EXHIBIT 4.2
EXECUTION COPY
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$300,000,000
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.........................................................21
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments..........................................................21
SECTION 2.02. Fees.....................................................................22
SECTION 2.03. Reduction of the Commitments; Mandatory Prepayments......................22
SECTION 2.04. Computations of Outstandings.............................................24
ARTICLE III
LOANS
SECTION 3.01. Loans....................................................................24
SECTION 3.02. Conversion of Loans......................................................25
SECTION 3.03. Interest Periods.........................................................26
SECTION 3.04. Other Terms Relating to the Making and Conversion of Loans...............26
SECTION 3.05. Repayment of Loans; Interest.............................................28
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. Issuing Banks............................................................29
SECTION 4.02. Letters of Credit........................................................29
SECTION 4.03. Issuing Bank Fees........................................................30
SECTION 4.04. Reimbursement to Issuing Banks...........................................31
SECTION 4.05. Obligations Absolute.....................................................32
SECTION 4.06. Liability of Issuing Banks and the Lenders...............................32
SECTION 4.07. Currency Equivalents.....................................................33
SECTION 4.08. Judgement Currency.......................................................33
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 5.01. Payments and Computations................................................34
SECTION 5.02. Interest Rate Determination..............................................35
SECTION 5.03. Prepayments..............................................................36
SECTION 5.04. Yield Protection.........................................................37
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TABLE OF CONTENTS (CONT'D)
SECTION PAGE
SECTION 5.05. Sharing of Payments, Etc.................................................38
SECTION 5.06. Taxes....................................................................39
SECTION 5.07. Apportionment of Payments................................................40
SECTION 5.08. Proceeds of Collateral...................................................42
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Effectiveness of this Agreement..............42
SECTION 6.02. Conditions Precedent to Each Extension of Credit.........................44
SECTION 6.03. Conditions Precedent to Certain Extensions of Credit.....................45
SECTION 6.04. Reliance on Certificates.................................................45
SECTION 6.05. Condition Precedent to the Initial Extension of Credit...................45
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower...........................46
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants....................................................49
SECTION 8.02. Negative Covenants.......................................................52
SECTION 8.03. Reporting Obligations....................................................59
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default........................................................62
SECTION 9.02. Remedies.................................................................65
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action................................................65
SECTION 10.02. Indemnification.........................................................67
SECTION 10.03. Concerning the Collateral and the Loan Documents........................67
SECTION 10.04. Release of Guarantors...................................................69
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc.........................................................69
SECTION 11.02. Notices, Etc............................................................70
SECTION 11.03. No Waiver of Remedies...................................................70
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TABLE OF CONTENTS (CONT'D)
SECTION PAGE
SECTION 11.04. Costs, Expenses and Indemnification.....................................70
SECTION 11.05. Right of Set-off........................................................71
SECTION 11.06. Binding Effect..........................................................72
SECTION 11.07. Assignments and Participation...........................................72
SECTION 11.08. Confidentiality.........................................................76
SECTION 11.09. Waiver of Jury Trial....................................................76
SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION...............................77
SECTION 11.11. Relation of the Parties; No Beneficiary.................................77
SECTION 11.12. Execution in Counterparts...............................................77
SECTION 11.13. Survival of Agreement...................................................78
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Exhibits
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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 Cash Collateral Agreement
EXHIBIT K - Form of Pledge and Security Agreement (Borrower)
EXHIBIT L - Form of Pledge and Security Agreement (Grantors)
Schedules
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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.
"ALTERNATIVE CURRENCY" means Canadian Dollars and euro.
"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:
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ABR Loans 2.00%
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Eurodollar
Rate Loans 3.00%
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2
"APPLICABLE RATE" means:
(i) in the case of each ABR Loan, a rate per annum
equal at all times to the sum of the Alternate Base Rate in
effect from time to time plus the Applicable Margin; 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.
"CANADIAN DOLLARS" means the lawful currency of Canada.
3
"CASH COLLATERAL AGREEMENT" means the Cash Collateral
Agreement, dated as of July 12, 2002, between the Borrower and the
Administrative Agent, for the benefit of the Lenders, substantially in
the form of Exhibit J.
"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 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, including, without limitation,
all "Collateral" under (and as defined in) the Cash Collateral
Agreement.
"COMMITMENT" means, for each Lender, the obligation of such
Lender to make Loans to the Borrower and to participate in Extensions
of Credit resulting from the issuance (or extension, modification or
amendment) of any Letter of Credit in an aggregate amount no greater
than the amount set forth opposite such Lender's name on the 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 $300,000,000.
"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.
4
"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;
(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 &
5
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
(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
6
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, 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.
"DEFAULT" means an event that, with the giving of notice or
lapse of time or both, would constitute an Event of Default.
"DEFAULT RATE" means a rate per annum equal at all times to
(i) in the case of any amount of principal of any Loan that is not paid
when due, 2% per annum above the Applicable Rate required to be paid on
such Loan immediately prior to the date on which such amount became
due, and (ii) in the case of any amount of interest, fees or other
amounts payable hereunder that is not paid when due, 2% per annum above
the Applicable Rate for an ABR Loan in effect from time to time.
"DESIGNATED PREPAYMENT" means each mandatory prepayment
required by clauses (i) and (ii) of Section 2.03(c).
7
"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.
"DOLLAR EQUIVALENT" means, as to Dollars, the amount thereof,
and as to any Alternative Currency, the Dollar equivalent of such
Alternative Currency as determined by the Administrative Agent in
accordance with the provisions of Section 4.07.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office or affiliate of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the Lender
Assignment pursuant to which it became a Lender, or such other office
or affiliate of such Lender as such Lender may from time to time
specify in writing to the Borrower and the Administrative Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank or trust
company organized under the laws of the United States, or any State
thereof; (b) a commercial bank organized under the laws of any other
country that is a member of the OECD, or a political subdivision of any
such country, provided that such bank is acting through a branch or
agency located in the United States; (c) the central bank of any
country that is a member of the OECD; and (d) any other commercial bank
or other financial institution engaged generally in the business of
extending credit or purchasing debt instruments; provided, however,
that (A) any such Person shall also (i) have outstanding unsecured
indebtedness that is rated A- or better by S&P or A3 or better by
Moody's (or an equivalent rating by another nationally-recognized
credit rating agency of similar standing if neither of such
corporations is then in the business of rating unsecured indebtedness
of entities engaged in such businesses) or (ii) have combined capital
and surplus (as established in its most recent report of condition to
its primary regulator) of not less than $250,000,000 (or its equivalent
in foreign currency), (B) any Person described in clause (b), (c), or
(d) above, shall, on the date on which it is to become a Lender
hereunder, (1) be entitled to receive payments hereunder without
deduction or withholding of any United States Federal income taxes (as
contemplated by Section 5.06) and (2) not be incurring any losses,
costs or expenses of the type for which such Person could demand
payment under Section 5.04(a) or (c) (except to the extent that, in the
absence of the making of an assignment to such Person, the assigning
Lender would have incurred an equal or greater amount of such losses,
costs or expenses and such losses, costs or expenses would have been
payable by the Borrower to such assigning Lender hereunder), (C) any
Person described in clauses (a), (b), (c) and (d) above, which is not a
Lender shall, in addition, be acceptable to any Issuing Bank based upon
their then existing credit criteria and (D) 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.
"EURO" means the euro referred to in Council Regulation (EC)
No. 1103/97 dated June 17, 1997 passed by the Counsel of the European
Union, or if different, the lawful currency of the member states of the
European Union that participate in the third stage of the Economic and
Monetary Union.
"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.
