U.S. $200,000,000
CREDIT AGREEMENT
Dated as of March 25, 2003
Among
CENTERPOINT ENERGY RESOURCES CORP.
as Borrower,
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders,
and
SALOMON SMITH BARNEY INC. and J.P. MORGAN SECURITIES INC.
as Lead Arrangers and Joint Bookrunners,
and
CITICORP USA, INC.
as Administrative Agent,
and
CITICORP NORTH AMERICA, INC
as Collateral Agent,
and
WACHOVIA BANK, NATIONAL ASSOCIATION and BANC ONE CAPITAL MARKETS, INC.
as Co-Syndication Agents,
and
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH
as Documentation Agent
CERC 364-Day Revolving Credit Agreement
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.............................................................................. 1
SECTION 1.02. Computation of Time Periods........................................................................ 16
SECTION 1.03. Accounting Terms................................................................................... 16
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Revolving Advances............................................................................. 17
SECTION 2.02. Making the Revolving Advances...................................................................... 17
SECTION 2.03. The CAF Advances................................................................................... 18
SECTION 2.04. Competitive Bid Procedure.......................................................................... 18
SECTION 2.05. Fees............................................................................................... 20
SECTION 2.06. Termination or Reduction of the Commitments........................................................ 20
SECTION 2.07. Repayment.......................................................................................... 21
SECTION 2.08. Interest........................................................................................... 21
SECTION 2.09. Interest Rate Determination........................................................................ 21
SECTION 2.10. Optional Conversion of Revolving Advances.......................................................... 22
SECTION 2.11. Optional Prepayments of Revolving Advances......................................................... 22
SECTION 2.12. Increased Costs.................................................................................... 22
SECTION 2.13. Illegality......................................................................................... 23
SECTION 2.14. Payments and Computations.......................................................................... 23
SECTION 2.15. Taxes.............................................................................................. 24
SECTION 2.16. Sharing of Payments, Etc........................................................................... 26
SECTION 2.17. Use of Proceeds.................................................................................... 26
SECTION 2.18. Evidence of Debt................................................................................... 26
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01 and 2.03.................................... 27
SECTION 3.02. Conditions Precedent to Each Revolving Borrowing................................................... 28
SECTION 3.03. Conditions Precedent to Each CAF Borrowing........................................................ 28
SECTION 3.04. Determinations Under Section 3.01................................................................. 29
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower..................................................... 29
ARTICLE V COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants.............................................................................. 30
SECTION 5.02. Negative Covenants................................................................................. 32
SECTION 5.03. Financial Covenants................................................................................ 34
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default.................................................................................. 35
CERC 364-Day Revolving Credit Agreement
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PAGE
ARTICLE VII THE AGENTs
SECTION 7.01. Authorization and Action........................................................................... 37
SECTION 7.02. Agents' Reliance, Etc. ............................................................................ 37
SECTION 7.03. CUSA, JPMS and Affiliates.......................................................................... 37
SECTION 7.04. Lender Credit Decision............................................................................. 37
SECTION 7.05. Indemnification.................................................................................... 38
SECTION 7.06. Successor Agents................................................................................... 38
ARTICLE VIII MISCELLANEOUS
SECTION 8.01. Amendments, Etc.................................................................................... 38
SECTION 8.02. Notices, Etc....................................................................................... 39
SECTION 8.03. No Waiver; Remedies................................................................................ 40
SECTION 8.04. Costs and Expenses................................................................................. 40
SECTION 8.05. Right of Set-off................................................................................... 41
SECTION 8.06. Binding Effect..................................................................................... 41
SECTION 8.07. Assignments and Participations..................................................................... 41
SECTION 8.08. Collateral......................................................................................... 43
SECTION 8.09. Confidentiality.................................................................................... 43
SECTION 8.10. Governing Law...................................................................................... 43
SECTION 8.11. Execution in Counterparts.......................................................................... 43
SECTION 8.12. Jurisdiction, Etc. ................................................................................ 43
Schedules
Schedule 1 - List of Applicable Lending Offices
Exhibits
Exhibit A - Form of Promissory Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of CAF Note
Exhibit E - Form of Competitive Bid Request
Exhibit F - Form of Competitive Bid
Exhibit G - Form of Competitive Bid Confirmation
Exhibit H - Form of Pledge Agreement
CERC 364-Day Revolving Credit Agreement
CREDIT AGREEMENT
Dated as of March 25, 2003
CENTERPOINT ENERGY RESOURCES CORP., a Delaware corporation
(the "Borrower"), the banks, financial institutions and other institutional
lenders (the "Initial Lenders") listed on the signature pages hereof, SALOMON
SMITH BARNEY INC. ("SSBI") and J.P. MORGAN SECURITIES INC. ("JPMS"), as lead
arrangers and as joint bookrunners (the "Lead Arrangers"), WACHOVIA BANK,
NATIONAL ASSOCIATION and BANC ONE CAPITAL MARKETS, INC., as syndication agents
(the "Co-Syndication Agents"), CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS
BRANCH, as documentation agent (the "Documentation Agent"), CITICORP NORTH
AMERICA, INC. ("CNAI"), as collateral agent (the "Collateral Agent") and
CITICORP USA, INC. ("CUSA"), as administrative agent (the "Administrative
Agent") for the Lenders (as hereinafter defined), 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 (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Acquired Entity" has the meaning set forth in the definition
of "Permitted Liens".
"Advance" means a Revolving Advance or a CAF Advance, as the
case may be, by a Lender to the Borrower pursuant to Article II, and
refers to a Base Rate Advance or a Eurodollar Rate Advance (each of
which shall be a "Type" of Advance).
"Affiliate" of any Person means any other Person that,
directly or indirectly, Controls or is Controlled by or is under common
Control with such first Person.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at
Citibank, N.A. with its office at Two Penns Way, Suite 200, New Castle,
Delaware, 19720, Account No. 36852248, Attention: Global Loans/Agency.
"Agents" means the Administrative Agent and the Collateral
Agent.
"Aggregate Outstanding Extensions of Credit" means, as to any
Lender at any time, an amount equal to the aggregate principal amount
of all Revolving Advances and CAF Advances made by such Lender then
outstanding.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance or CAF Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on
such date as set forth below:
Public Debt Rating Applicable Margin for Applicable Margin for
S&P/Moody's Base Rate Advances Eurodollar Rate Advances
------------------ --------------------- ------------------------
Level 1
BBB+/Baa1 or above 0.00% 0.85%
- -------------------------------------------------------------------------------------
Level 2
BBB/Baa2 0.05% 1.05%
- -------------------------------------------------------------------------------------
CERC 364-Day Revolving Credit Agreement
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Level 3
BBB-/Baa3 0.50% 1.50%
- -------------------------------------------------------------------------------------
Level 4
BB+/Ba1 1.00% 2.00%
- -------------------------------------------------------------------------------------
Level 5
Lower than Level 4 or
unrated by both S&P and
Moody's 1.50% 2.50%
- -------------------------------------------------------------------------------------
provided, that at all times that any amounts due under the Bridge
Credit Agreement remain outstanding, the Applicable Margin shall be
equal to 4.50%.
"Applicable Percentage" means, as of any date, a percentage
per annum determined by reference to the Public Debt Rating in effect
on such date as set forth below:
Public Debt Rating Applicable
S&P/Moody's Percentage
------------------ ----------
Level 1 0.15%
BBB+/Baa1
- ----------------------------------------------------
Level 2 0.20%
BBB/Baa2
- ----------------------------------------------------
Level 3 0.25%
BBB-/Baa3
- ----------------------------------------------------
Level 4 0.50%
BB+/Ba1
- ----------------------------------------------------
Level 5 0.50%
Lower than Level 4 or unrated
by both S&P and Moody's
- ----------------------------------------------------
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C hereto.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by
Citibank, N.A. in New York, New York, from time to time, as
its base rate; and
(b) 1/2 of one percent per annum above the
Federal Funds Rate.
"Base Rate Advance" means a Revolving Advance that bears
interest as provided in Section 2.08(a)(i).
"Board" means the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"Borrowed Money" of any Person means any Indebtedness of such
Person for or in respect of money borrowed or raised by whatever means
(including acceptances, deposits and lease obligations under Capital
Leases); provided, however, that Borrowed Money shall not include (a)
any guarantees that may be incurred by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business or similar transactions, (b) any obligations or guarantees of
performance of obligations under a franchise, performance bonds,
franchise bonds, obligations to reimburse drawings under letters of
credit issued in accordance with the terms of any safe harbor lease or
franchise or in lieu of performance or in
CERC 364-Day Revolving Credit Agreement
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lieu of franchise bonds or other obligations that do not represent
money borrowed or raised, which reimbursement obligations in each case
shall be payable in full within ten (10) Business Days after the date
upon which such obligation arises, (c) trade payables, (d) customer
advance payments and deposits arising in the ordinary course of such
Person's business, (e) operating leases and (f) obligations under swap
agreements.
"Borrowing" means either a Revolving Borrowing or a CAF
Borrowing.
"Borrowing Date" means any Business Day specified by the
Borrower as a date on which the Borrower requests the relevant Lenders
to make Advances hereunder.
"Bridge Credit Agreement" means the $350,000,000 Bridge Credit
Agreement to be entered into among the Borrower, Salomon Smith Barney
Inc. as lead arranger, the lenders party thereto and Citicorp North
America, Inc. as administrative agent.
"Bridge Lenders" means the "Lenders" as defined in the Bridge
Credit Agreement.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAF Advance" means an Advance made to the Borrower pursuant
to Section 2.04 by a Lender in response to a Competitive Bid Request.
"CAF Borrowing" means a borrowing consisting of CAF Advances
under Section 2.04 consisting of CAF Advances of the same Type made on
the same day by the Lender or Lenders whose Competitive Bid or Bids
have been accepted pursuant to Section 2.04(d).
"CAF Eurodollar Rate Advance" means any CAF Advance that bears
interest at the Eurodollar Rate.
"CAF Facility" has the meaning as set forth in Section
2.03(a).
"CAF Margin" means, as to any Competitive Bid relating to a
CAF Eurodollar Rate Advance, the margin (expressed as a percentage rate
per annum in the form of a decimal to no more than four decimal places)
to be added to or subtracted from the Eurodollar Rate in order to
determine the interest rate acceptable to such Lender with respect to
such CAF Eurodollar Rate Advance.
"CAF Note" means a promissory note of the Borrower payable to
the order of any Lender that has requested a CAF Note pursuant to
Section 2.18(a), in substantially the form of Exhibit D hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the CAF Advances made by such Lender.
"CAF Rate" means, as to any Competitive Bid made by a Lender
pursuant to Section 2.04(b), (i) in the case of a CAF Eurodollar Rate
Advance, the CAF Margin added to or subtracted from, as the case may
be, the Eurodollar Rate, and (ii) in the case of a Fixed Rate Advance,
the fixed rate of interest, in each case, offered by such Lender.
"Capital Lease" means a lease that, in accordance with GAAP,
would be recorded as a capital lease on the balance sheet of the
lessee.
"Cash Interest" means interest expense of the Borrower and its
Subsidiaries, to the extent actually paid in cash, during the relevant
period.
"Collateral" has the meaning specified in the Pledge
Agreement.
CERC 364-Day Revolving Credit Agreement
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"Collateral Agent" has the meaning as set forth in the recital
of the parties hereto.
"Commitment" has the meaning specified in Section 2.01.
"Communications" has the meaning specified in Section 8.02(b).
"Competitive Bid" has the meaning as set forth in Section
2.04(b).
"Competitive Bid Confirmation" has the meaning as set forth in
Section 2.04(d).
"Competitive Bid Request" has the meaning as set forth in
Section 2.04(a).
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender in a writing
designated as confidential or which in the Borrower's course of dealing
with the Administrative Agent or such Lender has been designated as
confidential, but does not include any such information that is or
becomes generally available to the public or that is or becomes
available to the Administrative Agent or such Lender from a source
other than the Borrower.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Capitalization" means the sum of (a)
Consolidated Shareholders' Equity, (b) Consolidated Indebtedness for
Borrowed Money and (c) without duplication, any Mandatory Payment
Preferred Stock.
"Consolidated Net Tangible Assets" means the total amount of
assets of the Borrower and its Subsidiaries less, without duplication,
(a) total current liabilities (excluding Indebtedness for Borrowed
Money due within 12 months); (b) all reserves for depreciation and
other asset valuation reserves, but, excluding reserves for deferred
federal income taxes arising from accelerated amortization or
otherwise; (c) all intangible assets such as goodwill, trademarks,
trade names, patents and unamortized debt discount and expense carried
as an asset; and (d) all appropriate adjustments on account of minority
interests of other persons holding common stock of any Subsidiary; all
as reflected in the Borrower's audited consolidated balance sheet most
recently delivered pursuant hereto prior to the date of a determination
of Consolidated Net Tangible Assets hereunder.
"Consolidated Shareholders' Equity" means, as of any date of
determination, the total assets of Borrower and its Consolidated
Subsidiaries less all liabilities of Borrower and its Consolidated
Subsidiaries. (As used in this definition, "liabilities" means all
obligations that, in accordance with GAAP consistently applied, would
be classified on a balance sheet as liabilities, including, without
limitation, (a) Indebtedness; (b) deferred liabilities; and (c)
Indebtedness of Borrower or any of its Consolidated Subsidiaries that
is expressly subordinated in right and priority of payment to other
liabilities of Borrower or such Consolidated Subsidiaries, but in any
case excluding as at such date of determination any Junior Subordinated
Debt owned by any Hybrid Preferred Securities Subsidiary and excluding
any adjustment, non-cash charge to net income or other non-cash charges
or write-offs resulting thereto from the application of SFAS No. 142
and similar provisions of GAAP).
"Controlled" means, with respect to any Person, the ability of
another Person (whether directly or indirectly and whether by the
ownership of voting securities, contract or otherwise) to appoint
and/or remove the majority of the members of the board of directors or
other governing body of that Person (and "Control" and "Controls" shall
be similarly construed).
"Convert", "Conversion" and "Converted" each refers to a
conversion of Revolving Advances of one Type into Revolving Advances of
the other Type pursuant to Section 2.09 or 2.10.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
CERC 364-Day Revolving Credit Agreement
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"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"EBITDA" means, for any period, net income (or net loss) plus
the sum of (a) interest expense, (b) income tax expense, (c)
depreciation expense, (d) amortization expense and (e) to the extent
reflected as a charge in the computation of net income for such period,
any other non-cash charges, in each case determined in accordance with
GAAP for such period.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Administrative Agent
and, unless an Event of Default has occurred and is continuing at the
time any assignment is effected in accordance with Section 8.07, the
Borrower, such approval not to be unreasonably withheld or delayed;
provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, Environmental Permit or Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental or
regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment,
decree or judicial or agency interpretation, policy or guidance having
the force of law relating to pollution or protection of the
environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous
Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"Equity Interests" means any capital stock, partnership, joint
venture, member or limited liability or unlimited liability company
interest, beneficial interest in a trust or similar entity or other
equity interest or investment of whatever nature.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title
IV of ERISA is a member of the Borrower's controlled group, or under
common control with the Borrower, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC, or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in
CERC 364-Day Revolving Credit Agreement
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Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of the Borrower or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a
lien under Section 302(f) of ERISA shall have been met with respect to
any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to administer,
a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum (rounded upward to the nearest whole
multiple of 1/100 of 1% per annum, if such rate per annum is not such a
multiple) at which deposits in U.S. dollars are offered by the
principal office of Citibank, N.A. in London, England to prime banks in
the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in an amount
substantially equal to the Administrative Agent's Eurodollar Rate
Advance comprising part of such Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period.
"Eurodollar Rate Advance" means a Revolving Advance that bears
interest as provided in Section 2.08(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all Eurodollar Rate Advances or CAF Eurodollar Rate Advances
comprising part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New
York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances or CAF Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means, for any period,
(a) net cash provided by (used in) operating
activities as reported in the Borrower's Statements of
Consolidated Cash Flows, less
(b) net cash used in investing activities as reported
in the Borrower's Statements of Consolidated Cash Flows, plus
(c) if there was a net increase in Consolidated
Indebtedness for Borrowed Money (other than with respect to
amounts borrowed under this Agreement), the amount of such
increase, less
CERC 364-Day Revolving Credit Agreement
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(d) if there was a net decrease in the amount of
Consolidated Indebtedness for Borrowed Money (other than with
respect to amounts borrowed under this Agreement), the amount
of such decrease.
"Exchange Act" means the Securities Exchange Act of 1933, as
amended.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fee Letter" means the 364-Day Revolving Credit Facility Fee
Letter dated as of February 28, 2003 between CUSA, SSBI and the
Borrower.
"Financial Officer" means, with respect to the Borrower, its
chief financial officer, chief accounting officer, treasurer, assistant
treasurer, comptroller or any other officer acceptable to the
Administrative Agent.
"Fixed Rate Advance" means any CAF Advance made by a Lender
pursuant to Section 2.04(b) based upon a fixed percentage rate per
annum offered by such Lender, expressed as a decimal (to no more than
four decimal places), and accepted by the Borrower.
"Fully Hedged" means, with respect to any Indexed Debt
Securities, that Borrower or any Consolidated Subsidiary of Borrower
either (i) owns or has in effect rights providing substantially the
economic effect, in such context, of owning, a sufficient amount of the
Indexed Asset relating thereto to satisfy completely its obligations at
maturity of the Indexed Debt Securities or (ii) has in effect a hedging
arrangement sufficient to enable it to satisfy completely its
obligations at maturity of the Indexed Debt Securities.
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee" means, as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any principal of any
Indebtedness for Borrowed Money (the "primary obligations") of any
other third Person in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds for the purchase or payment
of any such primary obligation or (iii) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in
respect thereof. The amount of any Guarantee of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee, unless such primary obligation and
the maximum amount for which such guaranteeing person may be liable are
not stated or determinable, in which case the amount of such Guarantee
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by Borrower in good faith
(and "guaranteed" and "guarantor" shall be construed accordingly).
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"Hazardous Materials" means (a) petroleum and petroleum
products, byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Hybrid Preferred Securities" means preferred securities
issued by any Hybrid Preferred Securities Subsidiary.
"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) at all times by 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 the Junior Subordinated Debt and payments made from time to
time on the Junior Subordinated Debt.
"Indebtedness" of any Person means the sum of (a) all items
(other than capital stock, capital surplus and retained earnings) that,
in accordance with GAAP consistently applied, would be included in
determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date on which the Indebtedness
is to be determined and (b) the amount of all Guarantees by such
Person; provided, however, that Indebtedness of a Person shall not
include any Junior Subordinated Debt owned by any Hybrid Preferred
Securities Subsidiary or any Guarantee by Borrower of payments with
respect to any Hybrid Preferred Securities.
"Indexed Asset" means, with respect to any Indexed Debt
Security, (i) any security or commodity that is deliverable upon
maturity of such Indexed Debt Security to satisfy the obligations under
such Indexed Debt Security at maturity or (ii) any security, commodity
or index relating to one or more securities or commodities used to
determine or measure the obligations under such Indexed Debt Security
at maturity thereof.
"Indexed Debt Securities" means any security issued by
Borrower or any Consolidated Subsidiary of Borrower that (a) in
accordance with GAAP, is shown on the consolidated balance sheet of
Borrower and its Consolidated Subsidiaries as Indebtedness or a
liability and (b) the obligations at maturity of which may be satisfied
completely by the delivery of, or the amount of such obligations are
determined by reference to, (1) an equity security issued by an issuer
other than Borrower or any such Consolidated Subsidiary or (2) an
underlying index, commodity or security.
"Indenture" means the Indenture between the Borrower
(successor in interest to Arkla, Inc.) and Citibank, N.A., as trustee,
dated December 1, 1986, as supplemented by the First Supplemental
Indenture dated as of September 30, 1988, by the Second Supplemental
Indenture dated as of November 15, 1989 and by the Third Supplemental
Indenture dated as of August 6, 1997.
