Exhibit 10.1
EXECUTION COPY
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of December 16, 2005
Among
DTE ENERGY COMPANY,
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN,
as Initial Lenders
and
THE BANK OF NOVA SCOTIA,
as Administrative Agent
================================================================================
SCOTIA CAPITAL,
as Lead Arranger and Sole Book Runner
================================================================================
TABLE OF CONTENTS
PAGE
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ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS.............................. 1
SECTION 1.01. Certain Defined Terms................................. 1
SECTION 1.02. Computation of Time Periods........................... 13
SECTION 1.03. Accounting Terms...................................... 13
ARTICLE II: AMOUNTS AND TERMS OF THE REIMBURSEMENT
ADVANCES AND THE FACILITY LCs......................................... 13
SECTION 2.01. Commitment............................................ 13
SECTION 2.02. Making the Reimbursement Advances..................... 14
SECTION 2.03. Fees.................................................. 15
SECTION 2.04. Termination or Reduction of the Commitments........... 15
SECTION 2.05. Repayment of Credit Extensions........................ 16
SECTION 2.06. Interest on Reimbursement Advances.................... 16
SECTION 2.07. Interest Rate Determination........................... 17
SECTION 2.08. Optional Conversion of Reimbursement Advances......... 18
SECTION 2.09. Prepayments of Reimbursement Advances................. 18
SECTION 2.10. Increased Costs....................................... 19
SECTION 2.11. Illegality............................................ 20
SECTION 2.12. Payments and Computations............................. 20
SECTION 2.13. Taxes................................................. 21
SECTION 2.14. Sharing of Payments, Etc.............................. 23
SECTION 2.15. Use of Proceeds....................................... 24
SECTION 2.16. Facility LCs.......................................... 24
SECTION 2.17. Noteless Agreement; Evidence of Indebtedness.......... 27
SECTION 2.18. Extension of Commitment Termination Date.............. 28
SECTION 2.19. Conversion to Term Loan............................... 28
ARTICLE III: CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS........... 29
SECTION 3.01. Conditions Precedent to
Effectiveness of this Agreement.................... 29
SECTION 3.02. Conditions Precedent to Each Credit Extension......... 30
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SECTION 3.03. Determinations Under Section 3.01..................... 31
ARTICLE IV: REPRESENTATIONS AND WARRANTIES............................... 31
SECTION 4.01. Representations and Warranties of the Borrower........ 31
ARTICLE V: COVENANTS OF THE BORROWER..................................... 33
SECTION 5.01. Affirmative Covenants................................. 33
SECTION 5.02. Negative Covenants.................................... 35
ARTICLE VI: EVENTS OF DEFAULT............................................ 36
SECTION 6.01. Events of Default..................................... 36
ARTICLE VII: THE AGENT................................................... 38
SECTION 7.01. Authorization and Action.............................. 38
SECTION 7.02. Agent's Reliance, Etc................................. 39
SECTION 7.03. Scotia Capital and Affiliates......................... 39
SECTION 7.04. Lender Credit Decision................................ 40
SECTION 7.05. Indemnification....................................... 40
SECTION 7.06. Successor Agent....................................... 40
ARTICLE VIII: MISCELLANEOUS.............................................. 41
SECTION 8.01. Amendments, Etc...................................... 41
SECTION 8.02. Notices, Etc.......................................... 41
SECTION 8.03. No Waiver; Remedies................................... 43
SECTION 8.04. Costs and Expenses.................................... 43
SECTION 8.05. Right of Set-off...................................... 44
SECTION 8.06. Binding Effect........................................ 45
SECTION 8.07. Assignments, Designations and Participations.......... 45
SECTION 8.08. Confidentiality....................................... 49
SECTION 8.09. Governing Law......................................... 49
SECTION 8.10. Execution in Counterparts; Integration................ 49
SECTION 8.11. Jurisdiction, Etc..................................... 50
SECTION 8.12. Waiver of Jury Trial.................................. 50
SECTION 8.13. USA Patriot Act Notification.......................... 50
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SCHEDULES AND EXHIBITS
Schedules
Schedule I - List of Applicable Lending Offices
Pricing Schedule
Exhibits
Exhibit A - Form of Note (If Requested)
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Certificate by Borrower
Exhibit E - Form of Opinion of Associate General Counsel to the Borrower
Exhibit F - Form of Compliance Certificate
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This LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this "Agreement")
dated as of December 16, 2005 is entered into among DTE ENERGY COMPANY, a
Michigan corporation (the "Borrower"), the banks, financial institutions and
other institutional lenders (the "Initial Lenders") listed on the signature
pages hereof, and THE BANK OF NOVA SCOTIA ("Scotia Capital"), as Administrative
Agent (the "Agent") for the Lenders (as hereinafter defined).
PRELIMINARY STATEMENTS.
The Borrower has requested that the Initial Lenders enter into this
Agreement, and the Initial Lenders have indicated their willingness to enter
into this Agreement upon the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree,
subject to the satisfaction of the conditions set forth in Article III, as
follows:
ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 25% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the
Agent at Scotia Capital with its office at Xxx Xxxxxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000, Account No. 2308363Corbk77, ABA No. 0026002532,
Attention: Xxxxxx Xxxxx.
"Aggregate Outstanding Credit Exposures" means, at any time, the
aggregate of the Outstanding Credit Exposures of all the Lenders.
"Applicable Commitment Fee Rate" means, as of any date, the percentage
rate per annum which is applicable at such time with respect to the
Commitments as set forth in the Pricing Schedule.
"Applicable LC Fee Rate" means, as of any date, the percentage rate
per annum which is applicable at such time with respect to Facility LCs as
set forth in the Pricing Schedule.
"Applicable Lending Office" means, with respect to each Lender or the
LC Issuer, such Lender's or the LC Issuer's Domestic Lending Office in the
case of a Base Rate
Advance or the issuance of any Facility LC and such Lender's Eurodollar
Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, (i) with respect to all
Base Rate Advances, 0.0% per annum, and (ii) with respect to all Eurodollar
Rate Advances, the percentage rate per annum which is applicable at such
time with respect to Eurodollar Rate Advances as set forth in the Pricing
Schedule.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit C hereto.
"Audited Statements" means the Consolidated balance sheets of the
Borrower, DECO and MichCon as at December 31, 2004, and the related
Consolidated statements of income and cash flows of the Borrower, DECO and
MichCon for the fiscal year then ended, accompanied by the opinion thereon
of the Borrower's, DECO's and MichCon's independent public accountants. For
the avoidance of doubt, the Audited Statements of the Borrower and DECO
shall mean such Audited Statements as are presented in the Borrower's and
DECO's Form 8-K, as applicable, dated August 3, 2005 and filed August 4,
2005 for the year ended December 31, 2004.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest then most recently established by Scotia
Capital in New York, New York (and transmitted to the Borrower) as its
base rate for dollars loaned in the United States (it being understood
and agreed that this rate is not necessarily intended to be the lowest
rate of interest determined by Scotia Capital in connection with
extensions of credit); or
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means a Reimbursement Advance that bears interest
as provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrowing" means a borrowing consisting of simultaneous Reimbursement
Advances of the same Type and (in the case of Eurodollar Rate Advances)
having the same Interest Period, made by each of the Lenders pursuant to
Section 2.01.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capitalization" means the sum of Consolidated Net Worth plus
Consolidated Debt.
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"Collateral Shortfall Amount" means, as of any date of determination,
an amount in immediately available funds, which funds shall be held in the
Facility LC Collateral Account, equal to the difference of (x) the amount
of LC Obligations at such time, less (y) the amount on deposit in the
Facility LC Collateral Account at such time which is free and clear of all
rights and claims of third parties and has not been applied against the
Obligations.
"Commitment" means, for each Lender, the obligation of such Lender to
make Reimbursement Advances to, and participate in Facility LCs issued upon
the application of, the Borrower in an aggregate amount not exceeding the
amount set forth opposite such Lender's name on Schedule I hereto or if
such Lender has entered into any Assignment and Acceptance, set forth for
such Lender in the Register maintained by the Agent pursuant to Section
8.07(d), as such amount may be modified from time to time pursuant to the
terms hereof.
"Commitment Termination Date" means the earlier of (a) December 15,
2006, as it may be extended pursuant to Section 2.18, and (b) the date of
termination in whole of the Commitments pursuant to Section 2.04 or 6.01.
"Confidential Information" means information that the Borrower
furnishes to the Agent or any Lender designated as confidential, but does
not include any such information that is or becomes generally available to
the public or that is or becomes available to the Agent or such Lender from
a source other than the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Net Worth" means, as of any date of determination, the
consolidated total stockholders' equity (including capital stock,
additional paid-in capital and retained earnings) of the Borrower and its
Subsidiaries determined in accordance with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Reimbursement Advances of one Type into Reimbursement Advances of the other
Type pursuant to Section 2.07 or 2.08.
"Conversion Date" is defined in Section 2.19.
"Credit Extension" means the making of a Reimbursement Advance or the
issuance, renewal, extension or increase of a Facility LC hereunder.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all obligations of such Person for
the deferred purchase price of property or services (other than trade
payables not overdue by more than 60 days incurred in the ordinary course
of such Person's business), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all obligations
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the
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rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (e)
all obligations of such Person as lessee under leases that have been or
should be, in accordance with GAAP, recorded as capital leases, (f) all
obligations, contingent or otherwise, of such Person in respect of
acceptances, letters of credit or similar extensions of credit, (g) all
obligations of such Person in respect of Hedge Agreements, (h) all Debt of
others referred to in clauses (a) through (g) above or clause (i) below
guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (1) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (2) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (3) to supply funds to or in
any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or
such services are rendered) or (4) otherwise to assure a creditor against
loss, and (i) all Debt referred to in clauses (a) through (h) above secured
by (or for which the holder of such Debt has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though
such Person has not assumed or become liable for the payment of such Debt.
See the definition of "Nonrecourse Debt" below.
"DECO" means The Detroit Edison Company, a Michigan corporation wholly
owned by the Borrower.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Designating Lender" has the meaning specified in Section 8.07(h).
"Disclosed Litigation" has the meaning specified in Section 4.01(f).
"Domestic Lending Office" means, with respect to any Lender or the LC
Issuer, the office of such Lender or the LC Issuer specified as its
"Domestic Lending Office" opposite its name on Schedule I hereto or, in the
case of a Lender, in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender or the LC Issuer as
such Lender or the LC Issuer may from time to time specify to the Borrower
and the Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
(iii) a commercial bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at least
$500,000,000; (iv) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $500,000,000; (v) a commercial
bank organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has concluded
special
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lending arrangements with the International Monetary Fund associated with
its General Arrangements to Borrow, or a political subdivision of any such
country, and having a combined capital and surplus of at least
$500,000,000, so long as such bank is acting through a branch or agency
located in the United States; (vi) the central bank of any country that is
a member of the Organization for Economic Cooperation and Development;
(vii) a finance company, insurance company or other financial institution
or fund (whether a corporation, partnership, trust or other entity) that is
engaged in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business and having a combined capital and
surplus of at least $500,000,000; and (viii) any other Person approved by
the Agent and, so long as no Event of Default shall be continuing, the
Borrower, such approval not to be unreasonably withheld or delayed by
either party; provided, however, that neither the Borrower nor an Affiliate
of the Borrower shall qualify as an Eligible Assignee.
"Enterprises" means DTE Enterprises, Inc., a Michigan corporation
wholly-owned by the Borrower.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, Environmental
Permit or Hazardous Materials or arising from alleged injury or threat of
injury to the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance relating to pollution
or protection of the environment or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the
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requirements of subsection (1) of Section 4043(b) of ERISA (without regard
to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an
event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator of
any Plan of a notice of intent to terminate such Plan pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of the Borrower or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by
the Borrower or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g)
the adoption of an amendment to a Plan requiring the provision of security
to such Plan pursuant to Section 307 of ERISA; or (h) the institution by
the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate
appearing on Page 3750 of Moneyline Telerate, Inc. ("Service") (or on any
successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent
after consultation with the Borrower from time to time for purposes of
providing quotations of interest rates applicable to U.S. dollar deposits
in the London interbank market) at approximately 11:00 A.M. (London time)
two Business Days prior to the commencement of such Interest Period, as the
rate for U.S. dollar deposits with a maturity comparable to such Interest
Period, or in the event that such rate is not available at such time for
any reason, the rate per annum at which deposits in U.S. dollars are
offered by the principal office of the Reference Bank in London, England to
prime banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the Reference Bank's Eurodollar Rate Advance
comprising part of such Borrowing to be outstanding during such Interest
Period and for a period equal to such Interest Period, by (b) a percentage
equal to 100%
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minus the Eurodollar Rate Reserve Percentage for such Interest Period,
subject, however, to the provisions of Section 2.07.
"Eurodollar Rate Advance" means a Reimbursement Advance that bears
interest as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Hedging Debt" means all Debt arising under any Hedge
Agreement in respect of fluctuations in commodity prices.
"Facility LC" has the meaning specified in Section 2.16(a).
"Facility LC Application" has the meaning specified in Section
2.16(c).
"Facility LC Collateral Account" has the meaning specified in Section
2.16(i).
"Facility Termination Date" means the second anniversary of the
Commitment Termination Date, or any earlier date on which the Obligations
shall become due pursuant to the terms hereof.
"Federal Funds Rate" means for any day the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) 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 on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transaction on the next preceding Business Day as so published on the
next succeeding Business Day and (ii) if no such rate is so published on
the next succeeding Business Day, the Federal Funds Rate for such day shall
be the average of quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected
by the Agent.
