EXHIBIT 4(h)
EXECUTION COPY
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$409,000,000
SECOND AMENDED AND RESTATED CREDIT
AGREEMENT
Dated as of March 30, 2003,
Among
CMS ENERGY CORPORATION
as Borrower
THE BANKS NAMED HEREIN
as Banks
CITICORP USA, INC.
as Administrative Agent and Collateral Agent
------------------------
SALOMON SMITH BARNEY INC.
as Sole Book Manager and Sole Lead Arranger
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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....................................... 22
SECTION 1.03. Accounting Terms................................................................ 22
ARTICLE II
LOANS, FEES, PREPAYMENTS AND OUTSTANDINGS
SECTION 2.01. Re-Evidencing of "Loans" under the Initial Amendment and Restatement............ 23
SECTION 2.02. Fees............................................................................ 24
SECTION 2.03. Mandatory Prepayments........................................................... 24
SECTION 2.04. Computations of Outstandings.................................................... 26
ARTICLE III
LOANS
SECTION 3.01. Evidence of Loans............................................................... 26
SECTION 3.02. Conversion of Loans............................................................. 27
SECTION 3.03. Interest Periods................................................................ 27
SECTION 3.04. Other Terms Relating to the Making and Conversion of Loans...................... 28
SECTION 3.05. Repayment of Loans; Interest.................................................... 30
ARTICLE IV
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 4.01. Payments and Computations....................................................... 30
SECTION 4.02. Interest Rate Determination..................................................... 32
SECTION 4.03. Prepayments..................................................................... 32
SECTION 4.04. Yield Protection................................................................ 33
SECTION 4.05. Sharing of Payments, Etc........................................................ 34
SECTION 4.06. Taxes........................................................................... 35
SECTION 4.07. Apportionment of Payments....................................................... 36
SECTION 4.08. Proceeds of Collateral.......................................................... 37
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Effectiveness of this Agreement..................... 38
SECTION 5.02. Conditions Precedent to Each Extension of Credit................................ 40
SECTION 5.03. Reliance on Certificates........................................................ 41
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TABLE OF CONTENTS (CONT'D)
SECTION PAGE
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Borrower.................................. 42
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01. Affirmative Covenants........................................................... 46
SECTION 7.02. Negative Covenants.............................................................. 49
SECTION 7.03. Reporting Obligations........................................................... 56
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default............................................................... 59
SECTION 8.02. Remedies........................................................................ 61
ARTICLE IX
THE AGENTS
SECTION 9.01. Authorization and Action........................................................ 62
SECTION 9.02. Indemnification................................................................. 64
SECTION 9.03. Concerning the Collateral and the Loan Documents................................ 64
SECTION 9.04. Release of Guarantors........................................................... 65
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc................................................................ 65
SECTION 10.02. Notices, Etc................................................................... 66
SECTION 10.03. No Waiver of Remedies.......................................................... 67
SECTION 10.04. Costs, Expenses and Indemnification............................................ 67
SECTION 10.05. Right of Set-off............................................................... 68
SECTION 10.06. Binding Effect................................................................. 68
SECTION 10.07. Assignments and Participation.................................................. 68
SECTION 10.08. Confidentiality................................................................ 71
SECTION 10.09. Waiver of Jury Trial........................................................... 72
SECTION 10.10. GOVERNING LAW; SUBMISSION TO JURISDICTION...................................... 72
SECTION 10.11. Relation of the Parties; No Beneficiary........................................ 73
SECTION 10.12. Execution in Counterparts...................................................... 73
SECTION 10.13. Survival of Agreement.......................................................... 73
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TABLE OF CONTENTS (CONT'D)
SECTION PAGE
ARTICLE XI
NO NOVATION; REFERENCES TO THIS AGREEMENT IN LOAN DOCUMENTS
SECTION 11.01. No Novation.................................................................... 75
SECTION 11.02. References to This Agreement In Loan Documents................................. 75
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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 Belinda Foxworth, Esq., counsel to the Borrower
EXHIBIT D - 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 Amended and Restated Pledge and Security Agreement
(Borrower)
EXHIBIT K - Form of Pledge and Security Agreement (Grantors)
EXHIBIT L - AIG Pledge Agreement
EXHIBIT M - Intercreditor Agreement
Schedules
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COMMITMENT
SCHEDULE
SCHEDULE I Certain Debt
SCHEDULE II Pledged Ownership Interests
ATTACHMENT A Reaffirmation
iv
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 30, 2003
THIS SECOND 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, and
(iii) Citicorp USA, Inc. ("CUSA"), as administrative agent (the
"ADMINISTRATIVE AGENT") for the Lenders hereunder and as
collateral agent (the "COLLATERAL AGENT") for the Lenders
hereunder.
PRELIMINARY STATEMENTS
The Borrower has requested the Banks (i) to amend and restate the
Existing Credit Agreements (as hereafter defined) on the Initial Funding Date as
a revolving credit facility on the same terms and conditions set forth in the
Existing Credit Agreements (the "Initial Amendment and Restatement"), which
Initial Amendment and Restatement is evidenced in full pursuant to this
paragraph, and to make Loans in an amount equal to the "Available Commitments"
(such term having the same meaning as set forth in the Existing 3-Year Credit
Agreement) pursuant to such Initial Amendment and Restatement (such Loans being
the "Initial Amendment and Restatement Revolving Loans"), and (ii) immediately
thereafter to amend and restate the Initial Amendment and Restatement 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 or the Collateral Agent, and "AGENTS" means any or all of the
foregoing.
"AIG PLEDGE AGREEMENT" means that certain Pledge and Security
Agreement, dated as of January 8, 2003, by and among Enterprises and
the other grantors parties thereto in favor of American Home Assurance
Company, as collateral agent, a copy of which is attached hereto as
Exhibit L, as amended, restated, supplemented or otherwise modified
from time to time.
"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, (b)
1/2 of one percent above the CD Rate, and (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the CD Rate or
the Federal Funds Effective Rate shall be effective from and including
the effective date of such change in the Prime Rate, CD Rate or the
Federal Funds Effective Rate, respectively.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, at the address specified for such Lender on its signature page
to this Agreement or in the Lender Assignment pursuant to which it
became a Lender, as applicable, or at any office, branch, subsidiary or
affiliate of such Lender specified in a notice received by the
Administrative Agent and the Borrower from such Lender.
"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:
2
Applicable Margin Applicable Margin
for Facility A for Facility B
Loans Loans
ABR Loans 4.50% 6.00%
Eurodollar
Rate Loans 5.50% 7.00%
" 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.
"APPROVED FUND" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in
commercial loans and is managed or advised by the same investment
advisor as such Lender or by an affiliate of such investment advisor.
"ARRANGER" means Salomon Smith Barney Inc.
"AVAILABLE FACILITY A REVOLVING COMMITMENT" means, for each
Lender on any day, the unused portion of such Lender's Facility A
Revolving 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 FACILITY A REVOLVING COMMITMENTS" means
the aggregate of the Lenders' Available Facility A Revolving
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.
3
"BORROWING" means a borrowing consisting of Loans of the same
Type, having the same Interest Period and made or Converted on the same
day by the Lenders, ratably in accordance with their respective
Percentages. Any Borrowing consisting of Loans of a particular Type may
be referred to as being a Borrowing of such "TYPE". All Loans of the
same Type, having the same Interest Period and made or Converted on the
same day shall be deemed a single Borrowing hereunder until repaid or
next Converted.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York City and Detroit, Michigan,
and, if the applicable Business Day relates to any Eurodollar Rate
Loan, on which dealings are carried on in the London interbank market.
"CASH DIVIDEND INCOME" means, for any period, the amount of
all cash dividends received by the Borrower from its Subsidiaries
during such period that are paid out of the net income or loss (without
giving effect to: any extraordinary gains in excess of $25,000,000, the
amount of any write-off or write-down of assets, including, without
limitation, write-offs or write-downs related to the sale of assets,
impairment of assets 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.
"CD RATE" means the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each
Monday (or, if such day is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous Friday
by Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve Bank of New
York or, if such publication shall be suspended or terminated, on the
basis of quotations for such rates received by Citibank from three New
York certificate of deposit dealers of recognized standing selected by
Citibank, in either case, adjusted to the nearest 1/16 of one percent
or, if there is no nearest 1/16 of one percent, to the next higher 1/16
of one percent.
"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.
"CITIBANK" means Citibank, N.A., a national banking
association.
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"CITIGROUP PARTIES" means Citibank, CUSA, Salomon Smith Barney
Inc. and each of their respective Affiliates, and each of their
respective officers, directors, employees, agents, advisors, and
representatives.
"CLOSING DATE" means March 30, 2003.
"COLLATERAL" means all property and interests in property now
owned or hereafter acquired by any Loan Party upon which a Lien is
granted under any of the Loan Documents.
"COMMITMENT" means, for each Lender, such Lender's Facility A
Commitment (including such Lender's Facility A Revolving Commitment)
and Facility B Commitment. "COMMITMENTS" means the total of the
Lenders' Commitments hereunder. As of the Closing Date the aggregate of
all of the Lenders' Commitments equals $409,000,000.
"COMMITMENT FEE MARGIN" means a per annum rate equal to the
sum of the Adjusted LIBO Rate for such Interest Period plus 5.50%.
"COMMITMENT SCHEDULE" means the Schedule identifying each
Lender's Commitment as of the Closing Date attached hereto and
identified as such.
"COMMITMENT TERMINATION DATE" means the earlier of (i) the
Conversion Date, (ii) the date of delivery of any Notice to Convert,
and (iii) the date of termination or reduction in whole of the Facility
A Revolving Commitments pursuant to Section 2.03 or 8.02.
"COMMUNICATIONS" is defined in Section 10.15.
"CONFIDENTIAL INFORMATION" has the meaning assigned to that
term in Section 10.08.
"CONSOLIDATED DEBT" means, without duplication, as determined
on a consolidated basis in accordance with GAAP, at any date of
determination, the sum of the aggregate Debt of the Borrower plus the
aggregate debt (as such term is construed in accordance with GAAP) of
the Consolidated Subsidiaries; provided, however, that:
(a) Consolidated Debt shall not include any
Support Obligation described in clause (iv) or (v) of the
definition thereof if such Support Obligation or the primary
obligation so supported is not fixed or conclusively
determined or is not otherwise reasonably quantifiable as of
the date of determination;
(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
5
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 Arranger 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 or its Subsidiaries 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 or
any of its Subsidiary's obligations under any such purchase or
sale transaction (a "COVERING TRANSACTION") entered into by
MS&T or any of its Subsidiaries 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
or any of its Subsidiaries in support of such Counterparty's
payment obligations to MS&T or such Subsidiary arising from
such purchase or sale, provided that (x) the senior,
unsecured, non-credit enhanced indebtedness of such
Counterparty Guarantor or such financial institution (as the
case may be) is rated BBB- (or its equivalent) or higher by
any two of S&P, Fitch and Moody's, provided that in the event
that such Counterparty Guarantor has no such rated
indebtedness, Dun & Bradstreet Inc. has rated such
Counterparty Guarantor at least investment grade, (y) no
default by such Counterparty Guarantor in respect of any such
Support Obligations provided by such Counterparty Guarantor
has occurred and is continuing and (z) such Counterparty
Guarantor is not the Borrower or any Affiliate of the Borrower
or any of its Subsidiaries;
(e) Consolidated Debt shall not include any
Project Finance Debt of the Borrower or any Consolidated
Subsidiary; and
(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
6
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" means, collectively, Consumer's
existing (i) $300,000,000 term loan facility, (ii) $150,000,000 term
loan B facility, (iii) $140,000,000 term loan facility and (iv)
$250,000,000 revolving loan facility, as in effect on the date hereof.
"CONSUMERS DIVIDEND RESTRICTION" means any restriction enacted
or imposed after October 1, 1992 upon the ability of Consumers to pay
cash dividends to the Borrower in respect of Consumers' capital stock,
whether such restriction is imposed by statute, regulation, decisions
or rulings by the Michigan Public Service Commission or the Federal
Energy Regulatory Commission (or any successor agency or agencies),
final judgments of any court of competent jurisdiction, indentures,
agreements, contracts or restrictions to which Consumers is a party or
by which it is bound or otherwise; provided, that no restriction on
such dividends existing on October 1, 1992 shall be a Consumers
Dividend Restriction at any time.
"CONTINUING DIRECTOR" means, as of any date of determination,
any member of the board of directors of the Borrower who (a) was a
member of such board of directors on the Closing Date, or (b) was
nominated for election or elected to such board of directors with the
approval of the Continuing Directors who were members of such board of
directors at the time of such nomination or election; provided that an
individual who is so elected or nominated in connection with a merger,
consolidation, acquisition or similar transaction shall not be a
Continuing Director unless such individual was a Continuing Director
prior thereto.
"CONVERSION", "CONVERT" or "CONVERTED" refers to a conversion
of Loans of one Type into Loans of another Type, or to the selection of
a new, or the renewal of the same, Interest Period for Loans, as the
case may be, pursuant to Section 3.02 or 3.03.
"CONVERSION DATE" is defined in Section 2.01(d).
"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
7
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 (except reimbursement obligations and letters
of credit that are cash collateralized), (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 7.01(j)(ii), Debt shall not include any Junior Subordinated
Debt issued by the Borrower and owned by any Hybrid Preferred
Securities Subsidiary.
"DEBT FOR BORROWED MONEY" means, for any Person, without
duplication, the sum of (i) Debt of such Person described in clause (i)
of the definition of "Debt", plus (ii) all obligations of such Person
with respect to receivables sold or otherwise discounted with recourse,
plus (iii) all Project Finance Debt entered into by such Person on or
after the Closing Date (other than Project Finance Debt incurred
substantially contemporaneously with the acquisition or construction of
the assets securing such Project Finance Debt), but shall exclude (a)
notes, bills and checks presented in the ordinary course of business by
such Person to banks for collection or deposit, (b) with respect to the
Borrower and its Subsidiaries, all obligations of the Borrower and its
Subsidiaries of the character referred to in this definition to the
extent owing to the Borrower or any of its Subsidiaries, (c) with
respect to Panhandle and its Subsidiaries, refinancings of Debt of
Panhandle and its Subsidiaries existing as of the Closing Date, and
Debt incurred or collateral delivered on or after the Closing Date with
respect to any Support Obligations of Panhandle or its Subsidiaries
existing as of the Closing Date, and (d) refinancings of Debt existing
as of the Closing Date or incurred after the Closing Date in accordance
with this Agreement, as applicable, to the extent such refinancing Debt
is otherwise permitted under this Agreement.
