the
Consolidated Subsidiaries shall include only such percentage of the Net
Proceeds from any issuance of any hybrid debt/equity securities (other
than Junior Subordinated Debt and Hybrid Preferred Securities) by the
Borrower or any Consolidated Subsidiary as shall be agreed by the
Administrative Agent and the Borrower (and consented to by the Required
Lenders) prior to such issuance, which percentage shall be based on,
among other things, the treatment (if any) given to such hybrid
securities by the rating agencies.
"Consolidated Debt" means, without duplication, at any date of
determination, the sum of the aggregate Debt of the Borrower plus the
aggregate debt (as such term is construed in accordance with GAAP) of
the Consolidated Subsidiaries; provided, however, that:
(a) Consolidated Debt shall not include any Support Obligation
described in clause (iv) or (v) of the definition thereof if such
Support Obligation or the primary obligation so supported is not
fixed or conclusively determined or is not otherwise reasonably
quantifiable as of the date of determination;
(b) Consolidated Debt shall not include (i) any Junior
Subordinated Debt owned by any Hybrid Preferred Securities
Subsidiary or (ii) any guaranty by the Borrower of payments with
respect to any Hybrid Preferred Securities, provided that such
guaranty is subordinated to the rights of the Lenders hereunder and
under the other Loan Documents pursuant to terms of subordination
substantially similar to those set forth in Exhibit I, or pursuant
to other terms and conditions satisfactory to the Required Lenders;
(c) for purposes of this definition only, the percentage of
the Net Proceeds from any issuance of hybrid debt/equity securities
(other than Junior Subordinated Debt and Hybrid Preferred
Securities) by the Borrower or any Consolidated Subsidiary that
shall be considered Consolidated Debt shall be agreed by the
Administrative Agent and the Borrower (and consented to by the
Required Lenders) prior to such issuance and shall be based on,
among other things, the treatment (if any) given to such hybrid
securities by the rating agencies;
(d) with respect to any Support Obligations provided by the
Borrower in connection with a sale by MS&T of natural gas, natural
gas liquids, electricity, oil, propane or coal to any other Person
(a "Purchasing Party"), Consolidated Debt shall include only:
(i) the excess, if any, of (A) the aggregate amount of any
Support Obligations provided by the Borrower in respect of MS&T's
payment obligations under any purchase or other cover arrangement
(a "Covering Transaction") entered into by MS&T in connection
with such sale over (B) the aggregate amount of (i) any Support
Obligations provided by the direct or indirect parent company of
such Purchasing Party (the "Purchasing Party Guarantor") or (ii)
any irrevocable letter of credit provided by any financial
institution for the account of such Purchasing Party or
Purchasing Party Guarantor, in each case for the benefit of MS&T
in support of such Purchasing Party's payment obligations to MS&T
arising from such sale, provided that (x) the senior, unsecured,
non-credit enhanced indebtedness of such Purchasing Party
Guarantor or such financial institution (as the case may be) is
rated BBB- (or its equivalent) or higher by any two of S&P,
Fitch, Moody's and D&P (provided that one of such two rating
agencies is S&P or Moody's), (y) no default by such Purchasing
Party Guarantor in respect of any such Support Obligations
provided by such Purchasing Party Guarantor has occurred and is
continuing and (z) such Purchasing Party Guarantor is not the
Borrower or any Affiliate of the Borrower or any of its
Subsidiaries, and
(ii) subject to subsection (a) above, the excess, if any, of
(A) the aggregate amount of any Support Obligations provided by
the Borrower in respect of MS&T's performance obligations to such
Purchasing Party in connection with such sale over (B) the
aggregate amount of (i) any Support Obligations provided by the
direct or indirect parent company (the "Counterparty Guarantor")
of the counterparty to any Covering Transaction entered into by
MS&T in connection with such sale or (ii) any performance bond
provided by any financial institution or surety company for the
account of such counterparty or Counterparty Guarantor, in each
case for the benefit of MS&T in support of such counterparty's
performance obligations to MS&T arising from such Covering
Transaction, provided that (x) the senior, unsecured, non-credit
enhanced indebtedness of such Counterparty Guarantor, financial
institution or surety company (as the case may be) is rated BBB-
(or its equivalent) or higher by any two of S&P, Fitch, Moody's
and D&P (provided that one of such two rating agencies is S&P or
Moody's), (y) no default by such Counterparty Guarantor in
respect of any such Support Obligations provided by such
Counterparty Guarantor has occurred and is continuing and (z)
such Counterparty Guarantor is not the Borrower or any Affiliate
of the Borrower or any of its Subsidiaries; and
(e) for purposes of this definition only, debt of any
Consolidated Subsidiary shall include Project Finance Debt of such
Consolidated Subsidiary only to the extent of the Borrower's
Ownership Interest in such Consolidated Subsidiary.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Borrower in
accordance with GAAP.
"Consumers" means Consumers Energy Company, a Michigan corporation,
all of whose common stock is on the date hereof owned by the Borrower.
"Consumers Dividend Restriction" means any restriction enacted or
imposed after October 1, 1992 upon the ability of Consumers to pay cash
dividends to the Borrower in respect of Consumers' capital stock,
whether such restriction is imposed by statute, regulation, decisions
or rulings by the Michigan Public Service Commission or the Federal
Energy Regulatory Commission (or any successor agency or agencies),
final judgments of any court of competent jurisdiction, indentures,
agreements, contracts or restrictions to which Consumers is a party or
by which it is bound or otherwise; provided, that no restriction on
such dividends existing on October 1, 1992 shall be a Consumers
Dividend Restriction at any time.
"Conversion", "Convert" or "Converted" refers to a conversion of
Loans of one Type into Loans of another Type, or to the selection of a
new, or the renewal of the same, Interest Period for Loans, 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, without duplication, 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 GAAP, 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; provided, however, for purposes
of the calculation of Debt for this clause (v) only, the actual amount
of Debt of such Person shall be determined on a net basis to the extent
such agreements permit such amounts to be calculated on a net basis,
(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, (vii) arising from any
accumulated funding deficiency (as defined in Section 412(a) of the
Internal Revenue Code of 1986, as amended) for a Plan, and
(viii) arising from (A) direct or indirect guaranties in respect of,
and obligations to purchase or otherwise acquire, or otherwise to
warrant or hold harmless, pursuant to a legally binding agreement, a
creditor against loss in respect of, Debt of others referred to in
clauses (i) through (vii) above and (B) other guaranty or similar
financial obligations in respect of the performance of others,
including Support Obligations.
"Default" means an event that, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
"Default Rate" means a rate per annum equal at all times to (i) in
the case of any amount of principal of any Loan that is not paid when
due, 2% per annum above the Applicable Rate required to be paid on such
Loan immediately prior to the date on which such amount became due, and
(ii) in the case of any amount of interest, fees or other amounts
payable hereunder that is not paid when due, 2% per annum above the
Applicable Rate for an ABR Loan in effect from time to time.
"Dividend Coverage Ratio" means, at any date, the ratio of (i) Pro
Forma Dividend Amounts to (ii) Issuer Interest Expense, as such terms
are defined in the Indenture as in effect on the date hereof.
"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 Administrative 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, (1) be entitled to receive
payments hereunder without deduction or withholding of any United
States Federal income taxes (as contemplated by Section 5.06) and
(2) not be incurring any losses, costs or expenses of the type for
which such Person could demand payment under Section 5.04(a) or (c)
(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 Issuing Bank based upon its then-existing credit
criteria and (D) any Person described in clause (d) above shall, in
addition, be acceptable to the Administrative Agent.
"Enterprises" means CMS Enterprises Company, a Michigan corporation,
all of whose common stock is on the date hereof owned by the Borrower.
"Enterprises Significant Subsidiary" means Nomeco, CMS Generation
Co., CMS Gas Transmission and Storage Company and any other direct
subsidiary of Enterprises having a net worth in excess of $50 million.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any governmental
agency or authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Substance or to health
and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any
of its Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any
Hazardous Substances, (c) exposure to any Hazardous Substances, (d) the
release or threatened release of any Hazardous Substances into the
environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Distributions" shall mean, for any period, the aggregate
amount of cash received by the Borrower from its Subsidiaries during
such period that are paid out of proceeds from the sale of common
equity of Subsidiaries of the Borrower.
"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.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the
Eurodollar Rate.
"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 Administrative Agent.
"Eurodollar Rate" means, for each Interest Period for each
Eurodollar Rate Loan made as part of the same Borrowing, an interest
rate per annum (rounded upwards, if necessary, to the nearest whole
multiple of 1/16 of 1%) equal to (a) the average of the rate per annum
at which deposits in 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 Loan made as part of
such Borrowing and for a period equal to such Interest Period,
multiplied by (b) the Statutory Reserve Rate. The Eurodollar Rate for
the Interest Period for each Eurodollar Rate Loan made as part of the
same Borrowing shall be determined by the Administrative Agent on the
basis of applicable rates furnished to and received by the
Administrative 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 Loan" means a Loan that bears interest as provided
in Section 3.05(c)(ii).
"Event of Default" has the meaning specified in Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Banks" means the Banks party to the Existing Revolving
Agreement.
"Existing Letters of Credit" means (i) the irrevocable standby
letter of credit, dated April 29, 1994, issued by The Bank of Tokyo-
Mitsubishi, Ltd., Los Angeles Branch (formerly known as The Bank of
Tokyo, Ltd., Los Angeles Agency), in favor of New York State Electric &
Gas Corporation, bearing letter of credit number 165-LCS-916840, and
(ii) the irrevocable standby letter of credit, dated December 9, 1994,
issued by The Bank of Tokyo-Mitsubishi, Ltd., Los Angeles Branch
(formerly known as The Bank of Tokyo, Ltd., Los Angeles Agency), in
favor of Banco Latino Americano de Exportaciones, S.A., bearing letter
of credit number 165-LCS-917216. The Existing Letters of Credit shall
each constitute a Letter of Credit hereunder.
"Existing Revolving Agreement" means the Credit Agreement, dated as
of November 21, 1995, among the Borrower, the lenders party thereto,
Citibank, N.A. and Union Bank of California, N.A., as Co-Agents,
Citibank, N.A., as Documentation Agent, Union Bank of California, N.A.,
as Operational Agent, and the Co-Managers named therein.
"Existing Term Agreement" means the Term Loan Agreement, dated as of
November 21, 1995, among the Borrower, the lenders party thereto,
Citibank, N.A. and Union Bank of California, N.A., as Co-Agents,
Citibank, N.A., as Documentation Agent, Union Bank of California, N.A.,
as Operational Agent, and the Co-Managers named therein.
"Extension of Credit" means (i) the making of a Borrowing (including
any Conversion), (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.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average (rounded upwards, if necessary, to the next 1/100 of
1%) of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers
of recognized standing selected by the Administrative Agent.
"Fee Letter" has the meaning assigned to that term in
Section 2.02(c).
"Fitch" means Fitch's Investors Services or any successor thereto.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located.
For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"GAAP" has the meaning assigned to that term in Section 1.03.
"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 the Borrower, (ii) the grant and
perfection of any Lien contemplated by the Cash Collateral Agreement or
(iii) the exercise by any Agent (on behalf of the Lenders) of any right
or remedy provided for under the Cash Collateral Agreement.
"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.
"Hybrid Preferred Securities" means any preferred securities issued
by a Hybrid Preferred Securities Subsidiary, where such preferred
securities have the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of such
preferred securities to the Borrower or Consumers in exchange for
Junior Subordinated Debt issued by the Borrower or Consumers,
respectively;
(ii) such preferred securities contain terms providing for the
deferral of interest payments corresponding to provisions providing
for the deferral of interest payments on the Junior Subordinated
Debt; and
(iii) the Borrower or Consumers (as the case may be) makes
periodic interest payments on the Junior Subordinated Debt, which
interest payments are in turn used by the Hybrid Preferred
Securities Subsidiary to make corresponding payments to the holders
of the preferred securities.
"Hybrid Preferred Securities Subsidiary" means any Delaware business
trust (or similar entity) (i) all of the common equity interest of
which is owned (either directly or indirectly through one or more
wholly-owned Subsidiaries of the Borrower or Consumers) at all times by
the Borrower or Consumers, (ii) that has been formed for the purpose of
issuing Hybrid Preferred Securities and (iii) substantially all of the
assets of which consist at all times solely of Junior Subordinated Debt
issued by the Borrower or Consumers (as the case may be) and payments
made from time to time on such Junior Subordinated Debt.
"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, the Second
Supplemental Indenture, dated as of October 1, 1992, and the Third
Supplemental Indenture, dated as of May 6, 1997, as said Indenture may
be further amended or otherwise modified from time to time in
accordance with its terms.
"Index Debt" means senior, unsecured indebtedness for borrowed money
of the Borrower that is not guaranteed by any other Person or subject
to any other credit enhancement; provided, however, that in the event
that all such senior unsecured indebtedness becomes equally and ratably
secured by the Pledged Stock, the Index Debt shall be such senior
secured indebtedness.
"Interest Period" has the meaning assigned to that term in Section
3.03.
"Issuing Bank" means (i) any Lender designated by the Borrower in
accordance with Section 4.01(a) as the issuer of a Letter of Credit
pursuant to an Issuing Bank Agreement and (ii) any other financial
institution that has issued an Existing Letter of Credit pursuant to an
Issuing Bank Agreement (provided, however, that unless such other
financial institution is a Lender hereunder, it shall not be permitted
to issue any Letters of Credit after the date hereof). As of the date
hereof, the Borrower has designated Chase as an Issuing Bank, and the
Administrative Agent has accepted such designee pursuant to Section
4.01.
"Issuing Bank Agreement" means an agreement between an Issuing Bank
and the Borrower, in form and substance satisfactory to the
Administrative Agent, providing for the issuance of one or more Letters
of Credit, in form and substance satisfactory to the Administrative
Agent, in support of a general corporate activity of the Borrower.
"Junior Subordinated Debt" means any unsecured Debt of the Borrower
or Consumers (i) issued in exchange for the proceeds of Hybrid
Preferred Securities and (ii) subordinated to the rights of the Lenders
hereunder and under the other Loan Documents pursuant to terms of
subordination substantially similar to those set forth in Exhibit H, or
pursuant to other terms and conditions satisfactory to the Required
Lenders.
"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).
"Lead Manager" has the meaning specified in the preamble to this
Agreement.
"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 G.
"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
Issuing Bank.
"Letter of Credit" means a letter of credit issued by an Issuing
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 Issuing Bank Agreement to which it relates.
"Lien" has the meaning assigned to that term in Section 8.02(a).
"Loan" means a Revolving 364-Day Loan, a Revolving Three-Year Loan
or a Term Loan (as the context may require) by a Lender to the
Borrower, and refers to an ABR Loan or a Eurodollar Rate Loan (each of
which shall be a "Type" of Loan). All Loans by a Lender of the same
Type under any Tranche, having the same Interest Period and made or
Converted on the same day shall be deemed to be a single Loan by such
Lender until repaid or next Converted.
"Loan Documents" means this Agreement, any Promissory Notes, the
Cash Collateral Agreement, the Fee Letter, the Issuing Bank
Agreement(s) and all other agreements, instruments and documents now or
hereafter executed and/or delivered pursuant hereto or thereto.
"Material Adverse Change" means any event, development or
circumstance that has had or could reasonably be expected to have a
material adverse effect on (a) the business, assets, property,
financial condition or results of operations of the Borrower and its
Subsidiaries, considered as a whole, (b) 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 (c) the validity or enforceability
of any Loan Document or the rights and remedies of any Agent or the
Lenders thereunder.
"Measurement Quarter" has the meaning assigned to that term in
Section 8.01(j).
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"MS&T" means CMS Marketing, Services and Trading Company, a Michigan
corporation, all of whose capital stock is on the date hereof owned by
Enterprises.
"Net Proceeds" means, with respect to any sale or issuance of
securities or incurrence of Debt by any Person, the excess of (i) the
gross cash proceeds received by or on behalf of such Person in respect
of such sale, issuance or incurrence (as the case may be) over
(ii) customary underwriting commissions, auditing and legal fees,
printing costs, rating agency fees and other customary and reasonable
fees and expenses incurred by such Person in connection therewith.
"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 GAAP
consistently applied, excluding, however, from the determination of
total assets (i) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, and other
similar intangibles, (ii) cash held in a sinking or other analogous
fund established for the purpose of redemption, retirement or
prepayment of capital stock or Debt, and (iii) any items not included
in clauses (i) or (ii) above, that are treated as intangibles in
conformity with GAAP.
"Nomeco" means CMS NOMECO Oil & Gas Co., a Michigan corporation, all
of whose capital stock is on the date hereof owned by Enterprises.
"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.
"Ownership Interest" of the Borrower in any Consolidated Subsidiary
means, at any date of determination, the percentage determined by
dividing (i) the aggregate amount of Project Finance Equity in such
Consolidated Subsidiary owned or controlled, directly or indirectly, by
the Borrower and any other Consolidated Subsidiary on such date, by
(ii) the aggregate amount of Project Finance Equity in such
Consolidated Subsidiary owned or controlled, directly or indirectly, by
all Persons (including the Borrower and the Consolidated Subsidiaries)
on such date. Notwithstanding anything to the contrary set forth
above, if the "Ownership Interest," calculated as set forth above, is
50% or less, such percentage shall be deemed to equal 0%.
"Participant" has the meaning assigned to that term in Section
11.07(e).
"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 Commitments under all of
the Tranches (or under any Tranche, as the context may require) on such
day by the total of the Lenders' Commitments under all of the Tranches
(or under such Tranche, as the context may require) on such date, and
multiplying the quotient so obtained by 100%; provided, that a Lender's
Percentage of the Commitments under any Tranche shall in all cases
equal such Lender's Percentage of the Commitments under any other
Tranche. In the event that the Commitments have been terminated, each
Lender's Percentage shall be calculated on the basis of the Commitments
in effect immediately prior to such termination.
"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, limited liability 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.
"Pledged Stock" has the meaning assigned to that term in Section
8.01(l).
"Prepayment Event" means any sale or issuance of securities or
incurrence of debt (as such term is construed in accordance with GAAP)
by the Borrower, other than (i) Debt of the Borrower to any Subsidiary
of the Borrower, (ii) Debt arising by reason of the endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of the Borrower's business, (iii)
Debt in the form of indemnities in respect of unfiled mechanics' liens
and Liens permitted under Section 8.02(a)(iii) and (iv) any such sale
or issuance of securities by the Borrower to any of its Subsidiaries.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced
as being effective.
