EXHIBIT 4.3
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$1,310,000,000
CREDIT AGREEMENT
Dated as of March 7, 2005
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Among
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC,
as Borrower,
THE BANKS PARTIES HERETO,
DEUTSCHE BANK SECURITIES INC.,
as Syndication Agent,
ABN AMRO BANK N.V.,
JPMORGAN CHASE BANK, N.A.
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agents
and
CITIBANK, N.A.,
as Administrative Agent
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DEUTSCHE BANK SECURITIES INC. and
WACHOVIA CAPITAL MARKETS, LLC,
as Joint Lead Arrangers and Bookrunners
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS................................ 1
SECTION 1.1. Certain Defined Terms..................................... 1
SECTION 1.2. Other Definitional Provisions............................. 22
ARTICLE II AMOUNTS AND TERMS OF THE LOANS................................. 22
SECTION 2.1. The Commitments........................................... 22
SECTION 2.2. Procedure for Revolving Loan Borrowing.................... 23
SECTION 2.3. Minimum Tranches.......................................... 24
SECTION 2.4. Conversion of Revolving Loans to Term Loans............... 24
ARTICLE III PROVISIONS RELATING TO ALL LOANS.............................. 25
SECTION 3.1. Evidence of Loans......................................... 25
SECTION 3.2. Fees...................................................... 25
SECTION 3.3. Interest.................................................. 25
SECTION 3.4. Reserve Requirements...................................... 26
SECTION 3.5. Interest Rate Determination and Protection................ 27
SECTION 3.6. Voluntary Interest Conversion or Continuation of Loans.... 28
SECTION 3.7. Funding Losses Relating to LIBOR Rate Loans............... 28
SECTION 3.8. Change in Legality........................................ 29
ARTICLE IV INCREASED COSTS, TAXES, PAYMENTS AND PREPAYMENTS............... 30
SECTION 4.1. Increased Costs; Capital Adequacy......................... 30
SECTION 4.2. Pro Rata Treatment and Payments and Computations.......... 31
SECTION 4.3. Taxes..................................................... 32
SECTION 4.4. Sharing of Payments, Etc.................................. 34
SECTION 4.5. Optional Termination or Reduction of the Commitments...... 34
SECTION 4.6. Voluntary Prepayments..................................... 35
SECTION 4.7. Mandatory Prepayments and Commitment Reductions........... 35
SECTION 4.8. Mitigation of Losses and Costs............................ 36
SECTION 4.9. Determination and Notice of Additional Costs and
Other Amounts............................................. 36
ARTICLE V CONDITIONS OF LENDING........................................... 36
SECTION 5.1. Conditions Precedent to Loans............................. 36
SECTION 5.2. Conditions Precedent to Each Borrowing.................... 38
ARTICLE VI REPRESENTATIONS AND WARRANTIES................................. 39
SECTION 6.1. Representations and Warranties of the Borrower............ 39
ARTICLE VII AFFIRMATIVE AND NEGATIVE COVENANTS............................ 43
SECTION 7.1. Affirmative Covenants..................................... 43
SECTION 7.2. Negative Covenants........................................ 46
SECTION 7.3. Borrower's Accounting Reorganization...................... 49
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ARTICLE VIII EVENTS OF DEFAULT............................................ 50
SECTION 8.1. Events of Default......................................... 50
SECTION 8.2. Cancellation/Acceleration................................. 53
ARTICLE IX THE ADMINISTRATIVE AGENT....................................... 53
SECTION 9.1. Appointment............................................... 53
SECTION 9.2. Delegation of Duties...................................... 54
SECTION 9.3. Exculpatory Provisions.................................... 54
SECTION 9.4. Reliance by Administrative Agent.......................... 54
SECTION 9.5. Notice of Default......................................... 54
SECTION 9.6. Non-Reliance on Administrative Agent and Other Banks...... 55
SECTION 9.7. Indemnification........................................... 55
SECTION 9.8. Agent in Its Individual Capacity.......................... 56
SECTION 9.9. Successor Administrative Agent............................ 56
ARTICLE X MISCELLANEOUS................................................... 56
SECTION 10.1. Amendments and Waivers................................... 56
SECTION 10.2. Notices.................................................. 57
SECTION 10.3. No Waiver; Cumulative Remedies........................... 58
SECTION 10.4. Survival of Representations and Warranties............... 58
SECTION 10.5. Payment of Expenses and Taxes; Indemnity................. 58
SECTION 10.6. Effectiveness, Successors and Assigns, Participations;
Assignments.............................................. 59
SECTION 10.7. Setoff................................................... 63
SECTION 10.8. Counterparts............................................. 63
SECTION 10.9. Severability............................................. 63
SECTION 10.10. Integration............................................. 63
SECTION 10.11. GOVERNING LAW........................................... 63
SECTION 10.12. Submission to Jurisdiction; Waivers..................... 64
SECTION 10.13. Acknowledgments......................................... 64
SECTION 10.14. Limitation on Agreements................................ 65
SECTION 10.15. Removal of Bank......................................... 65
SECTION 10.16. Officer's Certificates.................................. 66
SECTION 10.17. USA Patriot Act......................................... 66
ii
Schedules
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Schedule 1.1(A) - Schedule of Commitments and Addresses
Schedule 6.1(p) - Ownership of Capital Stock of Subsidiaries; Significant
Subsidiaries
Exhibits
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Exhibit A - Notice of Borrowing
Exhibit B - Notice of Interest Conversion/Continuation
Exhibit C - Assignment and Acceptance
Exhibit D - Note
Exhibit E - Pledge Agreement
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This Credit Agreement (this "Agreement"), dated as of March 7, 2005,
among CenterPoint Energy Houston Electric, LLC, a Texas limited liability
company (the "Borrower"), the banks and other financial institutions from time
to time parties hereto (individually, a "Bank" and, collectively, the "Banks"),
Deutsche Bank Securities Inc., as syndication agent (in such capacity, the
"Syndication Agent"), ABN Amro Bank N.V., JPMorgan Chase Bank, N.A. and Wachovia
Bank, National Association, as co-documentation agents (in such capacities, the
"Documentation Agents") and Citibank, N.A., as administrative agent (in such
capacity, together with any successors thereto in such capacity, the
"Administrative Agent").
The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR" means for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/64 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" means
the rate of per annum publicly announced from time to time by Citibank,
N.A. as its prime rate in effect at its principal office in New York City
(the Prime Rate not being intended to be the lowest rate of interest
charged by Citibank, N.A. in connection with extensions of credit to
debtors). Any change in the ABR due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loan" means a Loan that bears interest at the ABR as provided in
Section 3.3(a).
"Adjusted Interest Expense" means, for any period, (a) total interest
expense (including that attributable to Capital Lease obligations and
capitalized interest) determined in accordance with GAAP of the Borrower
and its Consolidated Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Consolidated Subsidiaries
(including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financings and net
costs under Swap Agreements in respect of interest rates to the extent such
net costs are allocable to such period in accordance with GAAP) less (b)
the sum of the following for such period (i) total interest income
determined in accordance with GAAP and (ii) but only to the extent included
in the amount calculated pursuant to clause (a) above, (x) interest expense
on Hybrid Preferred Securities, (y) interest expense in respect of the
securitization programs of the Borrower and its Consolidated Subsidiaries
in respect of Securitization Securities and (z) amortization of settlement
payments previously made on forward-starting Swap Agreements and of any
upfront fees and other costs associated with financings for the Borrower
and its Consolidated Subsidiaries.
"Administrative Agent" has the meaning specified in the introduction
to this Agreement.
"Affiliate" means any Person that, directly or indirectly, Controls or
is Controlled by or is under common Control with another Person.
"Agents" means the collective reference to the Syndication Agent, the
Documentation Agents and the Administrative Agent.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Applicable Margin" means the rate per annum set forth below opposite
the Designated Rating from time to time in effect during the period for
which payment is due:
DESIGNATED RATING LIBOR RATE MARGIN ABR MARGIN
----------------- ----------------- ----------
BBB+ or Baa1 or higher 0.625% 0.000%
BBB or Baa2 0.750% 0.000%
BBB- or Baa3 0.875% 0.000%
BB+ or Ba1 1.000% 0.000%
BB or Ba2 or lower 1.250% 0.250%
In each row in the table set forth above, the first indicated rating
corresponds to that assigned by S&P and the second indicated rating
corresponds to that assigned by Moody's; the determination of which row of
such table is applicable at any time is set forth in the definition of
"Designated Rating".
"Assignment and Acceptance" has the meaning specified in Section
10.6(c).
"Available Commitment" means, as to any Bank at any time, an amount
equal to the excess, if any, of (a) such Bank's Commitment then in effect
over (b) such Bank's Outstanding Loans then outstanding.
"Bank" and "Banks" have the meanings specified in the introduction to
this Agreement.
"Bank Affiliate" means, (a) with respect to any Bank, (i) an Affiliate
of such Bank that is a bank or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course of its business and is administered or
managed by a Bank or an Affiliate of such Bank and (b) with respect to any
Bank that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by
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such Bank, an Affiliate of such Bank or the same investment advisor as such
Bank or by an Affiliate of such investment advisor.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor thereto).
"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, lease obligations under Capital Leases, Mandatory
Payment Preferred Stock and synthetic 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 franchise bonds or other obligations
incurred in the ordinary course of business that do not represent money
borrowed or raised, in each case to the extent that such reimbursement
obligations are payable in full within ten (10) Business Days after the
date upon which such obligation arises, (c) trade payables, (d) any
obligations of such Person under Swap Agreements, (e) customer advance
payments and deposits arising in the ordinary course of business or (f)
operating leases.
"Borrower" has the meaning specified in the introduction to this
Agreement.
"Borrowing" means a borrowing consisting of Revolving Loans under
Section 2.1 of the same Type, and having, in the case of LIBOR Rate Loans,
the same Interest Period, made on the same day by the Banks.
"Borrowing Date" means any Business Day specified by the Borrower as a
date on which the Borrower requests the Banks to make Revolving Loans
hereunder.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by
law to close; provided that when used in connection with a LIBOR Rate Loan,
the term "Business Day" shall also exclude any day on which commercial
banks are not open for dealings in Dollar deposits in the London interbank
market.
"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.
3
"Cash Equivalents" means (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of 270 days or less from the date
of acquisition issued by any Bank or by any commercial bank organized under
the laws of the United States or any state thereof having combined capital
and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-1 by S&P or P-1 by Moody's, or carrying an
equivalent rating by a nationally recognized rating agency, if both of the
two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within 270 days from the date of
acquisition; (d) repurchase obligations of any Bank or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days, with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of
which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of 270 days or less
from the date of acquisition backed by standby letters of credit issued by
any Bank or any commercial bank satisfying the requirements of clause (b)
of this definition; (g) money market mutual or similar funds that invest
exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition; or (h) money market funds that (i) comply with the
criteria set forth in SEC Rule 2a-7 under the Investment Company Act of
1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody's and (iii)
have portfolio assets of at least $5,000,000,000.
"CenterPoint" means CenterPoint Energy, Inc., a Texas corporation and
utility holding company, and the indirect parent of the Borrower.
"Change in Control" means (i) with respect to CenterPoint, the
acquisition by any Person or "group" (within the meaning of Rule 13d-5 of
the Exchange Act) of beneficial ownership (determined in accordance with
Rule 13d-3 of the Exchange Act) of Capital Stock of CenterPoint, the result
of which is that such Person or group beneficially owns 50% or more of the
aggregate voting power of all then issued and outstanding Capital Stock of
CenterPoint or (ii) CenterPoint shall cease to own and control
beneficially, directly or indirectly, 100% of the outstanding common
Capital Stock of the Borrower free and clear of all Liens. For purposes of
the foregoing, the phrase "voting power" means, with respect to an issuer,
the power under ordinary circumstances to vote for the election of members
of the board of directors or other governing body of such issuer.
"Closing Date" means the date, on or before March 31, 2005, all the
conditions set forth in Section 6.1 are satisfied (or waived) in accordance
with the terms hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute.
4
"Collateral" means all property of the Borrower and its Subsidiaries,
now owned or hereafter acquired, upon which a Lien is purported to be
created by the Pledge Agreement.
"Commitment" means, as to any Bank, the obligation of such Bank, if
any, to make Revolving Loans in an aggregate principal amount not to exceed
the amount set forth under the heading "Commitment" opposite such Bank's
name on Schedule 1.1(A) or in the Assignment and Acceptance pursuant to
which such Bank became a party hereto, as the same may be changed from time
to time pursuant to the terms hereof; and "Commitments" shall be the
collective reference to the Commitments of all of the Banks. The original
amount of the Total Commitments is $1,310,000,000.
"Commitment Fee" means, as to any Bank, the fee equal to the rate per
annum set forth below opposite the Designated Rating from time to time in
effect during the period for which payment is due on the Available
Commitment of such Bank:
DESIGNATED RATING COMMITMENT FEE
----------------- --------------
BBB+ or Baa1 or higher 0.100%
BBB or Baa2 0.125%
BBB- or Baa3 0.150%
BB+ or Ba1 0.175%
BB or Ba2 or lower 0.225%
In each row in the table set forth above, the first indicated rating
corresponds to that assigned by S&P and the second indicated rating
corresponds to that assigned by Moody's; the determination of which row of
such table is applicable at any time is set forth in the definition of
"Designated Rating".
"Commonly Controlled Entity" means an entity, whether or not
incorporated, that is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes the
Borrower and that is treated as a single employer under Section 414 of the
Code.
"Confidential Information Memorandum" means the Confidential
Information Memorandum, dated January, 2005.
"Consolidated Capitalization" means, as of any date of determination,
the sum of (a) Consolidated Shareholders' Equity, (b) Consolidated
Indebtedness for Borrowed Money and, without duplication, (c) Mandatory
Payment Preferred Stock; provided that for the purpose of calculating
compliance with Section 7.2(a), Consolidated Capitalization shall be
determined excluding any adjustment, non-cash charge to net income or other
non-cash charges or writeoffs resulting thereto from application of SFAS
No. 142.
5
"Consolidated EBITDA" means, for any twelve-month period ending on the
date of determination, Consolidated Net Income for such period plus,
without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, distributions on Hybrid Preferred
Securities (to the extent not included in interest expense and to the
extent deducted to arrive at Consolidated Net Income), amortization or
writeoff of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans) of the Borrower and its Consolidated Subsidiaries and
amortization of settlement payments previously made on forward-starting
Swap Agreements, (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring
expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such
period, losses on sales of assets outside of the ordinary course of
business), and (f) any other non-cash charges, and minus, to the extent
included as income in the statement of such Consolidated Net Income for
such period, the sum of (a) interest income, (b) any extraordinary, unusual
or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income for such period, gains on the sales of assets outside of the
ordinary course of business), (c) any other non-cash income, (d) Transition
Charges Principal and Interest, (e) Pre-Tax Excess Mitigation Credit and
(f) the aggregate pre-tax principal amount of CTC Recoveries, all as
determined on a consolidated basis. For purposes of this definition, any
results of operations classified as "discontinued operations" in accordance
with GAAP will be included in the manner set forth above.
"Consolidated Indebtedness" means, as of any date of determination,
the sum of
(i) the total Indebtedness for Borrowed Money of the Borrower and
its Consolidated Subsidiaries as shown on the consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries, determined
without duplication of any Guarantee of Indebtedness of the Borrower
by any of its Consolidated Subsidiaries or of any Guarantee of
Indebtedness of any such Consolidated Subsidiary by the Borrower or
any other Consolidated Subsidiary of the Borrower, plus
(ii) any Mandatory Payment Preferred Stock, less
(iii) the amount of Indebtedness described in clause (i)
attributable to amounts then outstanding under receivables facilities
or arrangements to the extent that such amounts would not have been
shown as Indebtedness on a balance sheet prepared in accordance with
GAAP prior to January 1, 1997, less
(iv) the greater of (x) until the date that is six months after
the receipt thereof, cash and Cash Equivalents of the Borrower and its
Consolidated Subsidiaries on such date of determination constituting
Net Cash Proceeds of the True-Up Securitization and (y) until the date
of the final scheduled maturity of the Facility, the lesser of (A) the
aggregate amount of cash and Cash Equivalents of
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the Borrower and its Consolidated Subsidiaries on such date of
determination constituting Net Cash Proceeds of the True-Up
Securitization and (B) the aggregate principal amount outstanding on
such date under the Facility.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Consolidated Subsidiary of the Borrower or
is merged into or consolidated with the Borrower or any of its Consolidated
Subsidiaries and (b) the income (or deficit) of any Person (other than a
Consolidated Subsidiary of the Borrower) in which the Borrower or any of
its Consolidated Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Borrower or such
Consolidated Subsidiary in the form of dividends or similar distributions.