"DEFAULT" means an event that, with the giving of notice or
lapse of time or both, would constitute an Event of Default.
"DEFAULT RATE" means a rate per annum equal at all times to
(i) in the case of any amount of principal of any Loan that is not paid
when due, 2% per annum above the Applicable Rate required to be paid on
such Loan immediately prior to the date on which
8
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), (ii) and (iii) of Section 2.03(b).
"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.
"ENTERPRISES" means CMS Enterprises Company, a Michigan
corporation, all of whose common stock is on the Closing Date owned by
the Borrower.
"ENTERPRISES CREDIT AGREEMENT" means that certain $150,000,000
Credit Agreement, dated as of July 12, 2002, by and among Enterprises,
as borrower, the Borrower, the lenders from time to time parties
thereto, and Citicorp USA, Inc., as administrative agent and as
collateral agent, which agreement has been paid in full and terminated.
"ENTERPRISES 2003 CREDIT AGREEMENT" means that certain
revolving Credit Agreement, dated as of March 30, 2003, by and among
Enterprises, as borrower, the Borrower, the lenders from time to time
parties thereto, and CUSA, as administrative agent, as the same may be
amended, restated, supplemented or otherwise modified from time to
time.
"ENTERPRISES SIGNIFICANT SUBSIDIARY" means 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.
9
"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 member of a
commonly controlled trade or business under Sections 414(b), (c), (m)
and (o) of the Internal Revenue Code of 1986, as amended.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted
LIBO Rate.
"EURODOLLAR RATE LOAN" means a Loan that bears interest as
provided in Section 3.05(b)(ii).
"EVENT OF DEFAULT" is defined in Section 8.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING CREDIT AGREEMENTS" means, collectively, (i) that
certain $300,000,000 Amended and Restated Credit Agreement (the
"EXISTING 3-YEAR CREDIT AGREEMENT"), and (ii) that certain $295,800,000
Amended and Restated Credit Agreement (the "EXISTING 364-DAY CREDIT
AGREEMENT"), each dated as of July 12, 2002, among the Borrower, the
lenders party thereto, Barclays Bank PLC, as administrative agent,
Citicorp USA, Inc, as collateral agent, Bank of America, N.A. and
JPMorgan Chase Bank, as co-syndication agents, and Citicorp USA, Inc.
and Union Bank of California, N.A., as documentation agents, as the
same may have been amended, restated, supplemented or otherwise
modified from time to time.
"EXTENSION OF CREDIT" means the making of a Borrowing
(including any Conversion).
"FACILITY A COMMITMENT" means, for each Lender, the obligation
of such Lender to make Facility A Loans (including Facility A Revolving
Loans pursuant to such Lender's Facility A Revolving Commitment) to the
Borrower in an aggregate amount no greater than the amount set forth
opposite such Lender's name on the Commitment Schedule under the
heading "Facility A Commitment".
"FACILITY A LOAN" means, for any Lender, term loans made by
such Lender as set forth in Section 2.01 and such Lender's Facility A
Revolving Loans.
"FACILITY A MATURITY DATE" means April 30, 2004.
10
"FACILITY A REVOLVING COMMITMENT" means, for each Lender, the
obligation of such Lender to make Facility A Revolving Loans to the
Borrower prior to the Commitment Termination Date in an aggregate
amount no greater than aggregate outstanding principal amount of the
Initial Amendment and Restatement Revolving Loans as of the Closing
Date, 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 10.07(c), in each such
case as such amount may be reduced from time to time pursuant to
Section 2.03.
"FACILITY A REVOLVING LOANS" means, for each Lender, Loans
made pursuant to such Lender's Facility A Revolving Commitment
hereunder.
"FACILITY B COMMITMENT" means, for each Lender, the obligation
of such Lender to make Facility B Loans to the Borrower in an aggregate
amount no greater than the amount set forth opposite such Lender's name
on the Commitment Schedule under the heading "Facility B Commitment".
"FACILITY B LOAN" is defined in Section 2.01.
"FACILITY B MATURITY DATE" means September 30, 2004.
"FAIR MARKET VALUE" means, with respect to any asset, the
value of the consideration obtainable in a sale of such asset in the
open market, assuming a sale by a willing seller to a willing purchaser
dealing at arm's length and arranged in an orderly manner over a
reasonable period of time, each having reasonable knowledge of the
nature and characteristics of such asset, neither being under any
compulsion to act, and, if in excess of $50,000,000, as determined in
good faith by the Board of Directors of the Borrower.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of
1%) of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.
"FEE LETTER" is defined in Section 2.02(b).
"FITCH" means Fitch, Inc. or any successor thereto.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is
located. For purposes of this definition, the United States of America,
each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"FOREIGN SUBSIDIARY" is defined in Section 7.01(l).
11
"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 & Gas, L.L.C. (formerly known as CMS
Electric and Gas Company), a Michigan limited liability company, 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, CMS Natural Gas Gathering, L.L.C., an Oklahoma
limited liability company and CMS Field Services Holdings Company, an
Oklahoma corporation.
"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 7.01(l).
"GUARANTY" means that certain Guaranty (and any and all
supplements thereto) executed from time to time by each Guarantor in
favor of the Collateral Agent for the benefit of itself and the
Lenders, in substantially the form of Exhibit I attached hereto, as
amended, restated, supplemented or otherwise modified from time to
time.
"HAZARDOUS SUBSTANCE" means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau, or instrumentality of the United
States or of the State or locality in which the same is located having
or exercising jurisdiction over such waste, substance or material.
"HYBRID PREFERRED SECURITIES" means any preferred securities
issued by a Hybrid Preferred Securities Subsidiary, where such
preferred securities have the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary
lends substantially all of the proceeds from the issuance of
such preferred securities to the Borrower or a wholly-owned
direct or indirect Subsidiary of the Borrower in exchange for
Junior Subordinated Debt issued by the Borrower or such
wholly-owned direct or indirect Subsidiary, respectively;
12
(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 10.04(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.
"INITIAL AMENDMENT AND RESTATEMENT" is defined in the first
recital hereto.
"INITIAL AMENDMENT AND RESTATEMENT REVOLVING LOANS" is defined
in the first recital hereto.
"INITIAL FUNDING DATE" mean the initial date the Loans are
made hereunder.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor and
Lien Subordination Agreement, dated as of January 8, 2003, by and among
Citicorp USA, Inc., as senior collateral agent, American Home Assurance
Company, individually and as junior collateral agent, and St. Paul Fire
and Marine Insurance Company, individually, a copy of which is attached
hereto as Exhibit M, as amended, restated, supplemented or otherwise
modified from time to time.
13
"INTEREST PERIOD" is defined in Section 3.03.
"JUNIOR SUBORDINATED DEBT" means any unsecured Debt of the
Borrower or a Subsidiary of the Borrower (i) issued in exchange for the
proceeds of Hybrid Preferred Securities and (ii) subordinated to the
rights of the Lenders hereunder and under the other Loan Documents
pursuant to terms of subordination substantially similar to those set
forth in Exhibit G, or pursuant to other terms and conditions
satisfactory to the Required Lenders.
"LENDER ASSIGNMENT" is defined in Section 10.07(e).
"LENDERS" means the Banks listed on the signature pages
hereof, together with their successors and assigns.
"LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, the greater of (i) 2.00% per annum and (ii)
the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to
those currently provided on such page of such Service, as determined by
the Administrative Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the
rate for dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for
any reason, then the "LIBO RATE" with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIEN" is defined in Section 7.02(a).
"LOAN" means a loan by a Lender to the Borrower, and refers to
an ABR Loan or a Eurodollar Rate Loan (each of which shall be a "TYPE"
of Loan). All Loans by a Lender of the same Type having the same
Interest Period and made or Converted on the same day shall be deemed
to be a single Loan by such Lender until repaid or next Converted.
"LOAN DOCUMENTS" means this Agreement, any Promissory Notes,
the Fee Letter, the Guaranty, the Pledge Agreements, and all other
agreements, instruments and documents now or hereafter executed and/or
delivered pursuant hereto or thereto.
"LOAN PARTY" is defined in Section 5.01(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
14
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;
provided that the occurrence of any Restatement Event shall not
constitute a Material Adverse Change.
"MEASUREMENT QUARTER" is defined in Section 7.01(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 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 (a) 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 and (b) amounts
received by the Borrower or any Subsidiary of the Borrower pursuant to
any transaction with the Borrower or any Subsidiary of the Borrower
otherwise permitted hereunder.
"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
15
any thereof, and other similar intangibles, (ii) cash held in a
sinking, escrow 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.
"NOTICE TO CONVERT" is defined in Section 2.01(d).
"OBLIGATIONS" means all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the
Borrower and other Loan Parties to any of the Agents, the Arranger, 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, 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 10.07(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
"PERCENTAGE" means, for any Lender on any date of
determination (a) prior to the Commitment Termination Date, the
percentage obtained by dividing the aggregate
16
outstanding principal amount of such Lender's Loans (other than
Facility A Revolving Loans) on such day plus such Lender's Facility A
Revolving Commitment on such day by the total of the Lenders' Loans
(other than Facility A Revolving Loans) plus Facility A Revolving
Commitments on such date, and multiplying the quotient so obtained by
100%, and (b) from and after the Commitment Termination Date, the
percentage obtained by dividing the aggregate outstanding principal
amount of such Lender's Loans on such day by the total of the Lenders'
Loans on such date, and multiplying the quotient so obtained by 100%.
"PERMITTED INVESTMENTS" means each of the following so long as
no such Permitted Investment shall have a final maturity later than six
months from the date of investment therein:
(i) direct obligations of the United States, or
of any agency thereof, or obligations guaranteed as to
principal and interest by the United States or any agency
thereof;
(ii) certificates of deposit or bankers'
acceptances issued, or time deposits held, or investment
contracts guaranteed, by any Lender, any nationally-recognized
securities dealer or any other commercial bank, trust company,
savings and loan association or savings bank organized under
the laws of the United States, or any State thereof, or of any
other country which is a member of the OECD, or a political
subdivision of any such country, and in each case having
outstanding unsecured indebtedness that (on the date of
acquisition thereof) is rated AA- or better by S&P or Aa3 or
better by Moody's (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating unsecured bank indebtedness);
(iii) obligations with any Lender, any other bank
or trust company described in clause (ii), above, or any
nationally-recognized securities dealer, in respect of the
repurchase of obligations of the type described in clause (i),
above, provided that such repurchase obligations shall be
fully secured by obligations of the type described in said
clause (i) and the possession of such obligations shall be
transferred to, and segregated from other obligations owned
by, such Lender, such other bank or trust company or such
securities dealer;
(iv) commercial paper rated (on the date of
acquisition thereof) A-1 or P-1 or better by S&P or Moody's,
respectively (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating commercial paper);
(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
17
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); and
(vi) interests in any money market mutual fund
which at the date of investment in such fund has the highest
fund rating by each of Moody's and S&P which has issued a
rating for such fund (which, for S&P, shall mean a rating of
AAAm or AAAmg).
"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" as defined in Section 3(3) of ERISA (other than a Multiemployer
Plan) maintained for employees of such Person or any ERISA Affiliate of
such Person that is subject to Title IV of ERISA and has "unfunded
benefit liabilities" as determined under Section 4001(a)(18) of ERISA.
"PLAN TERMINATION EVENT" means, (i) with respect to any Plan,
a "reportable event" within the meaning of 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 a "reportable event" for which the provision for the
30-day notice to the PBGC under such regulations has been waived), or
(ii) the withdrawal by the Borrower 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 resulting in liability to the
Borrower or any of its ERISA Affiliates under Section 4063 or 4064 of
ERISA, or (iii) the filing of a notice of intent to terminate a Plan or
the termination 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.
"PLATFORM" is defined in Section 10.15
"PLEDGE AGREEMENTS" means each of (i) that certain Amended and
Restated Pledge and Security Agreement, dated as of March 30, 2003, 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 Consumers and
Enterprises and a security interest in accounts receivable and notes
owed by Enterprises or any Subsidiary of Enterprises to the Borrower,
and (ii) that certain Pledge and Security Agreement, dated as of July
12, 2002, by and among the Grantors and the Collateral Agent in
substantially the form of Exhibit K hereto, pursuant to which such
Grantors shall grant a security interest in the capital stock (or
comparable interest) of each of the Subsidiaries of the Borrower
identified as owned by it on Schedule II
18
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.
"PRIMARY WEB PORTAL" is defined in Section 10.15.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by Citibank as its base 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(c); and "PROMISSORY NOTES"
means any or all of the foregoing.
"RECIPIENT" is defined in Section 10.08.
"REGISTER" is defined in Section 10.07(h).
"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.
"REQUIRED LENDERS" means, on any date of determination,
Lenders that, collectively, on such date hold more than 50% of the then
aggregate unpaid principal amount of the Loans owing to Lenders. 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.
"RESTATEMENT" means the restatement of the financial
statements of the Borrower or its Subsidiaries for any fiscal quarter
of 2001, as well as any adjustment of previously announced quarterly
results, but only if made to reflect the restatement of such quarters.
19
"RESTATEMENT EVENT" means (i) the Restatement, (ii) any
lawsuit or other action previously or hereafter brought against the
Borrower, any of its Subsidiaries or any of their Affiliates or any
present or former officer or director of the Borrower, any of its
Subsidiaries or any of their Affiliates involving or arising out of the
Restatement, and any settlement thereof, or other development with
respect thereto, or (iii) the occurrence of any default or event of
default under any indenture, instrument or other agreement or contract,
or the exercise of any remedy in respect thereof, that arises directly
or indirectly as a result of any of the matters described in any of the
foregoing clauses (i) or (ii) or this clause (iii); provided, however,
that, for purposes of the definition of "MATERIAL ADVERSE CHANGE", (a)
the foregoing clause (ii) shall be inapplicable if such lawsuit or
other action, settlement (in an amount in the aggregate together with
all other settlements of such lawsuits or actions) or other development
described in such clause (ii) could reasonably be expected, in each
case, to result in liability to such Person in excess of $6,000,000 and
(b) the foregoing clause (iii) shall be inapplicable if any such event
described in such clause (iii) would constitute an Event of Default
under Section 8.01(e).