"Project" means any power or energy project in which the Borrower,
directly or indirectly, makes or intends to make an equity investment
using the proceeds of a Borrowing under the Revolving 364-Day Tranche.
"Project Finance Debt" means Debt of any Person that is non-recourse
to such Person (unless such Person is a special-purpose entity) and any
Affiliate of such Person, other than with respect to the interest of
the holder of such Debt in the collateral, if any, securing such Debt.
"Project Finance Equity" means, at any date of determination,
consolidated equity of the common, preference and preferred
stockholders of the Borrower and the Consolidated Subsidiaries relating
to any obligor with respect to Project Finance Debt.
"Promissory Note" means any promissory note of the Borrower payable
to the order of a Lender (and, if requested, its registered assigns)
under a Tranche, issued pursuant to Section 3.01(d); and "Promissory
Notes" means any or all of the foregoing.
"Recipient" has the meaning assigned to that term in Section 11.08.
"Reference Banks" means Chase, Bank of America Illinois and
NationsBank, N.A., or any additional or substitute Lenders as may be
selected from time to time to act as Reference Banks hereunder by the
Administrative Agent, the Required Lenders and the Borrower.
"Register" has the meaning specified in Section 11.07(c).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"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 Loans owing to Lenders and
(ii) if no Loans 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 Administrative
Agent and shall be conclusive and binding on all parties absent
manifest error.
"Restricted Subsidiary" means (i) Enterprises and (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.
"Revolving Loans" means Revolving 364-Day Loans and Revolving Three-
Year Loans.
"Revolving 364-Day Commitment" means, for each Lender, the
obligation of such Lender to make Revolving 364-Day Loans to the
Borrower in an aggregate amount no greater than the amount set forth
opposite such Lender's name on the signature pages hereof under the
heading "Revolving 364-Day Commitment" or, if such Lender has entered
into one or more Lender Assignments, set forth for such Lender in the
Register maintained by the Administrative 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. "Revolving 364-Day Commitments" means
the total of the Lenders' Revolving 364-Day Commitments hereunder. The
Revolving 364-Day Commitments shall in no event exceed $400,000,000.
"Revolving 364-Day Loan" means a loan by a Lender to the Borrower
under the Revolving 364-Day Tranche.
"Revolving 364-Day Tranche" means the 364-day revolving credit
facility provided by the Lenders to the Borrower pursuant to Section
2.01(a)(i).
"Revolving Three-Year Commitment" means, for each Lender, the
obligation of such Lender to make Revolving Three-Year Loans 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 under the
heading "Revolving Three-Year Commitment" or, if such Lender has
entered into one or more Lender Assignments, set forth for such Lender
in the Register maintained by the Administrative 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. "Revolving Three-Year
Commitments" means the total of the Lenders' Revolving Three-Year
Commitments hereunder. The Revolving Three-Year Commitments shall in
no event exceed $600,000,000.
"Revolving Three-Year Loan" means a loan by a Lender to the Borrower
under the Revolving Three-Year Tranche, including any such loan deemed
made pursuant to Section 4.04(d).
"Revolving Three-Year Tranche" means the three-year revolving credit
facility provided by the Lenders to the Borrower pursuant to Section
2.01(a)(ii).
"Revolving Tranches" means the Revolving 364-Day Tranche and the
Revolving Three-Year Tranche.
"S&P" means Standard & Poor's Ratings Services or any successor
thereto.
"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, the Series B Senior Deferred Coupon Notes Due 1999 and the 8-1/8%
Senior Unsecured Notes Due 2002, in each case issued by the Borrower
pursuant to the Indenture.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject (a) with respect to the Base CD Rate,
for new negotiable nonpersonal time deposits in Dollars of over
$100,000 with maturities approximately equal to three months and
(b) with respect to the Eurodollar Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Rate Loans shall be deemed
to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under
such Regulation D or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"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, for any Person, without duplication,
any financial obligation, contingent or otherwise, of such Person
guaranteeing or otherwise supporting any Debt or other obligation of
any other Person in any manner, whether directly or indirectly, and
including 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 (to the extent that such
obligation to provide equity capital does not otherwise constitute
Debt), or (v) to perform, or arrange for the performance of, any non-
monetary obligations or non-funded debt payment obligations of the
primary obligor.
"Tax Sharing Agreement" means the Amended and Restated Agreement for
the Allocation of Income Tax Liabilities and Benefits, dated as of
January 1, 1994, 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.
"Term Commitment" means, for each Lender, the obligation of such
Lender to make Term Loans to the Borrower in an aggregate amount no
greater than the amount set forth opposite such Lender's name on the
signature pages hereof under the heading "Term Commitment" or, if such
Lender has entered into one or more Lender Assignments, set forth for
such Lender in the Register maintained by the Administrative 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. "Term Commitments"
means the total of the Lenders' Term Commitments hereunder. The Term
Commitments shall in no event exceed $125,000,000.
"Term Loan" means a loan by a Lender to the Borrower under the Term
Tranche.
"Term Tranche" means the five-year term loan facility provided by
the Lenders to the Borrower pursuant to Section 2.01(b).
"Termination Date" means:
(a) with respect to the Term Tranche, the earlier to occur of
(i) July 2, 2002 or such later date to which the Termination Date of
the Term Tranche is extended in accordance with Section 2.05 and
(ii) the date of termination or reduction in whole of the Term
Commitments pursuant to Section 2.03 or 9.02,
(b) with respect to the Revolving 364-Day Tranche, the earlier to
occur of (i) July 1, 1998 or such later date to which the Termination
Date of the Revolving 364-Day Tranche is extended in accordance with
Section 2.05 and (ii) the date of termination or reduction in whole of
the Revolving 364-Day Commitments pursuant to Section 2.03 or 9.02 and
(c) with respect to the Revolving Three-Year Tranche, the earlier
to occur of (i) July 2, 2000 or such later date to which the
Termination Date of the Revolving Three-Year Tranche is extended in
accordance with Section 2.05 and (ii) the date of termination or
reduction in whole of the Revolving Three-Year Commitments pursuant to
Section 2.03 or 9.02.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in the
Federal Reserve Statistical Release H.15(519) during the week following
such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in
New York City received at approximately 10:00 a.m. on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by
the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Tranche" means the Revolving 364-Day Tranche, the Revolving Three-
Year Tranche or the Term Tranche; and "Tranches" means any or all of
the foregoing.
"Transaction" means an equity investment in a Project, together with
the transactions in connection therewith.
"Trigger Date" means the first date to occur on or after the 180th
day following any Borrowing under the Revolving 364-Day Tranche on
which the ratio of the Borrower's Consolidated Debt to Consolidated
Capital equals or exceeds 0.64:1.0; provided, however, that a Trigger
Date shall occur only if all or any portion of such Borrowing, or any
subsequent Borrowing, under the Revolving 364-Day Tranche remained
outstanding during such 180-day period and remains outstanding on such
Trigger Date.
"Trustee" has the meaning assigned to that term in the Indenture.
"Type" has the meaning assigned to such term (i) in the definition
of "Loan" when used in such context and (ii) in the definition of
"Borrowing" when used in such context.
SECTION 1.02. Computation of Time Periods; Construction. (a) 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".
(b) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "include", "includes", and "including" shall
be deemed to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set
forth herein), (ii) any reference herein to any Person shall be construed
to include such Person's successors and assigns, (iii) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed
to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (v) the
words "asset" and "property" shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
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) ("GAAP").
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments. (a) Revolving Commitments. Each Lender
severally agrees, on the terms and conditions hereinafter set forth:
(i) to make Revolving 364-Day Loans to the Borrower during the
period from the Closing Date until the Termination Date of the
Revolving 364-Day Tranche, in an aggregate outstanding amount not to
exceed on any day such Lender's Available Commitment under the
Revolving 364-Day Tranche (after giving effect to all Extensions of
Credit to be made on such day and the application of the proceeds
thereof), and
(ii) to make Revolving Three-Year Loans to the Borrower and to
participate in the issuance of Letters of Credit (and the LC
Outstandings thereunder) under the Revolving Three-Year Tranche, during
the period from the Closing Date until the Termination Date of the
Revolving Three-Year Tranche, in an aggregate outstanding amount not to
exceed on any day such Lender's Available Commitment under the
Revolving Three-Year Tranche (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 Loans under any Revolving Tranche,
or reduce or cancel Letters of Credit, and use the resulting increase in
the Available Commitments under such Revolving Tranche for further
Extensions of Credit in accordance with the terms hereof.
(b) Term Commitments. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make a single Term Loan to the
Borrower on the Closing Date, and to Convert Term Loans pursuant to
Section 3.02 during the period from the Closing Date until the Termination
Date of the Term Tranche, in each case in an aggregate outstanding amount
not to exceed on any day such Lender's Term Commitment.
SECTION 2.02. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on
the average daily amount of such Lender's Available Commitment under each
of the Revolving Tranches 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 of the respective Revolving
Tranche, 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 of such Revolving Tranche.
(b) The Borrower agrees to pay to the Administrative 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 of
the Revolving Three-Year Tranche at a rate per annum equal to the
Applicable Margin with respect to Eurodollar Rate Loans from time to time,
payable quarterly in arrears on the last day of each January, April, July
and October, commencing on July 31, 1997, and on the Termination Date of
the Revolving Three-Year Tranche; provided, however, that with respect to
Letters of Credit that support only performance obligations of the
Borrower or any of its Subsidiaries, such commission shall be at a rate
per annum equal to 50% of the Applicable Margin with respect to Eurodollar
Rate Loans from time to time. The determination (the "Initial
Determination") of whether a particular Letter of Credit supports only
performance obligations of the Borrower or any of its Subsidiaries shall
be made by the Administrative Agent prior to the issuance of such Letter
of Credit, and the foregoing Letter of Credit commission shall, subject to
clauses (i) and (ii) below, be payable in accordance with such Initial
Determination. The Administrative Agent shall promptly give notice of the
Initial Determination to the Borrower and each Lender. If the Initial
Determination of the Administrative Agent is that, for capital
requirements purposes, such Letter of Credit supports only performance
obligations of the Borrower or any of its Subsidiaries, then each Lender
shall, within 90 days after its receipt of notice of the Initial
Determination from the Administrative Agent, provide written notice to the
Administrative Agent stating whether it concurs with and approves the
Initial Determination. The failure of any Lender to so respond within
such 90-day period shall be deemed to constitute an approval by such
Lender of the Initial Determination. If the Required Lenders do not
concur with and approve the Initial Determination within such period,
(i) the Borrower shall pay to the Administrative Agent for the account of
each Lender an amount equal to the excess, if any, of (A) the Letter of
Credit commission that would have been payable by the Borrower pursuant to
the first sentence of this subsection (b) (without giving effect to the
proviso thereto) with respect to such Letter of Credit over (B) the actual
Letter of Credit commission paid by the Borrower pursuant to this
subsection (b) with respect to such Letter of Credit, such amount to be
payable immediately upon the Borrower's receipt of notice from the
Administrative Agent stating that the Required Lenders failed to concur
with and approve the Initial Determination, and (ii) the Letter of Credit
commission payable by the Borrower with respect to such Letter of Credit
shall be at the rate specified in the first sentence of this
subsection (b) (without giving effect to the proviso thereto). If the
Initial Determination of the Administrative Agent is that, for capital
requirements purposes, a particular Letter of Credit supports only
financial obligations of the Borrower or any of its Subsidiaries and,
within 30 days after the Administrative Agent gives notice of such Initial
Determination to the Borrower and each Lender, the Administrative Agent
determines that such Letter of Credit in fact supports only performance
obligations of the Borrower or any of its Subsidiaries, the Administrative
Agent shall promptly notify the Borrower and each Lender of such
determination (the "Final Determination") and each Lender shall, within 90
days after its receipt of notice of the Final Determination from the
Administrative Agent, provide written notice to the Administrative Agent
stating whether it concurs with and approves the Final Determination. The
failure of any Lender to so respond within such 90-day period shall be
deemed to constitute an approval by such Lender of the Final
Determination. If the Required Lenders concur with and approve the Final
Determination within such period, (1) an amount equal to the excess, if
any, of (x) the actual Letter of Credit commission paid by the Borrower
pursuant to this subsection (b) with respect to such Letter of Credit over
(y) the Letter of Credit commission that would have been payable by the
Borrower pursuant to the proviso to the first sentence of this subsection
(b) with respect to such Letter of Credit, shall be set off and deducted
by the Borrower from all subsequent Letter of Credit commissions payable
pursuant to this subsection (b) until such amount has been set off and
deducted in full, and (2) the Letter of Credit commission payable by the
Borrower with respect to such Letter of Credit shall be at the rate
specified in the proviso to the first sentence of this subsection (b). In
connection with the Lenders' review of each Initial Determination and
Final Determination, the Borrower shall provide to each Lender all
supporting information regarding the applicable Letter of Credit and such
other information as any Lender, through the Administrative Agent, may
reasonably request.
(c) In addition to the fees provided for in subsections (a) and (b)
above, the Borrower shall pay to the Administrative Agent, for the account
of Chase, such other fees as are provided for in that certain letter
agreement, dated May 9, 1997, among the Borrower, the Arranger and Chase
(the "Fee Letter"), in the amounts and at the times specified therein.
SECTION 2.03. Reduction of the Commitments. (a) The Borrower may,
upon at least five Business Days' notice to the Administrative Agent
(which shall promptly distribute copies thereof to the Lenders), terminate
in whole or reduce ratably in part the unused portions of the Revolving
364-Day Commitments, the Revolving Three-Year Commitments and/or the Term
Commitments; provided that any such partial reduction under any Tranche
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 (on a pro rata basis among all of the Tranches) by an amount equal
in the aggregate to the product of (i) the Commitments on such date
(whether used or unused) 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.
(c) On any Business Day following the Closing Date on which the sum
of the Commitments under the Term Tranche shall exceed the aggregate
outstanding principal amount of Term Loans, the Term Commitments of the
Lenders shall automatically and permanently reduce ratably by an amount
equal to such excess. In addition, on the date of any prepayment of the
principal amount of the Term Loans made hereunder, the Term Commitments of
the Lenders shall automatically and permanently reduce ratably by an
amount equal to the amount of principal so prepaid.
SECTION 2.04. Computations of Outstandings. Whenever reference is
made in this Agreement to the principal amount outstanding on any date
under this Agreement (or under any Tranche), such reference shall refer to
the sum of (i) the aggregate principal amount of all Loans outstanding on
such date under this Agreement (or under such Tranche) plus (ii) in the
case of the principal amount outstanding under this Agreement or under the
Revolving Three-Year Tranche, 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. At no time shall the principal amount outstanding
under this Agreement (or under any Tranche) exceed the aggregate amount of
the Commitments hereunder (or under such Tranche). References to the
unused portion of the Commitments under this Agreement (or under any
Tranche) shall refer to the excess, if any, of the Commitments hereunder
(or under such Tranche) over the principal amount outstanding hereunder
(or under such Tranche); and references to the unused portion of any
Lender's Commitment under this Agreement (or under any Tranche) shall
refer to such Lender's Percentage of the unused Commitments hereunder (or
under such Tranche).
SECTION 2.05. Extension of Termination Date. At least 30 but not more
than 60 days prior to each anniversary of the date of the Closing Date
(but in any event no later than 45 days prior to the then-scheduled
Termination Date of the Revolving 364-Day Tranche, the Revolving Three-
Year Tranche or the Term Tranche, as the case may be), the Borrower may,
by delivering a written notice to such effect to the Administrative Agent
(each such request being irrevocable), request that each Lender consent to
(i) a 364-day extension of the Termination Date of the Revolving 364-Day
Tranche and/or (ii) a one-year extension of the Termination Date of the
Revolving Three-Year Tranche and/or the Term Tranche. Upon receipt of any
such notice, the Administrative Agent shall promptly communicate such
request to the Lenders. Within 30 days following the giving of such
notice by the Borrower, the Lenders shall indicate to the Administrative
Agent whether the Borrower's request to so extend the then-scheduled
Termination Date of such Tranche is acceptable to the Lenders (and, if so,
the conditions, if any, relating to such acceptance, including, with
respect to the Term Tranche, revisions to the principal repayment schedule
set forth in Section 3.05(b)), it being understood that the unanimous
written consent of the Lenders shall be required to effect any such
requested extension, that the determination by each Lender will be in its
sole and absolute discretion and that the failure of any Lender to so
respond within such period shall be deemed to constitute a refusal by such
Lender to consent to such request (with the result being that such request
is denied). The Administrative Agent shall promptly notify the Borrower
and the Lenders of the result of such request, and if such request shall
have been consented to by all of the Lenders, the Termination Date of the
applicable Tranche shall be extended to (A) in the case of any extension
of the Revolving Three-Year Tranche or the Term Tranche, the first
anniversary of the then-scheduled Termination Date of such Tranche, or
(B) in the case of any extension of the Revolving 364-Day Tranche, the
date that occurs 364 days after the then-scheduled Termination Date of
such Tranche; provided, however, that the Termination Date of such Tranche
shall be so extended notwithstanding the existence of one or more Lenders
(the "Nonextending Lenders") that have elected not to extend (or failed to
notify the Administrative Agent of its (or their) consent to extend) if
(1) such Nonextending Lender(s) has (or have) been replaced in the full
amount of its (or their) Commitments hereunder pursuant to Section
11.07(h) and (2) no Event of Default or Default shall then have occurred
and be continuing. If a Nonextending Lender is not so replaced pursuant
to Section 11.07(h), the Commitments of all of the Lenders under the
applicable Tranche shall automatically terminate on the then-scheduled
Termination Date of such Tranche.
ARTICLE III
LOANS
SECTION 3.01. Loans. (a) The Borrower may request a Borrowing (other
than a Conversion) under any Tranche by delivering a notice (a "Notice of
Borrowing") to the Administrative Agent no later than 12:00 noon on the
third Business Day or, in the case of ABR Loans, on the first Business
Day, prior to the date of the proposed Borrowing (which Borrowing, in the
case of the Term Tranche, shall be on the Closing Date). The
Administrative Agent shall give each Lender prompt notice of each Notice
of Borrowing. Each Notice of Borrowing shall be in substantially the form
of Exhibit A and shall specify the requested (i) date of such Borrowing,
(ii) Tranche under which such Borrowing is to be made, (iii) Type of Loans
to be made in connection with such Borrowing, (iv) Interest Period, if
any, for such Loans and (v) amount of such Borrowing (which amount, in the
case of the Term Tranche, shall be the aggregate amount of the Term
Commitments). Each proposed Borrowing shall conform to the requirements
of Sections 3.03 and 3.04. Amounts borrowed under the Term Tranche
pursuant to this Section 3.01 and repaid or prepaid may not be reborrowed.