"Consolidated Shareholders' Equity" means, as of any date of
determination, the total assets of the Borrower and its Significant
Subsidiaries, less all liabilities of the Borrower and its Significant
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 Significant Subsidiaries
that is expressly subordinated in right and priority of payment to other
liabilities of the Borrower or such Significant Subsidiary, but in any case
excluding as at such date of determination any Junior Subordinated Debt
owned by any Hybrid Preferred Securities Subsidiary).
"Consolidated Subsidiary" means, with respect to a specified Person at
any date, any Subsidiary or any other Person (other than with respect to
the Borrower, any Securitization Subsidiary or any Unrestricted
Subsidiary), the accounts of which under GAAP would be consolidated with
those of such specified Person in its consolidated financial statements as
of such date.
"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" shall be similarly construed).
"CTC Recoveries" means the competition transition charges to be paid
to the Borrower by retail electric providers in respect of stranded costs
and certain power market price and fuel cost recovery true-ups.
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"Default" means any event that, with the lapse of time or giving of
notice, or both, or any other condition, would constitute an Event of
Default.
"Default Rate" means with respect to any overdue amount owed
hereunder, a rate per annum equal to (a) in the case of overdue principal
with respect to any Loan, the sum of the interest rate in effect at such
time with respect to such Loan under Section 3.3, plus 2%; provided that in
the case of overdue principal with respect to any LIBOR Rate Loan, after
the end of the Interest Period with respect to such Loan, the Default Rate
shall equal the rate set forth in clause (b) below, and (b) in the case of
overdue interest with respect to any Loan, Commitment Fees or other amounts
payable hereunder, the sum of the interest rate per annum in effect at such
time with respect to ABR Loans, plus 2%.
"Designated Rating" means (a) the higher of the Ratings and (b) if the
difference in the Rating issued by S&P and Xxxxx'x is greater than one
level, the Rating that is one level higher than the lower of such Ratings
shall apply. Any change in the calculation of the Applicable Margin with
respect to the Borrower that is caused by a change in the Designated Rating
will become effective on the date of the change in the Designated Rating.
If the rating system of any Rating Agency shall change, or if either S&P or
Moody's 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 and the definitions of
"Rating" and "Rating Agencies" to reflect such changed rating system or the
unavailability of Ratings from such Rating Agencies and, pending the
effectiveness of any such amendment, the Designated Rating shall be
determined by reference to the Rating most recently in effect prior to such
change or cessation.
"Disposition" means with respect to any Property (excluding cash and
Cash Equivalents), any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition thereof outside the ordinary
course of business. The terms "Dispose" and "Disposed of" shall have
correlative meanings.
"Documentation Agents" has the meaning specified in the introduction
to this Agreement.
"Dollars" and the symbol "$" mean the lawful currency of the United
States.
"Early Funding ABR Loan" has the meaning specified in Section 2.2(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" has the meaning specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Indebtedness" means the incurrence or issuance by the
Borrower and its Subsidiaries of the following:
8
(a) Indebtedness for Borrowed Money in respect of any
refinancing, refundings, renewals or extensions (on or prior to the
maturity thereof) of (without any increase in the principal amount
thereof plus any expenses (including any redemption premium or
penalty) or any shortening of the final maturity thereof to a date
earlier than the earlier of (i) the maturity date thereof then in
effect and (ii) May 16, 2008) Indebtedness for Borrowed Money
outstanding on the date hereof;
(b) Intercompany Indebtedness for Borrowed Money;
(c) Indebtedness for Borrowed Money permitted hereunder to the
extent constituting (i) the issuance by the Borrower or any of its
Subsidiaries of commercial paper, (ii) any backup credit or liquidity
facilities in respect of any such commercial paper issuance, (iii)
other short-term instruments in lieu of the issuance of commercial
paper, (iv) letters of credit issued for the account of the Borrower
or any of its Subsidiaries in respect of any of the foregoing and (v)
drawings on letters of credit, bonds or similar obligations permitted
under this Agreement if the proceeds are applied to the underlying
obligation secured or supported thereby;
(d) Indebtedness for Borrowed Money of the Borrower pursuant to
the Loan Documents;
(e) Indebtedness for Borrowed Money in respect of performance,
surety and similar bonds and completion guarantees provided by the
Borrower or any of its Subsidiaries in the ordinary course of
business;
(f) Indebtedness for Borrowed Money in respect of Capital Leases
entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business;
(g) Indebtedness for Borrowed Money in respect of Swap Agreements
entered into in the ordinary course of business and not entered into
for speculative purposes; and
(h) Indebtedness for Borrowed Money incurred by the Borrower and
any of its Restricted Subsidiaries after the date hereof at any time
outstanding in the aggregate principal amount not to exceed
$200,000,000.
"Existing CenterPoint Credit Agreement" means the $2,350,000,000
Credit Agreement, dated as of October 7, 2003, among CenterPoint, the
Administrative Agent and other financial institutions parties thereto, as
heretofore amended, modified or supplemented.
"Existing CenterPoint Credit Facility" means the credit facility
provided under the Existing CenterPoint Credit Agreement.
9
"Existing Credit Agreement" means the $1,310,000,000 Credit Agreement,
dated as of November 12, 2002, among CenterPoint Electric, as borrower,
Credit Suisse First Boston, as administrative agent, and the other
financial institutions parties thereto, as amended, modified or
supplemented from time to time.
"Facility" means the Commitments and the extensions of credit made
thereunder, including the Term Loans.
"Federal Funds Effective Rate" means, for any day, a fluctuating rate
per annum equal 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 on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such
day for such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by the Borrower.
"Funding Office" means the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from
time to time by the Administrative Agent as its funding office by written
notice to the Borrower and the Banks.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America.
"General Mortgage Indenture" means the General Mortgage Indenture,
dated as of October 10, 2002, between the Borrower and JPMorgan Chase Bank,
N.A. (as successor to JPMorgan Chase Bank), as trustee, as amended,
modified or supplemented from time to time.
"Global Coordinators" means X.X. Xxxxxx 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
10
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).
"Highest Lawful Rate" means, with respect to each Bank, the maximum
nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received with respect to
any Loan or on other amounts, if any, due to such Bank pursuant to this
Agreement or any other Loan Document under applicable law. "Applicable law"
as used in this definition means, with respect to each Bank, that law in
effect from time to time that permits the charging and collection by such
Bank of the highest permissible lawful, nonusurious rate of interest on the
transactions herein contemplated including, without limitation, the laws of
each State that may be held to be applicable, and of the United States, if
applicable.
"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.
"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, (iii) any Securitization Securities or (iv) any
Hybrid Preferred Securities.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA (and "Insolvent" shall be construed accordingly for such purposes).
11
"Interest Period" means, for each LIBOR Rate Loan comprising part of
the same Borrowing, the period commencing on the date of such LIBOR Rate
Loan or the date of the conversion of any Loan into such LIBOR Rate Loan,
as the case may be, and ending on the last day of the period selected by
the Borrower pursuant to Section 2.2 or 3.6, as the case may be, and,
thereafter, 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 Section 3.6. The duration of
each such Interest Period shall be one, two, three, six or, if available to
all Banks under the Facility, nine or twelve months or periods shorter than
one month, as Borrower may select by notice pursuant to Section 2.2 or 3.6
hereof, provided, however, that:
(i) any Interest Period in respect of a Loan that would otherwise
extend beyond the Revolving Commitment Termination Date shall end on
the Revolving Commitment Termination Date or, if the Revolving Loans
are converted pursuant to Section 2.4, the Term Loan Maturity Date;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day; provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day, and
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Investment" has the meaning specified in Section 7.2(f).
"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" means Deutsche Bank Securities Inc. and Wachovia
Capital Markets, LLC, in their capacities as joint lead arrangers and
bookrunners.
"LIBOR Rate" means, with respect to each day during each Interest
Period pertaining to a LIBOR Rate Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first days of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise
12
on such screen), the "LIBOR 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 prior to the beginning 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.
"LIBOR Rate Loan" means a Loan that bears interest at the LIBOR Rate
as provided in Section 3.3(b).
"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).
"Loans" means the loans made by the Banks to the Borrower pursuant to
this Agreement.
"Loan Documents" means this Agreement, the Pledge Agreement, any Notes
and any document or instrument executed in connection with the foregoing.
"Majority Banks" means, at any time, Banks having in excess of 50% of
the Total Commitments then in effect or, if the Commitments shall have
terminated, the Total Outstanding Loans then outstanding.
"Mandatory Payment Preferred Stock" means any preference or preferred
stock of the Borrower or of any Consolidated Subsidiary (other than (x) any
preference or preferred stock issued to the Borrower or its Subsidiaries,
(y) Hybrid Preferred Securities and (z) Junior Subordinated Debt) that is
subject to mandatory redemption, sinking fund or retirement provisions
(regardless of whether any portion thereof is due and payable within one
year).
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Material Adverse Effect" means any material adverse effect on the
ability of the Borrower to perform its obligations under the Loan Documents
on a timely basis (it being understood that Material Adverse Effect shall
not include the effect of any True-Up Litigation).
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
rating agency.
"Multiemployer Plan" means a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, in connection with any True-Up
Securitization or any incurrence of Indebtedness for Borrowed Money, the
cash proceeds received from
13
such securitization or incurrence, respectively, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts, escrow
fees, reserves, related swap costs and commissions and other customary fees
and expenses actually incurred in connection therewith and other similar
payment obligations resulting therefrom that are required to be paid
concurrently or otherwise as a result of such securitization or incurrence.
"Net Tangible Assets" means the total assets of the Borrower, its
Consolidated Subsidiaries and the 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 7.1(a) in respect of the most recently ended fiscal
quarter of the Borrower.
"Notes" means the collective reference to any promissory note
evidencing Loans.
"Notice of Borrowing" has the meaning specified in Section 2.2.
"Notice of Interest Conversion/Continuation" has the meaning specified
in Section 3.6(a).
"Original Mortgage" means the Mortgage and Deed of Trust, dated as of
November 1, 1944, by the Borrower to South Texas Commercial National Bank
of Houston, as Trustee (JPMorgan Chase Bank, N.A., as successor Trustee),
as amended, modified or supplemented from time to time.
"Other Taxes" has the meaning specified in Section 4.3(b).
"Outstanding Loans" means, as to any Bank at any time, the aggregate
principal amount of all Loans made (or deemed made) by such Bank then
outstanding.
"Participant" has the meaning specified in Section 10.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
"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,
14
repairmen and other similar nonconsensual Liens imposed 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 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
appeal bonds, bids, leases, performance or payment bonds, purchase,
construction, sales contracts 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
8.1(i) (so long as such Lien is discharged or released within 60 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 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;
15
(h) (i) 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 created in connection with a sale,
securitization or monetization of such receivables, customer charges,
notes, ownership interests, contracts or contract rights, and Liens on
rights of the Borrower or any Subsidiary related to such 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 futures contracts) for the purchase or
sale of any energy-related commodity or interest rate or currency rate
management contracts;
(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 7.2(f), Indebtedness of such Unrestricted
Subsidiary.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, government (or any political subdivision or agency thereof)
or any other entity of whatever nature.
16
"Plan" means, at a particular time with respect to the Borrower, any
employee benefit plan that is covered by ERISA and in respect of which
Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement to be executed and
delivered by the Borrower and the collateral agent thereunder,
substantially in the form of Exhibit E, as amended, modified or
supplemented from time to time.
"Pre-Tax Excess Mitigation Credit" means the amount of the credit, if
any, (including the interest component) provided to retail electric
customers under order of the PUC to reflect the refund of an amount equal
to estimated cumulative excess earnings applicable to the years 1998
through 2001 which were used to accelerate depreciation on electric
generation assets in order to reduce or mitigate exposure to stranded costs
associated with electric generation assets or any other credit provided to
customers that will be recovered through securitization or CTC Recoveries.
"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 Restricted 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).
"Project Financing Subsidiary" means any Restricted Subsidiary of the
Borrower (or any other Person in which 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.
"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.
"Purchasing Banks" has the meaning specified in Section 10.6(c).
"PUC" means the Public Utility Commission of Texas.
"Rating" means the Borrower's corporate credit rating issued by S&P
and the Borrower's issuer rating issued by Moody's (it being understood
that a change in outlook status (e.g., watch status, negative outlook
status) is not a change in Rating as contemplated hereby).
17
"Rating Agencies" means (a) S&P and (b) Moody's.
"Register" has the meaning specified in Section 10.6(d) hereof.
"Regulation U" means Regulation U of the Board or any other regulation
hereafter promulgated by the Board to replace the prior Regulation U and
having substantially the same function.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA and PBGC Reg. Section 4043, other than those events as to
which the thirty-day notice period is waived under PBGC Reg. Section 4043
or other regulations, notices or rulings issued by the PBGC.
"Requirement of Law" means, as to any Person, any law, statute,
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 controller 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 Subsidiaries" means all Subsidiaries of the Borrower other
than Securitization Subsidiaries and Unrestricted Subsidiaries.
"Revolving Commitment Termination Date" means the earlier to occur of
(a) November 16, 2005 and (b) the date on which no Bank has any Available
Commitment.
"Revolving Loans" has the meaning specified in Section 2.1(a) hereof.
"Revolving Percentage" means, as to any Bank at any time, a fraction
(expressed as a percentage) the numerator of which is the amount of such
Bank's Commitment or, if the Commitments shall have terminated, the
Outstanding Loans of such Bank then outstanding, and the denominator of
which is the Total Commitments then in effect or, if the Commitments shall
have terminated, the Total Outstanding Loans then outstanding.
"S&P" means Standard & Poor's Ratings Group and any successor rating
agency.
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Secured Indebtedness" means, with respect to any Person, all
Indebtedness secured (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured) by any Lien on any
Property (including, without limitation, accounts and contract rights)
owned by such Person or any of its Subsidiaries, even
18
though such Person has not assumed or become liable for the payment of such
Indebtedness.
"Securitization Securities" means transition bonds issued pursuant to
the Texas Electric Choice Plan if (and only if) no recourse may be had to
the Borrower or any of its Subsidiaries (or to their respective assets) for
the payment of such obligations, other than the issuer of the bonds and its
assets, provided that payment of transition charges by any retail electric
provider ("REP") in accordance with such legislation, whether or not such
REP has collected such charges from the retail electric customers, shall
not be deemed "recourse" hereunder, including any REP that is a Subsidiary
of the Borrower or a division of an Affiliate of the Borrower or any
Affiliate of the Borrower.
"Securitization Subsidiary" means a special purpose subsidiary created
to issue Securitization Securities.
"Significant Subsidiary" means (i) for the purposes of determining
what constitutes an "Event of Default" under Sections 8.1(f), (g), (h), (i)
and (j), a Subsidiary of the Borrower (other than a Project Financing
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
of the Borrower 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 7.1(a)(iv)(C);
provided that no Securitization Subsidiary or Unrestricted Subsidiary shall
be deemed to be a Significant Subsidiary or subject to the restrictions,
covenants or Events of Default under this Agreement.
"Single Employer Plan" means any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which more than 50% of the
outstanding shares of Capital Stock or other ownership interests having
ordinary voting power (other than Capital 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 such corporation,
partnership or other entity are at the time owned, directly or indirectly,
through one or more Subsidiaries of such Person, by such Person; provided,
however, that no Securitization Subsidiary shall be deemed to be a
Subsidiary for purposes of this Agreement.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing
risk or value or any similar transaction or any combination of these
transactions;
19
provided that no phantom stock or similar plan providing for payments only
on account of services provided by current or former directors, officers,
employees or consultants of the Borrower or any of its Subsidiaries shall
be a "Swap Agreement".
"Syndication Agent" has the meaning specified in the introduction to
this Agreement.
"Taxes" has the meaning specified in Section 4.3(a).
"Term Loan Maturity Date" means the second anniversary of the
Revolving Commitment Termination Date.
"Term Loans" has the meaning specified in Section 2.4 hereof
"Texas Genco" means Texas Genco Holdings, Inc.
"Texas Genco Stock" means the Capital Stock of Texas Genco now owned
or hereafter acquired by Utility Holding, LLC, which, as of the date
hereof, constitutes 100% of the issued and outstanding Capital Stock of
Texas Genco.
"Total Commitments" means, at any time, the aggregate amount of the
Commitments of all Banks then in effect.
"Total Outstanding Loans" means, at any time, the aggregate amount of
the Outstanding Loans of all Banks outstanding at such time.
"Tranche" means the collective reference to LIBOR Rate Loans, the
Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have
been made on the same day).
"Transferee" has the meaning specified in Section 10.6(f).
"Transfer Effective Date" has the meaning specified in Section
10.6(c).