"Information Memorandum" means the information memorandum
dated February 28, 2003 used by the Administrative Agent in connection
with the syndication of the Commitments.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Revolving Borrowing and each CAF Eurodollar
Rate Advance comprising part of the same CAF Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or CAF
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance and ending on the last day of
the period selected by the Borrower pursuant to the provisions below
and, thereafter, with respect to Eurodollar Rate Advances, each
subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be two weeks or one, two, three or
six months (or such other period as may be approved by the
Administrative Agent), as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period,
select; provided, however, that:
CERC 364-Day Revolving Credit Agreement
9
(i) the Borrower may not select any Interest
Period that ends after the Termination Date;
(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Revolving
Borrowing or for CAF Eurodollar Rate Advances comprising part
of the same CAF Borrowing shall be of the same duration;
(iii) 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 be extended to occur on
the next succeeding Business Day, provided, however, 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
(iv) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, other securities or all or substantially all
of the assets of such Person or any capital contribution to such Person
or any other investment in such Person.
"Junior Subordinated Debt" means subordinated debt of Borrower
or any Subsidiary of Borrower (i) that is issued at par to a Hybrid
Preferred Securities Subsidiary in connection with the issuance of
Hybrid Preferred Securities, (ii) the payment of the principal of which
and interest on which is subordinated (with certain exceptions) to the
prior payment in full in cash or its equivalent of all senior
indebtedness of the obligor thereunder and (iii) that has an original
tenor no earlier than 30 years from the issuance thereof.
"Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 8.07.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, charge, security
interest, encumbrance or lien of any kind whatsoever (including any
Capital Lease).
"Loan Documents" means this Agreement, the Notes or CAF Notes
(if any) and all other documents executed in connection herewith and
therewith, including, without limitation, each Notice of Borrowing and
the Pledge Agreement upon execution and delivery of the same.
"Mandatory Payment Preferred Stock" means any preference or
preferred stock of the Borrower or of any Consolidated Subsidiary (in
each case other than any issued to the Borrower or its Subsidiaries and
other than Hybrid Preferred Securities or Junior Subordinated Debt)
that is subject to mandatory redemption, sinking fund or retirement
provisions; provided, that any amounts subject to any mandatory
redemption, sinking fund or retirement provisions due and payable prior
to the Termination Date or within one year following the Termination
Date will not be considered Mandatory Payment Preferred Stock.
"Margin Stock" means any margin stock (as defined in
Regulation U) and any margin security (as defined in Regulation T).
CERC 364-Day Revolving Credit Agreement
10
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance or properties of the Borrower or the Borrower and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
the ability of the Borrower to perform its obligations under this
Agreement or any other Loan Document.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any ERISA Affiliate and at least one
Person other than the Borrower and the ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower or any ERISA Affiliate
could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"Non-Recourse Debt" means (i) any Indebtedness for Borrowed
Money incurred by any Project Finance Subsidiary to finance the
acquisition, improvement, installation, design, engineering,
construction, development, completion, maintenance or operation of, or
otherwise to pay costs and expenses relating to or providing financing
for any project, which Indebtedness for Borrowed Money does not provide
for recourse against the Borrower or any Subsidiary of the Borrower
(other than a Project Finance Subsidiary and such recourse as exists
under a Performance Guaranty) or any property or asset of the Borrower
or any Subsidiary of the Borrower (other than Equity Interests in, or
the property or assets of, a Project Finance Subsidiary and such
recourse as exists under a Performance Guaranty) and (ii) any
refinancing of such Indebtedness for Borrowed Money that does not
increase the outstanding principal amount thereof (other than to pay
costs incurred in connection therewith and the capitalization of any
interest, fees, premium or penalties) at the time of the refinancing or
increase the property subject to any Lien securing such Indebtedness
for Borrowed Money or otherwise add additional security or support for
such Indebtedness for Borrowed Money.
"Note" means a promissory note of the Borrower payable to the
order of any Lender that has requested a Note pursuant to Section
2.18(a), in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from
the Revolving Advances made by such Lender.
"Notice" has the meaning specified in Section 8.02(c).
"Notice of Borrowing" has the meaning specified in Section
2.02.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not claim is discharged, stayed or otherwise affected by
any proceeding referred to in Section 6.01(f). Without limiting the
generality of the foregoing, the Obligations of the Borrower under the
Loan Documents include (a) the obligation to pay principal, interest,
charges, expenses, fees, attorneys' fees and disbursements, indemnities
and other amounts payable by the Borrower under any Loan Document and
(b) the obligation of the Borrower to reimburse any amount in respect
of any of the foregoing that any Lender, in its sole discretion, may
elect to pay or advance on behalf of the Borrower.
"Original Revolving Credit Facility" has the meaning specified
in Section 3.01(b).
CERC 364-Day Revolving Credit Agreement
11
"Parent" means CenterPoint Energy, Inc., a Texas corporation.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Performance Guaranty" means any guaranty issued in connection
with any Non-Recourse Debt that (i) if secured, is secured only by
assets of or Equity Interests in a Project Finance Subsidiary, and (ii)
guarantees to the provider of such Non-Recourse Debt or any other
Person (a) performance of the improvement, installation, design,
engineering, construction, acquisition, development, completion,
maintenance or operation of, or otherwise affects any such act in
respect of, all or any portion of the project that is financed by such
Non-Recourse Debt, (b) completion of the minimum agreed equity or other
contributions or support to the relevant Project Finance Subsidiary, or
(c) performance by a Project Finance Subsidiary of obligations to
Persons other than the provider of such Non-Recourse Debt.
"Permitted Liens" means
(a) mortgage Liens securing Indebtedness in an
aggregate amount which, together with all other Indebtedness
of the Company or a Subsidiary secured by a mortgage Lien
permitted by this clause (a) (not including Indebtedness
permitted to be secured under clauses (b)-(u) below) and the
Value of all Sale and Leaseback Transactions in existence at
such time (other than any Sale and Leaseback Transaction
which, if such Sale and Leaseback Transaction had been a Lien,
would have been permitted by clauses (k) or (m) below), does
not at the time of incurrence of such Indebtedness exceed 5%
of the Consolidated Net Tangible Assets;
(b) undetermined or inchoate Liens and charges
incidental to construction, maintenance, development or
operation;
(c) the Lien of taxes and assessments for the then
current year;
(d) the Lien of taxes and assessments not at the time
delinquent;
(e) the Lien of specified taxes and assessments which
are delinquent but the validity of which is being contested at
the time by the Borrower or such Subsidiary in good faith and
by appropriate proceedings or for which its non-payment would
not reasonably be expected to have a Material Adverse Effect;
(f) the Lien reserved in leases for rent and for
compliance with the terms of the lease in the case of
leasehold estates;
(g) any obligations or duties, affecting the property
of the Borrower or such Subsidiary, to any municipality or
public authority with respect to any franchise, grant,
license, permit or similar arrangement;
(h) the Liens of any judgments or attachments in an
aggregate amount not in excess of $5,000,000, or the Lien of
any judgment or attachment the execution or enforcement of
which has been stayed or which has been appealed and secured,
if necessary, by the filing of an appeal bond;
(i) any Lien on any property held or used by the
Borrower or a Subsidiary in connection with the exploration
for, development of or production of oil, gas, natural gas
(including liquefied gas and storage gas), other hydrocarbons,
helium, coal, metals, minerals, steam, timber, geothermal or
other natural resources or synthetic fuels, such properties to
include, but not be limited to, the Borrower's or a
Subsidiary's interest in any mineral fee interests, oil, gas
or other mineral leases, royalty, overriding royalty or net
profits interests, production payments and other similar
interests, wellhead production equipment, tanks, field
gathering lines, leasehold or field separation and processing
facilities, compression facilities and other similar personal
property and fixtures:
CERC 364-Day Revolving Credit Agreement
12
(j) any Lien on oil, gas, natural gas (including
liquefied gas and storage gas), and other hydrocarbons,
helium, coal, metals, minerals, steam, timber, geothermal or
other natural resources or synthetic fuels produced or
recovered from any property, an interest in which is owned or
leased by the Borrower or a Subsidiary;
(k) Liens upon any property heretofore or hereafter
acquired, constructed or improved, created at the time of
acquisition or commercial operation thereof within one year
thereafter (and the accessions thereto and proceeds thereof)
to secure all or a portion of the purchase price thereof or
the cost of such construction or improvement, or existing
thereon at the date of acquisition or within one year
thereafter to secure all or a portion of the purchase price
thereof or the cost of such construction or improvement, or
existing thereon at the date of acquisition, whether or not
assumed by the Borrower or a Subsidiary, provided, that every
such Lien shall apply only to the property so acquired or
constructed and fixed improvements thereon (and the accessions
thereto and proceeds thereof);
(l) any extension, renewal or refunding, in whole or
in part, of any mortgage, pledge, Lien or encumbrance
permitted by subparagraph (k) above, if limited to the same
property or any portion thereof subject to, and securing not
more than the amount secured by, the mortgage, pledge, Lien or
encumbrance extended, renewed or refunded and related
transaction costs and expenses;
(m) Liens upon any property heretofore or hereafter
acquired by any Person that is or becomes a Subsidiary after
the date hereof ("Acquired Entity"), provided, that every such
Lien (1) shall either (A) exist prior to the time the Acquired
Entity becomes a Subsidiary or (B) be created at the time the
Acquired Entity becomes a Subsidiary or within one year
thereafter to secure all or a portion of the acquisition price
thereof and (2) shall only apply to those properties owned by
the Acquired Entity at the time it becomes a Subsidiary or
thereafter acquired by it from sources other than the Borrower
or any other Subsidiary;
(n) the pledge of current assets, in the ordinary
course of business, to secure current liabilities;
(o) mechanics' or materialmen's Liens, any Liens or
charges arising by reason of pledges or deposits to secure
payment of workmen's compensation or other insurance, good
faith deposits in connection with tenders, leases of real
estate, bids or contracts (other than contracts for the
payment of money), deposits to secure duties or public or
statutory obligations, deposits to secure, or in lieu of,
surety, stay or appeal bonds, and deposits as security for the
payment of taxes or assessments or similar charges;
(p) any Lien arising by reason of deposits with, or
the giving of any form of security to, any governmental
regulation for any purpose at any time in connection with the
financing of the acquisition or construction of property to be
used in the business of the Borrower or a Subsidiary or as
required by law or governmental regulation as a condition to
the transaction of any business or the exercise of any
privilege or license, or to enable the Borrower or a
Subsidiary to maintain self-insurance or to participate in any
funds established to cover any insurance risks or in
connection with workmen's compensation, unemployment
insurance, old age pensions or other social security, or to
share in the privileges or benefits required for companies
participating in such arrangements;
(q) any Lien of or upon any office equipment, data
processing equipment (including, without limitation, computer
and computer peripheral equipment), or transportation
equipment (including, without limitation, motor vehicles,
tractors, trailers, marine vessels, barges, towboats, rolling
stock and aircraft);
(r) any Lien created or assumed by the Borrower or a
Subsidiary in connection with the issuance of debt securities
the interest on which is excludable from gross income of the
holder of
CERC 364-Day Revolving Credit Agreement
13
such security pursuant to the Internal Revenue code, as
amended, for the purpose of financing, in whole or in part,
the acquisition or construction or property to be used by the
Borrower or a Subsidiary;
(s) the pledge or assignment of accounts receivable,
or the pledge or assignment of conditional sales contracts or
chattel mortgages and evidences of indebtedness secured
thereby, received in connection with the sale by the Borrower
or such Subsidiary or others of goods or merchandise to
customers of the Borrower or such Subsidiary;
(t) Liens granted to secure the obligations of the
Borrower under the Bridge Credit Agreement, provided, that the
Borrower grants to the Collateral Agent, for the benefit of
the Lenders, an equal and ratable security interest in any
collateral with respect to which such Lien is granted in
accordance with the Pledge Agreement substantially in the form
of Exhibit H hereto;
(u) Liens created in connection with the Receivables
Transaction;
(v) Liens granted to secure the obligations of the
Borrower under debt securities, the proceeds of which are used
to refinance the Bridge Credit Agreement, provided, that the
Borrower grants to the Collateral Agent, for the benefit of
the Lenders, an equal and ratable security interest in any
collateral with respect to which such Lien is granted in
accordance with the Pledge Agreement substantially in the form
of Exhibit H hereto;
(w) Liens granted to secure the obligations of the
Borrower under debt securities issued to refinance the
$500,000,000 bonds due November, 2003, provided, that the
Borrower grants to the Collateral Agent, for the benefit of
the Lenders, an equal and ratable security interest in any
collateral with respect to which such Lien is granted in
accordance with the Pledge Agreement substantially in the form
of Exhibit H hereto; or
(x) any other Liens securing obligations under
agreements to which the Borrower or any of its Subsidiaries is
a party or by which it is bound as of the date hereof, which
the Borrower is obligated to equally and ratably secure as a
result of granting the Liens to secure Indebtedness hereunder.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Platform" has the meaning specified in Section 8.02(b).
"Pledge Agreement" means the Pledge Agreement to be entered
into by the Borrower in favor of the Collateral Agent at such time as
the Borrower executes and delivers the Bridge Credit Agreement in
substantially the form of Exhibit H hereto.
"Principal Property" means any natural gas distribution
property, natural gas pipeline or gas processing plant located in the
United States and all common stock Equity Interests in any Subsidiary
(other than a Project Finance Subsidiary) of the Borrower that owns any
natural gas distribution property, natural gas pipeline or gas
processing plant located in the United States, except any such property
and Equity Interests that in the reasonable opinion of the board of
directors of Borrower is not of material importance to the total
business conducted by the Borrower and its Consolidated Subsidiaries.
"Principal Property" shall not include any oil or gas property or the
production or proceeds of production from an oil or gas producing
property or the production or any proceeds of production of gas
processing plants or oil or gas or petroleum products in any pipeline
or storage field.
CERC 364-Day Revolving Credit Agreement
14
"Project Finance Subsidiary" and "Project Finance
Subsidiaries" means any Subsidiary of the Borrower designated by the
Borrower whose principal purpose is to incur Non-Recourse Debt and/or
construct, lease, own or operate the assets financed thereby, or to
become a direct or indirect partner, member or other equity participant
or owner in a Person created for such purpose, and substantially all
the assets of which Subsidiary or Person are limited to (x) those
assets being financed (or to be financed), or the operation of which is
being financed (or to be financed), in whole or in part by Non-Recourse
Debt, or (y) Equity Interests in, or Indebtedness or other obligations
of, one or more other such Subsidiaries or Persons, or (z) Indebtedness
or other obligations of the Borrower or its Subsidiaries or other
Persons; provided, however, that the sum of the net book value of all
Project Finance Subsidiaries shall at no time exceed 10% of
Consolidated Net Tangible Assets.
"Property" means any interest or right in any kind of property
or asset, whether real, personal or mixed, owned or leased, tangible or
intangible and whether now held or hereafter acquired.
"Public Debt Rating" means, as of any date, the lowest rating
that has been most recently announced by either S&P or Moody's, as the
case may be, for any class of non-credit enhanced long-term senior
unsecured debt issued by the Borrower. For purposes of the foregoing,
(a) if only one of S&P and Moody's shall have in effect a Public Debt
Rating, the Applicable Margin and the Applicable Percentage shall be
determined by reference to the available rating; (b) if the ratings
established by S&P and Moody's shall fall within different levels, the
Applicable Margin and the Applicable Percentage shall be based upon the
lower rating; (c) if any rating established by S&P or Moody's shall be
changed, such change shall be effective as of the date on which such
change is first announced publicly by the rating agency making such
change; and (d) if S&P or Moody's shall change the basis on which
ratings are established, each reference to the Public Debt Rating
announced by S&P or Moody's, as the case may be, shall refer to the
then equivalent rating by S&P or Moody's, as the case may be.
"Receivables Transaction" means the Receivables Contribution
and Sale Agreement, dated as of November 15, 2002 among various
Affiliates of the Borrower, as sellers, and CenterPoint Energy Gas
Receivables, LLC or another Person, as buyer, together with the Second
Amended and Restated Trade Receivables Purchase and Sale Agreement,
dated as of November 15, 2002 among CenterPoint Energy Gas Receivables,
LLC, as the seller, the Borrower, as the servicer, Corporate Asset
Funding Company, Inc., as the purchaser and Citicorp North America,
Inc., as the Administrative Agent, and related agreements (as each such
agreement may be amended, supplemented, or otherwise modified from time
to time, or replaced, refunded, refinanced).
"Register" has the meaning specified in Section 8.07(c).
"Regulation T" and "Regulation U" means Regulation T and U,
respectively, of the Board or any other regulation hereafter
promulgated by the Board to replace the prior Regulation T or U, as the
case may be, and having substantially the same function.
"Required Lenders" means at any time Lenders owed at least 51%
of the then aggregate unpaid principal amount of the Advances owing to
the Lenders, or, if no such principal amount is then outstanding,
Lenders having at least 51% of the Commitments.
"Responsible Officer" means, with respect to any Person, its
chief financial officer, chief accounting officer, assistant treasurer,
treasurer or comptroller of such Person or any other officer of such
Person whose primary duties are similar to the duties of any of the
previously listed officers of such Person.
"Restricted Subsidiary" means any Subsidiary of the Borrower
which owns Principal Property.
"Revolving Advances" has the meaning as set forth in Section
2.01.
"Revolving Borrowing" means a borrowing consisting of
Revolving Advances of the same Type, made by the Lenders on the same
day under Section 2.02.
CERC 364-Day Revolving Credit Agreement
15
"Revolving Extensions of Credit" means, as to any Lender at
any time, an amount equal to the aggregate principal amount of all
Revolving Advances held by such Lender then outstanding.
"Revolving Facility" has the meaning as set forth in Section
2.01.
"Sale and Leaseback Transaction" means any arrangement with
any Person providing for the leasing to the Borrower or any Restricted
Subsidiary of any Principal Property (except for temporary leases for a
term, including any renewal thereof of not more than three years and
except for leases between the Borrower and a Restricted Subsidiary or
between Restricted Subsidiaries), which Principal Property has been or
is to be sold or transferred by the Borrower or any Restricted
Subsidiary to such Person.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.
"Significant Subsidiary" means (i) for the purposes of
determining what constitutes an "Event of Default" under Sections
6.01(d), (e), (f) and (g), a Subsidiary of the Borrower (other than a
Project Finance Subsidiary) whose total assets, as determined in
accordance with GAAP, represent at least 10% of the total assets of the
Borrower, on a consolidated basis, as determined in accordance with
GAAP and (ii) for all other purposes the "Significant Subsidiaries"
shall be those Subsidiaries whose total assets, as determined in
accordance with GAAP, represent at least 10% of the total assets of the
Borrower on a consolidated basis, as determined in accordance with GAAP
for the Borrower's most recently completed fiscal year and identified
in the certificate most recently delivered pursuant to Section
5.01(j)(ii).
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any ERISA Affiliate and no Person other
than the Borrower and the ERISA Affiliates or (b) was so maintained and
in respect of which the Borrower or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been
or were to be terminated.
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the
facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such limited liability
company, partnership, joint venture or other Person or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one
or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"Termination Date" means the earlier of March 23, 2004 and the
date of termination in whole of the Commitments pursuant to Section
2.06 or 6.01.
"Total Aggregate Outstanding Extensions of Credit" means, at
any time, the aggregate amount of Aggregate Outstanding Extensions of
Credit of all Lenders outstanding at such time.
CERC 364-Day Revolving Credit Agreement
16
"Total Commitments" means, at any time, the aggregate amount
of the Commitments of all Lenders then in effect.
"Total Debt" means, as of any date of determination, the sum
of (i) the total Indebtedness for Borrowed Money as shown on the
consolidated balance sheet of Borrower and its Consolidated
Subsidiaries, determined without duplication of any Guarantee of
Indebtedness for Borrowed Money of Borrower by any of its Consolidated
Subsidiaries or of any Guarantee of Indebtedness of any such
Consolidated Subsidiary by Borrower or any other Consolidated
Subsidiary of Borrower, and any Mandatory Payment Preferred Stock, less
(ii) such amount of Indebtedness for Borrowed Money attributable to
amounts then outstanding under receivables facilities or arrangements
to the extent that such amount would not have been shown as
Indebtedness for Borrowed Money on a balance sheet prepared in
accordance with GAAP prior to January 1, 1997, less (iii) with respect
to any Indexed Debt Securities that are Fully Hedged and the
liabilities in respect of which as shown on the consolidated balance
sheet of Borrower and its Consolidated Subsidiaries have increased from
the amount of liabilities in respect thereof at the time of their
issuance by reason of an increase in the price of the Indexed Asset
relating thereto, the excess of (a) the aggregate amount of liabilities
in respect of such Indexed Debt Securities at the time of determination
over (b) the initial amount of liabilities in respect of such Indexed
Debt Securities at the time of their issuance, provided that at the
time of determination such increase in the price of the Indexed Asset
relating to such Indexed Debt Securities has not been recorded on such
consolidated balance sheet, less (iv) funds segregated to repay bonds
maturing in November, 2003, and less (v) Non-Recourse Debt of the
Borrower and its Subsidiaries.