"Fee Letter" means that certain fee letter, dated as of the Effective
Date by and between the Borrower and the Agent, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
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"Financial Officer" of any Person means the chief executive officer,
president, chief financial officer, any vice president, controller,
assistant controller, treasurer or any assistant treasurer of such Person.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Hazardous Materials" means (a) petroleum and petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements.
"Identified Reports on Form 8-K" means those certain reports of the
Borrower, DECO and MichCon on Form 8-K filed or furnished with the
Securities and Exchange Commission on (a) February 1, February 3, February
10, February 11 (two filings), February 22, February 25, March 10, April 8,
April 27, April 28, May 2, May 3, May 10, June 14, June 16, June 28, July
28 (two filings), July 29 (two filings), August 4 (two filings), September
21, September 26, September 27, October 5, October 21 (three filings),
October 31, November 3 (two filings), November 7, and November 23, 2005
with respect to the Borrower, (b) February 10, February 11 (two filings),
March 10, April 8, April 27, April 28, May 2, June 14, July 12, July 28
(two filings), July 29, August 4 (two filings) , September 21, September
27, October 5, October 21, October 31, November 3 (two filings), and
November 7, 2005 with respect to DECO, and (c) February 11, March 10, April
27, April 28, May 2, May 3, May 10, June 14, June 16, July 28, July 29,
September 27, October 21, November 3 (two filings), and November 7, 2005
with respect to MichCon.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, with respect to Eurodollar Rate Advances, each subsequent
period commencing on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such Interest Period
shall be one, two, three or six months, as the Borrower may, upon notice
received by the Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(i) the Borrower may not select any Interest Period that ends
after the Commitment Termination Date then in effect (or, if the
Aggregate Outstanding
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Credit Exposures have been converted to a term loan as set forth in
Section 2.19, on the Facility Termination Date);
(ii) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Junior Subordinated Debt" means (a) subordinated junior deferrable
interest debentures of the Borrower, DECO, Enterprises or MichCon, (b) the
related preferred securities, if applicable, of Subsidiaries of the
Borrower and (c) the related subordinated guarantees, if applicable, of the
Borrower, DECO, Enterprises or MichCon, in each case, from time to time
outstanding.
"LC Commitment" has the meaning specified in Section 2.16(a).
"LC Fee" has the meaning specified in Section 2.03(c).
"LC Issuer" means Scotia Capital (or any subsidiary or Affiliate
thereof designated thereby) in its capacity as issuer of Facility LCs
hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding
at such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" has the meaning specified in Section 2.16(d).
"Lenders" means the Initial Lenders and each Person that shall become
a party hereto pursuant to Section 8.07(a), (b) and (c).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
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"Loan Documents" means this Agreement, the Facility LC Applications,
the Fee Letter and the Notes.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries taken as a whole, or (b)
the ability of the Borrower to perform its obligations under any Loan
Document to which it is a party.
"MichCon" means Michigan Consolidated Gas Company, a Michigan
corporation, wholly owned (indirectly) by the Borrower.
"Modify" and "Modification" have the respective meanings specified in
Section 2.16(a).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Xxxxx'x Rating" is defined in the Pricing Schedule.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making
or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the
Borrower and the ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Nonrecourse Debt" means Debt of the Borrower or any of its
Subsidiaries in respect of which no recourse may be had by the creditors
under such Debt against the Borrower or such Subsidiary in its individual
capacity or against the assets of the Borrower or such Subsidiary, other
than assets which were purchased by the Borrower or such Subsidiary with
the proceeds of such Debt to which a creditor has recourse; it being
understood that Securitization Bonds shall constitute Nonrecourse Debt for
all purposes of the Loan Documents, except to the extent (and only to the
extent) of any claims made against DECO in respect of its indemnification
obligations relating to such Securitization Bonds.
"Note" has the meaning specified in Section 2.17.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
10
"Obligations" means all unpaid principal of and accrued and unpaid
interest on Reimbursement Advances, all Reimbursement Obligations, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and
other obligations of the Borrower to the Lenders or to any Lender, the
Agent, the LC Issuer or any indemnified party arising under the Loan
Documents.
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Reimbursement Advances
outstanding at such time, plus (ii) an amount equal to its Pro Rata Share
of the LC Obligations at such time.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pricing Schedule" means the Pricing Schedule identifying the
Applicable Margin, the Applicable Commitment Fee Rate and the Applicable LC
Fee Rate attached hereto identified as such.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the
denominator of which is the aggregate of all the Lenders' Commitments.
"Reference Bank" means The Bank of Nova Scotia and its successors.
"Register" has the meaning specified in Section 8.07(d).
"Reimbursement Advance" means an advance by a Lender to the Borrower
as part of a Borrowing, and refers to a Base Rate Advance or a Eurodollar
Rate Advance (each of which shall be a "Type" of Reimbursement Advance).
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.16 to
reimburse the LC Issuer for amounts paid by the LC Issuer in respect of any
one or more drawings under Facility LCs issued by the LC Issuer.
"Required Lenders" means at any time Lenders owed more than fifty
percent (50%) of the Aggregate Outstanding Credit Exposures at such time,
or, if the Aggregate Outstanding Credit Exposures is zero, Lenders having
more than fifty percent (50%) of the Commitments.
"S&P" means Standard & Poor's Ratings Services, a division of the
XxXxxx-Xxxx Companies, Inc.
11
"S&P Rating" is defined in the Pricing Schedule.
"SEC Reports" means the following reports and financial statements:
(i) the Borrower's, DECO's and MichCon's Annual Reports on Form 10-K,
as amended by Form 10-K/A, for the year ended December 31, 2004, as filed
with or sent to the Securities and Exchange Commission, including the
Audited Statements of the Borrower, DECO and MichCon, respectively; and
(ii) the Borrower's, DECO's and MichCon's Quarterly Reports on Form
10-Q for the quarters ended March 31, 2005, June 30, 2005 and September 30,
2005, including therein the Unaudited Statements of the Borrower, DECO and
MichCon, respectively, and the Identified Reports on Form 8-K.
"Service" has the meaning specified in the definition of "Eurodollar
Rate".
"Securitization Bonds" means Debt of one or more Securitization SPEs,
issued pursuant to The Customer Choice and Electricity Reliability Act, Act
Xx. 000, Xxxxxx Xxxx xx Xxxxxxxx, 0000, as the same may be amended from
time to time.
"Securitization SPE" means an entity established or to be established
directly or indirectly by the Borrower for the purpose of issuing
Securitization Bonds and includes The Detroit Edison Securitization Funding
LLC, a limited liability company organized under the laws of the State of
Michigan.
"Significant Subsidiary" means (i) DECO, Enterprises and MichCon, and
(ii) any other Subsidiary of the Borrower (A) the total assets (after
intercompany eliminations) of which exceed 30% of the total assets of the
Borrower and its Subsidiaries or (B) the net worth of which exceeds 30% of
the Consolidated Net Worth, in each case as shown on the audited
Consolidated financial statements of the Borrower as of the end of the
fiscal year immediately preceding the date of determination.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and
the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"SPV" has the meaning specified in Section 8.07(h).
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such
12
trust or estate is at the time directly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more
of such Person's other Subsidiaries.
"Unaudited Statements" means the unaudited condensed Consolidated
balance sheets of the Borrower, DECO and MichCon, as at September 30, 2005,
and the related condensed Consolidated statements of income and cash flows
of the Borrower, DECO and MichCon for the nine-month period then ended.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II: AMOUNTS AND TERMS OF THE REIMBURSEMENT ADVANCES AND THE FACILITY LCs
SECTION 2.01. Commitment. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to (i) make Reimbursement Advances to the
Borrower solely to satisfy any Reimbursement Obligations pursuant to Section
2.16(e) on any Business Day during the period from the Effective Date until the
Commitment Termination Date and (ii) participate in Facility LCs issued upon the
request of the Borrower from time to time; provided that, after giving effect to
the making of each such Reimbursement Advance and the issuance of each such
Facility LC, such Lender's Outstanding Credit Exposure shall not exceed its
Commitment. Each Borrowing shall be in an aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof (or, if less, in the aggregate
principal amount of any applicable Reimbursement Obligation as provided in
Section 2.16(e)) and shall consist of
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Reimbursement Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Within the limits of each
Lender's Commitment, the Borrower may borrow under this Section 2.01 only to
satisfy any Reimbursement Obligation, prepay pursuant to Section 2.09 and
reborrow under this Section 2.01 to satisfy any other Reimbursement Obligation.
The LC Issuer will issue Facility LCs hereunder on the terms and conditions set
forth in Section 2.16.
SECTION 2.02. Making the Reimbursement Advances. (a) Each Borrowing
shall be made on notice, given not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the date of the proposed Borrowing in the case
of a Borrowing consisting of Eurodollar Rate Advances, or 10:00 A.M. (New York
City time) on the Business Day of the proposed Borrowing in the case of a
Borrowing consisting of Base Rate Advances, by the Borrower to the Agent, which
shall give to each Lender prompt notice thereof by telecopier or telex. Each
such notice of a Borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed immediately in writing signed by a Financial Officer in substantially
the form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing, (ii) Type of Reimbursement Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, (iv) in the case of a Borrowing consisting
of Eurodollar Rate Advances, initial Interest Period for each such Reimbursement
Advance and (v) wire transfer instructions. Each Lender shall, before 12:00 noon
(New York City time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Agent at the Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing. After the
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Agent will make such funds available to the
Borrower as specified in the Notice of Borrowing.
(b) Anything in subsection (a) above to the contrary notwithstanding, (i)
the Borrower may not select Eurodollar Rate Advances for any Borrowing if the
aggregate amount of such Borrowing is less than $5,000,000 or if the obligation
of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant
to Section 2.07 or 2.11 and (ii) at no time shall the number of Borrowings
comprising Eurodollar Rate Advances outstanding hereunder be greater than ten.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Reimbursement Advance to be made by such Lender as part of such Borrowing when
such Reimbursement Advance, as a result of such failure, is not made on such
date.
(d) Unless the Agent shall have received notice from a Lender prior to the
time of any Borrowing that such Lender will not make available to the Agent such
Lender's ratable portion of such Borrowing, the Agent may assume that such
Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02
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and the Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the Agent, such
Lender and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the Borrower, the interest
rate applicable at the time to Reimbursement Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Reimbursement Advance as part of such Borrowing for
purposes of this Agreement.
(e) The failure of any Lender to make the Reimbursement Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Reimbursement Advance on the date of
such Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Reimbursement Advance to be made by such other Lender on the
date of any Borrowing.
SECTION 2.03. Fees. (a) Commitment Fee. The Borrower agrees to pay to
the Agent for the account of each Lender (based on its Pro Rata Share), for the
period (including any portion thereof when any Commitment is suspended by reason
of the Borrower's inability to satisfy any condition of Article III) commencing
on the Effective Date and continuing through the Commitment Termination Date, a
commitment fee at a per annum rate equal to the then effective Applicable
Commitment Fee Rate, multiplied by the sum of the average daily unused portion
of the Commitment of such Lender. All commitment fees payable pursuant to this
Section shall be payable by the Borrower in arrears on the last day of each
March, June, September and December, and on the Commitment Termination Date. For
purposes of computing commitment fees, the Commitment of a Lender shall be
deemed to be used to the extent of the Outstanding Credit Exposure of such
Lender.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own account
such fees as may from time to time be agreed between the Borrower and the Agent.
(c) LC Fees. The Borrower shall pay to the Agent, for the account of the
Lenders ratably in accordance with their respective Pro Rata Shares, a per annum
letter of credit fee equal to the Applicable LC Fee Rate multiplied by the
average daily undrawn stated amount under such Facility LC, such fee to be
payable in arrears quarterly on the last day of each March, June, September and
December, and on the Commitment Termination Date (each such fee described in
this sentence an "LC Fee"). The Borrower shall also pay to the LC Issuer for its
own account (x) a fronting fee in an amount and payable at such times as is
agreed upon between the LC Issuer and the Borrower, and (y) documentary and
processing charges in connection with the issuance or Modification of and draws
under Facility LCs in accordance with the LC Issuer's standard schedule for such
charges as in effect from time to time.
SECTION 2.04. Termination or Reduction of the Commitments. (a) The
Commitments shall be automatically terminated on the Commitment Termination
Date.
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(b) The Borrower shall have the right, upon at least three Business Days'
notice to the Agent, to terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders, provided that each
partial reduction shall be in the aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof. Once terminated, a Commitment or
portion thereof may not be reinstated.
SECTION 2.05. Repayment of Credit Extensions. The Borrower shall repay
to the Agent for the ratable account of the Lenders on the Commitment
Termination Date (or, if the Aggregate Outstanding Credit Exposures have been
converted to a term loan as set forth in Section 2.19, on the Facility
Termination Date) any Aggregate Outstanding Credit Exposures and all other
unpaid Obligations. In addition, the Borrower shall make all payments required
to be made under Section 2.18 to each Lender that does not consent to an
extension of the Commitment Termination Date.
SECTION 2.06. Interest on Reimbursement Advances. (a) Scheduled
Interest. The Borrower shall pay interest on the unpaid principal amount of each
Reimbursement Advance owing to each Lender from the date of such Reimbursement
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(i) Base Rate Advances. During such periods as such Reimbursement
Advance is a Base Rate Advance, a rate per annum equal at all times to the
sum of (x) the Base Rate in effect from time to time plus (y) the
Applicable Margin in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or paid
in full.