"Transition Charges Principal and Interest" means the non-bypassable
transition charges billed to customers for payment of debt service on
Securitization Securities.
"Triggering Event" has the meaning specified in Section 4.8(b).
"True-Up Litigation" means any litigation or other proceeding in
connection with the determination by the PUC of the recovery by CenterPoint
and its Subsidiaries of stranded costs and other amounts to be recovered in
the true-up process.
"True-Up Securitization" means a sale or contribution of assets to a
Securitization Subsidiary or series of such transactions, together with the
issuance of Securitization Securities.
"Type" refers to the determination of whether a Loan is an ABR Loan or
a LIBOR Rate Loan (or a Borrowing comprised of such Loans).
20
"United States" means the United States of America.
"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, 10% of the Net Tangible Assets, (y) such designation and
the Investment of the Borrower in such Subsidiary complies with the
limitations in Section 7.2(f) and (z) such Subsidiary: (i) has no
Indebtedness with recourse to the Borrower and the Restricted Subsidiaries
except that permitted under Section 7.2(f); (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 7.2(f) (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 7.2(f) delivered to the
Administrative Agent. 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 7.2(f), 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 of the Borrower that is not an
Unrestricted Subsidiary; provided that such designation shall be deemed to
be an incurrence of Indebtedness by such Subsidiary 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 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.
"Wholly-Owned" means, with respect to any Subsidiary of any Person,
all the outstanding Capital Stock (other than directors' qualifying shares
required by law) or other ownership interest of such Subsidiary which are
at the time owned by such Person or by one or more Wholly-Owned
Subsidiaries of such Person, or both.
21
SECTION 1.2. Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have such defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to the Borrower or any of its Subsidiaries not defined in Section
1.1 and accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP, (ii) the
words "include", "includes" and "including" shall be deemed to be followed by
the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), (iv) the words "asset" and "property" shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights, and (v) references to
agreements or other Contractual Obligations shall, unless otherwise specified,
be deemed to refer to such agreements or Contractual Obligations as amended,
supplemented, restated or otherwise modified from time to time.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.1. The Commitments. (a) Each Bank severally agrees, on the terms
and subject to the conditions hereinafter set forth, to make revolving credit
Loans ("Revolving Loans") to the Borrower from time to time on any Business Day
during the period from the Closing Date until the Revolving Commitment
Termination Date in an aggregate principal amount outstanding, which does not
exceed at any time such Bank's Commitment; provided that (x) no more than six
Borrowings shall be made hereunder and (y) no Revolving Loan shall be made as a
LIBOR Rate Loan with an Interest Period ending after the Revolving Commitment
Termination Date; and provided, further, that in no event shall (x) the Total
Outstanding Loans at any time exceed the Total Commitments at such time and (y)
the aggregate principal amount of any requested Borrowing on any date exceed the
aggregate principal amount outstanding under the Existing Credit Agreement.
(b) Each Borrowing by the Borrower shall be in an aggregate principal
amount not less than $10,000,000 (in the case of LIBOR Rate Loans) or $5,000,000
(in the case of ABR Loans), or an integral multiple of $1,000,000 in excess
thereof and shall consist of Revolving Loans of
22
the same Type made on the same day by the Banks ratably according to their
respective Revolving Percentages. Within the limits of the applicable
Commitments, the Borrower may borrow, prepay pursuant to Section 4.6 and
reborrow under this Section 2.1. Subject to Section 2.4, the principal amount
outstanding on the Revolving Loans shall be due and payable, and the Commitment
of each Bank shall terminate, on the Revolving Commitment Termination Date,
together with accrued and unpaid interest thereon.
SECTION 2.2. Procedure for Revolving Loan Borrowing. (a) The Borrower may
borrow under the Commitments on any Business Day during the period from and
including the Closing Date to and excluding the Revolving Commitment Termination
Date, provided that the Borrower shall give the Administrative Agent irrevocable
oral notice or written notice pursuant to a notice of borrowing, in
substantially the form of Exhibit A hereto ("Notice of Borrowing") which shall
be signed by the Borrower and shall specify therein the requested (i) date of
such Borrowing, (ii) Type of Revolving Loans comprising such Borrowing, (iii)
aggregate amount of such Borrowing and (iv) the Interest Period for each such
Revolving Loan, in the case of any LIBOR Rate Loan,:
(i) not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
LIBOR Rate Loan;
(ii) not later than 11:00 A.M. (New York City time) on the Business
Day immediately preceding the date of the proposed Borrowing in the case of
an Early Funding ABR Loan; and
(iii) not later than 11:00 A.M. (New York City time) on the same
Business Day of the proposed Borrowing in the case of any other ABR Loan.
With respect to any oral notice of borrowing given by the Borrower, the Borrower
shall promptly thereafter confirm such notice in writing pursuant to a Notice of
Borrowing. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Bank thereof. Each Bank shall, before 1:00 P.M. (New York
City time) on the date of such Borrowing, make available to the Administrative
Agent at the Funding Office, in immediately available funds, such Bank's
applicable Revolving Percentage of such Borrowing; provided, however, that, in
the event of a requested ABR Loan with respect to which the Borrower has
delivered its Notice of Borrowing on the Business Day immediately preceding the
requested Borrowing Date (an "Early Funding ABR Loan"), each Bank shall make its
applicable Revolving Percentage of such Borrowing available before 10:00 A.M.
(New York City time) on the requested Borrowing Date. The Administrative Agent
shall, no later than 2:00 P.M. (New York City time) on such date (or no later
than 11:00 A.M. (New York City time), in the case of an Early Funding ABR Loan),
make available to the Borrower the proceeds of the Revolving Loans received by
the Administrative Agent hereunder by crediting such account of the Borrower
which the Administrative Agent and the Borrower shall from time to time
designate. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(b) Unless the Administrative Agent shall have received notice from a Bank
at least two hours prior to the applicable time described in clause (a) above by
which such Bank is required to deliver its funds to the Administrative Agent
with respect to any Borrowing that such Bank
23
will not make available to the Administrative Agent such Bank's applicable
Revolving Percentage of such Borrowing, the Administrative Agent may assume that
such Bank has made such portion available to the Administrative Agent on the
date of such Borrowing in accordance with Section 2.2(a) and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If such amount is made available to the
Administrative Agent on a date after such date of Borrowing, such Bank shall pay
to the Administrative Agent on demand an amount equal to the product of (i) the
daily average Federal Funds Effective Rate during such period, times (ii) the
amount of such Bank's applicable Revolving Percentage of such Borrowing, times
(iii) a fraction, the numerator of which is the number of days that elapse from
and including such date of Borrowing to the date on which such Bank's applicable
Revolving Percentage of such Borrowing shall have become immediately available
to the Administrative Agent and the denominator of which is 360. A certificate
of the Administrative Agent submitted to any Bank with respect to any amounts
owing under this Section 2.2(b) shall be conclusive in the absence of manifest
error. If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Revolving Loan as
part of such Borrowing for purposes of this Agreement. If such Bank's applicable
Revolving Percentage of such Borrowing is not in fact made available to the
Administrative Agent by such Bank within one (1) Business Day of such date of
Borrowing, the Administrative Agent shall be entitled to recover such amount
with interest thereon at the rate per annum, equal to (i) the ABR (in the case
of ABR Loans) or (ii) the Federal Funds Effective Rate (in the case of LIBOR
Rate Loans), on demand, from the Borrower.
(c) The failure of any Bank to make the Revolving Loan to be made by it as
part of any Borrowing shall not relieve any other Bank of its obligation, if
any, hereunder to make its Revolving Loan on the date of such Borrowing, but no
Bank shall be responsible for the failure of any other Bank to make the
Revolving Loan to be made by such other Bank on the date of any Borrowing.
SECTION 2.3. Minimum Tranches. All Borrowings, prepayments, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Tranche of LIBOR Rate Loans shall be equal to $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
SECTION 2.4. Conversion of Revolving Loans to Term Loans. (a) The aggregate
principal amount of the Revolving Loans outstanding on the Revolving Commitment
Termination Date shall be converted into, and the Banks shall be deemed to have
made, term loans to the Borrower on the Revolving Commitment Termination Date in
an aggregate principal amount equal to the aggregate principal amount of the
Revolving Loans so converted ("Term Loans"). The Term Loans may from time to
time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Section 3.6.
(b) The Borrower shall repay all outstanding Term Loans on the Term Loan
Maturity Date.
24
ARTICLE III
PROVISIONS RELATING TO ALL LOANS
SECTION 3.1. Evidence of Loans. (a) Each Bank shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Bank resulting from each Loan made by such Bank from time to
time, including, without limitation, the amounts of principal and interest
payable and paid to such Bank from time to time under this Agreement.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 10.6(d) and a subaccount therein for each Bank, in which shall be
recorded (i) the amount of each Loan made by each Bank through the
Administrative Agent hereunder, the type thereof and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Bank hereunder and (iii)
both the amount of any sum received by the Administrative Agent hereunder from
the Borrower and each Bank's share thereof.
(c) The entries made in the Register and the accounts of each Bank
maintained pursuant to Section 3.1(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amount of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Bank or the Administrative Agent to maintain the Register or any
such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans
actually made to the Borrower by such Bank in accordance with the terms of this
Agreement.
SECTION 3.2. Fees. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Bank the Commitment Fee, from the date hereof
until the Revolving Commitment Termination Date payable on the Revolving
Commitment Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent for the account
of each Bank a draw fee in an amount equal to 0.05% of the principal amount of
each Revolving Loan made by such Bank on a Borrowing Date, payable on such
Borrowing Date.
(c) The fees payable under Section 3.2(a) shall be calculated by the
Administrative Agent on the basis of a 365- or 366-day year, as the case may be,
for the actual days (including the first day but excluding the last day)
occurring in the period for which such fee is payable.
(d) The Borrower shall pay to the Administrative Agent, for its own
account, the fees in the amounts and on the dates previously agreed to in
writing by the Borrower and the Administrative Agent.
SECTION 3.3. Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan made by each Bank from the date of such Loan until
such principal amount shall be paid in full, at the times and at the rates per
annum set forth below:
(a) ABR Loans. Each ABR Loan shall bear interest at a rate per annum equal
at all times to the lesser of (i) the ABR plus the Applicable Margin and (ii)
the Highest Lawful Rate, payable
25
quarterly in arrears on the last day of each March, June, September and December
and on the Revolving Commitment Termination Date or, if the Revolving Loans are
converted pursuant to Section 2.4, the Term Loan Maturity Date.
(b) LIBOR Rate Loans. Each LIBOR Rate Loan shall bear interest at a rate
per annum equal at all times to, in the case of each LIBOR Rate Loan, the lesser
of (A) the sum of the LIBOR Rate for the applicable Interest Period for such
Loan plus the Applicable Margin and (B) the Highest Lawful Rate, payable on the
last day of such Interest Period and, with respect to Interest Periods of six,
nine or twelve months, on the ninetieth (90th) day after the commencement of the
Interest Period and on each succeeding ninetieth (90th) day during such Interest
Period, and on the Revolving Commitment Termination Date or, if the Revolving
Loans are converted pursuant to Section 2.4, the Term Loan Maturity Date.
(c) Calculations. Interest that is determined by reference to the ABR shall
be calculated by the Administrative Agent on the basis of a 365- or 366-day
year, as the case may be, for the actual days (including the first day but
excluding the last day) occurring in the period in which such interest is
payable and otherwise shall be calculated by the Administrative Agent on the
basis of a 360-day year for the actual days (including the first day and
excluding the last day) occurring in the period for which such interest is
payable.
(d) Default Rate. Notwithstanding the foregoing, if all or a portion of (i)
the principal amount of any Loan, (ii) any interest payable thereon, or (iii)
any Commitment Fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest, payable from time to time on demand, at a rate per
annum equal to the lesser of (A) the Highest Lawful Rate and (B) the Default
Rate, in each case from the date of such non-payment until such amount is paid
in full (as well after as before judgment).
(e) Determination Conclusive. Each determination of an interest rate by the
Administrative Agent pursuant to any provisions of this Agreement shall be
conclusive and binding on the Borrower and the Banks in the absence of manifest
error. The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing in reasonable detail the quotations used by
the Administrative Agent in determining the LIBOR Rate.
SECTION 3.4. Reserve Requirements. (a) The Borrower agrees to pay to each
Bank that requests compensation under this Section 3.4 in accordance with the
provisions set forth in Section 4.8(b), so long as such Bank shall be required
to maintain reserves against "Eurocurrency liabilities" under Regulation D of
the Board (or, so long as such Bank shall be required by the Board or by any
other Governmental Authority to maintain reserves against any other category of
liabilities that includes deposits by reference to which the interest rate on
LIBOR Rate Loans is determined as provided in this Agreement or against any
category of extensions of credit or other assets of such Bank that includes any
LIBOR Rate Loans), an additional amount (determined by such Bank and notified to
the Borrower pursuant to the provisions set forth in Section 4.8(b))
representing such Bank's calculation or, if an accurate calculation is
impracticable, reasonable estimate (using such method of allocation to such
Loans of the Borrower as such Bank shall determine in accordance with Section
4.8(a)) of the actual
26
costs, if any, incurred by such Bank during the relevant Interest Period as a
result of the applicability of the foregoing reserves to such LIBOR Rate Loans,
which amount in any event shall not exceed the product of the following for each
day of such Interest Period:
(i) the principal amount of the relevant LIBOR Rate Loans made by such
Bank outstanding on such day;
(ii) the difference between (A) a fraction, the numerator of which is
the LIBOR Rate (expressed as a decimal) applicable to such LIBOR Rate Loan
(expressed as a decimal), and the denominator of which is one minus the
maximum rate (expressed as a decimal) at which such reserve requirements
are imposed by the Board or other Governmental Authority on such date,
minus (B) such numerator; and
(iii) a fraction, the numerator of which is one and the denominator of
which is 360.
(b) The agreements in this Section 3.4 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 Bank for amounts contemplated by this Section 3.4 for any period
prior to the date that is 90 days before the date upon which such Bank requests
in writing such reimbursement or compensation from the Borrower.
SECTION 3.5. Interest Rate Determination and Protection. (a) The rate of
interest for each LIBOR Rate Loan shall be determined by the Administrative
Agent two Business Days before the first day of each Interest Period applicable
to such Loan. The Administrative Agent shall give prompt notice to the Borrower
and the Banks of the applicable interest rate determined by the Administrative
Agent for purposes of Sections 3.3(a) and (b) hereof.
(b) If, with respect to any LIBOR Rate Loans, prior to the first day of an
Interest Period (i) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the London interbank market, adequate and reasonable
means do not exist for ascertaining the LIBOR Rate for such Interest Period or
(ii) the Administrative Agent shall have received notice from the Majority Banks
that the LIBOR Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Banks (as determined in good
faith and certified by such Banks) of making or maintaining their affected LIBOR
Rate Loans during such Interest Period, the Administrative Agent shall give
facsimile or telephonic notice thereof (with written notice to follow promptly)
to the Borrower and the Banks as soon as practicable thereafter. If such notice
is given, (A) any LIBOR Rate Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (B) any Loans that were to have been
converted on the first day of such Interest Period to LIBOR Rate Loans shall be
continued as ABR Loans and (C) any outstanding LIBOR Rate Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further LIBOR Rate
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Loans to LIBOR Rate Loans.
27
SECTION 3.6. Voluntary Interest Conversion or Continuation of Loans. (a)The
Borrower may on any Business Day, upon the Borrower's irrevocable oral or
written notice of interest conversion/continuation given by the Borrower 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 interest conversion or
continuation in the case of a LIBOR Rate Loan, (i) convert Loans of one Type
into Loans of another Type; (ii) convert LIBOR Rate Loans for a specified
Interest Period into LIBOR Rate Loans for a different Interest Period; or (iii)
continue LIBOR Rate Loans for a specified Interest Period as LIBOR Rate Loans
for the same Interest Period-; provided, however, that (A) any conversion of any
LIBOR Rate Loans into LIBOR Rate Loans for a different Interest Period, or into
ABR Loans, or any continuation of LIBOR Rate Loans for the same Interest Period
shall be made on, and only on, the last day of an Interest Period for such LIBOR
Rate Loans; (B) no Loan may be converted into or continued as a LIBOR Rate Loan
by the Borrower so long as an Event of Default has occurred and is continuing,
and (C) no Loan may be converted into or continued as a LIBOR Rate Loan if after
giving effect thereto, Section 2.3 would be contravened. With respect to any
oral notice of interest conversion/continuation given by the Borrower under this
Section 3.6(a), the Borrower shall promptly thereafter confirm such notice in
writing. Each written notice of interest conversion/continuation given by the
Borrower under this Section 3.6(a) and each confirmation of an oral notice of
interest conversion/continuation given by the Borrower under this Section 3.6(a)
shall be in substantially the form of Exhibit B hereto ("Notice of Interest
Conversion/Continuation"). Each such Notice of Interest Conversion/Continuation
shall specify therein the requested (x) date of such interest conversion or
continuation; (y) the Loans to be converted or continued; and (z) if such
interest conversion or continuation is into LIBOR Rate Loans, the duration of
the Interest Period for each such LIBOR Rate Loan. Upon receipt of any such
Notice of Interest Conversion/Continuation, the Administrative Agent shall
promptly notify each Bank thereof. Each Notice of Interest
Conversion/Continuation shall be irrevocable and binding on the Borrower.
