EXHIBIT 4.1
EXECUTION COPY
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$295,800,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 12, 2002,
Among
CMS ENERGY CORPORATION
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
BARCLAYS BANK PLC
as Administrative Agent
and
CITICORP USA, INC.
as Collateral Agent
and
BANK OF AMERICA, N.A.
and
JPMORGAN CHASE BANK
as Co-Syndication Agents
and
UNION BANK OF CALIFORNIA, N.A.
and
CITICORP USA, INC.
as Documentation Agents
----------------------------
SALOMON SMITH BARNEY INC.
as Book Manager
SALOMON SMITH BARNEY INC. AND BARCLAYS CAPITAL
as Joint Lead Arrangers
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms..............................................................................1
SECTION 1.02. Computation of Time Periods; Construction.........................................................20
SECTION 1.03. Accounting Terms..................................................................................20
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments...................................................................................21
SECTION 2.02. Fees..............................................................................................21
SECTION 2.03. Reduction of the Commitments; Mandatory Prepayments...............................................21
SECTION 2.04. Computations of Outstandings......................................................................23
ARTICLE III
LOANS
SECTION 3.01. Loans.............................................................................................23
SECTION 3.02. Conversion of Loans...............................................................................24
SECTION 3.03. Interest Periods..................................................................................25
SECTION 3.04. Other Terms Relating to the Making and Conversion of Loans........................................25
SECTION 3.05. Repayment of Loans; Interest......................................................................27
ARTICLE IV
[RESERVED]
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 5.01. Payments and Computations.........................................................................28
SECTION 5.02. Interest Rate Determination.......................................................................30
SECTION 5.03. Prepayments.......................................................................................30
SECTION 5.04. Yield Protection..................................................................................30
SECTION 5.05. Sharing of Payments, Etc..........................................................................32
SECTION 5.06. Taxes.............................................................................................32
SECTION 5.07. Apportionment of Payments.........................................................................34
SECTION 5.08. Proceeds of Collateral............................................................................35
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TABLE OF CONTENTS (CONT'D)
SECTION PAGE
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Effectiveness of this Agreement.......................................35
SECTION 6.02. Conditions Precedent to Each Extension of Credit..................................................37
SECTION 6.03. Conditions Precedent to Certain Extensions of Credit..............................................38
SECTION 6.04. Reliance on Certificates..........................................................................38
SECTION 6.05. Condition Precedent to the Initial Extension of Credit............................................39
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower....................................................39
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants.............................................................................42
SECTION 8.02. Negative Covenants................................................................................45
SECTION 8.03. Reporting Obligations.............................................................................52
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default.................................................................................55
SECTION 9.02. Remedies..........................................................................................57
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action.........................................................................58
SECTION 10.02. Indemnification..................................................................................60
SECTION 10.03. Concerning the Collateral and the Loan Documents.................................................60
SECTION 10.04. Release of Guarantors............................................................................61
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc..................................................................................62
SECTION 11.02. Notices, Etc.....................................................................................62
SECTION 11.03. No Waiver of Remedies............................................................................63
SECTION 11.04. Costs, Expenses and Indemnification..............................................................63
SECTION 11.05. Right of Set-off.................................................................................64
SECTION 11.06. Binding Effect...................................................................................64
SECTION 11.07. Assignments and Participation....................................................................64
SECTION 11.08. Confidentiality..................................................................................68
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TABLE OF CONTENTS (CONT'D)
SECTION PAGE
SECTION 11.09. Waiver of Jury Trial.............................................................................69
SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION........................................................69
SECTION 11.11. Relation of the Parties; No Beneficiary..........................................................70
SECTION 11.12. Execution in Counterparts........................................................................70
SECTION 11.13. Survival of Agreement............................................................................70
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Exhibits
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Notice of Conversion
EXHIBIT C - Form of Opinion of Michael D. VanHemert, Esq., counsel to the Borrower
EXHIBIT D-1 - Form of Opinion of Hughes Hubbard & Reed LLP, special counsel to the Borrower
EXHIBIT D-2 - Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the
Borrower
EXHIBIT E - Form of Compliance Schedule
EXHIBIT F - Form of Lender Assignment
EXHIBIT G - Terms of Subordination (Junior Subordinated Debt)
EXHIBIT H - Terms of Subordination (Guaranty of Hybrid Preferred Securities)
EXHIBIT I - Form of Guaranty
EXHIBIT J - Form of Pledge and Security Agreement (Borrower)
EXHIBIT K - Form of Pledge and Security Agreement (Grantors)
Schedules
COMMITMENT
SCHEDULE
SCHEDULE I Applicable Lending Offices
SCHEDULE II Certain Debt
SCHEDULE III Pledged Capital Stock
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 12, 2002
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "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) Barclays Bank PLC ("BARCLAYS"), as administrative agent (the
"ADMINISTRATIVE AGENT") for the Lenders hereunder,
(iv) Citicorp USA, Inc. ("CUSA"), as collateral agent (the
"COLLATERAL AGENT") for the Lenders hereunder, and
(v) Bank of America, N.A. and JPMorgan Chase Bank, as
co-syndication agents (the "CO-SYNDICATION AGENTS"), and Union
Bank of California, N.A. and CUSA, as documentation agents
(the "DOCUMENTATION AGENTS").
PRELIMINARY STATEMENTS
The Borrower has requested the Banks to amend and restate the Existing
Credit Agreement (as hereinafter defined) to provide the credit facility
hereinafter described in the amount 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:
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"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(b)(i).
"ADJUSTED LIBO 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 next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b)
the Statutory Reserve Rate.
"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 Collateral Agent, any Co-Syndication Agent or any
Documentation Agent, and "AGENTS" means any or all of the foregoing.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and
(b) 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 or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime 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 with
respect to any Loans, the per annum rate specified in the table below
for such Loans:
ABR Loans 2.00%
-----------------------------
Eurodollar
Rate Loans 3.00%
-----------------------------
"APPLICABLE RATE" means:
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(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; 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
Adjusted LIBO Rate for such Interest Period plus the
Applicable Margin.
"ARRANGERS" means Salomon Smith Barney Inc. and Barclays
Capital.
"AVAILABLE COMMITMENT" means, for each Lender on any day, the
unused portion of such Lender's Commitment, computed after giving
effect to all Extensions of Credit or prepayments to be made on such
day and the application of proceeds therefrom. "AVAILABLE COMMITMENTS"
means the aggregate of the Lenders' Available Commitments.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWER INTEREST EXPENSE" means at any date, the total
interest expense in respect of Debt of the Borrower for the four
calendar quarters immediately preceding such date, including, without
duplication, (i) interest expense attributable to capital leases, (ii)
amortization of debt discount, (iii) capitalized interest, (iv) cash
and noncash payments, (v) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) net costs under interest rate swap, "cap", "collar" or
other hedging agreements (including amortization of discount) and (vii)
interest expense in respect of obligations of Persons deemed to be Debt
of the Borrower under clause (viii) of the definition of Debt,
provided, however that Borrower Interest Expense shall exclude any
costs otherwise included in interest expense recognized on early
retirement of debt.
"BORROWING" means a borrowing 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, 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 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 or loss (without
giving effect to: any extraordinary gains in excess of $25,000,000, the
amount of any write-off or write-down of assets, including, without
limitation, write-offs or write-downs related to the sale of assets,
impairment of assets
3
and loss on contracts, in each case in accordance with GAAP
consistently applied, and up to $200,000,000 of other non-cash
write-offs) of such Subsidiaries during such period.
"CHANGE OF CONTROL" means (a) any "person" or "group" within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act shall
become the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the then outstanding voting capital
stock of the Borrower, or (b) the majority of the board of directors of
the Borrower shall fail to consist of Continuing Directors, or (c) a
consolidation or merger of the Borrower shall occur after which the
holders of the outstanding voting capital stock of the Borrower
immediately prior thereto hold less than 50% of the outstanding voting
capital stock of the surviving entity, or (d) more than 50% of the
outstanding voting capital stock of the Borrower shall be transferred
to any entity of which the Borrower owns less than 50% of the
outstanding voting capital stock.
"CLOSING DATE" means July 12, 2002.
"COLLATERAL" means all property and interests in property now
owned or hereafter acquired by any Loan Party upon which a Lien is
granted under any of the Loan Documents.
"COMMITMENT" means, for each Lender, the obligation of such
Lender to make Loans to the Borrower in an aggregate amount no greater
than the amount set forth opposite such Lender's name on the Commitment
Schedule under the heading "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. "COMMITMENTS" means the total of the
Lenders' Commitments hereunder. The Commitments shall in no event
exceed $295,800,000.
"COMMITMENT FEE MARGIN" means a per annum rate equal to 0.50%.
"COMMITMENT SCHEDULE" means the Schedule identifying each
Lender's Commitment as of the Closing Date attached hereto and
identified as such.
"CONFIDENTIAL INFORMATION" has the meaning assigned to that
term in Section 11.08.
"CONSOLIDATED DEBT" means, without duplication, as determined
on a consolidated basis in accordance with GAAP, 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;
4
(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 H, 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 Arrangers and the Borrower (and
consented to by the Required Lenders) 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 purchase or sale by MS&T,
its Subsidiaries or PremStar Energy Canada Ltd. ("PREMSTAR")
of natural gas, natural gas liquids, gas condensates,
electricity, oil, propane, coal, any other commodity, weather
derivatives or any derivative instrument with respect to any
commodity with any other Person (a "COUNTERPARTY"),
Consolidated Debt shall include only the excess, if any, of
(A) the aggregate amount of any Support Obligations provided
by the Borrower in respect of MS&T's, any of its Subsidiary's
or PremStar's obligations under any such purchase or sale
transaction (a "COVERING TRANSACTION") entered into by MS&T,
any of its Subsidiaries or PremStar in connection with such
purchase or sale over (B) the aggregate amount of (i) any
Support Obligations provided by the direct or indirect parent
company of such Counterparty (the "COUNTERPARTY GUARANTOR")
and (ii) any irrevocable letter of credit provided by any
financial institution for the account of such Counterparty or
Counterparty Guarantor, in each case for the benefit of MS&T,
any of its Subsidiaries or PremStar in support of such
Counterparty's payment obligations to MS&T, such Subsidiary or
PremStar arising from such purchase or sale, provided that (x)
the senior, unsecured, non-credit enhanced indebtedness of
such Counterparty 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 and Moody's, provided that in the
event that such Counterparty Guarantor has no such rated
indebtedness, Dun & Bradstreet Inc. has rated such
Counterparty Guarantor at least investment grade, (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;
(e) Consolidated Debt shall not include any Project
Finance Debt of the Borrower or any Consolidated Subsidiary;
and
5
(f) Consolidated Debt shall not include the principal
amount of any Securitized Bonds.
"CONSOLIDATED EBITDA" means, with reference to any period, the
pretax operating income of the Borrower and its Subsidiaries ("PRETAX
OPERATING INCOME") for such period plus, to the extent deducted in
determining Pretax Operating Income (without duplication), (i)
depreciation, depletion and amortization, and (ii) any non-cash
write-offs and write-downs contained in the Borrower's Pretax Operating
Income, including, without limitation, write-offs or write-downs
related to the sale of assets, impairment of assets and loss on
contracts, in each case in accordance with GAAP consistently applied,
all calculated for the Borrower and its Subsidiaries on a consolidated
basis for such period; provided, however that Consolidated EBITDA shall
not include any operating income attributable to that portion of the
revenues of Consumers dedicated to the repayment of the Securitized
Bonds.