"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 qualified costs.
"6.75% SENIOR NOTES" means the Borrower's 6.75% Senior Notes
due January 2004, the aggregate outstanding principal amount of which
was equal to $287,025,000 as of February 28, 2003.
"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.
20
"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 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 (including, but not limited to, letters of credit and surety
bonds in connection therewith), (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.
"TRUSTEE" has the meaning assigned to that term in the
Indenture.
21
"TYPE" has the meaning assigned to such term (i) in the
definition of "Loan" when used in such context and (ii) in the
definition of "Borrowing" when used in such context.
SECTION 1.02. COMPUTATION OF TIME PERIODS; CONSTRUCTION.
(a) Unless otherwise indicated, each reference in this
Agreement to a specific time of day is a reference to New York City time. In the
computation of periods of time under this Agreement, any period of a specified
number of days or months shall be computed by including the first day or month
occurring during such period and excluding the last such day or month. In the
case of a period of time "from" a specified date "to" or "until" a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
(b) The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes", and "including" shall be deemed
to be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (v)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 6.01(e) ("GAAP"), it being
understood that such financial statements do not reflect the Restatement. 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 Arranger and the Required
22
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 7.03 shall be prepared in
accordance with generally accepted accounting principles in effect at such time.
ARTICLE II
COMMITMENTS, LOANS, FEES, PREPAYMENTS AND OUTSTANDINGS
SECTION 2.01. RE-EVIDENCING OF "LOANS" UNDER THE INITIAL AMENDMENT AND
RESTATEMENT.
(a) Subject to the terms and conditions set forth in this
Agreement, on the Initial Funding Date, outstanding loans under the Initial
Amendment and Restatement (other than the Initial Amendment and Restatement
Revolving Loans) in an amount equal to each Lender's Facility A Commitment
(exclusive of each Lender's Facility A Revolving Commitment) shall be
re-evidenced hereunder as term loans, in Dollars, to the Borrower from such
Lender in an amount equal to such Lender's Facility A Commitment (exclusive of
each Lender's Facility A Revolving Commitment) (each individually, a "Facility A
Loan" and, collectively, the "Facility A Loans").
(b) Subject to the terms and conditions set forth in this
Agreement, on the Initial Funding Date, outstanding loans under the Initial
Amendment and Restatement (other than the Initial Amendment and Restatement
Revolving Loans) in an amount equal to each Lender's Facility B Commitment shall
be re-evidenced hereunder as term loans, in Dollars, to the Borrower from such
Lender in an amount equal to such Lender's Facility B Commitment (each
individually, a "Facility B Loan" and, collectively, the "Facility B Loans").
(c) Each Lender severally agrees, on the terms and
conditions hereinafter set forth to make Facility A Revolving Loans to the
Borrower during the period from the Initial Funding Date until the Commitment
Termination Date in an aggregate outstanding amount not to exceed on any day
such Lender's Available Facility A Revolving 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 Facility A Revolving Loans, and
use the resulting increase in the Available Facility A Revolving Commitments for
further Extensions of Credit in accordance with the terms hereof.
(d) (x) At the Borrower's option prior to the date all or
a portion of the secondary syndication of the Commitments shall be effective,
upon written notice (a "Notice to Convert") to the Administrative Agent (who
shall promptly notify each of the Lenders), or (y) automatically, if not
converted prior to such date, on the later of (A) the 21st day after the Initial
Funding Date and (B) the date all or a portion of the secondary syndication of
the Commitments shall be effective (such date of conversion under clauses (x) or
(y) being the "Conversion Date"), the then outstanding aggregate principal
amount of the Loans hereunder shall be converted to a term loan. Any Notice to
Convert shall expressly state the applicable Conversion Date and shall be
irrevocable once given. The Borrower shall be deemed to have represented and
warranted
23
that the conditions contained in Section 5.03 have been satisfied as of the date
of any Notice to Convert. Upon delivery of such Notice to Convert (or if no such
Notice to Convert is given, upon the automatic Conversion Date described above),
(i) the Borrower's option to borrow and reborrow Facility A Revolving Loans
shall terminate, (ii) the aggregate of the Lenders' Facility A Revolving
Commitments shall be reduced to zero, and (iii) the outstanding principal
balance of all Facility A Revolving Loans hereunder shall be due and payable on
the Facility A Termination Date. All references in this Agreement to Facility A
Loans shall include such Facility A Revolving Loans as converted hereunder.
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 Facility A Revolving
Commitment from the Initial Funding 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 Commitment 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 March, June, September and December, commencing the first such date
to occur following the Initial Funding Date, and on the Commitment Termination
Date.
(b) In addition to the fees provided for in subsection
(a) above, the Borrower shall pay to the Administrative Agent, for the account
of CUSA and the other Persons entitled thereto, such other fees as are provided
for in that certain letter agreement, dated March 30, 2003 among the Borrower,
the Agents, the Arranger (the "FEE LETTER"), in the amounts and at the times
specified therein.
SECTION 2.03. 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 Facility A Revolving Commitments; provided
that any such partial reduction shall be in the aggregate amount of $5,000,000
or an integral multiple of $1,000,000 in excess thereof.
(b) Upon the occurrence of a Change of Control the
Commitments shall be reduced to zero and the principal amount outstanding
hereunder, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower.
(c) From and after the date that all of the obligations
under the Enterprises 2003 Credit Agreement shall have been paid in full in cash
and the Enterprises 2003 Credit Agreement shall have been terminated, the
Borrower shall make the following mandatory prepayments:
24
(i) Promptly and in any event within 3 Business Days
after the Borrower's or any of its Subsidiaries' receipt of any Net
Proceeds from the sale or issuance of equity securities, the Borrower
shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such
Net Proceeds;
(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 incurrence of Debt For Borrowed Money, other than
Debt incurred by Consumers or any Subsidiary of Consumers, the Borrower
shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such
Net Proceeds; and
(iii) Promptly and in any event within 3 Business Days
after the Borrower's or any of its Subsidiaries' receipt of any Net
Proceeds from the sale, assignment or other disposition of (but not the
lease or license of) any property, including, without limitation, any
sale of capital stock or other equity interest in any of the Borrower's
direct or indirect Subsidiaries, in an amount, when combined with the
Net Proceeds of all other such transactions since the Closing Date that
have not been applied to the prepayment of the Obligations in
accordance with this clause (iii), in excess of $10,000,000, the
Borrower shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such
aggregate Net Proceeds, provided that such amount shall exclude Net
Proceeds arising from (A) any sale, assignment or other disposition of
property by Consumers or any Subsidiary of Consumers (other than the
capital stock of Consumers), (B) the sale of all or substantially all
of the electrical power book of MS&T and (C) any sale or other
disposition by the Borrower or any of its Subsidiaries in the ordinary
course of business consistent with past practice, provided, further
that any Designated Prepayment under this clause (iii) shall be made
without regard to whether the obligations under the Enterprises 2003
Credit Agreement shall have been paid in full in cash and terminated if
an "Event of Default" under (and as defined in) the AIG Pledge
Agreement arising from the non-compliance with the terms of Section 4.5
of the AIG Pledge Agreement has occurred and is continuing, or would
result from the transaction giving rise to such Designated Prepayment.
Nothing in this Section 2.03(c) shall be construed to constitute the Lenders'
consent to any transaction referenced in clauses (i), (ii) and (iii) above which
is not expressly permitted by Article VII. 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
Prepayment becomes due and payable pursuant to this Section 2.03(c)). Designated
Prepayments shall be allocated and applied first to the outstanding Facility A
Loans (and amounts applied thereunder being deemed to be applied first to
Facility A Revolving Loans (and shall permanently reduce on a ratable basis the
Facility A Revolving Commitments) or any Facility A Loans following the
Conversion Date that re-evidence such Facility A Revolving Loans, and thereafter
all other Facility A Loans) and then to the outstanding Facility B Loans. So
long as any Facility B Loans shall be outstanding, any Lender with a Facility A
Loan may, after the repayment of the Facility A Revolving Loans and termination
of the Facility A Revolving Commitments, or any Facility A Loans following the
Conversion Date that re-evidence such Facility A Revolving Loans, decline any
Designated
25
Prepayment, in which case the amount declined will be applied pro rata and
ratably to prepayment of the Facility B Loans. Any Lender with a Facility B Loan
may decline any Designated Prepayment, in which case the amount declined shall
be paid as the Borrower so designates. All Designated Prepayments 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.
SECTION 2.04. COMPUTATIONS OF OUTSTANDINGS. Whenever reference is made
in this Agreement to the principal amount outstanding on any date under this
Agreement, such reference shall refer to the aggregate principal amount of all
Loans outstanding on such date under this Agreement after giving effect to all
Extensions of Credit to be made on such date and the application of the proceeds
thereof. At no time shall the outstanding principal amount of the Facility A
Revolving Loans exceed the aggregate amount of the Facility A Revolving
Commitment hereunder. References to the unused portion of the Facility A
Revolving Commitments shall refer to the excess, if any, of the Facility A
Revolving Commitments hereunder over the outstanding principal amount of the
Facility A Revolving Loans; and references to the unused portion of any Lender's
Facility A Revolving Commitment shall refer to such Lender's Percentage of the
unused Facility A Revolving Commitments.
ARTICLE III
LOANS
(a) LOANS. 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 (New York City time) 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 Facility A Revolving 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 (New York City
time) 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 2 Penns Way, Suite 200, New Castle, DE 19270, 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 V, 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.
26
(c) 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 10.07) 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 (New York City
time) on (x) the third Business Day prior to the date of any proposed Conversion
into a Eurodollar Rate Loan and (y) the first Business Day prior to the date of
any proposed Conversion into an ABR Loan. The Administrative Agent shall give
each Lender prompt notice of each Notice of Conversion. Each Notice of
Conversion shall be in substantially the form of Exhibit B and shall specify (i)
the requested date of such Conversion, (ii) the 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 is (a) a Facility A Loan that ends after the
Facility A Maturity Date or (b) a Facility B Loan that ends after the
Facility B Maturity 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.
27
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 Facility A 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) at no time shall the number of Borrowings comprising
Eurodollar Rate Loans outstanding hereunder be greater than ten (10);
(iii) 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 4.04(b) are paid contemporaneously with such
Conversion;
(iv) 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
(v) 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
28
rights and obligations hereunder pursuant to Section 10.07), the Administrative
Agent shall deliver notice thereof to the Borrower and the Lenders and such
suspension shall terminate.
(c) If the Required Lenders shall, at least one Business
Day before the date of any requested Borrowing, notify the Administrative Agent
that the Adjusted LIBO Rate for Eurodollar Rate Loans to be made in connection
with such Borrowing will not adequately reflect the cost to such Required
Lenders of making, funding or maintaining their respective Eurodollar Rate Loans
for such Borrowing, or that they are unable to acquire funding in a reasonable
manner so as to make available Eurodollar Rate Loans in the amount and for the
Interest Period requested, or if the Administrative Agent shall determine that
adequate and reasonable means do not exist to be able to determine the Adjusted
LIBO Rate, then the right of the Borrower to select Eurodollar Rate Loans for
such Borrowing and any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Loan to be made
or Converted in connection with such Borrowing shall be an ABR Loan.
(d) If any Lender shall have delivered a notice to the
Administrative Agent described in Section 3.04(b), and if and so long as such
Lender shall not have withdrawn such notice in accordance with said Section
3.04(b), the Borrower or the Administrative Agent may demand that such Lender
assign in accordance with Section 10.07, to one or more banks or other financial
institutions designated by the Borrower or the Administrative Agent (each a
"Prospective Lender"), 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 Prospective Lender 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 Prospective
Lender, 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 Prospective Lender (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 4.04(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 V, 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
29
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 Facility A Loans on the Facility A Maturity Date (or
such earlier date as may be required pursuant to Section 2.03 or 8.02) and shall
repay the outstanding principal amount of the Facility B Loans on the Facility B
Maturity Date (or such earlier date as may be required pursuant to Section 2.03
or 8.02). No installment of any Loan (other than Facility A Revolving Loans
prior to the Conversion Date) may be reborrowed once repaid.
(b) Interest. The Borrower shall pay interest on the
unpaid principal amount of each Loan owing to each Lender from the date of such
Loan until such principal amount shall be paid in full, at the Applicable Rate
for such Loan (except as otherwise provided in this subsection (b)), payable as
follows:
(i) ABR Loans. If such Loan is an ABR Loan, interest
thereon shall be payable quarterly in arrears on the last day of each
March, June, September and December, 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
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 4.01. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and
under the other Loan Documents not later than 2:00 p.m. (New York City time) on
the day when due in Dollars to the Administrative Agent at its offices at 2
Penns Way, Suite 200, New Castle, DE 19270, in same day funds; any payment
received after 3:00 p.m. (New York City time) shall be deemed to have been
received at the start of business on the next succeeding Business Day, unless
the 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.
(New York City time). The
30
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal, interest, fees or other amounts payable to
the Lenders, to the respective Lenders to which the same are payable, for the
account of their respective Applicable Lending Offices, in each case to be
applied in accordance with the terms of this Agreement. If and to the extent
that any distribution of any payment from the Borrower required to be made to
any Lender pursuant to the preceding sentence shall not be made in full by the
Administrative Agent on the date such payment was received by the Administrative
Agent, the Administrative Agent shall pay to such Lender, upon demand, interest
on the unpaid amount of such distribution, at a rate per annum equal to the
Federal Funds Effective Rate, from the date of such payment by the Borrower to
the Administrative Agent to the date of payment in full by the Administrative
Agent to such Lender of such unpaid amount. Upon the Administrative Agent's
acceptance of a Lender Assignment and recording of the information contained
therein in the Register pursuant to Section 10.07, 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 and each Lender, if and to the extent payment owed to the Administrative
Agent or such Lender, as the case may be, is not made when due hereunder (or, in
the case of a Lender, under any Promissory Note held by such Lender), to charge
from time to time against any or all of the Borrower's accounts with the
Administrative Agent or such Lender, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate
Base Rate (when the Alternate Base Rate is based on the Prime Rate) shall be
made by the Administrative Agent on the basis of a year of 365 or 366 days, as
the case may be. All other computations of interest and fees hereunder
(including computations of interest based on the Adjusted LIBO Rate and the
Federal Funds Effective Rate) shall be made by the Administrative Agent on the
basis of a year of 360 days. In each such case, such computation shall be made
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are payable. Each
such determination by the Administrative Agent or a Lender shall be conclusive
and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under any other
Loan Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest
and fees hereunder; provided, however, that if such extension would cause
payment of interest on or principal of Eurodollar Rate Loans to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day and such reduction of time shall in such case be included in the
computation of payment of interest hereunder.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date, and the
31
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 4.07, (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 4.02. INTEREST RATE DETERMINATION. The Administrative Agent
shall give prompt notice to the Borrower and the Lenders of the applicable
interest rate determined by the Administrative Agent for purposes of Section
3.05(b)(i) or (ii).