(b) If the Borrower shall fail to deliver to the Administrative Agent a
Notice of Interest Conversion/Continuation in accordance with Section 3.6(a)
hereof, or to select the duration of any Interest Period for the principal
amount outstanding under any LIBOR Rate Loan by 11:00 A.M. (New York City time)
on the third Business Day prior to the last day of the Interest Period
applicable to such Loan in accordance with Section 3.6(a), the Administrative
Agent will forthwith so notify the Borrower and the Banks (provided that the
failure to give such notice shall not affect the conversion referred to below)
and such Loans will automatically, on the last day of the then existing Interest
Period therefor, convert into LIBOR Rate Loans with a one month Interest Period.
SECTION 3.7. Funding Losses Relating to LIBOR Rate Loans. (a) The Borrower
agrees, without duplication of any other provision under this Agreement, to
indemnify each Bank and to hold each Bank harmless from any loss or expense that
such Bank may sustain or incur as a consequence of (i) default by the Borrower
in payment when due of the principal amount of or interest on any LIBOR Rate
Loan, (ii) default by the Borrower in making a borrowing of, conversion into or
continuation of any LIBOR Rate Loan after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (iii)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (iv) the
making of a prepayment of LIBOR Rate Loans or the conversion of LIBOR Rate Loans
into ABR Loans, on a day that is not the last day of an
28
Interest Period with respect thereto (excluding any prepayment made pursuant to
Section 3.8) on a day that is not the scheduled maturity date with respect
thereto, including, without limitation, in each case, any such loss or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate the deposits from which such funds were obtained. The calculation of
all amounts payable to a Bank under this Section 3.7(a) shall be made pursuant
to the method described in Section 4.8(a), but in no event shall such amounts
payable with respect to any LIBOR Rate Loan exceed the amounts that would have
been payable assuming such Bank had actually funded its relevant LIBOR Rate Loan
through the purchase of a deposit bearing interest at the LIBOR Rate in an
amount equal to the amount of such LIBOR Rate Loan and having a maturity
comparable to, with respect to any LIBOR Rate Loan, the relevant Interest
Period, provided, that each Bank may fund each of its LIBOR Rate Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section 3.7(a).
(b) The agreements in this Section 3.7 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 Bank for amounts contemplated by this Section 3.7 for amounts
accruing prior to the date that is 90 days prior to the date upon which such
Bank requests in writing such reimbursement or compensation from the Borrower.
SECTION 3.8. Change in Legality. (a) Notwithstanding any other provision of
this Agreement, if any Bank shall notify the Administrative Agent that it has
determined in good faith that the introduction of or any change in or in the
interpretation or application of any law or regulation by any Governmental
Authority (in each case occurring after the date of this Agreement) makes it
unlawful, or any central bank or other Governmental Authority asserts after the
date of this Agreement that it is unlawful, for any Bank or its applicable
lending office to perform its obligations hereunder to make LIBOR Rate Loans or
to fund or maintain LIBOR Rate Loans hereunder, (i) the obligation of such Bank
to make, or to convert Loans into, or to continue LIBOR Rate Loans as, LIBOR
Rate Loans shall be suspended until the Administrative Agent shall notify the
Borrower that the circumstances causing such suspension no longer exist; (ii)
the Borrower shall, at its option, either prepay in full all LIBOR Rate Loans of
such Bank then outstanding, or convert all such Loans to ABR Loans, on the
respective last days of the then current Interest Periods with respect to such
Loans (or within such earlier period as required by law), accompanied, in the
case of any prepayments, by interest accrued thereon and any amounts payable
under Section 3.7(a). Each Bank agrees that it will use reasonable efforts to
designate a different lending office for the LIBOR Rate Loans due to it affected
by this Section 3.8, if such designation will avoid the illegality described in
this Section 3.8 so long as such designation will not be disadvantageous to such
Bank as determined by such Bank in its sole discretion acting in good faith.
(b) For purposes of this Section 3.8, a notice to the Borrower (with a copy
to the Administrative Agent) by any Bank pursuant to paragraph (a) above shall
be effective on the date of receipt thereof by the Borrower.
29
ARTICLE IV
INCREASED COSTS, TAXES, PAYMENTS
AND PREPAYMENTS
SECTION 4.1. Increased Costs; Capital Adequacy. (a) If after the date of
this Agreement the adoption of or any change in any law or regulation or in the
interpretation or application thereof by any Governmental Authority or
application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date of this Agreement:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Bank that is not otherwise included in the determination of
the LIBOR Rate hereunder (except for amounts covered by Section 3.4 or any
other Section hereof); or
(ii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the actual cost to such
Bank, by an amount that such Bank deems to be material, of making, converting
into, continuing or maintaining LIBOR Rate Loans or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Bank, upon its demand in the manner set forth in Section
4.8(b), any additional amounts, computed by such Bank in accordance with Section
4.8(a), necessary to compensate such Bank for such actual increased cost or
reduced amount receivable that is attributable to Loans or Commitments (to the
extent that such Bank has not already been compensated or reimbursed for such
amounts pursuant to any other provision of this Agreement). If any Bank becomes
entitled to claim any additional amounts pursuant to this Section 4.1(a) from
the Borrower, it shall promptly notify the Borrower, through the Administrative
Agent, of the event by reason of which it has become so entitled in the manner
set forth in Section 4.8(b).
(b) If any Bank determines in good faith that the introduction of or any
change in or in the interpretation or application by any Governmental Authority
of any law or regulation regarding capital adequacy after the date of this
Agreement or compliance by such Bank or any corporation controlling such Bank
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) made or
issued after the date of this Agreement does or shall have the effect, as a
result of such Bank's obligations under this Agreement, of reducing the rate of
return on such Bank's or such corporation's capital to a level below that which
such Bank or such corporation could have achieved but for such change or
compliance (taking into consideration such Bank's or such corporation's policies
with respect to capital adequacy) by an amount deemed by such Bank to be
material, the Borrower shall pay to the Administrative Agent for the account of
such Bank, from time to time as specified by such Bank in the manner set forth
in Section 4.8(b), additional amounts, computed by such Bank in accordance with
Section 4.8(a), sufficient to compensate
30
such Bank or such corporation in the light of such circumstances, to the extent
that such Bank reasonably determines such reduction in rate of return is
allocable to the existence of such Bank's obligations hereunder.
(c) The agreements contained in this Section 4.1 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 Bank for amounts contemplated by this Section 4.1 for any
period prior to the date that is 90 days prior to the date upon which such Bank
requests in writing such reimbursement or compensation from the Borrower.
SECTION 4.2. Pro Rata Treatment and Payments and Computations. (a) Each
Borrowing of Loans by the Borrower from the Banks hereunder, each payment by the
Borrower on account of any commitment or other fee, any reduction of the
Commitments of the Banks and any prepayment on account of principal and interest
on the Loans shall be made pro rata according to the respective Revolving
Percentages of the Banks.
(b) The Borrower shall make each payment (including each prepayment)
hereunder, whether on account of principal, interest, fees or otherwise, without
setoff or counterclaim, not later than 12:00 Noon (New York City time) on the
day when due in Dollars to the Administrative Agent at the Funding Office in
immediately available funds. The Administrative Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal,
interest or commitment or other fees (to the extent received by the
Administrative Agent) ratably to the Banks according to the amounts of their
respective Loans and Commitments in respect of which such payment is made, and
like funds relating to the payment of any other amount payable to any Bank (to
the extent received by the Administrative Agent) to such Bank, in each case to
be applied in accordance with the terms of this Agreement.
(c) Whenever any payment hereunder or under the Notes 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 fees, as the case may be;
provided, however, if such extension would cause payment of interest on or
principal of LIBOR Rate Loans to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks 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 Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent the Borrower shall
not have so made such payment in full to the Administrative Agent, each Bank
shall pay to the Administrative Agent on demand an amount equal to the product
of (i) the daily average Federal Funds Effective Rate during such period, times
(ii) the amount of such Bank's Revolving Percentage of such payment, times (iii)
a fraction, the numerator of which is the number of days that elapse from and
including the date such amount is distributed to such Bank to the date on which
such Bank's
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Revolving Percentage of such payment shall have become immediately available to
the Administrative Agent and the denominator of which is 360.
SECTION 4.3. Taxes. (a) Any and all payments by the Borrower hereunder or
under the Loan Documents shall be made free and clear of and without deduction
or withholding for or on account of 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 Bank and the Administrative Agent, net
income taxes, branch profits taxes and franchise taxes imposed on it as a result
of a present or former connection between the jurisdiction (or political
subdivision thereof) of the government or taxing authority imposing such tax and
the Administrative Agent or such Bank other than a connection arising solely
from the Administrative Agent or such Bank having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any Note (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Bank 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 4.3) such Bank 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 Bank with respect to any Taxes (i) that are attributable to such
Bank's failure to comply with the requirements of Section 4.3(d) or (ii) that
are United States withholding taxes imposed on sums payable to such Bank at the
time such Bank becomes a party to this Agreement (or maintains a lending
office), except to the extent that any such Bank'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 4.3. Whenever any
Taxes or Other Taxes (as defined in Section 4.3(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 Bank or Administrative Agent, as the case
may be, either (A) official tax receipts or notarized copies of such receipts to
such Bank 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 agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under any Note or from the
execution, delivery or registration of or otherwise with respect to, this
Agreement, any other Loan Document, or the Loans and for which such Bank or the
Administrative Agent (as the case may be) has not been otherwise reimbursed by
the Borrower under this Agreement (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank and the Administrative Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 4.3) paid by such Bank 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,
32
any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Bank 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 Bank the receipts or other evidence of payment of Taxes or Other
Taxes.
(d) Each Bank registered in the Register that is not a U.S. Person as
defined in Section 7701(a)(30) of the Code agrees that it will deliver to the
Borrower and the Administrative Agent on the date hereof, or on the date which
it becomes a party to this Agreement, two duly completed copies of United States
Internal Revenue Service Form X-0XXX, X-0XXX W-8EXP or W-8IMY (or other
appropriate corresponding form) or any successor applicable form, as the case
may be. Each such Bank 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 or certification previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the
Borrower or the Administrative Agent, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required that renders all such forms inapplicable or that would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank so advises the Borrower and the Administrative Agent. Each such Bank
shall certify in the case of a Form W-8BEN, W-8ECI, W-8EXP, or W-8IMY that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, subject to notification
to the Borrower otherwise pursuant to this Section 4.3(d). In the event that any
such Bank fails to deliver any forms required under this Section 4.3(d), 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.
(e) If any Taxes or Other Taxes are not correctly or legally asserted and
the Administrative Agent or any Bank determines, in its reasonable 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 Bank 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
Bank for such Taxes or Other Taxes pursuant to this Section 4.3, net of any
out-of-pocket costs of the Administrative Agent or such Bank 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 Bank, 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 Bank in the
event the Administrative Agent or such Bank is required to repay such refund to
such Governmental Authority. This paragraph shall not be construed to require
the Administrative Agent or any Bank 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.
(f) The agreements in this Section 4.3 shall survive the termination of
this Agreement and the payment of all amounts payable hereunder; provided,
however, that (i) in no event shall the Borrower be obligated to reimburse or
compensate any Bank for amounts contemplated by
33
this Section 4.3 for any period before the date that is 120 days before the date
upon which such Bank requests in writing such reimbursement or compensation from
the Borrower (other than any amounts as to which the ultimate amount of the
reimbursement due could not then be determined) and (ii) nothing contained in
this Section 4.3 shall require the Borrower to pay any amount to any Bank or the
Administrative Agent in addition to that for which it has already reimbursed any
Bank or the Administrative Agent under any other provision of this Agreement.
SECTION 4.4. Sharing of Payments, Etc. If any Bank (a "Benefitted Bank")
shall at any time receive any payment (other than pursuant to Section 3.4, 3.7,
4.1 or 4.3) of all or part of its Loans owing to it or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by setoff, pursuant to events or proceedings of the nature referred to in
Section 8.1(g) or 8.1(h), or otherwise), in a greater proportion than any such
payment to or collateral received by any other Bank, if any, in respect of such
other Bank's Loans owing to it, or interest thereon, such benefitted Bank shall
purchase for cash from the other Banks a participating interest in such portion
of each such other Bank's Loans owing to it or shall provide such other Banks
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Bank to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Banks; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Bank, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that any Bank so purchasing
a participation from another Bank pursuant to this Section 4.4 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of setoff) with respect to such participation as fully as if such Bank
were the direct creditor of the Borrower in the amount of such participation.
SECTION 4.5. Optional Termination or Reduction of the Commitments. (a)
Unless previously terminated, the Commitments of the Banks to make Loans shall
terminate on the Revolving Commitment Termination Date.
(b) The Borrower shall have the right, without penalty or premium, upon at
least three (3) Business Days' irrevocable written notice to the Administrative
Agent (which shall give prompt notice to each Bank), to terminate in whole the
Commitments or permanently, from time to time, to reduce ratably in part the
unused portion of the Commitments, provided that (i) each partial reduction
shall be in the aggregate principal amount of $5,000,000 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 4.6 by the Borrower on the effective date thereof, the Total Outstanding
Loans then outstanding would exceed the Total Commitments then in effect.
(c) Each reduction of Commitments pursuant to this Section 4.5 shall be
applied pro rata to the Commitments of each Bank. If at any time, including
after giving effect to any reduction of Commitments pursuant to this Section
4.5, the Total Outstanding Loans exceed the Total Commitments, the Borrower
shall be obligated to prepay the Loans in the amount of such excess. Optional
prepayments of the Loans may not be reborrowed.
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SECTION 4.6. Voluntary Prepayments. The Borrower may, upon written notice
delivered to the Administrative Agent not later than 11:00 A.M. (New York City
time) one (1) Business Day (or in the case of LIBOR Rate Loans, three (3)
Business Days) prior to the date of prepayment stating the aggregate principal
amount of the prepayment and the Loans to be prepaid, prepay the outstanding
principal amounts of such Loans comprising part of the same 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 losses
incurred by any Bank under Section 3.7 shall be payable with respect to each
such prepayment in the manner set forth in Section 3.7. Any such notice provided
pursuant to this Section 4.6 shall be irrevocable, and the payment amount
specified in such notice shall be due and payable on the prepayment date
described in such notice, together with accrued and unpaid interest on the
amount prepaid. Partial prepayments pursuant to this Section 4.6 with respect to
any Tranche of LIBOR Rate Loans shall be in an aggregate principal amount equal
to the lesser of (a) $10,000,000 or an integral multiple of $1,000,000 in excess
thereof and (b) the aggregate principal amount of such Tranche of LIBOR Rate
Loans then outstanding, as the case may be; provided that no partial prepayment
of any Tranche of LIBOR Rate Loans may be made if, after giving effect thereto,
Section 2.3 would be contravened. Partial prepayments with respect to the ABR
Loans shall be made in an aggregate principal amount equal to the lesser of (i)
$5,000,000 or an integral multiple of $1,000,000 in excess thereof or (ii) the
aggregate principal amount of ABR Loans then outstanding, as the case may be.
SECTION 4.7. Mandatory Prepayments and Commitment Reductions. (a) If any
Indebtedness for Borrowed Money shall be issued or incurred (including, without
limitation, the issuance of any general mortgage bonds pursuant to the General
Mortgage Indenture or of any first mortgage bonds pursuant to the Mortgage) by
the Borrower or any of its Subsidiaries after the date hereof (other than
Excluded Indebtedness), an amount equal to 100% of the Net Cash Proceeds thereof
shall be applied within one (1) Business Day after such issuance or incurrence
toward the prepayment of the Loans and the reduction of the Commitments as set
forth in Section 4.7(c).
(b) If the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from the True-Up Securitization, within one (1) Business Day after
receipt thereof, the Borrower shall, or shall cause the applicable Subsidiary
to, apply such Net Cash Proceeds toward the prepayment of the Loans and the
reduction of the Commitments as set forth in Section 4.7(c).