(ii) Eurodollar Rate Advances. During such periods as such
Reimbursement Advance is a Eurodollar Rate Advance, a rate per annum equal
at all times during each Interest Period for such Reimbursement Advance to
the sum of (x) the Eurodollar Rate for such Interest Period for such
Reimbursement Advance plus (y) the Applicable Margin in effect from time to
time, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day
that occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such Eurodollar Rate Advance
shall be Converted or paid in full.
(b) Default Interest. (i) Upon the occurrence and during the continuance of
an Event of Default, (x) the Borrower shall pay interest on the unpaid principal
amount of each Reimbursement Advance owing to each Lender, payable in arrears on
the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such Reimbursement Advance pursuant to clause (a)(i) or (a)(ii) above and (y)
the LC Fee shall be increased by 2% per annum, and (ii) the Borrower shall pay,
to the fullest extent permitted by law, the amount of any interest, fee or other
amount payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid on
Base Rate Advances pursuant to clause (a)(i) above.
16
SECTION 2.07. Interest Rate Determination. (a) The Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate. The Agent shall give prompt notice to the Borrower and the
Lenders of the applicable interest rate determined by the Agent for purposes of
Section 2.06(a)(i) or (ii), and the rate, if any, furnished by the Reference
Bank for the purpose of determining the interest rate under Section 2.06(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required Lenders
notify the Agent that the Eurodollar Rate for any Interest Period for such
Eurodollar Rate Advances will not adequately reflect the cost to such Required
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to
make, or to Convert Reimbursement Advances into, Eurodollar Rate Advances shall
be suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the Lenders and such Eurodollar Rate
Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $5,000,000, such Eurodollar Rate
Advances shall automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of Default,
(i) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Reimbursement Advances into,
Eurodollar Rate Advances shall be suspended.
(f) If the Service is not available or a rate does not timely appear on the
Service and the Reference Bank does not furnish timely information to the Agent
for determining the Eurodollar Rate for any Eurodollar Rate Advances:
(i) the Agent shall forthwith notify the Borrower and the Lenders that
the interest rate cannot be determined for such Eurodollar Rate Advances,
(ii) with respect to Eurodollar Rate Advances, each such Eurodollar
Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance (or if such
Advance is then a Base Rate Advance, will continue as a Base Rate Advance),
and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances
or to Convert Reimbursement Advances into Eurodollar Rate Advances shall be
suspended
17
until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.08. Optional Conversion of Reimbursement Advances. The
Borrower may on any Business Day, upon notice given to the Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.07 and 2.11,
Convert all Reimbursement Advances of one Type comprising the same Borrowing
into Reimbursement Advances of the other Type (it being understood that such
Conversion of a Reimbursement Advance or of its Interest Period does not
constitute a repayment or prepayment of such Reimbursement Advance); provided,
however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b) and no Conversion of any Reimbursement Advances shall result in
more separate Borrowings than permitted under Section 2.02(b). Each such notice
of a Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Reimbursement Advances to be Converted, and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for each such Eurodollar Rate Advance. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
SECTION 2.09. Prepayments of Reimbursement Advances. (a) Optional
Prepayment. The Borrower may on any Business Day, upon notice given to the Agent
not later than 11:00 A.M. (New York City time), (i) on the same day for Base
Rate Advances and (ii) on the second Business Day prior to the prepayment in the
case of Eurodollar Rate Advances stating the proposed date and aggregate
principal amount of the prepayment (and if such notice is given the Borrower
shall) prepay the outstanding principal amount of the Reimbursement Advances
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 (x) each partial prepayment shall be in an aggregate
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and (y) in the event of any such prepayment of a Eurodollar Rate
Advance, the Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 8.04(c).
(b) Mandatory Prepayment. The Borrower shall, upon five Business Days'
notice from the Agent given at the request or with the consent of the Required
Lenders, (i) pay to the Agent the Collateral Shortfall Amount at such time,
which funds shall be held in the Facility LC Collateral Account, and (ii) prepay
the Aggregate Outstanding Credit Exposures (other than the undrawn stated amount
under all Facility LCs outstanding at such time) plus all interest thereon and
all other amounts payable hereunder or under the Notes, in the event that any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly,
of Voting Stock of the Borrower (or other securities convertible into such
Voting Stock) representing 30% or more of the combined voting power of all
Voting Stock of the Borrower. If at any time subsequent to the foregoing payment
of the Collateral Shortfall Amount, the Agent determines that the Collateral
Shortfall Amount at such time is greater than zero, the Agent may make demand on
the Borrower to pay, and the Borrower will, forthwith upon such demand and
without any further notice or act, pay to the Agent the Collateral Shortfall
18
Amount at such time, which funds shall be deposited in the Facility LC
Collateral Account. The Agent may at any time or from time to time after funds
are deposited in the Facility LC Collateral Account, apply such funds to the
payment of the Obligations and any other amounts as shall from time to time have
become due and payable by the Borrower to the Lenders or the LC Issuer under the
Loan Documents. Neither the Borrower nor any Person claiming on behalf of or
through the Borrower shall have any right to withdraw any of the funds held in
the Facility LC Collateral Account pursuant to this Section 2.09(b); provided,
however, that after all of the Obligations have been indefeasibly paid in full
and the aggregate Commitments have been terminated, any funds remaining in the
Facility LC Collateral Account shall be returned by the Agent to the Borrower or
paid to whomever may be legally entitled thereto at such time.
SECTION 2.10. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances or participating in any
Facility LC or to the LC Issuer of agreeing to issue any Facility LC hereunder
(excluding for purposes of this Section 2.10 any such increased costs resulting
from taxes (as to which Section 2.13 shall govern), then the Borrower shall from
time to time, upon demand by such Lender or the LC Issuer (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender or the LC
Issuer, as applicable, additional amounts sufficient to compensate such Lender
or the LC Issuer, as applicable, for such increased cost. A certificate as to
the amount of such increased cost, submitted to the Borrower and the Agent by
such Lender or the LC Issuer, as applicable, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any Lender or the LC Issuer determines that compliance with any law
or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or the LC Issuer or any corporation controlling such Lender or the LC
Issuer, as applicable, and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder or to
participate in Facility LCs hereunder and other commitments of this type or the
LC Issuer's issuance of Facility LCs hereunder, then, upon demand by such Lender
or the LC Issuer, as applicable, (with a copy of such demand to the Agent), the
Borrower shall pay to the Agent for the account of such Lender or the LC Issuer,
as applicable, from time to time as specified by such Lender or the LC Issuer,
as applicable, additional amounts sufficient to compensate such Lender or the LC
Issuer, as applicable, or such corporation in the light of such circumstances,
to the extent that such Lender or the LC Issuer, as applicable, reasonably
determines such increase in capital to be allocable to the existence of such
Lender's commitment to lend hereunder or to participate in Facility LCs
hereunder or the LC Issuer's agreement to issue Facility LCs hereunder. A
certificate as to such amounts submitted to the Borrower and the Agent by such
Lender or the LC Issuer, as applicable, shall be conclusive and binding for all
purposes, absent manifest error.
(c) In the event that a Lender demands payment from the Borrower for
amounts owing pursuant to subsection (a) or (b) of this Section 2.10, the
Borrower may, upon payment of such amounts and subject to the requirements of
Sections 8.04 and 8.07, substitute for such Lender another financial
institution, which financial institution shall be an Eligible Assignee and
19
shall assume the Commitments of such Lender and purchase the Outstanding Credit
Exposures held by such Lender in accordance with Section 8.07, provided,
however, that (i) no Default shall have occurred and be continuing, (ii) the
Borrower shall have satisfied all of its obligations in connection with the Loan
Documents with respect to such Lender, and (iii) if such assignee is not a
Lender, (A) such assignee is acceptable to the Agent and (B) the Borrower shall
have paid the Agent a $3,000 administrative fee.
SECTION 2.11. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate Advances hereunder, (i) each Eurodollar Rate Advance will automatically,
upon such demand, Convert into a Base Rate Advance or a Reimbursement Advance
that bears interest at the rate set forth in Section 2.06(a)(i), as the case may
be, and (ii) the obligation of the Lenders to make Eurodollar Rate Advances or
to Convert Reimbursement Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.12. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in U.S. dollars to the Agent at the Agent's
Account in same day funds and without set off, deduction or counterclaim other
than deductions on account of taxes. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest,
commitment fees or LC Fees ratably (other than amounts payable pursuant to
Section 2.10, 2.13 or 8.04(c)) to the Lenders and the LC Issuer, as applicable,
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender or the LC
Issuer to such Lender or the LC Issuer for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.07(c),
from and after the effective date specified in such Assignment and Acceptance,
the Agent shall make all payments hereunder and under the Notes in respect of
the interest assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender and the LC Issuer, if and to
the extent payment owed to such Lender or the LC Issuer is not made when due
hereunder or under the Note held by such Lender or the LC Issuer, to charge from
time to time against any or all of the Borrower's accounts with such Lender or
the LC Issuer any amount so due.
(c) All computations of interest based on the Base Rate (other than such
computations of the Base Rate that are based on the Federal Funds Rate) shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be,
and all computations of interest based on the Eurodollar Rate or the Federal
Funds Rate and of the commitment fees and
20
the LC Fee shall be made by the Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, commitment fees
or the LC Fee are payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(d) 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, commitment fee or the LC
Fee, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders or the LC Issuer hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender or the LC Issuer, as applicable, on such due date an amount equal to the
amount then due such Lender or the LC Issuer. If and to the extent the Borrower
shall not have so made such payment in full to the Agent, each Lender or the LC
Issuer, as applicable, shall repay to the Agent forthwith on demand such amount
distributed to such Lender or the LC Issuer together with interest thereon, for
each day from the date such amount is distributed to such Lender or the LC
Issuer until the date such Lender or the LC Issuer repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes. (a) Subject to the exclusions set forth below in
this Section 2.13(a) and, if applicable, compliance with Section 2.13(e), any
and all payments by the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.12, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender, the LC Issuer and the Agent, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings imposed on its
income, and franchise taxes imposed on it in lieu of income taxes, (i) by the
jurisdiction under the laws of which such Lender, the LC Issuer or the Agent (as
the case may be) is organized or any political subdivision thereof and (ii), in
the case of each Lender and the LC Issuer, by the jurisdiction of such Lender's
or the LC Issuer's Applicable Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the Notes
being hereinafter referred to as "Taxes"). Notwithstanding the above, 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 Lender, the LC Issuer or the
Agent, the Borrower will so deduct and (i) the sum payable shall be increased as
may be necessary so that after making all such deductions on account of Taxes
(including deductions on account of Taxes applicable to additional sums payable
under this Section 2.13) such Lender, the LC Issuer or the 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
21
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) 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 the Notes or from the execution,
delivery or registration of this Agreement or the Notes (hereinafter referred to
as "Other Taxes").
(c) Without duplication of the Borrower's payment obligations on account of
Taxes or Other Taxes pursuant to Sections 2.13(a) and (b), the Borrower shall
indemnify each Lender, the LC Issuer and the Agent for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.13) imposed on or paid by
such Lender or the Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date such Lender, the
LC Issuer or the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Agent, at its address referred to in Section 8.02, the
original or a certified copy of a receipt evidencing payment thereof. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter as requested in writing by the Borrower
(but only so long as such Lender remains lawfully able to do so), shall provide
each of the Agent and the Borrower with two original Internal Revenue Service
Form W-8BEN or W-8ECI, as appropriate, or any successor or other form prescribed
by the Internal Revenue Service, certifying that such Lender is exempt from
United States withholding tax on payments pursuant to this Agreement or the
Notes. If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
Form W-8BEN or W-8ECI, that the Lender reasonably considers to be confidential,
the Lender shall give notice thereof to the Borrower and shall not be obligated
to include in such form or document such confidential information; however, such
a Lender will not be entitled to any payment or indemnification on account of
any Taxes imposed by the United States.
(f) Notwithstanding any provision to the contrary in this Agreement, the
Borrower will not be obligated to make payments on account of or indemnify the
Lenders, the LC Issuer or the Agent for any present or future taxes, levies,
imposts, deductions, charges or withholdings,
22
and all liabilities with respect thereto, or any present or future stamp or
other documentary taxes or property taxes, charges or similar levies that are
neither Taxes nor Other Taxes.
(g) For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form described in Section 2.13(e) (other than if
such failure is due to a change in law occurring subsequent to the date on which
a form originally was required to be provided, or if such form otherwise is not
required under the first sentence of subsection (e) above), such Lender shall
not be entitled to indemnification under Section 2.13(a) or (c) with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
(h) In the event that a Lender demands payment from the Borrower for
amounts owing pursuant to subsection (a) or (b) of this Section 2.13, the
Borrower may, upon payment of such amounts and subject to the requirements of
Sections 8.04 and 8.07, substitute for such Lender another financial
institution, which financial institution shall be an Eligible Assignee and shall
assume the Commitments of such Lender and purchase the Outstanding Credit
Exposures held by such Lender in accordance with Section 8.07, provided,
however, that (i) no Default shall have occurred and be continuing, (ii) the
Borrower shall have satisfied all of its obligations in connection with the Loan
Documents with respect to such Lender, and (iii) if such assignee is not a
Lender, (A) such assignee is acceptable to the Agent and (B) the Borrower shall
have paid the Agent a $3,000 administrative fee.