9
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office or affiliate of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the Lender
Assignment pursuant to which it became a Lender (or, if no such office
or affiliate is specified, its Domestic Lending Office), or such other
office or affiliate of such Lender as such Lender may from time to time
specify in writing to the Borrower and the Administrative Agent.
"EURODOLLAR RATE 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 $300,000,000 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 (i) the making of a Borrowing
(including any Conversion), (ii) the issuance of a Letter of Credit, or
(iii) the amendment of any Letter of Credit having the effect of
extending the stated termination date thereof, increasing the LC
Outstandings thereunder, or otherwise altering any of the material
terms or conditions thereof.
"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.
10
"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.
"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:
11
(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
(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.
"ISSUING BANK" means any Lender designated by the Borrower in
accordance with Section 4.01(a) as the issuer of a Letter of Credit
pursuant to an Issuing Bank Agreement. As of the date hereof, the
Borrower has designated Barclays as an Issuing Bank, and the
Administrative Agent has accepted such designee pursuant to Section
4.01.
12
"ISSUING BANK AGREEMENT" means an agreement between an Issuing
Bank and the Borrower, in form and substance satisfactory to the
Administrative Agent, providing for the issuance of one or more Letters
of Credit, in form and substance satisfactory to the Administrative
Agent, in support of a general corporate activity of the Borrower.
"JUNIOR SUBORDINATED DEBT" means any unsecured Debt of the
Borrower or 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.
"LC PAYMENT NOTICE" is defined in Section 4.04(b).
"LC OUTSTANDINGS" means, for any Letter of Credit on any date
of determination, the maximum amount available to be drawn under such
Letter of Credit (assuming the satisfaction of all conditions for
drawing enumerated therein) plus any amount which has been drawn on
such Letter of Credit which has neither been reimbursed by the Borrower
nor converted into an ABR Loan pursuant to the terms of Section 4.04.
"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, each Eligible Assignee that shall become a party hereto
pursuant to Section 11.07 and, if and to the extent so provided in
Section 4.04(c), each Issuing Bank.
"LETTER OF CREDIT" means a letter of credit issued by an
Issuing Bank pursuant to Section 4.02, as such letter of credit may
from time to time be amended, modified or extended in accordance with
the terms of this Agreement and the Issuing Bank Agreement to which it
relates.
"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
13
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 Cash Collateral Agreement, the Fee Letter, the Issuing Bank
Agreement(s), 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.
"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
14
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 reimbursement obligations under
Section 4.04(a), 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 Issuing
Banks, 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 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,
15
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 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
16
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.
"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
17
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.
"REQUEST FOR ISSUANCE" is defined in Section 4.02(a).
"REQUIRED LENDERS" means, on any date of determination,
Lenders that, collectively, on such date (i) hold at least 51% of the
then aggregate unpaid principal amount of the Loans owing to Lenders
and (ii) if no Loans are then outstanding, have Percentages in the
aggregate of at least 51%. Any determination of those Lenders
constituting the Required Lenders shall be made by the Administrative
Agent and shall be conclusive and binding on all parties absent
manifest error.
18
"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 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
19
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) December
15, 2003 and (ii) the date of termination or reduction in whole of the
Commitments pursuant to Section 2.03 or 9.02.
"364 DAY FACILITY" means that certain $295,800,000 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.
"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
20
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 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 and to
participate in the issuance of Letters of Credit (and the LC Outstandings
thereunder) during the period from the Closing
21
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 or reduce or cancel Letters of
Credit, and use the resulting increase in the Available Commitments for further
Extensions of Credit in accordance with the terms hereof.
SECTION 2.02. FEES.
(a) The Borrower agrees to pay to the 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 June 17, 2003, the Borrower shall pay to the
Administrative Agent, for the account of each Lender, an incentive fee equal to
0.50% multiplied by each such Lenders' Commitment as of such date.
(c) The Borrower agrees to pay to the Administrative Agent,
for the account of each Lender, a commission on the average daily aggregate
amount of the LC Outstandings from the Closing Date until the Termination Date
at a rate per annum equal to the Applicable Margin with respect to Eurodollar
Rate Loans, payable quarterly in arrears on the last day of each January, April,
July and October, commencing on the first such date to occur following the
Closing Date, and on the Termination Date.
(d) In addition to the fees provided for in subsections (a),
(b) and (c) above, the Borrower shall pay to the 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, 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, 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
22
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 and the 364 Day Facility shall have been paid
in full in cash and the Enterprises Credit Agreement and the 364 Day Facility
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
(exclusive of any proceeds applied to mandatory prepayments under the
Enterprises Credit Agreement and/or the 364 Day Facility) in excess of
$100,000,000 from the sale, assignment or other disposition of (but not
the lease or license of) any property identified to the Lenders in the
Borrower's Confidential Information Memorandum dated June 2002,
including, without limitation, any sale of capital stock or other
equity interest in any of the Borrower's direct or indirect
Subsidiaries identified therein (the "IDENTIFIED TRANSACTIONS"), in an
amount, when combined with the Net Proceeds of all other such
Identified Transactions since the Closing Date that have not been
applied to the prepayment of the Obligations in accordance with this
clause (i), 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 fifty percent (50%) of such aggregate Net Proceeds, provided that
such amount shall exclude Net Proceeds arising from any sale,
assignment or other disposition of property by Consumers or any
Subsidiary of Consumers; 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, 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, other than in respect of the Identified
Transactions, 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 with this
clause (ii), 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 fifty percent (50%) 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.
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
23
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 sum of (i) the aggregate principal
amount of all Loans outstanding on such date under this Agreement plus (ii) the
aggregate LC Outstandings of all Letters of Credit outstanding on such date, in
each case after giving effect to all Extensions of Credit to be made on such
date and the application of the proceeds thereof. 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.
24
(c) If and to the extent that any Lender (a "NON-PERFORMING
LENDER") shall not have made available to the Administrative Agent, in
accordance with subsection (b) above, such Lender's Percentage of any Borrowing,
the non-performing Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand corresponding amounts, together with
interest thereon for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, the interest rate applicable at the time to
Loans made in connection with such Borrowing and (ii) in the case of such
Lender, the Federal Funds Effective Rate. Within the limits of each Lender's
Available Commitment 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
25
proposed Conversion into an ABR Loan. The Administrative Agent shall give each
Lender prompt notice of each Notice of Conversion. Each Notice of Conversion
shall be in substantially the form of Exhibit B and shall specify (i) the
requested date of such Conversion, (ii) the 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
26
Loans" under, and as such terms are defined in, the 364 Day Facility,
be greater than fifteen (15);
(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
27
until the Administrative Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist, and each Loan to be
made or Converted in connection with such Borrowing shall be an ABR Loan.
(d) If any Lender shall have delivered a notice to the
Administrative Agent described in Section 3.04(b), or shall become a
non-performing Lender under Section 3.01(c) or Section 4.04(c), and if and so
long as such Lender shall not have withdrawn such notice or corrected such
non-performance in accordance with said Section 3.04(b), Section 3.01(c) or
Section 4.04(c), the Borrower or the Administrative Agent may demand that such
Lender assign in accordance with Section 11.07, to one or more Eligible
Assignees designated by the Borrower or the Administrative Agent, all (but not
less than all) of such Lender's 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
28
be paid in full, at the Applicable Rate for such Loan (except as otherwise
provided in this subsection (b)), payable as follows:
(i) ABR Loans. If such Loan is an ABR Loan, interest
thereon shall be payable quarterly in arrears on the last day of each
January, April, July and October, on the date of any Conversion of
such ABR Loan and on the date such ABR Loan shall become due and
payable or shall otherwise be paid in full; provided that any amount
of principal that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which
such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the Default Rate.