SECTION 4.03. PREPAYMENTS. The Borrower shall have no right to prepay
any principal amount of any Loans other than as follows:
(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
4.04(b); provided, however, that (a) 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 and (b) the Borrower shall not prepay any
Facility B Loans unless and until all Facility A Loans have been prepaid in full
in cash.
(b) On the date of any termination or optional or
mandatory reduction of the Facility A Revolving Commitments pursuant to Section
2.03, the Borrower shall pay or prepay the principal outstanding on the Facility
A Revolving Loans in full in cash in an amount equal to the excess of (i) the
sum of the aggregate principal amount of the Facility A Revolving Loans
outstanding (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 Facility A Revolving Commitments (following such termination or
reduction, if any), together with (x) accrued interest to the date of such
prepayment on the principal amount repaid and (y) in the case of prepayments of
Eurodollar Rate Loans, any amount payable to the Lenders pursuant to Section
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4.04(b). Any payments and prepayments required by this subsection (b) shall be
applied to outstanding ABR Loans up to the full amount thereof before they are
applied to outstanding Eurodollar Rate Loans.
SECTION 4.04. YIELD PROTECTION.
(a) Increased Costs. If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation after the Closing Date, or (ii) the compliance with any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) issued or made after the Closing Date, there shall be
reasonably incurred any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurodollar Rate Loans, then the Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost and giving
a reasonable explanation thereof, submitted to the Borrower and the
Administrative Agent by such Lender shall constitute such demand and shall be
conclusive and binding for all purposes, absent manifest error.
(b) Breakage. If, due to any prepayment pursuant to
Section 4.03, an acceleration of maturity of the Loans pursuant to Section 8.02,
or any other reason, any Lender receives payments of principal of any Eurodollar
Rate Loan other than on the last day of the Interest Period relating to such
Loan or if the Borrower shall Convert any Eurodollar Rate Loans on any day other
than the last day of the Interest Period therefor, or if the Borrower shall fail
to prepay a Eurodollar Rate Loan on the date specified in a notice of
prepayment, the Borrower shall, promptly after demand by such Lender (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender any amounts required to compensate such
Lender for additional losses, costs, or expenses (including anticipated lost
profits) that such Lender may reasonably incur as a result of such payment,
Conversion or failure to prepay, including any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain such Loan. For purposes of this subsection (b),
a certificate setting forth the amount of such additional losses, costs, or
expenses and giving a reasonable explanation thereof, submitted to the Borrower
and the Administrative Agent by such Lender, shall constitute such demand and
shall be conclusive and binding for all purposes, absent manifest error.
(c) Capital. If any Lender determines that (i) compliance
with any law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender, whether directly, or indirectly as a result of commitments of any
corporation controlling such Lender (but without duplication), and (ii) the
amount of such capital is increased by or based upon (A) the existence of such
Lender's commitment to lend hereunder, or (B) the issuance or maintenance of any
Loan and (C) other similar such commitments, then, upon demand by such Lender,
the Borrower shall immediately pay to the Administrative Agent for the account
of such Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to
33
be allocable to the transactions contemplated hereby. A certificate as to such
amounts and giving a reasonable explanation thereof (to the extent permitted by
law), submitted to the Borrower and the Administrative Agent by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.
(d) Notices. Each Lender hereby agrees to use its best
efforts to notify the Borrower of the occurrence of any event referred to in
subsection (a), (b) or (c) of this Section 4.04 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 4.04, 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 4.04 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 4.04 shall survive the
repayment of all other amounts owing to the Lenders and the Agents under the
Loan Documents and the termination of the Commitments. If and to the extent that
the obligations of the Borrower under this Section 4.04 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 4.05. 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 4.04 or Section 4.06) 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 4.05 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
Notwithstanding the foregoing, if any Lender shall obtain any such excess
payment involuntarily, such Lender may, in lieu of purchasing participations
from the other Lenders in accordance with this Section 4.05, on the date of
receipt of such excess payment, return such excess payment to the Administrative
Agent for distribution in accordance with Section 4.01(a).
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SECTION 4.06. TAXES.
(a) All payments by the Borrower hereunder and under the
other Loan Documents shall be made in accordance with Section 4.01, free and
clear of and without deduction for all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and each Agent, taxes imposed on its
overall net income, and franchise taxes imposed on it by the jurisdiction under
the laws of which such Lender or Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes imposed on
its overall net income, and franchise taxes imposed on it by the jurisdiction of
such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "TAXES"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Loan Document to any Lender or Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 4.06) such Lender or Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or under
any other Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "OTHER TAXES").
(c) The Borrower will indemnify each Lender and Agent for
the full amount of Taxes and Other Taxes (including any Taxes and any Other
Taxes imposed by any jurisdiction on amounts payable under this Section 4.06)
paid by such Lender or Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within thirty (30) days from the date such
Lender or Agent (as the case may be) makes written demand therefor; provided,
that such Lender or Agent (as the case may be) shall not be entitled to demand
payment under this Section 4.06 for an amount if such demand is not made within
one year following the date upon which such Lender or Agent (as the case may be)
shall have been required to pay such amount.
(d) Within thirty (30) days after the date of any payment
of Taxes, the Borrower will furnish to the Administrative Agent, at its address
referred to in Section 10.02, 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
35
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 4.07. APPORTIONMENT OF PAYMENTS.
(a) Subject to the provisions of Section 2.03 and Section
4.07(b), all payments of principal and interest in respect of outstanding Loans,
all payments of fees and all other payments in respect of any other Obligations
hereunder, shall be allocated among such of the Lenders as are entitled thereto,
ratably or otherwise as expressly provided herein. Except as provided in Section
4.07(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 CUSA for which the Administrative
Agent has not then been reimbursed by such Lender or the Borrower,
(ii) second, to pay interest on the Facility A Loans and
the interest on the Facility B Loans, and then the principal of the
Facility A Loans and the principal of the Facility B Loans, in each
case, then due and payable (in the order described hereinbelow),
(iii) third, to pay all other Obligations of any Loan Party
under any Loan Document then due and payable, ratably, and
(iv) fourth, as the Borrower so designates.
All amounts applied in respect of Facility A Loans shall be deemed to be applied
first to Facility A Revolving Loans (and shall permanently reduce on a ratable
basis the Facility A Revolving Commitment of each Lender) or any Facility A
Loans following the Conversion Date that re-evidence such Facility A Revolving
Loans, and thereafter all other Facility A Loans. All such
36
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 CUSA for which the Administrative
Agent has not then been reimbursed by such Lender or the Borrower;
(ii) second, to pay any fees, expense reimbursements or
indemnities then due to the Agents under any of the Loan Documents;
(iii) third, to pay any fees, expense reimbursements or
indemnities then due to the Lenders under any of the Loan Documents;
(iv) fourth, to pay interest due in respect of the
Facility A Loans and the interest in respect of the Facility B Loans,
in each case, ratably, in accordance with the Lenders' respective
Percentages;
(v) fifth, to the payment or prepayment of principal
outstanding on all Facility A Loans and then on all Facility B Loans;
(vi) sixth, to the ratable payment of all other
Obligations of the Loan Parties then outstanding under the Loan
Documents.
Notwithstanding the foregoing, if the obligations under the Enterprises 2003
Credit Agreement shall not have been paid in full, the Collateral Agent shall
apply the proceeds of any voluntary sale 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) as contemplated by
the Enterprises 2003 Credit Agreement unless an "Event of Default" under (and as
defined in) the AIG Pledge Agreement arising from the non-compliance with the
terms of Section 4.5 of the AIG Pledge Agreement has occurred and is continuing,
or would result from the transaction giving rise to such proceeds. The order of
priority set forth in this Section 4.07(b) and the related provisions of this
Agreement are set forth solely to determine the rights and priorities of the
Agents and the Lenders as among themselves.
SECTION 4.08. 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) 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
37
applicable) for application pursuant to Section 4.07 or, unless an "Event of
Default" under (and as defined in) the AIG Pledge Agreement arising from the
non-compliance with the terms of Section 4.5 of the AIG Pledge Agreement has
occurred and is continuing, or would result from the transaction giving rise to
such proceeds, as otherwise required under the Enterprises 2003 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 4.07 or, unless an "Event of Default" under (and
as defined in) the AIG Pledge Agreement arising from the non-compliance with the
terms of Section 4.5 of the AIG Pledge Agreement has occurred and is continuing,
or would result from the transaction giving rise to such proceeds, as otherwise
required under the Enterprises 2003 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 4.07 or, unless an "Event of Default" under (and
as defined in) the AIG Pledge Agreement arising from the noncompliance with the
terms of Section 4.5 of the AIG Pledge Agreement has occurred and is continuing,
or would result from the transaction giving rise to such proceeds, as otherwise
required under the Enterprises 2003 Credit Agreement so long as such agreements
shall be in effect.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. 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 (or
persons performing similar functions), 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 or
other 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
38
such Loan Party authorized to sign notices to be provided under the
Loan Documents to which it is, or is to be, a party, which
representatives shall be acceptable to the Administrative Agent.
(iii) Copies of the Certificate of Incorporation and
by-laws (or comparable constitutive documents) 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 I 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 February 28, 2003;
and
(B) debt (as such term is construed in
accordance with GAAP) of the Loan Parties as of February 28,
2003.
(viii) A certificate, executed by a duly authorized officer
of the Borrower, (a) confirming that attached thereto is a true,
correct and complete copy of the Enterprises 2003 Credit Agreement, as
in effect on the Closing Date and (b) certifying that as of December
31, 2002 the Borrower was in compliance with the requirements of
Section 4.4 of the AIG Pledge Agreement (which certificate shall set
forth in reasonable detail the calculations upon which the Borrower
determined such compliance).
(ix) Favorable opinions of:
(A) Belinda Foxworth, 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) Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Loan Parties in substantially the form
of Exhibit D and as to such other matters as the
Administrative Agent may reasonably request.
(x) Duly executed copies of a Reaffirmation in the form
of Attachment A attached hereto from each of the Borrower's
Subsidiaries identified thereon.
39
(b) The following statements shall be true and the
Administrative Agent shall have received a certificate of a duly authorized
officer of the Borrower, dated the Closing Date and in sufficient copies for
each Lender stating that:
(i) the representations and warranties set forth in
Section 6.01 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 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/or filed, and all certificates
representing capital stock or other ownership interests included in the
Collateral have been delivered to the Collateral Agent (with duly executed stock
powers).
SECTION 5.02. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The
obligation of each Lender to make an Extension of Credit (including the initial
Extension of Credit, but excluding the Conversion of a Eurodollar Rate Loan into
an ABR Loan) shall be subject to the further conditions precedent that, on the
date of such Extension of Credit and after giving effect thereto:
(a) The following statements shall be true (and each of
the giving of the applicable notice or request with respect thereto and the
making of such Extension of Credit without prior correction by the Borrower
shall (to the extent that such correction has been previously consented to by
the Lenders) constitute a representation and warranty by the Borrower that, on
the date of such Extension of Credit, such statements are true):
(i) the representations and warranties contained in
Section 6.01 of this Agreement (other than those contained in
subsections (e)(iii) and (f) thereof) are correct on and as of the date
of such Extension of Credit, before and after giving effect to such
Extension of Credit and to the application of the proceeds thereof, as
though made on and as of such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Extension of Credit or the
application of the proceeds thereof.
(b) The Administrative Agent shall have received such
other approvals, opinions and documents as any Lender, through the
Administrative Agent, may reasonably
40
request as to the legality, validity, binding effect or enforceability of the
Loan Documents or the business, assets, property, financial condition, results
of operations or prospects of the Borrower and its Consolidated Subsidiaries.
SECTION 5.03. CONDITIONS PRECEDENT TO CERTAIN EXTENSIONS OF CREDIT. The
obligation of each Lender to make an Extension of Credit (including the initial
Extension of Credit) that would (after giving effect to all Extensions of Credit
on such date and the application of proceeds thereof) increase the principal
amount outstanding hereunder, shall be subject to the further conditions
precedent that, on the date of such Extension of Credit and after giving effect
thereto:
(a) the following statements shall be true (and each of
the giving of the applicable notice or request with respect thereto and the
making of such Extension of Credit without prior correction by the Borrower
shall (to the extent that such correction has been previously consented to by
the Lenders) constitute a representation and warranty by the Borrower that, on
the date of such Extension of Credit, such statements are true):
(i) the representations and warranties contained in
subsections (e)(iii) and (f) of Section 6.01 of this Agreement are
correct on and as of the date of such Extension of Credit, before and
after giving effect to such Extension of Credit and to the application
of the proceeds thereof, as though made on and as of such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Extension of Credit or the
application of the proceeds thereof; and
(b) the Administrative Agent shall have received such
other approvals, opinions and documents as any Lender, through the
Administrative Agent, may reasonably request.
SECTION 5.04. RELIANCE ON CERTIFICATES. The Lenders and each Agent
shall be entitled to rely conclusively upon the certificates delivered from time
to time by officers of the Borrower as to the names, incumbency, authority and
signatures of the respective persons named therein 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 5.05. CONDITION PRECEDENT TO THE INITIAL EXTENSION OF CREDIT.
The obligation of each Lender to make its initial Extension of Credit is subject
to the fulfillment of the following conditions precedent:
(a) The Borrower shall have paid all fees under or
referenced in Section 2.02(b) and all expenses referenced in Section 10.04(a),
in each case to the extent then due and payable.