(c) Amounts to be applied in connection with prepayments and Commitment
reductions made pursuant to this Section 4.7 shall be applied (a) at any time
prior to the Revolving Commitment Maturity Date, to reduce permanently the Total
Commitments and (b) at any time on and after the Revolving Commitment
Termination Date, to the prepayment of the Loans outstanding. Any reduction of
the Total Commitments described in the foregoing sentence shall be accompanied
by prepayment of the Loans to the extent, if any, that the Total Outstanding
Loans exceed the amount of the Total Commitments as so reduced. The application
of any prepayment pursuant to this Section 4.7 shall be made, first, to ABR
Loans and, second, to LIBOR Rate Loans. Each prepayment of the Loans under this
Section 4.7 shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
35
SECTION 4.8. Mitigation of Losses and Costs. Any Bank claiming
reimbursement from the Borrower under any of Sections 3.4, 3.7, 4.1 and 4.3
hereof shall use reasonable efforts (including, without limitation, if requested
by the Borrower, reasonable efforts to designate a different lending office of
such Bank) to mitigate the amount of such losses, costs, expenses and
liabilities, if such efforts can be made and such mitigation can be accomplished
without such Bank suffering (i) any economic disadvantage for which such Bank
does not receive full indemnity from the Borrower under this Agreement or (ii)
any legal or regulatory disadvantage.
SECTION 4.9. Determination and Notice of Additional Costs and Other
Amounts. (a) In determining the amount of any claim for reimbursement or
compensation under Sections 3.4, 3.7 and 4.1, each Bank may use any reasonable
averaging, attribution and allocation methods consistent with such methods
customarily employed by such Bank in similar situations.
(b) Each Bank or, with respect to compensation claimed by it pursuant to
Section 4.3, the Administrative Agent, as the case may be, will (i) use its best
efforts to notify the Borrower through the Administrative Agent (in the case of
each Bank) of any event occurring after the date of this Agreement promptly
after the occurrence thereof and (ii) notify the Borrower through the
Administrative Agent (in the case of each Bank) promptly after such Bank or the
Administrative Agent, as the case may be, becomes aware of any event occurring
after the date of this Agreement, in either case if such event (for purposes of
this Section 4.8(b), a "Triggering Event") will entitle such Bank or the
Administrative Agent, as the case may be, to compensation pursuant to Section
3.4, 3.7, 4.1 or 4.3, as the case may be. Each such notification of a Triggering
Event shall be accompanied by a certificate of such Bank or the Administrative
Agent, as the case may be, setting forth the calculations and justification in
reasonable detail such amount or amounts as shall be necessary to compensate
such Bank or the Administrative Agent, as the case may be, as specified in
Section 3.4, 3.7, 4.1 or 4.3, as the case may be, and certifying that such costs
are generally being charged by such Bank to other similarly situated borrowers
under similar credit facilities, which certificate shall be conclusive absent
manifest error. The Borrower shall pay to the Administrative Agent for the
account of such Bank or to the Administrative Agent for its own account, as the
case may be, the amount shown as due on any such certificate within ten Business
Days after its receipt of the same.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.1. Conditions Precedent to Loans. The agreement of each Bank to
make the initial Loans requested to be made by it is subject to the
satisfaction, prior to or concurrently with the making of such Loans on the
Closing Date, of the following conditions precedent:
(a) The Administrative Agent (or its counsel) shall have received (i) this
Agreement duly executed by the Borrower and each Bank and (ii) the Pledge
Agreement executed and delivered by the Borrower.
(b) The Administrative Agent (or its counsel) shall have received a
certificate dated as of the Closing Date of the Secretary or an Assistant
Secretary of the Borrower certifying (i) the names and true signatures of the
Responsible Officers of the Borrower authorized to sign each
36
Loan Document to which the Borrower is a party and the notices and other
documents to be delivered by the Borrower pursuant to any such Loan Document;
(ii) the operating agreement and certificate of formation of the Borrower as in
effect on the date of such certification; (iii) the resolutions of the Board of
Directors or equivalent thereof of the Borrower approving and authorizing the
execution, delivery and performance by the Borrower of each Loan Document to
which it is a party and any Notes from time to time issued hereunder and
authorizing the borrowings and other transactions contemplated hereunder and
(iv) that all material authorizations, approvals and consents by any
Governmental Authority or other Person necessary in connection with the
execution, delivery and performance of the Loan Documents and any other
regulatory approvals in respect thereof required to be obtained prior to the
Closing Date, have been obtained and are in full force and effect.
(c) The Administrative Agent shall have received an executed legal opinion,
dated the Closing Date, of (i) Xxxxx Xxxxx LLP, special counsel to the Borrower
and (ii) Xxxxx Xxxxx, Esq., deputy general counsel of the Borrower. Each such
legal opinion shall cover such matters incident to the transactions contemplated
by the Loan Documents as the Administrative Agent may reasonably require and
shall otherwise be in form and substance reasonably satisfactory to the
Administrative Agent.
(d) The Administrative Agent (or its counsel) shall have received a
certificate dated on or about the Closing Date of the Secretary of State of the
State of Texas as to the existence and good standing of the Borrower.
(e) The Administrative Agent shall have received satisfactory evidence that
(i) the Existing CenterPoint Credit Agreement shall concurrently be terminated
and all amounts owing thereunder shall concurrently be paid or refinanced in
full and (ii) satisfactory arrangements shall have been made for the termination
of all Liens granted in connection therewith, and the Borrower shall have
delivered such documentation with respect to the foregoing as the Administrative
Agent shall reasonably request.
(f) The effectiveness, substantially concurrent with the effectiveness of
this Agreement, of (i) the $200,000,000 credit facility arranged by X.X. Xxxxxx
Securities Inc. and Citigroup Global Markets Inc., as global coordinators, for
the Borrower and (ii) the $1,000,000,000 credit facility arranged by X.X. Xxxxxx
Securities Inc. and Citigroup Global Markets Inc., as global coordinators, for
CenterPoint.
(g) All governmental and third-party approvals necessary in connection with
the execution, delivery and performance by the Borrower of the Loan Documents
shall have been obtained and be in full force and effect, including without
limitation receipt of a financing order from the SEC.
(h) The Administrative Agent shall have received all financial statements
and other information as the Administrative Agent shall reasonably request,
including projections and pro forma balance sheets adjusted to give effect to
the financing contemplated hereby and the other financings described in clause
(f) above, and such financial statements shall not, in the reasonable judgment
of the Banks, reflect any material adverse change in the consolidated
37
financial condition of the Borrower and its Subsidiaries, as reflected in the
financial statements or projections contained in the Confidential Information
Memorandum.
(i) The Administrative Agent shall have received all fees required to be
paid on or before the Closing Date.
(j) All corporate and other proceedings, and all documents, instruments and
other legal matters in connection with the Facility shall be in form and
substance reasonably satisfactory to the Administrative Agent.
The Administrative Agent shall notify the Borrower and the Banks of the
Closing Date, and such notice shall be conclusive and binding.
SECTION 5.2. Conditions Precedent to Each Borrowing. The obligation of each
Bank to make each Loan (including, to the extent relevant, the initial Loans
hereunder) is subject to the satisfaction of the following conditions precedent:
(a) On or prior to the date of the making of such Loan, the Administrative
Agent shall have received from the Borrower a Notice of Borrowing in accordance
with the terms of this Agreement.
(b) The representations and warranties of the Borrower contained in Section
6.1 of this Agreement and in the other Loan Documents shall be true and correct
in all material respects on and as of the date of such Loan (except for those
representations or warranties or parts thereof that, by their terms, expressly
relate solely to a specific date, in which case such representations and
warranties shall be true and correct in all material respects as of such
specific date and, except at any time after the Closing Date, the
representations and warranties contained in Sections 6.1(j) and (k)), before and
after giving effect to such Loan, and to the application of the proceeds
therefrom, as though made on and as of such date.
(c) No Default or Event of Default shall have occurred and be continuing or
would result from such Loan.
(d) The Administrative Agent having received satisfactory evidence that (i)
an aggregate principal amount outstanding under the Existing Credit Agreement
shall have been repaid (or the proceeds of the Loans shall be applied to pay an
aggregate principal amount under the Existing Credit Agreement) in the principal
amount of the Loans being requested on the date of such Loan and, if all
outstanding amounts under the Existing Credit Agreement are being repaid in
full, the Existing Credit Agreement shall have been terminated and (ii)
satisfactory arrangements shall have been made for the termination of all liens
granted in connection with the amounts being repaid under the Existing Credit
Agreement and, if all outstanding amounts under the Existing Credit Agreement
are being repaid in full, all liens granted in connection with the Existing
Credit Agreement shall have been terminated.
(e) The Administrative Agent having received general mortgage bonds in an
aggregate principal amount equal to at least the aggregate principal amount of
the Loans being requested on the date of such Loan and an opinion of counsel to
the Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, in respect of the Collateral, and all
38
documents and instruments required to create a perfected security interest
therein, prior and superior in right to any other Person, shall have been
executed and be in proper form for filing.
(f) Each of the giving of any applicable Notice of Borrowing or the
acceptance by the Borrower of the proceeds of each Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Loan that
the conditions contained in this Section 5.2 have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) Organizational Status of the Borrower. The Borrower (i) is validly
organized and existing as a limited liability company and in good standing under
the laws of its jurisdiction of formation; (ii) is duly authorized or qualified
to do business in and is in good standing in each other jurisdiction in which
the conduct of its business or the ownership or leasing of its Property requires
it to be so authorized or qualified to do business, except where the failure to
be so duly authorized or qualified or in good standing, individually or in the
aggregate, would not have a Material Adverse Effect, and (iii) has the corporate
or other requisite power and authority to conduct its business, as presently
conducted.
(b) Organizational Status of Significant Subsidiaries of the Borrower. Each
Significant Subsidiary of the Borrower (i) is validly organized and existing and
in good standing under the laws of the jurisdiction of its organization and is
duly authorized or qualified to do business in and is in good standing in each
other jurisdiction in which the conduct of its business or the ownership or
leasing of its Property requires it to be so authorized or qualified to do
business, except where the failure to be so validly organized and existing or
duly authorized or qualified or in good standing, individually or in the
aggregate, would not have a Material Adverse Effect and (ii) has the corporate,
partnership or other requisite power and authority to conduct its business, as
presently conducted, except where the failure to have such power and authority,
individually or in the aggregate, would not have a Material Adverse Effect.
(c) Organizational Powers. The Borrower has the corporate or other
requisite power to execute, deliver and perform and comply with its obligations
under this Agreement, any Notes and the other Loan Documents to which it is a
party. This Agreement has been, and each other Loan Document to which the
Borrower is a party will be, duly executed and delivered on behalf of the
Borrower.
(d) Authorization, No Conflict, Etc. The borrowings by the Borrower
contemplated by this Agreement, the execution and delivery by the Borrower of
this Agreement and the other Loan Documents to which it is a party and the
performance by the Borrower of its obligations hereunder and thereunder have
been duly authorized by all requisite corporate or other requisite action on the
part of the Borrower and do not and will not (i) violate any law, any order to
which the Borrower or any Restricted Subsidiary of the Borrower is subject of
any court or other
39
Governmental Authority, or the articles of incorporation or bylaws or other
organizational documents (each as amended from time to time) of the Borrower or
any Restricted Subsidiary of the Borrower; (ii) violate, conflict with, result
in a breach of or constitute (with due notice or lapse of time or both, or any
other condition) a default under, any indenture, loan agreement or other
agreement to which the Borrower or any Restricted Subsidiary of the Borrower is
a party or by which the Borrower or any Restricted Subsidiary of the Borrower,
or any of their respective Property, is bound (except for such violations,
conflicts, breaches or defaults that, individually or in the aggregate, do not
have or would not have a Material Adverse Effect); or (iii) result in, or
require, the creation or imposition of any material Lien upon any of the
Properties of the Borrower or any Significant Subsidiary not permitted under
this Agreement.
(e) Governmental Approvals and Consents. No authorization or approval or
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower of, or
for the Borrowings under, this Agreement and the other Loan Documents to which
it is a party, except those that have been obtained.
(f) Obligations Binding. This Agreement and the other Loan Documents to
which the Borrower is a party are the legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their
respective terms (assuming due and valid authorization, execution and delivery
of this Agreement by any party other than the Borrower), except as such
enforceability may be (i) limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) subject to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(g) Use of Proceeds, Margin Stock. The proceeds of the Loans will be used
by the Borrower solely to repay the amounts outstanding under the Existing
Credit Agreement. Neither the Borrower nor any Restricted Subsidiary of the
Borrower is principally engaged in, or has as one of its important activities,
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock, and no part of the proceeds of any Loan made to the Borrower will
be used for any purpose that would violate the provisions of the margin
regulations of the Board.
(h) Title to Properties. The issued and outstanding Capital Stock owned by
the Borrower of each of its Significant Subsidiaries whether such stock is owned
directly or indirectly through one or more of its Subsidiaries, is owned free
and clear of any Lien. In addition, each of the Borrower and each Significant
Subsidiary has good title to the Properties reflected in the financial
statements referred to in Section 6.1(m) and in any financial statements
delivered pursuant to Section 7.1(a), except for such Properties that have been
disposed of subsequent to the dates of the balance sheets included in such
financial statements and that are no longer used or useful in the conduct of the
business of the Borrower or any Significant Subsidiary or that have been
disposed of pursuant to Section 7.2(b) or (c) or that have been disposed of in
the ordinary course of their respective business, and all such Properties are
free and clear of any Lien except Liens permitted under this Agreement.
40
(i) Investment Company Act. Neither the Borrower nor any Restricted
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.
(j) Material Adverse Change. Since December 31, 2003, there has been no
event, development or circumstance that, as of the Closing Date, has or would
reasonably be expected to have a Material Adverse Effect.
(k) Litigation. As of the Closing Date, there is no litigation, action,
suit, investigation or other legal or governmental proceeding pending or, to the
best knowledge of the Borrower, threatened, at law or in equity, or before or by
any arbitrator or Governmental Authority (i) relating to the transactions under
this Agreement or under any other Loan Document or (ii) in which there is a
reasonable possibility of an adverse decision that would have a Material Adverse
Effect.
(l) ERISA. Neither the Borrower nor any Significant Subsidiary has incurred
any material liability or deficiency arising out of or in connection with (i)
any Reportable Event or "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) with respect to any Plan that
has occurred during the five-year period immediately preceding the date on which
this representation is made or deemed made, (ii) any failure of a Plan to comply
with the applicable provisions of ERISA and the Code, (iii) any termination of a
Single Employer Plan, (iv) any complete or partial withdrawal by the Borrower or
any Commonly Controlled Entity from any Multiemployer Plan or (v) any Lien in
favor of the PBGC or any Plan that has arisen during the five-year period
referred to in clause (i) above. In addition, no Multiemployer Plan is in
Reorganization or is Insolvent, where such Reorganization or Insolvency,
individually or when aggregated with the events described in the first sentence
of this Section 6.1(l), is likely to result in a material liability or
deficiency of the Borrower or any Significant Subsidiary. As used in this
Section 6.1(1), any liability or deficiency shall be deemed not to be "material"
so long as the sum of all liabilities and deficiencies referred to in this
Section 6.1(1) at any one time outstanding, individually and in the aggregate,
is less than $25,000,000.
(m) Financial Statements. The consolidated financial statements of the
Borrower as of and for the nine months ended September 30, 2004 filed with the
SEC with the Borrower's 10-Q for the period then ended, copies of which have
been delivered to the Banks, present fairly in all material respects the
consolidated financial condition and results of operations of the Borrower, its
Consolidated Subsidiaries and the Unrestricted Subsidiaries as of such date and
for the period then ended, in conformity with, as applicable, GAAP and, except
as otherwise stated therein, consistently applied (in the case of such unaudited
statements, subject to year-end adjustments and the exclusion of detailed
footnotes).
(n) Accuracy of Information. None of the documents or written information
(excluding estimates, financial projections and forecasts) provided by the
Borrower to the Banks in connection with or pursuant to this Agreement or the
other Loan Documents contains as of the date thereof or will contain as of the
date thereof any untrue statement of a material fact or omits or will omit to
state as of the date thereof a material fact (other than industry-wide risks
normally associated with the types of businesses conducted by the Borrower and
its Subsidiaries)
41
necessary to make the statements therein, in the light of the circumstances
under which they were made, not materially misleading, as a whole. The
estimates, financial projections and forecasts furnished to the Banks by the
Borrower with respect to the transactions contemplated under this Agreement were
prepared in good faith and on the basis of information and assumptions that the
Borrower believed to be reasonable as of the date of such information; it being
recognized by the Banks that such estimates, financial projections and forecasts
as they relate to future events are not to be viewed as fact and that actual
results during the period or periods covered by such estimates, financial
projections and forecasts may differ from the projected results set forth
therein by a material amount.