"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 Closing Date owned by
the Borrower.
"CONSUMERS CREDIT FACILITY" is defined in Section 6.05.
"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.
"CONTINUING DIRECTOR" means, as of any date of determination,
any member of the board of directors of the Borrower who (a) was a
member of such board of directors on the Closing Date, or (b) was
nominated for election or elected to such board of directors with the
approval of the Continuing Directors who were members of such board of
directors at the time of such nomination or election; provided that an
individual who is so elected or nominated in connection with a merger,
consolidation, acquisition or similar transaction shall not be a
Continuing Director unless such individual was a Continuing Director
prior thereto.
"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 or 3.03.
"DEBT" means, for any Person, without duplication, any and all
indebtedness, liabilities and other monetary obligations of such Person
(whether for principal, interest,
6
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, (viii) arising in connection with any withdrawal
liability under ERISA to any Multiemployer Plan and (ix) 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
(viii) above and (B) other guaranty or similar financial obligations in
respect of the performance of others, including Support Obligations.
Notwithstanding the foregoing, solely for purposes of the calculation
required under Section 8.01(j)(ii), Debt shall not include any Junior
Subordinated Debt issued by the Borrower and owned by any Hybrid
Preferred Securities Subsidiary.
"DEBT FOR BORROWED MONEY" means, for any Person, without
duplication, the sum of (i) Debt of such Person described in clause (i)
of the definition of "Debt", plus (ii) all obligations of such Person
with respect to receivables sold or otherwise discounted with recourse,
plus (iii) all Project Finance Debt entered into by such Person on or
after the Closing Date (other than Project Finance Debt incurred
substantially contemporaneously with the acquisition or construction of
the assets securing such Project Finance Debt), but shall exclude (a)
notes, bills and checks presented in the ordinary course of business by
such Person to banks for collection or deposit, (b) with respect to the
Borrower and its Subsidiaries, all obligations of the Borrower and its
Subsidiaries of the character referred to in this definition to the
extent owing to the Borrower or any of its Subsidiaries, (c) with
respect to Panhandle and its Subsidiaries, refinancings of Debt of
Panhandle and its Subsidiaries existing as of the Closing Date, and
Debt incurred or collateral delivered on or after the Closing Date with
respect to any Support Obligations of Panhandle or its Subsidiaries
existing as of the Closing Date, and (d) refinancings of Debt existing
as of the Closing Date or incurred after the Closing Date in accordance
with this Agreement, as applicable, to the extent such refinancing Debt
is otherwise permitted under this Agreement.
"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
7
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.
"DESIGNATED PREPAYMENT" means each mandatory prepayment
required by clauses (i) and (ii) of Section 2.03(c).
"DIVIDEND COVERAGE RATIO" means, at any date, the ratio of (i)
Pro Forma Dividend Amounts to (ii) Borrower Interest Expense.
"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), and (C)
any Person described in clause (d) above shall, in addition, be
acceptable to the Administrative Agent (which acceptance shall not be
unreasonably withheld or delayed).
"ENTERPRISES" means CMS Enterprises Company, a Michigan
corporation, all of whose common stock is on the Closing Date owned by
the Borrower.
8
"ENTERPRISES CREDIT AGREEMENT" means that certain Credit
Agreement, dated as of July 12, 2002, by and among Enterprises, as
borrower, the lenders from time to time parties thereto, and Citicorp
USA, Inc., as administrative agent, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"ENTERPRISES SIGNIFICANT SUBSIDIARY" means CMS Oil and Gas
Company, CMS Generation Co., CMS Gas Transmission Company, Panhandle,
any direct or indirect subsidiary of Panhandle and any other direct
subsidiary of Enterprises having a net worth in excess of $50,000,000.
"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" means, 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 Adjusted
LIBO 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.
9
"EURODOLLAR RATE LOAN" means a Loan that bears interest as
provided in Section 3.05(b)(ii).
"EVENT OF DEFAULT" is defined in Section 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING CREDIT AGREEMENT" means the $450,000,000 Credit
Agreement, dated as of June 18, 2001, among the Borrower, the lenders
party thereto, Barclays Bank PLC, as administrative agent and
collateral agent, Bank of America, N.A. and The Chase Manhattan Bank,
as co-syndication agents, and Citibank, N.A. and Union Bank of
California, as documentation agents, as the same may have been amended,
restated, supplemented or otherwise modified from time to time.
"EXTENSION OF CREDIT" means the making of a Borrowing
(including any Conversion).
"FAIR MARKET VALUE" means, with respect to any asset, the
value of the consideration obtainable in a sale of such asset in the
open market, assuming a sale by a willing seller to a willing purchaser
dealing at arm's length and arranged in an orderly manner over a
reasonable period of time, each having reasonable knowledge of the
nature and characteristics of such asset, neither being under any
compulsion to act, and, if in excess of $50,000,000, as determined in
good faith by the Board of Directors of the Borrower.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, 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 it.
"FEE LETTER" is defined in Section 2.02(b).
"FITCH" means Fitch, Inc. 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.
"FOREIGN SUBSIDIARY" is defined in Section 8.01(l).
"GAAP" is defined in Section 1.03.
10
"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 (i) the execution,
delivery, or performance of any Loan Document by any Loan Party, (ii)
the grant and perfection of any Lien in favor of the Collateral Agent
contemplated by the Loan Documents, or (iii) the exercise by any Agent
(on behalf of the Lenders) of any right or remedy provided for under
the Loan Documents.
"GRANTOR(s)" means each Guarantor and each of the following
Subsidiaries of the Borrower: CMS Capital, L.L.C., a Michigan limited
liability company, CMS Electric and Gas Company, a Michigan
corporation, CMS Oil and Gas Company, a Michigan corporation, MS&T, CMS
International Ventures, L.L.C., a Michigan limited liability company,
CMS Field Services, Inc., a Michigan corporation, Dearborn Industrial
Energy, L.L.C., a Michigan limited liability company, Dearborn
Industrial Generation, L.L.C., a Michigan limited liability company,
CMS Generation Michigan Power L.L.C., a Michigan limited liability
company, CMS Gas Processing, L.L.C., an Oklahoma limited liability
company, and CMS Natural Gas Gathering, L.L.C., an Oklahoma limited
liability company.
"GUARANTOR" means Enterprises, CMS Generation Co., a Michigan
corporation, CMS Gas Transmission Company, a Michigan corporation, and
each other Restricted Subsidiary (excluding Panhandle and its
Subsidiaries) that has delivered, or shall be obligated to deliver, a
guaranty under and pursuant to the terms of Section 8.01(l).
"GUARANTY" means that certain Guaranty (and any and all
supplements thereto) executed from time to time by each Guarantor in
favor of the Collateral Agent for the benefit of itself and the
Lenders, in substantially the form of Exhibit I attached hereto, as
amended, restated, supplemented or otherwise modified from time to
time.
"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 a wholly-owned direct
or indirect Subsidiary of the Borrower in exchange for Junior
Subordinated Debt issued by the Borrower or such wholly-owned
direct or indirect Subsidiary, 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
11
(iii) the Borrower or a wholly-owned direct or
indirect Subsidiary of the Borrower (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 a wholly-owned direct or indirect Subsidiary
of the Borrower, (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 a wholly-owned direct or indirect Subsidiary of the
Borrower (as the case may be) and payments made from time to time on
such Junior Subordinated Debt.
"INDEMNIFIED PERSON" is defined 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, the Third Supplemental Indenture, dated as of May 6, 1997, the
Fourth Supplemental Indenture, dated as of September 26, 1997, the
Fifth Supplemental Indenture, dated as of November 4, 1997, the Sixth
Supplemental Indenture, dated as of January 13, 1998, the Seventh
Supplemental Indenture, dated as of January 25, 1999, the Eighth
Supplemental Indenture, dated as of February 3, 1999, the Ninth
Supplemental Indenture, dated as of June 22, 1999, the Tenth
Supplemental Indenture, dated as of October 12, 2000, the Eleventh
Supplemental Indenture, dated as of March 29, 2001, and the Twelfth
Supplemental Indenture, dated as of July 2, 2001, as said Indenture may
be further amended or otherwise modified from time to time in
accordance with its terms.
"INTEREST PERIOD" is defined in Section 3.03.
"JUNIOR SUBORDINATED DEBT" means any unsecured Debt of the
Borrower or a Subsidiary of the Borrower (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 G, or pursuant to other terms and conditions
satisfactory to the Required Lenders.
"LENDER ASSIGNMENT" means an assignment and agreement entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit F.
"LENDERS" means the Banks listed on the signature pages hereof
and each Eligible Assignee that shall become a party hereto pursuant to
Section 11.07.
12
"LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing
rate quotations comparable to those currently provided on such page of
such Service, as determined by the Administrative Agent from time to
time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with
respect to such Eurodollar Borrowing for such Interest Period shall be
the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London
office of the Administrative Agent in immediately available funds in
the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"LIEN" is defined in Section 8.02(a).
"LOAN" means a loan 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 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 Fee Letter, the Guaranty, the Pledge Agreements, and all other
agreements, instruments and documents now or hereafter executed and/or
delivered pursuant hereto or thereto.
"LOAN PARTY" is defined in Section 6.01(a)(i).
"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, results of operations or prospects of the Borrower
and its Subsidiaries, considered as a whole, (b) the Borrower's and the
Guarantors' ability, taken as a whole, to perform their 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 or remedies of any Agent or the Lenders thereunder.
"MEASUREMENT QUARTER" is defined in Section 8.01(i).
"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 Closing Date
owned by Enterprises.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
13
"NET PROCEEDS" means, with respect to any sale, assignment or
other disposition of (but not the lease or license of) any property, or
with respect to any sale or issuance of securities or incurrence of
Debt, by any Person, gross cash proceeds received by such Person or any
Subsidiary of such Person from such sale, assignment, disposition,
issuance or incurrence (including cash received as consideration for
the assumption or incurrence of liabilities incurred in connection with
or in anticipation of such transaction) after (i) provision for all
income or other taxes measured by or resulting from such transaction,
(ii) payment of all 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 with
such transaction, (iii) all amounts used to repay Debt (and any premium
or penalty thereon) secured by a Lien on any asset disposed of in such
sale, assignment or other disposition or which is or may be required
(by the express terms of the instrument governing such Debt or by
applicable law) to be repaid in connection with such sale, assignment,
or other disposition, and (iv) deduction of appropriate amounts to be
provided by such Person or a Subsidiary of such Person as a reserve, in
accordance with GAAP consistently applied, against any liabilities
associated with the assets sold, transferred or disposed of in such
transaction and retained by such Person or a Subsidiary of such Person
after such transaction, provided that "Net Proceeds" shall include on a
dollar-for-dollar basis all amounts remaining in such reserve after
such liability shall have been satisfied in full or terminated;
provided, however, that notwithstanding the foregoing, "Net Proceeds"
shall exclude any amounts received or deemed to be received by the
Borrower for the purchase of the Borrower's capital stock in connection
with the Borrower's dividend reinvestment program.