(b) The Administrative Agent shall have received, on or
before the day of the initial Extension of Credit, in form and substance
satisfactory to it with sufficient copies for each Lender:
41
(i) A certificate, executed by the chief executive
officer and the chief financial officer of the Borrower and Consumers,
as applicable, in favor of the Agents and the Lenders with respect to
the financial statements described in Section 6.01(e)(i) and (ii)
certifying that such financial statements have been prepared in
accordance with GAAP (except for changes resulting from any Restatement
Event) and are true and correct as of the date of such certificate;
(ii) Copies of the financial statements of the Borrower
and Consumers described in Section 6.01(e)(i) and (ii); and
(iii) Copies of the Borrower's Annual Report on Form 10-K
for the fiscal years ended December 31, 2001 and December 31, 2002.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. 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 duly organized, validly existing and in good standing
under the laws of the state of its organization 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 each 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 the Enterprises 2003 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 5.01(c), perfected Liens in the Collateral covered
42
thereby securing the payment of all of the Loans purported to be secured
thereby, which Liens (x) with respect to all Collateral subject to a Lien under
the AIG Pledge Agreement shall be first perfected Liens and (y) with respect to
all other Collateral shall be pari-passu with any Liens thereon securing the
Borrower's guaranty of Enterprises' obligations under the Enterprises 2003
Credit Agreement, and (ii) be, legal, valid and binding obligations of such Loan
Party enforceable against such Loan Party in accordance with their respective
terms; subject to the qualification, however, that the enforcement of the rights
and remedies herein and therein is subject to bankruptcy and other similar laws
of general application affecting rights and remedies of creditors and the
application of general principles of equity (regardless of whether considered in
a proceeding in equity or at law).
(e) (i) The consolidated balance sheets of the Borrower
and its Consolidated Subsidiaries as at December 31, 2001 and December 31, 2002,
and the related consolidated statements of income, retained earnings and cash
flows of the Borrower and its Consolidated Subsidiaries for the fiscal years
then ended, included in the Borrower's Annual Report on Form 10-K for the fiscal
years ended December 31, 2001 and December 31, 2002, in each case as such
financial statements are proposed to be restated in connection with the
Restatement, copies of each of which have been furnished to each Lender, fairly
present 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 (it being
understood that such financial statements do not give effect to any Restatement
Event), all in accordance with generally accepted accounting principles
consistently applied (except for changes resulting from any Restatement Event);
(ii) the consolidated balance sheets of Consumers and its consolidated
Subsidiaries as at December 31, 2001 and December 31, 2002, and the related
consolidated statements of income, retained earnings and cash flows of Consumers
and its consolidated Subsidiaries for the fiscal years then ended, included in
the Borrower's Annual Report on Form 10-K for the fiscal years ended December
31, 2001 and December 31, 2002, in each case as such financial statements are
proposed to be restated in connection with the Restatement, copies of each of
which have been furnished to each Lender, fairly present the financial condition
of Consumers and its consolidated Subsidiaries as at such dates and the results
of operations of Consumers and its consolidated Subsidiaries for the periods
ended on such dates (it being understood that such financial statements do not
give effect to any Restatement Event), all in accordance with generally accepted
accounting principles consistently applied (except for changes resulting from
any Restatement Event); (iii) since December 31, 2002, except as disclosed in
the Borrower's Annual Report on Form 10-K for the fiscal year ended December 31,
2002, there has been no Material Adverse Change; and (iv) except as a result of
any Restatement Event, no Loan Party has any material liabilities or obligations
except as reflected in the foregoing financial statements and in Schedule I, 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, 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
Annual Report filed with the Securities and Exchange Commission set forth in
clause (i) above (all such matters in clauses (i) and (ii) being the "Disclosed
Matters") and (iii) any Restatement Event, there are no pending or threatened
actions, suits or
43
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 7.01(b) is in full
force and effect.
(h) No Plan Termination Event has occurred nor is
reasonably expected to occur with respect to any Plan of the Borrower or any of
its ERISA Affiliates which would result in a material liability to the Borrower,
except as disclosed and consented to by the Required Lenders in writing from
time to time. Except as disclosed in the Borrower's Annual Report on Form 10-K
for the period ended December 31, 2002, 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.
44
(m) The Borrower owns not less than 80% of the
outstanding shares of common stock of Consumers.
(n) The Consolidated 2002-2007 Projections of Consumers,
Enterprises and the Borrower (the "PROJECTIONS") are based upon assumptions that
the Borrower believed were reasonable at the time the Projections were
delivered, and all other financial information delivered by the Borrower to the
Administrative Agent and the Banks on and after March 30, 2003 is true and
correct in all material respects as at the dates and for the periods indicated
therein (it being understood that such Projections and financial information do
not give effect to any Restatement Event).
(o) No Loan Party is engaged in the business of extending
credit for the purpose of buying or carrying margin stock (within the meaning of
Regulation U issued by the Board), and no proceeds of any Loan will be used to
buy or carry any margin stock or to extend credit to others for the purpose of
buying or carrying any margin stock.
(p) No Loan Party is an investment company (within the
meaning of the Investment Company Act of 1940, as amended).
(q) No proceeds of any Extension of Credit will be used
to acquire any security in any transaction without the approval of the board of
directors of the Person issuing such security if (i) the acquisition of such
security would cause the Borrower to own, directly or indirectly, 5.0% or more
of any outstanding class of securities issued by such Person, or (ii) such
security is being acquired in connection with a tender offer.
(r) Following application of the proceeds of each
Extension of Credit, not more than 25 percent of the value of the assets of the
Borrower and its Subsidiaries on a consolidated basis will be margin stock
(within the meaning of Regulation U issued by the Board).
(s) No Loan Party is a registered "holding company" or a
"subsidiary" or an "affiliate" of a registered "holding company," as such terms
are defined in the Public Utility Holding Company Act of 1935, as amended, 15
USC 79 et seq.
(t) The Borrower has not withheld any fact from the
Administrative Agent or the Lenders in regard to the occurrence of any Material
Adverse Change.
(u) After giving effect to the Loans to be made on the
Initial Funding Date or such other date as Loans requested hereunder are made,
and the disbursement of the proceeds of such Loans pursuant to the Borrower's
instructions, the Borrower and its Subsidiaries, taken as a whole, are Solvent.
(v) Schedule I sets forth as of February 28, 2003 (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).
45
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01. AFFIRMATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, or
any Lender shall have any Commitment:
(a) Payment of Taxes, Etc. The Borrower shall pay and
discharge, and each of its Subsidiaries shall pay and discharge, before the same
shall become delinquent, all taxes, assessments and governmental charges,
royalties or levies imposed upon it or upon its property except, in the case of
taxes, to the extent the Borrower or any Subsidiary, as the case may be, is
contesting the same in good faith and by appropriate proceedings and has set
aside adequate reserves for the payment thereof in accordance with GAAP.
(b) Maintenance of Insurance. The Borrower shall
maintain, and each of its Restricted Subsidiaries and Consumers shall maintain,
insurance covering the Borrower, each of its Restricted Subsidiaries, Consumers
and their respective properties in effect at all times in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general geographical area
in which the Borrower, its Restricted Subsidiaries and Consumers operates,
either with reputable insurance companies or, in whole or in part, by
establishing reserves of one or more insurance funds, either alone or with other
corporations or associations.
(c) Preservation of Existence, Etc. Except as otherwise
permitted by Section 7.02, the Borrower shall preserve and maintain, and each of
its Restricted Subsidiaries and Consumers shall preserve and maintain, its
corporate or limited liability company existence, material rights (statutory and
otherwise) and franchises, and take such other action as may be necessary or
advisable to preserve and maintain its right to conduct its business in the
states where it shall be conducting its business.
(d) Compliance with Laws, Etc. The Borrower shall comply,
and each of its Restricted Subsidiaries and Consumers shall comply, in all
material respects with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, including any such laws,
rules, regulations and orders relating to zoning, environmental protection, use
and disposal of Hazardous Substances, land use, construction and building
restrictions, and employee safety and health matters relating to business
operations.
(e) Inspection Rights. Subject to the requirements of
laws or regulations applicable to the Borrower or its Subsidiaries, as the case
may be, and in effect at the time, at any time and from time to time upon
reasonable notice, the Borrower shall permit (i) each Agent and its agents and
representatives to examine and make copies of and abstracts from the records and
books of account of, and the properties of, the Borrower or any of its
Subsidiaries and (ii) each Agent, each of the Lenders, and their respective
agents and representatives to discuss the affairs, finances and accounts of the
Borrower and its Subsidiaries with the Borrower and its Subsidiaries and their
respective officers, directors and accountants. Each such visitation and
inspection described in the preceding sentence by or on behalf of any Lender
shall, unless
46
occurring at a time when a Default or Event of Default shall be continuing, be
at such Lender's expense; all other such inspections and visitations shall be at
the Borrower's expense.
(f) Keeping of Books. From and after December 31, 2002,
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 (except
as related to the Restatement).
(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 7.02(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 (calculated exclusive of Panhandle and its Subsidiaries), to
(ii) Consolidated EBITDA for such period (calculated exclusive of Panhandle and
its Subsidiaries), of not more than 7.00 to 1.00, commencing with the period
ending June 30, 2003.
(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, 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 to (ii) an
amount equal to (A) interest expense (excluding all arrangement, underwriting
and other similar fees payable in connection with this Agreement and the
Enterprises 2003 Credit Agreement) accrued by the Borrower in respect of all
Debt during such period, minus (B) cash interest income received by the Borrower
and its Subsidiaries from Persons other than the Borrower or any of its
Subsidiaries, minus (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, of not less than 1.20 to 1.00,
commencing with the Measurement Quarter ending on June 30, 2003; 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 principal amount
outstanding under this Agreement and the Promissory Notes, such that the amount
determined pursuant to clause (ii) above, when recalculated on a pro forma basis
assuming that the amount of such reduced principal amount outstanding under such
agreements and promissory
47
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 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 resolutions, opinions of counsel and such other constitutive
documentation as the Administrative Agent may reasonably request, all in form
and substance reasonably satisfactory to the Administrative Agent.
(m) Compliance with Fee Letter. The Borrower and
Enterprises shall comply with its obligations under the Fee Letter.
(n) Payment of Declared Dividend. The Borrower shall
cause each of its direct Subsidiaries to pay all dividends within 30 days after
declaration thereof.
(o) Securities Demand. Unless (x) the "Loans" and
"Commitments" under (and as defined in) the Enterprises 2003 Credit Agreement
and Loans and Commitments hereunder shall have been permanently reduced in an
aggregate principal amount of $550,000,000 or more on or before January 2, 2004,
or (y) the Borrower's reset put securities due July 1, 2003 shall have been
reissued or remarketed pursuant to the terms thereof or refinanced, then, upon
notice from the Administrative Agent (at the direction of the Required Lenders)
(a "SECURITIES DEMAND"), to the extent permitted under each of the Borrower's
indentures (and each supplement issued thereunder), the Borrower will cause the
issuance and sale of debt and/or equity securities ("SECURITIES") the proceeds
of which shall be used to repay the 6.75% Senior Notes on their maturity date
upon such terms and conditions specified in the Securities Demand; provided that
(i) the interest rate (whether floating or fixed) shall be determined by
Administrative Agent in light of the then prevailing market conditions for
comparable securities, (ii) the Administrative Agent in their reasonable
discretion and after consultation with the Borrower, shall determine whether the
Securities shall be issued through a public offering or a private placement;
(iii) the Securities will be issued pursuant to an indenture or indentures,
which shall contain such terms, conditions, and covenants as are typical and
customary for similar financings and are reasonably satisfactory in all respects
to the Administrative Agent; and (iv) all other arrangements with respect to the
Securities shall be
48
reasonably satisfactory in all respects to the Administrative Agent in light of
the then prevailing market conditions.
SECTION 7.02. NEGATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid or any
Lender shall have any Commitment, the Borrower shall not, without the written
consent of the Required Lenders:
(a) Liens, Etc. (1) Create, incur, assume or suffer to
exist, or permit any of the 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 and other ownership interests of the
Borrower's 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 Enterprises or MS&T in respect of hedging arrangements
and commodity purchases and sales (including any cash margins with
respect thereto); provided that with respect to clauses (C) and (D)
above the aggregate amount of cash pledges or deposits securing such
Support Obligations and such obligations of Enterprises or MS&T shall
not exceed $400,000,000 at any one time outstanding;
(iii) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's liens and other
similar Liens arising in the ordinary course of business securing
obligations which are not overdue or which have been fully bonded and
are being contested in good faith;
(iv) Liens securing the obligations under the Loan
Documents and under the "Loan Documents" as defined in the Enterprises
2003 Credit Agreement (and subordinated Liens securing the refinancing
of all or any portion of such obligations, which Liens shall be
subordinated on terms and conditions acceptable to the Administrative
Agent and the Collateral Agent);
49
(v) Liens securing Off-Balance Sheet Liabilities (and all
refinancings and recharacterizations thereof permitted under Section
7.02(b)(iv)) in an aggregate amount not to exceed $775,000,000;
(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 $15,000,000;
(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;
(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;
50
(xiv) subordinated Liens granted pursuant to the terms of
the AIG Pledge Agreement, which Liens shall be subordinated pursuant to
the terms of the Intercreditor Agreement, to secure certain surety bond
obligations as described in the AIG Pledge Agreement; and
(xv) subordinated Liens arising out of the refinancing,
extension, renewal or refunding of the 6.75% Senior Notes, the
Borrower's reset put securities due July 1, 2003 and the Borrower's
general term notes due in 2003, which Liens shall be subordinated on
terms and conditions acceptable to the Administrative Agent and the
Collateral Agent.
(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 7.02(a)(iii);
(iii) debt arising under (a) the Loan Documents and (b) the
"Loan Documents" as defined in the Enterprises 2003 Credit Agreement in
a principal amount equal to $441,000,000 minus any principal payments
(but with respect to principal payments of revolving loans prior to the
"Conversion Date" thereunder, only to the extent of any concurrent
reduction or termination of the "Commitments" as defined therein) 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 7.02(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 February 28, 2003 as set forth on Schedule I), 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;
51
(vi) (a) unsecured, subordinated debt owed (i) to the
Borrower by Enterprises, (ii) to Enterprises or CMS Capital, L.L.C. (or
any successor by merger to CMS Capital, L.L.C.) and (iii) to any
Grantor by any Loan Party, and (b) unsecured debt owed to any
Subsidiary of Enterprises (other than a Grantor) by CMS Capital, L.L.C.