(ii) Eurodollar Rate Loans. If such Loan is a Eurodollar
Rate Loan, interest thereon shall be payable on the last day of such
Interest Period and, if the Interest Period for such Loan has a
duration of more than three months, on that day of each third month
during such Interest Period that corresponds to the first day of such
Interest Period (or, if any such month does not have a corresponding
day, then on the last day of such month); provided that any amount of
principal that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which
such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the Default Rate.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. ISSUING BANKS. Subject to the terms and conditions
hereof, the Borrower may from time to time identify and arrange for one or more
Lenders to act as Issuing Banks hereunder. Any such designation by the Borrower
shall be notified to the Administrative Agent at least three (3) Business Days
prior to the first date upon which the Borrower proposes that such Issuing Bank
issue its first Letter of Credit. Nothing contained herein shall be deemed to
require any Lender to agree to act as an Issuing Bank, if it does not so desire.
SECTION 4.02. LETTERS OF CREDIT.
(a) Each Letter of Credit shall be issued (or the stated
maturity thereof extended or terms thereof modified or amended) on not less than
three (3) Business Days' prior written notice thereof to the Administrative
Agent (which shall promptly distribute copies thereof to the Lenders) and the
relevant Issuing Bank and shall be denominated in Dollars or in an Alternative
Currency. Each such notice (a "REQUEST FOR ISSUANCE") shall specify (i) the date
(which shall be a Business Day) of issuance of such Letter of Credit (or the
date of effectiveness of such extension, modification or amendment) and the
stated expiry date thereof (which shall be no later than the earlier of the date
that is five (5) Business Days prior to the Termination Date, and the date which
is one year after the requested date of issuance, provided that any Letter of
Credit with a one year tenor may provide for the renewal thereof for additional
periods of up to one year which shall in no event extend beyond the date which
is five (5) Business Days prior to the Termination Date), (ii) the proposed
stated amount of such Letter of Credit (which shall not be less than $500,000
(or the Dollar Equivalent thereof in an Alternative Currency) unless
29
otherwise agreed by the applicable Issuing Bank) and whether such Letter of
Credit is denominated in Dollars, Canadian Dollars or euro and (iii) such other
information as shall demonstrate compliance of such Letter of Credit with the
requirements specified therefor in this Agreement and the relevant Issuing Bank
Agreement; provided that, notwithstanding that a letter of credit issued
pursuant to the Existing Credit Agreement shall have a stated expiry date after
the Termination Date, each letter of credit issued thereunder shall be deemed to
be a Letter of Credit hereunder (but no such Letter of Credit with a stated
expiry date after the Termination Date may be extended, modified or amended);
provided, further that on or prior to the twentieth (20th) day prior to the
Termination Date, the Borrower shall deliver (i) cash collateral in accordance
with the terms of the Cash Collateral Agreement in an amount equal to one
hundred five percent (105%) of the face amount of any Letter of Credit then
outstanding with a stated expiry date on or after the Termination Date (each an
"IDENTIFIED LETTER OF CREDIT") or (ii) one or more letters of credit (each a
"SUPPORT LETTER OF CREDIT"), for the benefit of the applicable Issuing Bank(s)
issuing the Identified Letters of Credit, for reimbursement of any draw under
any such Identified Letters of Credit, in each case in an amount and issued by
an issuing bank and otherwise in form and substance reasonably acceptable to the
Administrative Agent, and upon delivery of such cash collateral or Support
Letters of Credit, as applicable, the participation of each Lender in such
Identified Letters of Credit (and the LC Outstandings thereunder) shall be
terminated. Each Request for Issuance shall be irrevocable unless modified or
rescinded by the Borrower not less than two (2) days prior to the proposed date
of issuance (or effectiveness) specified therein. Not later than 12:00 noon on
the proposed date of issuance (or effectiveness) specified in such Request for
Issuance, and upon fulfillment of the applicable conditions precedent and the
other requirements set forth herein and in the relevant Issuing Bank Agreement,
such Issuing Bank shall issue (or extend, amend or modify) such Letter of Credit
and provide notice and a copy thereof to the Administrative Agent, which shall
promptly furnish copies thereof to the Lenders.
(b) Each Lender severally agrees with such Issuing Bank to
participate in the Extension of Credit resulting from the issuance (or
extension, modification or amendment) of such Letter of Credit (including,
without limitation, each letter of credit issued pursuant to the Existing Credit
Agreement), in the manner and the amount provided in Section 4.04(b), and the
issuance of such Letter of Credit (or, in the case of each letter of credit
issued pursuant to the Existing Credit Agreement, the execution by the Issuing
Bank and each Lender of this Agreement) shall be deemed to be a confirmation by
such Issuing Bank and each Lender of such participation in such amount.
(c) Notwithstanding anything herein to the contrary, (i)
the aggregate Dollar Equivalent of the stated amount of all Letters of Credit
outstanding at any one time shall not exceed $275,000,000, (ii) the aggregate
Dollar Equivalent of the stated amount of all Letters of Credit outstanding at
any one time and denominated in Canadian Dollars shall not exceed $25,000,000,
and (iii) the aggregate Dollar Equivalent of the stated amount of all Letters of
Credit outstanding at any one time and denominated in euro shall not exceed
$35,000,000.
SECTION 4.03. ISSUING BANK FEES. The Borrower shall pay directly to
each Issuing Bank such fees and expenses, if any, specified to be paid to such
Issuing Bank pursuant to the Issuing Bank Agreement to which it is a party, at
the times, and in the manner, specified in such Issuing Bank Agreement.
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SECTION 4.04. REIMBURSEMENT TO ISSUING BANKS.
(a) The Borrower hereby agrees to pay to the
Administrative Agent for the account of each Issuing Bank, on demand made by
such Issuing Bank to the Borrower and the Administrative Agent, on and after
each date on which such Issuing Bank shall pay any amount under the Letter of
Credit issued by such Issuing Bank, a sum in Dollars equal to the Dollar
Equivalent of the amount so paid plus interest on such amount from the date so
paid by such Issuing Bank until repayment to such Issuing Bank in full at a
fluctuating interest rate per annum equal at all times to the Applicable Rate
for ABR Loans.
(b) If any Issuing Bank shall not have been reimbursed in
full for any payment made by such Issuing Bank under the Letter of Credit issued
by such Issuing Bank on the date of such payment, such Issuing Bank shall give
the Administrative Agent and each Lender prompt notice thereof (an "LC PAYMENT
NOTICE") no later than 12:00 noon on the Business Day immediately succeeding the
date of such payment by such Issuing Bank. Each Lender severally agrees to
purchase from each Issuing Bank a participation in the reimbursement obligation
of the Borrower to such Issuing Bank under subsection (a) above, by paying to
the Administrative Agent for the account of such Issuing Bank an amount in
Dollars equal to such Lender's Percentage of the Dollar Equivalent of such
unreimbursed amount paid by such Issuing Bank, plus interest on the Dollar
Equivalent of such amount at a rate per annum equal to the Federal Funds
Effective Rate from the date of such payment by such Issuing Bank to the date of
payment to such Issuing Bank by such Lender. Each such payment by a Lender shall
be made not later than 3:00 P.M. on the later to occur of (i) the Business Day
immediately following the date of such payment by such Issuing Bank and (ii) the
Business Day on which such Lender shall have received an LC Payment Notice from
such Issuing Bank. Each Lender's obligation to make each such payment to the
Administrative Agent for the account of such Issuing Bank shall be several and
shall not be affected by the occurrence or continuance of any Default or Event
of Default or the failure of any other Lender to make any payment under this
Section 4.04. Each Lender further agrees that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
(c) The failure of any Lender to make any payment to the
Administrative Agent for the account of an Issuing Bank in accordance with
subsection (b) above, shall not relieve any other Lender of its obligation to
make payment, but no Lender shall be responsible for the failure of any other
Lender. If any Lender (a "NON-PERFORMING LENDER") shall fail to make any payment
to the Administrative Agent for the account of an Issuing Bank in accordance
with subsection (b) above, within five (5) Business Days after the LC Payment
Notice relating thereto, then, for so long as such failure shall continue, such
Issuing Bank shall be deemed, for purposes of Section 5.05 and Article IX hereof
and the Cash Collateral Agreement, to be a Lender hereunder owed a Loan in an
amount equal to the Dollar Equivalent of the outstanding principal amount due
and payable by such Lender to the Administrative Agent for the account of such
Issuing Bank pursuant to subsection (b) above.