"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.
"NOTICE OF BORROWING" is defined in Section 3.01(a).
"NOTICE OF CONVERSION" is defined in Section 3.02.
"OBLIGATIONS" means all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the
Borrower and other Loan Parties to any of the Agents, the Arrangers,
the Lenders or any other indemnified party arising under the Loan
Documents.
"OECD" means the Organization for Economic Cooperation and
Development.
"OFF-BALANCE SHEET LIABILITY" of a Person shall mean any of
the following obligations not appearing on such Person's consolidated
balance sheet: (i) all lease
14
obligations, leveraged leases, sale and leasebacks and other similar
lease arrangements of such Person, (ii) any liability under any so
called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, and (iii) any obligation arising with
respect to any other transaction if and to the extent that such
obligation is the functional equivalent of borrowing but that does not
constitute a liability on the consolidated balance sheet of such
Person.
"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%.
"PANHANDLE" means Panhandle Eastern Pipe Line Company, a
Delaware corporation, all of whose capital stock is on the Closing Date
owned indirectly by Enterprises.
"PARTICIPANT" is defined 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
Commitment on such day by the total of the Lenders' Commitments on such
date, and multiplying the quotient so obtained by 100%. 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
15
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.
16
"PLEDGE AGREEMENTS" means each of (i) that certain Pledge and
Security Agreement, dated as of July 12, 2002, by and between the
Borrower and the Collateral Agent, in substantially the form of Exhibit J
attached hereto, pursuant to which the Borrower shall grant a security
interest in the capital stock of Enterprises and a security interest in
accounts receivable and notes owed by Enterprises or any Subsidiary of
Enterprises to the Borrower, and (ii) that certain Pledge and Security
Agreement, dated as of July 12, 2002, by and among the Grantors and the
Collateral Agent in substantially the form of Exhibit K hereto, pursuant
to which such Grantors shall grant a security interest in the capital
stock (or comparable interest) of each of the Subsidiaries of the
Borrower identified as owned by it on Schedule III hereto and a security
interest in accounts receivable and notes owed by the Borrower or
Enterprises or any Subsidiary of Enterprises to such Grantor, in each
case as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by Barclays 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.
"PRO FORMA DIVIDEND AMOUNT" means, from and after any date of
any Consumers Dividend Restriction, the sum of (a) the aggregate amount
which Consumers could have paid to the Borrower during the four calendar
quarters immediately preceding such date had such Consumers Dividend
Restriction been in effect during such quarters plus (b) cash dividends
received by the Borrower from any other Subsidiary during such quarters.
"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) issued pursuant to Section 3.01(d); and "PROMISSORY NOTES" means
any or all of the foregoing.
"RECIPIENT" is defined in Section 11.08.
"REGISTER" is defined 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.
17
"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.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor thereto.
"SECURITIZED BONDS" means any nonrecourse bonds or similar
asset-backed securities issued by a special-purpose subsidiary of
Consumers which are payable solely from specialized charges authorized by
the utility commission of the relevant state in connection with the
recovery of regulatory assets or other stranded costs.
"SOLVENT", when used with respect to any Person, means that at
the time of determination:
(i) the fair market value of its assets is in excess of
the total amount of its liabilities (including, without
limitation, net contingent liabilities); and
(ii) it is then able and expects to be able to pay its
debts (including, without limitation, contingent debts and
other commitments) as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
For purposes of this definition, the amount of contingent liabilities at
any time shall be computed as the amount that, in light of all the facts
and circumstances known to such Person at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"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 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
18
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.
"TERMINATION DATE" means the earlier to occur of (i) March 31,
2003 and (ii) the date of termination or reduction in whole of the
Commitments pursuant to Section 2.03 or 9.02.
"THREE YEAR FACILITY" means that certain $300,000,000 Amended
and Restated Credit Agreement dated as of July 12, 2002, by and among the
Borrower, the Banks and the Agents, as the same may amended, restated,
supplemented or otherwise modified from time to time.
"TRUSTEE" has the meaning assigned to that term in the
Indenture.
19
"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"). If any changes
in generally accepted accounting principles are hereafter required or
permitted and are adopted by the Borrower or any of its Subsidiaries, or the
Borrower or any of its Subsidiaries shall change its application of generally
accepted accounting principles with respect to any Off-Balance Sheet
Liabilities, in each case, with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, tests, restrictions or
standards herein or in the related definitions or terms used therein
("ACCOUNTING CHANGES"), the parties hereto agree, at the Borrower's request,
to enter into negotiations, in good faith, in order to amend such provisions
in a credit neutral manner so as to reflect equitably such changes with the
desired result that the criteria for evaluating the Borrower's and its
Subsidiaries' financial condition shall be the same after such changes as if
such changes had not been made; provided, however, until such provisions are
amended in a manner reasonably satisfactory to the Agents, the Arrangers and
the Required Lenders, no Accounting Change shall be given effect in such
calculations. In the event such
20
amendment is entered into, all references in this Agreement to GAAP shall mean
generally accepted accounting principles as of the date of such amendment.
Notwithstanding the foregoing, all financial statements to be delivered by the
Borrower pursuant to Section 8.03 shall be prepared in accordance with
generally accepted accounting principles in effect at such time.
ARTICLE II
COMMITMENTS
SECTION 2.01. THE COMMITMENTS. Each Lender severally agrees, on the
terms and conditions hereinafter set forth to make Loans to the Borrower
during the period from the Closing Date until the Termination Date in an
aggregate outstanding amount not to exceed on any day such Lender's Available
Commitment (after giving effect to all Extensions of Credit to be made on such
day and the application of the proceeds thereof). Within the limits
hereinafter set forth, the Borrower may request Extensions of Credit
hereunder, prepay Loans, and use the resulting increase in the Available
Commitments for further Extensions of Credit in accordance with the terms
hereof.
SECTION 2.02. FEES.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee equal to the product of (i) the
average daily amount of such Lender's Available Commitment from the Closing
Date, 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 multiplied by (ii) the Commitment Fee
Margin in effect as of the date upon which such fee is payable. Such fees
shall be payable quarterly in arrears on the last day of each January, April,
July and October, commencing the first such date to occur following the
Closing Date, and on the Termination Date.
(b) On December 31, 2002, the Borrower shall pay to the
Administrative Agent, for the account of each Lender, an incentive fee equal
to 1.00% multiplied by each such Lenders' Commitment as of such date, unless
on or prior to such date the Borrower or Enterprises shall have received not
less than $200,000,000 in the aggregate in Net Proceeds from the sale or
disposition of assets of the Borrower and its Subsidiaries or the issuance of
debt securities by the Borrower or its Subsidiaries in the capital markets,
and shall have applied such Net Proceeds in accordance with the terms of this
Agreement.
(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
Barclays and the other Persons entitled thereto, such other fees as are
provided for in that certain letter agreement (including, without limitation,
an upfront fee payable to the Administrative Agent for the ratable benefit of
the Lenders hereunder equal to 50 basis points multiplied by the aggregate
amount of the Commitments), dated July 12, 2002 among the Borrower, the
Arrangers and Barclays (the "FEE LETTER"), in the amounts and at the times
specified therein.
SECTION 2.03. REDUCTION OF THE COMMITMENTS; MANDATORY PREPAYMENTS.
(a) The Borrower may (and shall provide notice thereof to the
Administrative Agent not later than 10:00 a.m. (New York City time) on the
date of termination or reduction,
21
and the Administrative Agent shall promptly distribute copies thereof to the
Lenders) terminate in whole or reduce ratably in part the unused portions of
the Commitments; provided that any such partial reduction shall be in the
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) Upon the occurrence of a Change of Control the Commitments shall
be reduced to zero and the principal amount outstanding hereunder, all
interest thereon and all other amounts payable under this Agreement and the
other Loan Documents 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.
(c) From and after the date that all of the obligations under the
Enterprises Credit Agreement shall have been paid in full in cash and the
Enterprises Credit Agreement shall have been terminated, the Borrower shall
make the following mandatory prepayments:
(i) Promptly and in any event within 3 Business Days after the
Borrower's or any of its Subsidiaries' receipt of any Net Proceeds from
the sale, assignment or other disposition of (but not the lease or
license of) any property, including, without limitation, any sale of
capital stock or other equity interest in any of the Borrower's direct or
indirect Subsidiaries, in an amount, when combined with the Net Proceeds
of all other such transactions since the Closing Date that have not been
applied to the prepayment of the Obligations in accordance herewith, in
excess of $5,000,000, the Borrower shall make or cause to be made a
mandatory prepayment of the Obligations in an amount equal to one hundred
percent (100%) of such aggregate Net Proceeds, provided that such amount
shall exclude Net Proceeds arising from (A) any sale, assignment or other
disposition of property by Consumers or any Subsidiary of Consumers and
(B) any sale or other disposition by the Borrower or any of its
Subsidiaries in the ordinary course of business consistent with past
practice; and
(ii) Promptly and in any event within 3 Business Days after the
Borrower's or any of its Subsidiaries' receipt of any Net Proceeds from
the sale or issuance of equity securities or incurrence of Debt For
Borrowed Money, other than securities issued by or Debt incurred by
Consumers or any Subsidiary of Consumers, the Borrower shall make or
cause to be made a mandatory prepayment of the Obligations in an amount
equal to (a) one hundred percent (100%) of such Net Proceeds until the
Borrower shall have received $250,000,000 of Net Proceeds from such sale
or issuance or incurrence, and (b) seventy-five percent (75%) of such Net
Proceeds thereafter.
Nothing in this Section 2.03(c) shall be construed to constitute the Lenders'
consent to any transaction referenced in clauses (i) and (ii) above which is
not expressly permitted by Article VIII. The Borrower shall give the
Administrative Agent prior written notice or telephonic notice promptly
confirmed in writing (each of which the Administrative Agent shall promptly
transmit to each Lender), when a Designated Prepayment will be made (which
date of prepayment shall be no later than the date on which such Designated
Payment becomes due and payable pursuant to this Section 2.03(c)). Designated
Prepayments shall be allocated and applied to the outstanding Loans and shall
permanently reduce on a ratable basis the Commitment of each Lender. All
Designated Prepayments shall be applied first to repay outstanding ABR Loans
and
22
then to repay outstanding Eurodollar Rate Loans with those Eurodollar Rate
Loans which have earlier expiring Interest Periods being repaid prior to those
which have later expiring Interest Periods.
SECTION 2.04. COMPUTATIONS OF OUTSTANDINGS. Whenever reference is
made in this Agreement to the principal amount outstanding on any date under
this Agreement, such reference shall refer to the aggregate principal amount
of all Loans outstanding on such date under this Agreement 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 exceed the aggregate amount of the Commitments hereunder. References
to the unused portion of the Commitments under this Agreement shall refer to
the excess, if any, of the Commitments hereunder over the principal amount
outstanding hereunder; and references to the unused portion of any Lender's
Commitment under this Agreement shall refer to such Lender's Percentage of the
unused Commitments hereunder.
ARTICLE III
LOANS
SECTION 3.01. LOANS.