(or any successor by merger to CMS Capital, L.L.C.), and (c) unsecured
debt of any Foreign Subsidiary of Enterprises owed to another Foreign
Subsidiary of Enterprises provided that the proceeds of any repayment
of such debt are remitted to a Loan Party;
(vii) Project Finance Debt of any Loan Party or any of its
Subsidiaries incurred on or after the Closing Date, provided that the
Net Proceeds thereof shall be applied in accordance with Section
2.03(c) if required to be so applied; and
(viii) capital lease obligations and other Debt secured by
purchase money Liens to the extent such Liens shall be permitted under
Section 7.02(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 or contingent
obligations of the Borrower or any other Loan Party as in effect as of the
Closing Date and in amounts not to exceed the estimated amounts as set forth on
Schedule I hereto (whether such obligation is conditioned upon a change in the
ratings of the securities issued by such Person or otherwise) and, in each case,
in an amount not to exceed such contractual or contingent obligation as in
effect on the Closing Date, (iii) investments, directly or indirectly, by any
Loan Party (x) in the capital of any Subsidiary of the Borrower that is a Loan
Party and (y) in assets contributed to such Loan Party, provided that if any
such assets constitute Collateral prior to such contribution, such assets shall
remain Collateral after giving effect to such contribution and prior to such
contribution the Borrower shall, and shall cause each applicable Subsidiary to,
execute and deliver to the Administrative Agent all agreements, instruments and
documents as may be necessary or reasonably requested by the Administrative
Agent to perfect its security interest in such Collateral, (iv) investments in
the capital stock or other ownership interests of any of the Borrower's
Subsidiaries arising from the conversion of intercompany indebtedness to equity,
(v) intercompany loans and advances to the extent the corresponding debt is
permitted under Section 7.02(b)(vi), (vi) investments constituting non-cash
consideration received in connection with the sale of any asset permitted under
Section 7.02(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
52
or would result therefrom; provided, further, that, notwithstanding the
foregoing, neither the Borrower nor any Loan Party shall make any loans or
advances to any of the Borrower's Subsidiaries other than, to the extent
otherwise permitted hereunder, Enterprises or any Subsidiary of Enterprises.
(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 or other
ownership interests 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) dividends and 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 or other
ownership interests 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") other than (i) 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)); and (ii)
payments made by the Borrower or any other Loan Party pursuant to the Tax
Sharing Agreement.
(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 such Plan, Multiemployer Plan or 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 so as to result in a material liability
to the Borrower, any other Loan Party or Consumers.
(g) Transactions with Affiliates. Enter into, or permit
any of its Subsidiaries to enter into, any transaction with any of its
Affiliates unless such transaction is on terms no less favorable to the Borrower
or such Subsidiary than if the transaction had been negotiated in good faith on
an arm's-length basis with a non-Affiliate; provided that (x) the purchase by,
or other transfer to, Trunkline Field Services Company of certain assets of CMS
Field Services, Inc. as described to the Administrative Agent and the Lenders
prior to the date hereof shall be permitted hereunder and (y) any transaction
permitted under Sections 7.02(b), 7.02(e) or 7.02(h) shall be permitted
hereunder.
(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
53
other Person, except that (i) (x) any Loan Party may merge with or into any
other Loan Party, (y) any Subsidiary of a Loan Party that is not a Loan Party
may merge into such Loan Party or with or into any other Subsidiary of any Loan
Party, provided that (a) in any such merger with or into the Borrower, the
Borrower is the surviving corporation, (b) in any such merger into a Loan Party
under clause (y) above, the Loan Party is the survivor thereof, (c) no Default
or Event of Default shall be continuing or result therefrom and (d) 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, or, in the case of any Loan Party that is a corporation reconstituting
itself as limited liability company, such limited liability company shall be the
survivor thereof and shall be thereafter deemed to be a Loan Party hereunder,
(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 (other than MS&T) 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 2003 Credit Agreement; provided, further, that
neither the Borrower nor any of the other Loan Parties (other than MS&T) shall
sell, assign, transfer, lease, convey or otherwise dispose of any property,
whether now owned or hereafter acquired, or any income or profits therefrom, or
enter into any agreement to do so, except:
(A) the sale of property for consideration not less than
the Fair Market Value thereof so long as (i) any non-cash consideration
resulting from such sale shall be pledged or assigned to the Collateral
Agent, for the benefit of the Lenders, pursuant to an instrument in
form and substance reasonably acceptable to the Collateral Agent, (ii)
cash consideration resulting from such sale shall be (x) in an amount
determined by the Borrower for any sale the consideration of which is
$10,000,000 or less, or, together with all other such sales under this
clause (x), $25,000,000 or less, (y) in the case of the sale of
substantially all or any portion of the capital stock and assets of CMS
Field Services, Inc. and its Subsidiaries, not less than 60% of the
aggregate consideration resulting from such sale, (z) for all other
sales, not less than 90% of the aggregate consideration resulting from
such sale, and (iii) 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 7.02(d);
54
(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 7.02(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/or any
other third-party 501(c)(3) charitable organization;
(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;
(H) the sale of substantially all of the capital stock
and assets of Panhandle; provided that such sale shall be consummated
substantially in accordance with, and on terms not materially more
adverse to the interests of the Agents and the Lenders than the terms
and conditions set forth in, that certain Stock Purchase Agreement,
dated as of December 21, 2002, by and among CMS Gas Transmission
Company, AIG Highstar Capital, L.P., AIG Highstar II Funding Corp.,
Southern Union Company and Southern Union Panhandle Corp.
(j) Maintenance of Ownership of Subsidiaries. Sell,
transfer, assign or otherwise dispose of any shares of capital stock or other
ownership interests 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 other ownership interests, 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 other ownership interests or the capital stock or other ownership
interests of any other Loan Party or any warrants, rights or options to acquire
such capital stock or other ownership interests, except (i) to give effect to a
transaction permitted by subsection (d), (h) or (i) above, and (ii) in
connection with the foreclosure of any Liens permitted under Section
7.02(a)(iv).
(k) Amendment of Tax Sharing Agreement. Directly or
indirectly, amend, modify, supplement, waive compliance with, seek a waiver
under, or assent to noncompliance with, any term, provision or condition of the
Tax Sharing Agreement if the effect of such amendment, modification, supplement,
waiver or assent is to (i) reduce materially any amounts otherwise payable to,
or increase materially any amounts otherwise owing or payable by, the Borrower
thereunder, or (ii) change materially the timing of any payments made by or to
the Borrower thereunder.
(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
55
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 the Enterprises 2003 Credit Agreement), other than (i)
any payments on account of (a) any Debt when and as such payment was due
(including at the maturity thereof if the initial stated maturity thereof is on
or prior to the Facility A Maturity Date) 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, (b) refinancings of Debt otherwise permitted under
this Agreement, (c) any Debt owed to the Borrower or any of its Subsidiaries,
(d) Debt secured by a Lien on assets subject to an asset sale permitted by
Section 7.02(i) and (e) the extinguishment of any intercompany Debt in
connection with a dividend or distributions permitted under Section 7.02(e),
(ii) payments constituting the exchange of the Borrower's common stock for the
Borrower's outstanding Debt (and any cash payments made in lieu of the issuance
of fractional shares) to the extent such exchange is permitted under the
Securities and Exchange Act of 1933, as amended and (iii) prepayments of (x) the
Borrower's reset put securities due July 1, 2003 and the Borrower's general term
notes due in 2003, (y) if the aggregate principal amount of the Loans shall be
less than $250,000,000, any securities with maturities on or after January 1,
2004 but prior to April 1, 2004, and (z) if the aggregate principal amount of
the Loans shall be less than $175,000,000, any securities with maturities on or
after January 1, 2004.
(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 and by-laws (or comparable constitutive documents) 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
7.02(c)) in the aggregate in excess of $775,000,000 at any time.
SECTION 7.03. REPORTING OBLIGATIONS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid or any
Lender shall have any Commitment, the Borrower will, unless the Required Lenders
shall otherwise consent in writing, furnish to the Administrative Agent (with
sufficient copies for each Lender), the following:
56
(a) as soon as possible and in any event within five days
after the Borrower knows or should have reason to know of the occurrence of each
Default or Event of Default continuing on the date of such statement, a
statement of the chief financial officer or chief accounting officer of the
Borrower setting forth details of such Default or Event of Default and the
action that the Borrower proposes to take with respect thereto;
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year of the
Borrower, commencing with the fiscal quarter ending on March 31, 2003, 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 7.01(i) and 7.01(j) and the ratio set forth in
Section 8.01(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,
commencing with the fiscal year ending on December 31, 2003, 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 7.01(i) and
7.01(j) and the ratio set forth in Section 8.01(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
57
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, commencing with the fiscal quarter ending on March 31, 2003, 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 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, commencing with the fiscal
year ending on December 31, 2003, a balance sheet of the Borrower as at the end
of such fiscal year and statements of income and retained earnings and of cash
flows of the Borrower for such fiscal year, all in reasonable detail and duly
certified (subject to year end audit adjustments) by the chief financial officer
or chief accounting officer of the Borrower as having been prepared in
accordance with GAAP;
(f) as soon as possible and in any event (A) within 30
days after the Borrower knows or has reason to know that any Plan Termination
Event described in clause (i) of the definition of Plan Termination Event with
respect to any Plan of the Borrower or any ERISA Affiliate of the Borrower has
occurred and could reasonably be expected to result in a material liability to
the Borrower and (B) within 10 days after the Borrower knows or has reason to
know that any other Plan Termination Event with respect to any Plan of the
Borrower or any ERISA Affiliate of the Borrower has occurred and could
reasonably be expected to result in a material liability to the Borrower, a
statement of the chief financial officer or chief accounting officer of the
Borrower describing such Plan Termination Event and the action, if any, which
the Borrower proposes to take with respect thereto;
(g) except as may arise in connection with the sale of
Panhandle, promptly after receipt thereof by the Borrower or any of its ERISA
Affiliates from the PBGC copies of each notice received by the Borrower or any
such ERISA Affiliate of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan;
(h) except as may arise in connection with the sale of
Panhandle, promptly and in any event within 30 days after the filing thereof
with the Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each Plan
(if any) to which the Borrower is a contributing employer;
(i) promptly after receipt thereof by the Borrower or any
of its ERISA Affiliates from a Multiemployer Plan sponsor, a copy of each notice
received by the Borrower or any of its ERISA Affiliates concerning the
imposition or amount of withdrawal liability in an aggregate principal amount of
at least $250,000 pursuant to Section 4202 of ERISA in respect of which the
Borrower is reasonably expected to be liable;
(j) promptly after the Borrower becomes aware of the
occurrence thereof, notice of all actions, suits, proceedings or other events of
the type described in Section 6.01(f);
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(k) 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;
(l) as soon as possible and in any event within five days
after the occurrence of any material default under any material agreement to
which the Borrower or any of its Subsidiaries is a party, which default would
materially adversely affect the 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
(m) promptly after requested, such other information
respecting the business, properties, condition or operations, financial or
otherwise, of the Borrower and its Subsidiaries as any Agent or the Required
Lenders may from time to time reasonably request in writing.
The Borrower shall be deemed to have fulfilled its obligations pursuant to
clauses (b), (c), (d), (e) and (k) 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 reasonably 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 VIII
DEFAULTS
SECTION 8.01. 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
8.02:
(a) The Borrower shall fail to pay (i) any principal of
any Loan when due or (ii) any interest thereon, fees or other amounts (other
than any principal of any Loan) payable hereunder within two Business Days after
such interest, fees or other amounts shall have become due; or
(b) Any representation or warranty made by or on behalf
of the Borrower in any Loan Document or certificate or other writing delivered
pursuant thereto shall prove to have been incorrect in any material respect when
made or deemed made; or
(c) The Borrower or any of its Subsidiaries shall fail to
perform or observe any term or covenant on its part to be performed or observed
contained in Section 7.01(c), (h),
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(i), (j), (l), (n) or (o) or in Section 7.02 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 Enterprises 2003
Credit Agreement, 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 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
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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 V, 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) Any "Event of Default" shall occur under and as
defined in the AIG Pledge Agreement as in effect on January 8, 2003 (and without
giving effect to any amendment or other modification thereto); 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; or
(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.
SECTION 8.02. REMEDIES. If any Event of Default has occurred and is
continuing, then the Administrative Agent or the Collateral Agent, as
applicable, shall at the request, or may with the consent, of the Required
Lenders, upon notice to the Borrower (i) declare the Commitments and the
obligation of each Lender to make or Convert Loans to be terminated, whereupon
the same shall forthwith terminate, (ii) declare the principal amount
outstanding hereunder, all interest thereon and all other amounts payable under
this Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the principal amount outstanding hereunder, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower, and (iii) exercise in respect of any and all collateral,
in addition to the other rights and remedies provided for herein or otherwise
available to the Administrative Agent, the Collateral Agent or the Lenders, all
the rights and remedies of a
61
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 or Convert Loans shall automatically be
terminated and (B) the principal amount outstanding hereunder, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
ARTICLE IX
THE AGENTS
SECTION 9.01. AUTHORIZATION AND ACTION.
(a) Each of the Lenders hereby irrevocably appoints each
Agent as its agent and authorizes each such Agent to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
(b) Any Lender serving as an Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not an Agent, and such Lender and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any of its Subsidiaries or other Affiliate
thereof as if it were not an Agent hereunder.
(c) No Agent shall have any duties or obligations except
those expressly set forth in the Loan Documents. Without limiting the generality
of the foregoing, (i) no Agent shall be subject to any fiduciary or other
implied duties, regardless of whether a Default or an Event of Default has
occurred and is continuing, (ii) no Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that such Agent
is required to exercise in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.01), 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
10.01 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
62
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 V or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to such Agent.
(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 9.01 shall
apply to any such sub-agent and to the Related Parties of each Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as an Agent.
(f) Subject to the appointment and acceptance of a
successor Agent as provided in this subsection (f), any Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a Lender with
an office in New York, New York, or an Affiliate of any such Lender. Upon the
acceptance of its appointment as an Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After an Agent's resignation hereunder, the provisions of this Article and
Section 10.04 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
63
10.05) that it will not take any legal action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or 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 or
otherwise enforce its portion of the Loans, or unilaterally terminate its
Commitment except in accordance with Section 8.02.
SECTION 9.02. 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 Arranger 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 10.04 but
are not reimbursed for such expenses by the Borrower.
SECTION 9.03. CONCERNING THE COLLATERAL AND THE LOAN DOCUMENTS.
(a) Each Lender authorizes and directs the Collateral
Agent to enter into the Loan Documents relating to the Collateral for the
benefit of the Lenders. Each Lender agrees that any action taken by any Agent or
the Required Lenders (or, where required by the express terms of this Agreement,
a greater proportion of the Lenders) in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by any Agent or the
Required Lenders (or, where so required, such greater proportion) of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders.