(o) No Violation. The Borrower is not in violation of any order, writ,
injunction or decree of any court or any order, regulation or demand of any
Governmental Authority that, individually or in the aggregate, reasonably could
be expected to have a Material Adverse Effect.
(p) Subsidiaries. Schedule 6.1(p) attached hereto sets forth each
Significant Subsidiary as of the date hereof. Except as disclosed on Schedule
6.1(p), as of the date hereof the Borrower owns, directly or indirectly through
one or more of its Subsidiaries, all of the outstanding Capital Stock of each
Significant Subsidiary, in each case free and clear of any Liens not permitted
under this Agreement.
(q) Taxes. The Borrower and each of its Subsidiaries has filed or caused to
be filed all Federal, state and other material tax returns that are required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its Property and all other taxes,
fees or other charges imposed on it or any of its Property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Subsidiaries), except where the failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such tax, fee or other charges (other than
any Liens or claims that could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect).
(r) Pledge Agreement. The Pledge Agreement is effective to create in favor
of the collateral agent thereunder, for the benefit of the Banks, a legal, valid
and enforceable security interest in the Collateral described therein and
proceeds thereof. When certificates representing the Collateral are delivered to
the Administrative Agent or when financing statements in appropriate form are
filed with the appropriate office in the State of Texas, upon execution thereof,
the Pledge Agreement shall constitute a fully perfected lien in, and security
interest in, all right, title and interest in the Collateral, prior and superior
in right to any other Person.
42
ARTICLE VII
AFFIRMATIVE AND NEGATIVE COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower covenants that, as long as
any amount is owing hereunder or under any other Loan Documents, or any Bank
shall have any Commitment outstanding under this Agreement:
(a) Delivery of Financial Statements, Notices and Certificates. The
Borrower shall deliver to the Administrative Agent for distribution to the Banks
sufficient copies for each of the Banks of the following:
(i) as soon as practicable and in any event within 90 days after the
end of each fiscal year of the Borrower (beginning with fiscal 2004), a
consolidated balance sheet of the Borrower, its Consolidated Subsidiaries
and the Unrestricted Subsidiaries as of the end of such fiscal year and the
related statements of consolidated income, retained earnings and cash flows
prepared in conformity with GAAP consistently applied, setting forth in
comparative form the figures for the previous fiscal year, together with a
report thereon by independent certified public accountants of nationally
recognized standing selected by the Borrower (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 SEC);
(ii) as soon as practicable and in any event within 55 days after the
end of each of the first three quarters of each fiscal year of the Borrower
(beginning with the quarter ending March 31, 2005), unaudited consolidated
financial statements of the Borrower, its Consolidated Subsidiaries and the
Unrestricted Subsidiaries consisting of at least consolidated balance
sheets as at the close of such quarter and statements of consolidated
income, retained earnings and cash flows for such quarter and for the
period from the beginning of such fiscal year to the close of such quarter
(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
SEC); such financial statements shall be accompanied by a certificate of a
Responsible Officer of the Borrower to the effect that such unaudited
financial statements present fairly in all material respects the
consolidated financial condition and results of operations of the Borrower,
its Consolidated Subsidiaries and the Unrestricted Subsidiaries as of such
date for the period then ending, and have been prepared in conformity with
GAAP in a manner consistent with the financial statements referred to in
paragraph (a)(i) above (subject to year-end adjustments and exclusion of
detailed footnotes);
(iii) with each set of statements to be delivered pursuant to Sections
7.1(a)(i) and (ii) above, a certificate in a form reasonably satisfactory
to the Administrative Agent, signed by a Responsible Officer of the
Borrower confirming compliance with Section 7.2(a) and setting out in
reasonable detail the calculations necessary to demonstrate such compliance
as at the date of the most recent balance sheet included in such financial
statements and stating that no Default or Event of Default has occurred and
43
is continuing or, if there is any Default or Event of Default, describing
it and the steps, if any, being taken to cure it; and
(iv) (A) within ten 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 SEC; (B) promptly, and in any event within seven (7) Business Days
after a Responsible Officer of the Borrower becomes aware of the occurrence
thereof, written notice of (x) any Event of Default or any Default, (y) the
institution of (I) any litigation, action, suit or other legal or
governmental proceeding involving the Borrower or any Restricted Subsidiary
of the Borrower as to which there is a reasonable possibility of an adverse
decision that would have a Material Adverse Effect on the Borrower or (II)
any other final adverse determination in any litigation, action, suit or
other legal or governmental proceeding involving the Borrower or any
Significant Subsidiary of the Borrower (1) in the True-Up Litigation or (2)
that would have a Material Adverse Effect or (z) the incurrence by the
Borrower or any Significant Subsidiary of a material liability or
deficiency not permitted under this Agreement, or the existence of an event
that could reasonably be expected to result in a material liability or
deficiency, arising out of or in connection with (1) any Reportable Event
with respect to any Plan, (2) the failure to make any required contribution
to a Plan, (3) the creation of any Lien in favor of the PBGC or a Plan, (4)
any withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (5) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the termination, Reorganization or Insolvency of, any Plan; provided that,
as used in this clause (z), any liability or deficiency shall be deemed not
to be "material" so long as the sum of all liabilities and deficiencies
referred to in this clause (z) at any one time outstanding, individually
and in the aggregate, is less than $25,000,000; (C) with each set of
statements delivered pursuant to Section 7.1(a)(i), a certificate signed by
a Responsible Officer of the Borrower identifying those Subsidiaries which,
determined as of the date of such financial statements, are Significant
Subsidiaries and Unrestricted Subsidiaries; and (D) such other information
relating to the Borrower or its business, properties, condition and
operations as the Administrative Agent (or any Bank through the
Administrative Agent) may reasonably request.
Information required to be delivered pursuant to the foregoing Sections
7.1(a)(i), (ii), and (iv)(A) 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 Banks) that such information has been posted on the SEC website on the
Internet at xxx.xxx/xxxxx/xxxxxxxx.xxx or at another website identified in such
notice and accessible by the Banks without charge; provided that (i) such notice
may be included in a certificate delivered pursuant to Section 7.1(a)(iii) and
(ii) the Borrower shall deliver paper copies of such information to the
Administrative Agent, and the Administrative Agent shall deliver paper copies of
such information to any Bank that requests such delivery.
44
(b) Use of Proceeds. The Borrower will use the proceeds of any Loan made by
the Banks to it for the purposes set forth in Section 6.1(g), and it will not
use the proceeds of any Loan made by the Banks for any purpose that would
violate the provisions of the margin regulations of the Board. The 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.
(c) Existence; Laws. The Borrower will and will cause each of its
Significant Subsidiaries to, do or cause to be done all things necessary (i) to
preserve, renew and keep in full force and effect its legal existence and all
rights, licenses, permits and franchises (except to the extent otherwise
permitted by Sections 7.2(c) or 7.2(e)) and (ii) to comply with all laws and
regulations applicable to it, except in each case, where the failure to do so,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(d) Maintenance of Properties. The Borrower will, and will cause each
Significant Subsidiary to, preserve and maintain all of its Property that is
material to the conduct of its business, provided, however, that nothing in this
Section 7.1(d) shall prevent (a) the Borrower or any of its Significant
Subsidiaries from selling, abandoning or otherwise disposing of any Properties
(including the Capital Stock of any Subsidiary of the Borrower that is not a
Significant Subsidiary), the retention of which in the good faith judgment of
the Borrower or such Significant Subsidiary is inadvisable or unnecessary to the
business of the Borrower and its Subsidiaries, taken as a whole, or the failure
to maintain would not reasonably be expected to have a Material Adverse Effect
or (b) any other transaction that is expressly permitted by the terms of any
other provision of this Agreement.
(e) Maintenance of Business Line. The Borrower will maintain its
fundamental business of providing services and products in the energy market.
(f) Books and Records; Access. The Borrower will, and will cause each
Significant Subsidiary to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities as required by GAAP. The Borrower will,
and will cause each of its Significant Subsidiaries to, at any reasonable time
and from time to time, permit up to six representatives of the Banks designated
by the Majority Banks, or representatives of the Administrative Agent, on not
less than five 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 Significant 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 Significant Subsidiaries shall be required to disclose
to any Agent, any Bank 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
45
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 and be continuing.
(g) Insurance. The Borrower will and will cause each of its Significant
Subsidiaries to, maintain insurance with responsible and reputable insurance
companies or associations, or to the extent that the Borrower or such
Significant Subsidiary deems it prudent to do so, through its own program of
self-insurance, in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses, of comparable size and financial
strength and with comparable risks.
(h) Corporate Rating. The Borrower will deliver to the Administrative Agent
notice of any change by a Rating Agency in its credit or corporate rating
promptly upon the effectiveness of such change.
SECTION 7.2. Negative Covenants. The Borrower covenants that, so long as
any amount is owing to the Banks hereunder or under any other Loan Documents or
any Bank shall have any Commitment outstanding under this Agreement, the
Borrower will not:
(a) Financial Ratios.
(i) Permit at any time the ratio of Consolidated Indebtedness at such
time to Consolidated Capitalization for the most recently ended
twelve-month period to exceed 68%.
(ii) Permit at any time the ratio of Consolidated EBITDA for the most
recently ended twelve-month period ending during any period set forth below
to Adjusted Interest Expense for such period to be less than the ratio set
forth below opposite such period:
PERIOD RATIO
------ ---------
Date hereof through December 31, 2005 1.75:1.0
January 1, 2006 through the Term Loan
Maturity Date 2.00:1.00
(b) Certain Liens. And will not permit any of its Restricted Subsidiaries
to, pledge, mortgage, hypothecate or xxxxx x Xxxx upon, or permit any mortgage,
pledge, security interest or other Lien upon, any Property of the Borrower or
any Restricted Subsidiary of the Borrower now or hereafter owned directly or
indirectly by the Borrower; provided, however, that this restriction shall
neither apply to nor prevent the creation or existence of:
(i) Permitted Liens;
(ii) (A) any Lien in existence on the date hereof; provided that no
such Lien described in this clause (ii) encumbers any additional Property
after the date hereof and
46
that the principal amount of Indebtedness of the Borrower or any of its
Subsidiaries secured thereby is not increased;
(iii) Liens securing bonds issued after the Closing Date pursuant to
the Original Mortgage (to the extent the proceeds thereof are used to
replace, refund or refinance first mortgage bonds outstanding on the date
hereof) or the General Mortgage Indenture (or second or subordinated, as
the case may be, Liens in lieu thereof);
(iv) 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);
(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 (i) such Liens
secure Indebtedness otherwise permitted by this Agreement, (ii) 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, (iii)
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 (iv) 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;
(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) Liens on the stock or assets of Securitization Subsidiaries
47
(xi) any extension, renewal or refunding of any Lien permitted by
clauses (i) through (x) 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 7.2(a);
(xii) Liens on cash collateral to secure obligations of the Borrower
and its Restricted Subsidiaries in respect of cash management arrangements
with any Bank or Affiliate thereof;
(xiii) Liens securing the Facility; and
(xiv) Liens not otherwise permitted by this Section 7.2(b) 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.
(c) Consolidation, Merger 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 Properties to any
Person; provided, however, that nothing contained in this Section 7.2(c) shall
prohibit (A) a merger involving a Subsidiary of the Borrower (including mergers
to reincorporate or change the domicile of such Subsidiary) if any Wholly-Owned
Significant Subsidiary of the Borrower is the surviving entity thereof; (B) the
liquidation, winding up or dissolution of a Significant Subsidiary of the
Borrower if all of the Properties of such Significant Subsidiary are conveyed,
transferred or distributed to the Borrower or a Person that after giving effect
to such transaction is a Wholly-Owned Significant Subsidiary of the Borrower;
(C) the conveyance, sale, transfer or other disposal of all or substantially all
(or any lesser portion) of the Properties of any Significant Subsidiary of the
Borrower to the Borrower or a Person that after giving effect to such
transaction is a Wholly-Owned Significant Subsidiary of the Borrower; or (D) the
transfer of assets in connection with the issuance of Securitization Securities;
provided that, in each case, immediately before and after giving effect to any
such merger, dissolution or liquidation, or conveyance, sale, transfer, lease or
other disposition, no Default or Event of Default shall have occurred and be
continuing.
(d) Sale of Significant Subsidiary Stock. And will not permit the sale,
assignment, transfer or other disposal of any of the Capital Stock of any
Significant Subsidiary. Notwithstanding the foregoing provisions of Section
7.2(c) or this Section 7.2(e), (x) the Borrower or any Significant Subsidiary
may sell, assign, transfer or otherwise dispose of (i) any of the Capital Stock
of any Significant Subsidiary to the Borrower or to a Wholly-Owned Subsidiary of
the Borrower that constitutes a Significant Subsidiary after giving effect to
such transaction; (ii) the Texas Genco Stock; and (iii) any of the Capital Stock
of any Subsidiary that is not a Significant Subsidiary and (y) any Significant
Subsidiary shall have the right to issue, sell, assign, transfer or otherwise
dispose of for value its preference or preferred stock in one or
48
more bona fide transactions to any Person; provided that immediately before and
after giving effect to any such Disposition described in the foregoing clauses
(x) and (y), no Event of Default or Default shall have occurred and be
continuing.
(e) Agreements Restricting Dividends. And will not permit any Significant
Subsidiary to enter into, incur or permit to exist any agreement or other
consensual arrangement that explicitly prohibits or restricts the payment by any
Significant Subsidiary of dividends or other distributions with respect to any
shares of its Capital Stock; 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 and (iv) any restrictions with respect to
a Significant Subsidiary imposed pursuant to an agreement that has been entered
into in connection with a disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary.
(f) Certain Investments, Loans, Advances, Guarantees and Acquisitions. And
will not 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 obligations 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 such Investment, 10% of the Net Tangible Assets.
SECTION 7.3. Borrower's Accounting Reorganization.
(a) The Borrower has advised the Banks that it is considering an accounting
reorganization of its operations and corporate structure that would involve the
extinguishment of a negative retained earnings balance and the restatement of
its assets and its liabilities to their fair values (the "Accounting
Reorganization").
(b) In the event that the Accounting Reorganization occurs, the Borrower
shall notify the Administrative Agent thereof and notwithstanding any of the
terms, conditions or provisions of this Agreement or the other Loan Documents to
the contrary, compliance with the financial covenants, standards, terms and
conditions in this Agreement and the Loan Documents shall be
49
based on the performance by the Borrower and its Subsidiaries therewith as
though the Accounting Reorganization had not occurred and the Borrower shall
deliver, together with the certificates required under Section 7.1(a)(iii), pro
forma financial statements prepared on the basis that the Accounting
Reorganization had not occurred.