(a) The Borrower may request a Borrowing (other than a
Conversion) 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. 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) Type of Loans to be made in connection with such
Borrowing, (iii) Interest Period, if any, for such Loans and (iv) amount of
such Borrowing. Each proposed Borrowing shall conform to the requirements of
Sections 3.03 and 3.04.
(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 222
Broadway, 11th Floor, New York, New York 10038, 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.
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,
23
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 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 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 Commitment, 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 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
24
the form of Exhibit B and shall specify (i) the requested date of such
Conversion, (ii) the Type of, and Interest Period, if any, applicable to, the
Loans (or portions thereof) proposed to be Converted, (iii) the requested Type
of Loans to which such Loans (or portions thereof) are proposed to be
Converted, (iv) the requested initial Interest Period, if any, to be
applicable to the Loans resulting from such Conversion and (v) 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 that ends after the Termination Date;
(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 shall be in an aggregate amount not less
than $5,000,000, 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 on such date, after giving effect to all other
Extensions of Credit to be made on such date), 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;
(ii) the Borrower may request that more than one Borrowing be
made on the same day;
(iii) at no time shall the sum of (i) all Borrowings
comprising Eurodollar Rate Loans outstanding hereunder and (ii) all
"Borrowings" comprising "Eurodollar Rate Loans" under, and as such terms
are defined in, the Three Year Facility, be greater than fifteen (15);
25
(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.
(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 Commitment, 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 the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Administrative Agent
that the Adjusted LIBO 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, or that they are unable to acquire funding in a
reasonable manner so as to make available Eurodollar Rate Loans in the amount
and for the Interest Period requested, or if the Administrative Agent shall
determine that adequate and reasonable means do not exist to be able to
determine the Adjusted LIBO Rate, then 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.
26
(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), 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) or Section 3.01(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
Commitment, 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 F 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. The Borrower shall repay the outstanding
principal amount of the Loans on the Termination Date (or such earlier date as
may be required pursuant to Section 2.03).
(b) 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 (b)), payable as
follows:
27
(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
[RESERVED]
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 2:00 P.M. on the day when due in
Dollars to the Administrative Agent at its offices at 222 Broadway, 11th
Floor, New York, New York 10038, in same day funds; any payment received after
3:00 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 4:00 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
28
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
and each Lender, if and to the extent payment owed to the Administrative Agent
or such Lender, 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 or such Lender, 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 Adjusted LIBO 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.
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(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, subject to
Section 5.07, (i) first, toward 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, toward
payment of principal then due hereunder, ratably among the parties entitled
thereto.
SECTION 5.02. INTEREST RATE DETERMINATION. 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(b)(i) or (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)
and (b) below.
(a) The Borrower may (and shall provide notice thereof to the
Administrative Agent not later than 10:00 a.m. (New York City time) on the
date of prepayment, and the Administrative Agent shall promptly distribute
copies thereof to the Lenders), and if such notice is given, the Borrower
shall, prepay the outstanding principal amounts of Loans made as part of the
same Borrowing, in whole or ratably in part, together with (i) accrued
interest to the date of such prepayment on the principal amount prepaid and
(ii) in the case of Eurodollar Rate Loans, any amount payable to the Lenders
pursuant to Section 5.04(b); provided, however, that each partial prepayment
shall be in an aggregate principal amount of not less than $5,000,000 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 as shall be necessary in
order that the aggregate principal amount outstanding (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 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 to outstanding Eurodollar Rate Loans.
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
Closing Date, 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 Closing Date, there shall be reasonably
incurred any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans, then the Borrower shall from
time to time, upon 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 additional amounts sufficient to compensate such Lender 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
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Administrative Agent by such Lender 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, or if the Borrower
shall fail to prepay a Eurodollar Rate Loan on the date specified in a notice
of prepayment, 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,
Conversion or failure to prepay, 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 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, whether directly, or indirectly as a result of commitments of any
corporation controlling such Lender (but without duplication), and (ii) the
amount of such capital is increased by or based upon (A) the existence of such
Lender's commitment to lend hereunder, or (B) the participation in or
maintenance of any Loan and (C) other similar such commitments, then, upon
demand by such Lender, the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
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, 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
31
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 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 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 or Section 5.06) in excess of its ratable share of
payments obtained by all the Lenders on account of the Loans of such Lenders,
such Lender shall forthwith purchase from the other Lenders such participation
in the Loans owing to them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 5.05 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. Notwithstanding
the foregoing, if any Lender shall obtain any such excess payment
involuntarily, such Lender may, in lieu of purchasing participations from the
other Lenders in accordance with this Section 5.05, on the date of receipt of
such excess payment, return such excess payment to the 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 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 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 or Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
32
applicable to additional sums payable under this Section 5.06) such Lender 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 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 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 thirty (30) days from the date such
Lender or Agent (as the case may be) makes written demand therefor; provided,
that such Lender 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 or Agent (as the
case may be) shall have been required to pay such amount.
(d) Within thirty (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
33
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.
SECTION 5.07. APPORTIONMENT OF PAYMENTS.
(a) Subject to the provisions of Section 2.03 and Section
5.07(b), all payments of principal and interest in respect of outstanding
Loans, all payments of fees and all other payments in respect of any other
Obligations hereunder, shall be allocated among such of the Lenders as are
entitled thereto, ratably or otherwise as expressly provided herein. Except as
provided in Section 5.07(b) with respect to payments and proceeds of
Collateral received after the occurrence of an Event of Default, all such
payments and any other amounts received by the Administrative Agent from or
for the benefit of the Borrower shall be applied
(i) first, to pay principal of and interest on any portion of
the Loans which the Administrative Agent may have advanced on behalf of
any Lender other than Barclays for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrower,
(ii) second, to pay interest on and then the principal of the
Loans then due and payable (in the order described hereinbelow),
(iii) third, to pay all other Obligations of any Loan Party
under any Loan Document then due and payable, ratably, and
(iv) fourth, as the Borrower so designates.
All such principal and interest payments in respect of the Loans shall be
applied first to repay outstanding ABR Loans and then to repay outstanding
Eurodollar Rate Loans with those Eurodollar Rate Loans which have earlier
expiring Interest Periods being repaid prior to those which have later
expiring Interest Periods
(b) During the continuance of an Event of Default and after
declaration thereof by written notice from the Administrative Agent to the
Borrower, the Administrative Agent shall apply all payments in respect of any
Loans, and the Collateral Agent shall deliver all proceeds of Collateral to
the Administrative Agent for application, in the following order:
(i) first, to pay principal of and interest on any portion of
the Loans which the Administrative Agent may have advanced on behalf of
any Lender other than Barclays for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrower;
(ii) second, to pay any fees, expense reimbursements or
indemnities then due to the Agents under any of the Loan Documents;
(iii) third, to pay any fees, expense reimbursements or
indemnities then due to the Lenders under any of the Loan Documents;
34
(iv) fourth, to pay interest due in respect of the Loans,
ratably, in accordance with the Lenders' respective Percentages;
(v) fifth, to the payment or prepayment of principal
outstanding on all Loans;
(vi) sixth, to the ratable payment of all other Obligations of
the Loan Parties then outstanding under the Loan Documents.
Notwithstanding the foregoing, if the obligations under the Enterprises Credit
Agreement shall not have been paid in full, the Collateral Agent shall apply
the proceeds of all Collateral (other than Collateral in respect of which the
Collateral Agent shall have a prior security interest on behalf of the Lenders
hereunder and under the Three Year Facility) as contemplated by the
Enterprises Credit Agreement. The order of priority set forth in this Section
5.07(b) and the related provisions of this Agreement are set forth solely to
determine the rights and priorities of the Agents and the Lenders as among
themselves.
SECTION 5.08. PROCEEDS OF COLLATERAL. During the continuance of an
Event of Default and after declaration thereof by written notice from the
Administrative Agent to the Borrower, the Borrower shall cause all proceeds of
Collateral (other than Collateral in respect of which the Collateral Agent
shall have a prior security interest on behalf of the Lenders hereunder and
under the Three Year Facility) to be deposited pursuant to arrangements for
the collection of such amounts established by the Borrower and the
Administrative Agent (or the Collateral Agent, as applicable) for application
pursuant to Section 5.07 or as otherwise required under the Enterprises Credit
Agreement so long as the Enterprises Credit Agreement shall be in effect. All
collections of proceeds of Collateral which are received directly by the
Borrower or any Subsidiary of the Borrower shall be deemed to have been
received by the Borrower or such Subsidiary of the Borrower as the Collateral
Agent's trustee and, during the continuance of an Event of Default and after
declaration thereof by written notice from the Administrative Agent to the
Borrower, upon the Borrower's or such Subsidiary's receipt thereof, the
Borrower shall immediately transfer or cause to be transferred all such
amounts to the Administrative Agent for application pursuant to Section 5.07
or as otherwise required under the Enterprises Credit Agreement so long as the
Enterprises Credit Agreement shall be in effect. All other proceeds of
Collateral received by the Collateral Agent and/or the Administrative Agent,
whether through direct payment or otherwise, will be deemed received by such
Agent, will be the sole property of such Agent, and will be held by such
Agent, for the benefit of the Lenders for application pursuant to Section 5.07
or as otherwise required under the Enterprises Credit Agreement so long as the
Enterprises Credit Agreement shall be in effect.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT. The effectiveness of this Agreement is subject to the fulfillment
of the following conditions precedent:
35
(a) The Administrative Agent shall have received, on or before
the Closing Date, the following, 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, each Guarantor and each other Grantor (each a "LOAN
PARTY") authorizing each such Loan Party to enter into each Loan
Document 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 each such Loan Document.
(ii) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names, true signatures and incumbency
of (A) the officers of such Loan Party authorized to sign the 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
such Loan Party authorized to sign notices to be provided under the
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 each Loan Party, together
with all amendments thereto, certified by the Secretary or an Assistant
Secretary of each such Loan Party.
(iv) Good Standing Certificates (or other similar certificate)
for each of the Loan Parties, issued by the Secretary of State of the
jurisdiction of organization of each such Loan Party as of a recent
date.
(v) The Guaranty, duly executed by each Guarantor.
(vi) The Pledge Agreements, duly executed by the Borrower and
each Grantor, as applicable.
(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, as of June 30, 2002; and
(B) debt (as such term is construed in accordance
with GAAP) of the Loan Parties as of June 30, 2002.
(viii) A certificate, executed by a duly authorized officer of
the Borrower, confirming that attached thereto is a true, correct and
complete copy of the Enterprises Credit Agreement, as in effect on the
Closing Date.
(ix) Favorable opinions of:
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(A) Michael D. VanHemert, Esq., Deputy General
Counsel of the Borrower and counsel for the other Loan
Parties, in substantially the form of Exhibit C and as to such
other matters as the Required Lenders, through the
Administrative Agent, may reasonably request; and
(B) Hughes Hubbard & Reed LLP, special counsel to the
Loan Parties in substantially the form of Exhibit D-1 and as
to such other matters as the Administrative Agent may
reasonably request; and
(C) Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Loan Parties in substantially the form of
Exhibit D-2 and as to such other matters as the Administrative
Agent may reasonably request.