(i) Notwithstanding any provision to the contrary in this Agreement, in the
event that a Lender that is not an Initial Lender and who purchased its interest
in this Agreement without the consent of the Borrower pursuant to Section
8.07(a), seeks (i) payment of additional amounts pursuant to Section 2.13(a),
(ii) payment of Other Taxes pursuant to Section 2.13(b), or (iii)
indemnification for Taxes or Other Taxes pursuant to Section 2.13(c), the amount
of any such payment or indemnification will be no greater than what it would
have been had the Initial Lender not transferred, assigned or sold its interest
in this Agreement.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Outstanding Credit Exposures owing to
it (other than pursuant to Section 2.10, 2.13 or 8.04(c)) in excess of its
ratable share of payments on account of the Aggregate Outstanding Credit
Exposures obtained by all of the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in the Aggregate Outstanding Credit
Exposures owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The
23
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.14 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.15. Use of Proceeds. The proceeds of the Reimbursement
Advances shall be available (and the Borrower agrees that it shall use such
proceeds) solely to satisfy only Reimbursement Obligations as contemplated in
Section 2.01; and Facility LCs shall be issued hereunder (and the Borrower
agrees that it shall use such Facility LCs) solely for general corporate
purposes of the Borrower and its Subsidiaries.
SECTION 2.16. Facility LCs. (a) Issuance. The LC Issuer hereby agrees,
on the terms and conditions set forth in this Agreement, to issue standby
letters of credit for the account of the Borrower and for the benefit of the
Borrower or any Subsidiary of the Borrower (each, a "Facility LC") and to renew,
extend, increase, decrease or otherwise modify each Facility LC ("Modify", and
each such action a "Modification"), from time to time from and including the
date of this Agreement and prior to the Commitment Termination Date upon the
request of the Borrower; provided that immediately after each such Facility LC
is issued or Modified, the Aggregate Outstanding Credit Exposures shall not
exceed the aggregate of all the Commitments. No Facility LC shall have an expiry
date later than the earlier of (x) the Commitment Termination Date and (y) one
year after its issuance; provided that any Facility LC with a one-year term may
provide for the renewal thereof for additional one-year periods (which shall in
no event extend beyond the date referenced in clause (x) above). In addition, no
Facility LC shall provide that the stated amount of such Facility LC may, by its
terms or by the terms of any Facility LC Application, be automatically increased
by an amount in excess of the stated amount of such Facility LC as of the
original issuance date thereof.
(b) Participations. Upon the issuance or Modification by the LC Issuer of a
Facility LC in accordance with this Section 2.16, the LC Issuer shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably sold to each Lender, and each Lender shall be deemed, without
further action by any party hereto, to have unconditionally and irrevocably
purchased from the LC Issuer, a participation in such Facility LC (and each
Modification thereof) and the related LC Obligations in proportion to its Pro
Rata Share.
(c) Notice. Subject to Section 2.16(a), the Borrower shall give the LC
Issuer and the Agent notice prior to 11:00 a.m. (New York City time) at least
five Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such Facility LC, and describing the
proposed terms of such Facility LC and the nature of the transactions proposed
to be supported thereby. Upon receipt of such notice, the Agent shall promptly
notify each Lender of the contents thereof and of the amount of such Lender's
participation in such proposed Facility LC. The issuance or Modification by the
LC Issuer of any Facility LC shall, in addition to the conditions precedent set
forth in Article III (the satisfaction of which the LC Issuer shall have no duty
to ascertain), be subject to the conditions precedent that such Facility LC
shall be satisfactory to the LC Issuer and that the Borrower shall have executed
and delivered such application agreement and/or such other instruments and
agreements relating to such Facility LC as the LC Issuer shall have reasonably
requested (each, a "Facility LC Application"). In the
24
event of any conflict between the terms of this Agreement and the terms of any
Facility LC Application, the terms of this Agreement shall control.
(d) Administration; Reimbursement by Lenders. Upon receipt from the
beneficiary of any Facility LC of any demand for payment under such Facility LC,
the LC Issuer shall notify the Agent and the Agent shall promptly notify the
Borrower and each other Lender as to the amount to be paid by the LC Issuer as a
result of such demand and the proposed payment date (the "LC Payment Date"). The
responsibility of the LC Issuer to the Borrower and each Lender shall be only to
determine that the documents (including each demand for payment) delivered under
each Facility LC in connection with such presentment shall be in conformity in
all material respects with such Facility LC. The LC Issuer shall endeavor to
exercise the same care in the issuance and administration of the Facility LCs
issued by the LC Issuer as it does with respect to letters of credit in which no
participations are granted, it being understood that each Lender shall be
unconditionally and irrevocably liable without regard to the occurrence of any
Default or any condition precedent whatsoever to reimburse the LC Issuer on
demand for (i) such Lender's Pro Rata Share of the amount of each payment made
by the LC Issuer under each Facility LC issued by the LC Issuer to the extent
such amount is not reimbursed by the Borrower pursuant to Section 2.16(e) below,
plus (ii) interest on the foregoing amount to be reimbursed by such Lender, for
each day from the date of the LC Issuer's demand for such reimbursement (or, if
such demand is made after 11:00 a.m. (New York City time) on such date, from the
next succeeding Business Day) to the date on which such Lender pays the amount
to be reimbursed by it, at a rate of interest per annum equal to the Federal
Funds Rate for the first three days and, thereafter, at a rate of interest equal
to the rate applicable to Eurodollar Rate Advances.
(e) Reimbursement by Borrower. The Borrower shall be irrevocably and
unconditionally obligated to reimburse the LC Issuer on or before the applicable
LC Payment Date for any amounts to be paid by the LC Issuer upon any drawing
under any Facility LC issued by the LC Issuer, without presentment, demand,
protest or other formalities of any kind; provided that neither the Borrower nor
any Lender shall hereby be precluded from asserting any claim for direct (but
not consequential) damages suffered by the Borrower or such Lender to the
extent, but only to the extent, caused by (i) the willful misconduct or gross
negligence of the LC Issuer in determining whether a request presented under any
Facility LC issued by it complied with the terms of such Facility LC or (ii) the
LC Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid
by the Borrower shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to (x) the rate applicable to Base Rate Advances for
such day if such day falls on or before the applicable LC Payment Date and (y)
the sum of 2% plus the rate applicable to Base Rate Advances for such day if
such day falls after such LC Payment Date. The LC Issuer will pay to each Lender
ratably in accordance with its Pro Rata Share all amounts received by it from
the Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer,
but only to the extent such Lender has made payment to the LC Issuer in respect
of such Facility LC pursuant to Section 2.16(d). Subject to the terms and
conditions of this Agreement (including without limitation the submission of a
Notice of Borrowing in compliance with Section 2.02(a) and the satisfaction of
the applicable
25
conditions precedent set forth in Section 3.02), the Borrower may request a
Reimbursement Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.
(f) Obligations Absolute. The Borrower's obligations under this Section
2.16 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the LC Issuer, any Lender or any
beneficiary of a Facility LC. The Borrower further agrees with the LC Issuer and
the Lenders that the LC Issuer and the Lenders shall not be responsible for, and
the Borrower's Reimbursement Obligation in respect of any Facility LC shall not
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even if such documents should in fact prove to be
in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or
any financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any of
its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Facility LC. The Borrower
agrees that any action taken or omitted by the LC Issuer or any Lender under or
in connection with each Facility LC and the related drafts and documents, if
done without gross negligence or willful misconduct, shall be binding upon the
Borrower and shall not put the LC Issuer or any Lender under any liability to
the Borrower. Nothing in this Section 2.16(f) is intended to limit the right of
the Borrower to make a claim against the LC Issuer for damages as contemplated
by the proviso to the first sentence of Section 2.16(e).
(g) Actions of LC Issuer. The LC Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Facility LC, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document 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, independent accountants and other experts selected by the LC Issuer.
The LC Issuer shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any other
provision of this Section 2.16, the LC Issuer shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and any future holders of a participation in any Facility LC.
(h) Lenders' Indemnification. Each Lender shall, ratably in accordance with
its Pro Rata Share, indemnify the LC Issuer, its Affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such indemnitees' gross negligence or willful misconduct or the LC Issuer's
failure to pay under any Facility LC after the presentation to it of a request
strictly complying with the terms and conditions of the Facility LC) that such
indemnitees may suffer or
26
incur in connection with this Section 2.16 or any action taken or omitted by
such indemnitees hereunder.
(i) Facility LC Collateral Account. The Borrower agrees that it will, upon
the request of the Agent or the Required Lenders and until the final expiration
date of any Facility LC and thereafter as long as any amount is payable to the
LC Issuer or the Lenders in respect of any Facility LC, maintain a special
collateral account pursuant to arrangements satisfactory to the Agent (the
"Facility LC Collateral Account") at the Agent's office at the address specified
pursuant to Section 8.02, in the name of the Borrower but under the sole
dominion and control of the Agent, for the benefit of the Lenders and in which
the Borrower shall have no interest other than as set forth in Section 2.09(b)
and Section 6.01. The Borrower hereby pledges, assigns and grants to the Agent,
on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a
security interest in all of the Borrower's right, title and interest in and to
all funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and performance of
the Obligations (including, without limitation, any contingent reimbursement
obligations in respect of any undrawn amounts under any Facility LCs). The Agent
will invest any funds on deposit from time to time in the Facility LC Collateral
Account in certificates of deposit of the Agent having a maturity not exceeding
30 days. Nothing in this Section 2.16(i) shall either obligate the Agent to
require the Borrower to deposit any funds in the Facility LC Collateral Account
or limit the right of the Agent to release any funds held in the Facility LC
Collateral Account in each case other than as required by Section 2.09(b) or
Section 6.01.
(j) Rights as a Lender. In its capacity as a Lender, the LC Issuer shall
have the same rights and obligations as any other Lender.
SECTION 2.17. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Credit Extension made by such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i) the
date and the amount of each Credit Extension made hereunder and the Interest
Period, if any, applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder, (iii) the effective date and amount of each Assignment and Acceptance
delivered to and accepted by it and the parties thereto pursuant to Section
8.07, (iv) the amount of any sum received by the Agent hereunder from the
Borrower and each Lender's share thereof, (v) the original stated amount of each
Facility LC and the amount of LC Obligations outstanding at any time, and (vi)
all other appropriate debits and credits as provided in this Agreement,
including, without limitation, all fees, charges, expenses and interest.
(c) The entries maintained in the accounts maintained pursuant to clauses
(a) and (b) above shall be prima facie evidence of the existence and amounts of
the obligations hereunder and under the Notes therein recorded; provided,
however, that the failure of the Agent or any
27
Lender to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay such obligations in accordance
with their terms.
(d) Any Lender may request that its Reimbursement Advances be evidenced by
a promissory note representing its Reimbursement Advances substantially in the
form of Exhibit A (each, a "Note"). In such event, the Borrower shall prepare,
execute and deliver to such Lender such Note payable to the order of such
Lender. Thereafter, the Reimbursement Advances evidenced by each such Note and
interest thereon shall at all times (including after any assignment pursuant to
Section 8.07) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 8.07, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Reimbursement Advances once again be
evidenced as described in clauses (a) and (b) above.
SECTION 2.18. Extension of Commitment Termination Date. Unless the
Agent or the Borrower shall have delivered written notice of termination of this
Agreement as of the then effective Commitment Termination Date (a "Termination
Notice") to the Borrower and the Lenders, in the case of any such Termination
Notice from the Agent, or the Agent and the Lenders, in the case of any such
Termination Notice from the Borrower, which Termination Notice shall have been
delivered no later than sixty (60) days prior to the Commitment Termination Date
then in effect, and so long as no Default or Event of Default has occurred and
is continuing as of the then effective Commitment Termination Date (without
giving effect to such extension), the Commitment Termination Date shall, subject
to the provisions of this Section and provided that the Borrower shall not have
elected to convert the Aggregate Outstanding Credit Exposures to a term loan as
set forth in Section 2.19, automatically be extended for an additional one-year
period, and the Borrower shall be deemed to have made each of the statements in
Section 3.02(a) as of such then effective Commitment Termination Date.
SECTION 2.19. Conversion to Term Loan. If the Borrower so elects by
(i) delivery of a written notice to the Agent (a "Notice to Convert") at least
three (3) but not more than ten (10) Business Days prior to the date of the then
current Commitment Termination Date and (ii) the cancellation and return of all
outstanding Facility LCs (or, alternatively, with respect to each such Facility
LC, the furnishing to the Agent of a cash deposit for deposit into the Facility
LC Collateral Account equal to 105% of the Collateral Shortfall Amount as of
such date), and (iii) the payment in full of all accrued and unpaid fees, then
on such date (the "Loan Conversion Date") the Commitments shall be terminated
and the then aggregate outstanding principal amount of the Reimbursement
Advances and all Reimbursement Obligations shall be converted to a term loan
which shall, in the case of each Lender, be in the amount of such Lender's
outstanding Reimbursement Advances and Reimbursement Obligations on such date,
and which shall be due and payable in full, together with accrued interest, on
the Facility Termination Date; provided, that no such conversion shall occur if
a Default or Event of Default has occurred and is continuing either on the date
of delivery of such Notice to Convert or on the Loan Conversion Date. The Agent
shall promptly deliver a copy of such Notice to Convert to each Lender. Upon
delivery of such Notice to Convert, the Borrower's option to borrow and reborrow
Reimbursement Advances shall terminate, and such Notice to Convert shall include
a representation and warranty by the Borrower that the conditions contained in
Section 3.02 have been or will be satisfied as of the date of such Notice to
Convert and as of the Loan Conversion
28
Date. Amounts repaid or prepaid following any such conversion may not be
reborrowed. If such term loan conversion has not previously been completed, then
on the Commitment Termination Date, the Commitments shall be terminated and the
Borrower shall pay in full any Aggregate Outstanding Credit Exposures and all
other unpaid Obligations.
ARTICLE III: CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS
SECTION 3.01. Conditions Precedent to Effectiveness of this Agreement.
This Agreement shall become effective on and as of the date hereof (the
"Effective Date"), provided that the following conditions precedent have been
satisfied on such date:
(a) There shall have occurred no Material Adverse Change since December 31,
2004, except as shall have been disclosed or contemplated in the SEC Reports.
(b) The Lenders shall have been given such access, as such Lenders have
reasonably requested, to the management, records, books of account, contracts
and properties of the Borrower and its Significant Subsidiaries as they shall
have requested.
(c) All governmental and third party consents, authorizations and approvals
necessary in connection with the transactions contemplated hereby shall have
been obtained (without the imposition of any conditions that are not acceptable
to the Lenders) and shall remain in effect, and no law or regulation shall be
applicable in the reasonable judgment of the Agent that restrains, prevents or
imposes materially adverse conditions upon the transactions contemplated by the
Loan Documents.
(d) The Borrower shall have notified each Lender and the Agent in writing
as to the proposed Effective Date.
(e) The Borrower shall have paid all accrued fees and reasonable expenses
of the Agent and the Lenders with respect to this Agreement for which the Agent
shall have made reasonable demand in accordance with Section 8.04 on or prior to
the Effective Date.
(f) On the Effective Date, the following statements shall be true and the
Agent shall have received for the account of each Lender a certificate,
substantially in the form of Exhibit D hereto, signed on behalf of the Borrower
by a duly authorized Financial Officer of the Borrower, dated the Effective
Date, stating, among other things, that:
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes a
Default.
(g) The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the Agent
and (except for any Notes requested by the Lenders) in sufficient copies for
each Lender:
(i) Notes, if any, to the order of each Lender requesting the issuance
of a Note as of the Effective Date pursuant to Section 2.17.
29
(ii) Certified copies of the resolutions of the Board of Directors of
the Borrower approving each Loan Document to which it is a party, and of
all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to each Loan Document to which it is a
party.
(iii) A certificate of the Corporate Secretary or an Assistant
Corporate Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign each Loan
Document to which it is a party and the other documents to be delivered
hereunder or thereunder.
(iv) A favorable opinion letter of X. X. Xxxxxx, the Associate General
Counsel of the Borrower, substantially in the form of Exhibit E hereto and
as to such other matters as any Lender through the Agent may reasonably
request.
SECTION 3.02. Conditions Precedent to Each Credit Extension. The
obligation of each Lender or the LC Issuer, as the case may be, to make a Credit
Extension shall be subject to the conditions precedent that the Effective Date
shall have occurred and on the date of such Credit Extension: (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing, the acceptance by the Borrower of the proceeds of such Borrowing and
the request for the issuance, renewal, extension or increase of any Facility LC
hereunder shall constitute a representation and warranty by the Borrower that on
the date of such Credit Extension such statements are true):
(i) the representations and warranties contained in Section 4.01 are
correct on and as of the date of such Credit Extension, before and after
giving effect to such Credit Extension and to the application of the
proceeds therefrom, as though made on and as of such date; provided, that
such condition shall not apply to (A) (x) the last sentence of Section
4.01(e) or (y) Section 4.01(f) (the "Identified Representations") or (B)
from and after the repeal of the Public Utility Holding Company Act of 1935
on February 8, 2006, Section 4.01(o), with respect to any Credit Extension
after the Effective Date, but shall apply to the Identified Representations
with respect to any extension of the Commitment Termination Date under
Section 2.18 or conversion to term loan under Section 2.19,
(ii) after giving effect to the application of the proceeds of all
Credit Extensions on such date (together with any other resources of the
Borrower applied together therewith), no event has occurred and is
continuing, or would result from such Credit Extension or from the
application of the proceeds therefrom, that constitutes a Default, and
(iii) the Borrower has not received notice from the Agent on or prior
to the date of such Credit Extension that a mandatory prepayment is
required under Section 2.09(b) (other than any such notice that has been
withdrawn in writing by the Agent);
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
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SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.
ARTICLE IV: REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation.
(b) The execution, delivery and performance by the Borrower of the Loan
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, and do not
contravene (i) the Borrower's charter or by-laws or (ii) law or any contractual
restriction binding on or affecting the Borrower.
(c) No consent, authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any other
third party is required for the due execution, delivery and performance by the
Borrower of any Loan Document to which it is a party.
(d) This Agreement has been, and each of the Notes when delivered hereunder
will have been, duly executed and delivered by the Borrower. This Agreement is,
and each of the Notes when delivered hereunder will be, the legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with their respective terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors rights generally.
(e) The Audited Statements of the Borrower, DECO and MichCon and the
Unaudited Statements of the Borrower, DECO and MichCon, copies of each of which
have been furnished to each Lender, fairly present, subject in the case of
Unaudited Statements to normal year-end audit adjustments, the Consolidated
financial condition, results of operations and cash flows of the relevant
Persons and entities, as at the dates and for the periods therein indicated, all
in accordance with generally accepted accounting principles consistently applied
as in effect on the date of such Audited Statements or Unaudited Statements, as
applicable. Since December 31, 2004 (or, in connection with the application of
this representation with respect to any extension of the Commitment Termination
Date under Section 2.18 or conversion to term loan under Section 2.19, since the
last day of the most recent fiscal year of the Borrower in respect of which the
Borrower shall have filed an Annual Report on Form 10-K with the Securities and
Exchange
31
Commission), there has been no Material Adverse Change, except as shall have
been disclosed or contemplated in the SEC Reports.
(f) There is no pending or threatened action, suit, investigation,
litigation or proceeding, including, without limitation, any Environmental
Action, affecting the Borrower or any of its Significant Subsidiaries before any
court, governmental agency or arbitrator that (i) could be reasonably likely to
have a Material Adverse Effect other than the matters disclosed or contemplated
in the SEC Reports (and/or, in connection with the application of this
representation with respect to any extension of the Commitment Termination Date
under Section 2.18 or conversion to term loan under Section 2.19, disclosed or
contemplated in each of the Borrower's Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and/or reports on Form 8-K, in each case filed with the
Securities and Exchange Commission after the Effective Date but not later than
60 days prior to the proposed extension date for the Commitment Termination Date
or Conversion Date, as applicable) (the "Disclosed Litigation") or (ii) purports
to affect the legality, validity or enforceability of any Loan Document or the
consummation of the transactions contemplated hereby, and there has been no
adverse change in the status or financial effect on the Borrower or any of its
Significant Subsidiaries, of the Disclosed Litigation from that disclosed or
contemplated in the SEC Reports that could be reasonably likely to have a
Material Adverse Effect.
(g) The operations and properties of the Borrower and each of the
Significant Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance with such
Environmental Laws and Environmental Permits has been resolved without ongoing
material obligations or costs, except as disclosed or contemplated in the SEC
Reports, and no circumstances exist that could be reasonably likely to (i) form
the basis of an Environmental Action against the Borrower or any of the
Significant Subsidiaries or any of their properties that could have a Material
Adverse Effect or (ii) cause any such property to be subject to any restrictions
on ownership, occupancy, use or transferability under any Environmental Law that
could have a Material Adverse Effect.
(h) No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan.
(i) Schedule B (Actuarial Information) to the most recent annual report
(Form 5500 Series) for each Plan, copies of which have been filed with the
Internal Revenue Service, is complete and accurate and fairly presents the
funding status of such Plan, and since the date of such Schedule B there has
been no material adverse change in such funding status.
(j) Neither the Borrower nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.
(k) Neither the Borrower nor any ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer Plan is reasonably expected to be in reorganization or
to be terminated, within the meaning of Title IV of ERISA.
32
(l) Except as set forth in the financial statements referred to in
subsection (e) above, the Borrower and its Subsidiaries have no material
liability with respect to "expected post retirement benefit obligations" within
the meaning of Statement of Financial Accounting Standards No. 106.
(m) The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Credit Extension will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock; and after applying the proceeds of each Credit Extension
hereunder, margin stock (within the meaning of Regulation U issued by the Board
of Governors of the Federal Reserve System) constitutes less than twenty-five
percent (25%) of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale or pledge, or any other restriction
hereunder.
(n) Neither the Borrower nor any of its Subsidiaries is, or after the
making of any Credit Extension or the application of the proceeds or repayment
thereof, or the consummation of any of the other transactions contemplated
hereby, will be, an "investment company", or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" (within the
meaning of the Investment Company Act of 1940, as amended).
(o) The Borrower is exempt from being required to seek approval to perform
its obligations under the Loan Documents pursuant to Rule 2 of the Rules and
Regulations promulgated pursuant to the Public Utility Holding Company Act of
1935, as amended.
ARTICLE V: COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Outstanding Credit
Exposure shall remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
to comply with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with ERISA and
Environmental Laws, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its property that, if not paid, could be reasonably expected to result in a
Material Adverse Effect; provided, however, that neither the Borrower nor any of
its Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
33
(c) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties (including
customary self-insurance) in the same general areas in which the Borrower or
such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain its
corporate existence, rights (charter and statutory) and franchises; provided,
however, that the Borrower shall not be required to preserve any right or
franchise if the Board of Directors of the Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Borrower and that the loss thereof is not disadvantageous in
any material respect to the Borrower and its Subsidiaries taken as a whole or
the ability of the Borrower to meet its obligations hereunder.
(e) Visitation Rights. At any reasonable time and from time to time, permit
the Agent or any of the Lenders or any agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Borrower and any of its Significant
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any of its Significant Subsidiaries with any of their officers or directors
and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Significant Subsidiaries
to keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Subject to clause (d) above, maintain
and preserve, and cause each of its Significant Subsidiaries to maintain and
preserve, all of their respective properties that are used or useful in the
conduct of their respective businesses in good working order and condition,
ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 65 days after the end
of each of the first three quarters of each fiscal year of the Borrower,
Consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and Consolidated statements of
income and cash flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end
of such quarter;
(ii) as soon as available and in any event within 115 days after the
end of each fiscal year of the Borrower, a copy of the annual report to
Shareholders for such year for the Borrower and its Consolidated
Subsidiaries, containing the Consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal year, in each case accompanied by an opinion
by Deloitte & Touche LLP or any other independent public accounting firms
which (x) as of the date of
34
this Agreement is one of the "big four" accounting firms or (y) is
reasonably acceptable to the Required Lenders;
(iii) together with the financial statements required under clauses
(i) or (ii) above, a compliance certificate in substantially the form of
Exhibit F signed by a Financial Officer of the Borrower showing the then
current information and calculations necessary to determine the Applicable
Margin and the Applicable Commitment Fee Rate and compliance with this
Agreement and stating that no Event of Default or Default exists, or if any
Event of Default or Default exists, stating the nature and status thereof;
(iv) as soon as possible and in any event within five days after the
occurrence of each Default continuing on the date of such statement, a
statement of a Financial Officer of the Borrower setting forth details of
such Default and the action that the Borrower has taken and proposes to
take with respect thereto;
(v) reasonably promptly after the sending or filing thereof copies of
all reports and registration statements that the Borrower or any Subsidiary
filed with the Securities and Exchange Commission or any national
securities exchange; and
(vi) such other information respecting the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
Information required to be delivered pursuant to clauses (i), (ii) or (v)
above shall be deemed to have been delivered on the date on which the Borrower
has posted such information on the Borrower's website on the Internet at
xxx.xxxxxxxxx.xxx (or any successor or replacement website thereof), which
website includes an option to subscribe to a free service alerting subscribers
by email of new Securities and Exchange Commission filings at
xxxx://xxx.xxxxxxxxx-xx.xxx/xxxxx/xx_xxxx.xxxxx?xxxxxxxXXX&xxxxxxx0000, or at
xxx.xxx.xxx or at another website identified in a notice to the Lenders and
accessible by the Lenders without charge.
SECTION 5.02. Negative Covenants. At all times on and after the
Effective Date so long as any Outstanding Credit Exposure shall remain unpaid or
any Lender shall have any Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit any Significant
Subsidiary to create or suffer to exist, any Lien on or with respect to any
shares of any class of equity securities (including, without limitation, Voting
Stock) of any Significant Subsidiary, whether such shares are now owned or
hereafter acquired.
(b) Debt. Create, incur, assume or suffer to exist any Debt except (i) Debt
that is expressly or effectively pari passu with or expressly subordinated to
the Debt of the Borrower hereunder, (ii) Nonrecourse Debt or (iii) other Debt
incurred in the ordinary course of the Borrower's business up to an aggregate
amount of $50,000,000.
(c) Mergers, Etc. Merge or consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially
35
all of its assets (whether now owned or hereafter acquired) to, any Person, or
permit any Significant Subsidiary to do so, except that (i) any Significant
Subsidiary may merge or consolidate with or into any other Significant
Subsidiary, (ii) any Significant Subsidiary may merge into or dispose of assets
to the Borrower, and (iii) the Borrower may merge or consolidate with or into
any other Person so long as the Borrower shall be the surviving entity and has,
after giving effect to such merger or consolidation, senior unsecured Debt
outstanding rated at least BBB- by S&P and Baa3 by Xxxxx'x; provided, in each
case, that no Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom.
(d) Change in Nature of Business. Make, or permit any of its Significant
Subsidiaries (including Enterprises and MichCon) to make, any material change in
the nature of its business as carried on the date hereof, other than as
disclosed or contemplated in the SEC Reports.
(e) Accounting Changes. Make or permit any change in accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles; or permit any of its Subsidiaries to make or permit any
change in accounting policies or reporting practices if, as a result of such
change, the Borrower shall fail to maintain a system of accounting established
and administered in accordance with generally accepted accounting principles.
ARTICLE VI: EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Reimbursement
Advance when the same becomes due and payable; or the Borrower shall fail to pay
any Reimbursement Obligation within one Business Day after the same becomes due
and payable; or the Borrower shall fail to pay any interest on any Outstanding
Credit Exposure or make any other payment of fees or other amounts payable under
this Agreement or any Note within three Business Days after the same becomes due
and payable; or
(b) Any representation or warranty made by the Borrower herein, by the
Borrower (or any of its officers) in connection with this Agreement shall prove
to have been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 2.09(b), 5.01(d), (e) or (h) or 5.02, or (ii) the
Borrower shall fail to perform or observe any other term, covenant or agreement
contained in any Loan Document on its part to be performed or observed if such
failure shall remain unremedied for 30 days after written notice thereof shall
have been given to the Borrower by the Agent or any Lender; or
(d) The Borrower or any of its Significant Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt that is outstanding in a
principal or notional amount of at least $50,000,000 in the aggregate (but
excluding Debt outstanding hereunder and Nonrecourse Debt) of the Borrower or
such Significant Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any,
36
specified in the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or required
to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Borrower
or any of its Significant Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
the Borrower or any of its Significant Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection (e);
or
(f) Any judgment or order for the payment of money, individually or in the
aggregate, in excess of $50,000,000 shall be rendered against the Borrower or
any of its Significant Subsidiaries and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(g) The Borrower shall at any time cease to hold directly or indirectly
100% of the Voting Stock of DECO and MichCon; or
(h) The Borrower or any of its ERISA Affiliates shall incur, or, in the
reasonable opinion of the Required Lenders, shall be reasonably likely to incur
liability in excess of $50,000,000 individually or in the aggregate as a result
of one or more of the following: (i) the occurrence of any ERISA Event; (ii) the
partial or complete withdrawal of the Borrower or any of its ERISA Affiliates
from a Multiemployer Plan; or (iii) the reorganization or termination of a
Multiemployer Plan; or
(i) The Borrower and its Subsidiaries, on a Consolidated basis, shall, as
of the last day of any fiscal quarter of the Borrower, have a ratio of
Consolidated Debt (excluding (A) all Nonrecourse Debt of the Borrower and its
Subsidiaries, (B) Excluded Hedging Debt and (C) the Junior Subordinated Debt) to
Capitalization (excluding all Nonrecourse Debt) in excess of .65:1; or
37
(j) Any provision of any of the Loan Documents after delivery thereof
pursuant to Section 3.01 shall for any reason cease to be valid and binding on
or enforceable against the Borrower, or the Borrower shall so state in writing;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender and the LC Issuer to make Credit Extensions to be
terminated, whereupon the same shall forthwith terminate, (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Aggregate Outstanding Credit Exposures (other than the
undrawn stated amount under all Facility LCs outstanding at such time), all
interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Aggregate Outstanding Credit Exposures
(other than the undrawn stated amount under all Facility LCs outstanding at such
time), all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower and (iii) shall at the
request, or may with the consent, of the Required Lenders upon notice to the
Borrower and in addition to the continuing right to demand payment of all
amounts payable under this Agreement, make demand on the Borrower to pay, and
the Borrower will, forthwith upon such demand and without any further notice or
act, pay to the Agent the Collateral Shortfall Amount, which funds shall be
deposited in the Facility LC Collateral Account; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender
and the LC Issuer to make Credit Extensions shall automatically be terminated,
(B) the Aggregate Outstanding Credit Exposures (other than the undrawn stated
amount under all Facility LCs outstanding at such time), all such interest and
all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower, and (C) the Borrower shall pay to the Agent
the Collateral Shortfall Amount, which funds shall be held in the Facility LC
Collateral Account. If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account. The Agent may at any time or from time to time
after funds are deposited in the Facility LC Collateral Account, apply such
funds to the payment of the Obligations and any other amounts as shall from time
to time have become due and payable by the Borrower to the Lenders or the LC
Issuer under the Loan Documents. At any time while any Default is continuing,
neither the Borrower nor any Person claiming on behalf of or through the
Borrower shall have any right to withdraw any of the funds held in the Facility
LC Collateral Account. After all of the Obligations have been indefeasibly paid
in full and the aggregate Commitments have been terminated, any funds remaining
in the Facility LC Collateral Account shall be returned by the Agent to the
Borrower or paid to whomever may be legally entitled thereto at such time.
ARTICLE VII: THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together
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with such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Outstanding Credit Exposures), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders (or all of the Lenders to the extent required by the terms of this
Agreement), and such instructions shall be binding upon all Lenders and all
holders of Outstanding Credit Exposures; provided, however, that the Agent shall
not be required to take any action that exposes the Agent to personal liability
or that is contrary to this Agreement or applicable law. The Agent agrees to
give to each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
payee in respect of any Outstanding Credit Exposure as the owner thereof until
the Agent receives and accepts an Assignment and Acceptance entered into by the
Lender that is the payee in respect of such Outstanding Credit Exposure, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of the Borrower or
to inspect the property (including the books and records) of the Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Scotia Capital and Affiliates. With respect to its
Commitment, the Credit Extensions made by it and any Note issued to it, Scotia
Capital shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Scotia Capital in its individual capacity. Scotia Capital and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if Scotia
Capital were not the Agent and without any duty to account therefor to the
Lenders.
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SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of their respective Outstanding Credit Exposures
(or if the Aggregate Outstanding Credit Exposures are zero or if any Credit
Extensions are owing to Persons that are not Lenders, ratably according to the
respective amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of any Loan Document or any action taken or omitted by the Agent
under any Loan Document, provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, any Loan Document, to the extent that the
Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
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ARTICLE VIII: MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders affected thereby, do any of the following:
(a) waive any of the conditions specified in Section 3.01, (b) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Outstanding Credit Exposures or
any fees or other amounts payable hereunder, (d) except as expressly set forth
in Section 2.18 or 2.19, postpone any date fixed for any payment of principal
of, or interest on, the Outstanding Credit Exposures or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Outstanding Credit Exposures, or
the number of Lenders, that shall be required for the Lenders or any of them to
take any action hereunder, (f) extend the expiry date of any Facility LC to a
date after the Commitment Termination Date or forgive all or any portion of any
Reimbursement Obligation, (g) alter the manner in which payments or prepayments
of principal, interest or other amounts hereunder shall be applied or shared as
among the Lenders or Types of Reimbursement Advances, or (h) amend this Section
8.01; and provided further that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Agent under this Agreement
or any Note; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the LC Issuer in addition to the Lenders
required above to take such action, affect the rights and duties of the LC
Issuer under this Agreement or any Facility LC.
SECTION 8.02. Notices, Etc.
(a) All notices and other communications provided for hereunder shall be in
writing or confirmed in writing (including telecopier communication) and mailed,
telecopied or delivered, if to the Borrower, at its address at 0000 0xx Xxxxxx,
Xxxxxxx, XX 00000, Attention: Treasurer; if to the LC Issuer or any Lender, at
its Domestic Lending Office; and if to the Agent, at its address at Xxx Xxxxxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxxxxxx Xxxx; or, as to
the Borrower or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Agent. All such notices and communications shall, when
mailed or telecopied be effective when deposited in the mails or telecopied,
respectively, except that notices and communications to the Agent pursuant to
Article II, III or VII shall not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
(b) (i) Except as otherwise provided in Section 5.01(h), the Borrower shall
provide to the Agent all information, documents and other materials that such
Person is obligated to furnish to the Agent pursuant to this Agreement and the
other Loan Documents, including, without
41
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a Notice of Borrowing or other request for a
new, or a conversion of an existing, Borrowing or other Credit Extension
(including any election of an interest rate or Interest Period relating
thereto), (ii) relates to the payment of any principal or other amount due
hereunder prior to the scheduled date therefor, (iii) provides notice of any
Default or Event of Default hereunder or (iv) is required to be delivered to
satisfy any condition precedent to the effectiveness of this Agreement and/or
any Borrowing or other Credit Extension hereunder (all such non-excluded
communications being referred to herein collectively as "Communications"), by
transmitting the Communications in an electronic/soft medium in a format
acceptable to the Agent to such electronic mail address as the Agent shall
identify to the Borrower. In addition, the Borrower shall continue to provide
the Communications to the Agent in the manner specified in this Agreement but
only to the extent requested by the Agent. The Borrower further agrees that the
Agent may make the Communications available to the Lenders by posting the
Communications on Intralinks, or a substantially similar electronic transmission
system mutually agreeable to the Agent and the Borrower (the "Platform").
Nothing in this Section 8.02(b) shall prejudice the right of the Agent to give
any notice or other communication pursuant hereto or to any other Loan Document
in any other manner specified herein or therein.
(ii) The Agent agrees that the receipt of the Communications by the
Agent at its e-mail address set forth in clause (i) above shall constitute
effective delivery of the Communications to the Agent for purposes of each Loan
Document. The Borrower agrees that e-mail notice to it (at the address provided
pursuant to the next sentence and deemed delivered as provided in subclause
(iii) below) specifying that Communications have been posted to the Platform
shall constitute effective delivery of such Communications to such Person under
the Loan Documents. The Borrower agrees (A) to notify the Agent in writing
(including by electronic communication) from time to time to ensure that the
Agent has on record an effective e-mail address for such Person to which the
foregoing notices may be sent by electronic transmission and (B) that the
foregoing notices may be sent to such e-mail address.
(iii) Each party hereto agrees that any electronic communication
referred to in this clause (b) shall be deemed delivered upon the posting of a
record of such Communication as "sent" in the e-mail system of the sending party
or, in the case of any such Communication to the Agent, upon the posting of a
record of such Communication as "received" in the e-mail system of the Agent;
provided, however, that if such Communication is received by the Agent after the
normal business hours of the Agent, such Communication shall be deemed delivered
at the opening of business on the next Business Day for the Agent; provided,
further, that in the event that the Agent's e-mail system shall be unavailable
for receipt of any Communication, Borrower may deliver such Communication to the
Agent in a manner mutually agreeable to the Agent and the Borrower.
(iv) The Borrower acknowledges and agrees that the distribution of the
Communications and other material through an electronic medium is not
necessarily secure and that there are confidentiality and other risks associated
with such distribution. THE BORROWER FURTHER ACKNOWLEDGES AND AGREES AS FOLLOWS:
(A) THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE"; (B) SCOTIA CAPITAL DOES
NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
42
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIMS
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS; AND (C) NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY
SCOTIA CAPITAL IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM.
(v) This clause (b) shall terminate on the date that neither Scotia
Capital nor any of its Affiliates is the Agent under this Agreement.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand, upon presentation of a statement of account and absent manifest error,
all reasonable costs and reasonable expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Document and the other documents to be delivered hereunder and
thereunder, including, without limitation, (A) all due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and reasonable expenses of counsel for the Agent with respect thereto and
with respect to advising the Agent as to its rights and responsibilities under
the Loan Documents. The Borrower further agrees to pay on demand all reasonable
costs and reasonable expenses of the Agent, the LC Issuer and the Lenders, if
any (including, without limitation, reasonable internal and external counsel
fees and expenses, provided such fees and expenses are not duplicative), in
connection with the "workout", restructuring or enforcement (whether through
negotiations, legal proceedings or otherwise) of the Loan Documents and the
other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent, the LC Issuer and each
Lender in connection with the enforcement of rights under this Section 8.04(a).
(b) The Borrower agrees to indemnify, to the extent legally permissible,
and hold harmless the Agent, the LC Issuer and each Lender and each of their
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) the Loan Documents, any Facility LC, any of the transactions
contemplated herein or therein or the actual or proposed use of the proceeds of
the Credit Extensions or (ii) the actual or alleged presence of Hazardous
Materials on any property of the Borrower or any of its Subsidiaries or any
Environmental Action relating in any
43
way to the Borrower or any of its Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct; provided that upon
receipt of notice of any such matter by a representative of the Agent, the LC
Issuer or any Lender, as applicable, having primary responsibility for the
relationship between the Borrower and the Agent, the LC Issuer or such Lender,
as applicable, the Agent, the LC Issuer or such Lender, as applicable, shall
promptly notify the Borrower to the extent permitted by applicable law. The
Borrower shall have no liability for any settlement effected without its prior
written consent, which consent shall not be unreasonably withheld or delayed.
The Borrower also agrees not to assert any claim against the Agent, the LC
Issuer, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Loan Documents, any Facility LC, any of the
transactions contemplated herein or therein or the actual or proposed use of the
proceeds of the Credit Extensions.
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Reimbursement Advance, as a result
of a payment or Conversion pursuant to Section 2.07(d) or (e), 2.09 or 2.11,
acceleration of the maturity of the Reimbursement Advances pursuant to Section
6.01, or for any other reason, the Borrower shall, upon demand by such Lender
(with a copy of such demand to the Agent), pay to the Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Credit Extension.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.10, 2.13 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Aggregate Outstanding Credit Exposures due and payable pursuant to
the provisions of Section 6.01, each Lender, the LC Issuer and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender, the LC Issuer or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under the Loan
Documents and any Note held by such Lender or the LC Issuer, whether or not such
Lender or the LC Issuer shall have made any demand under this Agreement or such
Note and although such
44
obligations may be unmatured. Each Lender and the LC Issuer agrees promptly to
notify the Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender, the LC Issuer and their respective
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender, the
LC Issuer and their respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Section 2.01, which shall only become effective upon satisfaction of
the conditions precedent set forth in Section 3.01) when it shall have been
executed by the Borrower and the Agent and when the Agent shall have been
notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent, the LC Issuer and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders to any Person.
SECTION 8.07. Assignments, Designations and Participations. (a) Each
Lender may (i) with the prior consent of the Agent (which consent shall not be
unreasonably withheld and which consent shall not be required in the event of an
assignment or grant pursuant to Sections 8.07(g) or (h)), (ii) for so long as no
Default has occurred and is continuing, with the consent of the Borrower (which
consent shall not be unreasonably withheld and which consent shall not be
required in the event of an assignment or grant pursuant to Sections 8.07(g) or
(h)), and (iii) with the prior consent of the LC Issuer (which consent may be
given or withheld in the sole discretion of the LC Issuer and which consent
shall not be required in the event of an assignment or grant pursuant to
Sections 8.07(g) or (h)), assign to one or more Persons all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, the Outstanding Credit Exposures owed to it and
any Note or Notes held by it); provided, however, that (A) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement, (B) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender or an assignment
of all of a Lender's rights and obligations under this Agreement, the amount of
the Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, (C) each such assignment
shall be to an Eligible Assignee, and (D) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,000. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (1) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (2) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
45
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are required to be performed
by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after the Borrower's receipt
of such notice, if requested by the applicable Lender, the Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Note a new Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder, if requested by such
assigning Lender, a new Note to the order of the assigning Lender in an amount
equal to the Commitment retained by it hereunder. Such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit A hereto.
(d) The Agent shall maintain at its address referred to in Section 8.02 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses and Commitment of, and
principal amount of Outstanding Credit
46
Exposure owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Each Lender may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Outstanding Credit Exposure
owing to it and any Note or Notes held by it); provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the owner of such Credit
Extensions for all purposes of this Agreement, (iv) the Borrower, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(v) no participant under any such participation shall have any right to approve
any amendment or waiver of any provision of this Agreement or any Note, or any
consent to any departure by the Borrower therefrom, except to the extent that
such amendment, waiver or consent would (A) reduce the principal of, or interest
on, the Credit Extensions or any fees or other amounts payable hereunder, or (B)
increase the Commitments, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Aggregate Outstanding Credit Exposures or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation. Each participant shall be entitled to the benefits and subject to
the exclusions, in each case, as if it were a Lender, of Sections 2.10, 2.11 and
2.13 to the same extent as if it were a Lender and had acquired its interest
under this Agreement by an assignment made pursuant to this Section 8.07,
provided, however, that (i) such participant complies with the requirements of
Section 2.13(e) and (ii) in no event shall the Borrower be obligated to make any
payment with respect to such Sections that is greater than the amount that the
Borrower would have otherwise made had no participations been sold under this
Section 8.07(e).
(f) Any Lender may, in connection with any assignment, designation or
participation or proposed assignment, designation or participation pursuant to
this Section 8.07, disclose to the assignee, designee or participant or proposed
assignee, designee or participant, any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided that, prior
to any such disclosure, the assignee, designee or participant or proposed
assignee, designee or participant shall agree to preserve the confidentiality of
any Confidential Information relating to the Borrower received by it from such
Lender.
(g) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or a portion of its
rights under this Agreement (including, without limitation, the Outstanding
Credit Exposure owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
47
(h) Notwithstanding anything to the contrary contained herein, any Lender
(a "Designating Lender") may grant to one or more special purpose funding
vehicles (each an "SPV"), identified as such in writing from time to time by the
Designating Lender to the Agent and the Borrower, the option to provide to the
Borrower all or any part of any Reimbursement Advance that such Designating
Lender would otherwise be obligated to make to the Borrower or to participate in
any Facility LC pursuant to this Agreement; provided that (i) nothing herein
shall constitute a commitment by any SPV to make any Reimbursement Advance or to
participate in any Facility LC issued hereunder, (ii) if an SPV elects not to
exercise such option or otherwise fails to provide all or any part of such
Reimbursement Advance, the Designating Lender shall be obligated to make such
Reimbursement Advance pursuant to the terms hereof, (iii) the Designating Lender
shall remain liable for any indemnity or other payment obligation with respect
to its Commitment hereunder and (iv) no SPV or Designating Lender shall be
entitled to receive any greater amount under this Agreement than the Designating
Lender would have been entitled to receive had the Designating Lender not
otherwise granted such SPV the option to provide any Reimbursement Advance to
the Borrower. The making of a Reimbursement Advance by an SPV hereunder and the
participation of an SPV in any Facility LC issued hereunder shall utilize the
Commitment of the Designating Lender to the same extent, and as if, such
Reimbursement Advance or participation in such Facility LC were made by such
Designating Lender.
(i) Each party hereto hereby acknowledges and agrees that no SPV shall have
the rights of a Lender hereunder, such rights being retained by the applicable
Designating Lender. Accordingly, and without limiting the foregoing, each party
hereby further acknowledges and agrees that no SPV shall have any voting rights
hereunder and that the voting rights attributable to any Credit Extension made
by an SPV shall be exercised only by the relevant Designating Lender and that
each Designating Lender shall serve as the administrative agent and
attorney-in-fact for its SPV and shall on behalf of its SPV receive any and all
payments made for the benefit of such SPV and take all actions hereunder to the
extent, if any, such SPV shall have any rights hereunder. No additional Note
shall be required to evidence the Credit Extensions or portion thereof made by
an SPV; and the related Designating Lender shall be deemed to hold its Note or
Notes, if any, as administrative agent for such SPV to the extent of the Credit
Extensions or portion thereof funded by such SPV. In addition, any payments for
the account of any SPV shall be paid to its Designating Lender as administrative
agent for such SPV.
(j) Each party hereto hereby agrees that no SPV shall be liable for any
indemnity or payment under this Agreement for which a Lender would otherwise be
liable so long as, and to the extent that, the related Designating Lender
provides such indemnity or makes such payment; provided, with respect to such
agreement by the Borrower that the related Designating Lender shall not be in
breach of its obligation to make Credit Extensions to the Borrower hereunder. In
furtherance of the foregoing, each party hereto hereby agrees (which agreements
shall survive the termination of this Agreement) that prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPV, it will not institute against, or
join any other person in instituting against, such SPV any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof; provided, with respect to such
agreement by the Borrower that the related Designating Lender shall not be in
breach of its obligation to make Credit
48
Extensions to the Borrower hereunder. Notwithstanding the foregoing, the
Designating Lender unconditionally agrees to indemnify the Borrower, the Agent
and each Lender against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be incurred by or asserted against the
Borrower, the Agent or such Lender, as the case may be, in any way relating to
or arising as a consequence of any such forbearance or delay in the initiation
of any such proceeding against its SPV.
(k) In addition, notwithstanding anything to the contrary contained in
subsection 8.07(h), (i), (j) or (k) or otherwise in this Agreement, any SPV may
(i) at any time and without paying any processing fee therefor, assign or
participate all or a portion of its interest in any Outstanding Credit Exposure
to the Designating Lender or to any financial institutions providing liquidity
and/or credit support to or for the account of such SPV to support the funding
or maintenance of Outstanding Credit Exposure and (ii) disclose on a
confidential basis any non-public information relating to its Outstanding Credit
Exposure to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancements to such SPV. Subsection
8.07(h), (i), (j) or (k) may not be amended without the written consent of any
Designating Lender affected thereby.
SECTION 8.08. Confidentiality. Neither the Agent nor the LC Issuer or
Lender shall disclose any Confidential Information to any other Person without
the consent of the Borrower, other than (a) to the Agent's, the LC Issuer's or
such Lender's Affiliates and their officers, directors, employees, agents and
advisors and, as contemplated by Section 8.07(f), to actual or prospective
assignees and participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) to any rating
agency when required by it, provided that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Borrower received by it from the Agent,
the LC Issuer or such Lender, (d) as requested or required by any state, federal
or foreign authority or examiner regulating banks, other financial institutions
or banking, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder and (f) on a confidential basis to the LC Issuer's or Lender's
direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.10. Execution in Counterparts; Integration. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement. This Agreement and any separate letter agreement
with respect to fees payable to the Agent or confidential information (the
latter of which shall apply solely to information provided prior to the date
hereof) constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof.
49
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any New
York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
SECTION 8.12. Waiver of Jury Trial. Each of the Borrower, the Agent,
the LC Issuer and the Lenders hereby irrevocably waives all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to this Agreement or the Notes or the
actions of the Agent, the LC Issuer or any Lender in the negotiation,
administration, performance or enforcement thereof.
SECTION 8.13. USA Patriot Act Notification. The following notification
is provided to the Borrower pursuant to Section 326 of the USA Patriot Act of
2001, 31 U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
the Borrower: When the Borrower opens an account, the Agent and the Lenders will
ask for the Borrower's name, tax identification number, business address, and
other information that will allow the Agent and the Lenders to identify the
Borrower. The Agent and the Lenders may also ask to see the Borrower's legal
organizational documents or other identifying documents.
REMAINDER OF PAGE INTENTIONALLY BLANK
50
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.
DTE ENERGY COMPANY
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Borrower's FEIN: 00-0000000
Signature Page to
Letter of Credit and Reimbursement Agreement
Lenders
THE BANK OF NOVA SCOTIA, as
Administrative Agent, as a Lender and
as the LC Issuer
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature Page to
Letter of Credit and Reimbursement Credit Agreement
SCHEDULE I
DTE ENERGY COMPANY
APPLICABLE LENDING OFFICES
NAME OF INITIAL LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE COMMITMENT
----------------------- ----------------------------- ------------------------- ---------------
The Bank of Nova Scotia 1 Liberty Plaza Same as Domestic Lending $150,000,000.00
Xxx Xxxx, XX 00000 Office
Attention: Xxxxxx Xx / Xxxxxx
Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
---------------
TOTAL $150,000,000.00
---------------
PRICING SCHEDULE
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
STATUS STATUS STATUS STATUS STATUS STATUS
------- -------- --------- -------- ------- --------
Applicable
Commitment Fee Rate 0.090% 0.100% 0.125% 0.150% 0.200% 0.250%
Applicable Margin
(Eurodollar Rate) 0.375% 0.450% 0.500% 0.700% 1.050% 1.250%
Applicable LC Fee
Rate 0.375% 0.450% 0.500% 0.700% 1.050% 1.250%
Applicable Margin
(Base Rate) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Borrower's
Xxxxx'x Rating is A3 or better or the Borrower's S&P Rating is A- or better.
"Level II Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status and (ii) the Borrower's Xxxxx'x
Rating is Baa1 or better or the Borrower's S&P Rating is BBB+ or better.
"Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Borrower's Xxxxx'x Rating is Baa2 or better or the Borrower's S&P Rating is BBB
or better.
"Level IV Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) the Borrower's Xxxxx'x Rating is Baa3 or better or the
Borrower's S&P Rating is BBB- or better.
"Level V Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status, Level II Status, Level III Status or Level
IV Status and (ii) the Borrower's Xxxxx'x Rating is Ba1 or better or the
Borrower's S&P Rating is BB+ or better.
"Level VI Status" exists at any date if, on such date, the Borrower
has not qualified for Level I Status, Level II Status, Level III Status, Level
IV Status or Level V Status.
"Xxxxx'x Rating" means, at any time, the rating issued by Xxxxx'x and
then in effect with respect to the Borrower's senior unsecured long-term debt
securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Borrower's senior unsecured long-term debt securities
without third-party credit enhancement.
"Status" means Level I Status, Level II Status, Level III Status,
Level IV Status, Level V Status or Level VI Status.
The Applicable Margin, the Applicable LC Fee Rate and Applicable
Commitment Fee Rate shall be determined in accordance with the foregoing table
based on the Borrower's Status as determined from its then-current Xxxxx'x and
S&P Ratings. The credit rating in effect on any date for the purposes of this
Schedule is that in effect at the close of business on such date. If at any time
the Borrower does not have both a Xxxxx'x Rating and an S&P Rating, Level VI
Status shall exist; provided, however, that if the credit rating system of
Xxxxx'x or S&P shall change, or if either such rating agency shall cease to be
in the business of rating corporate debt obligations, the Borrower and the
Lenders shall negotiate in good faith to amend this Schedule to reflect such
changed rating system or the unavailability of ratings from such rating agency
and, pending the effectiveness of any such amendment, the applicable Status for
the Borrower shall be the Borrower's Status most recently in effect prior to
such change or cessation.
Except as specifically provided above in this Schedule, in the event
that a split occurs between the two ratings, then the rating corresponding to
the higher of the two ratings shall apply. However, if the split is greater than
one level, then the pricing shall be based upon the rating one level above the
lower of the two ratings.
EXHIBIT A - FORM OF NOTE
U.S.$____________________________ Dated: ____________________________, 200_
FOR VALUE RECEIVED, the undersigned, DTE ENERGY COMPANY, a Michigan
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its Applicable
Lending Office on the Commitment Termination Date (or, if the Aggregate
Outstanding Credit Exposures have been converted to a term loan as set forth in
Section 2.19 of the Agreement referred to below, on the Facility Termination
Date) (each as defined in the Agreement referred to below), the principal sum of
U.S.$[amount of the Lender's Commitment in figures] or, if less, the aggregate
principal amount of the Reimbursement Advances made by the Lender to the
Borrower pursuant to the Letter of Credit and Reimbursement Agreement dated as
of December 16, 2005 (as amended or modified from time to time, the "Agreement";
the terms defined therein being used herein as therein defined) among the
Borrower, the Lender and certain other lenders parties thereto, and The Bank of
Nova Scotia, as Agent for the Lender and such other lenders outstanding on the
Commitment Termination Date (or, if the Aggregate Outstanding Credit Exposures
have been converted to a term loan as set forth in Section 2.19 of the
Agreement, on the Facility Termination Date).
The Borrower promises to pay interest on the unpaid principal amount
of each Reimbursement Advance from the date of such Reimbursement Advance until
such principal amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Agreement.
Both principal and interest are payable in lawful money of the United
States of America to The Bank of Nova Scotia, as Agent, at Xxx Xxxxxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000, Account No. 2308363Corbk77, ABA No. 0026002532,
Attention: Xxxxxx Xxxxx, in same day funds. Each Reimbursement Advance owing to
the Lender by the Borrower pursuant to the Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Agreement. The Agreement, among other things,
(i) provides for the making of Reimbursement Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Reimbursement Advance being evidenced by
this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
DTE ENERGY COMPANY
By
-------------------------------------
Title:
---------------------------------
ADVANCES AND PAYMENTS OF PRINCIPAL
UNPAID
AMOUNT OF AMOUNT OF PRINCIPAL PRINCIPAL
DATE ADVANCE PAID OR PREPAID BALANCE NOTATION MADE BY
---- --------- ------------------- --------- ----------------
EXHIBIT B - FORM OF NOTICE OF BORROWING
The Bank of Nova Scotia, as Agent for the Lenders parties
to the Agreement referred to below
[_____________]
[_____________]
Attention: [____________]
[Date]
Ladies and Gentlemen:
The undersigned, DTE ENERGY COMPANY, refers to the Letter of Credit
and Reimbursement Agreement dated as of December 16, 2005 (as amended or
modified from time to time, the "Agreement"; the terms defined therein being
used herein as therein defined), among the undersigned, certain Lenders parties
thereto and The Bank of Nova Scotia, as Agent for said Lenders, and hereby gives
you notice, irrevocably, pursuant to Section 2.02 of the Agreement that the
undersigned hereby requests a Borrowing under the Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Agreement:
(i) The Business Day of the Proposed Borrowing is _______________,
____.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$_______________.
(iv) [The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
(v) [Wire transfer instructions].
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(i) the representations and warranties contained in Section 4.01 of
the Agreement are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date; provided, that, the foregoing certification shall
not apply to the representations and warranties set forth in (x) the last
sentence of Section 4.01(e) of the Agreement, (y) Section 4.01(f) of the
Agreement and (z) from and after the repeal of the Public Utility Holding
Company Act of 1935 on February 8, 2006, Section 4.01(o) of the Agreement
with respect to any Credit Extension after the Effective Date;
(ii) after giving effect to the application of the proceeds of all
Credit Extensions on such date (together with any other resources of the
Borrower applied together therewith), no event has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds therefrom, that constitutes a Default; and
(iii) the Borrower has not received notice from the Agent on or prior
to the date of such Credit Extension that a mandatory prepayment is
required under Section 2.09(b) of the Agreement (other than any such notice
that has been withdrawn in writing by the Agent).
Very truly yours,
By
-------------------------------------
Title: [Financial Officer]
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Letter of Credit and Reimbursement Agreement
dated as of December 16, 2005 (as amended or modified from time to time, the
"Agreement") among DTE Energy Company, a Michigan corporation (the "Borrower"),
the Lenders (as defined in the Agreement) and The Bank of Nova Scotia, as agent
for the Lenders (the "Agent"). Terms defined in the Agreement are used herein
with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Agreement as of the date hereof
(if any) equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Agreement. After giving effect to
such sale and assignment, the Assignee's Commitment and the amount of the
Outstanding Credit Exposures owing to the Assignee under the Agreement will be
as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Agreement or any
other instrument or document furnished pursuant thereto; and (iv) attaches the
Note or Notes held by the Assignor, if any, and requests that the Agent exchange
such Note or Notes for a new Note or Notes payable to the order of the Assignee
in an amount equal to the Commitment assumed by the Assignee pursuant hereto and
the Agreement or new Notes payable to the order of the Assignee in an amount
equal to the Commitment assumed by the Assignee pursuant hereto and the
Agreement and the Assignor in an amount equal to the Commitment retained by the
Assignor under the Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in each
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Agreement as are delegated to the Agent by
the terms thereof, together with such powers and discretion as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by
the terms of the Agreement are required to be performed by it as a Lender; and
(vi) attaches any U.S. Internal Revenue Service forms required under Section
2.13 of the Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Agreement, and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Agreement, and the
Notes in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest, commitment fees and LC Fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement and the Notes for periods prior to
the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
Schedule 1 to
Assignment and Acceptance
Agreement
---------
Percentage interest assigned: ____%
Assignee's Commitment: $___
Aggregate Outstanding Credit Exposures assigned: $___
Principal amount of Outstanding Credit Exposures
payable to Assignee: $___
Principal amount of Outstanding Credit Exposures
payable to Assignor: $___
Effective Date(1): $___
[NAME OF ASSIGNOR], as Assignor
By
-------------------------------------
Title:
---------------------------------
Dated:
---------------------------------
[NAME OF ASSIGNEE], as Assignee
By
-------------------------------------
Title:
---------------------------------
Dated:
---------------------------------
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
----------
(1) This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
Accepted [and Approved](2) this
_____day of
___________________________, as Agent
By
----------------------------------
Title:
------------------------------
[Approved this [ ] day of ___________
DTE ENERGY COMPANY
By
----------------------------------
Title:](3)
----------
(2) Required if the Assignee is an Eligible Assignee solely by reason of clause
(viii) of the definition of "Eligible Assignee".
(3) To be added only if the consent of the Borrower is required by the terms of
the Agreement.
EXHIBIT D - FORM OF CERTIFICATE BY BORROWER
DTE ENERGY COMPANY
OFFICER'S CERTIFICATE
I, X. X. Xxxxxx, Assistant Treasurer of DTE ENERGY COMPANY ("DTE"), a
Michigan corporation (the "Borrower"), DO HEREBY CERTIFY, pursuant to Section
3.01 of that certain Letter of Credit and Reimbursement Agreement, dated as of
December 16, 2005, among DTE, the financial institutions from time to time
parties thereto as "Lenders" and The Bank of Nova Scotia ("Scotia Capital"), as
agent for said Lenders (the "Agreement"), that the terms defined in the
Agreement are used herein as therein defined and, further, that:
1. The Effective Date shall be December 16, 2005.
2. The representations and warranties contained in Section 4.01 of the
Agreement are true and correct on and as of the date hereof.
3. No event has occurred and is continuing that constitutes a Default.
Dated as of the _____ day of __________, 2005.
DTE ENERGY COMPANY
By
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Name: X. X. Xxxxxx
Title: Assistant Treasurer
EXHIBIT E - FORM OF
OPINION OF ASSOCIATE GENERAL COUNSEL TO THE BORROWER
December 16, 2005
To each of the Lenders party to the
Agreement defined below
DTE Energy Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(g)(iv) of
the Letter of Credit and Reimbursement Agreement, dated as of December 16, 2005,
among DTE Energy Company (the "Borrower"), the Lenders party thereto, and The
Bank of Nova Scotia ("Scotia Capital"), as Administrative Agent (the
"Agreement"). Terms defined in the Agreement are used herein as therein defined.
I am the Associate General Counsel of the Borrower, and have acted as
counsel for the Borrower in connection with the preparation, execution and
delivery of the Loan Documents.
In that connection, I, in conjunction with the members of my staff,
have examined:
(i) Each Loan Document, executed by each of the parties thereto.
(ii) The other documents furnished by the Borrower pursuant to Article
III of the Agreement.
(iii) The Restated Articles of Incorporation of the Borrower and all
amendments thereto (the "Charter").
(iv) The Bylaws of the Borrower and all amendments thereto (the
"Bylaws").
(v) A certificate from the State of Michigan attesting to the
continued corporate existence and good standing of the Borrower.
In addition, I have examined the originals, copies certified to my satisfaction,
of such other corporate records of the Borrower, certificates of public
officials and of officers of the Borrower, and agreements, instruments and other
documents, as I have deemed necessary as a basis for the opinions expressed
below. As to questions of fact material to such opinions, I have, when relevant
facts were not independently established by me, relied upon certificates of
public officials. I have assumed the due execution and delivery, pursuant to due
authorization, of the Agreement by the Lenders and the Agent.
My opinions expressed below are limited to the law of the State of
Michigan and the federal law of the United States.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the following opinion:
1. The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Michigan.
2. The execution, delivery and performance by the Borrower of the Loan
Documents to which it is party, and the consummation of the transactions
contemplated thereby, are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i) the
Charter or the Bylaws of the Borrower or (ii) any law, rule or regulation
applicable to the Borrower, or (iii) any contractual restriction binding on or
affecting the Borrower.
3. No consent, authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery, recordation,
filing or performance by the Borrower of the Loan Documents to which it is a
party.
4. The Agreement has been, and each of the respective Notes when
delivered will have been, duly executed and delivered on behalf of the Borrower.
5. Except as may have been disclosed to you in the SEC Reports, to the
best of my knowledge (after due inquiry) there are no pending or overtly
threatened actions or proceedings affecting the Borrower or any of its
Significant Subsidiaries before any court, governmental agency or arbitrator
that (i) could be reasonably likely to have a Material Adverse Effect or (ii)
purport to affect the legality, validity, or enforceability of any Loan
Documents to which the Borrower is a party or the consummation of the
transactions contemplated thereby.
6. In a properly presented case, a Michigan court or a federal court
sitting in the State of Michigan applying Michigan choice of law rules should
give effect to the choice of law provisions of the Loan Documents and should
hold that such Loan Documents are to be governed by the laws of the State of New
York rather than the laws of the State of Michigan. In rendering the foregoing
opinion, I note that by their terms the Loan Documents expressly select New York
law as the laws governing their interpretation and that the Loan Documents
governed by New York law were delivered by the parties thereto to the Agent in
New York. The choice of law provisions of the Loan Documents are not voidable
under the laws of the State of Michigan.
7. If, despite the provisions of Section 8.09 of the Agreement wherein
the parties thereto agree that the Loan Documents shall be governed by, and
construed in accordance with, the laws of the State of New York, a court of the
State of Michigan or a federal court sitting in the State of Michigan were to
hold that the Loan Documents are governed by, and to be construed in accordance
with the laws of the State of Michigan, the respective Loan Documents would be,
under the laws of the State of Michigan, legal, valid and binding obligations of
the Borrower, enforceable against the Borrower in accordance with their
respective terms.
8. Neither the Borrower nor any of its Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended; and
the Borrower is currently exempt from the provisions of the Public Utility
Holding Company Act of 1935, as amended (except Section 9 thereof);
The opinions set forth above are subject to the following
qualifications:
(a) My opinion in paragraph 7 above as to enforceability is
subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or laws affecting
creditors' rights generally.
(b) My opinion in paragraph 7 above as to enforceability is
subject to the effect of general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether considered in a
proceeding in equity or at law).
(c) I express no opinion as to participation and the effect of
the law of any jurisdiction other than the State of Michigan wherein
any Lender may be located or wherein enforcement of the Loan Documents
may be sought that limits the rates of interest legally chargeable or
collectible.
I am a member of the Bar of the State of Michigan, and do not express
any opinion concerning any law other than the law of the State of Michigan and
the federal laws of the United States of America.
This opinion letter is rendered to you in connection with the
above-described transaction. This opinion letter may not be relied upon by you
for any other purpose, or relied upon by any other person or entity without my
prior written consent (provided, that this opinion letter may be furnished to
and relied upon by a subsequent assignee of, or participant under, the Agreement
and a Note, if any, solely for the purpose of such assignment or participation,
subject to the assumptions, limitations and qualifications, set forth herein,
without any prior written consent). I undertake no duty to inform you or any
assignee or participant of events occurring subsequent to the date hereof.
Very truly yours,
EXHIBIT F - FORM OF
COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Letter of Credit and Reimbursement Agreement, dated as of December 16, 2005 (as
amended or modified from time to time, the "Agreement") among DTE Energy
Company, a Michigan corporation (the "Borrower"), the lenders parties thereto,
and The Bank of Nova Scotia ("Scotia Capital"), as Agent for the lenders. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected __________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Event of Default or Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ___ day of
__________, ____.
DTE ENERGY COMPANY
By
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Name:
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Title:
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SCHEDULE 1 TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of Section 5.01(h) of
the Agreement
FINANCIAL COVENANT
Ratio of Consolidated Debt to Capitalization (Section 6.01(i)).
(A) Numerator:
(i) Consolidated Debt: $_________
(ii) Minus: Nonrecourse Debt of the Borrower and its -$_________
Subsidiaries:
(iii) Minus: Excluded Hedging Debt: -$_________
(iv) Minus: Junior Subordinated Debt: -$_________
(v) Numerator: (A)(i) minus A(ii) through A(iv): $_________
(B) Denominator: Capitalization (excluding all Nonrecourse Debt): $_________
(C) State whether the ratio of (A)(v) to (B) was not greater
than.65:1: YES/NO