(c) In addition, the Borrower may request various amendments to the
covenants, representations, Events of Defaults and the other standards, terms
and conditions of this Agreement and the Loan Documents. If so requested, the
Borrower and the Banks agree to enter into negotiations in order to amend such
provisions (with the agreement of the Majority Banks or, if required by Section
10.1, all of the Banks) so as to equitably reflect such changes with the desired
result that the criteria for evaluating any of the Borrower's and its Restricted
Subsidiaries' financial condition shall be the same after the Accounting
Reorganization as if such Accounting Reorganization had not occurred. Each of
the Banks agrees to consider these requests and proposed amendments in good
faith and agrees not to unreasonably withhold or delay its consent to such
amendments. Unless and until such provisions have been so amended, Section
7.3(b) shall govern the Borrower's compliance with this Agreement and the Loan
Documents.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default":
(a) Non-Payment of Principal, Interest and Commitment Fee. The Borrower
fails to pay, in the manner provided in this Agreement, (i) any principal
payable by it hereunder when due or (ii) any interest payment or any Commitment
Fee payable by it hereunder within five (5) Business Days after its due date; or
(b) Non-Payment of Other Amounts. The Borrower fails to pay, in the manner
provided in this Agreement, any other amount (other than the amounts set forth
in Section 8.1(a) above) payable by it hereunder within ten (10) Business Days
after notice of such payment is received by the Borrower from the Administrative
Agent; or
(c) Breach of Representation or Warranty. Any representation or warranty by
the Borrower in Section 6.1, in any other Loan Document or in any certificate,
document or instrument delivered by the Borrower under this Agreement shall have
been incorrect in any material respect when made or when deemed hereunder to
have been made; or
(d) Breach of Certain Covenants. Borrower fails to perform or comply with
any one or more of its obligations under Section 7.1(a)(iv)(B)(x), Section 7.2
or Section 4 of the Pledge Agreement; or
(e) Breach of Other Obligations. Borrower does not perform or comply with
any one or more of its other obligations under this Agreement (other than those
set forth in Section 8.1(a), (b) or (d) above) or under any other Loan Document
and such failure to perform or comply shall
50
not have been remedied within 30 days after the earlier of notice thereof to it
by the Administrative Agent or the Majority Banks or discovery thereof by a
Responsible Officer of the Borrower; or
(f) Other Indebtedness. (i) The Borrower or any Significant Subsidiary
fails to pay when due (either at stated maturity or by acceleration or otherwise
but subject to applicable grace periods) any principal or interest in respect of
any Indebtedness for Borrowed Money, Secured Indebtedness or Junior Subordinated
Debt (other than Indebtedness of the Borrower under this Agreement) if the
aggregate principal amount of all such Indebtedness for which such failure to
pay shall have occurred and be continuing exceeds $50,000,000 or (ii) any
default, event or condition shall have occurred and be continuing with respect
to any Indebtedness for Borrowed Money, Secured Indebtedness or Junior
Subordinated Debt of the Borrower or any Significant Subsidiary (other than
Indebtedness of the Borrower under this Agreement), the effect of which default,
event or condition is to cause, or to permit the holder thereof to cause, (A)
such Indebtedness to become due prior to its stated maturity (other than in
respect of mandatory prepayments required thereby) or (B) in the case of any
Guarantee of Indebtedness for Borrowed Money of any Person or Junior
Subordinated Debt by the Borrower or any of its Significant Subsidiaries the
primary obligation (as such term is defined in the definition of "Guarantee" in
Section 1.1) to which such Guarantee relates to become due prior to its stated
maturity, if the aggregate amount of all such Indebtedness or primary
obligations (as the case may be) that is or could be caused to be due prior to
its stated maturity exceeds $50,000,000; or
(g) Involuntary Bankruptcy, Etc. (i) There shall be commenced against the
Borrower or any Significant Subsidiary any case, proceeding or other action (A)
seeking a decree or order for relief in respect of the Borrower or any
Significant Subsidiary under any applicable domestic or foreign bankruptcy,
insolvency, reorganization or other similar law, (B) seeking a decree or order
adjudging the Borrower or any Significant Subsidiary a bankrupt or insolvent,
(C) except as permitted by Section 7.2(c)(ii), seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other similar relief of or in respect of the Borrower or any Significant
Subsidiary or their respective debts under any applicable domestic or foreign
law or (D) seeking the appointment of a custodian, receiver, conservator,
liquidator, assignee, trustee, sequestrator or other similar official of the
Borrower or any Significant Subsidiary or of any substantial part of their
respective Properties, or the liquidation of their respective affairs, and such
petition is not dismissed within 90 days or (ii) a decree, order or other
judgment is entered in respect of any of the remedies, reliefs or other matters
for which any petition referred to in (i) above is presented or (iii) there
shall be commenced against the Borrower or any Significant Subsidiary any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged or stayed or bonded pending appeal within 90
days from the entry thereof; or
(h) Voluntary Bankruptcy, Etc. (i) The commencement by the Borrower or any
Significant Subsidiary of a voluntary case, proceeding or other action under any
applicable domestic or foreign bankruptcy, insolvency, reorganization or other
similar law (A) seeking to have an order of relief entered with respect to it,
(B) seeking to be adjudicated a bankrupt or insolvent, (C) seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other similar relief with respect to it or its debts under any
applicable
51
domestic or foreign law or (D) seeking the appointment of or the taking
possession by a custodian, receiver, conservator, liquidator, assignee, trustee,
sequestrator or similar official of the Borrower or any Significant Subsidiary
of any substantial part of its Properties; or (ii) the making by the Borrower or
any Significant Subsidiary of a general assignment for the benefit of creditors;
or (iii) the Borrower or any Significant Subsidiary shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts described in clause (i) or (ii) above or in Section 8.1(g); or
(iv) the admission by the Borrower or any Significant Subsidiary in writing of
its inability to pay its debts generally as they become due or the failure by
the Borrower or any Significant Subsidiary generally to pay its debts as such
debts become due; or
(i) Enforcement Proceedings. A final judgment or decree for the payment of
money (not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) which, together with all other such judgments
or decrees against the Borrower or any Significant Subsidiary then outstanding
and unsatisfied, exceeds $25,000,000 in aggregate amount shall be rendered
against the Borrower or any Significant Subsidiary and the same shall remain
undischarged for a period of 60 days, during which the execution thereon shall
not effectively be stayed, released, bonded or vacated; or
(j) ERISA Events. The Borrower or any Significant Subsidiary shall incur
any liability arising out of (A) any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (B) the
occurrence of any "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) by a Plan, whether or not
waived, or any Lien in favor of the PBGC or a Plan on the assets of the Borrower
or any Commonly Controlled Entity, (C) the occurrence of a Reportable Event with
respect to, or the commencement of proceedings under Section 4042 of ERISA to
have a trustee appointed, or the appointment of a trustee under Section 4042 of
ERISA, to administer or to terminate any Single Employer Plan, which Reportable
Event, commencement of proceedings or appointment of a trustee which would
reasonably be expected to result in the termination of such Plan for purposes of
Title IV of ERISA, (D) the termination of any Single Employer Plan for purposes
of Title IV of ERISA, (E) withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan or (F) the occurrence of any other event or condition
with respect to a Plan, and any of such items (A) through (F) above results in
or would reasonably be expected to result in a material liability or deficiency
of the Borrower or any Significant Subsidiary; provided, however, that for
purposes of this Section 8.1(j), any liability or deficiency of the Borrower or
any Significant Subsidiary shall be deemed not to be material so long as the sum
of all liabilities or deficiencies referred to in this Section 8.1(j) at any one
time outstanding, individually and in the aggregate, is less than $25,000,000;
or
(k) Change in Control. A Change in Control shall have occurred; or
(l) Pledge Agreement. (i) The Pledge Agreement shall cease, for any reason
(other than in accordance with its terms), to be in full force and effect or the
Borrower or any Affiliate of the Borrower shall so assert (other than in
accordance with its terms), or (ii) any Lien created by the Pledge Agreement
shall cease to be enforceable and of the same effect and priority purported to
be created thereby (other than in accordance with its terms).
52
SECTION 8.2. Cancellation/Acceleration. If at any time and for any reason
(whether within or beyond the control of any party to this Agreement):
(a) either of the Events of Default specified in Section 8.1(g) or 8.1(h)
occurs with respect to the Borrower, then automatically:
(i) the Commitments shall immediately be cancelled; and
(ii) all Loans made hereunder, all unpaid accrued interest or fees and
any other sum payable under this Agreement or any other Loan Document shall
become immediately due and payable; or
(b) any other Event of Default specified in Section 8.1 occurs and, while
such Event of Default is continuing, the Administrative Agent, having been so
instructed by the Majority Banks, by notice to the Borrower shall so declare
that:
(i) the Commitments shall immediately be cancelled; and/or
(ii) either (A) all Loans made hereunder, all unpaid accrued interest
or fees and any other sum payable under this Agreement or any other Loan
Document shall become immediately due and payable or (B) all Loans made
hereunder, all unpaid accrued interest or fees and any other sum payable
under this Agreement or any other Loan Document shall become due and
payable at any time thereafter immediately on demand by the Administrative
Agent (acting on the instructions of the Majority Banks).
Except as expressly provided above in this Section 8.2, presentment, demand,
protest, notice of intent to accelerate, notice of acceleration and all other
notices of any kind whatsoever are hereby expressly waived by the Borrower.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Appointment. Each Bank hereby irrevocably designates and
appoints Citibank, N.A. as the Administrative Agent of such Bank under this
Agreement and the other Loan Documents, and each such Bank irrevocably
authorizes Citibank, N.A., as the Administrative Agent for such Bank, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, (a) the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent and (b) the other Agents and the Lead Arrangers shall not
have any duties or responsibilities hereunder, or any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
53
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the other Agents or the Lead Arrangers.
SECTION 9.2. Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 9.3. Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent or any other Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any Note or any other Loan Document or for any failure of the
Borrower to perform its obligations hereunder or thereunder. The Agents shall
not be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower.
SECTION 9.4. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
facsimile, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note or any loan
account in the Register as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed with
the Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Banks (or, if so specified by this Agreement, all Banks) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Majority Banks (or, if so specified by this Agreement, all Banks), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Banks and all future holders of the amounts owing hereunder.
SECTION 9.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless
54
the Administrative Agent has received notice from a Bank or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Banks. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Majority Banks; provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
SECTION 9.6. Non-Reliance on Administrative Agent and Other Banks. Each
Bank expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by any Agent to any Bank.
Each Bank represents to the Agents that it has, independently and without
reliance upon any Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Bank also represents
that it will, independently and without reliance upon any Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Administrative
Agent hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower that may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, Administrative Agent, attorneys-in-fact or Affiliates.
SECTION 9.7. Indemnification. The Banks agree to indemnify the Agents and
the Lead Arrangers in their respective capacities as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective applicable Revolving
Percentages in effect on the date on which indemnification is sought under this
Section 9.7, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of all amounts owing hereunder and the
termination of the Commitments) be imposed on, incurred by or asserted against
the Agents or the Lead Arrangers, as the case may be, in any way relating to or
arising out of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agents or
the Lead Arrangers, as the case may be, under or in connection with any of the
foregoing; provided that no Bank shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agents' or
the Lead
55
Arrangers', as the case may be, gross negligence or willful misconduct. The
agreements in this Section 9.7 shall survive the payment of all amounts payable
hereunder.
SECTION 9.8. Agent in Its Individual Capacity. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though such Agent were not an Agent
hereunder and under the other Loan Documents. With respect to its Loans made or
renewed by it and its Commitment hereunder, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any Bank
and may exercise the same as though it were not an Agent, and the terms "Bank"
and "Banks" shall include the each Agent in its individual capacity.
SECTION 9.9. Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Banks and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Majority Banks shall
appoint from among the Banks a successor agent for the Banks, which successor
agent shall be approved by the Borrower, whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement or any holders of any amounts payable hereunder; provided that if
an Event of Default has occurred and is continuing, no consent of the Borrower
shall be required. If a successor Administrative Agent shall not have been so
appointed within said 30-day period, the Administrative Agent may then appoint a
successor Administrative Agent who shall be a financial institution engaged or
licensed to conduct banking business under the laws of the United States with an
office in New York City and that has total assets in excess of $500,000,000 and
who shall serve as Administrative Agent until such time, if any, as an
Administrative Agent shall have been appointed as provided above. After any
retiring Administrative Agent's resignation or removal as Administrative Agent,
the provisions of this Article X 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 and the other Loan Documents.
Notwithstanding anything to the contrary contained herein, no Bank
identified as an "Agent", "Arranger" or "Global Coordinator" other than the
Administrative Agent, shall have the right, power, obligation, liability,
responsibility or duty under this Agreement or any Loan Document other than
those applicable to all Banks as such. Without limiting the foregoing, none of
the Banks so identified shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on any of the Banks so identified in deciding to enter into this
Agreement or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Amendments and Waivers. Neither this Agreement, any Note, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except pursuant to an instrument or instruments in
writing executed in accordance with
56
the provisions of this Section 10.1. The Majority Banks may, or, with the
written consent of the Majority Banks, the Administrative Agent may, from time
to time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to any Notes and the other Loan Documents for the
purpose of adding any provisions to this Agreement or any Notes or the other
Loan Documents or changing in any manner the rights of the Banks or of the
Borrower hereunder or thereunder or (b) waive, on such terms and conditions as
the Majority Banks or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or any Notes or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(i) reduce the amount or extend the scheduled date of maturity of any
Note or Loan, or reduce the stated rate of any interest or fee (including
the prepayment premium provided for in Section 4.6) payable hereunder or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Bank's Commitments, in each case without
the consent of each Bank directly affected thereby;
(ii) amend, modify or waive any provision of this Section or of
Section 4.2 in a manner that would alter the pro rata sharing of payments
required thereby, or reduce the percentage specified in the definition of
Majority Banks, or consent to the assignment or transfer by the Borrower of
any of its respective rights and obligations under this Agreement and the
other Loan Documents or release all or substantially all of the Collateral,
in each case without the written consent of all the Banks; or
(iii) amend, modify or waive any provision of Article IX without the
written consent of the then Administrative Agent.
Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Banks and shall be binding upon the Borrower,
the Banks, the Administrative Agent and all future holders of the amounts
payable hereunder. In the case of any waiver (to the extent specified therein),
the Borrower, the Banks, and the Administrative Agent shall be restored to their
former position and rights hereunder and under any outstanding Notes and any
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
SECTION 10.2. Notices. Unless otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile followed by any original
sent by mail or delivery), and, shall be deemed to have been duly given or made
when delivered by hand, or three days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed as follows
in the case of the Borrower and the Administrative Agent, and as set forth in
Schedule 1.1(A) in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the amounts payable hereunder:
57
Borrower: 0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Assistant Treasurer
Telecopy: (000) 000-0000
With a copy to: Xxxx Xxxxxxxx
Treasurer
Telecopy: (000) 000-0000
The
Administrative
Agent: Citibank, N.A.
0 Xxxxx Xxx, Xxxxx 000, 0xx Xxxxx
Xxx Xxxxxx, XX 000000
Attention: Xxxxxxxxx Xxxx
Telecopy: (000) 000-0000
With a copy to: Citibank, N.A.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Nietzsche Rodricks
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Banks shall not be effective until received.
SECTION 10.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 10.4. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.
SECTION 10.5. Payment of Expenses and Taxes; Indemnity. The Borrower agrees
(a) to pay all reasonable out-of-pocket expenses of the Global Coordinators
associated with the syndication of the Facility, (b) to pay or reimburse the
Administrative Agent and its Affiliates for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation,
negotiation and execution and delivery of, and any amendment, supplement or
modification to, this Agreement and any Notes and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without
58
limitation, the reasonable fees and disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx
LLP, special counsel to the Administrative Agent (but excluding the fees or
expenses of any other counsel), (c) to pay or reimburse the Administrative Agent
for all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, any Notes, the other Loan
Documents and any such other documents, including, without limitation, the
reasonable fees and disbursements of the special counsel to the Administrative
Agent, (d) to pay or reimburse each Bank for all its costs and expenses incurred
in connection with the enforcement, or at any time after the occurrence and
during the continuance of a Default or an Event of Default the preservation, of
any rights under this Agreement, any Notes, the other Loan Documents and any
such other documents, including, without limitation, the reasonable fees and
disbursements of counsel to such Bank, (e) without duplication of any other
provision contained in this Agreement or any Notes, to pay, indemnify, and hold
each Bank and the Administrative Agent harmless from, any and all recording and
filing fees, if any, and any and all liabilities (for which each Bank has not
been otherwise reimbursed under this Agreement) with respect to, or resulting
from any delay in paying, stamp, excise and other taxes, if any, that may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, any Notes, the other Loan
Documents and any such other documents, and (f) without duplication of any other
provision contained in this Agreement or any Notes, to pay, indemnify, and hold
each Global Coordinator, each Lead Arranger, each Bank and each Agent together
with their respective directors, officers, employees, agents, trustees, advisors
and affiliates (collectively, "Indemnified Persons") harmless from and against,
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including without limitation, all fees and expenses of counsel to
any indemnified person) with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, any Notes or the other Loan
Documents, the transactions contemplated by this Agreement, any Notes or the
other Loan Documents, or the use, or proposed use, of proceeds of the Loans (all
the foregoing in this clause (f), collectively, the "Indemnified Liabilities");
provided that the Borrower shall have no obligation hereunder to an Indemnified
Person with respect to Indemnified Liabilities arising from the gross negligence
or willful misconduct of such Indemnified Person, AND PROVIDED FURTHER THAT IT
IS THE INTENTION OF THE BORROWER TO INDEMNIFY THE INDEMNIFIED PERSONS AGAINST
THE CONSEQUENCES OF THEIR OWN NEGLIGENCE. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.
SECTION 10.6. Effectiveness, Successors and Assigns, Participations;
Assignments. (a) This Agreement shall become effective on the date hereof and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Banks, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Bank.