(b) 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 are true and correct on and as of the Closing
Date as though made on and as of such date,
(ii) no event has occurred and is continuing that constitutes
a Default or an Event of Default, and
(iii) all Governmental Approvals necessary in connection with
the Loan Documents and the transactions contemplated thereby have been
obtained and are in full force and effect, and all third party
approvals necessary or advisable in connection with the Loan Documents
and the transactions contemplated thereby have been obtained and are in
full force and effect, other than filings necessary to create or
perfect security interests in the Collateral or as may be required
under applicable energy, antitrust or securities laws in connection
with the exercise of remedies with respect to certain Collateral.
(c) 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.
(d) The Administrative Agent shall have received evidence
satisfactory to it that all financing statements relating to the Collateral have
been completed for filing or recording, and all certificates representing
capital stock included in the Collateral have been delivered to the Collateral
Agent (with duly executed stock powers).
SECTION 6.02. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The
obligation of each Lender to make an Extension of Credit (including the initial
Extension of Credit, but excluding the Conversion of a Eurodollar Rate Loan into
an ABR Loan) shall be subject to the further conditions precedent that, on the
date of such Extension of Credit and after giving effect thereto:
37
(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)
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) 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 or Event of Default has occurred and is
continuing, or would result from such Extension of Credit or the
application of the proceeds thereof.
(b) The Administrative Agent shall have received such other
approvals, opinions and documents as any Lender, through the Administrative
Agent, may reasonably request as to the legality, validity, binding effect or
enforceability of the Loan Documents or the business, assets, property,
financial condition, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries.
SECTION 6.03. CONDITIONS PRECEDENT TO CERTAIN EXTENSIONS OF CREDIT. The
obligation of each Lender 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, 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)
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 or Event of Default has occurred and is
continuing, or would result from such Extension of Credit or the
application of the proceeds thereof; and
(b) the Administrative Agent shall have received such other
approvals, opinions and documents as any Lender, through the Administrative
Agent, may reasonably request.
SECTION 6.04. RELIANCE ON CERTIFICATES. The Lenders 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
38
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.
SECTION 6.05. CONDITION 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 condition precedent: the Administrative
Agent shall have received, on or before the day of the initial Extension of
Credit, in form and substance satisfactory to it, a certificate, executed by a
duly authorized officer of the Borrower, confirming that attached thereto is a
true, correct and complete copy of the credit agreements and other instruments
evidencing the refinancing and/or replacement of Consumer's existing
$300,000,000 senior credit facilities (such refinancing and/or replacement, as
amended, restated, refunded, replaced, supplemented or otherwise modified from
time to time being the "CONSUMERS CREDIT FACILITY"), as in effect on the date of
such certificate.
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 Loan Party of
each Loan Document to which it is or will be a party (i) are within such Loan
Party's powers, (ii) have been duly authorized by all necessary corporate or
other organizational action or proceedings and (iii) do not and will not (A)
require any consent or approval of the stockholders (or other applicable holder
of equity) of such Loan Party (other than such consents and approvals which have
been obtained and are in full force and effect), (B) violate any provision of
the charter or by-laws (or other comparable constitutive documents) of such Loan
Party or of law, (C) violate any legal restriction binding on or affecting such
Loan Party, (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 such Loan Party 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 and pursuant to the "Loan Documents"
as defined in each of the Three Year Facility and the Enterprises Credit
Agreement) upon or with respect to any of its respective properties.
(c) No Governmental Approval is required, other than filings
necessary to create or perfect security interests in the Collateral or as may be
required under applicable energy, antitrust or securities laws in connection
with the exercise of remedies with respect to certain Collateral.
39
(d) Each Loan Document executed on the Closing Date is, and
each other Loan Document to which any Loan Party will be a party when executed
and delivered hereunder will (i) where applicable, create valid and, upon filing
of the financing statements delivered on the Closing Date and described in
Section 6.01(d), perfected Liens in the Collateral covered thereby securing the
payment of all of the Loans purported to be secured thereby, which Liens shall
be first perfected Liens with respect to all Collateral that is not otherwise
subject to a Lien in favor of the collateral agent under the Enterprises Credit
Agreement, and (ii) be, legal, valid and binding obligations of such Loan Party
enforceable against such Loan Party 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, 2001, 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, included in the
Borrower's Annual Report on Form 10-K for the fiscal year ended December 31,
2001, and the unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at March 31, 2002, and the related unaudited
consolidated statements of income, retained earnings and cash flows for the
three-month period then ended, in each case as such financial statements are
proposed to be restated as disclosed in the Borrower's Forms 8-K filed with the
Securities and Exchange Commission on May 29, 2002 and June 11, 2002, 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, 2002, 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 March 31, 2002, except as disclosed
in the Borrower's Quarterly Report on Form 10-Q for the period ended March 31,
2002 and in the Current Reports on Form 8-K filed by the Borrower on May 29,
2002 and June 11, 2002, there has been no Material Adverse Change; and (iii) no
Loan Party has any 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 Closing Date.
(f) Except (i) as disclosed in the Borrower's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, the Borrower's Quarterly
Report on Form 10-Q for the period ended March 31, 2002, and the Current Report
on Form 8-K filed by the Borrower on May 29, 2002, and (ii) such other similar
actions, suits and proceedings predicated on the occurrence of the same events
giving rise to any actions, suits and proceedings described in the Reports filed
with the Securities and Exchange Commission set forth in clause (i) hereof (all
such matters in clauses (i) and (ii) being the "DISCLOSED MATTERS"), 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,
40
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. There have been no adverse
developments with respect to the Disclosed Matters that have had or could
reasonably be expected to result in a Material Adverse Change.
(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,
assets, property, financial condition, results of operations or prospects 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, other than pursuant to the
Consumers Credit Facility.
(l) The Borrower owns not less than 80% 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 2002-2006 Projections of Consumers,
Enterprises and the Borrower (the "PROJECTIONS"), copies of which have been
distributed to the Banks in the Confidential Information Memorandum dated June
2002 (the "CONFIDENTIAL INFORMATION MEMORANDUM"), are based upon assumptions
that the Borrower believed were reasonable at the
41
time the Projections were delivered, and all other financial information
contained in the Confidential Information Memorandum or otherwise delivered by
the Borrower to the Administrative Agent and the Banks on and after June 11,
2002 is true and correct in all material respects as at the dates and for the
periods indicated therein.
(o) No Loan Party is 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 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.
(p) No Loan Party is an investment company (within the meaning
of the Investment Company Act of 1940, as amended).
(q) No proceeds of any Extension of Credit will be used to
acquire any security in any transaction without the approval of the board of
directors of the Person issuing such security if (i) the acquisition of such
security would cause the Borrower to own, directly or indirectly, 5.0% or more
of any outstanding class of securities issued by such Person, or (ii) such
security is being acquired in connection with a tender offer.
(r) 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).
(s) Borrower, each Guarantor and Consumers are exempt from the
registration requirements of the Public Utility Holding Company Act of 1935, as
amended, 15 USC 79 et seq.
(t) The Borrower has not withheld any fact from the
Administrative Agent or the Lenders in regard to the occurrence of any Material
Adverse Change.
(u) After giving effect to the Loans to be made on the Closing
Date or such other date as Loans requested hereunder are made, and the
disbursement of the proceeds of such Loans pursuant to the Borrower's
instructions, the Borrower and its Subsidiaries, taken as a whole, are Solvent.
(v) Schedule II sets forth as of June 30, 2002 (i) all Project
Finance Debt of the Consolidated Subsidiaries, and (ii) debt (as such term is
construed in accordance with GAAP) of the Loan Parties, and, as of the Closing
Date, there are no defaults in the payment of principal or interest on any such
Debt and no payments thereunder have been deferred or extended beyond their
stated maturity (except as disclosed on such Schedule).
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 or any
Lender shall have any Commitment:
42
(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 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. Each such visitation and
inspection described in the preceding sentence (i) by or on behalf of any Lender
shall, unless occurring at a time when a Default or Event of Default shall be
continuing, be at such Lender's expense and (ii) by or on behalf of the
Administrative Agent, other than the first two visitations and inspections
occurring during any calendar year or any visitations and inspections occurring
at a time when a Default or Event of Default shall be continuing, shall be at
the Administrative Agent's expense; all other such inspections and visitations
shall be at the Borrower's expense.
(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
43
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 use all Extensions of
Credit for general corporate purposes (subject to the terms and conditions of
this Agreement).
(i) Consolidated Leverage Ratio. The Borrower shall maintain,
as of the last day of each fiscal quarter (in each case, the "MEASUREMENT
QUARTER"), a maximum ratio of (i) Consolidated Debt for the immediately
preceding four-fiscal-quarter period ending on the last day of such Measurement
Quarter, to (ii) Consolidated EBITDA for such period, of not more than 5.75 to
1.00, commencing with the period ending June 30, 2002.
(j) Cash Dividend Coverage Ratio. The Borrower shall maintain,
as of the last day of each Measurement Quarter, a minimum ratio of (i) the sum
of (A) Cash Dividend Income for the four-fiscal-quarter period ending on such
day (except that, with respect to each Measurement Quarter ending in 2002, such
ratio shall be calculated for the period from January 1, 2002 through and
including the last day of 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 and commitment, guaranty and letter of credit
charges of the Borrower to 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 not less than 1.25 to
1.00, commencing with the Measurement Quarter ending on June 30, 2002; provided,
that the Borrower shall be deemed not to be in breach of the foregoing covenant
if, during the Measurement Quarter, it has permanently reduced the Commitments
and the principal amount outstanding under this Agreement and the Promissory
Notes and/or the "Commitments" and the principal amount outstanding under the
Three Year Facility and the "Promissory Notes" (as such terms are defined in the
Three Year Facility), 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 such agreements and
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.
(k) Further Assurances. The Borrower shall promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or that any
44
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.
(l) Subsidiary Guarantees. The Borrower will (i) with respect
to each Person that becomes a Restricted Subsidiary after the Closing Date
(other than (a) any Subsidiary of the Borrower organized under the laws of a
jurisdiction located other than in the United States (each a "FOREIGN
SUBSIDIARY") if the execution of the Guaranty by such Subsidiary would result in
any materially adverse tax consequences to the Borrower, (b) Panhandle and its
Subsidiaries, and (c) MS&T), subject to any limitations under contractual
restrictions as in effect as of the Closing Date or applicable law with respect
to each Foreign Subsidiary, cause each such Restricted Subsidiary to execute the
Guaranty pursuant to which it agrees to be bound by the terms and provisions of
the Guaranty, and (ii) cause such Persons identified in clause (i) above to
deliver corporate resolutions, opinions of counsel and such other corporate
documentation as the Administrative Agent may reasonably request, all in form
and substance reasonably satisfactory to the Administrative Agent.