(d) Each participation purchased by a Lender under
subsection (b) above, shall constitute an ABR Loan in the amount in Dollars
paid by such Lender to the Administrative Agent for the account of the
applicable Issuing Bank and shall be deemed made by such Lender to the Borrower
on the date of such payment by the relevant Issuing Bank under the Letter of
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Credit issued by such Issuing Bank (irrespective of the Borrower's
noncompliance, if any, with the conditions precedent for Loans hereunder); and
all such payments by the Lenders in respect of any one such payment by such
Issuing Bank shall constitute a single Borrowing hereunder.
SECTION 4.05. OBLIGATIONS ABSOLUTE. The payment obligations of each
Lender under Section 4.04(b) and of the Borrower under this Agreement in respect
of any payment under any Letter of Credit and any Loan made under Section
4.04(d) shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following circumstances:
(i) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto or to
such Letter of Credit;
(ii) any amendment or waiver of, or any consent to
departure from, all or any of the Loan Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any beneficiary,
or any transferee, of such Letter of Credit (or any Persons for whom
any such beneficiary or any such transferee may be acting), any Issuing
Bank, or any other Person, whether in connection with this Agreement,
the transactions contemplated herein or by such Letter of Credit, or
any unrelated transaction;
(iv) any statement or any other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment in good faith by any Issuing Bank under the
Letter of Credit issued by such Issuing Bank against presentation of a
draft or certificate which does not comply with the terms of such
Letter of Credit; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
SECTION 4.06. LIABILITY OF ISSUING BANKS AND THE LENDERS. The
Borrower assumes all risks of the acts and omissions of any beneficiary or
transferee of any Letter of Credit. Neither the Issuing Bank that has issued
such Letter of Credit, the Lenders nor any of their respective officers,
directors, employees, agents or Affiliates shall be liable or responsible for
(a) the use that may be made of such Letter of Credit or any acts or omissions
of any beneficiary or transferee thereof in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank
against presentation of documents that do not comply with the terms of such
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to such Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under such Letter of Credit,
except that the Borrower shall have the right to bring suit against such Issuing
Bank, and such Issuing Bank shall be liable to the Borrower and any Lender, to
the extent of any direct, as opposed to consequential, damages suffered by the
Borrower or such Lender which the
32
Borrower or such Lender proves were caused by such Issuing Bank's willful
misconduct or gross negligence, including such Issuing Bank's willful failure to
make timely payment under such Letter of Credit following the presentation to it
by the beneficiary thereof of a draft and accompanying certificate(s) which
strictly comply with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, any Issuing Bank may accept
sight drafts and accompanying certificates presented under the Letter of Credit
issued by such Issuing Bank that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary. Notwithstanding the foregoing, no Lender shall be
obligated to indemnify the Borrower for damages caused by any Issuing Bank's
willful misconduct or gross negligence, and the obligation of the Borrower to
reimburse the Lenders hereunder shall be absolute and unconditional,
notwithstanding the gross negligence or willful misconduct of any Issuing Bank.
SECTION 4.07. CURRENCY EQUIVALENTS. For purposes of Articles IV and V
of this Agreement, the Dollar Equivalent of any Alternative Currency shall be
determined by the Administrative Agent by using the quoted closing spot rate at
which Barclays' principal office in London offers to exchange Dollars for such
Alternative Currency in London on the day such equivalent is to be determined;
provided, however, that if at the time of any such determination, for any
reason, no spot rate is being quoted, the Administrative Agent, after
consultation with the Borrower, may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be conclusive
absent manifest error. The Dollar Equivalent of the stated amount of each Letter
of Credit outstanding made in an Alternative Currency and of the amount of each
participation purchased by a Lender under Section 4.04(b) shall be recalculated
hereunder on (i) each date that it shall be necessary to determine the unused
portion of each Lender's Commitment, or the outstanding amount of any or all
Loans, Letters of Credit outstanding, LC Outstandings or any Extension of
Credit, or (ii) on any such other date which the Administrative Agent deems such
recalculation necessary or advisable or is otherwise directed to make such
recalculation by the Required Lenders, but in any event at least monthly. The
Administrative Agent agrees to provide notice to the Lenders of the relevant
Dollar Equivalent determined pursuant to each such determination and each such
recalculation as soon as practicable following such determination or
recalculation, as the case may be.
SECTION 4.08. JUDGEMENT CURRENCY. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder or under
the Promissory Notes in any currency (the "ORIGINAL CURRENCY") into another
currency (the "OTHER CURRENCY") the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the Original Currency with the Other Currency at Barclays on the
Business Day immediately preceding that on which final judgment is given. The
obligation of the Borrower in respect of any sum due in the Original Currency
from it to any Lender, Issuing Bank, Collateral Agent or Administrative Agent
hereunder or under any other Loan Document shall, notwithstanding any judgment
in any Other Currency, be discharged only to the extent that on the Business Day
following receipt by such Lender, Issuing Bank, Collateral Agent or
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such Other Currency such Lender, Issuing Bank, Collateral Agent or
Administrative Agent (as the case may be) may in accordance with normal banking
procedures purchase the Original Currency with such Other Currency; if the
amount of the Original Currency so purchased is less than the sum
33
originally due to such Lender, Issuing Bank, Collateral Agent or Administrative
Agent (as the case may be) in the Original Currency, the Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender, Issuing Lender, Collateral Agent or Administrative Agent (as the case
may be) against such loss, and if the amount of the Original Currency so
purchased exceeds the sum originally due in the Original Currency to any Lender,
Issuing Lender, Collateral Agent or Administrative Agent (as the case may be),
such Lender, Issuing Lender, Collateral Agent or Administrative Agent (as the
case may be) agrees to remit to the Borrower such excess.
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, except payments to be made directly
to any Issuing Bank as expressly provided herein; 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 Dollar Equivalent
of the unpaid amount of such distribution, at a rate per annum equal to the
Federal Funds Effective Rate, from the date of such payment by the Borrower to
the Administrative Agent to the date of payment in full by the Administrative
Agent to such Lender of such unpaid amount. Upon the Administrative Agent's
acceptance of a Lender Assignment and recording of the information contained
therein in the Register pursuant to Section 11.07, from and after the effective
date specified in such Lender Assignment, the Administrative Agent shall make
all payments hereunder and under any Promissory Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Lender Assignment shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes the Administrative
Agent, each Lender and each Issuing Bank, if and to the extent payment owed to
the Administrative Agent, such Lender or such Issuing Bank, as the case may be,
is not made when due hereunder (or, in the case of a Lender, under any
Promissory Note held by such Lender), to charge from time to time against any or
all of the Borrower's accounts with the Administrative Agent, such Lender or
such Issuing Bank, as the case may be, any amount so due.
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(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.
(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).