(b) Any Bank may, in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks or other financial
institutions or Bank Affiliates (a "Participant") participating interests in any
Loan owing to such Bank, any Note held by such Bank, any Commitment of such Bank
or any other interest of such Bank hereunder and
59
under the other Loan Documents. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Bank shall remain solely responsible for the performance thereof, such Bank
shall remain the holder of any such Loan and Commitment or other interest for
all purposes under this Agreement and the other Loan Documents, the Borrower and
the Administrative Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and the other Loan Documents and except with respect to the matters set forth in
Section 10.1, the amendment of which requires the consent of all of the Banks,
the participation agreement between the selling Bank and the Participant may not
restrict such Bank's voting rights hereunder. The Borrower agrees that each
Participant, to the extent provided in its participation, shall be entitled to
the benefits of Sections 3.4, 3.7, 4.1 and 4.3 with respect to its participation
in the Commitments and the Loans outstanding from time to time; provided that
(i) no Participant shall be entitled to receive any greater amount pursuant to
such Sections than the selling Bank would have been entitled to receive in
respect of the amount of the participation sold by such selling Bank to such
Participant had no such sale occurred and (ii) each such sale of participating
interests shall be to a "qualified purchaser", as such term is defined under the
Investment Company Act of 1940. Except as expressly provided in this Section
10.6(b), no Participant shall be a third-party beneficiary of or have any rights
under this Agreement or under any of the other Loan Documents.
(c) Except as set forth below, the Banks shall be permitted to assign all
or a portion of their Loans and Commitments to one or more financial
institutions ("Purchasing Banks") with the consent, not to be unreasonably
withheld, of (a) the Borrower, unless (i) the Purchasing Bank is a Bank or a
Bank Affiliate or (ii) an Event of Default has occurred and is continuing and
(b) the Administrative Agent, unless the assignment is from a Bank to its Bank
Affiliate pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit C (an "Assignment and Acceptance"), executed by such Purchasing Bank and
such transferor Bank (and by the Borrower and the Administrative Agent, as
applicable) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that (i) such Purchasing Bank is a
"qualified purchaser" as defined under the Investment Company Act of 1940, (ii)
each such sale shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of the Commitment of such Bank,
(iii) each such sale shall be in an aggregate amount of not less than $5,000,000
(or such lesser amount representing the entire Commitment of such transferor
Bank) if such sale is not to an existing Bank and (iv) after giving effect to
such sale, the transferor Bank shall (to the extent that it continues to have
any Commitment hereunder) have a Commitment of not less than $5,000,000,
provided that such amounts shall be aggregated in respect of each Bank and its
Bank Affiliates, if any. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance (the "Transfer Effective Date"), (i) the Purchasing
Bank thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
with the Commitments as set forth therein and (ii) the transferor Bank
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a transferor
Bank's rights and obligations under this Agreement, such transferor Bank shall
cease to be a party hereto). Such Assignment and Acceptance shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect
the
60
addition of such Purchasing Bank and the resulting adjustment of Revolving
Percentages arising from the purchase by such Purchasing Bank of all or a
portion of the rights and obligations of such transferor Bank under this
Agreement. On or prior to the Transfer Effective Date determined pursuant to
such Assignment and Acceptance, (i) appropriate entries shall be made in the
accounts of the transferor Bank and the Register evidencing such assignment and
releasing the Borrower from any and all obligations to the transferor Bank in
respect of the assigned Loan or Loans and (ii) appropriate entries evidencing
the assigned Loan or Loans shall be made in the accounts of the Purchasing Bank
and the Register as required by Section 3.1 hereof. In the event that any Notes
have been issued in respect of the assigned Loan or Loans, such Notes shall be
marked "cancelled" and surrendered by the transferor Bank to the Administrative
Agent for return to the Borrower.
(d) The Administrative Agent shall maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Banks and the Commitments of, and principal amount of the Loans owing to, each
Bank from time to time. To the extent permitted by applicable law, the entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Banks may (and, in the case of any
Loan or other obligations hereunder not evidenced by a Note, shall) treat, each
Person whose name is recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes of this Agreement and
the other Loan Documents, notwithstanding any notice to the contrary. Any
assignment of any Loan or other obligation hereunder not evidenced by a Note
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by a
transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank that
is not then a Bank Affiliate, by the Borrower and the Administrative Agent)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall promptly accept such
Assignment and Acceptance on the Transfer Effective Date determined pursuant
thereto, record the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and the Borrower.
(f) Each of the Banks and the Administrative Agent agrees to exercise its
best efforts to keep, and to cause any third party recipient of the information
described in this Section 10.6(f) to keep, any information delivered or made
available by the Borrower to it (including any information obtained pursuant to
Section 7.1), confidential from anyone other than Persons employed or retained
by such party who are or are expected to become engaged in evaluating,
approving, structuring or administering the transactions contemplated hereunder;
provided that nothing shall prevent any Bank or the Administrative Agent from
disclosing such information (i) to any other Bank or any Affiliate of any Bank,
(ii) pursuant to subpoena or upon the order of any court or administrative
agency, (iii) upon the request or demand of any Governmental Authority having
jurisdiction over such Bank, (iv) if such information has been publicly
disclosed, (v) to the extent reasonably required in connection with any
litigation to which either the Administrative Agent, any Bank, the Borrower or
their respective Affiliates may be a party, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder,
61
(vii) to the Administrative Agent's or such Bank's, as the case may be, legal
counsel, independent auditors and other professional advisors, or (viii) to any
actual or proposed Participant, Purchasing Bank or pledgee (each, a
"Transferee") that has agreed in writing to be bound by the provisions of this
Section 10.6(f). To the extent permitted by applicable law, in the event that
any Bank or the Administrative Agent is legally requested or required to
disclose any confidential information pursuant to clause (ii), (iii), or (v) of
this Section 10.6(f), such party shall promptly notify the Borrower of such
request or requirement prior to disclosure so that Borrower may seek an
appropriate protective order and/or waive compliance with the terms of this
Agreement. If, however, in the opinion of counsel for such party, such party is
nonetheless, in the absence of such order or waiver, compelled to disclose such
confidential information or otherwise stand liable for contempt or suffer
possible censure or other penalty or liability, then such party may disclose
such confidential information without liability to the Borrower; provided,
however, that such party will use its best efforts to minimize the disclosure of
such information. Subject to the exceptions above to disclosure of information,
each of the Banks and the Administrative Agent agrees that it shall not publish,
publicize, or otherwise make public any information regarding this Agreement or
the transactions contemplated hereby without the written consent of the
Borrower, in its sole discretion.
(g) If, pursuant to this Section 10.6, any interest in this Agreement or
any Loan is transferred to any Transferee that is organized under the laws of
any jurisdiction other than the United States or any state thereof, the
transferor Bank shall cause such Transferee, concurrently with the effectiveness
of such transfer, (i) to deliver to the transferor Bank (and, in the case of any
Purchasing Bank registered in the Register, the Administrative Agent and the
Borrower) either U.S. Internal Revenue Service Form W-8BEN or U.S. Internal
Revenue Service Form W-8ECI, or successor applicable forms (wherein such
Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (ii) to agree (for the
benefit of the transferor Bank, the Administrative Agent and the Borrower) to
deliver to the transferor Bank (and, in the case of any Purchasing Bank
registered in the Register, the Administrative Agent and Borrower) a new Form
duly executed and completed W-8BEN or W-8ECI, or successor applicable forms or
other manner of certification, as the case may be, upon the expiration or
obsolescence of any previously delivered form in accordance with applicable U.S.
laws and regulations and amendments, unless in any such case any change in
treaty, law or regulation has occurred prior to the date on which any such
delivery would otherwise be required that renders all such forms inapplicable or
that would prevent such Transferee from duly completing and delivering any such
form with respect to it and such Transferee so advises the transferor Bank (and,
in the case of any Purchasing Bank registered in the Register, the
Administrative Agent and the Borrower).
(h) Any Bank may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Bank, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Bank from any of its obligations hereunder or
substitute any such pledgee or Purchasing Bank for such Bank as a party hereto.
The Borrower hereby agrees that, upon request of any Bank at any time and from
time to time after the Borrower has made its initial Borrowing hereunder, the
Borrower shall provide to such Bank, at the Borrower's own
62
expense, a promissory note, substantially in the form of Exhibit D evidencing
the Loans owing to such Bank.
SECTION 10.7. Setoff. In addition to any rights and remedies of the Banks
provided by law, each Bank shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under the Loans to which it is a party (whether at the
stated maturity, by acceleration or otherwise) to setoff and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Bank or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Bank agrees promptly to notify the Borrower and
the Administrative Agent after any such setoff and application made by such
Bank, provided that the failure to give such notice shall not affect the
validity of such setoff and application.
SECTION 10.8. Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the parties
shall be maintained with Borrower and the Administrative Agent.
SECTION 10.9. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.10. Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the Banks
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Bank relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
SECTION 10.11. GOVERNING LAW. (a) THIS AGREEMENT AND ANY NOTES OR OTHER
LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT AND ANY NOTES AND ANY OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) Notwithstanding anything in Section 10.11(a) to the contrary,
nothing in this Agreement or in any Note or any other Loan Documents shall be
deemed to constitute a waiver of any rights which any Bank may have under
applicable federal law relating to the amount of interest which any Bank may
contract for, take, receive or charge in respect of any Loans, including any
right to take, receive, reserve and charge interest at the rate allowed by the
laws of the state where such Bank is located. To the extent that Texas law is
applicable to the determination of the Highest Lawful Rate, the Banks and the
Borrower agree that (i) if
63
Chapter 303 of the Texas Finance Code, as amended, is applicable to such
determination, the weekly rate ceiling (formerly known as the indicated (weekly)
rate ceiling in Article 1.04, Subtitle 1, Title 79, of the Revised Civil
Statutes of Texas, as amended) as computed from time to time shall apply,
provided that, to the extent permitted by such Article, the Administrative Agent
may from time to time by notice to the Borrower revise the election of such
interest rate ceiling as such ceiling affects the then current or future
balances of the Loans; and (ii) the provisions of Chapter 346 of the Texas
Finance Code, as amended (formerly found in Chapter 15 of Subtitle 3, Title 79,
of the Revised Civil Statutes of Texas, 1925, as amended) shall not apply to
this Agreement or any Note issued hereunder.
SECTION 10.12. Submission to Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid to the Borrower at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) waives, to the maximum extent permitted by applicable law, any right it
may have to claim or recover in any legal action or proceeding any special,
exemplary, punitive or consequential damages.
SECTION 10.13. Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, any Notes and the other Loan Documents;
(b) neither the Administrative Agent nor any Bank has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Administrative Agent and the Banks, on one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture exists among the Banks or among the Borrower and the
Banks.
64
SECTION 10.14. Limitation on Agreements. All agreements between the
Borrower, the Administrative Agent or any Bank, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of demand being
made in respect of an amount due under any Loan Document or otherwise, shall the
amount paid, or agreed to be paid, to the Administrative Agent or any Bank for
the use, forbearance, or detention of the money to be loaned under this
Agreement, any Notes or any other Loan Document or otherwise or for the payment
or performance of any covenant or obligation contained herein or in any other
Loan Document exceed the Highest Lawful Rate. If, as a result of any
circumstances whatsoever, fulfillment of any provision hereof or of any of such
documents, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable usury law, then,
ipso facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if, from any such circumstance, the Administrative Agent or any
Bank shall ever receive interest or anything that might be deemed interest under
applicable law that would exceed the Highest Lawful Rate, such amount that would
be excessive interest shall be applied to the reduction of the principal amount
owing on account of such Bank's Loans or the amounts owing on other obligations
of the Borrower to the Administrative Agent or any Bank under any Loan Document
and not to the payment of interest, or if such excessive interest exceeds the
unpaid principal balance of such Bank's Loans and the amounts owing on other
obligations of the Borrower to the Administrative Agent or any Bank under any
Loan Document, as the case may be, such excess shall be refunded to the
Borrower. All sums paid or agreed to be paid to the Administrative Agent or any
Bank for the use, forbearance or detention of the indebtedness of the Borrower
to the Administrative Agent or any Bank shall, to the fullest extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness until payment in full of the principal (including
the period of any renewal or extension thereof) so that the interest on account
of such indebtedness shall not exceed the Highest Lawful Rate. Notwithstanding
anything to the contrary contained in any Loan Document, it is understood and
agreed that if at any time the rate of interest that accrues on the outstanding
principal balance of any Loan shall exceed the Highest Lawful Rate, the rate of
interest that accrues on the outstanding principal balance of any Loan shall be
limited to the Highest Lawful Rate, but any subsequent reductions in the rate of
interest that accrues on the outstanding principal balance of any Loan shall not
reduce the rate of interest that accrues on the outstanding principal balance of
any Loan below the Highest Lawful Rate until the total amount of interest
accrued on the outstanding principal balance of any Loan equals the amount of
interest that would have accrued if such interest rate had at all times been in
effect. The terms and provisions of this Section 10.14 shall control and
supersede every other provision of all Loan Documents.
SECTION 10.15. Removal of Bank. Notwithstanding anything herein to the
contrary, the Borrower may, at any time in its sole discretion, remove any Bank
upon 15 Business Days' written notice to such Bank and the Administrative Agent
(the contents of which notice shall be promptly communicated by the
Administrative Agent to each other Bank), such removal to be effective at the
expiration of such 15-day notice period; provided, however, that no Bank may be
removed hereunder at a time when an Event of Default shall have occurred and be
continuing. Each notice by the Borrower under this Section 10.15 shall
constitute a representation by the Borrower that the removal described in such
notice is permitted under this Section 10.15. Concurrently with such removal,
the Borrower shall pay to such removed Bank all amounts owing to such Bank
hereunder and under any other Loan Document in immediately available
65
funds. Upon full and final payment hereunder of all amounts owing to such
removed Bank, such Bank shall make appropriate entries in its accounts
evidencing payment of all Loans hereunder and releasing the Borrower from all
obligations owing to the removed Bank 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 Bank will not be considered to be a "Bank" 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 Bank shall immediately terminate. Such removal will not, however,
affect the Commitments of any other Bank hereunder.
SECTION 10.16. Officer's Certificates. It is not intended that any
certificate of any officer of the Borrower delivered to the Administrative Agent
or any Bank pursuant to this Agreement shall give rise to any personal liability
on the part of such officer.
SECTION 10.17. USA Patriot Act. Each Bank 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 Bank or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Patriot Act. The Borrower shall,
and shall cause each of its Subsidiaries to, provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested
by each Bank and the Administrative Agent to maintain compliance with the
Patriot Act.
66
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 HOUSTON
ELECTRIC, LLC
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President and Treasurer
CITIBANK, N.A.,
as Administrative Agent and as a Bank
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
DEUTSCHE BANK SECURITIES INC.,
as Syndication Agent
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: Director
67
Signature Page
CEHE Backstop Credit Agreement
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Co-Documentation
Agent
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
Signature Page
CEHE Backstop Credit Agreement
JPMORGAN CHASE BANK, N.A., as Co-
Documentation Agent
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
ABN AMRO BANK N.V., as Co-
Documentation Agent
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: Director
By: /s/ R. Xxxxx Xxxxxxxxx
------------------------------------
Name: R. Xxxxx Xxxxxxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
CITIBANK, N.A.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch
By: /s/ S. Xxxxxxx Xxx
------------------------------------
Name: S. Xxxxxxx Xxx
Title: Director
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
JPMorgan Chase Bank, N.A.
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
Southwest Bank of Texas
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
Signature Page
CEHE Backstop Credit Agreement
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
Signature Page
CEHE Backstop Credit Agreement
Xxxxx Fargo Bank, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
Signature Page
CEHE Backstop Credit Agreement
Wachovia Bank N.A.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
Signature Page
CEHE Backstop Credit Agreement
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
The Bank of Tokyo-Mitsubishi, Ltd.
Houston Agency, Dallas CBO
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: V.P. & Manager
Signature Page
CEHE Backstop Credit Agreement
BANK OF AMERICA, N.A.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Senior Vice President
Signature Page
CEHE Backstop Credit Agreement
ROYAL OF CANADA
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
Signature Page
CEHE Backstop Credit Agreement
SUNTRUST BANK
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
Deutsche Bank AG New York Branch
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: Director
Signature Page
CEHE Backstop Credit Agreement
Commerzbank, AG
New York and Grand Cayman Branches
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
XXXXXXX XXXXX BANK USA
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Director
Signature Page
CEHE Backstop Credit Agreement
The Bank of Nova Scotia
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
Signature Page
CEHE Backstop Credit Agreement
THE ROYAL BANK OF SCOTLAND plc
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
Signature Page
CEHE Backstop Credit Agreement
BARCALAYS BANK PLC
By: /s/ Sydney X. Xxxxxx
------------------------------------
Name: Sydney X. Xxxxxx
Title: Director
Signature Page
CEHE Backstop Credit Agreement
ABN AMRO Bank N.V.
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: Director
By: /s/ R. Xxxxx Xxxxxxxxx
------------------------------------
Name: R. Xxxxx Xxxxxxxxx
Title: Vice President
Signature Page
CEHE Backstop Credit Agreement
UBS LOAN FINANCE LLC
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
Banking Products
Services, US
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Associate Director
Banking Products
Services, US