(b) Each Lender shall, before 12:00 noon on the date of such
Borrowing, make available for the account of its Applicable Lending Office
to the Administrative Agent at the Administrative Agent's offices at 1
Chase Manhattan Plaza, 8th Floor, New York, New York, in same day funds,
such Lender's Percentage of such Borrowing. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article VI, the Administrative Agent will make
such funds available to the Borrower at the Administrative Agent's
aforesaid address; provided, however, that the proceeds of (i) the
Borrowing under the Term Tranche and (ii) the initial Extension of Credit
under the Revolving Three-Year Tranche shall be applied first directly by
the Administrative Agent on the Closing Date to the prepayment in full of
all outstanding principal, accrued interest and other amounts then owing
under the Existing Term Agreement and the Existing Revolving Agreement,
respectively, and then, to the extent the proceeds of such Borrowing and
initial Extension of Credit exceed the amount necessary to prepay in full
all outstanding principal, accrued interest and other amounts then owing
under the Existing Term Agreement and the Existing Revolving Agreement, to
the Borrower at the Administrative Agent's aforesaid address for general
corporate purposes. Notwithstanding the foregoing, unless the
Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's Percentage of such Borrowing, the
Administrative Agent may assume that such Lender has made such Percentage
available to the Administrative Agent on the date of such Borrowing in
accordance with the first sentence of this subsection (b), and the
Administrative 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 Administrative 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
Administrative 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
Administrative Agent, at (i) in the case of the Borrower, the interest
rate applicable at the time to Loans made in connection with such
Borrowing and (ii) in the case of such Lender, the Federal Funds Effective
Rate. Within the limits of each Lender's Available Commitment under each
Revolving Tranche and subject to the other terms and conditions set forth
in this Agreement for the making of Loans (including Section 8.01(h)), the
Borrower may request (and the Lenders shall honor) one or more additional
Borrowings under any Revolving Tranche from the performing Lenders to fund
such repayment to the Administrative Agent. If a non-performing Lender
shall repay to the Administrative Agent such corresponding amount in full
(with interest as above provided), (x) the Administrative Agent shall
apply such corresponding amount and interest to the repayment to the
Administrative Agent (or repayment of Loans made to fund such repayment to
the Administrative Agent), and shall make any remainder available to the
Borrower and (y) such amount so repaid shall be deemed to constitute such
Lender's Loan, made as part of such Borrowing for purposes of this
Agreement as if funded concurrently with the other Loans 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 Administrative Agent of Percentages, Commitments
and payments hereunder shall be made without regard to the Commitments, or
outstanding Loans, of such non-performing Lender, and any amounts paid to
the Administrative Agent for the account of such non-performing Lender
shall be held by the Administrative Agent in trust for such non-performing
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 Loan 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 Loan on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(d) Any Lender may request that Loans made by it under any Tranche be
evidenced by a Promissory Note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a Promissory Note payable to
the order of such Lender (or, if requested by such Lender, to such Lender
and its registered assigns) and in a form approved by the Administrative
Agent. Thereafter, the Loans evidenced by such Promissory Note and
interest thereon shall at all times (including after assignment pursuant
to Section 11.07) be represented by one or more Promissory Notes in such
form payable to the order of the payee named therein (or, if such
Promissory Note is a registered note, to such payee and its registered
assigns).
SECTION 3.02. Conversion of Loans. The Borrower may from time to time
Convert any Loan (or portion thereof) of any Type to one or more Loans of
the same or any other Type by delivering a notice of such Conversion (a
"Notice of Conversion") to the Administrative Agent no later than 12:00
noon on (x) the third Business Day prior to the date of any proposed
Conversion into a Eurodollar Rate Loan and (y) the first Business Day
prior to the date of any proposed Conversion into an ABR Loan. The
Administrative Agent shall give each Lender prompt notice of each Notice
of Conversion. Each Notice of Conversion shall be in substantially the
form of Exhibit B and shall specify (i) the requested date of such
Conversion, (ii) the Tranche under which such Loan (or portion thereof)
was made, (iii) the Type of, and Interest Period, if any, applicable to,
the Loans (or portions thereof) proposed to be Converted, (iv) the
requested Type of Loans to which such Loans (or portions thereof) are
proposed to be Converted, (v) the requested initial Interest Period, if
any, to be applicable to the Loans resulting from such Conversion and
(vi) the aggregate amount of Loans (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 Loan and the date of payment in full of such Loan shall be
divided into successive periods of months ("Interest Periods") for
purposes of computing interest applicable thereto. The initial Interest
Period for each such Loan shall begin on the day such Loan is made, and
each subsequent Interest Period shall begin on the last day of the
immediately preceding Interest Period for such Loan. 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 for a
Eurodollar Rate Loan under any Tranche that ends after the Termination
Date of such Tranche;
(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; and
(iii) any Interest Period that commences on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period)
shall end on the last Business Day of the last calendar month of such
Interest Period.
SECTION 3.04. Other Terms Relating to the Making and Conversion of
Loans. (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)) under any Tranche shall be in an aggregate amount not
less than $10,000,000, 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 under such Tranche on such date, after giving
effect to all other Extensions of Credit to be made on such date under
such Tranche), and shall consist of Loans 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 Borrowing under the Term Tranche and the initial
Borrowing under the Revolving Three-Year Tranche shall be in an
aggregate amount sufficient to repay in full all outstanding principal,
accrued interest and other amounts owing under the Existing Term
Agreement and the Existing Revolving Agreement, respectively, as of the
Closing Date;
(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 Loans be outstanding hereunder;
(iv) no Eurodollar Rate Loan may be Converted on a date other than
the last day of the Interest Period applicable to such Loan unless the
corresponding amounts, if any, payable to the Lenders pursuant to
Section 5.04(b) 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 Loans or fail, in
any Notice of Conversion that has been timely given, to select the
duration of any Interest Period for Loans to be Converted into
Eurodollar Rate Loans in accordance with Section 3.03, such Loans
shall, on the last day of the then existing Interest Period therefor,
automatically Convert into, or remain as, as the case may be, ABR
Loans; and
(vi) if, on the date of any proposed Conversion, any Event of
Default or Default shall have occurred and be continuing, all Loans
then outstanding shall, on such date, automatically Convert into, or
remain as, as the case may be, ABR Loans; provided, however, that with
respect to any Default that occurs and is continuing as a result of the
failure of the Borrower to comply with the ratio set forth in Section
8.01(j), any such Loans may be Converted into Eurodollar Rate Loans
with an Interest Period not to exceed three months in duration.
(b) If any Lender shall notify the Administrative 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 Loans hereunder, (i) the obligation
of such Lender to make, or to Convert Loans into, Eurodollar Rate Loans
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 Loans,
and (ii) if the maintenance of Eurodollar Rate Loans 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 Loans 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
Administrative 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, Loans,
participation and other rights and obligations hereunder to an Eligible
Assignee), the Administrative 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 Administrative Agent for determining the Eurodollar
Rate for Eurodollar Rate Loans to be made in connection with any proposed
Borrowing or (ii) the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Administrative
Agent that the Eurodollar Rate for Eurodollar Rate Loans to be made in
connection with such Borrowing will not adequately reflect the cost to
such Required Lenders of making, funding or maintaining their respective
Eurodollar Rate Loans for such Borrowing, the right of the Borrower to
select Eurodollar Rate Loans for such Borrowing and any subsequent
Borrowing shall be suspended until the Administrative Agent shall notify
the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Loan to be made or Converted in
connection with such Borrowing shall be an ABR Loan.
(d) If any Lender shall have delivered a notice to the Administrative
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 3.04(b), Section 3.01(c)
or Section 4.04(c), the Borrower or the Administrative Agent may demand
that such Lender assign in accordance with Section 11.07, to one or more
Eligible Assignees designated by the Borrower or the Administrative Agent,
all (but not less than all) of such Lender's Commitments, Loans,
participation and other rights and obligations hereunder; provided that
any such demand by the Borrower during the continuance of an Event of
Default or Default shall be ineffective without the consent of the
Required Lenders. If, within 30 days following any such demand by the
Administrative Agent 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 Administrative Agent
shall have failed to designate any such Eligible Assignee, then such
demand by the Borrower or the Administrative Agent 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 G 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 Administrative Agent), including, without limitation,
all accrued interest and fees and, to the extent not paid by the Borrower,
any payments required pursuant to Section 5.04(b).
(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 Loans, 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 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 Loan to be made by such Lender when such Loan, as a result of such
failure, is not made on such date.
SECTION 3.05. Repayment of Loans; Interest. (a) Principal under
Revolving Tranches. The Borrower shall repay the outstanding principal
amount of the Loans under the Revolving 364-Day Tranche and the Revolving
Three-Year Tranche on the respective Termination Date for such Tranche.
(b) Principal under Term Tranche. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders the aggregate
outstanding principal amount of the Loans under the Term Tranche in
fourteen (14) installments, payable in thirteen (13) equal installments
each in the amount of $7,812,500 on each March 31, June 30, September 30
and December 31, commencing on March 31, 1999 and ending on March 31,
2002, and a final installment of the remaining outstanding principal
amount of the Loans under the Term Tranche on the Termination Date for the
Term Tranche.
(c) Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan owing to each Lender from the date of such
Loan until such principal amount shall be paid in full, at the Applicable
Rate for such Loan (except as otherwise provided in this subsection (c)),
payable as follows:
(i) ABR Loans. If such Loan is an ABR Loan, 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 ABR Loan
and on the date such ABR Loan 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 Loans. If such Loan is a Eurodollar Rate
Loan, interest thereon shall be payable on the last day of such
Interest Period and, if the Interest Period for such Loan 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. Issuing Banks. Subject to the terms and conditions
hereof, the Borrower may from time to time identify and arrange for one or
more Lenders to act as Issuing Banks hereunder. Any such designation by
the Borrower shall be notified to the Administrative Agent at least five
Business Days prior to the first date upon which the Borrower proposes
that such Issuing Bank issue its first Letter of Credit. Nothing
contained herein shall be deemed to require any Lender to agree to act as
an Issuing Bank, if it does not so desire.
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 Administrative Agent (which shall promptly distribute
copies thereof to the Lenders) and the relevant Issuing 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 earlier to occur of
(A) the date one year after the date of issuance of such Letter of Credit
(or, in the case of any extension thereof, one year after the
effectiveness of such extension) and (B) the date that is five Business
Days prior to the Termination Date of the Revolving Three-Year Tranche,
provided that any Letter of Credit with a stated expiry date of one year
after its date of issuance may provide for the renewal thereof for
additional one-year periods (but in no event later than the Termination
Date of the Revolving Three-Year Tranche) subject to the other terms and
conditions contained herein (including the satisfaction of the conditions
precedent set forth in Section 6.02)), (ii) the proposed stated amount of
such Letter of Credit (which shall not be less than $500,000) 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 Issuing 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 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 Issuing Bank
Agreement, such Issuing Bank shall issue (or extend, amend or modify) such
Letter of Credit and provide notice and a copy thereof to the
Administrative Agent, which shall promptly furnish copies thereof to the
Lenders.
(b) Each Lender severally agrees with such Issuing 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 Issuing
Bank and each Lender of such participation in such amount.
(c) Notwithstanding anything herein to the contrary, the aggregate
stated amount of all Letters of Credit outstanding at any one time shall
not exceed $200,000,000.
SECTION 4.03. Issuing Bank Fees. The Borrower shall pay directly to
each Issuing Bank such fees and expenses, if any, specified to be paid to
such Issuing Bank pursuant to the Issuing Bank Agreement to which it is a
party, at the times, and in the manner, specified in such Issuing Bank
Agreement.
SECTION 4.04. Reimbursement to Issuing Banks. (a) The Borrower hereby
agrees to pay to the Administrative Agent for the account of each Issuing
Bank, on demand made by such Issuing Bank to the Borrower and the
Administrative Agent, on and after each date on which such Issuing Bank
shall pay any amount under the Letter of Credit issued by such Issuing
Bank, a sum equal to the amount so paid plus interest on such amount from
the date so paid by such Issuing Bank until repayment to such Issuing Bank
in full at a fluctuating interest rate per annum equal at all times to the
Applicable Rate for ABR Loans.
(b) If any Issuing Bank shall not have been reimbursed in full for
any payment made by such Issuing Bank under the Letter of Credit issued by
such Issuing Bank on the date of such payment, such Issuing Bank shall
give the Administrative Agent and each Lender prompt notice thereof (an
"LC Payment Notice") no later than 12:00 noon on the Business Day
immediately succeeding the date of such payment by such Issuing Bank.
Each Lender severally agrees to purchase a participation in the
reimbursement obligation of the Borrower to such Issuing Bank under
subsection (a) above, by paying to the Administrative Agent for the
account of such Issuing Bank an amount equal to such Lender's Percentage
of such unreimbursed amount paid by such Issuing Bank, plus interest on
such amount at a rate per annum equal to the Federal Funds Effective Rate
from the date of such payment by such Issuing Bank to the date of payment
to such Issuing Bank by such Lender. Each such payment by a Lender shall
be made not later than 3:00 P.M. on the later to occur of (i) the Business
Day immediately following the date of such payment by such Issuing Bank
and (ii) the Business Day on which such Lender shall have received an LC
Payment Notice from such Issuing Bank. Each Lender's obligation to make
each such payment to the Administrative Agent for the account of such
Issuing Bank shall be several and shall not be affected by the occurrence
or continuance of any 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
Administrative Agent for the account of an Issuing 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 Administrative Agent for the account of an Issuing
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 Issuing Bank shall be deemed, for purposes of
Section 5.05 and Article IX hereof and the Cash Collateral Agreement, to
be a Lender hereunder owed a Revolving Three-Year Loan in an amount equal
to the outstanding principal amount due and payable by such Lender to the
Administrative Agent for the account of such Issuing Bank pursuant to
subsection (b) above.
(d) Each participation purchased by a Lender under subsection (b)
above, shall constitute an ABR Loan deemed made by such Lender to the
Borrower under the Revolving Three-Year Tranche on the date of such
payment by the relevant Issuing Bank under the Letter of Credit issued by
such Issuing Bank (irrespective of the Borrower's noncompliance, if any,
with the conditions precedent for Loans hereunder); and all such payments
by the Lenders in respect of any one such payment by such Issuing 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 Loan 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 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 Issuing 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 Issuing Bank under the Letter of
Credit issued by such Issuing 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 Issuing 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 Issuing 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 Issuing 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 Issuing Bank, and
such Issuing 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 Issuing Bank's wilful misconduct or gross negligence,
including such Issuing 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 Issuing Bank may accept sight
drafts and accompanying certificates presented under the Letter of Credit
issued by such Issuing 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
Issuing 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 Issuing 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. on the day when due in Dollars to the Administrative Agent at
its offices at 1 Chase Manhattan Plaza, 8th Floor, New York, New York, in
same day funds (in each case specifying the amount to be allocated to each
Tranche), except payments to be made directly to any Issuing Bank as
expressly provided herein; any payment received after 2:00 P.M. shall be
deemed to have been received at the start of business on the next
succeeding Business Day, unless the Administrative 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. The Administrative
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 Administrative Agent on the date such payment was
received by the Administrative Agent, the Administrative 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 Effective
Rate, from the date of such payment by the Borrower to the Administrative
Agent to the date of payment in full by the Administrative Agent to such
Lender of such unpaid amount. Upon the Administrative 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 Administrative Agent shall
make all payments hereunder and under any Promissory 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 Administrative Agent, each
Lender and each Issuing Bank, if and to the extent payment owed to the
Administrative Agent, such Lender or such Issuing Bank, as the case may
be, is not made when due hereunder (or, in the case of a Lender, under any
Promissory Note held by such Lender), to charge from time to time against
any or all of the Borrower's accounts with the Administrative Agent, such
Lender or such Issuing Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate
(when the Alternate Base Rate is based on the Prime Rate) shall be made by
the Administrative 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, the Base
CD Rate and the Federal Funds Effective Rate) shall be made by the
Administrative 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 Administrative 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 Loans
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 Administrative 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
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date, and the Administrative
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 Administrative Agent, such Lender shall repay to
the Administrative 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 Administrative Agent, at the Federal Funds
Effective Rate.
(f) Any amount payable by the Borrower hereunder or under any of the
Promissory 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.
(g) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i)
first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards
payment of principal then due hereunder, ratably among the parties
entitled thereto.
SECTION 5.02. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Administrative 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 Administrative Agent for the purpose of determining any
such interest rate, the Administrative Agent shall determine such interest
rate on the basis of timely information furnished by the remaining
Reference Banks, subject to Section 3.04(c).
(b) The Administrative Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 3.05(c)(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(c)(ii).
SECTION 5.03. Prepayments. The Borrower shall have no right to prepay
any principal amount of any Loans other than as provided in subsections
(a), (b), (c) and (d) below.
(a) The Borrower may, upon at least five Business Days' notice to the
Administrative Agent stating the proposed date, the applicable Tranche(s)
and the aggregate principal amount of the prepayment, and if such notice
is given, the Borrower shall, prepay the outstanding principal amounts of
Loans made as part of the same Borrowing under such Tranche(s), 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 Loans, any amount payable to the Lenders pursuant to
Section 5.04(b); provided, however, that each partial prepayment under any
Tranche shall be in an aggregate principal amount of not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(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 each Tranche as
shall be necessary in order that the aggregate principal amount
outstanding under such Tranche (after giving effect to all Extensions of
Credit to be made on such date and the application of the proceeds
thereof) will not exceed the Commitments under such Tranche 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 Loans, any amount payable to the Lenders
pursuant to Section 5.04(b). Any prepayments required by this subsection
(b) shall be applied to outstanding ABR Loans up to the full amount
thereof before they are applied, first, to outstanding Eurodollar Rate
Loans and, second, with respect to the Revolving Three-Year Tranche, as
cash collateral, pursuant to the Cash Collateral Agreement, to secure LC
Outstandings.