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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, and on any date
on which the sum of the aggregate outstanding principal amount of the Loans and
the aggregate Dollar Equivalent of all LC Outstandings shall exceed the
aggregate amount of the Commitments, and on any date on which the aggregate
Dollar Equivalent of (1) all LC Outstandings shall exceed $275,000,000, (2) all
LC Outstandings denominated in Canadian Dollars shall exceed $25,000,000, or (3)
all LC Outstandings denominated in euro shall exceed $35,000,000, the Borrower
shall first, pay or prepay the principal outstanding on the Loans and/or LC
Outstandings that represent amounts that have been drawn under Letters of Credit
but have neither been reimbursed by the Borrower nor converted into ABR Loans,
second, if all of the Loans and all of such unreimbursed amounts constituting LC
Outstanding shall have been paid in full, provide cash collateral pursuant to
the Cash Collateral Agreement, to secure remaining LC Outstandings, and third,
cause an amount of Letters of Credit to be cancelled (if necessary after taking
into account the payments and provision of cash collateral in the immediately
preceding clauses), in each case, in an amount equal to the excess, as
applicable, of (A) (i) the sum of the aggregate principal amount of the Loans
outstanding and the aggregate Dollar Equivalent of all LC Outstandings (in each
case after giving effect to all Extensions of Credit to be made on such date and
the application of the proceeds thereof) over (ii) the aggregate amount of the
sum of the Commitments (following such termination or reduction, if any) and
such cash collateral, or (B) (i) the aggregate Dollar Equivalent of all LC
Outstandings, over (ii) the sum of $275,000,000 and such cash collateral, or (C)
(i) the aggregate Dollar Equivalent of all LC Outstandings denominated in
Canadian Dollars, over (ii) the sum of $25,000,000 and such cash collateral, or
(D) (i) the aggregate Dollar Equivalent of all LC Outstandings denominated in
euro, over (ii) the sum of $35,000,000 and such cash collateral, together with,
in the case of any such payment (x) accrued interest to the date of such
prepayment on the amount repaid and (y) in the case of prepayments of Eurodollar
Rate Loans, any amount payable to the Lenders pursuant to Section 5.04(b). Any
payments and prepayments required by clause "first" of this subsection (b) shall
be applied, first, to outstanding ABR Loans up to the full amount thereof,
second, to outstanding Eurodollar Rate Loans, and third, as cash collateral,
pursuant to the Cash Collateral Agreement, to secure LC Outstandings. In the
event that the Borrower requests the release of any cash collateral pursuant to
the terms of the Cash Collateral Agreement and on the date of such request or at
any time prior to the time of such release, there has become, or there becomes,
due and payable any prepayment of any Loans under this Agreement, the Borrower
hereby directs the Administrative Agent to apply the
36
proceeds of such release of cash collateral to such prepayment of such Loans and
agrees that any such request is a confirmation of such direction.
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 (A) the cost to any Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans, or of
participating in the issuance, maintenance or funding of any Letter of Credit,
or (B) the cost to any Issuing Bank of issuing or maintaining any Letter of
Credit, then the Borrower shall from time to time, upon demand by such Lender or
Issuing Bank, as the case may be (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender or Issuing Bank, as the case may be, additional amounts sufficient to
compensate such Lender or Issuing Bank, as the case may be, for such increased
cost. A certificate as to the amount of such increased cost and giving a
reasonable explanation thereof, submitted to the Borrower and the Administrative
Agent by such Lender or such Issuing Bank, as the case may be, shall constitute
such demand and shall be conclusive and binding for all purposes, absent
manifest error.
(b) Breakage. If, due to any prepayment pursuant to
Section 5.03, an acceleration of maturity of the Loans pursuant to Section 9.02,
or any other reason, any Lender receives payments of principal of any Eurodollar
Rate Loan other than on the last day of the Interest Period relating to such
Loan or if the Borrower shall Convert any Eurodollar Rate Loans on any day other
than the last day of the Interest Period therefor, or if the Borrower shall fail
to repay 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 or Issuing Bank determines that
(i) compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be
maintained by such Lender or Issuing Bank, whether directly, or indirectly as a
result of commitments of any corporation controlling such Lender or Issuing Bank
(but without duplication), and (ii) the amount of such capital is increased by
or based upon (A) the existence of such Lender's or Issuing Bank's commitment to
lend or issue or participate in any Letter of Credit hereunder, or (B) the
participation in or issuance or maintenance of any Letter of Credit or Loan and
(C) other similar such commitments, then, upon
37
demand by such Lender or Issuing Bank, the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender or Issuing Bank from time to
time as specified by such Lender or Issuing Bank additional amounts sufficient
to compensate such Lender or Issuing Bank in the light of such circumstances, to
the extent that such Lender or Issuing Bank reasonably determines such increase
in capital to be allocable to the transactions contemplated hereby. A
certificate as to such amounts and giving a reasonable explanation thereof (to
the extent permitted by law), submitted to the Borrower and the Administrative
Agent by such Lender or Issuing Bank, shall be conclusive and binding for all
purposes, absent manifest error.
(d) Notices. Each Lender hereby agrees to use its best
efforts to notify the Borrower of the occurrence of any event referred to in
subsection (a), (b) or (c) of this Section 5.04 promptly after becoming aware of
the occurrence thereof. The failure of any Lender to provide such notice or to
make demand for payment under said subsection shall not constitute a waiver of
such Lender's rights hereunder; provided that, notwithstanding any provision to
the contrary contained in this Section 5.04, the Borrower shall not be required
to reimburse any Lender for any amounts or costs incurred under subsection (a),
(b) or (c) above, more than 90 days prior to the date that such Lender notifies
the Borrower in writing thereof, in each case unless, and to the extent that,
any such amounts or costs so incurred shall relate to the retroactive
application of any event notified to the Borrower which entitles such Lender to
such compensation. If any Lender shall subsequently determine that any amount
demanded and collected under this Section 5.04 was done so in error, such Lender
will promptly return such amount to the Borrower.
(e) Survival of Obligations. Subject to subsection (d)
above, the Borrower's obligations under this Section 5.04 shall survive the
repayment of all other amounts owing to the Lenders, the Agents and the Issuing
Banks under the Loan Documents and the termination of the Commitments. If and to
the extent that the obligations of the Borrower under this Section 5.04 are
unenforceable for any reason, the Borrower agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 5.05. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans owing to it (other than pursuant
to Section 5.04 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
38
Borrower in the amount of such participation. Notwithstanding the foregoing, if
any Lender shall obtain any such excess payment involuntarily, such Lender may,
in lieu of purchasing participations from the other Lenders in accordance with
this Section 5.05, on the date of receipt of such excess payment, return such
excess payment to the Administrative Agent for distribution in accordance with
Section 5.01(a).
SECTION 5.06. TAXES.
(a) All payments by the Borrower hereunder and under the
other Loan Documents shall be made in accordance with Section 5.01, free and
clear of and without deduction for all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, each Issuing Bank and each Agent, taxes
imposed on its overall net income, and franchise taxes imposed on it by the
jurisdiction under the laws of which such Lender, Issuing Bank or Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Lender, taxes imposed on its overall net income, and franchise taxes
imposed on it by the jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any other Loan Document to
any Lender, Issuing Bank or Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.06) such Lender,
Issuing Bank or Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "OTHER TAXES").
(c) The Borrower will indemnify each Lender, Issuing Bank
and Agent for the full amount of Taxes and Other Taxes (including any Taxes and
any Other Taxes imposed by any jurisdiction on amounts payable under this
Section 5.06) paid by such Lender, Issuing Bank or Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. This indemnification shall be made within thirty (30) days
from the date such Lender, Issuing Bank or Agent (as the case may be) makes
written demand therefor; provided, that such Lender, Issuing Bank or Agent (as
the case may be) shall not be entitled to demand payment under this Section 5.06
for an amount if such demand is not made within one year following the date upon
which such Lender, Issuing Bank or Agent (as the case may be) shall have been
required to pay such amount.