SECTION 8.02. NEGATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid or any
Lender shall have any Commitment, the Borrower shall not, without the written
consent of the Required Lenders:
(a) Liens, Etc. (1) Create, incur, assume or suffer to exist,
or permit any of the other Loan Parties 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, CMS Oil and
Gas Company and any of the Borrower's other directly-owned Subsidiaries,
intercompany obligations and accounts) (any of the foregoing being referred to
herein as a "LIEN"), whether now owned or hereafter acquired, or (2) file, or
permit any of the other Loan Parties to file, under the Uniform Commercial Code
of any jurisdiction a financing statement which names the Borrower or any other
Loan Party as debtor (other than financing statements that do not evidence a
Lien), or (3) sign, or permit any of the other Loan Parties to sign, any
security agreement authorizing any secured party thereunder to file such
financing statement, or (4) assign, or permit any of the other Loan Parties 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 the other Loan Parties,
(C) Support Obligations of the Borrower or any Loan Party or (D)
obligations of MS&T in respect of hedging arrangements and commodity
purchases and sales (including any cash margins with respect thereto);
provided that the aggregate amount of pledges or deposits securing such
Support
45
Obligations and such obligations of MS&T shall not exceed $125,000,000
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;
(iv) Liens securing the obligations under the Loan Documents
and under the "Loan Documents" as defined in each of the Three Year
Facility and the Enterprises Credit Agreement;
(v) Liens securing Off-Balance Sheet Liabilities (and all
refinancings and recharacterizations thereof permitted under Section
8.02(b)(iv)) in an aggregate amount not to exceed $725,000,000;
(vi) purchase money Liens or purchase money security interests
upon or in property acquired or held by the Borrower or any of the
other Loan Parties 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
(vi) shall not exceed $10,000,000;
(vii) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Borrower
or any other Loan Party;
(viii) Liens existing on any capital asset of any Person at
the time such Person is merged or consolidated with or into, or
otherwise acquired by, the Borrower or any other Loan Party and not
created in contemplation of such event, provided that such Liens do not
encumber any other property or assets and such merger, consolidation or
acquisition is otherwise permitted under this Agreement;
(ix) Liens existing on any capital asset prior to the
acquisition thereof by the Borrower or any other Loan Party and not
created in contemplation thereof; provided that such Liens do not
encumber any other property or assets;
(x) Liens existing as of the Closing Date;
46
(xi) Liens securing Project Finance Debt otherwise permitted
under this Agreement;
(xii) Liens arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses (v), (viii), (ix), (x) or (xi); provided that (a)
such Debt is not secured by any additional assets, and (b) the amount
of such Debt secured by any such Lien is otherwise permitted under this
Agreement; and
(xiii) Liens on accounts receivable (other than intercompany
receivables) and other contract rights of MS&T and its Subsidiaries
arising on or after the Closing Date in favor of any Person (other than
an Affiliate of the Borrower or any of its Subsidiaries) that
facilitates the origination of such accounts receivable or other
contract rights.
(b) Enterprises Debt. Permit Enterprises or any Subsidiary of
Enterprises (other than Panhandle and its Subsidiaries) 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' or its Subsidiaries' business;
(ii) in the form of indemnities in respect of unfiled
mechanics' liens and Liens affecting Enterprises' or its Subsidiaries'
properties permitted under Section 8.02(a)(iii);
(iii) debt arising under (a) the Loan Documents, (b) the "Loan
Documents" as defined in the Three Year Facility, and (c) the "Loan
Documents" as defined in the Enterprises Credit Agreement in a
principal amount equal to $150,000,00 minus any principal payments made
from time to time thereunder;
(iv) debt constituting Off-Balance Sheet Liabilities
(including any recharacterization thereof as debt pursuant to any
changes in generally accepted accounting principles hereafter required
or permitted and which are adopted by the Borrower or any of its
Subsidiaries with the agreement of its independent certified public
accountants) to the extent permitted by Section 8.02(o), and any
extensions, renewals, refundings or replacements thereof, provided that
any such extension, renewal, refunding or replacement is in an
aggregate principal amount not greater than the principal amount of, is
an obligation of the same Person that is the obligor in respect of, and
has a weighted average life to maturity not less than the weighted
average life to maturity of, the debt so extended, renewed, refunded or
replaced;
(v) other debt of Enterprises and its Subsidiaries outstanding
on the Closing Date (including the debt of the Loan Parties as of June
30, 2002 as set forth on Schedule II), and any extensions, renewals,
refundings or replacements thereof, provided that any such extension,
renewal, refunding or replacement is in an aggregate principal amount
not greater than the principal amount of, is an obligation of the same
Person that is the obligor in respect of, and has a weighted average
life to maturity not less than the weighted average life to maturity
of, the debt so extended, renewed, refunded or replaced;
47
(vi) (a) unsecured, subordinated debt owed (i) to the Borrower
by Enterprises, (ii) to Enterprises or CMS Capital, L.L.C. (or any
successor by merger to CMS Capital, L.L.C.) and (iii) to any Grantor by
any Loan Party, and (b) unsecured debt owed to any Subsidiary of
Enterprises (other than a Grantor) by CMS Capital, L.L.C. (or any
successor by merger to CMS Capital, L.L.C.), and (c) unsecured debt of
any Foreign Subsidiary of Enterprises owed to another Foreign
Subsidiary of Enterprises provided that the proceeds of any repayment
of such debt are remitted to a Loan Party;
(vii) Project Finance Debt of any Loan Party or any of its
Subsidiaries incurred on or after the Closing Date, provided that the
Net Proceeds thereof shall be applied in accordance with Section
2.03(c) if required to be so applied; and
(viii) capital lease obligations and other Debt secured by
purchase money Liens to the extent such Liens shall be permitted under
Section 8.02(a)(vi).
(c) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of the other Loan Parties 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
the other Loan Parties in respect of all such obligations payable in any period
of 12 consecutive calendar months to exceed $50,000,000.
(d) Investments in Other Persons. Make, or permit any of the
other Loan Parties 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 (i)
Permitted Investments, (ii) pursuant to the contractual obligations of the
Borrower or any other Loan Party as in effect as of the Closing Date, (iii)
investments by any Loan Party in the capital of any Subsidiary of the Borrower
that is a Loan Party, (iv) investments in the capital stock of any of the
Borrower's Subsidiaries arising from the conversion of intercompany indebtedness
to equity, (v) loans and advances by any Loan Party to another Loan Party to the
extent permitted under Section 8.02(b)(vi), (vi) investments constituting
non-cash consideration received in connection with the sale of any asset
permitted under Section 8.02(i), and (vii) additional loans, advances,
purchases, contributions and other investments in an amount not to exceed
$150,000,000 in the aggregate at any time; provided, however, that investments
described in clauses (iv) (solely with respect to investments made in any
Subsidiary that is not a Loan Party) and (vii) above shall not be permitted to
be made at a time when either a Default or an Event of Default shall be
continuing or would result therefrom.
(e) Restricted Payments. Declare or pay, or permit any other
Loan Party 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 the other Loan Parties (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 Loan Party), or purchase, redeem,
retire, or otherwise acquire for value, or permit any of the other Loan Parties
to purchase, redeem, retire, or otherwise acquire for value, any shares of any
class of capital stock of the Borrower or any of the other Loan Parties or any
48
warrants, rights, or options to acquire any such shares, now or hereafter
outstanding, or make, or permit any of the other Loan Parties to make, any
distribution of assets to any of its shareholders (other than distributions to
the Borrower or any other Loan Party) (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, (ii)
after giving effect thereto, the aggregate amount of all such Restricted
Payments made by the Borrower during any fiscal quarter shall not exceed an
amount in the aggregate equal to $0.1825 multiplied by the aggregate number of
issued and outstanding shares of common stock of the Borrower (exclusive of any
common stock held by the Borrower or any of its Subsidiaries, other than common
stock held by Consumers and Enterprises as of the Closing Date) as of the record
date for such fiscal quarter, and (iii) with respect to any Restricted Payment
to be made on or after January 1, 2003, on or prior to December 31, 2002 the
Borrower shall have received not less than $250,000,000 of Net Proceeds from the
issuance of equity or equity-linked securities of the Borrower and shall have
applied such Net Proceeds in accordance with Section 2.03(c); provided, however,
that the foregoing shall not prohibit (1) pursuant to the terms of any class of
capital stock of the Borrower issued and outstanding (and as in effect on) the
Closing Date, 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 on the Closing Date)), provided that
such purchase or redemption shall be excluded from the calculation of the amount
of Restricted Payments permitted by this subsection (e); (2) Restricted Payments
made within 60 days after the date of declaration thereof if at such date of
declaration such Restricted Payment would have complied with this subsection
(e), provided that at the time of payment of such Restricted Payment, no Default
or Event of Default shall have occurred and be continuing (or result therefrom),
and provided further that such Restricted Payments shall be included (without
duplication) in the calculation of the amount of Restricted Payments permitted
by this subsection (e), and provided further that with respect to any Restricted
Payment to be paid after December 31, 2002, the Borrower shall have received not
less than $250,000,000 of Net Proceeds from the issuance of equity or
equity-linked securities of the Borrower and shall have applied such Net
Proceeds in accordance with Section 2.03(c) on or prior to the date of
declaration thereof; or (3) payments made by the Borrower or any other Loan
Party 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 $25,000,000, 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, as amended), (ii) terminate, or permit any ERISA Affiliate
to terminate, any Plan or withdraw from, or permit any ERISA Affiliate to
withdraw from, any Multiemployer Plan, so as to result in any material (in the
opinion of the Required Lenders) liability of the Borrower, any other Loan Party
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
49
opinion of the Required Lenders) risk of such a termination by the PBGC of any
Plan or withdrawal from any Multiemployer Plan and such a material liability to
the Borrower, any other Loan Party 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 the other Loan Parties or Consumers to merge with or into
or consolidate with or into, any other Person, except that (i) any Loan Party
may merge with or into any other Loan Party, provided that (a) in any such
merger with or into the Borrower, (1) all of the obligations under the
Enterprises Credit Agreement shall have been paid in full in cash and the
Enterprises Credit Agreement shall have been terminated, and (2) the Borrower is
the surviving corporation, (b) no Default or Event of Default shall be
continuing or result therefrom and (c) such Loan Party shall not be liable with
respect to any Debt or allow its property to be subject to any Lien which it
could not become liable with respect to or allow its property to become subject
to under this Agreement or any other Loan Document on the date of such
transaction, and (ii) any Loan Party may merge with or into any other Person,
provided that (a) the Loan Party is the survivor thereof, (b) no Default or
Event of Default shall be continuing or result therefrom, (c) such Loan Party
shall not be liable with respect to any Debt or allow its property to be subject
to any Lien which it could not become liable with respect to or allow its
property to become subject to under this Agreement or any other Loan Document on
the date of such transaction, and (d) immediately after giving effect to such
merger, the Net Worth of such Loan Party shall be equal to or greater than the
Net Worth of such Loan Party as of the last day of the fiscal quarter
immediately preceding the date of such merger.