"Type" has the meaning as set forth in the definition of
"Advance".
"Value" means, with respect to a Sale and Leaseback
Transaction, as of any particular time, the amount equal to the greater
of (1) the net proceeds from the sale or transfer of the property
leased pursuant to such Sale and Leaseback Transaction or (2) the fair
value, in the opinion of the board of directors, of such property at
the time of entering into such Sale and Leaseback Transaction, in
either case divided first by the number of full years of the term of
the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal
or extension options contained in the lease.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"Wholly-Owned" means, with respect to any Subsidiary of any
Person, a Subsidiary, all the outstanding capital stock (other than
directors' qualifying shares required by law) or other ownership
interest of which are at the time owned by such Person or by one or
more Wholly-Owned Subsidiaries of such Person, or both.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in effect from time to time in the United States
of America ("GAAP").
CERC 364-Day Revolving Credit Agreement
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Revolving Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make advances to
the Borrower (the "Revolving Advances") from time to time on any Business Day
during the period from the Effective Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding the amount set forth
opposite such Lender's name on the signature pages hereof or, if such Lender has
entered into any Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(c), as
such amount may be reduced pursuant to Section 2.06 (such Lender's "Commitment",
and, in the aggregate, the "Revolving Facility"). Each Revolving Borrowing, in
the case of a Revolving Borrowing consisting of Eurodollar Rate Advances, shall
be in minimum principal aggregate amounts of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof, or in the case of a Revolving Borrowing
consisting of Base Rate Advances, shall be in minimum principal aggregate
amounts of $5,000,000 or an integral multiple of $1,000,000 in excess thereof,
and shall consist of Revolving Advances of the same Type made on the same day by
the Lenders ratably according to their respective Commitments. Within the limits
of each Lender's Commitment, the Borrower may borrow under this Section 2.01,
prepay pursuant to Section 2.11 and reborrow under this Section 2.01.
SECTION 2.02. Making the Revolving Advances. (a) Each
Revolving Borrowing shall be made on notice, given not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the date of the proposed
Revolving Borrowing in the case of a Revolving Borrowing consisting of
Eurodollar Rate Advances, or on the same Business Day as the date of the
proposed Revolving Borrowing in the case of a Revolving Borrowing consisting of
Base Rate Advances, by the Borrower to the Administrative Agent, which shall
give to each Lender prompt notice thereof by telecopier or telex. Each such
notice of a Revolving Borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed immediately in writing, or telecopier or telex, in substantially the
form of Exhibit B hereto, specifying therein the requested (i) date of such
Revolving Borrowing, (ii) Type of Revolving Advances comprising such Revolving
Borrowing, (iii) aggregate amount of such Revolving Borrowing, (iv) in the case
of a Revolving Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Revolving Advance and (v) whether any of such
Revolving Borrowing shall be used by the Borrower to repay commercial paper.
Each Lender shall, before 11:00 A.M. (New York City time) on the date of such
Revolving Borrowing, in the case of a Revolving Borrowing consisting of
Eurodollar Rate Advances, or before 3:00 P.M. (New York City time) in the case
of a Revolving Borrowing consisting of Base Rate Advances, make available for
the account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable portion
of such Revolving Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower at
the Administrative Agent's address referred to in Section 8.02 no later than
12:00 P.M. (New York City time) on such date, in the case of a Revolving
Borrowing consisting of Eurodollar Rate Advances, or 4:00 P.M. (New York City
time) on such date, in the case of a Revolving Borrowing consisting of Base Rate
Advances.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for any Revolving
Borrowing if the aggregate amount of such Revolving Borrowing is less than
$5,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.09 or 2.13 and (ii) the Eurodollar
Rate Advances may not be outstanding as part of more than twelve separate
Revolving Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Revolving Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Revolving Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Revolving Advance to be made by
such Lender as part of such Revolving Borrowing when such Revolving Advance, as
a result of such failure, is not made on such date.
CERC 364-Day Revolving Credit Agreement
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(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Revolving Borrowing that such Lender will not
make available to the Administrative Agent such Lender's ratable portion of such
Revolving Borrowing, the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the date of such
Revolving Borrowing in accordance with subsection (a) of this Section 2.02 and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent that
such Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to Revolving Advances comprising such Revolving Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Revolving Advance as part of such Revolving Borrowing
for purposes of this Agreement.
(e) The failure of any Lender to make the Revolving Advance to be made
by it as part of any Revolving Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Revolving Advance on the date of
such Revolving Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Revolving Advance to be made by such other Lender
on the date of any Revolving Borrowing.
SECTION 2.03. The CAF Advances. (a) From time to time on any
Business Day during the period from the Effective Date until the Termination
Date, the Borrower may request CAF Advances from the Lenders in amounts such
that the Total Aggregate Outstanding Extensions of Credit at any time shall not
exceed the Total Commitments at such time (the "CAF Facility").
(b) Under the terms and conditions set forth below, the Borrower may
borrow, repay pursuant to Section 2.07 and reborrow under this Section 2.03.
SECTION 2.04. Competitive Bid Procedure. (a) In order to
request a CAF Advance, the Borrower shall deliver to the Administrative Agent a
written notice in the form of Exhibit E, attached hereto (a "Competitive Bid
Request"), to be received by the Administrative Agent (i) in the case of each
CAF Eurodollar Rate Advance, not later than 3:00 P.M. (New York City time), four
(4) Business Days before the Borrowing Date specified for such CAF Eurodollar
Rate Advance and (ii) in the case of each Fixed Rate Advance, not later than
11:00 A.M. (New York City time), one (1) Business Day before the Borrowing Date
specified for such Fixed Rate Advance. Each Competitive Bid Request shall in
each case refer to this Agreement and specify (i) the date of Borrowing of such
CAF Advances (which shall be a Business Day), (ii) the aggregate principal
amount thereof, (iii) whether the CAF Advances then being requested are to be
CAF Eurodollar Rate Advances or Fixed Rate Advances, (iv) the maturity date for
each CAF Advance requested to be made and (v) the interest payment dates for
each CAF Advance requested to be made. The Administrative Agent shall promptly
notify each Lender by telex or facsimile transmission of the contents of each
Competitive Bid Request received by it. Each Competitive Bid Request may solicit
bids for CAF Advances in an aggregate principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and for not more than three
alternative maturity dates for such CAF Advances. The maturity date for each CAF
Advance shall be not less than 15 days nor more than 180 days after the
applicable date of CAF Borrowing (and in any event shall not extend beyond the
Termination Date).
(b) Each Lender may, in its sole discretion, irrevocably offer to make
one or more CAF Advances to the Borrower responsive to each Competitive Bid
Request from the Borrower. Any such irrevocable offer by a Lender must be
received by the Administrative Agent, in the form of Exhibit F hereto (a
"Competitive Bid"), (i) in the case of each CAF Eurodollar Rate Advance, not
later than 10:30 A.M. (New York City time), three (3) Business Days before the
Borrowing Date specified for such CAF Eurodollar Rate Advance and (ii) in the
case of each Fixed Rate Advance, not later than 9:30 A.M. (New York City time)
on the Borrowing Date specified for such Fixed Rate Advance. Competitive Bids
that do not conform substantially to the format of Exhibit F may be rejected by
the Administrative Agent after conferring with, and upon the instruction of, the
Borrower, and the Administrative Agent shall notify the Lender of such rejection
as soon as practicable. Each Competitive Bid shall refer to this Agreement and
(i) specify the maximum principal amount of CAF Advances for each maturity date
(which shall be in an aggregate principal amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and which may equal, but not
exceed, the principal amount requested for such maturity date by the Borrower)
and the
CERC 364-Day Revolving Credit Agreement
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aggregate maximum principal amount of CAF Advances for all maturity dates (which
amount, with respect to any Lender, may exceed such Lender's Commitment) that
the Lender is willing to make to the Borrower, and (ii) specify the CAF Rate at
which the Lender is prepared to make each such CAF Advance. A Competitive Bid
submitted by a Lender pursuant to this Section 2.04(b) shall be irrevocable
absent manifest error.
(c) The Administrative Agent shall (i) in the case of each CAF
Eurodollar Rate Advance, not later than 11:00 A.M. (New York City time) three
(3) Business Days before the Borrowing Date specified for such CAF Eurodollar
Rate Advance and (ii) in the case of each Fixed Rate Advance, not later than
10:00 A.M. (New York City time) on the Borrowing Date specified for such Fixed
Rate Advance, notify the Borrower in writing of all the Competitive Bids made
(arranging each such bid in ascending interest rate order), and the CAF Rate or
Rates and the maximum principal amount of each CAF Advance in respect of which a
Competitive Bid was made, and the identity of the Lender that made each bid. The
Administrative Agent shall send a copy of all Competitive Bids to the Borrower
for its records as soon as practicable after completion of the bidding process
set forth in this Section 2.04.
(d) The Borrower may in its sole and absolute discretion, subject only
to the provisions of this Section 2.04(d), accept or reject any Competitive Bid
referred to in Section 2.04(c); provided, however, that the aggregate amount of
the Competitive Bids for CAF Advances so accepted by the Borrower may not exceed
the lesser of (i) the principal amount of the applicable CAF Borrowing requested
by the Borrower in respect thereof and (ii) the amount of the Commitments less
the Total Aggregate Outstanding Extensions of Credit then outstanding, after
giving effect to the application of the proceeds of such respective CAF
Borrowing on the Borrowing Date therefor. The Borrower shall notify the
Administrative Agent in writing whether and to what extent it has decided to
accept or reject any or all of the bids referred to in Section 2.04(c) by
delivering to the Administrative Agent a written notice in the form of Exhibit G
hereto (a "Competitive Bid Confirmation"), (i) in the case of each CAF
Eurodollar Rate Advance, not later than 1:00 P.M. (New York City time), three
(3) Business Days before the Borrowing Date specified for such CAF Eurodollar
Rate Advance and (ii) in the case of each Fixed Rate Advance, not later than
11:00 A.M. (New York City time) on the Borrowing Date specified for such Fixed
Rate Advance, which Competitive Bid Confirmation shall specify the principal
amount of CAF Advances for each relevant maturity date to be made by each such
bidding Lender (which amount for each such maturity date shall be equal to or
less than the maximum amount for such maturity date specified in the Competitive
Bid of such Lender, and for all maturity dates included in such Competitive Bid
in respect thereof shall be equal to or less than the aggregate maximum amount
specified in such Competitive Bid for all such maturity dates); provided,
however, that (A) the failure by the Borrower to so deliver a Competitive Bid
Confirmation by the specified time shall be deemed to be a rejection of all the
bids referred to in Section 2.04(c) for the related Competitive Bid Request; (B)
the Borrower shall not accept a bid made at a particular CAF Rate for a
particular maturity if the Borrower has decided to reject a bid made at a lower
CAF Rate for such maturity; (C) if the Borrower shall accept bids made at a
particular CAF Rate for a particular maturity but shall be restricted by other
conditions hereof from borrowing the maximum principal amount of CAF Advances in
respect of which bids at such CAF Rate have been made, then the Borrower shall
accept a pro rata portion of each bid made at such CAF Rate based as nearly as
possible on the respective maximum principal amounts of CAF Advances offered to
be made by the relevant Lenders pursuant to such bids; and (D) no bid shall be
accepted for a CAF Advance by any Lender unless such CAF Advance is in an
aggregate principal amount not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. Notwithstanding the foregoing, if it is necessary
for the Borrower to accept a pro rata allocation of the bids made in response to
a Competitive Bid Request (whether pursuant to the events specified in clause
(C) above or otherwise) and the available principal amount of CAF Advances to be
allocated among the Lenders is not sufficient to enable CAF Advances to be
allocated to each Lender in an aggregate principal amount not less than
$5,000,000 or in integral multiples of $1,000,000 in excess thereof, then the
Borrower shall, subject to clause (D) above, select the Lenders to be allocated
such CAF Advances and shall round allocations up or down to the next higher or
lower multiple of $1,000,000 as it shall deem appropriate; provided that the
allocations among the Lenders to be allocated such CAF Advances shall be made
pro rata based as nearly as possible on the respective maximum principal amounts
of CAF Advances offered to be made by such Lenders. The Competitive Bid
Confirmation given by the Borrower pursuant to this Section 2.04(d) shall be
irrevocable.
(e) Upon receipt from the Administrative Agent of the Eurodollar Rate
applicable to any CAF Eurodollar Rate Advance to be made by any Lender pursuant
to a Competitive Bid that has been accepted by the Borrower pursuant to this
Section 2.04, the Administrative Agent shall notify such Lender of the
applicable Eurodollar Rate.
CERC 364-Day Revolving Credit Agreement
20
(f) If the Administrative Agent shall at any time elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such bid directly
to the Borrower by (i) in the case of a CAF Eurodollar Rate Advance, not later
than 10:15 A.M. (New York City time), and (ii) in the case of a Fixed Rate
Advance, not later than 9:15 A.M. (New York City time), in each case, on the
Business Day on which the other Lenders are required to submit their bids to the
Administrative Agent pursuant to Section 2.04(b) above.
(g) If the Borrower accepts pursuant to Section 2.04(d) one or more of
the offers made by any Lender or Lenders, the Administrative Agent shall
promptly notify each Lender that has made such an offer of the aggregate amount
of such CAF Advances to be made on the Borrowing Date for each maturity date and
of the acceptance or rejection of any offers to make such CAF Advances made by
such Lender. Each Lender that is to make a CAF Advance shall, before 12:00 Noon
(New York City time) on the Borrowing Date specified in the Competitive Bid
Request applicable thereto, make available to the Administrative Agent at its
office set forth in Section 8.02 the amount of CAF Advances to be made by such
Lender, in immediately available funds. The Administrative Agent shall, no later
than 1:00 P.M. (New York City time) on such Borrowing Date, make such funds
available to the Borrower at the Borrower's account as shall be designated by it
to the Administrative Agent from time to time. As soon as practicable after each
Borrowing Date, the Administrative Agent shall notify each Lender of the
aggregate amount of CAF Advances advanced on such Borrowing Date and the
respective maturity dates thereof.
(h) The Borrower shall repay to the Administrative Agent for the
account of each Lender that has made a CAF Advance (or the Eligible Assignee in
respect thereof, as the case may be) on the maturity date of each CAF Advance
(such maturity date being that specified by the Borrower for repayment of such
CAF Advance in the related Competitive Bid Request) the then unpaid principal
amount of such CAF Advance. The Borrower shall not, without the consent of the
relevant Lender, have the right to prepay, at its option, any principal amount
of any CAF Advance.
All notices required by this Section 2.04 shall be made in accordance with
Section 8.02 hereof; provided, however, that each request or notice required to
be made under Section 2.04(a) or 2.04(d) by the Borrower may be made by the
giving of telephone notice to the Administrative Agent that is promptly
confirmed by delivery of a notice in writing (in substantially the form of
Exhibit B or Exhibit E, as the case may be) to the Administrative Agent.
SECTION 2.05. Fees. (a) Facility Fee. The Borrower agrees to
pay to the Administrative Agent for the account of each Lender a facility fee on
the aggregate amount of such Lender's Commitment, irrespective of usage, from
the Effective Date in the case of each Initial Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date at a rate per
annum equal to the Applicable Percentage in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing June 30, 2003, and on the Termination Date.
(b) Agents' Fees. The Borrower shall pay to each Agent for its own
account such fees as may from time to time be agreed between the Borrower and
such Agent.
SECTION 2.06. Termination or Reduction of the Commitments. The
Borrower shall have the right, upon at least three Business Days' notice to the
Administrative Agent, to terminate in whole or permanently reduce ratably in
part the unused portions of the respective Commitments of the Lenders, provided
that (i) each partial reduction shall be in a minimum aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) no
such termination or reduction shall be permitted if, after giving effect thereto
and to any prepayments made under Section 2.11 by the Borrower on the effective
date thereof, the Total Aggregate Outstanding Extensions of Credit then
outstanding would exceed the Total Commitments then in effect. Any terminated or
permanently reduced portion of the respective Commitments of the Lenders may not
be reinstated.
Each reduction of Commitments pursuant to this Section 2.06
shall be applied pro rata to the Commitments of each Lender. If at any time,
including after giving effect to any reduction of Commitments pursuant to this
Section 2.06, the Total Aggregate Outstanding Extensions of Credit exceed the
Total Commitments, the Borrower shall be obligated, first, to prepay the
Revolving Advances in the amount of such excess and second, to prepay the CAF
Advances (whether or not consented to by the relevant Lender) to the extent that
the aggregate amount of CAF Advances exceeds such Total Commitments after
prepayment of all Revolving Advances.
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21
SECTION 2.07. Repayment. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders on the Termination
Date the aggregate principal amount of the Revolving Advances then outstanding.
SECTION 2.08. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Revolving Advance
owing to each Lender from the date of such Revolving Advance to but excluding
the date such principal amount shall be paid in full, at the following rates per
annum:
(i) Base Rate Advances. During such periods as such Revolving
Advance is a Base Rate Advance, a rate per annum equal at all times to
the sum of (x) the Base Rate in effect from time to time plus (y) the
Applicable Margin in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December,
during such periods and on the date such Base Rate Advance shall be
Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Revolving Advance bearing interest at the Eurodollar Rate,
a rate per annum equal at all times during each Interest Period for
such Revolving Advance to the sum of (x) the Eurodollar Rate for such
Interest Period for such Revolving Advance plus (y) the Applicable
Margin in effect from time to time, payable in arrears on the last day
of such Interest Period and, if such Interest Period has a duration of
more than three months, on each day that occurs during such Interest
Period every three months from the first day of such Interest Period
and on the date such Eurodollar Rate Advance shall be Converted or paid
in full.
(iii) CAF Eurodollar Rate Advances. In the case of each CAF
Eurodollar Rate Advance, a rate per annum equal at all times to the sum
of the Eurodollar Rate applicable to such CAF Advance plus or minus, as
the case may be, the CAF Margin specified by a Lender with respect to
such CAF Advance in its Competitive Bid submitted pursuant to Section
2.04(b), payable on the date or dates specified in the relevant
Competitive Bid Request.
(b) Default Interest. Upon the occurrence and during the continuance of
any default in the payment of any amount owed hereunder, the Administrative
Agent may, and upon the request of the Required Lenders shall, require the
Borrower to pay interest ("Default Interest") on (i) the unpaid principal amount
of each Revolving Advance past due and owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum
equal at all times to 2.00% per annum above the rate per annum required to be
paid on such Revolving Advance pursuant to clause (a)(i), (a)(ii) or (a)(iii)
above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2.00% per annum above the rate per
annum required to be paid on Base Rate Advances pursuant to clause (a)(i) above;
provided, however, that following acceleration of the Advances pursuant to
Section 6.01, Default Interest shall accrue and be payable hereunder whether or
not previously required by the Administrative Agent.
SECTION 2.09. Interest Rate Determination. (a) 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 2.08(a)(i), (ii) or (iii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Revolving Advances will not adequately reflect the cost
to such Required Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Lenders, whereupon (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance, and (ii) the
obligation of the Lenders to make, or to Convert Revolving Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative
CERC 364-Day Revolving Credit Agreement
22
Agent will forthwith so notify the Borrower and the Lenders and such Revolving
Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances. If no Advances are outstanding
at the time of delivery of a Notice of Borrowing with respect to Eurodollar Rate
Advances and the Borrower shall fail to select an Interest Period for such
Advances, such Advances shall be made as Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Revolving Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Revolving
Advances shall automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default under Section 6.01(a), (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Revolving Advances into, Eurodollar Rate Advances shall be
suspended.