(c) During the period from the Trigger Date to the Collateral Release
Date, the Borrower shall, within two Business Days after the date of each
Prepayment Event that occurs during such period, prepay the Revolving 364-
Day Loans in an aggregate amount equal to the lesser of (i) 100% of the
Net Proceeds of such Prepayment Event, other than any such Net Proceeds
applied within such two-Business Day period to refinance existing Debt of
the Borrower (including the Senior Notes), and (ii) the outstanding
principal amount under the Revolving 364-Day Tranche, together with
(A) accrued interest to the date of such prepayment on the principal
amount repaid and (B) in the case of prepayments of Eurodollar Rate Loans,
any amount payable to the Lenders pursuant to Section 5.04(b). Any
prepayments required by this subsection (c) shall be applied to
outstanding ABR Loans up to the full amount thereof before they are
applied to outstanding Eurodollar Rate Loans.
(d) Any prepayments of the principal amount of Term Loans shall be
applied to the Borrower's obligations under Section 3.05(b) in inverse
order of maturity. To the extent consistent with the foregoing, any such
prepayments shall be applied to outstanding ABR Loans under the Term
Tranche up to the full amount thereof before they are applied to
outstanding Eurodollar Rate Loans under the Term Tranche.
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 Loans, or of participating in the issuance,
maintenance or funding of any Letter of Credit, or (B) the cost to any
Issuing Bank of issuing or maintaining any Letter of Credit, then the
Borrower shall from time to time, upon demand by such Lender or Issuing
Bank, as the case may be (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender or
Issuing Bank, as the case may be, additional amounts sufficient to
compensate such Lender or Issuing 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
Administrative Agent by such Lender or such Issuing Bank, as the case may
be, shall constitute such demand and shall be conclusive and binding for
all purposes, absent manifest error.
(b) Breakage. If, due to any prepayment pursuant to Section 5.03, an
acceleration of maturity of the Loans pursuant to Section 9.02, or any
other reason, any Lender receives payments of principal of any Eurodollar
Rate Loan other than on the last day of the Interest Period relating to
such Loan, or if the Borrower shall Convert any Eurodollar Rate Loans 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 Administrative Agent), pay to the Administrative 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 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 Loan. For purposes of this
subsection (b), 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 Administrative Agent by such Lender,
shall constitute such demand and shall be conclusive and binding for all
purposes, absent manifest error.
(c) Capital. If any Lender or Issuing 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 Issuing Bank, whether
directly, or indirectly as a result of commitments of any corporation
controlling such Lender or Issuing Bank (but without duplication), and
(ii) the amount of such capital is increased by or based upon (A) the
existence of such Lender's or Issuing Bank's commitment to lend or issue
or participate in any Letter of Credit hereunder, or (B) the participation
in or issuance or maintenance of any Letter of Credit or Loan and
(C) other similar such commitments, then, upon demand by such Lender or
Issuing Bank, the Borrower shall immediately pay to the Administrative
Agent for the account of such Lender or Issuing Bank from time to time as
specified by such Lender or Issuing Bank additional amounts sufficient to
compensate such Lender or Issuing Bank in the light of such circumstances,
to the extent that such Lender or Issuing 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 Administrative Agent by such Lender or Issuing Bank,
shall be conclusive and binding for all purposes, absent manifest error.
(d) 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) or (c) 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 subsection (a), (b) or (c) above, more
than 90 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.
(e) Survival of Obligations. Subject to subsection (d) 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 Issuing
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 Loans owing to it (other
than pursuant to Section 5.04) under any Tranche in excess of its ratable
share of payments obtained by all the Lenders on account of the Loans of
such Lenders under such Tranche, such Lender shall forthwith purchase from
the other Lenders such participation in the Loans owing to them under such
Tranche as shall be necessary to cause such purchasing Lender to share the
excess payment under such Tranche 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 Administrative 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 Issuing 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, Issuing 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, Issuing 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, Issuing 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, Issuing Bank and Agent
for the full amount of Taxes and Other Taxes (including any Taxes and any
Other Taxes imposed by any jurisdiction on amounts payable under this
Section 5.06) paid by such Lender, Issuing 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, Issuing Bank or Agent (as
the case may be) makes written demand therefor; provided, that such
Lender, Issuing 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,
Issuing 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 Administrative 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 Administrative Agent duly completed
copies of such form or forms prescribed by the United States 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 Administrative Agent, such Lender will deliver to
the Borrower and the Administrative Agent (to the extent that it is not
prohibited by law from doing so) 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
Administrative Agent the form or forms referred to in the two preceding
sentences further undertakes to deliver to the Borrower and the
Administrative Agent, to the extent that it is not prohibited by law from
doing so, 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 Administrative 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 the Initial Extension of Credit.
The obligation of each Lender to make its initial Extension of Credit is
subject to the fulfillment of the following conditions precedent:
(a) The Administrative 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 any Promissory Notes) in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the Board of
Directors, or of the Executive Committee of the Board of Directors, of
the Borrower authorizing the Borrower to enter into this Agreement 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 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 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 Administrative Agent.
(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 Existing Revolving Agreement
and the Existing Term Agreement effective automatically on such date
upon the satisfaction (or waiver) of the other conditions precedent set
forth in this Section 6.01.
(v) The Promissory Notes (if requested by any Lender pursuant to
Section 3.01(d)), duly executed by the Borrower.
(vi) The Cash Collateral Agreement duly executed by the Borrower
together with evidence of the completion of all other actions as may be
necessary or, in the opinion of the Administrative Agent and counsel
for the Administrative Agent, desirable to perfect the security
interests and liens created thereby.
(vii) A certified copy of Schedule II hereto, in form and substance
reasonably satisfactory to the Administrative Agent setting forth:
(A) all Project Finance Debt of the Consolidated Subsidiaries,
together with the Borrower's Ownership Interest in each such
Consolidated Subsidiary; and
(B) debt (as such term is construed in accordance with GAAP)
of Enterprises as of the Closing Date.
(viii) Favorable opinions of:
(A) Michael D. VanHemert, Esq., Assistant General Counsel of
the Borrower, in substantially the form of Exhibit D and as to such
other matters as the Required Lenders, through the Administrative
Agent, may reasonably request; and
(B) McDermott, Will & Emery, counsel to the Administrative
Agent, in substantially the form of Exhibit E and as to such other
matters as the Administrative Agent may reasonably request.
(ix) A letter from The Bank of Tokyo-Mitsubishi, Ltd., Los Angeles
Branch, confirming that the participation obligations of each Existing
Bank has been terminated with respect to each Existing Letter of
Credit.
(b) Each of the Existing Revolving Agreement and the Existing Term
Agreement has been (or will have been, upon the first Extension of Credit
and the application of the proceeds thereof) paid in full, the commitments
thereunder terminated and all letters of credit issued thereunder either
cash collateralized, canceled or replaced.
(c) The following statements shall be true and the Administrative
Agent shall have received a certificate of a duly authorized officer of
the Borrower, dated the Closing Date and in sufficient copies for each
Lender stating that:
(i) the representations and warranties set forth in Section 7.01
of this Agreement and Section 7 of the Cash Collateral Agreement are
true and correct on and as of the Closing Date as though made on and as
of such date, and
(ii) no event has occurred and is continuing that constitutes a
Default or an Event of Default.
(d) The Borrower shall have paid all fees under or referenced in
Section 2.02 and all expenses referenced in Section 11.04(a), in each case
to the extent then due and payable.
(e) All Governmental Approvals necessary in connection with the Loan
Documents and the transactions contemplated thereby shall have been
obtained and be in full force and effect. All third party approvals
necessary or, in the judgment of the Administrative Agent, advisable in
connection with the Loan Documents and the transactions contemplated
thereby shall have been obtained and be in full force and effect.
(f) The Lenders shall have received the unaudited interim
consolidated financial statements of the Borrower and its Subsidiaries for
the fiscal quarter ended March 31, 1997 (which requirement may be
satisfied by the delivery of the Borrower's quarterly report on Form 10-Q
for such quarter). The business, assets, property and financial condition
of the Borrower and its Subsidiaries as reflected in such financial
statements shall be satisfactory to the Lenders.
SECTION 6.02. Conditions Precedent to Each Extension of Credit. The
obligation of each Lender or Issuing 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 Issuing 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)(ii) and (f) thereof) and in Section 7 of the Cash Collateral
Agreement 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; and
(ii) no Event of Default has occurred and is continuing, or
would result from such Extension of Credit or the application of the
proceeds thereof.
(b) In connection with any Extension of Credit under a Revolving
Tranche that will be used to finance any Transaction:
(i) the Borrower's equity investment in the applicable Project
shall be made within five Business Days after the making of such
Extension of Credit;
(ii) such Transaction shall not be made on a hostile basis;
(iii) all governmental authorizations and regulatory approvals
necessary in connection with such Transaction shall have been
obtained and be in full force and effect; and
(iv) all third party approvals necessary or, in the judgment of
the Administrative Agent, advisable in connection with such
Transaction shall have been obtained and be in full force and
effect.
(c) The Administrative Agent shall have received such other
approvals, opinions and documents as any Lender or Issuing Bank,
through the Administrative 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 6.03. Conditions Precedent to Certain Extensions of Credit.
The obligation of each Lender or Issuing Bank, as the case may be, to make
an Extension of Credit (including the initial Extension of Credit) that
would (after giving effect to all Extensions of Credit on such date and
the application of proceeds thereof) increase the principal amount
outstanding hereunder, or to make an Extension of Credit of the type
described in clause (ii) or (iii) of the definition thereof (except any
amendment of a Letter of Credit the sole effects of which are to extend
the stated termination date thereof and/or to make nonmaterial
modifications thereto), 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 Issuing 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 subsections
(e)(ii) and (f) of Section 7.01 of this Agreement 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; and
(ii) no Default has occurred and is continuing, or would result
from such Extension of Credit or the application of the proceeds
thereof; and
(b) the Administrative Agent shall have received such other
approvals, opinions and documents as any Lender or Issuing Bank, through
the Administrative Agent, may reasonably request.
SECTION 6.04. Reliance on Certificates. The Lenders, the Issuing
Banks and each Agent shall be entitled to rely conclusively upon the
certificates delivered from time to time by officers of the Borrower as to
the names, incumbency, authority and signatures of the respective persons
named therein until such time as the Administrative Agent may receive a
replacement certificate, in form acceptable to the Administrative Agent,
from an officer of such Person identified to the Administrative 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) Each of the Borrower, Consumers and each of the Restricted
Subsidiaries 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, 1996, 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, 1996, and the unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as at March 31, 1997, and the related
unaudited consolidated statements of income, retained earnings and cash
flows for the three-month period then ended, copies of each of which have
been furnished to each Lender, fairly present (subject, in the case of
such balance sheet and statement of income for the three months ended
March 31, 1997, 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 December
31, 1996, there has been no Material Adverse Change; and (iii) the
Borrower has no material liabilities or obligations except as reflected in
the foregoing financial statements and in Schedule II, 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 Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 and the Borrower's Quarterly
Report on Form 10-Q for the period ended March 31, 1997, 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 its 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 Required 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 Required Lenders in writing from time to
time.
(i) No fire, explosion, accident, strike, lockout or other labor
dispute, 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) affecting the properties, business or
operations of the Borrower, Consumers or any Restricted Subsidiary has
occurred that could reasonably be expected to have a material adverse
effect on the business, financial condition or results of operations of
(A) the Borrower and its Subsidiaries, considered as a whole, or
(B) Consumers and its Subsidiaries, considered as a whole.
(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 GAAP.
(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 Enterprises.
(m) The Borrower owns not less than 80% of the outstanding shares of
common stock of Consumers.
(n) The Consolidated 1997-2001 Projections of Consumers, Enterprises
and the Borrower, dated May 9, 1997 (the "Projections"), copies of which
have been distributed to the Banks in the Revised Confidential Information
Package dated June 1997, are based upon assumptions that the Borrower
believed were reasonable at the time the Projections were delivered, and
all other financial information previously delivered by the Borrower to
the Administrative Agent are true and correct in all material respects as
at the dates and for the periods indicated therein.
(o) The executed and delivered Cash Collateral Agreement creates a
valid, perfected, first priority Lien in the Collateral (other than the
"Account", as such term is defined therein) 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), and no proceeds of any Loan 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 to acquire any equity security of a class
that is registered pursuant to Section 12 of the Exchange Act.
(s) 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).
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants. So long as any Loan or any other
amount payable hereunder or under any Promissory 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 GAAP.
(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 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) each Agent and its 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) each Agent, each Issuing Bank, 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 Default shall have occurred and be continuing, at the
expense of such Agent, such Issuing Bank, such Lender, 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 GAAP.
(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 the proceeds of the
initial Extensions of Credit under the Revolving Three-Year Tranche and
the Term Tranche, to the extent necessary, to the repayment in full and
termination of all outstanding obligations under the Existing Revolving
Agreement and the Existing Term Agreement, respectively, whether for
principal, interest, fees, or otherwise (and, in furtherance thereof, the
Borrower hereby expressly and irrevocably authorizes the Administrative
Agent to so apply such proceeds to such repayment), and use all subsequent
Extensions of Credit under the Revolving Three-Year Tranche for general
corporate purposes (subject to the terms and conditions of this
Agreement). The Borrower shall apply the proceeds of each Extension of
Credit under the Revolving 364-Day Tranche solely to finance all or a
portion of the funds required by the Borrower for any Transaction.
(i) Consolidated Leverage Ratio. The Borrower shall maintain at all
times a ratio of Consolidated Debt to Consolidated Capital of not more
than the amount set forth below during each corresponding period set forth
below:
Period Amount
----------------- ---------------
Closing Date through 0.68:1.0
June 30, 1998
July 1, 1998 through 0.67:1.0
June 30, 1999
July 1, 1999 through 0.65:1.0
June 30, 2000
July 1, 2000 through 0.63:1.0
June 30, 2001
Thereafter 0.60.1.0;
provided, however, that in the event that the Collateral Release Date
occurs prior to June 30, 1999, the Borrower shall maintain at all times
from the Collateral Release Date through June 30, 1999 a ratio of
Consolidated Debt to Consolidated Capital of not more than 0.66:1.0.
(j) Cash Dividend Coverage Ratio. The Borrower shall maintain, as of
the last day of each fiscal quarter (in each case, the "Measurement
Quarter"), a ratio of (i) the sum of (A) Cash Dividend Income for the
immediately preceding four-fiscal-quarter period ending on the last day of
the fiscal quarter immediately preceding such Measurement Quarter, plus
(B) 25% of the amount of Equity Distributions received by the Borrower
during such period but in no event in excess of $10,000,000, plus (C) all
amounts received by the Borrower from its Subsidiaries and Affiliates
during such period constituting reimbursement of interest expense
(including commitment, guaranty and letter of credit fees) paid by the
Borrower on behalf of any such Subsidiary or Affiliate to (ii) interest
expense (including commitment, guaranty and letter of credit fees) accrued
by the Borrower in respect of all Debt during such period of (1) not less
than 2.1 to 1.0 for each such period from the Closing Date until (and
including) the fiscal quarter ending December 31, 1998 and (2) not less
than 2.0 to 1.0 thereafter; provided, that the Borrower shall be deemed
not to be in breach of the foregoing covenant if, during the Measurement
Quarter, it has (I) permanently reduced the Commitments and the principal
amount outstanding under this Agreement and the Promissory Notes such that
the amount determined pursuant to clause (ii) above, when recalculated on
a pro forma basis assuming that the amount of such reduced Commitments and
principal amount outstanding under this Agreement and the Promissory Notes
were in effect at all times during such four-fiscal-quarter period, would
result in the Borrower being in compliance with such ratio, and/or
(II) increased Cash Dividend Income during such Measurement Quarter such
that the ratio of (x) Cash Dividend Income for the four-fiscal-quarter
period ending on the last day of the Measurement Quarter to (y) the amount
determined pursuant to clause (ii) above (as recalculated pursuant to
clause (I) above), equals or exceeds (1) 2.1 to 1.0 for each such period
from the Closing Date until (and including) the fiscal quarter ending
December 31, 1998 and (2) 2.0 to 1.0 thereafter; and provided further,
that until the Borrower so reduces such Commitments and principal amount
outstanding under this Agreement and the Promissory Notes and/or increases
Cash Dividend Income during such Measurement Quarter, the Borrower may not
request any additional Extensions of Credit (other than Conversions).
(k) Refinancing of Senior Note Debt. In connection with any
refinancings of the Senior Note Debt, the Borrower shall cause the
maturity thereof to be no sooner than the earlier to occur of (i) the
third anniversary of the date of any such refinancing and (ii) the then-
scheduled maturity date of the Senior Notes being refinanced.
(l) Pledge of Enterprises Stock. The Borrower shall, within 30 days
after any Trigger Date, provide a perfected first priority pledge of 100%
of the issued and outstanding shares of common stock of Enterprises to the
Collateral Agent, as security for the obligations of the Borrower
hereunder and under the other Loan Documents (the "Pledged Stock"). Such
pledge shall be provided pursuant to documentation (including a pledge
agreement, a collateral agency and intercreditor agreement (if any other
Debt of the Borrower is required to be equally and ratably secured by the
Pledged Stock), any necessary amendments to the Loan Documents, legal
opinions of counsel to the Borrower, and certified resolutions of the
Board of Directors of the Borrower) in form and substance satisfactory to
the Administrative Agent and the Lenders. The Pledged Stock will be
released by the Collateral Agent promptly after the occurrence of the
Collateral Release Date.
(m) 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
Administrative Agent may reasonably request in order to give effect to the
transactions contemplated by this Agreement and the other Loan 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 Loan or any other
amount payable hereunder or under any Promissory 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
Required 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 capital stock of
Consumers, Enterprises, Nomeco and any of the Borrower's other 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) cash 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; provided that
the aggregate amount of pledges or deposits securing such Support
Obligations shall not exceed $30 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) Enterprises Debt. Permit Enterprises to create, incur, assume or
suffer to exist any debt (as such term is construed in accordance with
GAAP) other than:
(i) debt arising by reason of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of Enterprises' business;
(ii) in the form of indemnities in respect of unfiled mechanics'
liens and Liens affecting Enterprises' properties permitted under
Section 8.02(a)(iii); and
(iii) other debt of Enterprises outstanding on the Closing Date set
forth on Schedule II.