Without limiting the generality of the foregoing, the Collateral Agent shall
have the sole and exclusive right and authority to (i) act as the disbursing and
collecting agent for the Lenders with respect to all payments and collections
arising in connection with this Agreement and the Loan Documents relating to the
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by the Borrower
or any other Loan Party a party thereto; (iii) act as collateral agent for the
Lenders for purposes of the perfection of all Liens created by such agreements
and all other purposes stated therein; provided, however, the Collateral Agent
hereby appoints, authorizes and directs the other Agents and the Lenders to act
as collateral sub-agent for the Collateral Agent and the Lenders for purposes of
the perfection of all Liens with respect to any property of the Borrower or any
of its Subsidiaries at any time in the possession of such Lender, including,
without limitation, deposit accounts maintained with, and cash held by, such
Lender; (iv) manage, supervise and otherwise deal with the Collateral; (v) take
such action as is necessary or desirable to maintain the perfection and priority
of the Liens created or purported to be created by the Loan Documents; and (vi)
except as may be otherwise specifically restricted by
64
the terms of this Agreement or any other Loan Document, exercise all remedies
given to the Collateral Agent or the Lenders with respect to the Collateral
under the Loan Documents relating thereto, applicable law or otherwise.
(b) The Administrative Agent and each Lender hereby
directs, in accordance with the terms of this Agreement, the Collateral Agent to
release any Lien held by the Collateral Agent for the benefit of the Lenders:
(i) against all of the Collateral, upon payment in full
of the Obligations of all of the Loan Parties under the Loan Documents
and termination of this Agreement;
(ii) against any part of the Collateral sold or disposed
of by the Borrower or any of its Subsidiaries, if such sale or
disposition is otherwise permitted under this Agreement, as certified
to the Collateral Agent by the Borrower, or is otherwise consented to
by the Required Lenders;
(iii) against any part of the Collateral consisting of a
promissory note, upon payment in full of the Debt evidenced thereby;
and/or
(iv) against any of the Collateral and any Grantor upon
the occurrence of any event described in Section 8.10 of the Pledge
Agreements.
The Administrative Agent and each Lender hereby directs the Collateral Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 9.03(b) promptly upon the effectiveness of any such release.
SECTION 9.04. RELEASE OF GUARANTORS. Upon (x) the liquidation or
dissolution of any Guarantor, or sale of all of the capital stock or other
ownership interests 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 or (y) the occurrence of
any event described in Section 11 of the Guaranty, 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 X
MISCELLANEOUS
SECTION 10.01. 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
65
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 V, (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(b)), (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(b)) (except with respect to any modifications of the provisions
relating to amounts, timing or application of prepayments of Loans and other
Obligations which modification shall require only the approval of the Required
Lenders (other than the provisions relating to the amounts, timing or
application of prepayments of (a) the Facility A Loans which modifications shall
also require the approval of Lenders with Facility A Loans greater than or equal
to 66 2/3% of all of the Facility A Loans, and (b) the Facility B Loans which
modifications shall also require the approval of Lenders with Facility B Loans
greater than or equal to 66 2/3% of all of the Facility B Loans)), (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, waive or modify Section 2.03(b) or this Section 10.01, (vii) release
the Collateral Agent's Lien on all of the Collateral or any portion of the
Collateral in excess of $50,000,000 (except as provided in Section 9.03(b)), or
(viii) extend the Commitment Termination Date, the Facility A Maturity Date or
the Facility B Maturity 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. Any request from the
Borrower for any amendment, waiver or consent under this Section 10.01 shall be
addressed to the Administrative Agent.
SECTION 10.02. 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 the address set forth on its signature page hereto; (iii) if to
any Lender other than a Bank, at its Applicable Lending Office specified in the
Lender Assignment pursuant to which it became a Lender; (iv) if to the
Administrative Agent with respect to funding or payment of any amounts
hereunder, at its address at 2 Penns Way, Suite 200, New Castle, DE 19270, Attn:
Dawn Conover, Telephone No. (302) 894-6063, Telecopy No. (302) 894-6120; (v) if
to the Administrative Agent for any other reason or 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
66
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 IX shall not be
effective until received by such Agent.
SECTION 10.03. NO WAIVER OF REMEDIES. No failure on the part of the
Borrower, any Lender or any Agent to exercise, and no delay in exercising, any
right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 10.04. COSTS, EXPENSES AND INDEMNIFICATION.
(a) The Borrower agrees to (i) reimburse on demand all
reasonable costs and expenses of each Agent and the Arranger (including
reasonable fees and expenses of counsel to the Agents) in connection with (A)
the preparation, 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 8.02 or an Event of
Default specified in Section 8.01(a) shall have occurred and be continuing, each
Lender (including fees and expenses of counsel to the Agents, special Michigan
counsel to the Lenders and, from and after such date, counsel for each Lender
(including the allocated costs and expenses of in-house counsel)) in connection
with the workout, restructuring or enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the other Loan Documents and
the other documents to be delivered hereunder.
(b) The Borrower shall indemnify each Agent, the
Arranger, each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "INDEMNIFIED PERSON") against, and hold each
Indemnified Person harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnified Person, incurred by or asserted
against any Indemnified Person arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby or thereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan
or other Extension of Credit or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of any Hazardous
Substance on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnified Person is a party thereto; provided that such indemnity shall
not, as to any Indemnified Person, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnified Person.
67
(c) The Borrower's other obligations under this Section
10.04 shall survive the repayment of all amounts owing to the Lenders and the
Agents under the Loan Documents and the termination of the Commitments. If and
to the extent that the obligations of the Borrower under this Section 10.04 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 10.05. 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 8.02 to authorize the Administrative Agent to
declare the principal amount outstanding hereunder to be due and payable
pursuant to the provisions of Section 8.02, each Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower, against any
and all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Promissory Notes held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such
Promissory Notes, as the case may be, and although such obligations may be
unmatured. Each Lender agrees to notify promptly the Borrower after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 10.05 are in addition to other rights
and remedies (including other rights of set-off) which such Lender may have.
(b) The Borrower agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations hereunder, and
that the obligations of the Lenders hereunder are several and not joint. Nothing
contained herein shall constitute a relinquishment or waiver of the Borrower's
rights to any independent claim that the Borrower may have against any Agent or
any Lender for such Agent's or such Lender's, as the case may be, gross
negligence or willful misconduct, but no Lender shall be liable for any such
conduct on the part of any Agent or any other Lender, and no Agent shall be
liable for any such conduct on the part of any Lender.
SECTION 10.06. 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 10.07. ASSIGNMENTS AND PARTICIPATION.
(a) Any Lender may sell participations in all or a
portion of its rights and obligations under this Agreement pursuant to
subsection (b) below and any Lender may assign all or any part of its rights and
obligations under this Agreement pursuant to subsection (c) below.
68
(b) Any Lender may sell participations to one or more
banks or other entities (each a "PARTICIPANT") in all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and its outstanding Loan), provided that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of the Loans of
such Lender for all purposes of this Agreement and (iv) the Borrower shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Each Lender shall retain
the sole right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which would require consent
of all of the Lenders pursuant to the terms of Section 10.01 or of any other
Loan Document. The Borrower agrees that each Participant shall be deemed to have
the right of set-off provided in Section 10.05 in respect of its participating
interest in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of set-off
provided in Section 10.05 with respect to the amount of participating interests
sold to each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of set-off provided in Section 10.05,
agrees to share with each Lender, any amount received pursuant to the exercise
of its right of set-off, such amounts to be shared in accordance with Section
10.05 as if each Participant were a Lender. The Borrower further agrees that
each Participant shall be entitled to the benefits of Sections 4.04 and 4.06 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 10.07(c); provided that (i) a Participant shall
not be entitled to receive any greater payment under Section 4.04 or 4.06 than
the Lender who sold the participating interest to such Participant would have
received had it retained such interest for its own account, unless the sale of
such interest to such Participant is made with the prior written consent of the
Borrower, and (ii) any Participant not incorporated under the laws of the United
States of America or any State thereof agrees to comply with the provisions of
Section 4.06 to the same extent as if it were a Lender.
(c) Any Lender may, in the ordinary course of its
business and in accordance with applicable law, with the consent of the
Administrative Agent (such consent not to be unreasonably withheld or delayed),
at any time assign to one or more financial institutions all or any part of its
rights and obligations under this Agreement, provided that the minimum principal
amount of any such assignment (other than assignments to a Federal Reserve Bank,
or to any other Lender or affiliate or Approved Fund of a Lender, or to any
direct or indirect contractual counterparties in swap agreements relating to the
Loans to the extent required in connection with the physical settlement of any
Lender's obligations pursuant thereto) shall be $1,000,000 (or such lesser
amount consented to by the Administrative Agent); provided that, unless such
Lender is assigning all of its rights and obligations hereunder, after giving
effect to such assignment the assigning Lender shall have Loans in the aggregate
of not less than $1,000,000 (unless otherwise consented to by the Administrative
Agent).
(d) Any Lender may, in connection with any sale or
participation or proposed sale or participation pursuant to this Section 10.07
disclose to the purchaser or Participant or
69
proposed purchaser 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 of non-public information, the purchaser or Participant or
proposed purchaser or Participant (which Participant is not an affiliate of a
Lender) shall agree to preserve the confidentiality of any confidential
information (except any such disclosure as may be required by law or regulatory
process) relating to the Borrower received by it from such Lender.
(e) Assignments under this Section 10.07 shall be made
pursuant to an agreement (a "LENDER ASSIGNMENT") substantially in the form of
Exhibit F hereto or in such other form as may be agreed to by the parties
thereto and shall not be effective until a $3,500 fee has been paid to the
Administrative Agent by the assignee, which fee shall cover the cost of
processing such assignment, provided, that such fee shall not be incurred in the
event of an assignment by any Lender of all or a portion of its rights under
this Agreement to (i) a Federal Reserve Bank or (ii) a Lender or an affiliate or
Approved Fund of the assigning Lender or (iii) to any direct or indirect
contractual counterparties in swap agreements relating to the Loans to the
extent required in connection with the physical settlement of any Lender's
obligations pursuant thereto.
(f) Notwithstanding anything to the contrary contained
herein, any Lender (a "GRANTING LENDER") may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender is
obligated to make to the Borrower pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
if an SPC elects not to exercise such option or otherwise fails to provide all
or any part of such Loan, the Granting Lender shall remain obligated to make
such Loan pursuant to the terms hereof, (iii) the Borrower shall not be required
to pay any amount under Section 4.06 that is greater than the amount which it
would have been required to pay had there been no grant to an SPC and (iv) any
SPC (or assignee of an SPC) will comply, if applicable, with the provisions
contained in Section 4.06. No grant by any Granting Lender to an SPC agreeing to
provide a Loan or the making of such Loan by such SPC shall operate to relieve
such Granting Lender of its liabilities and obligations hereunder, except to the
extent of the making of such Loan by such SPC. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In addition, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that any SPC may (i)
with notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by the Administrative Agent in its sole
discretion) providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. This Section 10.07(f) may not be
amended without the written consent of any SPC that holds an option to provide
Loans. No recourse under any obligation, covenant, or agreement of the SPC
contained in this Agreement shall be had against any shareholder, officer, agent
or
70
director of the SPC as such, by the enforcement of any assessment or by any
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is a corporate obligation of the SPC and no
personal liability shall attach to or be incurred by any officer, agent or
member of the SPC as such, or any of them under or by reason of any of the
obligations, covenants or agreements of the SPC contained in this Agreement, or
implied therefrom, and that any and all personal liability for breaches by the
SPC of any such obligations, covenants or agreements, either at law or by
statute or constitution, of every such shareholder, officer, agent or director
is hereby expressly waived by all parties to this Agreement as a condition of
and consideration for the SPC entering into this Agreement; provided, however,
that the foregoing shall not relieve any such person or entity of any liability
they might otherwise have as a result of fraudulent actions or omissions taken
by them. All parties to this Agreement acknowledge and agree that the SPC shall
only be liable for any claims that each of them may have against the SPC only to
the extent of the SPC's assets. The provisions of this clause shall survive the
termination of this Agreement.
(g) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(h) The Administrative Agent shall maintain at its
address referred to in Section 10.02 a copy of each Lender Assignment delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time (the "REGISTER"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agents and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
SECTION 10.08. CONFIDENTIALITY. In connection with the negotiation and
administration of this Agreement and the other Loan Documents, the Borrower has
furnished and will from time to time furnish to the Agents and the Lenders
(each, a "RECIPIENT") written information which is identified to the Recipient
when delivered as confidential (such information, other than any such
information which (i) was publicly available, or otherwise known to the
Recipient, at the time of disclosure, (ii) subsequently becomes publicly
available other than through any act or omission by the Recipient or (iii)
otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Borrower, being hereinafter referred to as "CONFIDENTIAL
INFORMATION"). The Recipient will not knowingly disclose any such Confidential
Information to any third party (other than to those 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
71
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 10.08. 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. Notwithstanding any other
provision of this Agreement, each party (and each Participant pursuant to
Section 10.07) (and each employee, representative or other agent of such party
(or Participant)) may disclose to any and all persons, without limitation of any
kind, the U.S. tax treatment and U.S. tax structure of the transactions
contemplated by the Loan Documents and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to such
U.S. tax treatment and U.S. tax structure, other than any information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
SECTION 10.09. Waiver of Jury Trial. THE BORROWER, THE AGENTS AND THE
LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
THEREUNDER.
SECTION 10.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND THE PROMISSORY NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES). THE BORROWER, THE LENDERS AND THE
AGENTS, EACH (I) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT OR FEDERAL COURT SITTING IN NEW YORK CITY IN ANY ACTION ARISING OUT OF ANY
LOAN DOCUMENT, (II) AGREES THAT ALL CLAIMS IN SUCH ACTION MAY BE DECIDED IN SUCH
COURT, (III) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM AND (IV) CONSENTS TO THE SERVICE OF PROCESS BY MAIL. A
FINAL JUDGMENT IN ANY SUCH ACTION SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE
LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR AFFECT ITS RIGHT TO BRING ANY
ACTION IN ANY OTHER COURT. THE BORROWER AGREES THAT THE AGENTS SHALL HAVE THE
RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION
TO ENABLE THE AGENTS AND THE LENDERS TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE AGENTS OR ANY LENDER. THE BORROWER AGREES THAT IT WILL
NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY ANY AGENT
72
OR ANY LENDER TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ANY AGENT
OR ANY LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH ANY AGENT OR ANY LENDER MAY COMMENCE A PROCEEDING
DESCRIBED IN THIS SECTION.