(i) Sales, Etc., of Assets. Sell, lease, transfer, assign, or
otherwise dispose of all or any substantial part of its assets, or permit any of
the other Loan Parties to sell, lease, transfer, or otherwise dispose of all or
any substantial part of its assets, except (i) to give effect to a transaction
permitted by subsection (h) above or subsection (j) below, and (ii) with respect
to Enterprises or any of its Subsidiaries, as permitted under the Enterprises
Credit Agreement; provided, further, that neither the Borrower nor any of the
other Loan Parties shall sell, assign, transfer, lease, convey or otherwise
dispose of any property, whether now owned or hereafter acquired, or any income
or profits therefrom, or enter into any agreement to do so, except:
(A) the sale of property for consideration not less than the
Fair Market Value thereof so long as (i) any non-cash consideration
resulting from such sale shall be pledged or assigned to the Collateral
Agent, for the benefit of the Lenders, pursuant to an instrument in
form and substance reasonably acceptable to the Collateral Agent and
(ii) the Borrower complies with the mandatory prepayment provisions set
forth in Section 2.03(c);
(B) the transfer of property from a Loan Party to any other
Loan Party;
50
(C) the transfer of property constituting an investment
otherwise permitted under Section 8.02(d);
(D) the sale of electricity and natural gas and other property
in the ordinary course of Borrower's and its Subsidiaries respective
businesses consistent with past practice;
(E) any transfer of an interest in receivables and related
security, accounts or notes receivable on a limited recourse basis in
connection with the incurrence of Off-Balance Sheet Liabilities,
provided that such transfer qualifies as a legal sale and as a sale
under GAAP and the incurrence of such Off-Balance Sheet Liabilities is
permitted under Section 8.02(o);
(F) the transfer of property constituting not more than two
percent (2%) of the ownership interests held by the Borrower and its
Subsidiaries as of the Closing Date in CMS International Ventures,
L.L.C. to CMS Energy Foundation and/or Consumers Foundation; and
(G) the disposition of equipment if such equipment is obsolete
or no longer useful in the ordinary course of the Borrower's or such
Subsidiary's business.
(j) Maintenance of Ownership of Subsidiaries. Sell, transfer,
assign or otherwise dispose of any shares of capital stock of any of the Loan
Parties or Consumers (other than preferred or preference stock of Consumers) or
any warrants, rights or options to acquire such capital stock, or permit any
other Loan Party 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 Loan Party or any
warrants, rights or options to acquire such capital stock, except to give effect
to a transaction permitted by subsection (h) above and in connection with the
foreclosure of any Liens permitted under Section 8.02(a)(iv); provided, however,
that subject to the requirements of Section 2.03(c) (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 each such transaction the
Borrower shall be in compliance with Section 8.01(i), (ii) the Borrower may
sell, transfer, assign or otherwise dispose of not more than 20% of the common
stock of Enterprises; provided, that after giving effect to each such
transaction the Borrower shall be in compliance with Section 8.01(i), (iii)
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 other than CMS Oil and Gas Company, provided
that after giving effect to each such transaction the Borrower shall be in
compliance with Section 8.01(i), and (iv) Enterprises and its Subsidiaries may,
and the Borrower may permit Enterprises and its Subsidiaries to, sell, transfer,
assign or otherwise dispose of all of the capital stock (or other equity
interests) of CMS Oil and Gas Company and CMS Electric and Gas Company owned by
Enterprises or any of its Subsidiaries, 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
51
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.
(l) Prepayments of Indebtedness. Make or agree to pay or make,
or permit any of the other Loan Parties to make or agree to pay or make,
directly or indirectly, any payment or other distribution (whether in cash
securities or other property) of or in respect of principal of or interest on
any Debt, or any payment or other distribution (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement acquisition, cancellation or termination of
any Debt (other than the obligations of the Loan Parties under the Loan
Documents and under the "Loan Documents" as defined in each of the Three Year
Facility and the Enterprises Credit Agreement), other than any payments on
account of (i) any Debt when and as such payment was due pursuant to the
mandatory payment provisions applicable to such Debt at the time it was incurred
(including, without limitation, regularly scheduled payment dates for principal,
interest, fees and other amounts due thereon) or any extension thereof
thereafter granted by the holder of such Debt, (ii) refinancings of Debt
otherwise permitted under this Agreement, and (iii) any Debt owed to the
Borrower or any of its Subsidiaries.
(m) Conduct of Business. Engage, or permit any Restricted
Subsidiary to engage, in any business other than (a) the business engaged in by
the Borrower and its Subsidiaries on the date hereof, and (b) any business or
activities which are substantially similar, related or incidental thereto.
(n) Organizational Documents. Amend, modify or otherwise
change, or permit any Restricted Subsidiary to amend, modify or otherwise change
any of the terms or provisions in any of their respective certificate of
incorporation (or comparable charter document) and by-laws as in effect on the
Closing Date in any manner adverse to the interests of the Lenders.
(o) Off-Balance Sheet Liabilities. Create, incur, assume or
suffer to exist, or permit any Subsidiary (other than Consumers and its
Subsidiaries) to create, incur, assume or suffer to exist, Off-Balance Sheet
Liabilities (exclusive of lease obligations otherwise permitted under Section
8.02(c)) in the aggregate in excess of $725,000,000 at any time.
SECTION 8.03. REPORTING OBLIGATIONS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid or any
Lender shall have any Commitment, the Borrower will, unless the Required Lenders
shall otherwise consent in writing, furnish to the Administrative Agent (with
sufficient copies for 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;
52
(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 and consolidated statements of income and retained
earnings and of cash flows of the Borrower and its Subsidiaries as at the end of
such quarter and 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 E 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 the ratio set forth in
Section 9.01(i), (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 a nationally-recognized independent public accounting firm, together
with (1) a schedule in form satisfactory to the Required Lenders of (A) the
computations used by such accounting firm in determining, as of the end of such
fiscal year, compliance with the covenants contained in Sections 8.01(i) and
8.01(j) and the ratio set forth in Section 9.01(i), (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, and (2) a
certificate of the chief financial officer or chief accounting officer of the
Borrower 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;
(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 and statements of income and retained earnings and of cash flows
of the Borrower as at the end of such quarter and 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
53
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 available, a copy of the report by a
nationally-recognized independent public accounting firm on the consolidated
balance sheet of the Borrower and its Subsidiaries as at December 31, 2001, and
the related consolidated statements of income, retained earnings and cash flows
of the Borrower and its Subsidiaries for such fiscal year then ended;
(g) as soon as available, and in any event within ten (10)
Business Days after the close of each calendar month, (i) month-end liquidity
statements with respect to the Borrower and its consolidated Subsidiaries and
(ii) updates to the monthly cash flow forecasts of the Borrower and its
consolidated Subsidiaries, in each case in form and detail consistent with such
statements and forecasts provided to the Lenders and the Agents prior to the
Closing Date;
(h) 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;
(i) 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;
(j) 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;
(k) 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
54
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;
(l) 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);
(m) promptly after the sending or filing thereof, notice to
the Administrative Agent and each Lender of any sending or filing of all proxy
statements, financial statements and reports which the Borrower sends to its
public security holders (if any), 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 all final prospectuses
with respect to any securities issued or to be issued by the Borrower or any of
its Subsidiaries;
(n) 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 business, assets, property, financial condition,
results of operations or prospects 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
(o) 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.
The Borrower shall be deemed to have fulfilled its obligations pursuant to
clauses (b), (c), (d), (e), (g) and (m) above to the extent the Administrative
Agent (and the Lenders, if applicable) receives an electronic copy of the
requisite document or documents in a format acceptable to the Administrative
Agent, provided that (1) an executed, tangible copy of any report required
pursuant to clause (e) above is delivered to the Administrative Agent at the
time of any such electronic delivery, and (2) a tangible copy of each requisite
document delivered electronically is made available by the Borrower promptly
upon request by any Agent or Lender.
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
55
(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) under the Three Year Facility,
or (ii) otherwise 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, 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 (including any "amortization event" or event of like
import in connection with any Off-Balance Sheet Liabilities), 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 (i) 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 (ii) with respect to any such event
occurring in connection with any Off-Balance Sheet Liabilities aggregating
$6,000,000 or more, to terminate the reinvestment of collections or proceeds of
receivables and related security under any agreements or instruments related
thereto (other than a termination resulting solely from the request of the
Borrower or its Subsidiaries); 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
56
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, any Guarantor or any of
their respective 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 any Loan Party shall so assert in writing; or any
Guarantor shall terminate or revoke any of its obligations under the applicable
Guaranty; or
(i) 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.
(j) At any time, for any reason (except to the extent
permitted by the terms of the Loan Documents or due to any failure by the
Collateral Agent to take any action on its part to be performed under applicable
law in order to maintain the perfection or priority of any such Liens), (i) the
Liens intended to be created under any of the Loan Documents with respect to
Collateral having a Fair Market Value of $6,000,000 or more become, or the
Borrower or any such Subsidiary seeks to render such Liens, invalid or
unperfected, or (ii) Liens in favor of the Collateral Agent for the benefit of
the Lenders contemplated by the Loan Documents with respect to Collateral having
a Fair Market Value of $6,000,000 or more shall, at any time, for any reason, be
invalidated or otherwise cease to be in full force and effect, or such Liens
shall not have the priority contemplated by this Agreement or the Loan
Documents.
SECTION 9.02. REMEDIES. If any Event of Default has occurred and is
continuing, then the Administrative Agent or the Collateral Agent, as
applicable, 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 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, and (iii) exercise in respect of any and all collateral,
in
57
addition to the other rights and remedies provided for herein 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 or
any Guarantor under the Federal Bankruptcy Code, (A) the Commitments and the
obligation of each Lender to make Loans 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.
ARTICLE X
THE AGENTS
SECTION 10.01. AUTHORIZATION AND ACTION.
(a) Each of the Lenders hereby irrevocably appoints each Agent
(other than the Co-Syndication Agents and Documentation 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 any other provision of this Agreement) or in the absence of its own
gross negligence or willful 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
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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. Neither any Co-Syndication Agent nor any
Documentation 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 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, 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.
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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. Each Lender agrees (except as provided in Section 11.05) that it
will not take any legal action, nor institute any actions or proceedings,
against the Borrower or any other obligor hereunder with respect to any
Collateral, without the prior written consent of the Required Lenders. Without
limiting the generality of the foregoing, no Lender may accelerate its portion
of the Loans, or unilaterally terminate its Commitment except in accordance with
Section 9.02.
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 and the Arrangers 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, syndication, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement to the extent that the Agents
are entitled to reimbursement for such expenses pursuant to Section 11.04 but
are not reimbursed for such expenses by the Borrower.
SECTION 10.03. CONCERNING THE COLLATERAL AND THE LOAN DOCUMENTS.
(a) Each Lender authorizes and directs the Collateral Agent to
enter into the Loan Documents relating to the Collateral for the benefit of the
Lenders. Each Lender agrees that any action taken by any Agent or the Required
Lenders (or, where required by the express terms of this Agreement, a greater
proportion of the Lenders) in accordance with the provisions of this Agreement
or the other Loan Documents, and the exercise by any Agent or the Required
Lenders (or, where so required, such greater proportion) of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders. Without
limiting the generality of the foregoing, the Collateral Agent shall have the
sole and exclusive right and authority to (i) act as the disbursing and
collecting agent for the Lenders with respect to all payments and collections
arising in connection with this Agreement and the Loan Documents relating to the
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by the Borrower
or any other Loan Party a party thereto; (iii) act as collateral agent for the
Lenders for purposes of the perfection of all Liens created by such agreements
and all other purposes stated therein; provided, however, the Collateral Agent
hereby appoints, authorizes and directs the other Agents and the Lenders to act
as collateral sub-agent for the Collateral Agent and the Lenders for purposes of
the perfection of all Liens with respect
60
to any property of the Borrower or any of its Subsidiaries at any time in the
possession of such Lender, including, without limitation, deposit accounts
maintained with, and cash held by, such Lender; (iv) manage, supervise and
otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the Liens created or
purported to be created by the Loan Documents; and (vi) except as may be
otherwise specifically restricted by the terms of this Agreement or any other
Loan Document, exercise all remedies given to the Collateral Agent or the
Lenders with respect to the Collateral under the Loan Documents relating
thereto, applicable law or otherwise.