SECTION 2.10. Optional Conversion of Revolving Advances. The
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of Sections
2.09 and 2.13, Convert all Revolving Advances of one Type comprising the same
Borrowing into Revolving Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b) and no
Conversion of any Revolving Advances shall result in more separate Borrowings
than permitted under Section 2.02(b). Each such notice of a Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Revolving Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Revolving Advance. Each notice of Conversion shall
be irrevocable and binding on the Borrower.
SECTION 2.11. Prepayments of Revolving Advances. (a) Optional
Prepayments. The Borrower may, upon at least two Business Days' notice to the
Administrative Agent, in the case of a Revolving Borrowing consisting of
Eurodollar Rate Advances, or upon same day notice to the Administrative Agent,
in the case of a Revolving Borrowing consisting of Base Rate Advances, stating
the proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amount of
the Revolving Advances comprising part of the same Revolving Borrowing in whole
or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in a minimum aggregate principal amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in
the event of any such prepayment of a Eurodollar Rate Advance, the Borrower
shall be obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(c).
(b) Mandatory Prepayments from Excess Cash Flow. The Borrower
shall, on the day the Borrower files its Form 10-Q or Form 10-K, but not later
than 45 days following the end of each calendar quarter (the "Prepayment Date"
and the "Reference Quarter", respectively), prepay an aggregate principal amount
of the Revolving Advances comprising part of the same Revolving Borrowings in an
amount sufficient to cause the aggregate principal amount of all Advances
outstanding as of the Prepayment Date to equal the aggregate principal amount of
all Advances outstanding as of the first day of the Reference Quarter, less the
amount of Excess Cash Flow for the Reference Quarter. Amounts prepaid under this
Section 2.11(b) shall be available to be reborrowed on the following Business
Day, provided that all other conditions to such Borrowing under this Agreement
are met.
SECTION 2.12. Increased Costs. (a) If, after the date hereof,
due to either (i) the introduction of or any change in or in the interpretation
of any law or regulation 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), there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining Eurodollar Rate Advances or CAF
Eurodollar Rate Advances (excluding for purposes of this Section 2.12 any such
increased costs resulting from (A) Taxes or Other Taxes (as to which Section
2.15 shall govern), (B) net income taxes and franchise taxes imposed on such
Lender as a result of a present or former connection between the jurisdiction of
the government or taxing authority imposing such tax and such Lender other than
a connection arising solely from such Lender having
CERC 364-Day Revolving Credit Agreement
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executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or the Advances and (C) changes in the rate of tax on
the overall net income of such Lender), 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 actual
increased cost; provided, however, that before making any such demand, each
Lender agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased cost and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender. A certificate as to
the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If any Lender determines in good faith that compliance with any law
or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), the Borrower
shall 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 or such corporation in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes, absent
manifest error.
(c) The agreements contained in this Section 2.12 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that in no event shall the Borrower be obligated to reimburse
or compensate any Lender for amounts contemplated by this Section 2.12 for any
period prior to the date that is 90 days prior to the date upon which such
Lender requests in writing such reimbursement or compensation from the Borrower.
SECTION 2.13. Illegality. Notwithstanding any other provision
of this Agreement, if any Lender shall notify the Administrative Agent that it
has determined in good faith that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for any Lender or
its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or CAF Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances or CAF Eurodollar Rate Advances hereunder, (a) each
Eurodollar Rate Advance or CAF Eurodollar Rate Advance, as the case may be, will
automatically, upon such demand, Convert into a Base Rate Advance or an Advance
that bears interest at the rate set forth in Section 2.08(a)(i), as the case may
be, and (b) the obligation of the Lenders to make Eurodollar Rate Advances or
CAF Eurodollar Rate Advances or to Convert Revolving Advances into, Eurodollar
Rate Advances shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist; provided, however, that before making any such demand, each Lender
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or CAF Eurodollar Rate Advances, as the case may be, or to continue to
fund or maintain Eurodollar Rate Advances or CAF Eurodollar Rate Advances, as
the case may be, and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.14. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes (if any), irrespective of
any right of counterclaim or set-off, not later than 12:00 Noon (New York City
time) on the day when due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same day funds. The Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest or facility fees ratably (other than amounts payable
pursuant to Sections 2.04, 2.12, 2.15 or 8.04(c)) to the Lenders for the account
of their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information
CERC 364-Day Revolving Credit Agreement
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contained therein in the Register pursuant to Section 8.07(c), from and after
the effective date specified in such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Notes or
CAF Notes (if any) in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the Note or
CAF Note, as the case may be, held by such Lender (if any), to charge from time
to time against any or all of the Borrower's accounts with such Lender any
amount so due.
(c) All computations of interest based on the Base Rate shall be made
by the Administrative Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar Rate, the
CAF Rate or the Federal Funds Rate or in respect of Fixed Rate Advances and of
facility fees shall be made by the Administrative Agent on the basis of a year
of 360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
facility fees are payable. Each determination by the Administrative Agent of an
interest rate hereunder shall be prima facie evidence of the correctness
thereof.
(d) Whenever any payment hereunder or under the Notes or CAF Notes (if
any) 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 or
facility fee, as the case may be; provided, however, that, if such extension
would cause payment of interest on or principal of Eurodollar Rate Advances or
CAF Eurodollar Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
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 Rate.
SECTION 2.15. Taxes. (a) Any and all payments by the Borrower
to or for the account of any Lender or the Administrative Agent hereunder or
under the Notes or CAF Notes (if any) or any other documents to be delivered
hereunder shall be made, in accordance with Section 2.14 or the applicable
provisions of such other documents, free and clear of and without deduction for
any and 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 the Administrative Agent, net income taxes and franchise
taxes imposed on it as a result of a present or former connection between the
jurisdiction of the government or taxing authority imposing such tax and the
Administrative Agent or such Lender other than a connection arising solely from
the Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or any
Note or CAF Note, if any (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes or CAF Notes (if any) 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 Note or CAF Note or any
other documents to be delivered hereunder to any Lender or the Administrative
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 2.15) such Lender or the Administrative 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;
provided, however, that the Borrower shall not be required to increase any such
sums payable to any Lender with respect to any Taxes (i) that are attributable
to such Lender's failure to comply with the requirements of Section 2.15(e) or
(ii) that are United States withholding taxes imposed on sums payable to such
Lender at the time such Lender becomes a party
CERC 364-Day Revolving Credit Agreement
25
to this Agreement, except to the extent that any such Lender's assignor (if any)
was entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Taxes pursuant to this Section 2.15. Whenever any
Taxes or Other Taxes (as defined in Section 2.15(b)) are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Lender or Administrative
Agent, as the case may be, either (A) official tax receipts or notarized copies
of such receipts to such Lender within thirty (30) days after payment of any
applicable tax or (B) a certificate executed by a Responsible Officer of the
Borrower confirming that such Taxes or Other Taxes have been paid, together with
evidence of such payment.
(b) In addition, the Borrower shall 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 the Notes or CAF
Notes (if any) or any other documents to be delivered hereunder or from the
execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement or the Notes or CAF Notes (if any) or any other
documents to be delivered hereunder (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Administrative
Agent for and hold it harmless against the full amount of Taxes or Other Taxes
(including, without limitation, taxes of any kind imposed or asserted by any
jurisdiction on amounts payable under this Section 2.15) imposed on or paid by
such Lender or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section
8.02, the original or a certified copy of a receipt evidencing such payment to
the extent such a receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Administrative Agent. In the case
of any payment hereunder or under the Notes or CAF Notes (if any) or any other
documents to be delivered hereunder by or on behalf of the Borrower through an
account or branch outside the United States or by or on behalf of the Borrower
by a payor that is not a United States person, if the Borrower determines that
no Taxes are payable in respect thereof, the Borrower shall furnish, or shall
cause such payor to furnish, to the Administrative Agent, at such address, an
opinion of counsel acceptable to the Administrative Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and subsection
(e), the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender registered in the Register that is not a United States
person as defined in Section 7701(a)(30) of the Internal Revenue Code agrees
that it will deliver to the Borrower and the Administrative Agent on the
Effective Date, or on the date which it becomes a party to this Agreement, two
duly completed copies of United States Internal Revenue Service Form W-8BEN,
W-8ECI, W-8EXP or W-8IMY (or other appropriate corresponding form) or any
successor applicable form, as the case may be. Each such Lender also agrees to
deliver to the Borrower and the Administrative Agent two further copies of the
said Form W-8BEN, W-8ECI, W-8EXP or W-8IMY or successor applicable forms or
other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be requested
by the Borrower or the Administrative Agent, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required that renders all such forms inapplicable or that would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Administrative Agent. Each such
Lender shall certify in the case of a Form W-8BEN, W-8ECI, W-8EXP or W-8IMY that
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes. In the event that any
such Lender fails to deliver any forms required under this Section 2.15(e), the
Borrower's obligation to pay additional amounts shall be reduced to the amount
that it would have been obligated to pay had such forms been provided.
(f) For any period with respect to which a Lender has failed to provide
the Borrower with the appropriate form, certificate or other document described
in Section 2.15(e) (other than if such failure is due to a change in law, or in
the interpretation or application thereof, occurring subsequent to the date on
which a form, certificate or other document originally was required to be
provided, or if such form, certificate or other document otherwise is not
CERC 364-Day Revolving Credit Agreement
26
required under subsection (e) above), such Lender shall not be entitled to
indemnification under Section 2.15(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Lender become subject to Taxes because of its failure to deliver a form,
certificate or other document required hereunder, the Borrower shall take such
steps as the Lender shall reasonably request to assist the Lender to recover
such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.15 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(h) If any Taxes or Other Taxes are not correctly or legally asserted
and the Agent or any Lender determines, in its sole discretion, that it has
received a refund of those Taxes or Other Taxes as to which it has been
indemnified by the Borrower, the Administrative Agent or such Lender shall
within 20 days after such refund pay to the Borrower the amount of such refund
to the extent that the Borrower indemnified the Administrative Agent or such
Lender for such Taxes or Other Taxes pursuant to this Section 2.15, net of any
out-of-pocket costs of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.
SECTION 2.16. 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 Revolving Advances owing to it
(other than pursuant to Sections 2.12, 2.15 or 8.04(c)) in excess of its ratable
share of payments on account of the Revolving Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Advances owing to them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.16 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.
SECTION 2.17. Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely for working capital, including capital expenditures, and to repay
commercial paper.
SECTION 2.18. Evidence of Debt. (a) Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Borrower agrees
that upon notice by any Lender to the Borrower (with a copy of such notice to
the Administrative Agent) to the effect that a promissory note or other evidence
of indebtedness is required or appropriate in order for such Lender to evidence
(whether for purposes of pledge, enforcement or otherwise) the Advances owing
to, or to be made by, such Lender, the Borrower shall promptly execute and
deliver to such Lender, with a copy to the Administrative Agent, a Note or a CAF
Note, as the case may be, in substantially the form of Exhibit A or Exhibit D
hereto, respectively and as the case may be, payable to the order of such Lender
in a principal amount equal to the amount of the Revolving Advance or the CAF
Advance, as
CERC 364-Day Revolving Credit Agreement
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the case may be, of such Lender. All references to Notes or CAF Notes in the
Loan Documents shall mean Notes or CAF Notes, respectively and if any, to the
extent issued hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 8.07(c) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the Type of Advances
comprising such Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder, and (iv)
the amount of any sum received by the Administrative Agent from the Borrower
hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Administrative Agent in
the Register pursuant to subsection (b) above, and by each Lender in its account
or accounts pursuant to subsection (a) above, shall be prima facie evidence of
the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Lender and, in
the case of such account or accounts, such Lender, under this Agreement, absent
manifest error; provided, however, that the failure of the Administrative Agent
or such Lender Party to make an entry, or any finding that an entry is
incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.03. Sections 2.01 and 2.03 of this Agreement shall become
effective on and as of the first date (the "Effective Date") on which the
following conditions precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change since
December 31, 2002.
(b) The Lead Arrangers shall be satisfied that any and all
amounts outstanding (including without limitation all principal,
interest, fees and other amounts owed) under the $350,000,000 Revolving
Credit Agreement, dated as of March 31, 1998 (as amended, supplemented
or otherwise modified from time to time, the "Original Revolving Credit
Facility"), among the Borrower, the lenders party thereto and Citibank,
N.A. as Administrative Agent, shall be paid by the Borrower in full,
and such Original Revolving Credit Facility shall be cancelled or
otherwise terminated prior to or immediately after the initial Advances
are made hereunder.
(c) Nothing shall have come to the attention of the Lenders
during the course of their due diligence investigation to lead them to
believe that the Information Memorandum was or has become misleading,
incorrect or incomplete in any material respect.
(d) The Borrower shall have paid all accrued fees and expenses
of the Lenders and Agents (including the accrued fees and expenses of
counsel to the Administrative Agent) and taxes, if any, due and payable
hereunder and under the Fee Letter.
(e) The Administrative Agent shall have received on or before
the Effective Date the following, each dated such day, in form and
substance satisfactory to the Administrative Agent and (except for the
Notes) in sufficient copies for each Lender:
(i) The Notes, duly executed by the Borrower and
made payable to the order of each Lender who has requested a
Note, pursuant to Section 2.18(a).
(ii) Certified copies of the (A) resolutions of
the board of directors of the Borrower approving this
Agreement and the Notes (if any), and of all documents
evidencing other necessary
CERC 364-Day Revolving Credit Agreement
28
corporate action and governmental approvals, if any, with
respect to this Agreement and the Notes (if any) and (B)
certificate of incorporation and bylaws of the Borrower (such
certificate, duly executed by an authorized officer of the
Borrower, shall state that such resolutions, certificate of
incorporation and bylaws are in full force and effect as of
the Effective Date).
(iii) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized to
sign this Agreement and the Notes (if any) and the other
documents to be delivered hereunder.
(iv) A favorable opinion of Baker Botts LLP,
counsel for the Borrower, in form and substance satisfactory
to the Agent.
(v) A favorable opinion of the in-house counsel
of the Borrower, in form and substance satisfactory to the
Agent.
(vi) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
(vii) If the obligations of the Borrower hereunder
are required to be secured, the Pledge Agreement, duly
executed by the Borrower, in substantially the form of Exhibit
H hereto.
(f) The Administrative Agent shall have received from the
Borrower such other approvals, opinions or documents as any Lender
through the Administrative Agent may reasonably request.
SECTION 3.02. Conditions Precedent to Each Revolving
Borrowing. The obligation of each Lender to make a Revolving Advance on the
occasion of each Revolving Borrowing shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such
Revolving Borrowing, the Administrative Agent shall have received the applicable
Notice of Borrowing signed by a Financial Officer of the Borrower, each of the
statements in which shall be true in all material respects.
SECTION 3.03. Conditions Precedent to Each CAF Borrowing. The
obligation of each Lender that is to make a CAF Advance on the occasion of a CAF
Borrowing to make such CAF Advance as part of such CAF Borrowing is subject to
the conditions precedent that (i) the Administrative Agent shall have received
the written confirmatory Competitive Bid Request pursuant to Section 2.04(a)
with respect thereto, (ii) the Administrative Agent shall have received a
Competitive Bid Confirmation from the Borrower pursuant to Section 2.04(d),
(iii) on or before the date of such CAF Borrowing, but prior to such CAF
Advance, the Administrative Agent shall have received a CAF Note in accordance
with Section 2.18(a) payable to the order of such Lender for each of the one or
more CAF Advances to be made by such Lender as part of such CAF Borrowing, in a
principal amount equal to the principal amount of the CAF Advance to be
evidenced thereby and otherwise on such terms as were agreed to for such CAF
Advance in accordance with Section 2.04, and (iv) on the date of such CAF
Borrowing the following statements shall be true (and each of the giving of the
applicable Competitive Bid Request and the acceptance by the Borrower of the
proceeds of such CAF Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such CAF Borrowing such statements are true):
(a) the representations and warranties contained in Section 4.01 are
correct on and as of the date of such CAF Borrowing, before and after giving
effect to such CAF Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date,
(b) no event has occurred and is continuing, or would result from such
CAF Borrowing or from the application of the proceeds therefrom, that
constitutes a Default, and
(c) no event has occurred and no circumstance exists as a result of
which the information concerning the Borrower that has been provided to the
Agent and each Lender by the Borrower in connection herewith would include an
untrue statement of a material fact or omit to state any material fact or any
fact necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
CERC 364-Day Revolving Credit Agreement
29
SECTION 3.04. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by
this Agreement shall have received notice from such Lender prior to the date
that the Borrower, by notice to the Lenders, designates as the proposed
Effective Date, specifying its objection thereto. The Administrative Agent shall
promptly notify the Lenders of the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by the Borrower of
this Agreement and the Notes or CAF Notes (if any), and the
consummation of the transactions contemplated hereby, are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Borrower's certificate
of incorporation or by-laws or any law or any contractual restriction
binding on or affecting the Borrower, or (ii) constitute a default
under any existing indenture, loan agreement or other material
agreement to which the Borrower or any Subsidiary of the Borrower is a
party.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery
and performance by the Borrower of this Agreement or the Notes or CAF
Notes (if any), and no law or regulation is applicable that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated hereby.
(d) This Agreement has been, and each of the Notes or CAF
Notes (if any) when delivered hereunder will have been, duly executed
and delivered by the Borrower. This Agreement is, and each of the Notes
or CAF Notes (if any) when delivered hereunder will be, the legal,
valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms.
(e) The Consolidated balance sheet of the Borrower and its
Subsidiaries as of December 31, 2002, and the related Consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion
of Deloitte & Touche LLP, independent public accountants, copies of
which have been furnished to each Lender, fairly present, in all
material respects, the Consolidated financial condition of the Borrower
and its Subsidiaries as at such date and the Consolidated results of
the operations of the Borrower and its Subsidiaries for the period
ended on such date, all in accordance with generally accepted
accounting principles consistently applied. Since December 31, 2002,
there has been no Material Adverse Change.
(f) There is no pending or threatened action, suit,
investigation, litigation or proceeding, including, without limitation,
any Environmental Action, affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator that
(i) could be reasonably likely to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of
this Agreement or any other Loan Document or the consummation of the
transactions contemplated hereby.
(g) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.
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(h) Neither the Borrower nor any Subsidiary of the Borrower is
an "investment company" as defined in, or otherwise subject to
regulation under, the Investment Company Act of 1940, as amended. None
of the execution and delivery of the Loan Documents by the Borrower or
the performance of its obligations thereunder violate any regulation
under the Public Utility Holding Company Act of 1935, as amended.
(i) The Borrower is and each of its Subsidiaries are in
substantial compliance with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including,
without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except for any non-compliance that could not
reasonably be expected to have a Material Adverse Effect.
(j) All written information heretofore furnished by the
Borrower to the Administrative Agent or any Lender for purposes of or
in connection with this Agreement or any transaction contemplated
hereby or thereby is, and all such information hereafter furnished by
the Borrower to the Administrative Agent or any Lender will be, true
and accurate in all material respects on the date as of which such
information is stated in the light of the circumstances under which
such information was provided (as modified or supplemented by other
information so furnished, when taken together as a whole as of the date
so stated); provided, that, with respect to projected financial
information, the Borrower represents only that such information was
prepared in good faith based on assumptions believed to be reasonable
at the time, it being recognized by the Lenders that such projections
as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections
may differ from the projected results. The Borrower has disclosed to
the Administrative Agent any and all facts specific to the Borrower and
its Subsidiaries and known as of the date hereof to a Responsible
Officer of the Borrower that could reasonably be expected to result in
a Material Adverse Effect or which could reasonably be expected to
materially and adversely affect or may affect (to the extent the
Borrower can now reasonably foresee), the business, operations or
financial condition of the Borrower and its Subsidiaries, taken as a
whole.
(k) The Borrower is, and together with its Subsidiaries, taken
as a whole, Solvent as of the date hereof.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and Environmental Laws,
except to the extent the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Significant Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon its property and (ii) all
lawful claims that, if unpaid, might by law become a Lien upon its
property or unless the failure to pay could not reasonably be expected
to result in a Material Adverse Effect; provided, however, that neither
the Borrower nor any of its Significant Subsidiaries shall be required
to pay or discharge any such tax, assessment, charge or claim that is
being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained or unless the failure to pay
could not reasonably be expected to result in a Material Adverse
Effect.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
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risks as is usually carried by companies engaged in similar businesses
and owning similar properties; provided, however, that the Borrower and
its Subsidiaries may self-insure to the same extent as other companies
engaged in similar businesses and owning similar properties and to the
extent consistent with prudent business practice.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and franchises,
except (other than in the case of the Borrower) to the extent such
failure could not reasonably be expected to have a Material Adverse
Effect; provided, however, that the Borrower and its Subsidiaries may
consummate any merger or consolidation permitted under Section 5.02(b)
and provided further that neither the Borrower nor any of its
Subsidiaries shall be required to preserve any right or franchise if
the board of directors of the Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lenders.
(e) Visitation Rights. The Borrower will, and will cause each
of its Subsidiaries to, at any reasonable time and from time to time,
permit up to six representatives of the Lenders designated by the
Required Lenders, or representatives of the Agents, on not less than
five (5) Business Days' notice, to examine and make copies of and
abstracts from the records and books of account of, and visit the
properties of, the Borrower and each Significant Subsidiary and to
discuss the general business affairs of the Borrower and each of its
Subsidiaries with their respective officers and independent certified
public accountants; subject, however, in all cases to the imposition of
such conditions as the Borrower and each of its Significant
Subsidiaries shall deem necessary based on reasonable considerations of
safety and security; provided, however, that neither the Borrower nor
any of its Subsidiaries shall be required to disclose to any Agent, any
Lender or any agents or representatives thereof any information which
is the subject of attorney-client privilege or attorney work-product
privilege properly asserted by the applicable Person to prevent the
loss of such privilege in connection with such information or which is
prevented from disclosure pursuant to a confidentiality agreement with
third parties. Notwithstanding the foregoing, none of the conditions
precedent to the exercise of the right of access described in the
preceding sentence that relate to notice requirements or limitations on
the Persons permitted to exercise such right shall apply at any time
when a Default or an Event of Default shall have occurred.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(h) Maintenance of Existing Business. Maintain and preserve
its fundamental business of being a local gas distribution company and
an owner and operator of natural gas pipeline systems.
(i) Use of Proceeds. Use the proceeds of each Advance only for
working capital purposes, including capital expenditures, of the
Borrower and its Subsidiaries and the repayment of commercial paper,
provided, that in no case shall such proceeds be used to repay amounts
outstanding under the Bridge Credit Agreement.
(j) Reporting Requirements. Furnish to the Lenders:
(i) as soon as practicable and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of the Borrower, unaudited Consolidated balance
sheets of the Borrower and its Subsidiaries, prepared in
conformity with GAAP consistently applied, as of the end of
such quarter and Consolidated statements of income and cash
flows of the Borrower and its Subsidiaries, prepared in
conformity with GAAP consistently applied, for the period
commencing at the end of the previous fiscal year and ending
with the end of such quarter, duly
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certified (subject to year-end audit adjustments and the
inclusion of abbreviated footnotes) by Responsible Officer of
the Borrower as having been prepared in accordance with
generally accepted accounting principles and certificates of a
Responsible Officer of the Borrower as to compliance with the
terms of this Agreement and setting forth in reasonable detail
the calculations necessary to demonstrate compliance with
Section 5.03 (which requirement may be satisfied by delivering
the Borrower's quarterly report on Form 10-Q with respect to
such fiscal quarter as filed with the Securities and Exchange
Commission);
(ii) as soon as practicable and in any event within
120 days after the end of each fiscal year of the Borrower
commencing 2003, a copy of the annual audit report for such
year for the Borrower and its Subsidiaries, containing
Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for such fiscal year accompanied
by an opinion of an independent public accountants, in each
case prepared in conformity with GAAP consistently applied
(which requirement may be satisfied by delivering the
Borrower's annual report on Form 10-K with respect to such
fiscal year as filed with the Securities and Exchange
Commission) together with a certificate of a Responsible
Officer of the Borrower identifying Significant Subsidiaries
determined with respect to such financial statements;
(iii) as soon as practicable and in any event within
seven Business Days after a Responsible Officer of the
Borrower becomes aware of the occurrence of each Default
continuing on the date of such statement, a statement of a
Responsible Officer of the Borrower setting forth details of
such Default and the action that the Borrower has taken and
proposes to take with respect thereto;
(iv) within ten (10) days of the filing thereof,
copies of all periodic reports (other than (x) reports on Form
11-K or any successor form, (y) current reports on Form 8-K
that contain no information other than exhibits filed
therewith and (z) reports on Form 10-Q or 10-K or any
successor forms) under the Exchange Act (in each case other
than exhibits thereto and documents incorporated by reference
therein)) filed by the Borrower with the Securities and
Exchange Commission;
(v) promptly after the commencement thereof, notice
of all actions and proceedings before any court, governmental
agency or arbitrator affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(f); and
(vi) such other information respecting the Borrower
or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request.
Information required to be delivered pursuant to the foregoing Sections
5.01(j)(i), (ii) and (iv) shall be deemed to have been delivered on the
date on which the Borrower provides notice (including notice by e-mail)
to the Administrative Agent (which notice the Administrative Agent will
convey promptly to the Lenders) that such information has been posted
on the Securities and Exchange Commission website on the internet at
sec.gov/edgar/searches.htm or at another website identified in such
notice and accessible by the Lenders without charge; provided that such
notice may be included in a certificate delivered pursuant to Section
5.01(j)(i).
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will not:
(a) Restrictions on Liens. Pledge, mortgage or hypothecate, or
permit to exist, and will not permit any Subsidiary (other than a
Project Finance Subsidiary) to pledge, mortgage or hypothecate, or
permit to exist, except in favor of Borrower or any Subsidiary (other
than a Project Finance Subsidiary), any Lien upon, any Principal
Property or Equity Interest in any Significant Subsidiary (other than a
Project Finance Subsidiary) owning any Principal Property, at any time
owned by Borrower or a Subsidiary (other
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than a Project Finance Subsidiary), to secure any Indebtedness;
provided, however, that this restriction shall not apply to or prevent
the creation or existence of any Permitted Lien.
(b) Consolidation, Mergers or Disposal of Assets. (i)
consolidate with, or merge into or amalgamate with or into, any other
Person; (ii) liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); or (iii) convey, sell, transfer, lease or
otherwise dispose of all or substantially all of its assets to any
Person, or permit any Significant Subsidiary (other than a Project
Finance Subsidiary) to do so; provided, however, that nothing contained
in this Section 5.02(b) shall prohibit (A) a merger in which Borrower
is the surviving entity thereof; (B) mergers involving Significant
Subsidiaries in which Borrower or, if the Borrower is not a party to
such merger, a Wholly-Owned Significant Subsidiary (other than a
Project Finance Subsidiary, except for the case where all parties to
such merger are Project Finance Subsidiaries) is the surviving entity;
(C) the liquidation, winding up or dissolution of a Significant
Subsidiary if all of the assets of such Significant Subsidiary are
conveyed, transferred or distributed to Borrower or a Wholly-Owned
Significant Subsidiary (other than a Project Finance Subsidiary, unless
such Significant Subsidiary is also a Project Finance Subsidiary); (D)
the conveyance, sale, transfer, lease or other disposal of all or
substantially all (or any lesser portion) of the assets of any
Significant Subsidiary to Borrower or a Wholly-Owned Significant
Subsidiary (other than a Project Finance Subsidiary, unless such
Significant Subsidiary is also a Project Finance Subsidiary); or (E)
additional conveyances, sales, transfers, leases or other disposals of
assets of the Borrower and its Subsidiaries, provided, that the
aggregate net book value of all assets of the Borrower and its
Subsidiaries conveyed, sold, transferred, leased or otherwise disposed
of pursuant to this clause (E) shall not exceed $200,000,000 or shall
constitute assets that are no longer necessary for the operation of the
business of the Borrower and its Subsidiaries; provided that, in each
case covered by this Section 5.02(b), immediately before and after
giving effect to any such merger, dissolution or liquidation, or
conveyance, sale, transfer, lease or other disposition, no Default
shall have occurred and be continuing.
(c) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by GAAP.
(d) Subsidiary Indebtedness. Permit any Significant Subsidiary
to be a party to, guarantee, assume, create, incur, issue or otherwise
be liable in any manner in connection with or suffer to exist, any
Indebtedness or preferred stock other than (i) Indebtedness for
Borrowed Money and preferred stock which does not exceed at any time
outstanding an aggregate amount for all Significant Subsidiaries of
$100,000,000 (for purposes of this clause (i), the amount of
Indebtedness for Borrowed Money will be the outstanding principal
amount thereof, and the amount of any preferred stock will be the
greater of the par value thereof or the consideration received in the
issuance thereof), (ii) assumed Indebtedness for Borrowed Money and
preferred stock of any Person that becomes a Subsidiary after the date
hereof, if such Indebtedness for Borrowed Money or preferred stock is
in existence at the time such Person becomes a Subsidiary and was not
created in contemplation thereof and no other Subsidiary is liable
therefor, (iii) Indebtedness for Borrowed Money owed to and held by,
and preferred stock held by, the Borrower or any Wholly-Owned
Subsidiary of the Borrower, (iv) Non-Recourse Debt and (v) Indebtedness
for Borrowed Money existing on the date hereof, any refinancing thereof
in an amount not greater than the outstanding amount thereof at the
time of such refinancing and any preferred stock existing on the date
hereof.
(e) Restrictions on Dividends, Intercompany Loans, or
Investments. Permit, or permit any Significant Subsidiary (other than a
Project Finance Subsidiary) to, create or otherwise cause or permit to
exist or become effective any explicit and direct restriction under any
agreement evidencing or providing for the issuance of Indebtedness for
Borrowed Money (other than this Agreement) on the ability of any
Significant Subsidiary (other than a Project Finance Subsidiary) to (i)
pay dividends or make any other distributions on its capital stock or
pay any Indebtedness owed to the Borrower or any Subsidiary of the
Borrower, (ii) make any loans or advances to or investments in the
Borrower or any Subsidiary of the Borrower, or (iii) transfer any of
its property or assets to the Borrower or any Subsidiary of the
Borrower; provided, that the foregoing shall not prohibit financial
incurrence, maintenance and similar covenants that indirectly have the
practical effect of prohibiting or restricting the ability of a
Significant Subsidiary to make such payments or provisions that require
that a certain amount of capital be maintained, or prohibit the return
of capital to shareholders above certain dollar limits; provided,
further, that the foregoing shall
CERC 364-Day Revolving Credit Agreement
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not apply to (i) restrictions and conditions imposed by law or by this
Agreement, (ii) restrictions and conditions existing on the date
hereof, any amendment or modification thereof (other than an amendment
or modification expanding the scope of any such restriction or
condition and any restrictions or conditions) that (x) replace
restrictions or conditions existing on the date hereof and (y) are
substantially similar to such existing restriction or condition, (iii)
restrictions (including any extension of such restrictions that does
not expand the scope of any such restrictions) existing at the time at
which any such Subsidiary first becomes a Significant Subsidiary, so
long as such restriction was in existence prior to such time in
accordance with the other provisions of this Agreement and was not
agreed to or incurred in contemplation of such change of status and
(iv) any restrictions with respect to a Significant Subsidiary imposed
pursuant to an agreement that has been entered into in connection with
a disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary (if such disposal is otherwise permitted
under this Agreement).
(f) Affiliate Transaction. And will not permit any Subsidiary
of Borrower to, make, directly or indirectly, (i) any transfer, sale,
lease or other disposition of any Property to any Affiliate of Borrower
or any Subsidiary of Borrower or any purchase or acquisition of any
Property from any such Affiliate; or (ii) any other arrangement or
transaction directly or indirectly with or for the benefit of any such
Affiliate (including without limitation, guaranties and assumptions of
obligations of any such Affiliate); provided, that (A) Borrower and any
such Subsidiary may enter into any arrangement or other transaction
with any such Affiliate if the monetary or business consideration
arising therefrom would be substantially at least as advantageous to
Borrower or such Subsidiary as the monetary or business consideration
which would be obtained in a comparable arm's length transaction with a
Person not an Affiliate of Borrower or any Subsidiary of Borrower; (B)
Borrower and any Subsidiary of Borrower may become liable in connection
with guaranties of the obligations of any such Affiliate in the
ordinary course of business, other than guaranties of Indebtedness for
Borrowed Money; (C) Borrower and its Subsidiaries may make purchases of
receivables of any kind from the Borrower and the Subsidiaries of
Borrower on terms that any of them deem acceptable; (D) intercompany
borrowings between Borrower and any Subsidiary of Borrower and between
any Subsidiaries of the Borrower and other such Subsidiaries of the
Borrower may be on terms that they deem acceptable or under the
Parent's money pool; (E) Borrower may enter into any arrangement or
other transaction with any Wholly-Owned Subsidiary of Borrower, and any
Wholly-Owned Subsidiary of Borrower may enter into any arrangement or
other transaction with Borrower or any other Wholly-Owned Subsidiary of
Borrower, in each case under this clause (E) only if such arrangements
and other transactions do not involve any Person other than Borrower
and Wholly-Owned Subsidiaries of Borrower; and (F) Borrower may enter
into arrangements or other transactions permitted by Section
5.02(b)(E).
(g) Payments on Preferred Stock. And will not permit any
Subsidiary of Borrower to, make or agree to make any payment or other
distribution on or in connection with, or purchase, redeem or otherwise
acquire or agree to do so, or convert or exchange or agree to convert
or exchange, in whole or in part, any capital stock or other equity
interest of Borrower or any Subsidiary of Borrower, in whole or in part
(including, without limitation, dividends), in each case if prior to
and immediately after giving effect thereto, any Default or Event of
Default exists or would occur.
(h) Investments in the Parent. Make or hold, or permit any of
its Subsidiaries to make or hold, any Investment in the Parent, other
than money pool loans.
(i) Use of Proceeds: Regulation U. Use the proceeds of any
Borrowing (i) to purchase or carry, within the meaning of Regulation U,
any Margin Stock, (ii) to participate in any tender offer for the
securities of any Person, unless such tender offer has been approved by
the board of directors, general partners or other governing body of
such Person or (iii) for any purpose that would violate or result in a
violation of any law or regulation. Borrower will not, and will not
permit any of its Subsidiaries to engage principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying, within the meaning of Regulation U,
any Margin Stock.
SECTION 5.03. Financial Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
CERC 364-Day Revolving Credit Agreement
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(a) Total Debt to Capitalization Ratio. Maintain a ratio of
Total Debt for Borrowed Money to Consolidated Capitalization of no
greater than 0.60:1.00, calculated on a quarterly basis.
(b) Fixed Charge Coverage Ratio. Maintain a ratio of EBITDA to
Cash Interest for the immediately preceding four calendar quarters of
no less than 2.25:1.00, calculated on a quarterly basis.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or the Borrower shall
fail to pay any interest on any Advance or make any other payment of
fees or other amounts payable under this Agreement or any Note or CAF
Note, as the case may be, within five Business Days after the same
becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein
or by the Borrower (or any of its officers) in this Agreement or any
other Loan Document shall prove to have been incorrect in any material
respect when made; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Sections 5.01(d), (e), (h) or
(j)(iii), 5.02 or 5.03, or (ii) the Borrower shall fail to perform or
observe any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed if such failure shall
not have been remedied within 30 days; or
(d) The Borrower or any of its Significant Subsidiaries (other
than a Project Finance Subsidiary) shall fail to pay any principal of
or premium or interest on any Indebtedness for Borrowed Money that is
outstanding in a principal amount of at least $30,000,000 in the
aggregate (but excluding Indebtedness outstanding hereunder) of the
Borrower or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Indebtedness; or any other event shall
occur or condition shall exist under any agreement or instrument
relating to any such Indebtedness and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or to permit the acceleration of, the maturity of such Indebtedness; or
any such Indebtedness shall be declared to be due and payable, or
required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or an offer
to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof;
or
(e) The Borrower or any of its Significant Subsidiaries (other
than a Project Finance Subsidiary) 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 a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the
Borrower or any of its Significant Subsidiaries (other than any Project
Finance Subsidiary) seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or 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, custodian or other similar official
for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a
period of 30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its
CERC 364-Day Revolving Credit Agreement
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property) shall occur; or the Borrower or any of its Significant
Subsidiaries (other than any Project Finance Subsidiary) shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts described in this subsection (e); or
(f) Judgments or orders for the payment of money in excess of
$30,000,000 in the aggregate shall be rendered against the Borrower or
any of its Significant Subsidiaries (other than a Project Finance
Subsidiary) 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
(g) Any non-monetary judgment or order shall be rendered
against the Borrower or any of its Significant Subsidiaries (other than
a Project Finance Subsidiary) that could be reasonably expected to have
a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(h) For any reason, (i) the Parent fails to own, directly or
indirectly, at least 50% of the economic interest in Borrower or (ii)
the Parent fails to own, directly or indirectly, at least 50% of the
outstanding shares of stock, Voting Stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect directors or other managers of Borrower or (iii)
the Borrower fails to own, directly or indirectly, at least 50% of the
economic interest in CenterPoint Energy - Mississippi River
Transmission Corporation, a Delaware corporation ("MRT") or (iv) the
Borrower fails to own, directly or indirectly, at least 50% of the
economic interest in CenterPoint Energy Gas Transmission Company, a
Delaware corporation ("CEGT") or (v) the Borrower fails to own at least
50% of the outstanding shares of stock, Voting Stock or other ownership
interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening
of a contingency) to elect directors or other managers of MRT or (vi)
the Borrower fails to own at least 50% of the outstanding shares of
stock, Voting Stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect
directors or other managers of CEGT; or
(i) The Borrower or any of its ERISA Affiliates shall incur,
or could be reasonably expected to incur, liability in excess of
$50,000,000 in the aggregate as a result of one or more of the
following: (i) the occurrence of any ERISA Event; (ii) the partial or
complete withdrawal of the Borrower or any of its ERISA Affiliates from
a Multiemployer Plan; or (iii) the reorganization or termination of a
Multiemployer Plan;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes or CAF Notes (if any), the unpaid principal amount of all
outstanding Advances, all interest thereon and all other amounts payable under
this Agreement to be forthwith due and payable, whereupon the Notes or CAF Notes
(if any), 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; provided,
however, that in the event of an actual or deemed entry of an order for relief
with respect to the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated and
(B) the Notes or CAF Notes (if any), the unpaid principal amount of all
outstanding Advances, 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.
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ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes each Agent to take such action as Agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes or CAF Notes, if any), the
Agents shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, subject, with respect to the Collateral Agent, to Section 8.08, and
such instructions shall be binding upon all Lenders and all holders of Notes or
CAF Notes (if any); provided, however, that neither of the Agents shall be
required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law. Each Agent agrees to give
to each Lender prompt notice of each notice given to it by the Borrower pursuant
to the terms of this Agreement.
SECTION 7.02. Agents' Reliance, Etc. Neither the Agents nor
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(i) may treat the payee of any Note or CAF Note, as the case may be, as the
holder thereof until the such Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note or CAF
Note, as the case may be, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.07; (ii) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representation to any Lender and shall not
be responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement; (iv)
shall not have any duty to ascertain or to inquire as to the performance,
observance or satisfaction of any of the terms, covenants or conditions of this
Agreement on the part of the Borrower or the existence at any time of any
Default or to inspect the property (including the books and records) of the
Borrower; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or, if
applicable, the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, this Agreement or any
other instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. CUSA, JPMS and Affiliates. With respect to its
Commitment, the Advances made by it and the Note or CAF Note, if any, issued to
it, CUSA and JPMS shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as though it were not an Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include CUSA and JPMS in their respective individual capacities. CUSA and JPMS
and their respective Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if CUSA and JPMS were not Agents and
without any duty to account therefor to the Lenders. The Agents shall have no
duty to disclose any information obtained or received by it or any of its
Affiliates relating to the Borrower or any of its Subsidiaries to the extent
such information was obtained or received in any capacity other than as Agent.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
CERC 364-Day Revolving Credit Agreement
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appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
each Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Notes (if any) then held by each of them
(or if no Notes are at the time outstanding or if any Notes are held by Persons
that are not Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that 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
(collectively, the "Indemnified Costs"), provided that no Lender shall be liable
for any portion of the Indemnified Costs resulting from such Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse each Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by each Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that such Agent is not
reimbursed for such expenses by the Borrower. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05
applies whether any such investigation, litigation or proceeding is brought by
any Agent, any Lender or a third party.
SECTION 7.06. Successor Agents. Any Agent may resign at any
time by giving written notice thereof to the Lender Parties and the Borrower and
may be removed at any time with or without cause by the Required Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes (if any), nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by the relevant Lenders, do any of the
following: (a) waive any of the conditions specified in Section 3.01, without
the consent of any affected Lender, (b) increase the Commitments of any affected
Lender, (c) reduce the principal of, or interest on, the Notes (if any) or any
fees or other amounts payable hereunder to such Lender, (d) postpone any date
fixed for any payment of principal of, or interest on, the Notes (if any) or any
fees or other amounts payable hereunder to such Lender, (e) change the
percentage of the Commitments or the aggregate unpaid principal amount of the
Notes (if any), or the number of Lenders, that shall be required for the Lenders
or any of them to take any action hereunder without the consent of all Lenders,
or (f) amend this Section 8.01 without the consent of all Lenders; and provided
further that without the consent of all Lenders, to the extent that the Lenders
have any rights of consent with respect thereto, the Collateral Agent shall not
release the security interest of the Lenders in any of the Collateral other than
in accordance with the terms of this Agreement or the other applicable Loan
Documents; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by an Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the such Agent under
this Agreement or any Note.
CERC 364-Day Revolving Credit Agreement
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SECTION 8.02. Notices, Etc. (a) (a) All notices and other
communications provided for hereunder shall be either (x) in writing (including
telecopier or telegraphic communication) and mailed, telecopied, telegraphed or
delivered or (y) as and to the extent set forth in Section 8.02(b) and in the
proviso to this Section 8.02(a), in an electronic medium and delivered as set
forth in Section 8.02(b), if to the Borrower, at its address at P.O. Box 2805,
Houston, TX 77252, Attention: Assistant Treasurer (telecopy: 713 207 3301); if
to any Initial Lender, at its Domestic Lending Office specified opposite its
name on Schedule I hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender; if to the Lead Arrangers, in the case of SSBI, at its address at 390
Greenwich Street, New York, New York, 10013, Attention: Peter Kettle (telecopy:
212 723 8548), with a copy to 388 Greenwich Street, New York, New York, 10013,
Attention: Stuart Glen (telecopy: 212 816 8098), or in the case of JPMS, at its
address at 600 Travis, 20th Floor, Houston, Texas, 77002, Attention: Rob Traband
(telecopy: 713 216 8870) or 270 Park Avenue, 4th Floor, New York, New York,
10017, Attention: Thomas Hou (telecopy: 212 270 3897); if to the Collateral
Agent, at its address at Two Penns Way, Suite 200, New Castle, Delaware, 19720,
Attention: Janet Wallace (212 994 0961), with a copy to 388 Greenwich Street,
New York, New York, 10013, Attention: Stuart Glen (telecopy: 212 816 8098); and
if to the Administrative Agent, at its address at Two Penns Way, Suite 200, New
Castle, Delaware, 19720, Attention: Bank Loan Syndications Department/Janet
Wallace (telecopy: 212 994 0961), with a copy to 388 Greenwich Street, New York,
New York, 10013, Attention: Stuart Glen (telecopy: 212 816 8098); or, as to the
Borrower or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Administrative Agent; provided, that
materials required to be delivered pursuant to Section 5.01(j)(i), (ii) and (iv)
shall be delivered to the Administrative Agent as specified in Section 8.02(b)
or as otherwise specified to the Borrower by the Administrative Agent. All such
notices and communications shall, when mailed, telecopied, telegraphed or
emailed, be effective when deposited in the mails, telecopied, delivered to the
telegraph company or confirmed by email, respectively, except that notices and
communications to the Administrative Agent pursuant to Article II, III or VII
shall not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or CAF Notes (if any) or of any Exhibit
hereto to be executed and delivered hereunder shall be effective as delivery of
a manually executed counterpart thereof.
(b) So long as CUSA is the Administrative Agent, materials required to
be delivered pursuant to Section 5.01(j)(i), (ii) and (iv) shall be delivered to
the Administrative Agent in an electronic medium in a format acceptable to the
Administrative Agent and the Lenders by email at oploanswebadmin@citigroup.com,
and if any Lender so requests, delivered to such Lender at its address set forth
on Schedule I hereto in hardcopy form. The Borrower agrees that the
Administrative Agent may make such materials, as well as any other written
information, documents, instruments and other material relating to the Borrower,
any of its Subsidiaries or any other materials or matters relating to this
Agreement, the Notes or CAF Notes (if any) or any of the transactions
contemplated hereby (collectively, the "Communications") available to the
Lenders by posting such notices 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. Although the primary web portal is
secured with a dual firewall and a User ID/Password Authorization System and the
Platform is secured through a single user per deal authorization method whereby
each user may access the Platform only on a deal-by-deal basis, the Borrower
acknowledges that (i) the distribution of material through an electronic medium
is not necessarily secure and that there are confidentiality and other risks
associated with such distribution, (ii) the Platform is provided "as is" and "as
available" and (iii) neither the Administrative Agent nor any of its Affiliates
warrants the accuracy, adequacy or completeness of the Communications or the
Platform and each expressly disclaims 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 Administrative Agent
or any of its Affiliates in connection with the Platform.
(c) Each Lender agrees that notice to it (as provided in the next
sentence) (a "Notice") specifying that any Communications have been posted to
the Platform shall constitute effective delivery of such information, documents
or other materials to such Lender for purposes of this Agreement; provided,
that, if requested by any Lender, the Administrative Agent shall deliver a copy
of the Communications to such Lender by e-mail or telecopier. Each Lender agrees
(i) to notify the Administrative Agent in writing of such Lender's e-mail
address to which a Notice may be sent by electronic transmission (including by
electronic communication) on or before the date such Lender
CERC 364-Day Revolving Credit Agreement
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becomes a party to this Agreement (and from time to time thereafter to ensure
that the Administrative Agent has on record an effective e-mail address for such
Lender) and (ii) that any Notice may be sent to such e-mail address. For
purposes of this Section 8.02(c), the term "Notices" shall only include notices
to be given regarding materials delivered in accordance with Section 8.02(b).
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender or Agent to exercise, and no delay in exercising, any right hereunder
or under any Note or CAF Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to
pay on demand all reasonable costs and expenses of each Agent and the Lead
Arranger in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Notes (if any)
and the other documents to be delivered hereunder, including, without
limitation, (A) all reasonable due diligence, syndication (including printing,
distribution and bank meetings), computer and duplication expenses and (B) the
reasonable fees and expenses of counsel for each Agent and the Lead Arranger
with respect thereto and with respect to advising each Agent as to its rights
and responsibilities under this Agreement. The Borrower further agrees to pay on
demand all costs and expenses of each Agent and the Lenders, if any (including,
without limitation, reasonable counsel fees and expenses), in connection with
the enforcement (whether through negotiations, legal proceedings or otherwise)
of this Agreement, the Notes (if any) and the other documents to be delivered
hereunder, including, without limitation, reasonable fees and expenses of
counsel for each Agent, the Lead Arranger and each Lender in connection with the
enforcement of rights under this Section 8.04(a).
(b) The Borrower agrees to indemnify and hold harmless each Agent, the
Lead Arranger and each Lender and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and reasonable
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) (i) the Notes or
CAF Notes (if any), this Agreement, any of the transactions contemplated herein
or the actual or proposed use of the proceeds of the Advances or (ii) the actual
or alleged presence of Hazardous Materials on any property of the Borrower or
any of its Subsidiaries or any Environmental Action relating in any way to the
Borrower or any of its Subsidiaries, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 8.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
equityholders or creditors or an Indemnified Party or any other Person, whether
or not any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower also agrees not
to assert any claim for special, indirect, consequential or punitive damages
against any Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability arising out of or otherwise relating to the Notes or CAF Notes (if
any), this Agreement, any of the transactions contemplated herein or the actual
or proposed use of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance or CAF Eurodollar Rate Advance is made by the Borrower to or for
the account of a Lender other than on the last day of the Interest Period for
such Advance, as a result of a payment or Conversion pursuant to Sections
2.09(d) or (e), 2.11 or 2.13, acceleration of the maturity of the Notes or CAF
Notes (if any), as the case may be, pursuant to Section 6.01 or for any other
reason, the Borrower shall, 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 any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance.
CERC 364-Day Revolving Credit Agreement
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(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.12, 2.15 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes or CAF
Notes (if any).
SECTION 8.05. Right of Set-off. 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 6.01 to authorize
the Administrative Agent to declare the Notes or CAF Notes, if any, due and
payable pursuant to the provisions of Section 6.01, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or such Affiliate to or for
the credit or the account of the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under this Agreement and the Note or
CAF Note, as the case may be, held by such Lender, whether or not such Lender
shall have made any demand under this Agreement or such Note or CAF Note and
although such obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender and its Affiliates under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective (other than Sections 2.01 and 2.03, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and each Agent and when the
Administrative Agent shall have been notified by each Initial Lender that such
Initial Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, each Agent 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 8.07. Assignments and Participations. (a) Each Lender
may assign to one or more Persons all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Revolving Advances owing to it and the Note or Notes, if any,
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under this
Agreement (other than any right to make CAF Advances, CAF Advances owing to it
and CAF Note or CAF Notes, if any), (ii) except in the case of an assignment to
a Person that, immediately prior to such assignment, was a Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the Commitment of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) each such assignment
shall be to an Eligible Assignee, (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note,
if any, subject to such assignment, and (v) the parties to each such assignment
shall deliver to the Administrative Agent a processing and recordation fee of
$3,500. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.13, 2.16 and 8.04
to the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or
CERC 364-Day Revolving Credit Agreement
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the performance or observance by the Borrower of any of its obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon any Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to such Agent
by the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be prima facie evidence of the correctness thereof, and the Borrower, the
Agents and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note, if any, subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note a new Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder, a new Note to the order of
the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes, if any, held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information relating to the Borrower
received by it from such Lender.
CERC 364-Day Revolving Credit Agreement
43
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time and without the consent of the Borrower or any Agent
(i) create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to it and the Note
or Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System, and (ii)
with notice to the Borrower and the Administrative Agent, assign all or part of
its rights and obligations under this Agreement to any of its Affiliates.
(h) In the event that any Lender requests payments of reimbursement,
compensation or indemnification from the Borrower pursuant to Sections 2.02,
2.12 or 2.15 herein, then the Borrower shall have the right, but not the
obligation, at its own expense, upon 5 Business Days notice to such Lender and
the Administrative Agent, to replace such Lender with an assignee (in accordance
with and subject to the restrictions contained in paragraphs (a) and (b) above),
and such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in paragraphs (a) and
(b) above) all its interests, rights and obligations in respect of its
Commitment to such assignee; provided, however, that (i) no such assignment
shall conflict with any law, rule and regulation or order of any governmental
authority, (ii) no Default has occurred or is continuing, (iii) the Borrower has
satisfied all of its obligations under this Agreement relating to such assigning
Lender through the date of such assignment, (iv) the Borrower shall pay to the
Administrative Agent the administrative fee in the amount of $3,500 if such
replacement Lender assignee is not an existing Lender, and (v) such assignee
shall pay to such assigning Lender in immediately available funds on the date of
such assignment the principal of and interest accrued to the date of payment on
the Advances made by such Lender hereunder and the Borrower, the Administrative
Agent or such assignee, as applicable, shall pay to such Lender all other
amounts accrued for such Lender's account or owed to it hereunder.
SECTION 8.08. Collateral. The Lenders acknowledge and agree
that their rights under the Pledge Agreement will be limited as set forth
therein. In particular, the rights of the Lenders under the Pledge Agreement
will be limited to their right to share in the proceeds of the Collateral as
provided therein, and they shall have no rights to direct actions of the
Collateral Agent thereunder. The security interest in the Collateral to be
granted in favor of the Lenders shall be automatically released at such time as
the security interest granted therein in favor of the Bridge Secured Parties (as
defined in the Pledge Agreement) has been released and terminated in accordance
with the terms of the Pledge Agreement.
SECTION 8.09. Confidentiality. Neither Agent nor any Lender
shall disclose any Confidential Information to any other Person without the
consent of the Borrower, other than (a) to such Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and, as
contemplated by Section 8.07(f), to actual or prospective assignees and
participants, and then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process and (c) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking or
any other regulatory or self-regulatory authorities. The Borrower 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 this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower relating to such U.S. tax treatment and U.S. tax
structure.
SECTION 8.10. Governing Law. This Agreement and the Notes (if
any) shall be governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 8.11. 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. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.12. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the Notes or CAF Notes (if any), or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such
CERC 364-Day Revolving Credit Agreement
44
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or the Notes or CAF Notes (if
any) in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes or CAF
Notes (if any) in any New York State or federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
CERC 364-Day Revolving Credit Agreement
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.
CENTERPOINT ENERGY RESOURCES CORP., as Borrower
By /s/ Marc Kilbride
-------------------------------
Title:
CERC 364-Day Revolving Credit Agreement
CITICORP USA, INC., as Administrative Agent
By /s/ [Illegible]
---------------------------
Title: Vice President
CERC 364-Day Revolving Credit Agreement
SALOMON SMITH BARNEY, INC., as Lead Arranger and as
Joint Bookrunner
By /s/ Anita J. Brickell
---------------------------------
Title: Managing Director
CERC 364-Day Revolving Credit Agreement
J.P. MORGAN SECURITIES INC., as Lead Arranger and as
Joint Bookrunner
By /s/ Richard R. Thayer
----------------------------------
Richard R. Thayer
Managing Director
CERC 364-Day Revolving Credit Agreement
CITICORP NORTH AMERICA, INC., as Collateral Agent
By /s/ [Illegible]
-------------------------------
Title: Vice President
CERC 364-Day Revolving Credit Agreement
WACHOVIA BANK, NATIONAL ASSOCIATION, as Co-
Syndication Agent
By /s/ [Illegible]
---------------------------
Title: Vice President
CERC 364-Day Revolving Credit Agreement
BANC ONE CAPITAL MARKETS, INC., as Co-Syndication
Agent
By /s/ Michael Murphy
------------------------------
Title: Managing Director
CERC 364-Day Revolving Credit Agreement
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS
BRANCH, as Documentation Agent
By /s/ S. William Fox
------------------------------
Title: Director
By /s/ Ian W. Nalitt
------------------------------
Title: Associate
CERC 364-Day Revolving Credit Agreement
INITIAL LENDERS
Commitments
$35,000,000 CITICORP USA, INC., as an Initial Lender
By /s/ [Illegible]
------------------------------
Title: Vice President
$35,000,000 JPMORGAN CHASE BANK, as an Initial Lender
By /s/ Robert Truhard
------------------------------
Title: Vice President
$30,000,000 WACHOVIA BANK, NATIONAL ASSOCIATION, as an
Initial Lender
By /s/ [Illegible]
------------------------------
Title: Vice President
$30,000,000 BANK ONE, NA, as an Initial Lender
By /s/ Madeleine N. Pember
------------------------------
Title: Director
$30,000,000 CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS
BRANCH, as an Initial Lender
By /s/ S. William Fox
------------------------------
Title: Director
By /s/ Ian W. Nalitt
------------------------------
Title: Associate
$25,000,000 BANK OF AMERICA, N.A., as an Initial Lender
By /s/ Richard L. Stein
------------------------------
Title: Principal
$15,000,000 DEUTSCHE BANK AG NEW YORK BRANCH, as an Initial
Lender
By /s/ Hans Narberhaus
------------------------------
Title: Vice President
By /s/ Joel Makowsky
------------------------------
Title: Vice President
$200,000,000 Total of the Commitments
CERC 364-Day Revolving Credit Agreement
SCHEDULE I
APPLICABLE LENDING OFFICES
Name of Initial Lender Domestic Lending Office Eurodollar Lending Office
- ---------------------- ----------------------- -------------------------
Citicorp USA, Inc. Two Penns Way, Suite 200 Two Penns Way, Suite 200
New Castle, DE 19720 New Castle, DE 19720
ABA # 021000089 ABA # 021000089
Account # 36852248 Account # 36852248
Account Name: Agency/Medium Account Name: Agency/Medium
Term Finance Term Finance
Attn: Jackie Caine Attn: Jackie Caine
Reference: CenterPoint Energy Reference: CenterPoint Energy
Resources Resources
JPMorgan Chase Bank 1111 Fannin, 10th Floor 1111 Fannin, 10th Floor
Houston, TX 77002 Houston, TX 77002
ABA # 021 000 021 ABA # 021 000 021
Account # 323 226 337 Account # 323 226 337
Account Name: Utilities Clearing Account Name: Utilities Clearing
Account Account
Attn: Janene English Attn: Janene English
Reference: CenterPoint Energy Reference: CenterPoint Energy
Resources Corp. Resources Corp.
Wachovia Bank, 201 South College Street 201 South College Street
National Association Charlotte, NC 28288-1183 Charlotte, NC 28288-1183
ABA # 053000219 ABA # 053000219
Account # 0145916-8118011 Account # 0145916-8118011
Account Name: Utilities Account Name: Utilities
Attn: Chanue Michael Attn: Chanue Michael
Reference: CenterPoint Energy Reference: CenterPoint Energy
Resources Resources
Bank One, NA 1 Bank One Plaza, Suite IL1-0634 1 Bank One Plaza, Suite IL1-0634
Chicago, IL 60670 Chicago, IL 60670
ABA # 071000013 ABA # 071000013
Account # 481152860000 Account # 481152860000
Account Name: LS2 Incoming Account Account Name: LS2 Incoming Account
Attn: LS2 Incoming Wires Attn: LS2 Incoming Wires
Reference: CenterPoint Energy Reference: CenterPoint Energy
Resources Corp. Resources Corp.
Credit Suisse First Boston, 11 Madison Avenue 11 Madison Avenue
Cayman Islands Branch New York, NY 10010 New York, NY 10010
ABA # 021 000 018 ABA # 021 000 018
Account # 890-0387-742 Account # 890-0387-742
Account Name: CSFB NY Loan Clearing Account Name: CSFB NY Loan Clearing
Attn: Sonya Shillingford Attn: Sonya Shillingford
Reference: CenterPoint Energy Reference: CenterPoint Energy
Resources Corp. Resources Corp.
CERC 364-Day Revolving Credit Agreement
Name of Initial Lender Domestic Lending Office Eurodollar Lending Office
- ---------------------- ----------------------- -------------------------
Bank of America, N.A. 901 Main Street, 14th Floor 901 Main Street, 14th Floor
Dallas, TX 75202-3714 Dallas, TX 75202-3714
ABA # 111000012 ABA # 111000012
Account # 1292000883 Account # 1292000883
Account Name: Credit Services Account Name: Credit Services
Attn: Marija Salic Attn: Marija Salic
Reference: Reliant Energy Reference: Reliant Energy
Resources Corp. Resources Corp.
Deutsche Bank AG New York 31 West 52nd Street 31 West 52nd Street
Branch New York, NY 10019 New York, NY 10019
ABA # 021001033 ABA # 021001033
Account # 60200119 Account # 60200119
Account Name: Deutsche Bank NY Account Name: Deutsche Bank NY
Loan Operations Loan Operations
Attn: Esther Ocampo/Frank Gerencser Attn: Esther Ocampo/Frank Gerencser
Reference: CenterPoint Energy Reference: CenterPoint Energy
Resources Resources
CERC 364-Day Revolving Credit Agreement
EXHIBIT A - FORM OF
PROMISSORY NOTE
U.S.$_______________ Dated: __________ __, 2003
FOR VALUE RECEIVED, the undersigned, CENTERPOINT ENERGY
RESOURCES CORP., a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY
to the order of _________________________ (the "Lender") for the account of its
Applicable Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal amount of the
Revolving Advances made by the Lender to the Borrower pursuant to the Credit
Agreement dated as of March 25, 2003 among the Borrower, the Lenders listed on
the signature pages thereto, Salomon Smith Barney Inc. and J.P. Morgan
Securities Inc., as Lead Arrangers and Joint Bookrunners, Citicorp North
America, Inc. as Collateral Agent and Citicorp USA, Inc., as Administrative
Agent for the Lenders (as amended or modified from time to time, the "Credit
Agreement"; the terms defined therein being used herein as therein defined)
outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Advance from the date of such Revolving Advance until
such principal amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citicorp USA, Inc., as Administrative Agent, at Two
Penns Way, Suite 200, New Castle, Delaware, 19720, in same day funds. Each
Revolving Advance owing to the Lender by the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Revolving Advances by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving Advance being
evidenced by this Promissory Note, and (ii) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
CENTERPOINT ENERGY RESOURCES CORP.
By _______________________________
Title:
CERC 364-Day Revolving Credit Agreement
ADVANCES AND PAYMENTS OF PRINCIPAL
AMOUNT OF REVOLVING AMOUNT OF PRINCIPAL UNPAID PRINCIPAL
DATE ADVANCE PAID OR PREPAID BALANCE NOTATION MADE BY
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
CERC 364-Day Revolving Credit Agreement
EXHIBIT B - FORM OF
NOTICE OF BORROWING
Citicorp USA, Inc., as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, NY 10043
Attention: ____________________
[DATE]
Ladies and Gentlemen:
The undersigned, CENTERPOINT ENERGY RESOURCES CORP., refers to
the Credit Agreement, dated as of March 25, 2003 (as amended or modified from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, the Lenders listed on the
signature pages thereto, Salomon Smith Barney Inc. and J.P. Morgan Securities
Inc., as Lead Arrangers and Joint Bookrunners, Citicorp North America, Inc., as
Collateral Agent and Citicorp USA, Inc., as Administrative Agent for said
Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Credit Agreement that the undersigned hereby requests a Revolving Borrowing
under the Credit Agreement, and in that connection sets forth below the
information relating to such Revolving Borrowing (the "Proposed Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Borrowing
is _______________, 20__.
(ii) The Type of Revolving Advances comprising the
Proposed Revolving Borrowing is [Base Rate Advances] [Eurodollar Rate
Advances].
(iii) The aggregate amount of the Proposed Revolving
Borrowing is $_______________.
(iv) [The initial Interest Period for each Eurodollar Rate
Advance made as part of the Proposed Revolving Borrowing is __________
[week][month][s].]
(v) All or a portion of the Proposed Revolving Borrowing
[will][will not] be used to repay commercial paper.
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Revolving Borrowing:
(A) the representations and warranties contained
in Section 4.01 (other than, in the case of any Revolving Borrowing,
all or a portion of the proceeds of which shall be applied to repay
commercial paper of the Borrower or its Subsidiaries, Section 4.01(e)
and (f)) of the Credit Agreement are correct, before and after giving
effect to the Proposed Revolving Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date (except
to the extent such representations are limited to a prior date);
(B) no event has occurred and is continuing, or
would result from such Proposed Revolving Borrowing or from the
application of the proceeds therefrom, that constitutes a Default; and
CERC 364-Day Revolving Credit Agreement
(C) the Borrower is Solvent.
Very truly yours,
CENTERPOINT ENERGY RESOURCES CORP.
By _______________________________
Title:(1)
- ----------------------
(1) Signatory must be a Financial Officer, as defined in the Credit
Agreement.
CERC 364-Day Revolving Credit Agreement
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of March
25, 2003 (as amended or modified from time to time, the "Credit Agreement")
among CENTERPOINT ENERGY RESOURCES CORP., a Delaware corporation (the
"Borrower"), the Lenders (as defined in the Credit Agreement), Salomon Smith
Barney Inc. and J.P. Morgan Securities Inc., as Lead Arrangers and Joint
Bookrunners, Citicorp North America, Inc., as Collateral Agent and Citicorp USA,
Inc., as Administrative Agent for the Lenders (the "Administrative Agent").
Terms defined in the Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1
hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the
Credit Agreement as of the date hereof (other than in respect of CAF
Advances and CAF Notes) equal to the percentage interest specified on
Schedule 1 hereto of all outstanding rights and obligations under the
Credit Agreement (other than in respect of CAF Advances and CAF Notes).
After giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Revolving Advances owing to the
Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iv)
attaches the Note (if any) held by the Assignor and requests that the
Administrative Agent exchange such Note for a new Note payable to the
order of the Assignee in an amount equal to the Commitment assumed by
the Assignee pursuant hereto or new Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the Assignee
pursuant hereto and the Assignor in an amount equal to the Commitment
retained by the Assignor under the Credit Agreement, respectively, as
specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon any
Agent, the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the
Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes each Agent to take such action as such Agent on
its behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to such Agent by the terms thereof, together
with such powers and discretion as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Credit Agreement are required
to be performed by it as a Lender; and (vi) attaches any U.S. Internal
Revenue Service forms required under Section 2.15 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Administrative Agent for acceptance and
recording by the Administrative Agent. The effective date for this
Assignment and Acceptance (the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
CERC 364-Day Revolving Credit Agreement
Acceptance, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent
shall make all payments under the Credit Agreement and the Notes (if
any) in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and facility fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and
the Notes (if any) for periods prior to the Effective Date directly
between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance 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. Delivery of an executed counterpart of Schedule 1 to
this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
CERC 364-Day Revolving Credit Agreement
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of Revolving Advances
assigned: $__________
Principal amount of Note payable to Assignee: $__________
Principal amount of Note payable to Assignor: $__________
Effective Date(1): _______________, 20__
[NAME OF ASSIGNOR], as Assignor
By ____________________________
Title:
Dated: _______________, 20__
[NAME OF ASSIGNEE], as Assignee
By ____________________________
Title:
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted [and Approved](2) this
__________ day of _______________, 20__
CITICORP USA, INC., as Administrative Agent
By ________________________
Title:
[Approved this __________ day of _______________, 20__
- -----------------------
(1) This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Agent.
(2) Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee".
CERC 364-Day Revolving Credit Agreement
CENTERPOINT ENERGY RESOURCES CORP.
By ________________________](1)
Title:
- ------------------------
(1) Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee".
CERC 364-Day Revolving Credit Agreement
EXHIBIT D - FORM OF
CAF NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, CENTERPOINT ENERGY
RESOURCES CORP., a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY
to the order of _________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement dated as of March
25, 2003 among the Borrower, the Lenders listed on the signature pages thereto,
Salomon Smith Barney Inc. and J.P. Morgan Securities Inc., as Lead Arrangers and
Joint Bookrunners, Citicorp North America, Inc., as Collateral Agent and
Citicorp USA, Inc., as Administrative Agent for the Lenders (as amended or
modified from time to time, the "Credit Agreement"; the terms defined therein
being used herein as therein defined)), on _______________, 200_, the principal
amount of U.S.$_______________.
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in full,
at the interest rate and payable on the interest payment date or dates provided
below:
Interest Rate: _____% per annum (calculated on the basis of a
year of 360 days for the actual number of days elapsed).
Both principal and interest are payable in lawful money of the
United States of America to _________________________ for the account of the
Lender at the office of _________________________, at _________________________
in same day funds.
This Promissory Note is one of the CAF Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
CENTERPOINT ENERGY RESOURCES CORP.
By _______________________________
Title:
CERC 364-Day Revolving Credit Agreement
EXHIBIT E - FORM OF
COMPETITIVE BID REQUEST
Citicorp USA, Inc.,
As Administrative Agent for the
Lenders parties to the Credit Agreement (as defined below)
399 Park Avenue
New York, NY 10043
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of March
25, 2003 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the undersigned, the Lenders listed on the signature
pages thereto, Salomon Smith Barney Inc. and J.P. Morgan Securities Inc., as
Lead Arrangers and Joint Bookrunners, Citicorp North America, Inc., as
Collateral Agent and Citicorp USA, Inc., as Administrative Agent for said
Lenders. Terms defined in the Credit Agreement are used herein as therein
defined.
This is a Competitive Bid Request pursuant to Section 2.04 of
the Credit Agreement requesting quotes for the following:
Aggregate Principal Amount $__________ $__________ $__________
Effective Date of CAF Advance ___________ ___________ ___________
Type of CAF Advance (1) ___________ ___________ ___________
Maturity Date (2) ___________ ___________ ___________
Interest Payment Dates ___________ ___________ ___________
Very truly yours,
CENTERPOINT ENERGY RESOURCES CORP.,
as Borrower
By ________________________________
Title:
Dated:__________________
- ------------------------
(1) Fixed Rate Advance or CAF Eurodollar Rate Advance.
(2) A period of at least 15 days and no longer than 180 days.
CERC 364-Day Revolving Credit Agreement
EXHIBIT F - FORM OF
COMPETITIVE BID
Citicorp USA, Inc.,
As Administrative Agent for the
Lenders parties to the Credit Agreement (as defined below)
399 Park Avenue
New York, NY 10043
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of March
25, 2003 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the undersigned, the Lenders listed on the signature
pages thereto, Salomon Smith Barney Inc. and J.P. Morgan Securities Inc., as
Lead Arrangers and Joint Bookrunners, Citicorp North America, Inc., as
Collateral Agent and Citicorp USA, Inc., as Administrative Agent for said
Lenders. Terms defined in the Credit Agreement are used herein as therein
defined.
In accordance with Section 2.04(b) of the Credit Agreement,
the undersigned Lender offers to make a CAF Advance thereunder in the following
amounts with the following maturity dates:
Effective Date of CAF Advance: _____________________, 200_
Aggregate Maximum Amount: $________________________
Maturity Date 1 Maturity Date 2 Maturity Date 3
- --------------- --------------- ---------------
Maximum Amount $ Maximum Amount $ Maximum Amount $
Rate(1) Amount Rate Amount Rate Amount
Rate Amount Rate Amount Rate Amount
The undersigned hereby confirms that it is prepared to extend
credit to the Borrower upon acceptance by the Borrower of this bid in accordance
with Section 2.04(d) of the Credit Agreement.
Very truly yours,
[NAME OF BIDDING LENDER]
By _____________________
Name:
Dated:________________ Title:
Telephone No.:
Fax:
- ------------------------
(1) In the case of CAF Eurodollar Rate Advances, insert CAF Margin; in the
case of Fixed Rate Advances, insert fixed rate bid.
CERC 364-Day Revolving Credit Agreement
EXHIBIT G - FORM OF
COMPETITIVE BID CONFIRMATION
Citicorp USA, Inc.,
As Administrative Agent for the
Lenders parties to the Credit Agreement (as defined below)
399 Park Avenue
New York, NY 10043
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of March
25, 2003 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the undersigned, the Lenders listed on the signature
pages thereto, Salomon Smith Barney Inc. and J.P. Morgan Securities Inc., as
Lead Arrangers and Joint Bookrunners, Citicorp North America, Inc., as
Collateral Agent and Citicorp USA, Inc., as Administrative Agent for said
Lenders. Terms defined in the Credit Agreement are used herein as therein
defined.
In accordance with Section 2.04(d) of the Credit Agreement,
the undersigned accepts and confirms the offers by the Lender[s] to make CAF
Advances to the undersigned on ___________, 200_ under said Section 2.04(d) in
the [respective] amount[s] set forth on the attached list of CAF Advances
offered.
By delivery of this Competitive Bid Confirmation and the
acceptance of any or all of the CAF Advances offered by the Lenders in response
to this Competitive Bid Confirmation, the undersigned shall be deemed to have
represented and warranted that the relevant conditions to making CAF Advances in
Section 3.03 of the Credit Agreement have been satisfied with respect to such
CAF Advances.
Very truly yours,
CENTERPOINT ENERGY RESOURCES CORP.,
as Borrower
By ________________________________
Title:
Dated:________________
[Borrower to attach CAF Advances offer list prepared by the Administrative Agent
with accepted amount entered by the Borrower to the right of each CAF Advance
offer]
CERC 364-Day Revolving Credit Agreement
EXHIBIT H - FORM OF
PLEDGE AGREEMENT
PLEDGE AGREEMENT
Dated [__], 2003
From
CENTERPOINT ENERGY RESOURCES CORP.
as Grantor
to
CITICORP NORTH AMERICA, INC.
as Collateral Agent
CERC - Pledge Agreement
i
TABLE OF CONTENTS
SECTION PAGE
Section 1. Grant of Security........................................................................... 2
Section 2. Security for Obligations.................................................................... 3
Section 3. Delivery and Control of Security Collateral................................................. 3
Section 4. Representations and Warranties.............................................................. 3
Section 5. Further Assurances.......................................................................... 5
Section 6. Post-Closing Changes........................................................................ 6
Section 7. Voting Rights; Dividends; Etc............................................................... 6
Section 8. Transfers and Other Liens; Additional Shares................................................ 7
Section 9. Collateral Agent Appointed Attorney-in-Fact................................................. 8
Section 10. Collateral Agent May Perform................................................................ 8
Section 11. The Collateral Agent's Duties............................................................... 8
Section 12. Remedies.................................................................................... 9
Section 13. Indemnity and Expenses...................................................................... 10
Section 14. Amendments; Waivers......................................................................... 11
Section 15. Notices, Etc................................................................................ 11
Section 16. Continuing Security Interest; Assignments under the Credit Agreements....................... 11
Section 17. Release; Termination........................................................................ 11
Section 18. Execution in Counterparts................................................................... 12
Section 19. Governing Law............................................................................... 12
Section 20. Collateral Agent's Direction................................................................ 12
Schedules
Schedules I - Location, Chief Executive Office, Type Of Organization,
Jurisdiction Of Organization And Organizational
Identification Number
Schedule II - Pledged Equity and Pledged Debt
Schedule III - Changes in Name, Location, Etc.
CERC - Pledge Agreement
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated [__], 2003 made by CENTERPOINT ENERGY
RESOURCES CORP., a Delaware corporation (the "GRANTOR"), to CITICORP NORTH
AMERICA, INC., as collateral agent (in such capacity, together with any
successor collateral agent, the "COLLATERAL AGENT") for the Secured Parties
(defined below).
PRELIMINARY STATEMENTS.
(1) The Grantor has entered into a U.S.$200,000,000
Credit Agreement, dated March 25, 2003 (said Credit Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the "REVOLVING CREDIT AGREEMENT") among the Grantor, as
borrower, Salomon Smith Barney, Inc. and J.P. Morgan Securities Inc. as lead
arrangers (the "REVOLVER ARRANGERS"), Wachovia Bank, National Association and
Banc One Capital Markets, Inc., as co-syndication agents, Credit Suisse First
Boston, Cayman Islands Branch, as documentation agent, Citicorp USA, Inc., as
administrative agent (the "REVOLVER AGENT") and the lenders listed on the
signature pages thereto (the "REVOLVER LENDERS" and, together with the Revolver
Arrangers and the Revolver Agent, the "REVOLVER SECURED PARTIES").
(2) The Grantor has also entered into a Bridge Credit
Agreement, dated March [__], 2003 (said Bridge Credit Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the "BRIDGE CREDIT AGREEMENT" and, together with the
Revolving Credit Agreement, the "CREDIT AGREEMENTS") among the Grantor, as
borrower, Citicorp North America, Inc., as administrative agent (the "BRIDGE
AGENT"), Salomon Smith Barney, Inc. as lead arranger (the "BRIDGE ARRANGER") and
the lenders listed on the signature pages thereto (the "BRIDGE LENDERS" and,
together with the Bridge Agent and the Bridge Arranger, the "BRIDGE SECURED
PARTIES" and, together with the Revolver Secured Parties, the "SECURED
PARTIES"). Terms defined in the Credit Agreements and not otherwise defined in
this Agreement are used in this Agreement as defined in the applicable Credit
Agreement.
(3) Pursuant to the Credit Agreements, the Grantor is
entering into this Agreement in order to grant to the Collateral Agent for the
ratable benefit of the Secured Parties a security interest in the Collateral (as
hereinafter defined).
(4) The Grantor is the owner of the shares of stock or
other equity interests (the "INITIAL PLEDGED EQUITY") set forth opposite the
Grantor's name on and as otherwise described in Schedule II hereto and issued by
the Persons named therein and of the indebtedness (the "INITIAL PLEDGED DEBT")
set forth opposite such Grantor's name on and as otherwise described in Part II
of Schedule II hereto and issued by the obligors named therein.
(5) It is a condition precedent to the making of Advances
by the Bridge Lenders under the Bridge Credit Agreement and the making of
further Advances by the Revolver Lenders under the Revolving Credit Agreement
that the Grantor shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.
CERC - Pledge Agreement
2
(6) Unless otherwise defined in this Agreement or in the
Credit Agreements, terms defined in Article 8 or 9 of the UCC (as defined below)
are used in this Agreement as such terms are defined in such Article 8 or 9.
"UCC" means the Uniform Commercial Code as in effect, from time to time, in the
State of New York; provided that, if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Bridge Lenders to make Advances under the Bridge Credit Agreement
and to induce the Revolver Lenders to make further Advances under the Revolving
Credit Agreement, the Grantor hereby agrees with the Collateral Agent for the
ratable benefit of the Secured Parties as follows:
Section 1. Grant of Security. The Grantor hereby grants
to the Collateral Agent, for the ratable benefit of the Secured Parties, a
security interest in, the Grantor's right, title and interest in and to the
following, in each case, as to each type of property described below, whether
now owned or hereafter acquired by the Grantor, wherever located, and whether
now or hereafter existing or arising (collectively, the "COLLATERAL"):
(a) the following (the "SECURITY COLLATERAL"):
(i) the Initial Pledged Equity and the
certificates, if any, representing the Initial Pledged Equity,
and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Equity and all
subscription warrants, rights or options issued thereon or
with respect thereto;
(ii) all additional shares of stock and other
Equity Interests of or in any issuer of the Initial Pledged
Equity or any successor entity from time to time acquired by
the Grantor in any manner (such shares and other Equity
Interests, together with the Initial Pledged Equity, being the
"PLEDGED EQUITY"), and the certificates, if any, representing
such additional shares or other Equity Interests, and all
dividends, distributions, return of capital, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or
all of such shares or other Equity Interests and all
subscription warrants, rights or options issued thereon or
with respect thereto;
(iii) the Initial Pledged Debt and the
instruments, if any, evidencing the Initial Pledged Debt, and
all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Initial
Pledged Debt; and
(b) all proceeds of, collateral for, income and other
payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the
CERC - Pledge Agreement
3
Collateral (including, without limitation, proceeds, collateral and
supporting obligations that constitute property of the types described
in clause (a) of this Section 1 and this clause (b)).
Section 2. Security for Obligations. This Agreement
secures, in the case of the Grantor, the payment of all obligations of the
Grantor now or hereafter existing under the Loan Documents, as defined in the
Bridge Credit Agreement ("BRIDGE OBLIGATIONS") and under the Loan Documents, as
defined in the Revolving Credit Agreement ("REVOLVER OBLIGATIONS"), whether
direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such obligations being the "SECURED OBLIGATIONS").
Section 3. Delivery and Control of Security Collateral.
(a) All certificates or instruments representing or evidencing Security
Collateral shall be delivered to and held by or on behalf of the Collateral
Agent pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent. The
Collateral Agent shall have the right, at any time after the occurrence and
during the continuation of an Event of Default, in its reasonable discretion and
without notice to the Grantor, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Security Collateral,
subject only to the revocable rights specified in Section 7(a). In addition,
after the occurrence and during the continuation of an Event of Default, the
Collateral Agent shall have the right to exchange certificates or instruments
representing or evidencing Security Collateral for certificates or instruments
of smaller or larger denominations.
(b) With respect to any Security Collateral in which the
Grantor has any right, title or interest and that constitutes an uncertificated
security, the Grantor will cause the issuer thereof either (i) to register the
Collateral Agent as the registered owner of such security or (ii) to agree in an
authenticated record with the Grantor and the Collateral Agent that such issuer
will comply with instructions with respect to such security originated by the
Collateral Agent without further consent of the Grantor, such authenticated
record to be in form and substance satisfactory to the Collateral Agent. With
respect to any Security Collateral in which the Grantor has any right, title or
interest and that is not an uncertificated security, upon the request of the
Collateral Agent upon the occurrence and during the continuance of an Event of
Default, the Grantor will notify each such issuer of Pledged Equity that such
Pledged Equity is subject to the security interest granted hereunder.
(c) Upon the request of the Collateral Agent, such
Grantor will notify the issuer of the Initial Pledged Debt that such Initial
Pledged Debt is subject to the security interest granted hereunder.
Section 4. Representations and Warranties. The Grantor
represents and warrants as follows:
(a) The Grantor's exact legal name, as defined in Section
9-503(a) of the UCC, is correctly set forth in Schedule 1 hereto. The
Grantor is located (within the meaning of Section 9-307 of the UCC) and
has its chief executive office in the state or
CERC - Pledge Agreement
4
jurisdiction set forth in Schedule I hereto. The information set forth
in Schedule I hereto with respect to the Grantor is true and accurate
in all respects. The Grantor has not previously changed its name,
location, chief executive office, type of organization, jurisdiction of
organization or organizational identification number from those set
forth in Schedule I hereto except as disclosed in Schedule III hereto.
(b) The Grantor is the legal and beneficial owner of the
Collateral of the Grantor free and clear of any Lien, claim, option or
right of others, except for the security interest created under this
Agreement or as otherwise permitted under each Credit Agreement. No
effective financing statement or other instrument similar in effect
covering all or any part of such Collateral or listing the Grantor or
any trade name of the Grantor as debtor is on file in any recording
office, except such as may have been filed in favor of the Collateral
Agent relating to the Loan Documents or as otherwise permitted under
each Credit Agreement.
(c) The Pledged Equity pledged by the Grantor hereunder
has been duly authorized and validly issued and is fully paid and
non-assessable. With respect to any Pledged Equity that is an
uncertificated security, the Grantor has caused the issuer thereof
either (i) to register the Collateral Agent as the registered owner of
such security or (ii) to agree in an authenticated record with the
Grantor and the Collateral Agent that such issuer will, upon the
occurrence and during the continuation of an Event of Default, comply
with instructions with respect to such security originated by the
Collateral Agent without further consent of the Grantor. The Initial
Pledged Debt pledged by such Grantor hereunder has been duly
authorized, authenticated or issued and delivered, is the legal, valid
and binding obligation of the issuers thereof, is evidenced by one or
more promissory notes (which notes have been delivered to the
Collateral Agent) and is not in default.
(d) The Initial Pledged Equity pledged by the Grantor
constitutes the percentage of the issued and outstanding Equity
Interests of the issuers thereof indicated on Schedule II hereto. The
Initial Pledged Debt constitutes all of the outstanding indebtedness
owed to such Grantor by the issuer thereof and is outstanding in the
principal amount indicated on Schedule II hereto.
(e) All filings and other actions (including, without
limitation, actions necessary to obtain control of Collateral as
provided in Section 9-106 of the UCC) necessary to perfect the security
interest in the Collateral of the Grantor created under this Agreement
have been duly made or taken and are in full force and effect, and this
Agreement creates in favor of the Collateral Agent for the benefit of
the Secured Parties a valid and, together with such filings and other
actions, perfected first priority security interest in the Collateral,
securing the payment of the Secured Obligations.
(f) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the grant by the
Grantor of the security interest granted hereunder or for the
execution, delivery or performance of this Agreement by the Grantor,
(ii) the perfection or maintenance of the security interest created
hereunder (including the first priority
CERC - Pledge Agreement
5
nature of such security interest), except for the filing of financing
and continuation statements under the UCC, which financing statements
have been duly filed and are in full force and effect, and the actions
described in Section 3 with respect to Security Collateral, which
actions have been taken and are in full force and effect, or (iii) the
exercise by the Collateral Agent of its voting or other rights provided
for in this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Security Collateral by laws
affecting the offering and sale of securities generally.
Section 5. Further Assurances. (a) The Grantor agrees
that from time to time, at the expense of the Grantor, the Grantor will promptly
execute and deliver, or otherwise authenticate, all further instruments and
documents, and take all further action that may be necessary or desirable, or
that the Collateral Agent may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted by
the Grantor hereunder or to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral of the Grantor.
Without limiting the generality of the foregoing, the Grantor will promptly with
respect to Collateral of the Grantor: (i) if any such Collateral shall be
evidenced by a promissory note or other instrument, deliver and pledge to the
Collateral Agent hereunder such note or instrument duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Collateral Agent; (ii) execute or authenticate and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as the
Collateral Agent may request, in order to perfect and preserve the security
interest granted or purported to be granted by the Grantor hereunder; (iii)
deliver and pledge to the Collateral Agent for benefit of the Secured Parties
certificates representing Security Collateral that constitutes certificated
securities, accompanied by undated stock or bond powers executed in blank; (iv)
take all action necessary to ensure that the Collateral Agent has control of
Collateral consisting of investment property as provided in Section 9-106 of the
UCC; and (v) deliver to the Collateral Agent evidence that all other action that
the Collateral Agent may deem reasonably necessary or desirable in order to
perfect and protect the security interest created by the Grantor under this
Agreement has been taken.
(b) The Grantor hereby authorizes the Collateral Agent to
file one or more financing or continuation statements, and amendments thereto,
in each case without the signature of the Grantor, and regardless of whether any
particular asset described in such financing statements falls within the scope
of the UCC or the granting clause of this Agreement. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law. The Grantor ratifies its authorization for the
Collateral Agent to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.
(c) The Grantor will furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Collateral of the Grantor and such other reports in connection with such
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail.
CERC - Pledge Agreement
6
Section 6. Post-Closing Changes. (a) The Grantor will
not change its name, type of organization, jurisdiction of organization,
organizational identification number or location from those set forth in Section
4(a) of this Agreement without first giving at least 10 Business Days' prior
written notice to the Collateral Agent and taking all action required by the
Collateral Agent for the purpose of perfecting or protecting the security
interest granted by this Agreement. The Grantor will not become bound by a
security agreement authenticated by another Person (determined as provided in
Section 9-203(d) of the UCC) without giving the Collateral Agent 10 Business
Days' prior written notice thereof and taking all action required by the
Collateral Agent to ensure that the perfection and first priority nature of the
Collateral Agent's security interest in the Collateral will be maintained.
(b) The Grantor will hold and preserve its records
relating to the Collateral and will permit up to six representatives of the
Bridge Secured Parties designated by the Required Lenders (as defined in the
Bridge Credit Agreement) or representatives of the Collateral Agent, on not less
than five (5) Business Days' notice, at any reasonable time during normal
business hours, to inspect and make copies of abstracts from such records and
other documents and to discuss general business affairs of the Grantor with its
officers; subject, however, in all cases to the imposition of such conditions as
the Grantor shall deem necessary based on reasonable considerations of safety
and security; provided, however, that the Grantor shall not be required to
disclose to the Collateral Agent or any Secured Party or representatives thereof
any information which is the subject of attorney-client privilege or attorney
work-product privilege properly asserted by the Grantor to prevent the loss of
such privilege in connection with such information or which is prevented from
disclosure pursuant to a confidentiality agreement with third parties.
Notwithstanding the foregoing, none of the conditions as to the exercise of the
right of access described in the preceding sentence that relate to notice
requirements or limitations on the Persons permitted to exercise such right
shall apply at any time when a Default or an Event of Default shall have
occurred (as each such term is defined in either of the Credit Agreements).
(c) If the Grantor does not have an organizational
identification number and later obtains one, it will forthwith notify the
Collateral Agent of such organizational identification number.
Section 7. Voting Rights; Dividends; Etc. (a) So long
as no Event of Default shall have occurred and be continuing:
(i) The Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Security
Collateral or any part thereof for any purpose; provided however, that
the Grantor will not exercise or refrain from exercising any such right
if such action would have a material adverse effect on the value of the
Security Collateral or any part thereof.
(ii) The Grantor shall be entitled to receive and retain
any and all dividends, interest and other distributions paid in respect
of the Security Collateral if and to the extent that the payment
thereof is not otherwise prohibited by the terms of the Loan Documents;
provided, however, that any and all
CERC - Pledge Agreement
7
(A) dividends, interest and other distributions
paid or payable other than in cash in respect of, and
instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Security Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Security Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a material reduction of capital, capital
surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Security Collateral
shall be, and shall be forthwith delivered to the Collateral Agent to
hold as, Security Collateral and shall, if received by the Grantor, be
received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of the Grantor and be
forthwith delivered to the Collateral Agent as Security Collateral in
the same form as so received (with any necessary indorsement).
(iii) The Collateral Agent will execute and deliver (or
cause to be executed and delivered) to the Grantor all such proxies and
other instruments as the Grantor may reasonably request for the purpose
of enabling the Grantor to exercise the voting and other rights that it
is entitled to exercise pursuant to paragraph (i) above and to receive
the dividends or interest payments that it is authorized to receive and
retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default:
(i) All rights of the Grantor (x) to exercise or refrain
from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 7(a)(i) shall,
upon notice to the Grantor by the Collateral Agent, cease and (y) to
receive the dividends, interest and other distributions that it would
otherwise be authorized to receive and retain pursuant to Section
7(a)(ii) shall automatically cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall thereupon have the
sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such
dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that
are received by the Grantor contrary to the provisions of paragraph (i)
of this Section 7(b) shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other funds of the Grantor
and shall be forthwith paid over to the Collateral Agent as Security
Collateral in the same form as so received (with any necessary
indorsement).
Section 8. Transfers and Other Liens; Additional
Shares. (a) The Grantor agrees that it will not (i) sell, assign or otherwise
dispose of, or grant any option with respect to, any of the Collateral, other
than sales, assignments and other dispositions of Collateral, and options
relating to Collateral, permitted under the terms of the Credit Agreements, or
(ii) create
CERC - Pledge Agreement
8
or suffer to exist any Lien upon or with respect to any of the Collateral of the
Grantor except for the pledge, assignment and security interest created under
this Agreement and Permitted Liens.
(b) The Grantor agrees that it will (i) cause each issuer
of the Pledged Equity pledged by the Grantor not to issue any Equity Interests
or other securities in addition to or in substitution for the Pledged Equity
issued by such issuer, except to the Grantor, and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional Equity Interests or other securities of each issuer of the Pledged
Equity.
Section 9. Collateral Agent Appointed Attorney-in-Fact.
The Grantor hereby irrevocably appoints the Collateral Agent the Grantor's
attorney-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of an Event of Default, in the Collateral Agent's
reasonable discretion, to take any action and to execute any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above, and
(c) to file any claims or take any action or institute
any proceedings that the Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Collateral Agent with respect to any of the
Collateral.
Section 10. Collateral Agent May Perform. If the Grantor
fails to perform any agreement contained herein, the Collateral Agent may, but
without any obligation to do so and without notice, itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Grantor under
Section 13.
Section 11. The Collateral Agent's Duties. (a) The
powers conferred on the Collateral Agent hereunder are solely to protect the
Secured Parties' interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Collateral Agent shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not any Secured
Party has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
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(b) Anything contained herein to the contrary
notwithstanding, the Collateral Agent may from time to time, when the Collateral
Agent deems it to be necessary with (so long as an Event of Default has not
occurred and is continuing) the written concurrence of the Grantor, appoint one
or more subagents (each a "SUBAGENT") for the Collateral Agent hereunder with
respect to all or any part of the Collateral. In the event that the Collateral
Agent so appoints any Subagent with respect to any Collateral, (i) the
assignment and pledge of such Collateral and the security interest granted in
such Collateral by the Grantor hereunder shall be deemed for purposes of this
Pledge Agreement to have been made to such Subagent, in addition to the
Collateral Agent, for the ratable benefit of the Secured Parties, as security
for the Secured Obligations of the Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder
with respect to such Collateral, and (iii) the term "Collateral Agent," when
used herein in relation to any rights, powers, privileges, interests and
remedies of the Collateral Agent with respect to such Collateral, shall include
such Subagent; provided, however, that no such Subagent shall be authorized to
take any action with respect to any such Collateral unless and except to the
extent expressly authorized in writing by the Collateral Agent.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party upon default under the UCC (whether or not the UCC
applies to the affected Collateral) and also may: (i) require the
Grantor to, and the Grantor hereby agrees that it will at its expense
and upon request of the Collateral Agent forthwith, assemble all or
part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place and time to be designated
by the Collateral Agent that is reasonably convenient to both parties;
(ii) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at
any of the Collateral Agent's offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Collateral
Agent may deem commercially reasonable; and (iii) exercise any and all
rights and remedies of any of the Grantor under or in connection with
the Collateral, or otherwise in respect of the Collateral, including,
without limitation, (A) rights of the Grantor to demand or otherwise
require payment of any amount with respect to the Collateral and (B)
exercise all other rights and remedies with respect to the Collateral.
The Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten days' notice to the Grantor of the time and place
of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Agent
shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Collateral Agent may adjourn any
public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(b) Any cash held by or on behalf of the Collateral Agent
and all cash proceeds received by or on behalf of the Collateral Agent
in respect of any sale of, collection from, or other realization upon
all or any part of the Collateral may, in the
CERC - Pledge Agreement
10
discretion of the Collateral Agent, be held by the Collateral Agent as
collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Collateral Agent pursuant to
Section 13) in whole or in part by the Collateral Agent for the ratable
benefit of the Secured Parties against, all or any part of the Secured
Obligations, in the following manner:
(i) first, paid to the Agents for any amounts
then owing to the Agents pursuant to Section 8.04 of each of
the Credit Agreements or otherwise under the Loan Documents,
ratably in accordance with such respective amounts then owing
to the Agents; and
(ii) second, paid to the Lenders for any amounts
then owing to them, in their capacities as such, under the
Loan Documents ratably in accordance with such respective
amounts then owing to such Lenders.
Any surplus of such cash or cash proceeds held by or on the behalf of
the Collateral Agent and remaining after payment in full of all the
Secured Obligations shall be paid over to the Grantor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) All payments received by the Grantor in respect of
the Collateral shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other funds of the Grantor
and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement).
(d) The Collateral Agent may, without notice to the
Grantor except as required by law and at any time or from time to time,
charge, set-off and otherwise apply all or any part of the Secured
Obligations against any funds held in any deposit account.
Section 13. Indemnity and Expenses. (a) The Grantor
agrees to indemnify, defend and save and hold harmless each Secured Party and
each of their Affiliates and their respective officers, directors, employees,
agents and advisors (each, an "INDEMNIFIED PARTY") from and against, and shall
pay on demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
(b) The Grantor will upon demand pay to the Collateral
Agent the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees and expenses of its counsel and of any experts
and agents, that the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from or other realization upon, any of
the Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the other Secured Parties hereunder or (iv) the failure by
the Grantor to perform or observe any of the provisions hereof.
CERC - Pledge Agreement
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Section 14. Amendments; Waivers. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Grantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Collateral Agent or any other
Secured Party to exercise, and no delay in exercising any right hereunder, 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.
Section 15. Notices, Etc. All notices and other
communications provided for hereunder shall be either (i) in writing (including
telegraphic, telecopier or telex communication) and mailed, telegraphed,
telecopied, telexed or otherwise delivered if to the Grantor, at its address at
P.O. Box 2805, Houston, Texas, 77252, Attention: Assistant Treasurer (telecopy:
713 207 3301); if to the Collateral Agent, at its address at Two Penns Way,
Suite 200, New Castle, Delaware, 19720 Attention: Janet Wallace (telecopy: 212
994 0961), with a copy to 388 Greenwich Street, New York, New York, 10013,
Attention: Stuart Glen (telecopy: 212 816 8098) or (ii) by electronic mail (if
electronic mail addresses are designated as provided below) confirmed
immediately in writing, in the case of the Grantor or the Collateral Agent,
addressed to it at its address specified herein and in the Bridge Credit
Agreement; or, as to any party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and other
communications shall, when mailed, telegraphed, telecopied, telexed, sent by
electronic mail or otherwise, be effective when deposited in the mails,
delivered to the telegraph company, telecopied, confirmed by telex answerback,
sent by electronic mail and confirmed in writing, or otherwise delivered (or
confirmed by a signed receipt), respectively, addressed as aforesaid; except
that notices and other communications to the Collateral Agent shall not be
effective until received by the Collateral Agent. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or Schedule hereto shall be effective as delivery of an original
executed counterpart thereof.
Section 16. Continuing Security Interest; Assignments
under the Credit Agreements. This Agreement shall create a continuing security
interest in the Collateral and shall (a) remain in full force and effect until
the later of (i) the payment in full in cash of the Secured Obligations
consisting of Bridge Obligations and (ii) the Termination Date (as defined in
the Bridge Credit Agreement), (b) be binding upon the Grantor, its successors
and assigns and (c) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender may assign or otherwise transfer all or
any portion of its rights and obligations under the applicable Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in Section 8.07 of the applicable Credit Agreement.
Section 17. Release; Termination. Upon the later of (i)
the payment in full in cash of the Secured Obligations consisting of Bridge
Obligations, (ii) the release by the Collateral Agent of all Collateral and
(iii) the Termination Date (as defined in the Bridge Credit Agreement), the
pledge and security interest granted hereby shall terminate and all rights to
the
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12
Collateral shall revert to the Grantor. Upon any such termination, the
Collateral Agent will, at the Grantor's expense, execute and deliver to the
Grantor such documents as the Grantor shall reasonably request to evidence such
termination.
Section 18. Execution in Counterparts. This Agreement
may be executed in any number of 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. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
an original executed counterpart of this Agreement.
Section 19. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Section 20. Collateral Agent's Direction.
Notwithstanding anything to the contrary contained herein or the Loan Documents,
no enforcement action may be taken by the Collateral Agent without the prior
written direction by the Required Lenders (as defined in the Bridge Credit
Agreement) or the Bridge Agent acting at the direction of the Required Lenders
(as defined in the Bridge Credit Agreement), and the Revolving Lenders shall
have no right to direct the Collateral Agent or vote on any matter other than
the sharing of proceeds hereunder pursuant to Section 12.
IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
CENTERPOINT ENERGY RESOURCES CORP.
By _______________________________
Title:
CERC - Pledge Agreement
SCHEDULE I TO THE
PLEDGE AGREEMENT
LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION,
JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION
NUMBER
CHIEF
EXECUTIVE TYPE OF JURISDICTION OF ORGANIZATIONAL
GRANTOR LOCATION OFFICE ORGANIZATION ORGANIZATION I.D. NO.
- ------- -------- --------- ------------ --------------- --------------
CenterPoint Corporation Delaware
Energy
Resources
Corp.
CERC - Pledge Agreement
SCHEDULE II TO THE
PLEDGE AGREEMENT
PLEDGED EQUITY AND PLEDGED DEBT
I. INITIAL PLEDGED EQUITY
- ----------------------------------------------------------------------------------------------------------
PERCENTAGE
OF
CLASS OF EQUITY CERTIFICATE NUMBER OUTSTANDING
ISSUER INTEREST PAR VALUE NO(S) OF SHARES SHARES
- ----------------------------------------------------------------------------------------------------------
CenterPoint Energy Gas [Common Stock] 100%
Transmission Company
- ----------------------------------------------------------------------------------------------------------
CenterPoint Energy [Common Stock] 100%
Mississippi River
Transmission Corporation
- ----------------------------------------------------------------------------------------------------------
II. INITIAL PLEDGED DEBT
- ----------------------------------------------------------------------------------------------------------------------------
OUTSTANDING
DEBT DESCRIPTION OF DEBT CERTIFICATE FINAL PRINCIPAL
GRANTOR ISSUER DEBT NO(S). MATURITY AMOUNT
- ----------------------------------------------------------------------------------------------------------------------------
Center- $
Point
Energy
Resources
Corp.
- ----------------------------------------------------------------------------------------------------------------------------
CERC - Pledge Agreement
SCHEDULE III TO THE
PLEDGE AGREEMENT
CHANGES IN NAME, LOCATION, ETC.
CHANGES IN THE GRANTOR'S NAME (INCLUDING NEW GRANTOR WITH A NEW NAME AND NAMES
ASSOCIATED WITH ALL PREDECESSORS IN INTEREST OF THE GRANTOR)
CHANGES IN THE GRANTOR'S LOCATION
CHANGES IN THE GRANTOR'S CHIEF EXECUTIVE OFFICE
CHANGES IN THE TYPE OF ORGANIZATION
CHANGES IN THE JURISDICTION OF ORGANIZATION
CHANGES IN THE ORGANIZATIONAL IDENTIFICATION NUMBER
CERC - Pledge Agreement