39
(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 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 in respect of unpaid reimbursement obligations under Section
4.04(a), all payments of fees and all other payments in respect of any other
Obligations hereunder, shall be allocated among such of the Lenders and the
Issuing Banks 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),
40
(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 and the Issuing Banks under any of
the Loan Documents;
(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 pay principal of and interest on all unpaid
reimbursement obligations under Section 4.04(a) and the aggregate
undrawn face amount of all outstanding Letters of Credit (or, to the
extent such reimbursement obligations are contingent, deposited in the
"Account" (as defined in the Cash Collateral Agreement) to provide cash
collateral in respect of such obligations);
(vii) seventh, 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 and/or the 364 Day Facility 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 and/or the Administrative
Agent shall have a prior security interest on behalf of the Lenders hereunder
and under the 364 Day Facility) as contemplated by the Enterprises Credit
Agreement or the 364 Day Facility, as applicable. 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.
41
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
and/or the Administrative Agent shall have a prior security interest on behalf
of the Lenders hereunder and under the 364 Day 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 364
Day Facility and the Enterprises Credit Agreement so long as such agreements
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 364 Day Facility and the Enterprises Credit
Agreement so long as such agreements 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 364 Day Facility and the Enterprises Credit
Agreement so long as such agreements 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:
(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
42
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:
(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:
43
(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 or Issuing Bank, as the case may be, 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:
(a) The following statements shall be true (and each of the
giving of the applicable notice or request with respect thereto and the making
of such Extension of Credit without prior correction by the Borrower shall (to
the extent that such correction has been previously consented to by the Lenders
and the Issuing Banks) constitute a representation and warranty by the Borrower
that, on the date of such Extension of Credit, such statements are true):
(i) the representations and warranties contained in Section
7.01 of this Agreement (other than those contained in subsections
(e)(ii) and (f) thereof) 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 or Issuing Bank, through the Administrative
Agent, may reasonably request as to the legality, validity, binding effect or
enforceability of the Loan
44
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 or Issuing Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit) that would
(after giving effect to all Extensions of Credit on such date and the
application of proceeds thereof) increase the principal amount outstanding
hereunder, or to make an Extension of Credit of the type described in clause
(ii) or (iii) of the definition thereof (except any amendment of a Letter of
Credit the sole effects of which are to extend the stated termination date
thereof and/or to make nonmaterial modifications thereto), shall be subject to
the further conditions precedent that, on the date of such Extension of Credit
and after giving effect thereto:
(a) the following statements shall be true (and each of the
giving of the applicable notice or request with respect thereto and the making
of such Extension of Credit without prior correction by the Borrower shall (to
the extent that such correction has been previously consented to by the Lenders
and the Issuing Banks) constitute a representation and warranty by the Borrower
that, on the date of such Extension of Credit, such statements are true):
(i) the representations and warranties contained in
subsections (e)(ii) and (f) of Section 7.01 of this Agreement are
correct on and as of the date of such Extension of Credit, before and
after giving effect to such Extension of Credit and to the application
of the proceeds thereof, as though made on and as of such date; and
(ii) no Default 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 or Issuing Bank, through the
Administrative Agent, may reasonably request.
SECTION 6.04. RELIANCE ON CERTIFICATES. The Lenders, the Issuing Banks
and each Agent shall be entitled to rely conclusively upon the certificates
delivered from time to time by officers of the Borrower as to the names,
incumbency, authority and signatures of the respective persons named therein
until such time as the Administrative Agent may receive a replacement
certificate, in form acceptable to the Administrative Agent, from an officer of
such Person identified to the Administrative Agent as having authority to
deliver such certificate, setting forth the names and true signatures of the
officers and other representatives of such Person thereafter authorized to act
on behalf of such Person.
SECTION 6.05. CONDITION PRECEDENT TO THE INITIAL EXTENSION OF CREDIT.
The obligation of each Lender or Issuing Bank, as the case may be, 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
45
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 364 Day 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.
(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 the 364 Day Facility, 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
46
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,
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
47
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 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 or any drawing
under any Letter of Credit will be used to
48
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 or any drawing
under any Letter 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, the Issuing Banks 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 Extensions of Credit requested hereunder are made,
and the disbursement of the proceeds of such Extensions of Credit 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, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment:
(a) Payment of Taxes, Etc. The Borrower shall pay and
discharge, and each of its Subsidiaries shall pay and discharge, before the same
shall become delinquent, all taxes, assessments and governmental charges,
royalties or levies imposed upon it or upon its property except, in the case of
taxes, to the extent the Borrower or any Subsidiary, as the case may be, is
contesting the same in good faith and by appropriate proceedings and has set
aside adequate reserves for the payment thereof in accordance with GAAP.
49
(b) Maintenance of Insurance. The Borrower shall maintain, and
each of its Restricted Subsidiaries and Consumers shall maintain, insurance
covering the Borrower, each of its Restricted Subsidiaries, Consumers and their
respective properties in effect at all times in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general geographical area in which the
Borrower, its Restricted Subsidiaries and Consumers operates, either with
reputable insurance companies or, in whole or in part, by establishing reserves
of one or more insurance funds, either alone or with other corporations or
associations.
(c) Preservation of Existence, Etc. The Borrower shall
preserve and maintain, and each of its Restricted Subsidiaries and Consumers
shall preserve and maintain, its corporate existence, material rights (statutory
and otherwise) and franchises, and take such other action as may be necessary or
advisable to preserve and maintain its right to conduct its business in the
states where it shall be conducting its business.
(d) Compliance with Laws, Etc. The Borrower shall comply, and
each of its Restricted Subsidiaries and Consumers shall comply, in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, including any such laws, rules,
regulations and orders relating to zoning, environmental protection, use and
disposal of Hazardous Substances, land use, construction and building
restrictions, and employee safety and health matters relating to business
operations.
(e) Inspection Rights. Subject to the requirements of laws or
regulations applicable to the Borrower or its Subsidiaries, as the case may be,
and in effect at the time, at any time and from time to time upon reasonable
notice, the Borrower shall permit (i) each Agent and its agents and
representatives to examine and make copies of and abstracts from the records and
books of account of, and the properties of, the Borrower or any of its
Subsidiaries and (ii) each Agent, each Issuing Bank, each of the Lenders, and
their respective agents and representatives to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with the Borrower and its
Subsidiaries and their respective officers, directors and accountants. 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 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
50
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
364 Day Facility and the "Promissory Notes" (as such terms are defined in the
364 Day 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 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
51
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, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower shall not, without the written consent of the Required
Lenders:
(a) Liens, Etc. (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 Obligations and 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;
52
(iv) Liens securing the obligations under the Loan Documents
and under the "Loan Documents" as defined in each of the 364 Day
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;
(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
53
(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 364 Day Facility and (c) the "Loan
Documents" as defined in the Enterprises Credit Agreement in a
principal amount equal to $150,000,000 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;
(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;
54
(vii) Project Finance Debt of any Loan Party or any of its
Subsidiaries incurred on or after the Closing Date; 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
$340,000,000 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
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)
the ratio of (a) the sum of (1) Cash Dividend Income for the four-fiscal-quarter
period ending on the last day of the Measurement Quarter ending immediately
prior to the date of such Restricted Payment (except that, with respect to each
Measurement Quarter ending in 2002, such ratio shall be calculated for the
period
55
from January 1, 2002 through and including the last day of such preceding
Measurement Quarter), plus (2) 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 (3) 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, plus (4) all amounts received by the Borrower from its
Subsidiaries and Affiliates during such period pursuant to the Tax Sharing
Agreement, to (b) the sum of (1) interest expense (including commitment,
guaranty and letter of credit fees) accrued by the Borrower in respect of all
Debt during such period, plus (2) the amount of such Restricted Payment (which,
for purposes of calculation of this clause (ii), shall be deemed to have been
made as of the last day of such period) and all other such Restricted Payments
made during the preceding three-fiscal-quarter period (except that, with respect
to any Restricted Payment made during 2002, all other Restricted Payments made
on or after April 1, 2002), shall be not less than 1.05 to 1.00, as certified to
the Administrative Agent by the Borrower; 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 paid 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); 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 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.