(b) The Administrative Agent and each Lender hereby directs,
in accordance with the terms of this Agreement, the Collateral Agent to release
any Lien held by the Collateral Agent for the benefit of the Lenders:
(i) against all of the Collateral, upon payment in full of the
Obligations of all of the Loan Parties under the Loan Documents and
termination of this Agreement;
(ii) against any part of the Collateral sold or disposed of by
the Borrower or any of its Subsidiaries, if such sale or disposition is
otherwise permitted under this Agreement, as certified to the
Collateral Agent by the Borrower, or is otherwise consented to by the
Required Lenders; and/or
(iii) against any part of the Collateral consisting of a
promissory note, upon payment in full of the Debt evidenced thereby.
The Administrative Agent and each Lender hereby directs the Collateral Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 10.03(b) promptly upon the effectiveness of any such release.
SECTION 10.04. RELEASE OF GUARANTORS. Upon the liquidation or
dissolution of any Guarantor, or sale of all of the capital stock of any
Guarantor, in each case which is permitted pursuant to the terms of any Loan
Document or consented to in writing by the Required Lenders or all of the
Lenders, as applicable, and upon at least five (5) Business Days' prior written
request by the Borrower, the Collateral Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the applicable Guarantor from its obligations under the
Guaranty; provided, however, that (i) the Collateral Agent shall not be required
to execute any such document on terms which, in the Collateral Agent's opinion,
would expose the Collateral Agent to liability or create any obligation or
entail any consequence other than the release of such Guarantor without recourse
or warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Loans, any other Guarantor's obligations under the Guaranty, or, if
applicable, any obligations of the Borrower or any Subsidiary in respect of the
proceeds of any such sale retained by the Borrower or any Subsidiary.
ARTICLE XI
MISCELLANEOUS
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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, (iii) reduce the
principal of, or interest on, any Loan, any Applicable Margin, any Commitment
Fee 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) or this Section 11.01,
(viii) release the Collateral Agent's Lien on all or a substantial portion of
the Collateral (except as provided in Section 10.03(b)), (ix) extend the
Termination Date, or (x) amend, waive or modify Section 8.02(e) to increase the
amount of Restricted Payments permitted to be paid by the Borrower thereunder or
to extend any date set forth therein; 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. 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: S. Kinnie Smith, Jr., General Counsel, with
a copy to Laura L. Mountcastle, Vice President, Investor Relations and
Treasurer, 330 Town Center Drive, Suite 1100, Dearborn, Michigan 48126; (ii) if
to any Bank, at its Domestic Lending Office specified opposite its name on
Schedule I; (iii) 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;
(iv) if to the Administrative Agent, at its address at 222 Broadway, New York,
New York 10038, Attn: Jeff Pannullo, Customer Service Unit, Telephone No. (212)
412-3724, Telecopy No. (212) 412-5306, with a copy to such party at 222
Broadway, New York, New York 10038, Attn: Sydney G. Dennis, Power and Utilities
Group, Telephone No. (212) 412-2470, Telecopy No. (212) 412-7511; (v) if to the
Collateral Agent, at its address at 388 Greenwich Street, New York, New York
10003, Attn: Nick McKee, Telephone No. (212) 816-8592, Telecopy No. (212)
816-8098; 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
62
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 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 Arrangers (including
reasonable fees and expenses of counsel to the Agents) in connection with (A)
the preparation, syndication, 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 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 workout, restructuring or 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 Arrangers,
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 or other Extension of
Credit or the use or proposed use of the proceeds therefrom, (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 willful
misconduct of such Indemnified Person.
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(c) The Borrower's other obligations under this Section 11.04
shall survive the repayment of all amounts owing to the Lenders 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 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 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, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such
Promissory Notes, as the case may be, and although such obligations may be
unmatured. Each Lender agrees to notify promptly the Borrower after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 11.05 are in addition to other rights
and remedies (including other rights of set-off) which such Lender 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 willful 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
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this Agreement and the other Loan Documents (including all or a portion of its
Commitment, the Loans owing to it and any Promissory Notes held by it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement, (ii) the amount of the Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date of
the Lender Assignment with respect to such assignment) shall in no event be less
than the lesser of the amount of such Lender's Commitment and $5,000,000 and
shall be an integral multiple of $1,000,000, (iii) each such assignment shall be
to an Eligible Assignee, (iv) 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 (v) after giving effect to such assignment, the
amount of the Commitment of the assigning Lender shall be not less than
$5,000,000 or such lesser amount as may be agreed to by the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrower; 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
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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 Commitment 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 and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a Lender Assignment executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with 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 F, (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/or obligations under the Loan Documents (including all or a portion of its
Commitment, 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 Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of any such Promissory Notes for all purposes of this Agreement, and (iv) the
Borrower, the Agents and the other Lenders shall
66
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 make any demand for payment under Section 5.04(a) or
(c), then in the case of any such demand, within 30 days after any such demand
(if, but only if, such demanded payment has been made by the Borrower) or
notice, the Borrower may, with the approval of the 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 Commitment and the Loans owing to
it within the period ending on the later to occur of (x) the last day in the
period described 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 Commitment 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
67
(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
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 Commitment 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 Commitment and Loans or
terminate and prepay the Commitment 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
Commitment 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 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
68
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 in connection with any proceeding, suit or
other action relating to any Loan Document 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 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 (INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES). THE BORROWER, THE LENDERS AND THE
AGENTS, EACH (I) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT OR FEDERAL COURT SITTING IN NEW YORK CITY IN ANY ACTION ARISING OUT OF ANY
LOAN DOCUMENT, (II) AGREES THAT ALL CLAIMS IN SUCH ACTION MAY BE DECIDED IN SUCH
COURT, (III) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM AND (IV) CONSENTS TO THE SERVICE OF PROCESS BY MAIL. A
FINAL JUDGMENT IN ANY SUCH ACTION SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE
LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR AFFECT ITS RIGHT TO BRING ANY
ACTION IN ANY OTHER COURT. THE BORROWER AGREES THAT THE AGENTS SHALL HAVE THE
RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION
TO ENABLE THE AGENTS AND THE LENDERS TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE AGENTS OR ANY LENDER. THE BORROWER AGREES THAT IT WILL
NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY ANY AGENT
69
OR ANY LENDER TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ANY AGENT
OR ANY LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH ANY AGENT OR ANY LENDER MAY COMMENCE A PROCEEDING
DESCRIBED IN THIS SECTION.
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. 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 11.13. 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.
[Signature pages follow.]
70
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/ Alan M. Wright
--------------------------------------
Name: Alan M. Wright
Title: Executive Vice President
Chief Financial Officer &
Chief Administrative Officer
Signature Page to $295,800,000 Amended and Restated Credit Agreement
BARCLAYS BANK PLC, individually as a Lender and
as Administrative Agent
By: /s/ Sidney G. Dennis
-----------------------------------------
Name: Sidney G. Dennis
Title: Director
(The signature pages for the remaining 20 banks are not attached.)
Signature Page to $295,800,000 Amended and Restated Credit Agreement
COMMITMENT SCHEDULE
- ------------------------------------------------------------ ---------------------------------------------------------
LENDER COMMITMENT
- ------------------------------------------------------------ ---------------------------------------------------------
BARCLAYS BANK PLC $23,466,800
- ------------------------------------------------------------ ---------------------------------------------------------
BANK OF AMERICA, N.A. $22,678,000
- ------------------------------------------------------------ ---------------------------------------------------------
JPMORGAN CHASE BANK $22,678,000
- ------------------------------------------------------------ ---------------------------------------------------------
CITICORP USA, INC. $22,678,000
- ------------------------------------------------------------ ---------------------------------------------------------
UNION BANK OF CALIFORNIA, N.A. $22,678,000
- ------------------------------------------------------------ ---------------------------------------------------------
BNP PARIBAS $18,734,000
- ------------------------------------------------------------ ---------------------------------------------------------
BANK ONE, NA $15,578,800
- ----------------------------------------------------------------------------------------------------------------------
COMERICA BANK $15,578,800
- ------------------------------------------------------------ ---------------------------------------------------------
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH $15,578,800
- ------------------------------------------------------------ ---------------------------------------------------------
FLEET NATIONAL BANK $15,578,800
- ------------------------------------------------------------ ---------------------------------------------------------
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED $9,860,000
- ------------------------------------------------------------ ---------------------------------------------------------
DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly known as $9,860,000
BANKERS TRUST COMPANY)
- ------------------------------------------------------------ ---------------------------------------------------------
CIBC INC. $9,860,000
- ------------------------------------------------------------ ---------------------------------------------------------
STANDARD FEDERAL BANK N.A. (formerly known as Michigan $9,860,000
National Bank)
- ------------------------------------------------------------ ---------------------------------------------------------
71
- ------------------------------------------------------------ ---------------------------------------------------------
LENDER COMMITMENT
- ------------------------------------------------------------ ---------------------------------------------------------
THE ROYAL BANK OF SCOTLAND PLC $9,860,000
- ------------------------------------------------------------ ---------------------------------------------------------
SOCIETE GENERALE -- NY $9,860,000
- ------------------------------------------------------------ ---------------------------------------------------------
SUMITOMO MITSUI BANKING CORPORATION $9,860,000
- ------------------------------------------------------------ ---------------------------------------------------------
THE BANK OF NOVA SCOTIA $9,860,000
- ------------------------------------------------------------ ---------------------------------------------------------
TORONTO DOMINION (TEXAS), INC. $9,860,000
- ------------------------------------------------------------ ---------------------------------------------------------
ARAB BANKING CORPORATION $5,916,000
- ------------------------------------------------------------ ---------------------------------------------------------
MIZUHO CORPORATE BANK, LTD. (formerly known as THE FUJI $5,916,000
BANK, LIMITED)
- ------------------------------------------------------------ ---------------------------------------------------------
Total Commitments: $295,800,000
- ------------------------------------------------------------ ---------------------------------------------------------
72
SCHEDULE III
Pledged Capital Stock
---------------------
GRANTOR PLEDGED SUBSIDIARIES
- ------- --------------------
CMS Energy Corporation CMS Enterprises Company (100%)
CMS Enterprises Company CMS Generation Co. (100%)
CMS Gas Transmission Company (100%)
CMS Capital, L.L.C. (100%)
CMS Electric and Gas Company (100%)
CMS Oil and Gas Company (100%)
CMS Marketing, Services and Trading Company (100%)
CMS International Ventures, L.L.C. (66.7%)
CMS Generation Co. CMS International Ventures, L.L.C. (33.3%)
Dearborn Industrial Energy, L.L.C. (100%)
CMS Generation Michigan Power L.L.C. (100%)
Dearborn Industrial Energy, L.L.C. Dearborn Industrial Generation, L.L.C. (100%)
CMS Gas Transmission Company CMS Field Services, Inc. (100%)
Panhandle Eastern Pipe Line Company (100%)
CMS Field Services, Inc. CMS Gas Processing, L.L.C. (100%)
CMS Natural Gas Gathering, L.L.C. (100%)
73