(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 Event of Default or a Default (other than a Default that
occurs and is continuing prior to the last day of any Measurement Quarter
resulting from the failure of the Borrower to comply with the ratio set
forth in Section 8.01(j)), 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 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, 1993 shall not have
exceeded the sum of (A) $120,000,000, (B) 100% of Consolidated Net Income
(as defined in the Indenture in effect on the date hereof) accrued during
the period (treated as one accounting period) from September 30, 1993 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 in effect on the date
hereof) received by the Borrower from any issuance or sale of, or
contribution with respect to, its capital stock subsequent to
September 30, 1993; 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 in
effect on the date hereof)), 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 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 Administrative Agent 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 Required
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 Required 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) 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 a 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; (5) Consumers
may merge with any other Person, provided that, immediately after giving
effect thereto, (w) no event shall occur and be continuing which
constitutes a Default or an Event of Default, (x) Consumers is the
surviving corporation, (y) the Borrower shall continue to own not less
than 80% of the outstanding shares of common stock of Consumers and (z)
Consumers' Net Worth shall be equal to or greater than its Net Worth
immediately prior to such merger; and (6) any Person (other than the
Borrower and its Affiliates) may merge with or into Enterprises, provided
that, immediately after giving effect thereto, (A) no event shall occur
and be continuing which constitutes a Default or an Event of Default,
(B) Enterprises is the surviving corporation, (C) Enterprises' Net Worth
shall be equal to or greater than its Net Worth immediately prior to such
merger and (D) Enterprises 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;
provided, that after giving effect to any merger described in clause (2),
(3), or (5) above, the Borrower shall be in compliance with Section
8.01(i).
(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 to give
effect to a transaction permitted by subsection (h) above or subsection
(j) below.
(j) Maintenance of Ownership of Subsidiaries. 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; provided, however, that
(i) the Borrower may sell, transfer, assign or otherwise dispose of not
more than 20% of the common stock of Consumers, provided that after giving
effect to such transaction the Borrower shall be in compliance with
Section 8.01(i) and (ii) Enterprises may, and the Borrower may permit
Enterprises to, sell, transfer, assign or otherwise dispose of not more
than 49% of the common stock of any Enterprises Significant Subsidiary,
provided that after giving effect to such transaction the Borrower shall
be in compliance with Section 8.01(i).
(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 Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid,
any Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower will, unless the Required 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 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
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 GAAP, together with (A) a schedule
(substantially in the form of Exhibit F appropriately completed) of
(1) the computations used by the Borrower in determining compliance
with the covenants contained in Sections 8.01(i) and 8.01(j) and, after
the enactment of any Consumers Dividend Restriction, the ratio set
forth in Section 9.01(k), (2) all Project Finance Debt of the
Consolidated Subsidiaries, together with the Borrower's Ownership
Interest in each such Consolidated Subsidiary and (3) all Support
Obligations of the Borrower of the types described in clauses (iv) and
(v) of the definition of Support Obligations (whether or not each such
Support Obligation or the primary obligation so supported is fixed,
conclusively determined or reasonably quantifiable) to the extent such
Support Obligations have not been previously disclosed as "Consolidated
Debt" pursuant to clause (1) above, and (B) a certificate of said
officer stating that no Default or Event of Default has occurred and is
continuing or, if a 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 Required Lenders of (A) the computations used by such accounting
firm in determining, as of the end such fiscal year, compliance with
the covenants contained in Sections 8.01(i) and 8.01(j) and, after the
enactment of any Consumers Dividend Restriction, the ratio set forth in
Section 9.01(k), (B) all Project Finance Debt of the Consolidated
Subsidiaries, together with the Borrower's Ownership Interest in each
such Consolidated Subsidiary and (C) all Support Obligations of the
Borrower of the types described in clauses (iv) and (v) of the
definition of Support Obligations (whether or not each such Support
Obligation or the primary obligation so supported is fixed,
conclusively determined or reasonably quantifiable) to the extent such
Support Obligations have not been previously disclosed as "Consolidated
Debt" pursuant to clause (A) above;
(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 GAAP;
(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
GAAP;
(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), copies of all regular,
periodic and special reports 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,
pursuant to the Exchange Act, and copies of all final prospectuses with
respect to any securities issued or to be issued by the Borrower or any
of its Subsidiaries;
(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; and
(m) 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
Required 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, the Administrative
Agent and the Lenders shall be entitled to exercise the remedies set forth
in Section 9.02:
(a) The Borrower shall fail to pay (i) any principal of any Loan when
due or (ii) any interest thereon, fees or other amounts (other than any
principal of any Loan) payable hereunder within two Business Days after
such interest, fees or other amounts shall have become due; or
(b) Any representation or warranty made by or on behalf of the
Borrower 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), (j) or (l) or in Section 8.02
hereof (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 Administrative Agent, for a period of 10 Business 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) The Borrower, any Restricted Subsidiary or Consumers shall fail
to pay any of its Debt (including any interest or premium thereon but
excluding Debt incurred under this Agreement) (i) aggregating, in the case
of the Borrower and each Restricted Subsidiary, $6,000,000 or more or, in
the case of Consumers, $25,000,000 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) The Borrower, 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 the Borrower, 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 the
Borrower, either such proceeding shall remain undismissed or unstayed for
a period of 60 days or any of the actions sought in such proceeding
(including the entry of an order for relief against the Borrower, a
Restricted Subsidiary or Consumers or the appointment of a receiver,
trustee, custodian or other similar official for the Borrower, such
Restricted Subsidiary or Consumers or any of its property) shall occur; or
(iii) the Borrower, 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
$6,000,000 shall be rendered against the Borrower 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
30 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 the Borrower shall so assert in writing; or
(i) The Cash Collateral Agreement after execution and delivery
thereof under Article VI 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 a valid and perfected first
priority Lien in any of the Collateral described therein; or
(j) At any time any Issuing 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 Issuing 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 Issuing 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; or
(k) There shall be imposed or enacted any Consumers Dividend
Restriction, the result of which is that the Dividend Coverage Ratio shall
be less than 1.15 to 1.0 at any time after the imposition of such
Consumers Dividend Restriction.
SECTION 9.02. Remedies. If any Event of Default has occurred and is
continuing, then the Administrative Agent 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 or
Convert Loans (other than Loans under Section 4.04) and of any Issuing
Bank to issue a Letter of Credit to be terminated, whereupon the same
shall forthwith terminate, (ii) declare the principal amount outstanding
hereunder, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the principal amount outstanding hereunder, 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 (as defined in the Cash Collateral Agreement)
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 Cash Collateral Agreement or
otherwise available to the Administrative Agent 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 Loans and of
any Issuing Bank to issue any Letter of Credit shall automatically be
terminated and (B) the principal amount outstanding hereunder, 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 Administrative Agent pursuant to this Section 9.02 shall
affect (i) the obligation of any Issuing Bank to make any payment under
any Letter of Credit issued by such Issuing 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.
(a) Each of the Lenders and the Issuing Banks hereby irrevocably
appoints each Agent (other than the Co-Agents) as its agent and authorizes
each such Agent to take such actions on its behalf and to exercise such
powers as are delegated to such Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental
thereto.
(b) Any Lender serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such Lender and its
Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrower or any of its Subsidiaries or other
Affiliate thereof as if it were not an Agent hereunder.
(c) No Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (i) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default or an
Event of Default has occurred and is continuing, (ii) no Agent shall have
any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by
the Loan Documents that such Agent is required to exercise in writing by
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 11.01),
and (iii) except as expressly set forth in the Loan Documents, no Agent
shall have any duty to disclose, or shall be liable for the failure to
disclose, any information relating to the Borrower or any of its
Subsidiaries or Affiliates that is communicated to or obtained by the
Lender serving as such Agent or any of its Affiliates in any capacity. No
Agent shall be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.01) or in the absence of its own gross negligence
or wilful misconduct. Each Agent shall be deemed not to have knowledge of
any Default or Event of Default unless and until written notice thereof is
given to such Agent by the Borrower or a Lender (in which case such Agent
shall promptly give a copy of such written notice to the Lenders and the
other Agents). No Agent shall be responsible for or have any duty to
ascertain or inquire into (A) any statement, warranty or representation
made in or in connection with any Loan Document, (B) the contents of any
certificate, report or other document delivered thereunder or in
connection therewith, (C) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (D) the validity, enforceability, effectiveness or genuineness
of any Loan Document or any other agreement, instrument or document, or
(E) the satisfaction of any condition set forth in Article VI or elsewhere
in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to such Agent. No Co-Agent shall have any duties
or obligations in such capacity under any of the Loan Documents.
(d) Each Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. Each Agent
also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. Each Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel,
accountants or experts.
(e) Each Agent may perform any and all its duties and exercise its
rights and powers by or through one or more sub-agents appointed by such
Agent. Each Agent and any such sub-agent may perform any and all its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding subsections of this
Section 10.01 shall apply to any such sub-agent and to the Related Parties
of each Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities
provided for herein as well as activities as an Agent.
(f) Subject to the appointment and acceptance of a successor Agent as
provided in this subsection (f), any Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor. If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Agent which shall be a Lender with an
office in New York, New York, or an Affiliate of any such Lender. Upon
the acceptance of its appointment as an Agent hereunder by a successor,
such successor shall 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 hereunder. The
fees payable by the Borrower to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After an Agent's resignation hereunder, the
provisions of this Article and Section 11.04 shall continue in effect for
the benefit of such retiring Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by
any of them while it was acting as an Agent.
(g) Each Lender acknowledges that it has independently and without
reliance upon any Agent or any other 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. Each Lender also acknowledges
that it will, independently and without reliance upon any Agent or any
other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other
Loan Document or any related agreement or any document furnished hereunder
or thereunder.
SECTION 10.02. Indemnification. The Lenders agree to indemnify each
Agent (to the extent not reimbursed by the Borrower), 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 such Agent in
any way relating to or arising out of this Agreement or any action taken
or omitted by such Agent 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 such Agent's 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.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. 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 Required 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 under any Tranche or subject
the Lenders to any additional obligations, (iii) reduce the principal of,
or interest on, any Loan, any Applicable Margin or any fees or other
amounts payable hereunder (other than fees payable to the Administrative
Agent pursuant to Section 2.02(c)), (iv) postpone any date fixed for any
payment of principal of, or interest on, any Loan or any fees or other
amounts payable hereunder (other than fees payable to the Administrative
Agent pursuant to Section 2.02(c)), (v) change the definition of "Required
Lenders" contained in Section 1.01 or change any other provision that
specifies the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans 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, waive or modify Section
2.03(b), Section 2.03(c), Section 8.01(l), the definition of "Collateral
Release Date" or "Trigger Date" contained in Section 1.01, or this Section
11.01, or (viii) release any collateral or change any provision of the
Cash Collateral Agreement 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 other Loan Document; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by each
Issuing Bank in addition to the Lenders required above to take such
action, affect the rights or duties of any Issuing Bank under this
Agreement or any other Loan Document. Any request from the Borrower for
any amendment, waiver or consent under this Section 11.01 shall be
addressed to the Administrative 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: Michael D.
VanHemert, Esq., Assistant General Counsel, with a copy to Doris F.
Galvin, Vice President and 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; (iii) if to any Issuing Bank,
at its address specified in the Issuing 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; and (v) if to the Administrative Agent, the Documentation Agent,
the Collateral Agent or the Syndication Agent, at its address at Agent
Bank Services Group, 1 Chase Manhattan Plaza, 8th Floor, New York,
New York 10081, Attention: Vincent Siino (Telecopy no. 212.552.5777), with
a copy to The Chase Manhattan Bank, 1 Chase Manhattan Plaza, 3rd Floor,
New York, New York 10081, Attention: Thomas L. Casey (Telecopy
No. 212.552.6276); 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 Issuing Bank or any Agent to exercise, and no
delay in exercising, any right hereunder or under any other Loan Document
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 (i) reimburse on demand all reasonable costs and expenses of
each Agent and the Arranger (including reasonable fees and expenses of
counsel to the Agents) 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) to pay on
demand all reasonable costs and expenses of each Agent and, on and after
the date upon which the principal amount outstanding hereunder becomes or
is 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 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 other Loan Documents and the other documents to be delivered
hereunder.
(b) The Borrower shall indemnify each Agent, the Arranger, the
Issuing Bank, each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnified Person") against,
and hold each Indemnified Person harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any
Indemnified Person, incurred by or asserted against any Indemnified Person
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument
contemplated hereby or thereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation
of the transactions contemplated hereby or thereby, (ii) any Loan, Letter
of Credit or other Extension of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of any
Hazardous Substance on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability
related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any
other theory and regardless of whether any Indemnified Person is a party
thereto; provided that such indemnity shall not, as to any Indemnified
Person, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or wilful misconduct of such Indemnified Person.
(c) The Borrower's other obligations under this Section 11.04 shall
survive the repayment of all amounts owing to the Lenders, the Issuing
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 Administrative Agent to declare the principal amount
outstanding hereunder to be due and payable pursuant to the provisions of
Section 9.02, each Lender and Issuing 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 Issuing 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 Promissory Notes
held by such Lender or the Issuing Bank Agreement to which such Issuing
Bank is a party, as the case may be, irrespective of whether or not such
Lender or Issuing Bank shall have made any demand under this Agreement,
such Promissory Notes or such Issuing Bank Agreement, as the case may be,
and although such obligations may be unmatured. Each Lender and Issuing
Bank agrees to notify promptly the Borrower after any such set-off and
application made by such Lender or Issuing 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 Issuing Bank under this
Section 11.05 are in addition to other rights and remedies (including
other rights of set-off) which such Lender and Issuing 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 Administrative 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,
with the consent of the Borrower and the Administrative Agent (such
consent not to be unreasonably withheld or delayed and, in the case of the
Borrower, shall not be required if an Event of Default has occurred and is
continuing), 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 all or a portion of its Commitments, the Loans
owing to it and any Promissory Notes held by it); provided, however, that
(i) each such assignment shall be made by such Lender on a pro rata basis
among such Lender's Revolving 364-Day Commitment, Revolving Three-Year
Commitment and Term Commitment, (ii) 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, (iii) the aggregate amount of
the Commitments 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 aggregate amount of such Lender's Commitments and $10,000,000 and
shall be an integral multiple of $5,000,000, (iv) each such assignment
shall be to an Eligible Assignee, and (v) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, a Lender Assignment, together
with any Promissory Notes subject to such assignment, an Administrative
Questionnaire and a processing and recordation fee of $3,500; and provided
further, however, that the consent of the Borrower and the Administrative
Agent shall not be required for any assignments by a Lender to any of its
Affiliates or to any other Lender or any of its Affiliates. 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 (iv), above, shall not apply if an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have
declared all Loans to be, or all Loans shall have automatically become,
immediately due and payable hereunder. The Administrative 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 Loans 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 Administrative Agent shall have
declared all Loans 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 Administrative 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 Commitments of, and principal amount of
the Loans 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, the Issuing Banks 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, any Issuing Bank 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 the assignee's completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), any Promissory
Notes subject to such assignment, the processing and recordation fee
referred to in subsection (a) above and any written consent to such
assignment required by subsection (a) above, the Administrative Agent
shall, if such Lender Assignment has been completed and is in
substantially the form of Exhibit G, (i) accept such Lender Assignment,
(ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. New and/or replacement
Promissory Notes payable to the assignee and the assigning Lender (if the
assigning Lender assigned less than all of its rights and obligations
hereunder) shall be issued upon request pursuant to Section 3.01(d), and
shall be dated the effective date of such Lender Assignment.
(e) Each Lender may sell participations to one or more banks or other
entities (a "Participant") in or to all or a portion of its rights and
obligations under the Loan Documents (including all or a portion of its
Commitments, the Loans owing to it and any Promissory Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including its Commitments 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 Promissory Notes for all purposes of
this Agreement, and (iv) the Borrower, the Agents, the Issuing Banks 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. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and the other Loan Documents and to
approve any amendment, modification or waiver of any provision of this
Agreement or any other Loan Document; provided, that such agreement or
instrument may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, modification or waiver described
in the first proviso to Section 11.01 that affects such Participant.
Subject to subsection (f) below, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 5.04 and 5.06 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (a) above. To the extent permitted by law, each
Participant shall also be entitled to the benefits of Section 11.05(a) as
though it were a Lender, provided such Participant agrees to be subject to
Section 5.05 as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 5.04 or 5.06 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would
be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 5.06 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 5.06(e) as though it
were a Lender.
(g) 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.
(h) If any Lender (or any Participant to which such Lender has sold a
participation) shall (i) make any demand for payment under Section 5.04(a)
or (c), or (ii) determine not to extend the Termination Date of any
Tranche in response to any request by the Borrower pursuant to Section
2.05, then (A) in the case of any demand made under clause (i) above,
within 30 days after any such demand (if, but only if, such demanded
payment has been made by the Borrower) or notice, and (B) in the case of
the occurrence of the event described in clause (ii) above, within 20 days
after such occurrence, the Borrower may, with the approval of the
Administrative Agent (which approval shall not be unreasonably withheld)
and provided that no Event of Default or Default shall then have occurred
and be continuing, demand that such Lender assign, at the sole cost and
expense of the Borrower, 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 Commitments and the Loans owing to it within the
period ending on the later to occur of (x) the last day in the period
described in clause (A) or (B) above, as applicable, and (y) the last day
of the longest of the then current Interest Periods for such Loans. 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 Commitments or Loans, then such demand by the
Borrower shall become ineffective; it being understood for purposes of
this subsection (h) 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 (1) shall agree to such assignment by
entering into a Lender Assignment with such Lender and (2) shall offer
compensation to such Lender in an amount equal to all amounts then owing
by the Borrower to such Lender hereunder and under any Promissory Notes
made by the Borrower to such Lender, whether for principal, interest,
fees, costs or expenses (other than the demanded payment referred to in
clause (i) above, and payable by the Borrower as a condition to the
Borrower's right to demand such assignment) or otherwise (including,
without limitation, to the extent not paid by the Borrower, any payments
required pursuant to Section 5.04(b)). In addition, in the case of any
amount demanded for payment by any Lender (or such Participant) pursuant
to Section 5.04(a) or (c), the Borrower may, in the case of any such
Lender, with the approval of the Administrative Agent (which approval
shall not be unreasonably withheld) and provided that no Event of Default
or Default shall then have occurred and be continuing, terminate all (but
not less than all) such Lender's Commitments and prepay all (but not less
than all) such Lender's Loans 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 any Promissory Notes 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 (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 Loans of all Lenders then outstanding does not
exceed the then remaining Commitments of the Lenders. Notwithstanding
anything set forth above in this subsection (h) 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 Commitments and Loans or
terminate and prepay the Commitments and Loans 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 Loans 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.
(i) Anything in this Section 11.07 to the contrary notwithstanding,
any Lender may assign and pledge all or any portion of its Commitments and
the Loans owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board 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
Borrower has furnished and will from time to time furnish to the Agents,
the Issuing Banks 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 the Borrower, 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 the Borrower may otherwise instruct. It is understood,
however, that the foregoing will not restrict the Recipient's ability to
freely exchange such Confidential Information with its Affiliates or 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 Affiliate's or prospective
participant's (as the case may be) 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 (1) by a regulatory agency or otherwise in connection with an
examination of the Recipient's records by appropriate authorities,
(2) pursuant to court order, subpoena or other legal process or
(3) otherwise, as required by law; in the event of any required disclosure
under clause (2) or (3), 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
ISSUING BANKS, THE LEAD MANAGERS 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; Submission to Jurisdiction. This
Agreement and the Promissory Notes shall be governed by, and construed in
accordance with, the laws of the State of New York. The Borrower, the
Lenders, the Issuing Banks, the Agents and the Lead Managers 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. The Borrower
hereby acknowledges that neither any Agent nor any Lender has any
fiduciary relationship with or fiduciary duty to the Borrower arising out
of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Agents and the Lenders, on the
one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor.
SECTION 11.12. Existing Banks' Waiver, Acknowledgment and Release.
The Existing Banks hereby waive compliance by the Borrower with the
requirement contained in Section 5.03(b) of the Existing Revolving
Agreement for the Borrower to provide, upon the termination in full of the
"Commitments" under the Existing Revolving Agreement on the date hereof,
cash collateral to secure LC Outstandings with respect to the Existing
Letters of Credit. The Lenders and each Issuing Bank acknowledge and
agree that each Existing Letter of Credit shall constitute a Letter of
Credit for all purposes under this Agreement. In addition, the Existing
Banks hereby release their Lien on all of the Collateral (as defined in
the "Cash Collateral Agreement" referred to in the Existing Revolving
Agreement), if any, and direct the Operational Agent (as defined in the
Existing Revolving Agreement) to return all such Collateral to the
Borrower. Furthermore, the Banks party to the Existing Term Agreement and
the Existing Banks hereby waive the five Business Days' notice requirement
for termination of the "Commitments" (as defined in the Existing Term
Agreement and the Existing Revolving Agreement) under Section 2.03(a) of
the Existing Term Agreement and Section 2.03(a) of the Existing Revolving
Agreement, respectively.
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 any
Promissory Notes evidencing the Extensions of Credit and shall continue in
full force and effect so long as any Promissory Note or any amount due
hereunder is outstanding and unpaid or any Commitment of any Lender has
not been terminated.
S-1
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, Chief
Financial Officer and Treasurer
THE CHASE MANHATTAN BANK,
as Administrative Agent, Collateral Agent,
Documentation Agent and Syndication Agent
By /s/ Thomas H. Kozlark
----------------------------------
Vice President
S-2
Revolving 364-Day Commitment THE CHASE MANHATTAN BANK
$16,711,111.09
Revolving Three-Year Commitment By: /s/ Thomas H. Kozlark
-------------------------------
$25,066,666.78 Title: Vice President
Term Commitment
$5,222,222.25
Total Commitment: $47,000,000.12
S-3
Revolving 364-Day Commitment ABN AMRO BANK N.V.,
as Co-Agent and Bank
$13,155,555.56
Revolving Three-Year Commitment By: /s/ Mark Lasek
-------------------------------
$19,733,333.33 Title: Mark R. Lasek
Vice President
Term Commitment
$4,111,111.11 By: /s/ R.E. Lee IV
-------------------------------
Title: Robert E. Lee IV
Corporate Finance Officer
Total Commitment: $37,000,000
S-4
Revolving 364-Day Commitment BANK OF AMERICA ILLINOIS,
as Co-Agent and Bank
$13,155,555.56
Revolving Three-Year Commitment By: /s/ Vanessa Sheh Meyer
-------------------------------
$19,733,333.33 Title: Vanessa Sheh Meyer
Vice President
Term Commitment
$4,111,111.11
Total Commitment: $37,000,000
S-5
Revolving 364-Day Commitment BANKBOSTON, N.A.,
as Co-Agent and Bank
$13,155,555.56
Revolving Three-Year Commitment By: /s/ Frank Smith
-------------------------------
$19,733,333.33 Title: Director
Term Commitment
$4,111,111.11
Total Commitment: $37,000,000
S-6
Revolving 364-Day Commitment BARCLAYS BANK PLC,
as Co-Agent and Bank
$13,155,555.56
Revolving Three-Year Commitment By: /s/ Sydney G Dennis
-------------------------------
$19,733,333.33 Title: Sydney G. Dennis
Director
Term Commitment
$4,111,111.11
Total Commitment: $37,000,000
S-7
Revolving 364-Day Commitment DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES,
$13,155,555.56 as Co-Agent and Bank
Revolving Three-Year Commitment By: /s/ Thomas Lake
-------------------------------
$19,733,333.33 Title: Thomas Lake
Vice President
Term Commitment
$4,111,111.11 By: /s/ M E Terry
-------------------------------
Title: Michael E. Terry
Assistant Vice President
Total Commitment: $37,000,000
S-8
Revolving 364-Day Commitment NATIONAL AUSTRALIA BANK,
LIMITED, Co-Agent and Bank
$13,155,555.56
Revolving Three-Year Commitment By: /s/ Thomas Kilfoyle
-------------------------------
$19,733,333.33 Title: Vice President
Term Commitment
$4,111,111.11
Total Commitment: $37,000,000
S-9
Revolving 364-Day Commitment NATIONSBANK, N.A.,
as Co-Agent and Bank
$13,155,555.56
Revolving Three-Year Commitment By: /s/ Gretchen P Burud
-------------------------------
$19,733,333.33 Title: Gretchen P. Burud
Vice President
Term Commitment
$4,111,111.11
Total Commitment: $37,000,000
S-10
Revolving 364-Day Commitment THE SUMMITOMO BANK, LIMITED
CHICAGO BRANCH, as Co-Agent and
$13,155,555.56 Bank
Revolving Three-Year Commitment By: /s/ H. Iwami
-------------------------------
$19,733,333.33 Title: Hiroyuki Iwami
Joint General Manager
Term Commitment
$4,111,111.11
Total Commitment: $37,000,000
S-11
Revolving 364-Day Commitment BANK OF MONTREAL,
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Howard A. Turner
-------------------------------
$16,533,333.33 Title: Director
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-12
Revolving 364-Day Commitment THE BANK OF NEW YORK,
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Dennis Pidherny
-------------------------------
$16,533,333.33 Title: Dennis Pidherny
Vice President
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-13
Revolving 364-Day Commitment BANK OF SCOTLAND,
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Annie Chin Tat
-------------------------------
$16,533,333.33 Title: Annie Chin Tat
Vice President
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-14
Revolving 364-Day Commitment BANQUE PARIBAS,
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Dan Cozine
-------------------------------
$16,533,333.33 Title: V P
Term Commitment
$3,444,444.44 By: /s/ David Lee
-------------------------------
Title: V.P.
Total Commitment: $30,999,999.99
S-15
Revolving 364-Day Commitment COMERICA BANK,
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Charles L. Weddell
-------------------------------
$16,533,333.33 Title: V.P.
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-16
CREDIT LYONNAIS CHICAGO
Revolving 364-Day Commitment BRANCH, as Lead Manager
and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ MAKlemm
-------------------------------
$16,533,333.33 Title: Mary Ann Klemm
Vice President and
Term Commitment Group Head
$3,444,444.44
Total Commitment: $30,999,999.99
S-17
Revolving 364-Day Commitment THE INDUSTRIAL BANK OF JAPAN,
LIMITED, as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Hiroaki Nakamura
-------------------------------
$16,533,333.33 Title: Joint General Manager
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-18
Revolving 364-Day Commitment MICHIGAN NATIONAL BANK,
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Mark S Aben
-------------------------------
$16,533,333.33 Title: Mark S. Aben
Sr. Relationship Manager
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-19
THE MITSUBISHI TRUST AND
BANKING CORPORATION, LOS
Revolving 364-Day Commitment ANGELES AGENCY, as Lead Manager
and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Y Satomi
-------------------------------
$16,533,333.33 Title: Yasushi Satomi
Senior Vice President
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-20
Revolving 364-Day Commitment SOCIETE GENERALE, CHICAGO
BRANCH, as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Eric Siebert, Jr.
-------------------------------
$16,533,333.33 Title: CBM
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-21
Revolving 364-Day Commitment TORONTO DOMINION (TEXAS), INC.
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Neva Nesbitt
-------------------------------
$16,533,333.33 Title: Neva Nesbitt
Vice President
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-22
Revolving 364-Day Commitment UNION BANK OF CALIFORNIA, N.A.,
as Lead Manager and Bank
$11,022,222.22
Revolving Three-Year Commitment By: /s/ Jason DiNapoli
-------------------------------
$16,533,333.33 Title: Jason P. DiNapoli
Vice President
Term Commitment
$3,444,444.44
Total Commitment: $30,999,999.99
S-23
Revolving 364-Day Commitment AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Ian P Sanders
-------------------------------
$13,333,333.33 Title: Vice President
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-24
Revolving 364-Day Commitment THE BANK OF NOVA SCOTIA
$8,888,888.89
Revolving Three-Year Commitment By: /s/ F C H Ashby
-------------------------------
$13,333,333.33 Title: F.C.H. Ashby
Senior Manager Loan Operations
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-25
Revolving 364-Day Commitment BANQUE NATIONALE DE PARIS
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Arnaud Collin du Bocage
-------------------------------
$13,333,333.33 Title: Arnaud Collin du Bocage
Executive Vice President
Term Commitment and General Manager
$2,777,777.78
Total Commitment: $25,000,000
S-26
Revolving 364-Day Commitment BHF-BANK AKTIENGESELLSCHAFT
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Thomas J Scifo
-------------------------------
$13,333,333.33 Title: AVP
Term Commitment By: /s/ John Sykes
-------------------------------
$2,777,777.78 Title: AVP
Total Commitment: $25,000,000
S-27
Revolving 364-Day Commitment CHANG HWA COMMERCIAL BANK,
LTD., NEW YORK BRANCH
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Wantu Yeh
-------------------------------
$13,333,333.33 Title: Wan-Tu Yeh
VP & General Manager
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-28
Revolving 364-Day Commitment CIBC INC.
$8,888,888.89
Revolving Three-Year Commitment By: /s/ John P Burke
-------------------------------
$13,333,333.33 Title: John P. Burke
Director
Term Commitment CIBC Wood Gundy Securities
Corp., As Agent
$2,777,777.78
Total Commitment: $25,000,000
S-29
Revolving 364-Day Commitment CITIBANK, N.A.
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Anita J. Brickell
-------------------------------
$13,333,333.33 Title: Attorney-In-Fact
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-30
Revolving 364-Day Commitment THE FIRST NATIONAL BANK
OF CHICAGO
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Jane Bek
-------------------------------
$13,333,333.33 Title: Vice President
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-31
Revolving 364-Day Commitment MELLON BANK, N.A.
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Richard D. Matthews
-------------------------------
$13,333,333.33 Title: Vice President
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-32
Revolving 364-Day Commitment NATIONAL WESTMINISTER BANK PLC
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Ian M Plester
-------------------------------
$13,333,333.33 Title: Ian M. Plester
Vice President
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-33
Revolving 364-Day Commitment THE ROYAL BANK OF SCOTLAND
PLC
$8,888,888.89
Revolving Three-Year Commitment By: /s/ G F Stoddart
-------------------------------
$13,333,333.33 Title: Grant F. Stoddart
Senior Vice President
Term Commitment & Manager
$2,777,777.78
Total Commitment: $25,000,000
S-34
Revolving 364-Day Commitment THE SAKURA BANK, LIMITED
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Shunji Sakurai
-------------------------------
$13,333,333.33 Title: Shunji Sakurai
Joint General Manager
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-35
Revolving 364-Day Commitment THE SANWA BANK, LIMITED,
CHICAGO BRANCH
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Richard H. Ault
-------------------------------
$13,333,333.33 Title: Richard H. Ault
Vice President
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
S-36
Revolving 364-Day Commitment THE SUMITOMO TRUST & BANKING
CO., LTD., NEW YORK BRANCH
$8,888,888.89
Revolving Three-Year Commitment By: /s/ Suraj P. Bhatia
-------------------------------
$13,333,333.33 Title: Sr. Vice President
Term Commitment
$2,777,777.78
Total Commitment: $25,000,000
CMS Energy Corporation
Credit Agreement
July 2, 1997
S-37
Revolving 364-Day Commitment UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
$8,888,888.89
Revolving Three-Year Commitment By: /s/ DEMikula
-------------------------------
$13,333,333.33 Title: David E. Mikula
Managing Director
Term Commitment
By: /s/ Karen Roth
$2,777,777.78 -------------------------------
Title: Karen Roth
Assistant Vice President
Total Commitment: $25,000,000
S-38
Revolving 364-Day Commitment FIRST COMMERCIAL BANK
(INCORPORATED IN TAIWAN,
$7,111,111.11 R.O.C.), LOS ANGELES BRANCH
Revolving Three-Year Commitment By: /s/ June Shiong Lu
-------------------------------
$10,666,666.67 Title: Vice President &
General Manager
Term Commitment
$2,222,222.22
Total Commitment: $20,000,000
S-39
Revolving 364-Day Commitment THE FUJI BANK, LIMITED
$5,333,333.33
Revolving Three-Year Commitment By: /s/ T Kamatsuk
-------------------------------
$8,000,000.00 Title: Tetsuo Kamatsu(K-219)
Joint General Manager
Term Commitment
$1,666,666.67
Total Commitment: $15,000,000
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
The Chase Manhattan Bank, as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention: Vincent Siino
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Credit
Agreement, dated as of July 2, 1997 (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 Lenders named therein, The Chase Manhattan Bank, as
Administrative Agent, Documentation Agent, Collateral Agent and
Syndication Agent, the Co-Agents named therein and the Lead Managers named
therein, 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 Proposed Borrowing is under the [Revolving 364-Day]
[Revolving Three-Year] [Term] Tranche.
(iii) The Type of Loans comprising the Proposed Borrowing is [ABR
Loans] [Eurodollar Rate Loans].
(iv) The aggregate amount of the Proposed Borrowing is $___________.
(1)[(v) The initial Interest Period for each Loan 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
Sections 6.02(a) and 6.03(a) of the Credit Agreement are true.
Very truly yours,
CMS ENERGY CORPORATION
By _________________________________
Name:
Title:
- -------------------
1 To be included for a Proposed Borrowing comprised of Eurodollar Rate
Loans.
EXHIBIT B
FORM OF NOTICE OF CONVERSION
[Date]
The Chase Manhattan Bank, as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention: Vincent Siino
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Credit
Agreement, dated as of July 2, 1997 (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 Lenders named therein, The Chase Manhattan Bank, as
Administrative Agent, Documentation Agent, Collateral Agent and
Syndication Agent, the Co-Agents named therein and the Lead Managers named
therein, 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 Proposed Conversion is being requested in connection with a
Loan under the [Revolving 364-Day] [Revolving Three-Year] [Term] Tranche.
(iii) The Type of Loans comprising the Proposed Conversion is [ABR
Loans] [Eurodollar Rate Loans].
(iv) The aggregate amount of the Proposed Conversion is $___________.
(v) The Type of Loans to which such Loans are proposed to be
Converted is [ABR Loans] [Eurodollar Rate Loans].
(vi) The Interest Period for each Loan made as part of the Proposed
Conversion is ____ month(s).(1)
The undersigned hereby certifies that 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. The undersigned hereby acknowledges that
the delivery of this Notice of Conversion shall constitute a
representation and warranty by the Borrower that, on the date of the
Proposed Conversion, [(i)] the statements contained in Section 6.02(a) of
the Credit Agreement are true and [(ii) no Default [(other than a Default
resulting from the failure of the Borrower to comply with the ratio set
forth in Section 8.01(j) of the Credit Agreement)](2) has occurred and is
continuing](3).
Very truly yours,
CMS ENERGY CORPORATION
By _________________________________
Name:
Title:
- ------------------------------------
1 Delete for ABR Loans.
2 Include only if a Default has occurred and is continuing as the
result of the failure of the Borrower to comply with the ratio set
forth in Section 8.01(j) of the Credit Agreement. In such case, a
Conversion into Eurodollar Rate Loans with an Interest Period not to
exceed three months in duration is permitted pursuant to
Section 3.04(a)(vi) of the Credit Agreement.
3 Delete if Conversion is into ABR Loans.
EXHIBIT C
FORM OF CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT, dated as of July ___, 1997, made by
CMS ENERGY CORPORATION, a Michigan corporation (the "Pledgor"), to The
Chase Manhattan Bank ("Chase"), as collateral agent (the "Collateral
Agent") for the lenders (the "Lenders") parties to the Credit Agreement
(as hereinafter defined).
PRELIMINARY STATEMENTS
(1) Chase, as Administrative Agent, Documentation Agent, Collateral
Agent and Syndication Agent, the Co-Agents, the Lead Managers and the
Lenders have entered into a Credit Agreement, dated as of July 2, 1997
(said Agreement, 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 Loans up to the full amount thereof before they are applied,
first, to outstanding Eurodollar Rate Loans 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 Collateral Agent in a special
non-interest-bearing cash collateral account (the "Account") with the
Collateral Agent at its office at 1 Chase Manhattan Plaza, New York,
New York 10081, Account No. 910-2-787398 (or at such other office of the
Collateral Agent as the Collateral Agent may, from time to time, notify
the Pledgor), in the name of the Pledgor but under the sole control and
dominion of the Collateral 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 Collateral 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 Collateral Agent for its benefit and the ratable benefit of
the Lenders, and grants to the Collateral 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 Collateral 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 Pledgor 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 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
Pledgor to the Collateral Agent or the Lenders under the Credit Agreement
and the Promissory Notes (if any) 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 Pledgor.
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 Collateral 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 Collateral Agent. The Collateral Agent
shall have the right, at any time upon the occurrence and during the
continuance of an Event of Default or a Default, in its discretion and
without notice to the Pledgor, to transfer to or to register in the name
of the Collateral Agent or any of its nominees any or all of the
Collateral. In addition, the Collateral 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 under the Revolving Three-Year Tranche or any Revolving Three-
Year Loan or interest thereon shall remain unpaid:
(a) The Pledgor will maintain the Account with the Collateral 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
Collateral 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 Collateral 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
Collateral 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
Collateral 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
Default shall have occurred and be continuing, the Collateral 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 under the Revolving Three-Year Tranche 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 Collateral 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
Collateral 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
Collateral Agent may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to
enable the Collateral 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. Collateral Agent Appointed Attorney-in-Fact. The Pledgor
hereby appoints the Collateral 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 Default or otherwise to the
extent that the Collateral Agent shall reasonably deem any action to be
necessary in order to maintain its security interest in the Collateral, in
the Collateral Agent's discretion, to take any action and to execute any
instrument which the Collateral 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. Collateral Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Pledgor under Section 14.
SECTION 12. The Collateral Agent's Duties. The powers conferred on
the Collateral 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
Collateral 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 Collateral 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 Collateral 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 Collateral Agent accords its own
property.
SECTION 13. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral 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 Collateral 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 Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Collateral 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 Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Collateral 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 Collateral Agent as Collateral and all cash
proceeds received by the Collateral 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 Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
be applied (after payment of any amounts payable to the Collateral Agent
pursuant to Section 14) in whole or in part by the Collateral Agent for
the ratable benefit of the Lenders against, all or any part of the
Obligations in such order as the Collateral Agent shall elect. Any
surplus of such cash or cash proceeds held by the Collateral 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
Collateral 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 Collateral 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
Collateral 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 Collateral 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: Michael D. VanHemert, Esq., with a
copy to Doris F. Galvin, Vice President and Treasurer, 212 West Michigan
Avenue, Jackson, Michigan 49201, and if to the Collateral 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 under the Revolving Three-Year Tranche, (ii) be binding upon
the Pledgor, its successors and assigns, and (iii) inure to the benefit
of, and be enforceable by, the Collateral 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 Commitments, the Loans owing to it and any Promissory Notes 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 under the Revolving Three-Year Tranche, the security interest
granted hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. Upon any such termination, the Collateral 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.
9
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__________________________________
Name:
Title:
ACCEPTED AND AGREED:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By_________________________________
Vice President
EXHIBIT D
FORM OF OPINION
OF COUNSEL FOR THE BORROWER
July __, 1997
To each of the Lenders parties to the
Credit Agreement referred to
below, to The Chase Manhattan
Bank, as an Agent under the
Credit Agreement, and to the
Co-Agents and Lead Managers
named therein
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 6.01(a)(viii)(A) of
the Credit Agreement, dated as of July 2, 1997 (the "Credit Agreement"),
among CMS Energy Corporation (the "Borrower"), the Banks parties thereto
and the other Lenders from time to time parties thereto, The Chase
Manhattan Bank ("Chase"), as Administrative Agent, Documentation Agent,
Collateral Agent and Syndication Agent, and the Co-Agents and Lead
Managers parties thereto. 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 of the Borrower and I, or an attorney or
attorneys under my general supervision, have represented the Borrower in
connection with the preparation, execution and delivery of, and the
initial Extension of Credit made under, the Credit Agreement and other
Loan Documents.
In that capacity, I, or an attorney or attorneys under my general
supervision, have examined:
(a) The Credit Agreement;
(b) The Cash Collateral Agreement;
(c) The Restated Articles of Incorporation of the Borrower and all
amendments thereto (the "Charter");
(d) The bylaws of the Borrower and all amendments thereto (the
"Bylaws"); and
(e) The Promissory Notes executed and delivered by the Borrower on
the date hereof.
In addition, I, or an attorney or attorneys under my general
supervision, have examined the originals, or copies certified to my
satisfaction, of such other corporate records of the Borrower,
certificates of public officials and of officers of the Borrower, and
agreements, instruments and other documents, as I have deemed necessary as
a basis for the opinions expressed below. As to various questions of fact
material to such opinions, I have, when relevant facts were not
independently established by me, relied upon the representations of
officers of the Borrower in the Loan Documents, and upon certificates of
the Borrower or its officers or of public officials.
I have assumed (i) the due execution and delivery, pursuant to due
authorization, of each document referred to in clauses (a) through (c)
above by all parties to such document (other than the Borrower), (ii) the
authenticity of all such documents submitted to us as originals, (ii) the
genuineness of all signatures (other than those of the Borrower), 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, I am of the following opinion:
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 other Loan Documents to which it is, or is to be, a
party, 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 Charter or the Bylaws, (b) any provision of
applicable law or (c) 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 Cash Collateral Agreement
and Section 8.01(l) of the Credit Agreement). The Credit Agreement,
the Cash Collateral Agreement and the Promissory Notes have been duly
executed and delivered on behalf of the Borrower.
3. Except as disclosed in the Borrower's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 and the Borrower's Quarterly
Report on Form 10-Q for the period ended March 31, 1997, 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 the Cash Collateral Agreement.
4. 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
the Borrower of the Credit Agreement and the other Loan Documents to
which it is, or is to be, a party or (b) the creation of any Lien
purported to be granted or created pursuant to the Cash Collateral
Agreement.
5. In any action or proceeding arising out of or relating to the Credit
Agreement or any other Loan Document to which the Borrower 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 or any other Loan Document, as
the case may be, wherein the parties thereto agree that the Credit
Agreement 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 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 and the other Loan
Documents, nothing has come to my attention to indicate that any of
such provisions would do so.
The opinions expressed herein are limited to the laws of the State of
Michigan and the Federal laws of the United States of America.
I consent to the reliance on this opinion by McDermott, Will & Emery in
their opinion to you of even date herewith delivered pursuant to Section
6.01(a)(viii)(B) of the Credit Agreement. 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 my prior written consent.
Very truly yours,
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE
ADMINISTRATIVE AGENT
[Date]
To each of the Banks parties to the
Credit Agreement referred to below,
to The Chase Manhattan Bank, as an
Agent under the Credit Agreement,
and to the Co-Agents and Lead
Managers named therein
Re: CMS Energy Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to The Chase Manhattan Bank,
individually and as Agent, 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 July 2, 1997 (the "Credit Agreement"),
among CMS Energy Corporation, the Banks parties thereto and the other
Lenders from time to time parties thereto, The Chase Manhattan Bank, as
Administrative Agent, Collateral Agent, Documentation Agent and
Syndication Agent, and the Co-Agents and Lead Managers named therein.
Terms defined in the Credit Agreement are used herein as therein defined.
In this connection, we have examined the following documents:
1. a counterpart of the Credit Agreement, executed by the parties
thereto; and
2. the other documents furnished to the Administrative Agent
pursuant to Section 6.01(a) of the Credit Agreement, including (without
limitation) the opinion of Michael D. VanHemert, Esq., Assistant
General Counsel of the Borrower.
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 business and financial terms evidenced by the Loan Documents. We
have relied, as to factual matters, on the documents we have examined.
To the extent that our opinions expressed below involve conclusions as
to matters governed by law other than the law of the State of New York, we
have relied upon the opinion, dated the date hereof, of Michael D.
VanHemert, Esq., Assistant General Counsel of the Borrower, and have
assumed without independent investigation the correctness of the matters
set forth therein, our opinions expressed below being subject to the
assumptions, qualifications and limitations set forth in such opinion.
Based upon and subject to the foregoing, and subject to the
qualifications set forth below, we are of the following opinion:
1. The Credit Agreement, the Cash Collateral Agreement, the Issuing
Bank Agreements and the Promissory Notes delivered on the date hereof
pursuant to Section 6.01(a) of the Credit Agreement are the legal, valid
and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms.
2. The Cash Collateral Agreement will, upon the deposit of cash with
the Collateral Agent pursuant thereto, create a valid security interest in
the Collateral (as defined therein, but excluding the Account (as defined
therein) and any other type of Collateral that is not subject to Article 9
of the UCC) securing payment of the Obligations (as defined therein).
Our opinion is subject to the following qualifications:
(a) The enforceability of the Borrower's obligations under the
Credit Agreement and the other Loan Documents is subject to the effect of
any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar law affecting creditors' rights
generally.
(b) The enforceability of the Borrower's obligations under the
Credit Agreement and the other Loan Documents is subject to the effect of
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether 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.
(c) We note further that, in addition to the application of
equitable principles described above, courts have imposed an obligation on
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 is
determined to have constituted negligence.
(d) We express no opinion herein as to (i) Section 11.05 of the
Credit Agreement, (ii) the enforceability of provisions purporting to
grant to a party conclusive rights of determination, (iii) the
availability of specific performance or other equitable remedies, (iv) the
enforceability of rights to indemnity under federal or state securities
laws or (v) the enforceability of waivers by parties of their respective
rights and remedies under law. In addition, our opinion in paragraph 1
above is subject to the further qualification that certain provisions of
the Cash Collateral Agreement are or may be unenforceable in whole or in
part under the laws of the State of New York, but the inclusion of such
provisions does not affect the validity of the Cash Collateral Agreement
and the Cash Collateral Agreement contains adequate provisions for the
practical realization of the rights and benefits afforded thereby, except
for the economic consequences of any delay which may be imposed thereby or
result therefrom.
(e) With respect to the opinions set forth in paragraph 2 above,
we have assumed that the Borrower has not 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 Uniform Commercial Code of any jurisdiction
to be enforceable against third parties. Further, with respect to any
Collateral constituting "securities" within the meaning of Article 8 of
the UCC, a security interest in such Collateral is enforceable and can
attach only if such security is transferred to the Collateral Agent or a
person designated by the Collateral Agent pursuant to a provision of
Section 8-313(1) of the Uniform Commercial Code as in effect in the State
of New York.
(f) We express no opinion herein as to:
(i) the Borrower's rights in or title to any Collateral, or
the authenticity or enforceability thereof;
(ii) the perfection or priority of any security interests.
(g) Our opinions expressed above are limited to the law of the
State of New York, and we do not express any opinion herein concerning any
other law.
The foregoing opinion is solely for your benefit and may not be relied
upon by any other person or entity, other than any Person that may become
a Lender under the Credit Agreement after the date hereof.
Very truly yours,
EXHIBIT F
COMPUTATIONS USED BY BORROWER
IN DETERMINING COMPLIANCE WITH COVENANTS
CONTAINED IN SECTIONS 8.01(i) AND 8.01(j)
(Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Credit Agreement, dated as of July 2,
1997, among CMS Energy Corporation, the banks named therein, The Chase
Manhattan Bank, as Administrative Agent, Collateral Agent, Documentation
Agent and Syndication Agent, and the Co-Agents and Lead Managers named
therein)
I. SECTION 8.01(i) (Consolidated Leverage Ratio)
(i) Consolidated Debt
(a) Debt of the Borrower (See worksheet
set forth on Schedule 1 hereto) $___________
(b)(1) Aggregate debt (as such term is
construed in accordance with GAAP)
of the Consolidated Subsidiaries $___________
Total Consolidated Debt $___________
===========
(ii) Consolidated Capital
(a) Total Consolidated Debt (See (i)
above) $___________
(b)(2) Consolidated equity of the common
stockholders of the Borrower and the
Consolidated Subsidiaries $___________
- -----------------
1 To the extent included, Project Finance Debt of any Consolidated
Subsidiary shall be included only to the extent of the Borrower's
Ownership Interest in such Consolidated Subsidiary.
2 To the extent included in (b), (c) or (d) above, Project Finance
Equity of the Borrower and the Consolidated Subsidiaries in any
Consolidated Subsidiary should be included only to the extent of the
Borrower's Ownership Interest in each such Consolidated Subsidiary.
2
(c)(2) Consolidated equity of the preference
stockholders of the Borrower and the
Consolidated Subsidiaries $___________
(d)(2) Consolidated equity of the preferred
stockholders of the Borrower and the
Consolidated Subsidiaries $___________
Total Consolidated Capital(3) $___________
===========
(iii) Consolidated Leverage Ratio (i/ii) _______
===========
Maximum Ratio - Section 8.01(i) _______
II. SECTION 8.01(j) (Cash Dividend Coverage Ratio)
(i) Cash Dividend Income
(a) Cash Dividend Income $___________
(b) 25% of Equity Distributions
received by the Borrower
(not to exceed $10,000,000) $_____________________
(c) All amounts received by the
Borrower from its Subsidiaries
and Affiliates constituting
reimbursement of interest expense
(including commitment, guaranty
- -----------------
3 The consolidated equity of the stockholders of the Borrower shall
include (i) the aggregate amount of all Hybrid Preferred Securities
and (ii) only such percentage of the Net Proceeds from any issuance
of any hybrid debt/equity securities (other than Junior Subordinated
Debt and Hybrid Preferred Securities) by the Borrower or any
Consolidated Subsidiary as shall be agreed by the Administrative
Agent and the Borrower (and consented to by the Required Lenders)
prior to such issuance, which percentage shall be based on, among
other things, the treatment (if any) given to such hybrid securities
by the rating agencies.
3
and letter of credit fees) paid by
the Borrower on behalf of any
such Subsidiary or Affiliate $________________
Total Cash Dividend Income $___________
============
(ii) Interest expense (including commitment,
guaranty and letter of credit fees) accrued
by the Borrower in respect of all Debt $___________
(iii) Cash Dividend Income/Interest
Expense Ratio ((i)/(ii)) ________
Minimum Ratio - Section 8.01(j) ________
III. Project Finance Debt(4)
IV. Support Obligations(5)
- -----------------
4 Set forth all Project Finance Debt of any Consolidated Subsidiary
and the Borrower's Ownership Interest in such Consolidated
Subsidiary.
5 Set forth all Support Obligations of the Borrower of the types
described in clauses (iv) and (v) of the definition of Support
Obligations (whether or not each such Support Obligation or the
primary obligation so supported is fixed, conclusively determined or
reasonable quantifiable) unless such Support Obligation is
previously disclosed as "Consolidated Debt" pursuant to Section I or
II above.
4
V. Junior Subordinated Debt/Guaranties of Hybrid Preferred Securities(6)
VI. Other Hybrid Debt/Equity Securities(7)
- -----------------
6 Set forth all Junior Subordinated Debt owned by any Hybrid Preferred
Securities Subsidiary and all guaranties by the Borrower of payments
with respect to any Hybrid Preferred Securities.
7 Set forth any hybrid debt/equity securities (other than Junior
Subordinated Debt and Hybrid Preferred Securities) issued by the
Borrower or any Consolidated Subsidiary and the amount of the Net
Proceeds from each such issuance.
SCHEDULE 1
TO EXHIBIT F
Computation of Aggregate Debt of the Borrower
Aggregate Debt of the Borrower shall include (without duplication) any and
all indebtedness, liabilities and other monetary obligations of the
Borrower (whether for principal, interest, fees, costs, expenses or
otherwise, and contingent or otherwise):(1)
(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 GAAP, 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;
provided, however, for purposes of the
calculation of Debt for this clause
only, the actual amount of Debt of the
Borrower shall be determined on a
net basis to the extent such agreements
permit such amounts to be calculated on
a net basis $___________
- -----------------
1 See the definition of "Consolidated Debt" contained in the Credit
Agreement for certain exclusions from Debt of the Borrower.
ii
(vi) to pay rent or other amounts under leases
entered into in connection with sale and
leaseback transactions involving assets of
the Borrower being sold in connection
therewith $___________
(vii) arising from any accumulated funding
deficiency (as defined in Section 412(a)
of the Internal Revenue Code of 1986,
as amended) for a Plan $___________
(viii) direct or indirect guaranties in respect
of, and obligations to purchase or
otherwise acquire, or otherwise to
warrant or hold harmless, pursuant
to a legally binding agreement, a
creditor against loss in respect of,
Debt of others referred to in clauses
(i) through (vii) above $___________
(ix)(2) other guaranty or similar financial
obligations in respect of the performance
of others, including, without limitation,
any financial obligation, contingent or
otherwise, of the Borrower 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 $___________
(A) 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
- -----------------
2 Set forth only the net amount of certain Support Obligations
provided by the Borrower in connection with sales of natural gas,
natural gas liquids, electricity, oil, propane or coal by MS&T, as
detailed in Annex A to this Schedule 1.
iii
Debt $___________
(B) to purchase property, securities or
services for the purpose of assuring
the owner of such Debt of the
payment of such Debt $___________
(C) 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 $___________
(D)(3) to provide equity capital under or
in respect of equity subscription
arrangements (to the extent that
such obligation to provide equity
capital does not otherwise
constitute Debt) $___________
(E)(3) to perform, or arrange for the
performance of, any non-monetary
obligations or non-funded debt
payment obligations of the primary
obligor $___________
(F) Other $___________
Total of Debt of the Borrower $___________
==========
- -----------------
3 For purposes of this clause do not include Support Obligations if
such Support Obligation or the primary obligation so supported is
not fixed or conclusively determined or is not otherwise reasonably
quantifiable as of the date of determination.
iv
ANNEX A to SCHEDULE 1
Details Regarding MS&T Transactions(4)
1. Support Obligations Relating to Payment Obligations
Aggregate amount of Support Obligations
provided by the Borrower in respect of
MS&T's payment obligations under any
Covering Transaction
(a) [List each such Support Obligation] $________
(b) $________
(c) $________
(d) $________
Less:
Aggregate amount of any Support Obligations
provided by any Purchasing Party Guarantor or
any irrevocable letter of credit issued for the
account of any Purchasing Party or Purchasing
Party Guarantor
(a) [List each such Support Obligation
or letter of credit that relates to
the corresponding subsection above] $________
(b) $________
(c) $________
(d) $________
- -----------------
4 See subsection (d) of the definition of "Consolidated Debt"
contained in the Credit Agreement for the specific requirements
of any offsetting Support Obligations.
v
2. Support Obligations Relating to Performance Obligations
Aggregate amount of Support Obligations
provided by the Borrower in respect of
MS&T's performance obligations to any
Purchasing Party
(i) [List each such Support Obligation] $________
(ii) $________
(iii) $________
(iv) $________
Less:
Aggregate amount of any Support Obligations
provided by any Counterparty Guarantor or
any performance bond issued for the account
of any counterparty to a Covering Transaction
or any Counterparty Guarantor
(i) [List each such Support Obligation
or performance bond that relates to
the corresponding subsection above] $________
(ii) $________
(iii) $________
(iv) $________
EXHIBIT G
FORM OF LENDER ASSIGNMENT
Dated _______ ___, ____
Reference is made to the Credit Agreement, dated as of July 2, 1997
(said Agreement, 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 named therein, The Chase Manhattan Bank, as
Administrative Agent, Collateral Agent, Documentation Agent and
Syndication Agent, and the Co-Agents and Lead Managers named therein.
Pursuant to the Credit Agreement, _________ ___________________ (the
"Assignor") has committed to make loans ("Loans") to the Borrower[, which
Loans 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 under each
Tranche[,] [and] the Loans owing to the Assignor [and the Note held by the
Assignor]. Such sale and assignment by the Assignor is being made on a
pro rata basis among the Assignor's rights and obligations under each
Tranche. After giving effect to such sale and assignment, the Assignee's
Commitments and the amount of the Loans owing to the Assignee in the
aggregate and under each Tranche will be as set forth in Section 2 of
Schedule 1. The effective date of this sale and assignment shall be the
date specified in Section 3 of Schedule 1 hereto (the "Effective Date").
2. On _______________, ____, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise
the Assignee, $___________, and (subject to the satisfaction of the
requirements set forth in Section 11.07(d) of the Credit Agreement) 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;
(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;
and (iv) represents and warrants to the Assignee and the Administrative
Agent that it has duly executed and delivered this Assignment and that the
execution, delivery and performance by the Assignor of this Assignment
have been duly authorized by all necessary action (corporate or
otherwise). 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 7.01(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) represents and
warrants to the Assignor and the Administrative Agent that it has duly
executed and delivered this Assignment and that the execution, delivery
and performance by the Assignor of this Assignment have been duly
authorized by all necessary action (corporate or otherwise).
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 ____________________, ____
Section 1.
Percentage Interest: _____%
Section 2.
Assignee's Aggregate Commitments: $___________
(i) Revolving 364-Day Commitment: $___________
(ii) Revolving Three-Year Commitment: $___________
(iii) Term Commitment: $___________
Aggregate Outstanding Principal Amount of
Loans owing to the Assignee: $___________
(i) Revolving 364-Day Loans: $___________
(ii) Revolving Three-Year Loans: $___________
(iii) Term Loans: $___________
Section 3.
Effective Date: __________, ____
[NAME OF ASSIGNOR]
By:_______________________________
Name:
Title:
[NAME OF ASSIGNEE]
By:_______________________________
Name:
Title:
Consented to: (1)
CMS ENERGY CORPORATION
By:____________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:____________________________
Name:
Title:
_______________________
(1) Consent of the Borrower and the Administrative Agent is required for
all assignments except for any assignment by a Lender to any of its
Affiliates or to any other Lender or any of its Affiliates.
EXHIBIT H
TERMS OF SUBORDINATION
(Junior Subodinated Debt)
ARTICLE ____
SUBORDINATION
Section ___.1 Applicability of Article; Securities Subordinated to
Senior Indebtedness. (a) This Article ____ shall apply only to the
Securities of any series which, pursuant to Section ___, are expressly
made subject to this Article. Such Securities are referred to in this
Article ____ as "Subordinated Securities."
(b) The Issuer covenants and agrees, and each Holder of
Subordinated Securities by his acceptance thereof likewise covenants and
agrees, that the indebtedness represented by the Subordinated Securities
and the payment of the principal and interest, if any, on the Subordinated
Securities is subordinated and subject in right, to the extent and in the
manner provided in this Article, to the prior payment in full of all
Senior Indebtedness.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date hereof or
thereafter incurred, created or assumed: (i) indebtedness of the Issuer
for money borrowed by the Issuer (including purchase money obligations) or
evidenced by debentures (other than the Subordinated Securities), notes,
bankers' acceptances or other corporate debt securities, or similar
instruments issued by the Issuer; (ii) all capital lease obligations of
the Issuer; (iii) all obligations of the Issuer issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
the Issuer and all obligations of the Issuer under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business); (iv) obligations with respect to letters of credit;
(v) all indebtedness of others of the type referred to in the preceding
clauses (i) through (iv) assumed by or guaranteed in any manner by the
Issuer or in effect guaranteed by the Issuer; (vi) all obligations of the
type referred to in clauses (i) through (v) above of other persons secured
by any lien on any property or asset of the Issuer (whether or not such
obligation is assumed by the Issuer), except for (1) any such indebtedness
that is by its terms subordinated to or pari passu with the Subordinated
Notes, as the case may be, including all other debt securities and
guaranties in respect of those debt securities, issued to any other
trusts, partnerships or other entities affiliated with the Issuer which
act as a financing vehicle of the Issuer in connection with the issuance
of preferred securities by such entity or other securities which rank pari
passu with, or junior to, the Preferred Securities, and (2) any
indebtedness between or among the Issuer and its affiliates; and/or
(vii) renewals, extensions or refundings of any of the indebtedness
referred to in the preceding clauses unless, in the case of any particular
indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same or the
assumption or guarantee of the same, or pursuant to which the same is
outstanding, such indebtedness or such renewal, extension or refunding
thereof is not superior in right of payment to the Subordinated
Securities.
This Article shall constitute a continuing obligation to all Persons
who, in reliance upon such provisions become holders of, or continue to
hold, Senior Indebtedness, and such provisions are made for the benefit of
the holders of Senior Indebtedness, and such holders are made obligees
hereunder and they and/or each of them may enforce such provisions.
Section ___.2 Issuer Not to Make Payments with Respect to
Subordinated Securities in Certain Circumstances. (a) Upon the maturity of
any Senior Indebtedness by lapse of time, acceleration or otherwise, all
principal thereof and premium and interest thereon shall first be paid in
full, or such payment duly provided for in cash in a manner satisfactory
to the holders of such Senior Indebtedness, before any payment is made on
account of the principal of, or interest on, Subordinated Securities or to
acquire any Subordinated Securities or on account of any sinking fund
provisions of any Subordinated Securities (except payments made in capital
stock of the Issuer or in warrants, rights or options to purchase or
acquire capital stock of the Issuer, sinking fund payments made in
Subordinated Securities acquired by the Issuer before the maturity of such
Senior Indebtedness, and payments made through the exchange of other debt
obligations of the Issuer for such Subordinated Securities in accordance
with the terms of such Subordinated Securities, provided that such debt
obligations are subordinated to Senior Indebtedness at least to the extent
that the Subordinated Securities for which they are exchanged are so
subordinated pursuant to this Article ____).
(b) Upon the happening and during the continuation of any default
in payment of the principal of, or interest on, any Senior Indebtedness
when the same becomes due and payable or in the event any judicial
proceeding shall be pending with respect to any such default, then, unless
and until such default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Issuer with respect to
the principal of, or interest on, Subordinated Securities or to acquire
any Subordinated Securities or on account of any sinking fund provisions
of Subordinated Securities (except payments made in capital stock of the
Issuer or in warrants, rights, or options to purchase or acquire capital
stock of the Issuer, sinking fund payments made in Subordinated Securities
acquired by the Issuer before such default and notice thereof, and
payments made through the exchange of other debt obligations of the Issuer
for such Subordinated Securities in accordance with the terms of such
Subordinated Securities, provided that such debt obligations are
subordinated to Senior Indebtedness at least to the extent that the
Subordinated Securities for which they are exchanged are so subordinated
pursuant to this Article ____).
(c) In the event that, notwithstanding the provisions of this
Section ___.2, the Issuer shall make any payment to the Trustee on account
of the principal of or interest on Subordinated Securities, or on account
of any sinking fund provisions of such Securities, after the maturity of
any Senior Indebtedness as described in Section ___.2(a) above or after
the happening of a default in payment of the principal of or interest on
any Senior Indebtedness as described in Section ___.2(b) above, then,
unless and until all Senior Indebtedness which shall have matured, and all
premium and interest thereon, shall have been paid in full (or the
declaration of acceleration thereof shall have been rescinded or
annulled), or such default shall have been cured or waived or shall have
ceased to exist, such payment (subject to the provisions of Sections ___.6
and ___.7) shall be held by the Trustee, in trust for the benefit of, and
shall be paid forthwith over and delivered to, the holders of such Senior
Indebtedness (pro rata as to each of such holders on the basis of the
respective amounts of Senior Indebtedness held by them) or their
representative or the trustee under the indenture or other agreement (if
any) pursuant to which such Senior Indebtedness may have been issued, as
their respective interests may appear, for application to the payment of
all such Senior Indebtedness remaining unpaid to the extent necessary to
pay the same in full in accordance with its terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness. The Issuer shall give prompt written notice to the Trustee
of any default in the payment of principal of or interest on any Senior
Indebtedness.
Section ___.3 Subordinated Securities Subordinated to Prior Payment
of All Senior Indebtedness on Dissolution, Liquidation or Reorganization
of Issuer. Upon any distribution of assets of the Issuer in any
dissolution, winding up, liquidation or reorganization of the Issuer
(whether voluntary or involuntary, in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full of the principal thereof and
premium and interest due thereon, or provision shall be made for such
payment, before the Holders of Subordinated Securities are entitled
to receive any payment on account of the principal of or interest on
such Securities;
(b) any payment or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities (other
than securities of the Issuer as reorganized or readjusted or
securities of the Issuer or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article ____
with respect to Subordinated Securities, to the payment in full
without diminution or modification by such plan of all Senior
Indebtedness), to which the Holders of Subordinated Securities or the
Trustee on behalf of the Holders of Subordinated Securities would be
entitled except for the provisions of this Article ____ shall be paid
or delivered by the liquidating trustee or agent or other person
making such payment or distribution directly to the holders of Senior
Indebtedness or their representative, or to the trustee under any
indenture under which Senior Indebtedness may have been issued (pro
rata as to each such holder, representative or trustee on the basis
of the respective amounts of unpaid Senior Indebtedness held or
represented by each), to the extent necessary to make payment in full
of all Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution or provision thereof to the
holders of such Senior Indebtedness; and
(c) in the event that notwithstanding the foregoing
provisions of this Section ___.3, any payment or distribution of
assets of the Issuer of any kind or character, whether in cash,
property or securities (other than securities of the Issuer as
reorganized or readjusted or securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment
the payment of which is subordinate, at least to the extent provided
in this Article ____ with respect to Subordinated Securities, to the
payment in full without diminution or modification by such plan of
all Senior Indebtedness), shall be received by the Trustee or the
Holders of the Subordinated Securities on account of principal of or
interest on the Subordinated Securities before all Senior
Indebtedness is paid in full, or effective provision made for its
payment, such payment or distribution (subject to the provisions of
Section ___.6 and ___.7) shall be received and held in trust for and
shall be paid over to the holders of the Senior Indebtedness
remaining unpaid or unprovided for or their representative, or to the
trustee under any indenture under which such Senior Indebtedness may
have been issued (pro rata as provided in subsection (b) above), for
application to the payment of such Senior Indebtedness until all such
Senior Indebtedness shall have been paid in full, after giving effect
to any concurrent payment or distribution or provision therefor to
the holders of such Senior Indebtedness.
The Issuer shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Issuer.
The consolidation of the Issuer with, or the merger of the Issuer
into, another corporation or the liquidation or dissolution of the Issuer
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article ____ hereof shall not be deemed a
dissolution, winding up, liquidation or reorganization for the purposes of
this Section ___.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated such in Article ____.
Section ___.4 Holders of Subordinated Securities to be Subrogated to
Right of Holders of Senior Indebtedness. Subject to the payment in full
of all Senior Indebtedness, the Holders of Subordinated Securities shall
be subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of assets of the Issuer applicable to
the Senior Indebtedness until all amounts owing on Subordinated Securities
shall be paid in full, and for the purposes of such subrogation no
payments or distributions to the holders of the Senior Indebtedness by or
on behalf of the Issuer or by or on behalf of the Holders of Subordinated
Securities by virtue of this Article ____ which otherwise would have been
made to the Holders of Subordinated Securities shall, as between the
Issuer, its creditors other than holders of Senior Indebtedness and the
Holders of Subordinated Securities, be deemed to be payment by the Issuer
to or on account of the Senior Indebtedness, it being understood that the
provisions of this Article ____ are and are intended solely for the
purpose of defining the relative rights of the Holders of the Subordinated
Securities, on the one hand, and the holders of the Senior Indebtedness,
on the other hand.
Section ___.5 Obligation of the Issuer Unconditional. Nothing
contained in this Article ____ or elsewhere in this Indenture or in any
Subordinated Security is intended to or shall impair, as among the Issuer,
its creditors other than holders of Senior Indebtedness and the Holders of
Subordinated Securities, the obligation of the Issuer, which is absolute
and unconditional, to pay to the Holders of Subordinated Securities the
principal of, and interest on, Subordinated Securities as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of
Subordinated Securities and creditors of the Issuer other than the holders
of the Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the Holder of any Subordinated Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article ____ of the
holders of Senior Indebtedness in respect of cash, property or securities
of the Issuer received upon the exercise of any such remedy. Upon any
payment or distribution of assets of the Issuer referred to in this
Article ____, the Trustee and Holders of Subordinated Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or, subject to the provisions of
Section ___ and ___, a certificate of the receiver, trustee in bankruptcy,
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or the Holders of Subordinated Securities, for
the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article ____.
Nothing contained in this Article ____ or elsewhere in this Indenture
or in any Subordinated Security is intended to or shall affect the
obligation of the Issuer to make, or prevent the Issuer from making, at
any time except during the pendency of any dissolution, winding up,
liquidation or reorganization proceeding, and, except as provided in
subsections (a) and (b) of Section ___.2, payments at any time of the
principal of, or interest on, Subordinated Securities.
Section ___.6 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice. The Issuer shall give prompt written notice to the
Trustee of any fact known to the Issuer which would prohibit the making of
any payment or distribution to or by the Trustee in respect of the
Subordinated Securities. Notwithstanding the provisions of this Article
____ or any provision of this Indenture, the Trustee shall not at any time
be charged with knowledge of the existence of any facts which would
prohibit the making of any payment or distribution to or by the Trustee,
unless at least two Business Days prior to the making of any such payment,
the Trustee shall have received written notice thereof from the Issuer or
from one or more holders of Senior Indebtedness or from any representative
thereof or from any trustee therefor, together with proof satisfactory to
the Trustee of such holding of Senior Indebtedness or of the authority of
such representative or trustee; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Sections ___ and
___, shall be entitled to assume conclusively that no such facts exist.
The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior
Indebtedness (or a representative or trustee on behalf of the holder) to
establish that such notice has been given by a holder of Senior
Indebtedness (or a representative of or trustee on behalf of any such
holder). In the event that the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payments or
distribution pursuant of this Article ____, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness held by such Person, as to the
extent to which such Person is entitled to participate in such payment or
distribution, and as to other facts pertinent to the rights of such Person
under this Article ____, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and nothing in this Article ____ shall
apply to claims of, or payments to, the Trustee under or pursuant to
Section ___.
Section ___.7 Application by Trustee of Monies or Government
Obligations Deposited with It. Money or Government Obligations deposited
in trust with the Trustee pursuant to and in accordance with Section ____
shall be for the sole benefit of Securityholders and, to the extent
allocated for the payment of Subordinated Securities, shall not be subject
to the subordination provisions of this Article ____, if the same are
deposited in trust prior to the happening of any event specified in
Section ___.2. Otherwise, any deposit of monies or Government Obligations
by the Issuer with the Trustee or any paying agent (whether or not in
trust) for the payment of the principal of, or interest on, any
Subordinated Securities shall be subject to the provisions of Section
___.1, ___.2 and ___.3 except that, if prior to the date on which by the
terms of this Indenture any such monies may become payable for any
purposes (including, without limitation, the payment of the principal of,
or the interest, if any, on any Subordinated Security) the Trustee shall
not have received with respect to such monies the notice provided for in
Section ___.6, then the Trustee or the paying agent shall have full power
and authority to receive such monies and Government Obligations and to
apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary which may be received by it on
or after such date. This Section ___.7 shall be construed solely for the
benefit of the Trustee and paying agent and, as to the first sentence
hereof, the Securityholders, and shall not otherwise effect the rights of
holders of Senior Indebtedness.
Section ___.8 Subordination Rights Not Impaired by Acts or Omissions
of Issuer or Holders of Senior Indebtedness. No rights of any present or
future holders of any Senior Indebtedness to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Issuer or by any act or
failure to act, in good faith, by any such holders or by any noncompliance
by the Issuer with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or be otherwise charged
with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Issuer may, at any
time and from time to time, without the consent of or notice to the
Trustee or the Holders of the Subordinated Securities, without incurring
responsibility to the Holders of the Subordinated Securities and without
impairing or releasing the subordination provided in this Article ____ or
the obligations hereunder of the Holders of the Subordinated Securities to
the holders of such Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebtedness or
any instrument evidencing the same or any agreement under which such
Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection for such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Issuer, as the case may be,
and any other Person.
Section ___.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of Subordinated Securities by
his acceptance thereof authorizes and expressly directs the Trustee on his
behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article ____ and appoints
the Trustee his attorney-in-fact for such purpose, including in the event
of any dissolution, winding up, liquidation or reorganization of the
Issuer (whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or otherwise) the
immediate filing of a claim for the unpaid balance of his Subordinated
Securities in the form required in said proceedings and causing said claim
to be approved. If the Trustee does not file a proper claim or proof of
debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of
Senior Indebtedness have the right to file and are hereby authorized to
file an appropriate claim for and on behalf of the Holders of said
Securities.
Section ___.10 Right of Trustee to Hold Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all of the rights
set forth in this Article ____ in respect of any Senior Indebtedness at
any time held by it to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive
the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Issuer, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article ____, and no
implied covenants or obligations with respect to the holders of such
Senior Indebtedness shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of such Senior Indebtedness and, subject to the provisions of Sections
___.2 and ___.3, the Trustee shall not be liable to any holder of such
Senior Indebtedness if it shall pay over or deliver to Holders of
Subordinated Securities, the Issuer or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue
of this Article ____ or otherwise.
Section ___.11 Article ____ Not to Prevent Events of Defaults. The
failure to make a payment on account of principal or interest by reason of
any provision in this Article ____ shall not be construed as preventing
the occurrence of an Event of Default under Section ____.
EXHIBIT I
TERMS OF SUBORDINATION
(Guaranty of Hybrid Preferred Securities)
SECTION ___. This Guarantee will constitute an unsecured obligation of
the Guarantor and will rank subordinate and junior in right of payment to
all other liabilities of the Guarantor and pari passu with any guarantee
now or hereafter entered into by the Guarantor in respect of the
securities representing common beneficial interests in the assets of the
Issuer or of any preferred or preference stock of any affiliate of the
Guarantor.