SECTION 10.11. 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 10.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement.
SECTION 10.13. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made herein and in the certificates pursuant
hereto shall be considered to have been relied upon by the Agents and the
Lenders and shall survive the making by the Lenders of the Extensions of Credit
and the execution and delivery to the Lenders of any Promissory Notes evidencing
the Extensions of Credit and shall continue in full force and effect so long as
any Promissory Note or any amount due hereunder is outstanding and unpaid or any
Commitment of any Lender has not been terminated.
SECTION 10.14. LIMITATION OF LIABILITY: COMMUNICATIONS. WITH RESPECT TO
COMMUNICATIONS DELIVERED PURSUANT TO SECTION 10.15 OF THIS AGREEMENT, SUCH
COMMUNICATIONS AND THE PLATFORM ARE PROVIDED "AS IS" AND "AS AVAILABLE". THE
CITIGROUP PARTIES DO NOT WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE
COMMUNICATIONS OR THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR
OMISSIONS IN THE COMMUNICATIONS OR THE PLATFORM. NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE
CITIGROUP PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. THE
BORROWER HEREBY ACKNOWLEDGES THAT ALTHOUGH THE PRIMARY WEB PORTAL IS SECURED
WITH A DUAL FIREWALL AND A USER IDENTIFICATION/PASSWORD AUTHORIZATION SYSTEM AND
THE PLATFORM IS SECURED THROUGH A SINGLE USER PER DEAL AUTHORIZATION METHOD
WHEREBY EACH USER MAY ACCESS
73
THE PLATFORM ONLY ON A DEAL-BY-DEAL BASIS, THE DISTRIBUTION OF MATERIAL THROUGH
AN ELECTRONIC MEDIUM IS NOT NECESSARILY SECURE AND THAT THERE ARE
CONFIDENTIALITY AND OTHER RISKS ASSOCIATED WITH SUCH DISTRIBUTION. THE
PROVISIONS OF THIS SECTION 10.14 SHALL SURVIVE THE MAKING OF ANY LOAN, THE
REPAYMENT THEREOF AND THE TERMINATION OF THIS AGREEMENT AND ANY LOAN DOCUMENT.
SECTION 10.15. PLATFORM AND PRIMARY WEB PORTAL.
(a) The Borrower shall use its commercially reasonable
best efforts to transmit to the Administrative Agent all information, documents
and other materials that it is obligated to furnish to the Administrative Agent
pursuant to this Agreement and the other Loan Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a notice of borrowing or other extension of
credit or a conversion of an existing interest rate on any Loan or borrowing
(including, without limitation, any Notice of Conversion), (ii) relates to the
payment of any principal or other amount due hereunder prior to the scheduled
date therefor, (iii) provides notice of any Default or Event of Default
hereunder or (iv) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any extension of credit hereunder
(all such non-excluded communications being referred to herein collectively as
"COMMUNICATIONS"), in an electronic/soft medium in a format reasonably
acceptable to the Administrative Agent to oploanswebadmin@citigroup.com. In
addition, the Borrower shall continue to provide the Communications to the
Administrative Agent in the manner specified in this Agreement but only to the
extent requested by the Administrative Agent. Each Lender and the Borrower
further agree that the Administrative Agent may make the Communications
available to the Lenders by posting the Communications on "e-Disclosure" (the
"PLATFORM"), the Administrative Agent's internet delivery system that is part of
SSB Direct, Global Fixed Income's primary web portal (the "PRIMARY WEB PORTAL").
(b) The Administrative Agent agrees that the receipt of
the Communications by the Administrative Agent at its e-mail address set forth
in clause (a) above shall constitute effective delivery of the Communications to
the Administrative Agent for purposes of this Agreement and under the Loan
Documents. Each Lender agrees that notice to it at its e-mail address provided
in clause (a) above specifying that Communications have been posted to the
Platform shall constitute effective delivery of the Communications to such
Lender under this Agreement and under the Loan Documents.
(c) Nothing in this Agreement or any other Loan Document
shall prejudice the right of the Administrative Agent or any Lender to give any
notice or other communication pursuant hereto or to any other Loan Document in
any other manner specified herein or therein.
(d) The provisions of Section 10.15(a) and (b) shall
terminate on the date that neither CUSA nor any of the Citigroup Parties is the
Administrative Agent.
74
ARTICLE XI
NO NOVATION; REFERENCES TO THIS AGREEMENT IN LOAN DOCUMENTS
SECTION 11.01. NO NOVATION. It is the express intent of the parties
hereto that the Initial Amendment and Restatement and this Agreement (i) shall
re-evidence, in part, the Borrower's indebtedness under the Existing Credit
Agreements and the Initial Amendment and Restatement, respectively, (ii) is
entered into in substitution for, and not in payment of, the obligations of the
Borrower under the Existing Credit Agreements and the Initial Amendment and
Restatement, respectively, and (iii) is in no way intended to constitute a
novation of any of the Borrower's indebtedness which was evidenced by the
Existing Credit Agreements, the Initial Amendment and Restatement, or any of the
other Loan Documents.
SECTION 11.02. REFERENCES TO THIS AGREEMENT IN LOAN DOCUMENTS. Upon the
effectiveness of this Agreement, on and after the date hereof, each reference in
any other Loan Document (including any reference therein to "the Credit
Agreement," "thereunder," "thereof," "therein" or words of like import referring
thereto) shall mean and be a reference to this Agreement.
[Signature pages follow.]
75
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/ Laura L. Mountcastle
---------------------------------
Name: Laura L. Mountcastle
Title: Authorized Representative
Signature Pages to
Second Amended and Restated Credit Agreement
CITICORP USA, INC., as Administrative Agent
By: /s/ Dale R. Goncher
-----------------------------------------
Name: Dale R. Goncher
Title: DIRECTOR
CITIBANK, N.A., as a Lender
By: /s/Dale R. Goncher
-----------------------------------------
Name: Dale R. Goncher
Title: DIRECTOR
Signature Page to Second Amended and Restated Credit Agreement
COMMITMENT SCHEDULE
- ----------------------------------------------------
Facility A Facility B
LENDER Commitment Commitment
- ----------------------------------------------------
CITIBANK, N.A. $234,000,000 $175,000,000
- ----------------------------------------------------
Total Commitments: $234,000,000 $175,000,000
- ----------------------------------------------------
CMS ENERGY CORPORATION
SCHEDULE I
GAAP DEBT BREAKDOWN
AS OF FEBRUARY 28, 2003
BORROWER FACILITY CURRENT BALANCE
CMS ENERGY
$295.8MM Credit Agreement $ 123,819,866
$300MM Credit Agreement 133,800,000
General Term Notes
Series D 79,922,000
Series E 215,955,000
Series F 297,686,000
Sr. Unsecured Notes @ 7 5/8% 175,815,000
Convert. Sub. Debentures 172,500,000
Extend. Tenor Rate Adj. Sec. 180,000,000
Sr. Unsecured Notes @ 7.5% 408,845,000
Sr. Unsecured Notes @ 6.75% 287,025,000
Sr. Notes @ 8.9% 260,475,000
Sr. Notes @ 8 3/8% 150,000,000
Sr. Notes @ 9.875% 467,558,000
Premium Equity Participating Security Units 220,000,000
Sr. Notes @ 8.5% 300,375,000
CMS Methanol Company 14,000,000
PANHANDLE EASTERN PIPE LINE
Sr. Notes @ 6.125% 292,500,000
Sr. Notes @ 6.5% 158,980,000
Sr. Notes @ 7.0% 135,890,000
Sr. Notes @ 8.25% 60,000,000
Notes @ 7.785% 100,000,000
Debentures @ 7.2% 58,000,000
Debentures @ 7.95% 76,500,000
Citibank Bridge Loan 40,000,000
CMS ENTERPRISES
None
CMS GENERATION COMPANY
CMS Capital LLC 4,957,214
CMS GAS TRANSMISSION
CMS Capital LLC 11,394,197
Antrim Gas Term Loan with BOM 22,625,000
Jackson Pipeline RCF with Tor Dom 2,687,000
CMS ELECTRIC & GAS
None
CMS MARKETING SERVICES & TRADING
CMS Capital LLC 127,353,473
CMS INTERNATIONAL VENTURES LLC
None
DEARBORN INDUSTRIAL ENERGY LLC
None
CMS GENERATION MICHIGAN POWER LLC
None
DEARBORN INDUSTRIAL GENERATION
CMS Capital LLC 13,337,242
CMS FIELD SERVICES
The CIT Group 731,204
CMS GAS PROCESSING LLC
CMS Capital LLC 6,036,529
CMS NATURAL GAS GATHERING LLC
CMS Capital LLC 3,346,852
PANHANDLE PIPE LINE COMPANY
Trunkline Gas Company S-T 100,000,000
Trunkline Gas Company L-T 100,000,000
CMS CAPITAL LLC
CMS Enterprises Company 11,197,420
CMSG Filer City Operating Company 413,815
CMSG Honey Lake Company 462,258
CMS Jackson Pipeline Company 91,705
CMS Bay Area Pipeline Company 1,054,924
CMSG Graying Holdings Company 1,164,325
CMSG Operating Company 1,323,669
CMSG Mon Valley Company 11,563
CMS Saginaw Bay Lateral Company 276,140
CMS Antrim Gas LLC 1,370,523
CMSG Holdings Company 1,206,958
CMSG Altoona Company 182,228
CMSG Genesee Company 1,513,182
CMS Resource Development 2,855,881
CMSG Recycling Company 371,025
CMSG Lyonsdale Company 20,160
Mon Valley Energy 113
CMSG Chateaugay Company 35,096
CMS Grands Lacs LLC 1,400,457
HYDRA-CO Enterprises, Inc. 1,696,027
CMSG Operating Company II 1,055,368
HCE Appomattox, Inc. 341,816
HCE Jamaica Development, Inc. 5,780
HCO Jamaica, Inc. 164,957
CMS Electric & Gas Company 4,036,096
CMS Texon Company 632,042
CMS Marysville Gas Liquids Company 670,134
CMSG Stratton Company 72,258
CMS Field Services, Inc. 34,262,090
CMS Laverne Gas Processing, LLC 64,085
Panhandle Eastern Pipeline Company 308,744,037
Taweeelah A2 Operating Company 810,173
Dearborn Generation Operating, LLC 3,955,220
CMS Capital Financial Services, Inc. 602,157
CMSG Michigan Power, LLC 804,292
CMS Enterprises Data Mart 243,398
CMS MS&T Michigan, LLC 15,991,117
CMS Energy UK Limited 1,879,798
CMS MicroPower Systems, LLC 3,422,229
CMSG Investment Company I 808,707
CMS Business Development, LLC 3,266,068
CMS Enterprises Development, LLC 232,701
CMS International Ventures, LLC 3,436,843
CMS Enterprise Oil & Gas Company 108,856,818
CMSG Investment Company V 1,553,780
TOTAL GAAP DEBT $ 5,324,674,009
SCHEDULE II
Pledged Ownership Interests
GRANTOR PLEDGED SUBSIDIARIES
------- --------------------
CMS Energy Corporation CMS Enterprises Company (100%)
Consumers Energy Company (100%)
CMS Enterprises Company CMS Generation Co. (100%)
CMS Gas Transmission Company (100%)
CMS Capital, L.L.C. (100%)
CMS Marketing, Services and Trading Company (100%)
CMS International Ventures, L.L.C. (40.47%)
CMS International Ventures, L.L.C. CMS Electric & Gas, L.L.C. (100%)
CMS Generation Co. CMS International Ventures, L.L.C. (21.02%)
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 International Ventures, L.L.C. (37.01%)
Panhandle Eastern Pipe Line Company (100%)
CMS Field Services, Inc. (100%)
CMS Field Services, Inc. CMS Gas Processing, L.L.C. (100%)
CMS Natural Gas Gathering, L.L.C. (100%)
CMS Field Services Holdings Company (100%)
ATTACHMENT A
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy
of the foregoing Second Amended and Restated Credit Agreement dated as of March
30, 2003 by and among CMS ENERGY CORPORATION (the "Borrower"), the financial
institutions from time to time party thereto (the "Lenders"), and CITICORP USA,
INC., in its capacity as contractual representative (the "Administrative Agent")
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Capitalized terms used in this Reaffirmation and not
defined herein shall have the meanings given to them in the Credit Agreement.
Without in any way establishing a course of dealing by any Agent or any Lender,
each of the undersigned reaffirms the guaranty pursuant to the Guaranty and the
grant of a security interest pursuant to the Pledge Agreement executed by it and
acknowledges and agrees that each such Loan Document executed by the undersigned
in connection with the Credit Agreement remains in full force and effect and is
hereby reaffirmed, ratified and confirmed. All references to the Credit
Agreement contained in the above-referenced documents shall be a reference to
the Credit Agreement as the same may from time to time hereafter be amended,
modified or restated.
Dated as of March 30, 2003
CMS ENTERPRISES COMPANY CMS GENERATION CO.
By:__________________________ By:__________________________
Its: Its:
CMS GAS TRANSMISSION CMS CAPITAL, L.L.C.
COMPANY
By:__________________________ By:__________________________
Its: Its:
CMS ELECTRIC & GAS, L.L.C. CMS INTERNATIONAL
(formerly known as CMS Electric and VENTURES, L.L.C.
Gas Company)
By:__________________________
By:__________________________ Its:
Its:
CMS MARKETING, SERVICES CMS FIELD SERVICES
AND TRADING COMPANY HOLDINGS COMPANY
By:__________________________
Its: By:__________________________
Its:
CMS GENERATION MICHIGAN DEARBORN INDUSTRIAL
POWER L.L.C. ENERGY, L.L.C.
By:__________________________ By:__________________________
Its: Its:
DEARBORN INDUSTRIAL CMS FIELD SERVICES, INC.
GENERATION, L.L.C.
By:__________________________ By:__________________________
Its: Its:
CMS GAS PROCESSING, L.L.C. CMS NATURAL GAS
GATHERING, L.L.C.
By:__________________________ By:__________________________
Its: Its: