EXHIBIT 4.3
EXECUTION COPY
U.S. $550,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 31, 2006
Among
CENTERPOINT ENERGY RESOURCES CORP.
as Borrower,
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders,
and
CITIGROUP GLOBAL MARKETS INC., DEUTSCHE BANK SECURITIES INC.
and BANC OF AMERICA SECURITIES LLC
as Lead Arrangers,
and
CITIBANK, N.A.
as Administrative Agent,
and
DEUTSCHE BANK SECURITIES INC. and BANK OF AMERICA, NATIONAL ASSOCIATION
as Co-Syndication Agents,
and
CITIBANK, N.A. and BANK OF AMERICA, NATIONAL ASSOCIATION
as Issuing Banks
and
THE ROYAL BANK OF SCOTLAND PLC and ABN AMRO BANK N.V.
as Co-Documentation Agents
CERC 5-Year Revolving Credit Agreement
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms....................................... 1
SECTION 1.02 Computation of Time Periods................................. 18
SECTION 1.03 Accounting Terms............................................ 18
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 The Revolving Advances and Letters of Credit................ 18
SECTION 2.02 Making the Revolving Advances............................... 19
SECTION 2.03 Issuance of and Drawings and Reimbursement Under Letters of
Credit...................................................... 20
SECTION 2.04 The CAF Advances............................................ 21
SECTION 2.05 Competitive Bid Procedure................................... 21
SECTION 2.06 Fees........................................................ 23
SECTION 2.07 Termination or Reduction of the Revolving Commitments....... 24
SECTION 2.08 Repayment................................................... 24
SECTION 2.09 Interest.................................................... 25
SECTION 2.10 Interest Rate Determination................................. 26
SECTION 2.11 Optional Conversion of Revolving Advances................... 26
SECTION 2.12 Optional Prepayments of Revolving Advances.................. 26
SECTION 2.13 Increased Costs............................................. 27
SECTION 2.14 Illegality.................................................. 27
SECTION 2.15 Payments and Computations................................... 28
SECTION 2.16 Taxes....................................................... 28
SECTION 2.17 Sharing of Payments, Etc.................................... 30
SECTION 2.18 Use of Proceeds............................................. 31
SECTION 2.19 Extension Option............................................ 31
SECTION 2.20 Increase in the Aggregate Revolving Commitments............. 31
SECTION 2.21 Evidence of Debt............................................ 32
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01 Conditions Precedent to Effectiveness of Sections 2.01
and 2.04.................................................... 33
SECTION 3.02 Conditions Precedent to Each Revolving Borrowing, Issuance
and Commitment Increase..................................... 34
SECTION 3.03 Conditions Precedent to Each CAF Borrowing.................. 34
SECTION 3.04 Determinations Under Section 3.01........................... 35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower.............. 35
CERC 5-Year Revolving Credit Agreement
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PAGE
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01 Affirmative Covenants....................................... 36
SECTION 5.02 Negative Covenants.......................................... 38
SECTION 5.03 Total Debt to Capitalization Ratio.......................... 42
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default........................................... 42
SECTION 6.02 Actions in Respect of the Letters of Credit upon Default.... 44
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01 Authorization and Action.................................... 44
SECTION 7.02 Administrative Agent's Reliance, Etc........................ 45
SECTION 7.03 Citibank and Affiliates..................................... 45
SECTION 7.04 Lender Credit Decision...................................... 45
SECTION 7.05 Indemnification............................................. 45
SECTION 7.06 Successor Administrative Agents............................. 46
SECTION 7.07 Agents; Lead Arrangers; Global Coordinators................. 46
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Amendments, Etc............................................. 47
SECTION 8.02 Notices, Etc................................................ 47
SECTION 8.03 No Waiver; Remedies......................................... 48
SECTION 8.04 Costs and Expenses.......................................... 48
SECTION 8.05 Right of Set off............................................ 49
SECTION 8.06 Binding Effect.............................................. 50
SECTION 8.07 Assignments and Participations.............................. 50
SECTION 8.08 Patriot Act Notification.................................... 52
SECTION 8.09 Confidentiality............................................. 52
SECTION 8.10 Governing Law............................................... 52
SECTION 8.11 Counterparts................................................ 52
SECTION 8.12 Removal of Lender........................................... 53
SECTION 8.13 Jurisdiction, Etc........................................... 53
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Schedules
Schedule I List of Applicable Lending Offices
Schedule II Global Coordinators Addresses
Schedule III Commitment Percentages
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 Notice of Letter of Credit Issuance
Exhibit I Form of Assumption Agreement
CERC 5-Year Revolving Credit Agreement
CREDIT AGREEMENT
Dated as of March 31, 2006
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), among
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, CITIGROUP GLOBAL MARKETS INC.
("CGMI"), DEUTSCHE BANK SECURITIES INC. ("Deutsche Bank") and BANC OF AMERICA
SECURITIES LLC, as joint lead arrangers and co-bookrunners (in such capacities,
the "Lead Arrangers"), and DEUTSCHE BANK and BANK OF AMERICA, NATIONAL
ASSOCIATION, as co-syndication agents (the "Co-Syndication Agents"), CITIBANK,
N.A. ("Citibank"), and BANK OF AMERICA, NATIONAL ASSOCIATION, as Issuing Banks,
and THE ROYAL BANK OF SCOTLAND PLC and ABN AMRO BANK N.V. as co-documentation
agents (the "Co-Documentation Agents") and CITIBANK, as administrative agent
(the "Administrative Agent") for the Lenders (as hereinafter defined).
WITNESSETH
WHEREAS, the Borrower entered into that certain Existing 5-Year
Revolving Credit Facility (as defined below); and
WHEREAS, the Borrower has requested that the Existing 5-Year Revolving
Credit Facility be amended and restated in its entirety;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto agree that on the Effective Date, the
Existing 5-Year Revolving Credit Facility shall be, and hereby is, amended and
restated in its entirety 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, a Letter of Credit 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.
"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, Letters of Credit, Letter of Credit 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.
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"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/Fitch Base Rate Advances Eurodollar Rate Advances
------------------ --------------------- ------------------------
Level 1
Higher than Level 2 0.0% 0.30%
Level 2
BBB+/Baal/BBB+ 0.0% 0.35%
Level 3
BBB/Baa2/BBB 0.0% 0.45%
Level 4
BBB-/Baa3/BBB- 0.0% 0.60%
Level 5
BB+/Ba1/BB+ 0.0% 1.00%
Level 6
Lower than Level 5 or
unrated by S&P, Moody's
and Fitch 0.25% 1.25%
"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/Fitch Percentage
------------------ ----------
Level 1
Higher than Level 2 0.07%
Level 2
BBB+/Baal/BBB+ 0.09%
Level 3
BBB/Baa2/BBB 0.11%
Level 4
BBB-/Baa3/BBB- 0.15%
Level 5
BB+/Ba1/BB+ 0.20%
Level 6
Lower than Level 5 or
unrated by S&P, Moody's
and Fitch 0.25%
"Applicable Utilization Fee" means, as of any date on which the
aggregate principal amount of the Advances plus the Letters of Credit
exceeds 50% of the aggregate amount of the Lenders' Revolving Commitments,
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 Utilization
S&P/Moody's/Fitch Fee
------------------ ----------------------
Level 1
Higher than Level 2 0.05%
Level 2
BBB+/Baal/BBB+ 0.05%
Level 3
BBB/Baa2/BBB 0.10%
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Level 4
BBB-/Baa3/BBB- 0.10%
Level 5
BB+/Ba1/BB+ 0.10%
Level 6
Lower than Level 5 or
unrated by S&P, Moody's
and Fitch 0.10%
"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.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit assuming
compliance at such time with all conditions to drawing.
"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 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 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.
"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 2.05 by a Lender in response to a Competitive Bid Request.
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"CAF Borrowing" means a borrowing consisting of CAF Advances under
Section 2.05 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 2.05(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 2.04(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
2.21(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 2.05(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.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
and any and all equivalent ownership interests in a Person (other than a
corporation), including without limitation, partnership interests in
partnerships and member interests in limited liability companies, and any
and all warrants or options to purchase any of the foregoing or securities
convertible into any of the foregoing.
"Commitment" means the Revolving Commitment and the Letter of Credit
Commitment.
"Commitment Increase" has the meaning as set forth in Section 2.20
(a).
"Commitment Percentage" means, for each Lender, the percentage
identified as its Commitment Percentage opposite such Lender's name on
Schedule III attached hereto, as such percentage may be modified by
assignment in accordance with the terms of this Agreement or by reductions
or increases in the Revolving Commitment pursuant to Section 2.07 and
Section 2.20.
"Communications" has the meaning specified in Section 8.02(b).
"Competitive Bid" has the meaning as set forth in Section 2.05(b).
"Competitive Bid Confirmation" has the meaning as set forth in Section
2.05(d).
"Competitive Bid Request" has the meaning as set forth in Section
2.05(a).
"Confidential Information" means information that the Borrower or any
of its Subsidiaries furnishes to the Administrative Agent or any Lender in
a writing designated as confidential or which in the Borrower's or its
Subsidiaries' 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
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to the public or that is or becomes available to the Administrative Agent
or such Lender from a source other than the Borrower or its Subsidiaries.
"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 Shareholders' Equity means, as of any date of
determination, the total assets of the Borrower and its Consolidated
Subsidiaries, less all liabilities of the 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
(to the extent so classified), (a) Indebtedness; (b) deferred liabilities;
and (c) Indebtedness of the Borrower or any of its Consolidated
Subsidiaries that is expressly subordinated in right and priority of
payment to other liabilities of the Borrower or such Consolidated
Subsidiary, 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.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any written agreement, instrument or
other written undertaking to which such Person is a party or by which it or
any of its property is bound.
"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 2.10 or 2.11.
"Declining Lender" has the meaning specified in Section 2.19.
"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.
"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.
"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, the
Issuing Banks 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,
CERC 5-Year Revolving Credit Agreement
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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 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
(rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if
such rate per annum is not such a multiple) for deposits in U.S. dollars
appearing on Page 3750 of the Telerate screen as of 11:00
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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. In the event that such rate does not
appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the "Eurodollar Rate" shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two
Business Days before the first day of such Interest Period in the interbank
eurodollar market where its eurodollar and foreign currency and exchange
operations are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein.
"Eurodollar Rate Advance" means a Revolving Advance that bears
interest as provided in Section 2.09(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.
"Exchange Act" means the Securities Exchange Act of 1933, as amended.
"Existing 5-Year Revolving Credit Facility" means the $400,000,000
5-Year Revolving Credit Agreement, dated as of June 30, 2005, among the
Borrower, the lenders party thereto, and Citigroup Global Markets Inc.,
Barclays Capital, the investment banking division of Barclays Bank PLC and
Banc of America Securities LLC, as lead arrangers, and Barclays Bank PLC
and Bank of America, National Association, as syndication agents, Citibank,
N.A., Barclays Bank PLC and Bank of America, National Association as
issuing banks, and Citibank, N.A., as administrative agent.
"Extending Lender" has the meaning specified in Section 2.19.
"Extended Termination Date" has the meaning specified in Section 2.19.
"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 Senior Credit Facility Fee Letter dated as of
March 3, 2006 among Citibank, CGMI, and J.P. Morgan Securities Inc. and
JPMorgan Chase Bank, N.A. 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.
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"Fitch" means Fitch Ratings, and any successors thereto.
"Fixed Rate Advance" means any CAF Advance made by a Lender pursuant
to Section 2.05(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 the Borrower or any Consolidated Subsidiary of the 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.
"Global Coordinators" means J.P. Morgan Securities Inc. and Citigroup
Global Markets Inc., in their capacities as global coordinators.
"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 obligation") 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 the
Borrower in good faith (and "guaranteed" and "guarantor" shall be construed
accordingly).
"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 the Borrower, (ii) that has been formed for
the purpose of issuing Hybrid Preferred Securities and (iii) substantially
all of the assets of which consist at all times solely of the Junior
Subordinated Debt and payments made from time to time on the Junior
Subordinated Debt.
CERC 5-Year Revolving Credit Agreement
9
"Increase Date" has the meaning as set forth in Section 2.20(a).
"Increasing Lender" has the meaning as set forth in Section 2.20(b).
"Indebtedness" of any Person means the sum of (a) all items (other
than Capital Stock, capital surplus, retained earnings, other comprehensive
income, treasury stock and any other items that would properly be included
in shareholder equity) 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, (b) all obligations of such Person,
contingent or otherwise, as account party or applicant (or equivalent
status) in respect of any standby letters of credit or equivalent
instruments, and (c) without duplication, the amount of Guarantees by such
Person of items described in clauses (a) and (b); provided, however, that
Indebtedness of a Person shall not include (i) any Junior Subordinated Debt
owned by any Hybrid Preferred Securities Subsidiary, (ii) any Guarantee by
the Borrower or its Subsidiaries of payments with respect to any Hybrid
Preferred Securities or (iii) 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.
"Information Memorandum" means the information memorandum dated March
2006 used by the Lead Arrangers 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:
(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
CERC 5-Year Revolving Credit Agreement
10
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.
"Issuing Banks" means Bank of America, National Association, Citibank,
N.A. and any other Lender approved as an Issuing Bank by the Administrative
Agent and any Eligible Assignee to which a Letter of Credit Commitment
hereunder has been assigned pursuant to Section 8.07 so long as each such
Lender or Eligible Assignee expressly agrees to perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by an Issuing Bank and notifies the Administrative
Agent of its Applicable Lending Office and the amount of its Letter of
Credit Commitment (which information shall be recorded by the
Administrative Agent in the Register), for so long as such Issuing Bank,
Lender or Eligible Assignee, as the case may be, shall have a Letter of
Credit Commitment.
"Junior Subordinated Debt" means subordinated debt of the Borrower or
any Subsidiary of the 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.
"Lead Arrangers" has the meaning specified in the recital of parties
to this Agreement.
"L/C Disbursement" means a payment or disbursement made by any Issuing
Bank pursuant to a Letter of Credit.
"Lenders" means the Initial Lenders and each Person that shall become
a party hereto pursuant to Section 8.07.
"Letter of Credit Advance" means an advance by any Issuing Bank or any
Lender pursuant to Section 2.03(c).
"Letter of Credit Commitment" means, with respect to any Issuing Bank
at any time, the amount set forth opposite such Issuing Bank's name on
Schedule III hereof under the caption "Letter of Credit Commitment" or, if
such Issuing Bank has entered into one or more Assignment and Acceptances,
set forth for such Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 8.07.
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Banks' Letter of Credit Commitments at such time, as
such amount may be reduced at or prior to such time pursuant to Section
2.07.
"Letters of Credit" has the meaning specified in Section 2.01(b).
CERC 5-Year Revolving Credit Agreement
11
"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), each Letter of Credit, and all other documents executed in connection
herewith and therewith, including, without limitation, each Notice of
Borrowing.
"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).
"Material Adverse Change" means any material adverse change in the
ability of the Borrower to perform its obligations under the Loan Documents
on a timely basis (it being understood and agreed that a Material Adverse
Change shall not include the effect of any True-Up Litigation) since
December 31, 2005.
"Material Adverse Effect" means any material adverse effect on the
ability of the Borrower to perform its obligations under this Agreement or
any other Loan Document on a timely basis (it being understood and agreed
that a Material Adverse Effect shall not include the effect of any True-Up
Litigation).
"Moody's" means Moody's Investors Service, Inc., and any successors
thereto.
"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.
"Net Tangible Assets" means, with respect to the Borrower, the total
assets of the Borrower and its Consolidated Subsidiaries and Unrestricted
Subsidiaries, minus goodwill and other intangible assets as shown on the
balance sheet of the Borrower, its Consolidated Subsidiaries and the
Unrestricted Subsidiaries delivered pursuant to Section 5.01(j) in respect
of the most recently ended fiscal quarter of the Borrower and with respect
to any other Person, the total assets of such Person and its Consolidated
Subsidiaries, minus goodwill and other intangible assets as determined
pursuant to such Person's most recently available financial statements.
"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
CERC 5-Year Revolving Credit Agreement
12
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 2.21(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.
"Notice of Letter of Credit Issuance" has the meaning specified in
Section 2.03(a).
"Noticed Anniversary Date" has the meaning specified in Section 2.19.
"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.
"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 with respect to any Person:
(a) Liens for current taxes, assessments or other governmental charges
that are not delinquent or remain payable without any penalty, or the
validity or amount of which is contested in good faith by appropriate
proceedings, provided, however, that adequate reserves with respect thereto
are maintained on the books of such Person in accordance with GAAP, and
provided further that any right to seizure, levy, attachment,
sequestration, foreclosure or garnishment with respect to Property of such
Person or any Subsidiary of such Person by reason of such Lien has not
matured, or has been, and continues to be, effectively enjoined or stayed;
(b) landlord Liens for rent not yet due and payable and Liens for
materialmen, mechanics, warehousemen, carriers, employees, workmen,
repairmen and other similar nonconsensual Liens imposed
CERC 5-Year Revolving Credit Agreement
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by operation of law, for current wages or accounts payable or other sums
not yet delinquent, in each case arising in the ordinary course of business
or if overdue, that are being contested in good faith by appropriate
proceedings, provided, however, that any right to seizure, levy,
attachment, sequestration, foreclosure or garnishment with respect to
Property of such Person or any Subsidiary of such Person by reason of such
Lien has not matured, or has been, and continues to be, effectively
enjoined or stayed;
(c) Liens (other than any Lien imposed pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code, ERISA or any environmental law,
order, rule or regulation) incurred or deposits made, in each case, in the
ordinary course of business, (i) in connection with workers compensation,
unemployment insurance and other types of social security or (ii) to secure
(or to obtain letters of credit that secure) the performance of tenders,
statutory obligations, surety and appeals bonds, bids, leases, performance
or payment bonds, purchase, construction, sales contacts, and other similar
obligations, in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or the payment of the
deferred purchase price of property;
(d) Liens arising out of or in connection with any litigation or other
legal proceeding that is being contested in good faith by appropriate
proceedings; provided, however, that adequate reserves with respect thereto
are maintained on the books of such Person in accordance with GAAP; and
provided further that subject to Section 6.01(f) (so long as such Lien is
discharged or released within 30 days of attachment thereof), any right to
seizure, levy, attachment, sequestration, foreclosure or garnishment with
respect to Property of such Person or any Subsidiary of such Person by
reason of such Lien has not matured, or has been and continues to be,
effectively enjoined or stayed;
(e) precautionary filings under the applicable Uniform Commercial Code
made by a lessor with respect to personal property leased to such Person or
any Subsidiary of such Person;
(f) other non-material Liens or encumbrances none of which secures
Indebtedness for Borrowed Money of the Borrower or any of its Subsidiaries
or interferes materially with the use of the Property affected in the
ordinary conduct of the Borrower's or its Subsidiaries' business and which
individually or in the aggregate do not have a Material Adverse Effect;
(g) easements, rights-of-way, restrictions and other similar
encumbrances and exceptions to title existing or incurred in the ordinary
course of business that, in the aggregate, do not in any case materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower and its
Subsidiaries, taken as a whole;
(h) Liens created by Capital Leases, provided that the Liens created
by any such Capital Lease attach only to the Property leased to the
Borrower or one of its Subsidiaries pursuant thereto, (ii) purchase money
Liens securing Indebtedness of the Borrower or any of its Subsidiaries
(including such Liens securing such Indebtedness incurred within twelve
months of the date on which such Property was acquired), provided that all
such Liens attach only to the Property purchased with the proceeds of the
Indebtedness secured thereby and only secure the Indebtedness incurred to
finance such purchase, (iii) Liens on receivables, customer charges, notes,
ownership interests, contracts or contract rights which are transferred to
the purchaser of such receivables, customer charges, notes, ownership
interests, contracts or contract rights in connection with such sale,
securitization or monetization, provided that such Liens secure only the
obligations of the Borrower or any of its Subsidiaries in connection with
such sale, securitization or monetization and (iv) Liens created by leases
that do not constitute Capital Leases at the time such leases are entered
into, provided that the Liens created thereby attach only to the Property
leased to the Borrower or one of its Subsidiaries pursuant thereto.
(i) Liens on cash and short term investments (i) deposited by the
Borrower or any of its Subsidiaries in accounts with or on behalf of
futures contract brokers or other counterparties or (ii) pledged by the
Borrower or any of its Subsidiaries, in the case of clause (i) or (ii) to
secure its obligations with respect to contracts (including without
limitation, physical delivery, option (whether cash or financial),
exchange, swap and future contracts) for the purchase or sale of any
energy-related commodity or interest rate or currency rate management
contracts;
CERC 5-Year Revolving Credit Agreement
14
(j) Liens on (i) Property owned by a Project Financing Subsidiary or
(ii) equity interests in a Project Financing Subsidiary (including in each
case a pledge of a partnership interest, common stock or a membership
interest in a limited liability company) securing Indebtedness of the
Borrower or any of its Subsidiaries incurred in connection with a Project
Financing; and
(k) Liens on equity interests in an Unrestricted Subsidiary (including
in each case a pledge of a partnership interest, common stock or a
membership interest in a limited liability company) securing, subject to
Section 5.02(e), Indebtedness of such Unrestricted Subsidiary.
"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(c).
"Principal Property" means any natural gas distribution property,
natural gas pipeline or gas processing plant located in the United States,
except any such property 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.
"Project Finance Subsidiary" and "Project Finance Subsidiaries" means
any Subsidiary of the Borrower (or any other Person in which the Borrower
directly or indirectly owns a 50% or less interest) whose principal purpose
is to incur Project Financing or to become an owner of interests in a
Person so created to conduct the business activities for which such Project
Financing was incurred, and substantially all the fixed assets of which
Subsidiary or Person are those fixed assets being financed (or to be
financed) in whole or in part by one or more Project Financings.
"Project Financing" means any Indebtedness or lease obligations that
do not constitute Capital Leases at the time such leases are entered into,
in each case that are incurred to finance a project or group of projects
(including any construction financing to the extent that such Indebtedness
(or other obligations) expressly are not recourse to the Borrower or any of
its Subsidiaries (other than a Project Financing Subsidiary) or any of
their respective Property other than the Property of a Project Financing
Subsidiary and equity interests in a Project Financing Subsidiary
(including in each case a pledge of a partnership interest, common stock or
a membership interest in a limited liability company).
"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.
"Pro Rata Share" of any amount means, with respect to any Lender, at
any time, the product of such amount times a fraction the numerator of
which is the amount of such Lender's Revolving Commitment at such time (or,
if the Commitments shall have terminated pursuant to Section 2.07 or 6.01,
such Lender's Revolving Commitment as in effect immediately prior to such
termination) and the denominator of which is the Revolving Facility at such
time (or, if the Commitments shall have been terminated pursuant to Section
2.07 or 6.01, the Revolving Facility as in effect immediately prior to such
termination).
"Public Debt Rating" means, as of any date, (a) at any time the senior
unsecured long-term debt of the Borrower is rated by S&P, by Moody's and by
Fitch and such ratings are equivalent, such rating, (b) the middle of such
ratings in the case where there is a split between all such ratings or (c)
if such ratings are split and two of the ratings fall in the same level
(the "Majority Level"), and the third rating is in a different
CERC 5-Year Revolving Credit Agreement
15
level then such rating shall be the Majority Level. For purposes of the
foregoing, (x) if only two of such three agencies issue a rating, the
higher of such ratings shall apply, provided that if the higher rating is
two or more levels above the lower rating, the rating next above the lower
of the two shall apply; if only one of such three agencies issues a rating,
such rating shall apply and (y) if any such rating established by S&P,
Moody's or Fitch 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 (z) if S&P, Moody's or Fitch shall change the basis
on which ratings are established or if any of S&P, Moody's or Fitch shall
cease to be in the business of rating corporate debt obligations, the
Borrower and the Administrative Agent shall negotiate in good faith if
necessary to amend this definition to reflect such changed rating system or
the unavailability of ratings from such rating agencies and, pending the
effectiveness of any such amendment, the Public Debt Rating shall be
determined by reference to the rating most recently in effect prior to such
change or cessation, each reference to the Public Debt Rating announced by
S&P, Moody's or Fitch, as the case may be, shall refer to the then
equivalent rating by S&P, Moody's or Fitch, as the case may be.
"Register" has the meaning specified in Section 8.07(c).
"Regulation T" and "Regulation U" mean 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 or holding at
least 51% of the sum of (a) the then aggregate unpaid principal amount of
the Advances owing to the Lenders, (b) the aggregate Available Amount of
all Letters of Credit outstanding at such time and (c) the aggregate Unused
Revolving Credit Commitments at such time.
"Requirements of Law" means, as to any Person, any law, statute or
ordinance, decree, requirement, order, judgment, rule, or regulation of any
Governmental Authority.
"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 all Subsidiaries of the Borrower other
than Unrestricted Subsidiaries.
"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.
"Revolving Commitment" has the meaning set forth in Section 2.01(a).
"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., and any successors thereto.
CERC 5-Year Revolving Credit Agreement
16
"Second Extended Termination Date" has the meaning specified in
Section 2.19.
"Significant Subsidiary" means (i) for the purposes of determining
what constitutes an "Event of Default" under Sections 6.01(d), (e), and (f)
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 31, 2011 and the date of
termination in whole of the Commitments pursuant to Section 2.07 or 6.01 or
if extended pursuant to Section 2.19, the Extended Termination Date or
Second Extended Termination Date, as applicable.
"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.
"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
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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) Non-Recourse Debt of
the Borrower and its Subsidiaries.
"True-Up Litigation" means any litigation or other Proceeding in
connection with the determination by the Public Utility Commission of Texas
of the recovery by Parent and its Subsidiaries of stranded costs and other
amounts to be recovered in the true-up process.
"Type" has the meaning as set forth in the definition of "Advance".
"Unused Revolving Credit Commitment" means, with respect to any Lender
at any time, (a) such Lender's Revolving Commitment at such time minus,
without duplication, (b) the sum of (i) the aggregate principal amount of
all Revolving Advances and Letter of Credit Advances made by such Lender
(in its capacity as a Lender) and outstanding at such time plus (ii) such
Lender's Pro Rata Share of (A) the aggregate principal amount of all
Letters of Credit outstanding at such time and (B) the aggregate principal
amount of all Letters of Credit Advances made by the Issuing Banks pursuant
to Section 2.03(c) and outstanding at such time.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower and its
direct or indirect Subsidiaries that is designated by a Responsible Officer
of the Borrower as an Unrestricted Subsidiary, but only if (x) the
aggregate amount of Net Tangible Assets of all Unrestricted Subsidiaries at
the time of designation does not exceed or would not exceed as a result of
such designation the lesser of (a) 10% of the Net Tangible Assets of Parent
and (b) 15% of the Net Tangible Assets of the Borrower, (y) such
designation and the Investment of Borrower in such Subsidiary complies with
the limitations in Section 5.02(j) and (z) such Subsidiary: (i) has no
Indebtedness with recourse to the Borrower and the Restricted Subsidiaries
except that permitted under Section 5.02(j); (ii) is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Significant Subsidiary of the Borrower unless the terms of any such
agreement, contract, arrangement or understanding and related transactions
are substantially no less favorable to the Borrower or such Significant
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Borrower; (iii) is a Person with respect to which
neither the Borrower nor any of its Significant Subsidiaries has any direct
or indirect obligation that violates Section 5.02(j:, (a) to subscribe for
additional Capital Stock of such Person or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and (iv) does not, either alone or
in the aggregate, operate, directly or indirectly, all or substantially all
of the business of the Borrower and its Subsidiaries.
Any designation of a Subsidiary of the Borrower as an Unrestricted
Subsidiary shall be evidenced by a certificate of a Responsible Officer of
the Borrower giving effect to such designation and a certificate executed
by a Responsible Officer certifying that such designation complied with the
preceding conditions and was permitted by Section 5.02(j) delivered to the
Administrative Agent, for delivery to each Lender. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Agreement and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Significant Subsidiary of
the Borrower as of such date and, if such Indebtedness is not permitted to
be incurred as of such date under Section 5.02(j), the Borrower shall be in
default of such covenant. A Responsible Officer of the Borrower may at any
time designate any Unrestricted Subsidiary to be a Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness
by a Subsidiary of the Borrower of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (1)
such Indebtedness is permitted under this Agreement calculated on a pro
forma basis as if such
CERC 5-Year Revolving Credit Agreement
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designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence
following such designation.
"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").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 The Revolving Advances and Letters of Credit. (a) 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
Schedule III 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 2.07 or increased pursuant to Section 2.20 (such Lender's
"Revolving 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
$10,000,000 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 Revolving Commitments. Within the limits of each Lender's Revolving
Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant to
Section 2.12 and reborrow under this Section 2.01.
(b) The Letters of Credit. Each Issuing Bank severally agrees, on the
terms and conditions hereinafter set forth, to issue letters of credit (the
"Letters of Credit") in U.S. Dollars for the account of the Borrower in support
of obligations (including, without limitation, performance, bid and similar
bonding obligations and credit enhancement) of the Borrower and its Affiliates,
from time to time on any Business Day during the period from the Effective Date
until the Business Day before the Termination Date in an aggregate Available
Amount (i) for all Letters of Credit issued by such Issuing Bank not to exceed
at any time the lesser of (x) the Letter of Credit Facility at such time and (y)
such Issuing Bank's Letter of Credit Commitment at such time and (ii) for each
such Letter of
CERC 5-Year Revolving Credit Agreement
19
Credit not to exceed the Unused Revolving Credit Commitments of the Lenders at
such time; provided, however, that in no event shall the aggregate Available
Amount for all Letters of Credit exceed $200,000,000. No Letter of Credit shall
have an expiration date (including all rights of the Borrower or the beneficiary
to require renewal) later than the Business Day before the Termination Date.
Within the limits of the Letter of Credit Facility, and subject to the limits
referred to above, the Borrower may request the issuance of Letters of Credit
under this Section 2.01(b), repay any Letter of Credit Advances resulting from
drawings thereunder pursuant to Section 2.03(c) and request the issuance of
additional Letters of Credit under this Section 2.01(b).
(c) Total Revolving Commitments. Notwithstanding anything else
contained herein, the obligations of the Lenders to make Advances and of the
Issuing Banks to issue Letters of Credit is subject to the condition that the
Total Aggregate Outstanding Extensions of Credit shall not exceed the total of
the Revolving Commitments.
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 electronic communication. Each such
notice of a Revolving Borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed immediately in writing, or telecopier or electronic communication,
complying in all material respects with 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
$10,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.10 or 2.14 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.
(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
CERC 5-Year Revolving Credit Agreement
20
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
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation. If
the Borrower and such Lender shall pay such interest to the Administrative Agent
for the same or an overlapping period, the Administrative Agent shall promptly
remit to the Borrower the amount of such interest paid by the Borrower for such
period. 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 Issuance of and Drawings and Reimbursement Under Letters
of Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (New York City time) on the second
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to any Issuing Bank, which shall give to the
Administrative Agent for delivery to each Lender prompt notice thereof by
telecopier or electronic communication. Each such notice of issuance of a Letter
of Credit shall be substantially in the form of Exhibit H attached hereto, or as
agreed between the Borrower and each Issuing Bank (a "Notice of Letter of Credit
Issuance"), shall be by telephone (conveying the information contained on
Exhibit H attached hereto), confirmed immediately in writing, or by telecopier
or electronic communication. If the requested form of such Letter of Credit is
acceptable to such Issuing Bank in its reasonable discretion, such Issuing Bank
will, upon fulfillment of the applicable conditions set forth in Article III,
make such Letter of Credit available to the Borrower at its office referred to
in Section 8.02 or as otherwise agreed with the Borrower in connection with such
issuance.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish to the
Administrative Agent (A) on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the previous week and drawings during such week under all
Letters of Credit issued by such Issuing Bank, (B) for delivery to each Lender
on the first Business Day of each month a written report summarizing issuance
and expiration dates of Letters of Credit issued by such Issuing Bank during the
preceding month and drawings during such month under all Letters of Credit
issued by such Issuing Bank and (C) to the Administrative Agent and each Lender
on the first Business Day of each calendar quarter a written report setting
forth the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit issued by such Issuing Bank.
(c) Participations in Letters of Credit. Upon the issuance of a Letter
of Credit by any Issuing Bank under Section 2.03(a), such Issuing Bank shall be
deemed, without further action by any party hereto, to have sold to each Lender,
and each Lender shall be deemed, without further action by any party hereto, to
have purchased from such Issuing Bank, a participation in such Letter of Credit
in an amount for each Lender equal to such Lender's Pro Rata Share of the
Available Amount of such Letter of Credit, effective upon the issuance of such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay such Lender's Pro
Rata Share of each L/C Disbursement made by such Issuing Bank and not reimbursed
by the Borrower forthwith on the date due as provided in Section 2.08(b) by
making available for the account of its Applicable Lending Office to the
Administrative Agent for the account of such Issuing Bank by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to such
Lender's Pro Rata Share of such L/C Disbursement. Each Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this Section
2.03(c) in respect of Letters of Credit is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default or the termination of the
Commitments, and that each such payment shall be made without any off-set,
abatement, withholding or reduction whatsoever. If and to the extent that any
Lender shall not have so made the amount of such L/C Disbursement available to
the Administrative Agent, such Lender agrees to pay to the Administrative
CERC 5-Year Revolving Credit Agreement
21
Agent forthwith on demand such amount together with interest thereon, for each
day from the date such L/C Disbursement is due pursuant to Section 2.08(b) until
the date such amount is paid to the Administrative Agent, at the Federal Funds
Rate for its account or the account of such Issuing Bank, as applicable. If such
Lender shall pay to the Administrative Agent such amount for the account of such
Issuing Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Letter of Credit Advance made by such Lender on such Business
Day for purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by such Issuing Bank shall be reduced by such
amount on such Business Day.
(d) Drawing and Reimbursement. The payment by any Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by such Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft.
(e) Failure to Make Letter of Credit Advances. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04 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 of the Revolving Commitments at such time (the "CAF Facility").
(b) Under the terms and conditions set forth below, the Borrower may
borrow, repay pursuant to Section 2.08 and reborrow under this Section 2.04.
SECTION 2.05 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 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
CERC 5-Year Revolving Credit Agreement
22
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 2.05(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 2.05.
(d) The Borrower may in its sole and absolute discretion, subject only
to the provisions of this Section 2.05(d), accept or reject any Competitive Bid
referred to in Section 2.05(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 2.05(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 2.05(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 2.05(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 2.05, the Administrative Agent shall notify such Lender of the
applicable Eurodollar Rate.
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(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 2.05(b) above.
(g) If the Borrower accepts pursuant to Section 2.05(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 2.05 shall be made in accordance with
Section 8.02 hereof; provided, however, that each request or notice required to
be made under Section 2.05(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 (complying in all material respects
with the form of Exhibit B or Exhibit E, as the case may be) to the
Administrative Agent.
SECTION 2.06 Fees. (a) Commitment Fee. The Borrower agrees to pay to
the Administrative Agent for the account of each Lender the commitment fee on
the aggregate amount of such Lender's Unused Revolving Credit Commitment, 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, 2006, and on the Termination Date.
(b) Agent's Fees. The Borrower shall pay to the Administrative Agent
for its own account such fees as may from time to time be agreed between the
Borrower and the Administrative Agent.
(c) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Lender a commission, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing June 30, 2006, and on the Termination Date, on such Lender's Pro Rata
Share of the average daily aggregate Available Amount during such quarter of all
Letters of Credit outstanding from time to time at the rate of the Applicable
Margin for Eurodollar Rate Advances under the Revolving Facility.
(ii) The Borrower shall pay to each Issuing Bank, for its own account,
a fronting fee payable in arrears quarterly on the last day of each March, June,
September and December, commencing June 30, 2006, and on the Termination Date,
in an amount equal to 0.125% on the average daily aggregate Available Amount
during such quarter of all Letters of Credit issued by such Issuing Bank and
outstanding from time to time.
CERC 5-Year Revolving Credit Agreement
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(iii) The Borrower shall pay to each Issuing Bank, for its own
account, issuance fees and transfer fees in connection with the issuance or
administration of each Letter of Credit as the Borrower and such Issuing Bank
shall agree.
(iv) The Borrower shall pay the Applicable Utilization Fees in
accordance with Section 2.09(a).
(v) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Lenders all commissions received by the
Administrative Agent for their respective accounts pursuant to this Section
2.06(c).
SECTION 2.07 Termination or Reduction of the Revolving 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 Revolving 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 2.12 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 Revolving
Commitments of the Lenders may not be reinstated.
Each reduction of Revolving Commitments pursuant to this Section 2.07
shall be applied pro rata to the Revolving Commitments of each Lender. If at any
time, including after giving effect to any reduction of the Revolving
Commitments pursuant to this Section 2.07, the Total Aggregate Outstanding
Extensions of Credit exceed the Total Commitments, the Borrower shall be
obligated, first, to prepay the Revolving Advances and the Letter of Credit
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 and Letter of Credit Advances.
SECTION 2.08 Repayment. (a) Revolving Advances. 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.
(b) Letter of Credit Advances. The Borrower shall repay to the
Administrative Agent for the account of each Issuing Bank and each other Lender
that has made a Letter of Credit Advance on or before the date of such payment
if the Borrower receives notice of such payment on or before 10:00 a.m. (New
York City time) on the date such payment is made by such Issuing Bank and if
such notice is received after 10:00 a.m. (New York City time) on the next
Business Day after such payment is to be made by such Issuing Bank, the
outstanding principal amount of each Letter of Credit Advance made by each of
them.
(c) Obligations Absolute.
(i) The Borrower's payment obligations under Section 2.08 shall be
absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment that the Borrower may
have or have had against the relevant Issuing Bank or any beneficiary of a
Letter of Credit other than a defense based upon the gross negligence or
willful misconduct of such Issuing Bank or violation of the standards of
care specified in the Uniform Commercial Code of the State of New York.
(ii) The Borrower also agrees with each Issuing Bank that no Issuing
Bank shall be responsible for, and the Borrower's payment obligations under
Section 2.08 shall not be affected by, among other things, (i) the validity
or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged,
(ii) any dispute between or among the Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit
CERC 5-Year Revolving Credit Agreement
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may be transferred or (iii) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.
(iii) No Issuing Bank shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by such Issuing Bank's gross
negligence or willful misconduct or in violation of the standards of care
specified in the Uniform Commercial Code of the State of New York.
(iv) The Borrower agrees that any action taken or omitted by any
Issuing Bank under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified
in the Uniform Commercial Code of the State of New York, shall be binding
on the Borrower and shall not result in any liability of such Issuing Bank
to the Borrower.
SECTION 2.09 Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Revolving Advance and Letter of
Credit Advance owing to each Lender from the date of such Revolving Advance and
Letter of Credit 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
or Letter of Credit 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 plus (z) the
Applicable Utilization Fee, 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 or Letter of Credit 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 or Letter of Credit Advance
plus (y) the Applicable Margin in effect from time to time plus (z) the
Applicable Utilization Fee, 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 2.05(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 or Letter of Credit 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 or Letter of Credit
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.
CERC 5-Year Revolving Credit Agreement
26
SECTION 2.10 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
2.09(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 or Letter of Credit 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
or Letter of Credit 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 Agent will forthwith so notify the Borrower and the Lenders and
such Revolving Advances or Letter of Credit 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 $10,000,000, 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 2.11 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 2.10 and
2.14, 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 2.12 Optional Prepayments of Revolving Advances. The Borrower
may, upon at least two Business Days' notice to the Administrative Agent (or
such shorter or no notice as may be satisfactory 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 $5,000,000 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).
CERC 5-Year Revolving Credit Agreement
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SECTION 2.13 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 2.13 any such increased
costs resulting from (A) Taxes or Other Taxes (as to which Section 2.16 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 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. The Borrower shall pay to the Administrative Agent for the
account of such Lender or to the Administrative Agent for its own account, as
the case may be, the amount shown as due on any such certificate within 10
Business Days after receipt thereof.
(c) The agreements contained in this Section 2.13 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 2.13 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 2.14 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 2.09(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.
CERC 5-Year Revolving Credit Agreement
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SECTION 2.15 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 2.05, 2.13, 2.16 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 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 and of
facility fees and utilization fees 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 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 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 2.16 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 2.15 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
CERC 5-Year Revolving Credit Agreement
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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
2.16) 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 2.16(e) or (ii) that are United States withholding taxes
imposed on sums payable to such Lender at the time such Lender becomes a party
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 2.16. Whenever any
Taxes or Other Taxes (as defined in Section 2.16(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 2.16) 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, including, without limitation or duplication, any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any failure by the Borrower to pay any Taxes or Other
Taxes when due to the appropriate taxing authority or to remit to any Lender the
receipts or other evidence of payment of Taxes or Other Taxes.
(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
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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 2.16(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 2.16(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
required under subsection (e) above), such Lender shall not be entitled to
indemnification under Section 2.16(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 2.16 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 Administrative 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 2.16, 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 2.17 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 2.13, 2.16, 2.19 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 2.17 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.
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SECTION 2.18 Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
general corporate purposes, including capital expenditures and to repay
commercial paper backstop.
SECTION 2.19 Extension Option. The Borrower may request that the
Commitments be extended for additional one year periods by providing not less
than 65 days' written notice to the Administrative Agent prior to any
anniversary of the Closing Date (each, a "Noticed Anniversary Date"). If a
Lender agrees, in its individual and sole discretion, to extend its Commitment
(such Lender, an "Extending Lender"), it will notify the Administrative Agent,
in writing, of its decision to do so no later than 20 days prior to the
applicable Noticed Anniversary Date. The Administrative Agent will notify the
Borrower, in writing, of the Lenders' decisions no later than 15 days prior to
such Noticed Anniversary Date. The Extending Lenders' Commitments will be
extended for an additional year from the Termination Date (the "Extended
Termination Date") or the Extended Termination Date (the "Second Extended
Termination Date"); provided that (i) more than 50% of the Commitments is
extended or otherwise committed to by Extending Lenders and any new Lenders and
(ii) on the date of any request by the Borrower to extend the Commitments, the
applicable conditions set forth in Section 3.02 shall be satisfied. No Lender
shall be required to consent to any such extension request and any Lender that
declines or does not respond to the Borrower's request for commitment renewal (a
"Declining Lender") will have its Commitment terminated on the then existing
Termination Date (without regard to any renewals by other Lenders). The Borrower
will have the right to accept commitments from Eligible Assignees in an amount
equal to the amount of the Commitments of any Declining Lenders; provided that
the Extending Lenders will have the right to increase their Commitments up to
the amount of the Declining Lenders' Commitments before the Borrower will be
permitted to substitute any Eligible Assignees for the Declining Lenders. The
Borrower may only extend the Termination Date twice during the term of this
Agreement pursuant to this Section 2.19.
SECTION 2.20 Increase in the Aggregate Revolving Commitments. (a) The
Borrower may, at any time but in any event not more than twice in any calendar
year prior to the Termination Date, whether or not the Revolving Commitments
have been reduced pursuant to Section 2.07, by notice to the Administrative
Agent, request that the aggregate amount of the Commitments be increased by an
amount of $10,000,000 or an integral multiple of $5,000,000 in excess thereof (a
"Commitment Increase") to be effective as of a date that is at least 90 days
prior to the scheduled Termination Date then in effect (the "Increase Date") as
specified in the related notice to the Administrative Agent; provided, however,
that (i) in no event shall the aggregate amount of the Commitments at any time
exceed $750,000,000 and (ii) on the date of any request by the Borrower for a
Commitment Increase and on the related Increase Date, the applicable conditions
set forth in Section 3.02 shall be satisfied.
(b) The Administrative Agent shall promptly notify the Lenders of a
request by the Borrower for a Commitment Increase, which notice shall include
(i) the proposed amount of such requested Commitment Increase, (ii) the proposed
Increase Date and (iii) the date by which the Lenders wishing to participate in
the Commitment Increase must commit to an increase in the amount of their
respective Revolving Commitments (the "Commitment Date"). Lender Bank that is
willing, in its sole discretion, to participate in such requested Commitment
Increase (each an "Increasing Lender") shall give written notice to the
Administrative Agent and the Borrower on or prior to the Commitment Date of the
amount by which it is willing to increase its Revolving Commitment. If the Banks
notify the Administrative Agent and the Borrower that they are willing to
increase the amount of their respective Revolving Commitments by an aggregate
amount that exceeds the amount of the requested Commitment Increase, the
requested Commitment Increase shall be allocated among the Lenders willing to
participate therein in such amounts as are agreed between the Borrower and the
Administrative Agent.
(c) Promptly following each Commitment Date, the Administrative Agent
shall notify the Borrower as to the amount, if any, by which the Lenders are
willing to participate in the requested Commitment Increase. If the aggregate
amount by which the Lenders are willing to participate in any requested
Commitment Increase on any such Commitment Date is less than the requested
Commitment Increase, then the Borrower may request Lenders to increase their
participation and extend offers to one or more Eligible Assignees to participate
in any portion of the requested Commitment Increase that has not been committed
to by the Lenders as of the applicable Commitment Date; provided, however, that
the Revolving Commitment of each such Eligible Assignee shall be in an amount
not less than $10,000,000.
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(d) On each Increase Date, each Eligible Assignee that accepts an
offer to participate in a requested Commitment Increase in accordance with
Section 2.20(b) (each such Eligible Assignee, an "Assuming Bank") shall become a
Lender party to this Agreement as of such Increase Date and the Revolving
Commitment of each Increasing Lender for such requested Commitment Increase
shall be so increased by such amount (or by the amount allocated to such Lender
pursuant to the last sentence of Section 2.20(b)) as of such Increase Date;
provided, however, that the Administrative Agent shall have received on or
before such Increase Date the following, each dated such date:
(i) (A) certified copies of resolutions of the Board of Directors
of the Borrower or the Executive Committee of such Board approving the
Commitment Increase and the corresponding modifications to this
Agreement and (B) opinions of counsel for the Borrower (which may be
in-house counsel), in form and substance reasonably acceptable to the
Administrative Agent, covering the matters covered by the opinions of
counsel delivered pursuant to Section 3.01 (d)(iv) and Section
3.01(d)(v) hereof;
(ii) an assumption agreement from each Assuming Lender, if any,
substantially in the form of Exhibit I hereto (each an "Assumption
Agreement"), duly executed by such Eligible Assignee, the
Administrative Agent and the Borrower; and
(iii) confirmation from each Increasing Lender of the increase in
the amount of its Revolving Commitment in a writing satisfactory to
the Borrower and the Administrative Agent.
On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.20(d), the Administrative Agent
shall notify the Lenders (including, without limitation, each Assuming Lender)
and the Borrower, on or before 1:00 P.M. (New York City time), by telecopier, of
the occurrence of the Commitment Increase to be effected on such Increase Date
and shall record in the Register the relevant information with respect to each
Increasing Lender and each Assuming Lender on such date.
(e) The Administrative Agent shall promptly notify the Borrower and
the Lenders of any increase in the amount of the aggregate Revolving Commitments
pursuant to this Section and of the respective adjusted Revolving Commitment and
Commitment Percentage of each Lender after giving effect thereto. The Borrower
acknowledges that, in order to maintain the Revolving Advances in accordance
with the Commitment Percentage of each Lender, a non-pro-rata increase in the
aggregate Revolving Commitment may require prepayment or funding of all or
portions of certain Revolving Advances on the date of such increase (and any
such prepayment or funding shall be subject to the other provisions of this
Agreement). Effective upon such increase, the amount of the participations held
by each Lender in each Letter of Credit then outstanding shall be adjusted such
that, after giving effect to such adjustments, each Lender shall hold
participations in each such Letter of Credit in accordance with the Commitment
Percentage of such Lender after giving effect to such increase.
SECTION 2.21 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 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
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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 2.04. Sections 2.01 and 2.04 of this Agreement shall become effective on and
as of the first date prior to March 31, 2006 (the "Effective Date") on which the
following conditions precedent have been satisfied:
(a) The Administrative Agent shall have received, for the benefit of
the lenders under the Existing 5-Year Revolving Credit Facility, all
accrued interest and fees, including any facility fees, utilization fees
and letter of credit fees, due and payable under the Existing 5-Year
Revolving Credit Facility as of the Closing Date.
(b) The effectiveness, substantially concurrently with the effective
of this Agreement, of (i) the $1,200,000,000 credit facility to be arranged
by the Global Coordinators for CenterPoint Energy, Inc. and (ii) the
$300,000,000 credit facility to be arranged by the Global Coordinators for
CenterPoint Energy Houston Electric, LLC.
(c) The Borrower shall have paid all accrued fees and expenses of the
Lenders and the Administrative Agent (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.
(d) 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
2.21(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 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 Administrative
Agent.
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(v) A favorable opinion of the in-house counsel of the Borrower,
in form and substance satisfactory to the Administrative Agent.
(e) 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,
Issuance and Commitment Increase. The obligation of each Lender to make a
Revolving Advance on the occasion of each Revolving Borrowing and the Obligation
of each Issuing Bank to issue or amend a Letter of Credit (including the initial
issuance) or renewal of a Letter of Credit, other than in the case of an
automatic renewal, and each Commitment Increase and each extension of
Commitments pursuant to Section 2.19 hereof shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such
Revolving Borrowing, issuance or the Commitment Increase (a) the following
statements shall be true (and each of the giving of the Applicable Notice of
Borrowing, Notice of Letter of Credit Issuance or request for Commitment
Increase and the acceptance by the Borrower of the proceeds of such Revolving
Borrowing or of such Letter of Credit or the renewal of such Letter of Credit,
other than in the case of an automatic renewal, shall constitute a
representation and warranty by the Borrower that on the date of such Revolving
Borrowing, Issuance, renewal or Commitment Increase such statements are true):
(i) the representations and warranties contained in Section 4.01
(except after the Effective Date, the last sentence of subsection (e)
thereof, subsection (f)(i) thereof, subsection (i) (only with respect to
environmental issues) and other representations that by their terms are
limited to a specific date) are correct in all material respects on and as
of such date, before and after giving effect to such Revolving Borrowing,
issuance or renewal or Commitment Increase and to the application of the
proceeds therefrom, as through made on and as of such date; and
(ii) no event has occurred and is continuing, or would result from
such Revolving Borrowing, issuance or renewal of any Letter of Credit or
such Commitment Increase or from the application of the proceeds therefrom,
that constitutes a Default;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.
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 2.05(a)
with respect thereto, (ii) the Administrative Agent shall have received a
Competitive Bid Confirmation from the Borrower pursuant to Section 2.05(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 2.21(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 2.05, 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
(except after the Effective Date, the last sentence of subsection (e)
thereof, subsection (f)(i) thereof, subsection (i) (only with respect to
environmental issues) and other representations and warranties that by
their terms are limited to a specific date) are correct in all material
respects 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
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(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
Administrative 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.
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, 2004, 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, 2005, 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, as of the Effective Date,
be reasonably
CERC 5-Year Revolving Credit Agreement
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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.
(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.
(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.
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 or any Letter of
Credit is outstanding under this Agreement, 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.
CERC 5-Year Revolving Credit Agreement
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(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 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 Administrative Agent, 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 the
Administrative 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 material
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted, to the extent
the failure to so maintain would not reasonably be expected to have a
Material Adverse Effect.
(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 general
corporate purposes, including to repay the Existing 5-Year Revolving Credit
Facility and for capital expenditures, of the Borrower and its
Subsidiaries, and the repayment of commercial paper.
(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
CERC 5-Year Revolving Credit Agreement
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and its Subsidiaries (including Securitization Subsidiaries and
Unrestricted 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
certified (subject to year end audit adjustments and the inclusion of
abbreviated footnotes) by a 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 2006, a
copy of the annual audit report for such year for the Borrower and its
Subsidiaries (including Securitization Subsidiaries and Unrestricted
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 (including Securitization Subsidiaries and
Unrestricted Subsidiaries) for such fiscal year accompanied by an
opinion of an independent public accountant, 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 or any Letter of Credit
is outstanding under this Agreement, the Borrower will not:
CERC 5-Year Revolving Credit Agreement
39
(a) Restrictions on Liens. Pledge, mortgage or hypothecate, or permit
to exist, and will not permit any Subsidiary (other than a Project Finance
Subsidiary or an Unrestricted Subsidiary) to pledge, mortgage or
hypothecate, or permit to exist, except in favor of Borrower or any
Subsidiary (other than a Project Finance Subsidiary or an Unrestricted
Subsidiary), any Lien upon, any Principal Property or Equity Interest in
any Significant Subsidiary (other than a Project Finance Subsidiary or an
Unrestricted Subsidiary) owning any Principal Property, at any time owned
by Borrower or a Subsidiary (other than a Project Finance Subsidiary or an
Unrestricted Subsidiary), to secure any Indebtedness; provided, however,
that this restriction shall not apply to or prevent the creation or
existence of:
(i) Permitted Liens;
(ii) any Lien in existence on the date hereof securing
Indebtedness of the Borrower or any of its Subsidiaries; provided that
no such Lien described in this clause (ii) encumbers any additional
Property after the date hereof and that the principal amount of
Indebtedness secured thereby is not increased;
(iii) Liens required to be granted pursuant to "equal and
ratable" clauses existing on the date hereof under Contractual
Obligations of the Borrower and its Restricted Subsidiaries (and
extensions and renewals thereof);
(iv) Liens arising in connection with the securitization of
accounts receivable of the Borrower and its Subsidiaries, in the case
of the Borrower and its Subsidiaries, to the extent affecting only the
accounts receivable of the Borrower and its Subsidiaries and assets
customarily related thereto;
(v) Liens on fixed or capital assets and related inventory and
intangible assets acquired, constructed, improved, altered or repaired
by the Borrower or any Restricted Subsidiary; provided that (A) such
Liens secure Indebtedness otherwise permitted by this Agreement, (B)
such Liens and the Indebtedness secured thereby are incurred prior to
or within 365 days after such acquisition or the later of the
completion of such construction, improvement, alteration or repair or
the date of commercial operation of the assets constructed, improved,
altered or repaired, (C) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing, improving, altering or
repairing such fixed or capital assets, as the case may be, and (D)
such Lien shall not apply to any other property or assets of the
Borrower or of its Restricted Subsidiaries (other than repairs,
renewals, replacements, additions, accessions, improvements and
betterments thereto);
(vi) Liens on Property and repairs, renewals, replacements,
additions, accessions, improvements and betterments thereto existing
at the time such Property is acquired by the Borrower or any
Restricted Subsidiary and not created in contemplation of such
acquisition (or on repairs, renewals, replacements, additions,
accessions and betterments thereto), and Liens on the Property of any
Person at the time such Person becomes a Restricted Subsidiary of the
Borrower and not created in contemplation of such Person becoming a
Restricted Subsidiary of the Borrower (or on repairs, renewals,
replacements, additions, accessions and betterments thereto);
(vii) rights reserved to or vested in any Governmental Authority
by the terms of any right, power, franchise, grant, license or permit,
or by any Requirements of Law, to terminate such right, power,
franchise, grant, license or permit or to purchase, condemn,
expropriate or recapture or to designate a purchaser of any of the
Property of the Borrower or any of its Restricted Subsidiaries;
(viii) rights reserved to or vested in (or exercised by) any
Governmental Authority to control, regulate or use any Property of a
Person or its activities, including zoning, planning and environmental
laws and ordinances and municipal regulations;
CERC 5-Year Revolving Credit Agreement
40
(ix) Liens on Property of the Borrower or any of its Restricted
Subsidiaries securing non-recourse Indebtedness of the Borrower or any
such Restricted Subsidiary;
(x) any extension, renewal or refunding of any Lien permitted by
clauses (i) through (ix) above on the same Property previously subject
thereto; provided that no extension, renewal or refunding of any such
Lien shall increase the principal amount of any Indebtedness secured
thereby immediately prior to such extension, renewal or refunding,
unless such Indebtedness is permitted under Section 5.03;
(xi) Liens on cash collateral to secure obligations of the
Borrower and its Restricted Subsidiaries in respect of cash management
arrangements with any Lender or Affiliate thereof; and
(xii) Liens not otherwise permitted by this Section 5.02(a)
securing Indebtedness of the Borrower and its Restricted Subsidiaries
so long as the aggregate outstanding principal amount of the
obligations secured thereby does not at any time exceed at the time of
incurrence of such obligations (including any such incurrence
resulting from any extension, renewal or refunding of such
obligations), as to the Borrower and all of its Restricted
Subsidiaries, 10% of Net Tangible Assets.
(b) Consolidation, Mergers or Disposal of Assets. And will not permit
any Significant Subsidiary to, (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; provided, however, that nothing contained
in this Section 5.02(b) shall prohibit (A) a merger involving a Subsidiary
in which the Borrower or, if the Borrower is not a party to such merger, a
Wholly-Owned Significant Subsidiary is the surviving entity; (B) 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 the Borrower or a Wholly-Owned Significant Subsidiary; (C)
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 the Borrower or a Wholly-Owned Significant Subsidiary; or (D)
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
(D) 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) [Reserved.]
(d) Subsidiary Indebtedness. Permit any Significant Subsidiary (other
than a Project Finance Subsidiary or an Unrestricted 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 (other than a
Project Finance Subsidiary or an Unrestricted 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 (other than a
Project Finance Subsidiary or an Unrestricted 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
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
41
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 or an Unrestricted 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 or
an Unrestricted 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 (other than a Project Finance Subsidiary or an
Unrestricted Subsidiary) of the Borrower, (ii) make any loans or advances
to or investments in the Borrower or any Subsidiary (other than a Project
Finance Subsidiary or an Unrestricted Subsidiary) of the Borrower, or (iii)
transfer any of its property or assets to the Borrower or any Subsidiary
(other than a Project Finance Subsidiary or an Unrestricted 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 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, (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) and (v) any restrictions in respect of preferred or
preference stock permitted to be issued by any Subsidiary under Section
5.02(d).
(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, provided that, the amount of any such
guaranty, to the extent such guaranty relates to Indebtedness for Borrowed
Money, of the obligations of any such Affiliate shall be included in the
determination of Total Debt for purposes of Section 5.03(a) hereof; (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).
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(g) 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.
(h) Takeover Bids. Use the proceeds of any Borrowing to it to
participate in any unsolicited bid for any other Person.
(i) Certain Investments, Loans, Advances, Guaranties and Acquisitions.
Permit, or permit any of its Significant Subsidiaries to purchase or
acquire (including pursuant to any merger) any Capital Stock, evidence of
indebtedness or other securities of or other interest in (including any
option, warrant or other right to acquire any of the foregoing), make any
loans or advances to, Guarantee any obligation of, or make any investment
or other interest in or capital contribution to any Unrestricted Subsidiary
or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any Unrestricted Subsidiary constituting a
business unit, (any of the foregoing, an "Investment") at any time if the
aggregate amount of Net Tangible Assets of all Unrestricted Subsidiaries at
such time exceeds, or would exceed as a result of any Investment the lesser
of (i) 10% of the Consolidated Net Tangible Assets of Parent and (ii) 15%
of the Consolidated Net Tangible Assets of the Borrower.
SECTION 5.03 Total Debt to Capitalization Ratio. So long as any
Advance shall remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower will maintain a ratio of Total Debt for Borrowed Money to
Consolidated Capitalization of no greater than 0.65:1.00, 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 (i) any principal of any Advance
when the same becomes due and payable, or (ii) any interest on any Advance,
any fees payable under the Fee Letter, any Applicable Utilization Fees, the
Facility Fee payable pursuant to Section 2.06(a) or any Letter of Credit
fees under Section 2.06(c) within five Business Days after the same becomes
due and payable or (iii) any other payment of fees or other amounts payable
under this Agreement or any Note or CAF Note, as the case may be, within
ten Business Days after notice of such payment is received by the Borrower
from the Administrative Agent or the Required Lenders; 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 after the earlier of notice thereof to it by the
Administrative Agent or the Required Lenders or discovery thereof by a
Responsible Officer of the Borrower; or
(d) The Borrower or any of its Significant Subsidiaries (other than a
Project Finance Subsidiary or an Unrestricted 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 $50,000,000 in
the
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
43
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 or an Unrestricted 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 or an Unrestricted 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 property) shall occur;
or the Borrower or any of its Significant Subsidiaries (other than any
Project Finance Subsidiary or an Unrestricted 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 (not paid or fully
covered by insurance as to which the relevant insurance company has
acknowledged coverage) in excess of $50,000,000 in the aggregate shall be
rendered against the Borrower or any of its Significant Subsidiaries (other
than a Project Finance Subsidiary or an Unrestricted 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 60 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) 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
(h) The Borrower or any of its ERISA Affiliates shall incur, or could
be reasonably expected to incur, liability with respect to the existence of
an event or events, individually or in the aggregate, that could reasonably
be expected to have a Material Adverse Effect arising out of or in
connection with: (i) the
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
44
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 (other than Letter of
Credit Advances by an Issuing Bank pursuant to Section 2.03(c)) and of each
Issuing Bank to issue Letters of Credit 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.
SECTION 6.02 Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lenders in same day funds at the Administrative Agent's Office an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding;
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, the
Borrower shall be obligated to pay to the Administrative Agent on behalf of the
Lenders in same day funds at the Administrative Agent's Office, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower. If at any time the Administrative Agent
determines that any funds held are subject to any right or claim of any Person
other than the Agents and the Lenders or that the total amount of such funds is
less than the aggregate Available Amount of all Letters of Credit, the Borrower
will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held, an amount
equal to the excess of (a) such aggregate Available Amount over (b) the total
amount of funds, if any, then held that the Administrative Agent determines to
be free and clear of any such right and claim. Upon the drawing of any Letter of
Credit for which funds are on deposit, such funds shall be applied to reimburse
the relevant Issuing Bank or Lenders, as applicable, to the extent permitted by
applicable law.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01 Authorization and Action. Each Lender and Issuing Bank
hereby appoints and authorizes the Administrative 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 the Administrative
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 Administrative Agent 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, and such
instructions shall be binding upon all Lenders and all holders of Notes or CAF
Notes (if any); provided, however, that the Administrative Agent shall be
required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to this Agreement or applicable law. The
Administrative 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.
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
45
SECTION 7.02 Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its 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, the Administrative Agent: (i) 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; (ii) 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; (iii) 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; (iv) 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 (v)
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 electronic communication) believed by it to be genuine
and signed or sent by the proper party or parties.
SECTION 7.03 Citibank and Affiliates. With respect to its Commitment,
the Advances made by it and the Note or CAF Note, if any, issued to it, Citibank
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Administrative Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Citibank in its respective individual capacities. Citibank and its
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 Citibank was not the Administrative Agent and without
any duty to account therefor to the Lenders. The Administrative Agent 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 the
Administrative Agent.
SECTION 7.04 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative 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 the
Administrative Agent 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.
SECTION 7.05 Indemnification. (a) The Lenders agree to indemnify the
Administrative 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 the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative Agent under this Agreement (collectively, the "Indemnified
Costs"), provided that no Lender shall be liable for any portion of the
Indemnified Costs resulting from the Administrative Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its ratable share of
any out of pocket expenses (including counsel fees) incurred by the
Administrative 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 the
Administrative 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 the Administrative Agent, any Lender or a
third party.
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
46
(b) Each Lender severally agrees to indemnify each Issuing Bank (to
the extent not promptly reimbursed by the Borrower) from and against such
Lender's ratable share (determined as provided below) of 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 Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by such Issuing Bank under the Loan Documents; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Issuing Bank's gross negligence or willful misconduct as
found in a final, non-appealable judgment by a court of competent jurisdiction.
Without limitation of the foregoing, each Lender agrees to reimburse such
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the extent that such Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower.
(c) For purposes of this Section 7.05, each Lender's ratable share of
any amount shall be determined, at any time, according to the sum of (i) the
aggregate principal amount of the Advances outstanding at such time and owing to
such Lender's, (ii) such Lender's Pro Rata Shares of the aggregate Available
Amount of all Letters of Credit outstanding at such time, and (iii) such Lender
Party's Unused Revolving Credit Commitments at such time; provided that the
aggregate principal amount of Letter of Credit Advances owing to any Issuing
Bank shall be considered to be owed to the Lenders ratably in accordance with
their respective Revolving Commitments. The failure of any Lender to reimburse
any Agent or any Issuing Bank, as the case may be, promptly upon demand for its
ratable share of any amount required to be paid by the Lenders to such Agent or
such Issuing Bank, as the case may be, as provided herein shall not relieve any
other Lender of its obligation hereunder to reimburse such Agent or such Issuing
Bank, as the case may be, for its ratable share of such amount, but no Lender
shall be responsible for the failure of any other Lender to reimburse such Agent
or such Issuing Bank, as the case may be, for such other Lender's ratable share
of such amount. Without prejudice to the survival of any other agreement of any
Lender hereunder, the agreement and obligations of each Lender contained in this
Section 7.05 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
SECTION 7.06 Successor Administrative Agents. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by the Required
Lenders; provided, however, that any removal of the Administrative Agent will
not be effective until it has also been replaced as Issuing Bank and released
from all of its obligations in respect thereof. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative 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, provided
that if the Administrative Agent shall notify the Borrower and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and (2) all payments, communications and determinations provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender and Issuing Bank directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this
paragraph. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative 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 Administrative Agent under this Agreement.
SECTION 7.07 Agents; Lead Arrangers; Global Coordinators. None of the
Lenders or other Persons identified on the facing page or signature pages of
this Agreement as a "co-syndication agent", "co-documentation agent", "lead
arranger" or "global coordinator" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than, in the case
of such Lenders, those applicable to all Lenders
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
47
as such. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender.
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), the
number of Lenders, or the Available Amount of outstanding Letters of Credit,
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 Section 2.17 in a
manner that would alter pro rata sharing of payments required thereby or this
Section 8.01 without the consent of all Lenders; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or any Note.
SECTION 8.02 Notices, Etc. (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 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 Global
Coordinators, at the addresses specified on Schedule II hereto; and if to the
Administrative Agent, at its address at Two Penns Way, Suite 200, New Castle,
Delaware, 19720, Attention: Bank Loan Syndications Department/Jacqueline Caine
(telecopy: 212 994 0961), with a copy to 388 Greenwich Street, New York, New
York, 10013, Attention: Nietzsche Rodricks (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 therein. 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) The Borrower hereby acknowledges that (i) certain of the Lenders
may be "public-side" Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
"Public Lender") and (ii) the Administrative Agent will make available to the
Lenders certain notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that initiates or responds to the legal process (all such
non-excluded information being referred to herein collectively as the
"Communications") on IntraLinks or another relevant website (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent) (the "Platform"). The Borrower hereby agrees that all Communications that
are to be made available to Public Lenders shall be clearly and conspicuously
marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall
appear prominently on the first page thereof, (ii) by marking Communications
"PUBLIC," the Borrower shall be deemed to
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
48
have authorized the Administrative Agent, the Issuing Banks and the Lenders to
treat such Communications as not containing any material non-public information
with respect to the Borrower or its securities for purposes of United States
Federal and state securities laws, it being understood that certain of such
Communications may be subject to the confidentiality requirements hereof, (iii)
all Communications marked "PUBLIC" are permitted to be made available through a
portion of the Platform designated "Public Investor," and (iv) the
Administrative Agent shall be entitled to treat any Communications that are not
marked "PUBLIC" as being suitable only for posting on a portion of the Platform
not designated "Public Investor." Notwithstanding the foregoing, (A) the
Borrower shall be under no obligation to mark any Communications "PUBLIC," and
each Public Lender hereby waives its right to receive any Communications that
are not marked "PUBLIC"; and (B) the Administrative Agent shall treat
Communications that are deemed to have been delivered based on notice pursuant
to the last sentence of Section 5.01(j) as "PUBLIC."
(c) [Reserved].
(d) [Reserved].
(e) Each Lender agrees that e-mail notice to it (at the address
provided pursuant to the next sentence and deemed delivered as provided in the
next paragraph) specifying that Communications has been posted to the Platform
shall constitute effective delivery of such Communications to such Lender for
purposes of this Agreement. Each Lender agrees (i) to notify the Administrative
Agent in writing (including by electronic communication) from time to time to
ensure that the Administrative Agent has on record an effective e-mail address
for such Lender to which the foregoing notice may be sent by electronic
transmission and (ii) that the foregoing notice may be sent to such e-mail
address.
(f) Each party hereto agrees that any electronic communication
referred to in this Section 8.02 shall be deemed delivered upon the posting of a
record of such communication (properly addressed to such party at the e-mail
address provided to the Administrative Agent) as "sent" in the e-mail system of
the sending party or, in the case of any such communication to the
Administrative Agent, upon the posting of a record of such communication as
"received" in the e-mail system of the Administrative Agent; provided that if
such communication is not so received by the Administrative Agent during the
normal business hours of the Administrative Agent, such communication shall be
deemed delivered at the opening of business on the next Business Day for the
Administrative Agent.
(g) Each party hereto acknowledges that (i) the distribution of
material through an electronic medium is not necessarily secure and there are
confidentiality and other risks associated with such distribution, (ii) the
Communications and the Platform are provided "as is" and "as available," (iii)
none of the Administrative Agent, its affiliates nor any of their respective
officers, directors, employees, agents, advisors or representatives
(collectively, the "Citigroup Parties") warrants the adequacy of the Platform or
the accuracy or completeness of any Communications, and each Citigroup Party
expressly disclaims liability for errors or omissions in any Communications or
the Platform, and (iv) 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 any Citigroup Party in connection with
any Communications or the Platform.
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 the Administrative Agent and Global
Coordinators in connection with the preparation, execution, delivery,
administration, modification and amendment of or any consent or waiver under
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, (B) the reasonable fees and expenses of counsel for the
Administrative Agent and the Lead Arrangers with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under this
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
49
Agreement and (C) all reasonable out-of-pocket expenses incurred by the Issuing
Banks in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder. The Borrower further
agrees to pay on demand all costs and expenses of the Administrative 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 the Administrative Agent, the Lead
Arrangers 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 the
Administrative Agent, the Global Coordinators 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, any 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. Each of the
parties hereto agrees not to assert any claim for special, indirect,
consequential or punitive damages against any other party hereto, 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, the Letters of Credit 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
2.10(d) or (e), 2.12 or 2.14, 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.
(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, the Issuing Banks and
each of their respective 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, in
whatever currency) 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 or the Issuing Banks, whether or not such Lender or Issuing Bank
shall have made any demand under this Agreement or such Note or CAF Note and
although such obligations may be unmatured or are owed to a branch or office of
such Lender or the Issuing Bank different from the branch or office holding such
deposit or obligated on such indebtedness. Each Lender and Issuing Bank agrees
promptly to
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
50
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, the Issuing Bank 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, Issuing Bank 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 the Administrative Agent and when
the Administrative Agent shall have been notified by each Lender that such
Lender has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative 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 each Lender.
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 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 the Administrative 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 the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Administrative 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.
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
51
(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
Administrative Agent 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 Issuing Bank may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under the undrawn portion of its
Letter of Credit Commitment at any time; provided, however, that (i) except in
the case of an assignment to a Person that immediately prior to such assignment
was an Issuing Bank or an assignment of all of an Issuing Bank's rights and
obligations under this Agreement, the amount of the Letter of Credit Commitment
of the assigning Issuing Bank 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 and shall be in an
integral multiple of $1,000,000 in excess thereof, (ii) each such assignment
shall be to an Eligible Assignee and (iii) 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 a
processing and recordation fee of $3,500.
(f) 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 Administrative Agent 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. A
Participant shall not be entitled to receive any greater payment under Sections
2.13 than the applicable Lender would have been entitled to receive with respect
to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower's prior written
consent.
(g) 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
CERC 5-YEAR REVOLVING CREDIT AGREEMENT
52
to preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time and without the consent of the Borrower or the
Administrative 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.
(i) In the event that any Lender requests payments of reimbursement,
compensation or indemnification from the Borrower pursuant to Sections 2.02,
2.13 or 2.16 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 Patriot Act Notification. Each Lender and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the "Patriot
Act"), it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify the Borrower in accordance with the Patriot Act. The
Borrower shall, and shall cause each of their Subsidiaries to, provide, to the
extent commercially reasonable, such information and take such actions as are
reasonably requested by the Administrative Agent or any Lenders in order to
assist the Administrative Agent and the Lenders in maintaining compliance with
the Patriot Act.
SECTION 8.09 Confidentiality. Neither the Administrative Agent nor any
Lender shall disclose any Confidential Information to any other Person without
the consent of the Borrower, other than (a) to the Administrative 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 Counterparts; Integration; Electronic Execution.
(a) Execution in Counterparts, Integration. 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. This Agreement, and any separate letter agreements with respect to
fees payable to the Administrative Agent and the
CERC 5-Year Revolving Credit Agreement
53
Lead Arrangers, constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. 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.
(b) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Acceptance
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
SECTION 8.12 Removal of Lender. Notwithstanding anything herein to the
contrary, the Borrower may, at any time in its sole discretion, remove any
Lender upon 15 Business Days' written notice to such Lender and the
Administrative Agent (the contents of which notice shall be promptly
communicated by the Administrative Agent to each other Lender), such removal to
be effective at the expiration of such 15-day notice period; provided, however,
that no Lender may be removed hereunder (i) at a time when an Event of Default
shall have occurred and be continuing or (ii) after giving effect to the
removal, the Total Aggregate Outstanding Extensions of Credit would exceed the
total of the Revolving Commitments. Each notice by the Borrower under this
Section shall constitute a representation by the Borrower that the removal
described in such notice is permitted under this Section. Concurrently with such
removal, the Borrower shall pay to such removed Lender all amounts owing to such
Lender hereunder and under any other Loan Document in immediately available
funds. Upon full and final payment hereunder of all amounts owing to such
removed Lender, such Lender shall make appropriate entries in its accounts
evidencing payment of all Loans hereunder and releasing the Borrower from all
obligations owing to the removed Lender in respect of the Loans hereunder and
surrender to the Administrative Agent for return to the Borrower any Notes of
the Borrower then held by it. Effective immediately upon such full and final
payment, such removed Lender will not be considered to be a "Lender" for
purposes of this Agreement except for the purposes of any provision hereof that
by its terms survives the termination of this Agreement and the payment of the
amounts payable hereunder. Effective immediately upon such removal, the
Commitments of such removed Lender shall immediately terminate and such Lender's
participation share in any outstanding Letters of Credit shall immediately
terminate and such participation share shall be divided among the remaining
Lenders according to their Pro Rata Share. Such removal will not, however,
affect the Commitments of any other Lender hereunder.
SECTION 8.13 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 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 5-Year 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
--------------------------------------
Name: Marc Kilbride
Title: Vice President and Treasurer
CERC 5-Year Revolving Credit Agreement
CITIBANK, N.A., as Administrative Agent
and as a Bank
By /s/ Nietzsche Rodricks
--------------------------------------
Name: Nietzsche Rodricks
Title: Vice President
CERC 5-Year Revolving Credit Agreement
JPMORGAN CHASE BANK, N.A., as a Bank
By /s/ Robert W. Traband
--------------------------------------
Name: Robert W. Traband
Title: Vice President
CERC 5-Year Revolving Credit Agreement
BARCLAYS BANK PLC, as a Bank
By /s/ Alison McGuigan
--------------------------------------
Name: Alison McGuigan
Title: Associate Director
CERC 5-Year Revolving Credit Agreement
WACHOVIA BANK, N.A., as a Bank
By /s/ Lawrence N. Gross
--------------------------------------
Name: Lawrence N. Gross
Title: Assistant Vice President
CERC 5-Year Revolving Credit Agreement
DEUTSCHE BANK SECURITIES, as Lead Arranger
and Co-Syndication Agent
By /s/ Frederick W. Laird
--------------------------------------
Name: Frederick W. Laird
Title: Managing Director
By /s/ Ming K. Chu
--------------------------------------
Name: Ming K. Chu
Title: Vice President
CERC 5-Year Revolving Credit Agreement
UBS LOAN FINANCE LLC, as a Bank
By /s/ Richard L. Tavrow
--------------------------------------
Name: Richard L. Tavrow
Title: Director
By /s/ Irja R. Otsa
--------------------------------------
Name: Irja R. Otsa
Title: Associate Director
CERC 5-Year Revolving Credit Agreement
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Syndication Agent and a Bank
By /s/ Kevin P. Bertelsen
--------------------------------------
Name: Kevin P. Bertelsen
Title: Senior Vice President
CERC 5-Year Revolving Credit Agreement
ABN AMRO BANK, N.V., as Documentation
Agent and as a Bank
By /s/ John D. Reed
--------------------------------------
Name: John D. Reed
Title: Director
By /s/ R. Scott Donaldson
--------------------------------------
Name: R. Scott Donaldson
Title: Vice President
CERC 5-Year Revolving Credit Agreement
THE BANK OF NOVA SCOTIA, as a Bank
By /s/ Thane Rattew
--------------------------------------
Name: Thane Rattew
Title: Managing Director
CERC 5-Year Revolving Credit Agreement
CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as a Bank
By /s/ Brian T. Caldwell
--------------------------------------
Name: Brian T. Caldwell
Title: Director
By /s/ Gregory S. Richards
--------------------------------------
Name: Gregory S. Richards
Title: Associate
CERC 5-Year Revolving Credit Agreement
THE ROYAL BANK OF SCOTLAND PLC,
as Documentation Agent and as a Bank
By /s/ Emily Freedman
--------------------------------------
Name: Emily Freedman
Title: Vice President
CERC 5-Year Revolving Credit Agreement
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as a Bank
By /s/ Douglas M. Barnell
--------------------------------------
Name: Douglas M. Barnell
Title: Vice President & Manager
CERC 5-Year Revolving Credit Agreement
LEHMAN BROTHERS BANK, FSB, as a Lender
By /s/ Gary T. Taylor
--------------------------------------
Name: Gary T. Taylor
Title: Senior Vice President
CERC 5-Year Revolving Credit Agreement
MORGAN STANLEY BANK, as a Bank
By /s/ Daniel Twenge
--------------------------------------
Name: Daniel Twenge
Title: Vice President
Morgan Stanley Bank
CERC 5-Year Revolving Credit Agreement
MERRILL LYNCH BANK USA, as a Bank
By /s/ David Millett
--------------------------------------
Name: David Millett
Title: Vice President
CERC 5-Year Revolving Credit Agreement
HSBC BANK USA, National Association,
as a Bank
By /s/ Richard Ward
--------------------------------------
Name: Richard Ward
Title: First Vice President
CERC 5-Year Revolving Credit Agreement
ROYAL BANK OF CANADA, as a Bank
By /s/ David A. McCluskey
--------------------------------------
Name: David A. McCluskey
Title: Authorized Signatory
CERC 5-Year Revolving Credit Agreement
THE NORTHERN TRUST COMPANY, as a Bank
By /s/ Preeti Sullivan
--------------------------------------
Name: Preeti Sullivan
Title: Vice President
CERC 5-Year Revolving Credit Agreement
SUNTRUST BANK, as a Bank
By /s/ Kelley Brandenburg
--------------------------------------
Name: Kelley Brandenburg
Title: Vice President
CERC 5-Year Revolving Credit Agreement
Schedule III
COMMITMENT PERCENTAGES
Bank Commitment Percentage
- ---- ---------------------
JPMorgan Chase Bank, N.A. 7.561%
Citibank, N.A. 7.561%
Bank of America, National Association 7.561%
Barclays Bank plc 7.561%
Deutsche Bank AG New York Branch 7.561%
Wachovia Bank, N.A. 7.561%
ABN AMRO Bank, N.V. 6.146%
The Bank of Nova Scotia 6.146%
Credit Suisse, Cayman Islands Branch 6.146%
The Royal Bank of Scotland plc 6.146%
UBS Loan Finance LLC 6.146%
The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3.659%
Morgan Stanley Bank 3.659%
Lehman Brothers Bank, FSB 3.659%
Merrill Lynch Bank USA 3.659%
HSBC Bank USA, N.A. 2.927%
Royal Bank of Canada 2.927%
The Northern Trust Company 1.707%
SunTrust Bank 1.707%
TOTAL: 100.00%
Schedule III to the CenterPoint Energy Resources Corp. Amended and Restated
Credit Agreement