56
(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 the sale of Collateral 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;
(C) the transfer of property constituting an investment
otherwise permitted under Section 8.02(d);
57
(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 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
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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 364 Day
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, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower will, unless the Required Lenders shall otherwise
consent in writing, furnish to 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;
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(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(j), (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(j), (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
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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
61
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
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(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 364 Day 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
63
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) At any time any Issuing Bank shall have been served with
or otherwise subjected to a court order, injunction, or other process or decree
issued or granted at the instance of the Borrower restraining or seeking to
restrain such Issuing Bank from paying any amount under any Letter of Credit
issued by it (other than pursuant to any action or proceeding based on Section
5-109 of the Uniform Commercial Code) and either (i) there has been a drawing
under such Letter of Credit which such Issuing Bank would otherwise be obligated
to pay or (ii) the stated expiration date or any reduction of the stated amount
of such Letter of Credit has occurred but the right of the beneficiary to draw
thereunder has been extended in connection with the pendency of the related
court action or proceeding; or
(j) 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.
(k) 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.
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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 (other than Loans under
Section 4.04) and of any Issuing Bank to issue a Letter of Credit to be
terminated, whereupon the same shall forthwith terminate, (ii) declare the
principal amount outstanding hereunder, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the principal amount outstanding hereunder,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower, (iii) provide from the
proceeds of any Collateral (as defined in the Cash Collateral Agreement) for
cash collateralization of LC Outstandings, and (iv) exercise in respect of any
and all collateral, in addition to the other rights and remedies provided for
herein and in the Cash Collateral Agreement or otherwise available to the
Administrative Agent or the Lenders, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the State of New
York and in effect in any other jurisdiction in which collateral is located at
that time; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to the Borrower or any Guarantor under the
Federal Bankruptcy Code, (A) the Commitments and the obligation of each Lender
to make Loans and of any Issuing Bank to issue any Letter of Credit shall
automatically be terminated and (B) the principal amount outstanding hereunder,
all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. Notwithstanding anything to
the contrary contained herein, no notice given or declaration made by the
Administrative Agent pursuant to this Section 9.02 shall affect (i) the
obligation of any Issuing Bank to make any payment under any Letter of Credit
issued by such Issuing Bank in accordance with the terms of such Letter of
Credit or (ii) the participatory interest of each Lender in each such payment.
ARTICLE X
THE AGENTS
SECTION 10.01. AUTHORIZATION AND ACTION.
(a) Each of the Lenders and the Issuing Banks hereby
irrevocably appoints each Agent (other than the Co-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
65
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 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, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the
66
right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders and
the Issuing Bank, appoint a successor Agent which shall be a Lender with an
office in New York, New York, or an Affiliate of any such Lender. Upon the
acceptance of its appointment as an Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After an Agent's resignation hereunder, the provisions of this Article and
Section 11.04 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as an Agent.
(g) Each Lender acknowledges that it has independently and
without reliance upon any Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder. 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.
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(a) Each Lender and each Issuing Bank authorizes and directs
the Collateral Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders and the Issuing Banks. Each Lender and each
Issuing Bank 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 and the Issuing Banks. 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 and the Issuing Banks 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 and the Issuing Banks 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 and the Issuing Banks to act as
collateral sub-agent for the Collateral Agent and the Lenders and the Issuing
Banks for purposes of the perfection of all Liens with respect to any property
of the Borrower or any of its Subsidiaries at any time in the possession of such
Lender or such Issuing Bank, including, without limitation, deposit accounts
maintained with, and cash held by, such Lender or such Issuing Bank; (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 or the Issuing Banks with respect to the Collateral under the Loan
Documents relating thereto, applicable law or otherwise.
(b) The Administrative Agent, each Lender and each Issuing
Bank 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 and the Issuing Banks:
(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, each Lender and each Issuing Bank 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.
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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
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(d)), (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(d)), (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)), or (ix) extend the
Termination Date; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by each Agent in addition to the Lenders
required above to take such action, affect the rights or duties of any Agent
under this Agreement or any other Loan Document; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by each Issuing
Bank in addition to the Lenders required above to take such action, affect the
rights or duties of any Issuing Bank under this Agreement or any other Loan
Document. Any request from the Borrower for any amendment, waiver or consent
under this Section 11.01 shall be addressed to the Administrative Agent.
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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 Issuing Bank, at its address specified in the
Issuing Bank Agreement to which it is a party; (iv) if to any Lender other than
a Bank, at its Domestic Lending Office specified in the Lender Assignment
pursuant to which it became a Lender; (v) 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; (vi) 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 communications to any Agent pursuant to Article II, III, or X shall
not be effective until received by such Agent.
SECTION 11.03. NO WAIVER OF REMEDIES. No failure on the part of the
Borrower, any Lender, any Issuing Bank or any Agent to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 11.04. COSTS, EXPENSES AND INDEMNIFICATION.
(a) The Borrower agrees to (i) reimburse on demand all
reasonable costs and expenses of each Agent and the 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.
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(b) The Borrower shall indemnify each Agent, the Arrangers,
the Issuing Bank, each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "INDEMNIFIED PERSON") against, and
hold each Indemnified Person harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnified Person, incurred by or asserted
against any Indemnified Person arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby or thereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan,
Letter of Credit or other Extension of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of any Hazardous
Substance on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnified Person is a party thereto; provided that such indemnity shall
not, as to any Indemnified Person, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnified Person.
(c) The Borrower's other obligations under this Section 11.04
shall survive the repayment of all amounts owing to the Lenders, the Issuing
Banks and the Agents under the Loan Documents and the termination of the
Commitments. If and to the extent that the obligations of the Borrower under
this Section 11.04 are unenforceable for any reason, the Borrower agrees to make
the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 11.05. RIGHT OF SET-OFF.
(a) Upon (i) the occurrence and during the continuance of any
Event of Default and (ii) the making of the request or the granting of the
consent specified by Section 9.02 to authorize the Administrative Agent to
declare the principal amount outstanding hereunder to be due and payable
pursuant to the provisions of Section 9.02, each Lender and Issuing Bank is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or Issuing Bank to or for the credit or the
account of the Borrower, against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and the Promissory Notes held by
such Lender or the Issuing Bank Agreement to which such Issuing Bank is a party,
as the case may be, irrespective of whether or not such Lender or Issuing Bank
shall have made any demand under this Agreement, such Promissory Notes or such
Issuing Bank Agreement, as the case may be, and although such obligations may be
unmatured. Each Lender and Issuing Bank agrees to notify promptly the Borrower
after any such set-off and application made by such Lender or Issuing Bank,
provided that the failure to give such notice shall not affect the validity of
such
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set-off and application. The rights of each Lender and Issuing Bank under this
Section 11.05 are in addition to other rights and remedies (including other
rights of set-off) which such Lender and Issuing Bank may have.
(b) The Borrower agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations hereunder, and
that the obligations of the Lenders hereunder are several and not joint. Nothing
contained herein shall constitute a relinquishment or waiver of the Borrower's
rights to any independent claim that the Borrower may have against any Agent or
any Lender for such Agent's or such Lender's, as the case may be, gross
negligence or 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, each
Issuing Bank, and the Administrative Agent (such consent not to be unreasonably
withheld or delayed and, in the case of the Borrower, shall not be required if
an Event of Default has occurred and is continuing), assign to one or more banks
or other entities all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including all or a portion of its
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, each
Issuing Bank 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
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Assignment, have the rights and obligations of a Lender hereunder and (B) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it to an Eligible Assignee pursuant to such
Lender Assignment, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of a Lender Assignment covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto); provided, however,
that the limitation set forth in clause (iv), above, shall not apply if an Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have declared all Loans to be, or all Loans shall have automatically
become, immediately due and payable hereunder. The Administrative Agent agrees
to give prompt notice to the Lenders and the Borrower of any assignment or
participation of its rights and obligations as a Bank hereunder. Notwithstanding
anything to the contrary contained in this Agreement, any Lender may at any time
assign all or any portion of the Loans owing to it to any Affiliate of such
Lender. The assigning Lender shall promptly notify the Borrower of any such
assignment. No such assignment, other than to an Eligible Assignee, shall
release the assigning Lender from its obligations hereunder.
(b) By executing and delivering a Lender Assignment, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Lender Assignment, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument or document furnished
pursuant thereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of each Loan Document, together with copies of the financial statements
referred to in Section 7.01(e) and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Lender Assignment; (iv) such assignee will, independently and without
reliance upon the Agents, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents; (v) such assignee confirms that it is an Eligible Assignee
(unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have declared all Loans to be immediately due and
payable hereunder, in which case no such confirmation is necessary); (vi) such
assignee appoints and authorizes each Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
each Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 11.02 a copy of each Lender Assignment delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the 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
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the Borrower, the Agents, the Issuing Banks and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, any Issuing Bank or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a Lender Assignment executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), any Promissory Notes subject to
such assignment, the processing and recordation fee referred to in subsection
(a) above and any written consent to such assignment required by subsection (a)
above, the Administrative Agent shall, if such Lender Assignment has been
completed and is in substantially the form of Exhibit 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, the Issuing Banks and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided, that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 11.01 that affects such Participant. Subject to
subsection (f) below, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 5.04 and 5.06 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to subsection
(a) above. To the extent permitted by law, each Participant shall also be
entitled to the benefits of Section 11.05(a) as though it were a Lender,
provided such Participant agrees to be subject to Section 5.05 as though it were
a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 5.04 or 5.06 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 5.06 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.06(e) as though it were a Lender.
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(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 (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, the Issuing Banks
and the Lenders (each, a "RECIPIENT") written information which is identified to
the Recipient when delivered as confidential (such information, other than any
such information which (i) was publicly available, or otherwise known to the
Recipient, at the time of disclosure, (ii) subsequently becomes publicly
available other than through any act or omission by the Recipient or (iii)
otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Borrower, being hereinafter referred to as "CONFIDENTIAL
INFORMATION"). The Recipient will not knowingly disclose any such Confidential
Information to any third party (other than to those persons who have a
confidential relationship with the Recipient), and will take all reasonable
steps to restrict access to such information in a manner designed to maintain
the confidential nature of such information, in each case until such time as the
same ceases to be Confidential Information or as the Borrower may otherwise
instruct. It is understood, however, that the foregoing will not restrict the
Recipient's ability to freely exchange such Confidential Information with its
Affiliates or with prospective participants in or assignees of the Recipient's
position herein, but the Recipient's ability to so exchange Confidential
Information shall be conditioned upon any such Affiliate's or prospective
participant's (as the case may be) entering into an agreement as to
confidentiality similar to this Section 11.08. It is further understood that the
foregoing will not prohibit the disclosure of any or all Confidential
Information if and to the extent that such disclosure may be required (1) by a
regulatory agency or otherwise in connection with an examination of the
Recipient's records by appropriate authorities, (2) pursuant to court order,
subpoena or other legal process or 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, THE
ISSUING BANKS AND THE LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN
76
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, THE ISSUING
BANKS AND THE AGENTS, EACH (I) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK CITY IN ANY ACTION
ARISING OUT OF ANY LOAN DOCUMENT, (II) AGREES THAT ALL CLAIMS IN SUCH ACTION MAY
BE DECIDED IN SUCH COURT, (III) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO, THE DEFENSE OF AN INCONVENIENT FORUM AND (IV) CONSENTS TO THE SERVICE OF
PROCESS BY MAIL. A FINAL JUDGMENT IN ANY SUCH ACTION SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
PARTY TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR AFFECT ITS RIGHT
TO BRING ANY ACTION IN ANY OTHER COURT. 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, THE ISSUING BANKS 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, ANY
ISSUING BANK OR ANY LENDER. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY ANY AGENT, ANY ISSUING
BANK 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, ANY ISSUING BANK OR ANY LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY AGENT, ANY ISSUING BANK 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
77
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 and the Issuing Banks 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.]
78
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 $300,000,000 Amended and Restated Credit Agreement
BARCLAYS BANK PLC, individually as a Lender and as
Administrative Agent and Issuing Bank
By: /s/ Sidney. G. Dennis
------------------------------------------
Name: Sidney. G. Dennis
Title: Director
(The signature pages of the remaining 20 Banks are not attached)
Signature Page to $300,000,000 Amended and Restated Credit Agreement
COMMITMENT SCHEDULE
- -------------------------------------------- -----------------------------------
LENDER COMMITMENT
- -------------------------------------------- -----------------------------------
$23,800,000
BARCLAYS BANK PLC
- -------------------------------------------- -----------------------------------
$23,000,000
BANK OF AMERICA, N.A.
- -------------------------------------------- -----------------------------------
$23,000,000
JPMORGAN CHASE BANK
- -------------------------------------------- -----------------------------------
$23,000,000
CITICORP USA, INC.
- -------------------------------------------- -----------------------------------
$23,000,000
UNION BANK OF CALIFORNIA, N.A.
- -------------------------------------------- -----------------------------------
$19,000,000
BNP PARIBAS
- -------------------------------------------- -----------------------------------
$15,800,000
BANK ONE, NA
- -------------------------------------------- -----------------------------------
$15,800,000
COMERICA BANK
- -------------------------------------------- -----------------------------------
CREDIT SUISSE FIRST BOSTON, CAYMAN $15,800,000
ISLANDS BRANCH
- -------------------------------------------- -----------------------------------
$15,800,000
FLEET NATIONAL BANK
- -------------------------------------------- -----------------------------------
AUSTRALIA AND NEW ZEALAND BANKING $10,000,000
GROUP LIMITED
- -------------------------------------------- -----------------------------------
DEUTSCHE BANK TRUST COMPANY AMERICAS $10,000,000
(formerly known as BANKERS TRUST COMPANY)
- -------------------------------------------- -----------------------------------
$10,000,000
CIBC INC.
- -------------------------------------------- -----------------------------------
STANDARD FEDERAL BANK N.A. (formerly known $10,000,000
as Michigan National Bank)
- -------------------------------------------- -----------------------------------
79
- -------------------------------------------- -------------------
LENDER COMMITMENT
- -------------------------------------------- -------------------
$10,000,000
THE ROYAL BANK OF SCOTLAND PLC
- -------------------------------------------- -------------------
$10,000,000
SOCIETE GENERALE -- NY
- -------------------------------------------- -------------------
$10,000,000
SUMITOMO MITSUI BANKING CORPORATION
- -------------------------------------------- -------------------
$10,000,000
THE BANK OF NOVA SCOTIA
- -------------------------------------------- -------------------
$10,000,000
TORONTO DOMINION (TEXAS), INC.
- -------------------------------------------- -------------------
$6,000,000
ARAB BANKING CORPORATION
- -------------------------------------------- -------------------
MIZUHO CORPORATE BANK, LTD. (formerly $6,000,000
known as, THE FUJI BANK, LIMITED)
- -------------------------------------------- -------------------
Total Commitments: $300,000,000
- -------------------------------------------- -------------------
80
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%)
81