EXHIBIT 4(f)
EXECUTION COPY
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AMENDED AND RESTATED TERM LOAN AGREEMENT
Dated as of September 26,2002
among
CONSUMERS ENERGY COMPANY,
as the Borrower,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as the Banks,
and
CITICORP NORTH AMERICA, INC.,
as Agent
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XXXXXXX XXXXX XXXXXX INC.
as Lead Arranger and Sole Book Runner
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ............................... 1
1.1 Definitions ............................... 1
1.2 Singular and Plural ....................... 11
1.3 Accounting Terms .......................... 11
ARTICLE II THE TERM LOANS ............................ 12
2.1 The Term Loans ............................ 12
2.2 Making of Term Loans ...................... 12
2.3 Repayment of Term Loans ................... 12
2.4 Optional Principal Payments ............... 12
2.5 Mandatory Prepayments ..................... 13
2.6 Conversion or Continuation ................ 13
2.7 Interest Rates, Interest Payment Dates .... 14
2.8 Rate after Maturity ....................... 14
2.9 Method of Payment ......................... 15
2.10 Evidence of Obligation; Telephonic
Notices.................................. 15
2.11 Lending Installations ..................... 15
2.12 Non-Receipt of Funds by the Agent ......... 16
ARTICLE III RESERVED ................................. 16
ARTICLE IV CHANGE IN CIRCUMSTANCES ................... 16
4.1 Yield Protection .......................... 16
4.2 Replacement Bank .......................... 17
4.3 Availability of Eurodollar Rate Loans ..... 17
4.4 Funding Indemnification ................... 18
4.5 Taxes ..................................... 18
4.6 Bank Certificates ......................... 20
ARTICLE V REPRESENTATIONS AND WARRANTIES ............ 20
5.1 Incorporation and Good Standing ........... 20
5 2 Corporate Power and Authority: No
Conflicts................................ 20
5.3 Governmental Approvals .................... 20
5.4 Legally Enforceable Agreements ............ 21
5.5 Financial Statements ...................... 21
5.6 Litigation ................................ 21
5.7 Margin Stock .............................. 21
5.8 ERISA ..................................... 21
5.9 Insurance ................................. 21
5.10 Taxes ..................................... 22
5.11 Investment Company Act .................... 22
5.12 Public Utility Holding Company Act ........ 22
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5.13 Bonds ..................................... 22
ARTICLE VI AFFIRMATIVE COVENANTS ..................... 22
6.1 Payment of Taxes .......................... 22
6.2 Maintenance of Insurance .................. 22
6.3 Preservation of Corporate Existence, Etc .. 22
6.4 Compliance with Laws ...................... 23
6.5 Visitation Rights ......................... 23
6.6 Keeping of Books .......................... 23
6.7 Reporting Requirements .................... 23
6.8 Use of proceeds ........................... 25
6.9 Maintenance of Properties, Etc ............ 25
6.10 Bonds ..................................... 25
6.11 Recordation of Supplemental Indenture ..... 25
ARTICLE VII NEGATIVE COVENANTS ........................ 25
7.1 Liens ..................................... 25
7.2 Sale of Assets ............................ 27
7.3 Mergers, Etc .............................. 27
7.4 Compliance with ERISA ..................... 27
7.5 Change in Nature of Business .............. 27
7.6 Restricted Payments ....................... 27
7.7 Off-Balance Sheet Liabilities ............. 27
ARTICLE VIII FINANCIAL COVENANTS ....................... 27
8.1 Debt to Capital Ratio ..................... 28
8.2 Interest Coverage Ratio ................... 28
ARTICLE IX EVENTS OF DEFAULT ......................... 28
9.1 Events of Default ......................... 28
9.2 Remedies .................................. 29
ARTICLE X WAIVERS, AMENDMENTS AND REMEDIES .......... 29
10.1 Amendments ................................ 30
10.2 Preservation of Rights .................... 30
ARTICLE XI CONDITIONS PRECEDENT ...................... 30
11.1 Delivery of Documents ..................... 30
11.2 Payment of Fees ........................... 31
11.3 No Default, Etc ........................... 31
ARTICLE XII GENERAL PROVISIONS ........................ 31
12.1 Successors and Assigns .................... 31
12.2 Survival of Representations ............... 34
12.3 Governmental Regulation ................... 34
12.4 Taxes ..................................... 34
12.5 Choice of Law; Waiver of Jury Trial ....... 34
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12.6 Headings .................................. 35
12.7 Entire Agreement .......................... 35
12.8 Expenses; Indemnification ................. 35
12.9 [Intentionally Omitted.] .................. 35
12.10 Severability of Provisions ................ 35
12.11 Setoff .................................... 35
12.12 Ratable Payments .......................... 36
12.13 Nonliability of Banks ..................... 36
ARTICLE XIII THE AGENT ................................. 37
13.1 Appointment ............................... 37
13.2 Powers .................................... 37
13.3 General Immunity .......................... 37
13.4 No Responsibility for Loans, Recitals, Etc. 37
13.5 Action on Instructions of Banks ........... 37
13.6 Employment of Agents and Counsel .......... 37
13.7 Reliance on Documents; Counsel ............ 37
13.8 Agent's Reimbursement and Indemnification.. 38
13.9 Rights as a Lender ........................ 38
13.10 Bank Credit Decision ...................... 38
13.11 Successor Agent ........................... 38
13.12 Agent and Arranger Fees ................... 39
ARTICLE XIV NOTICES ................................... 39
14.1 Giving Notice ............................. 39
14.2 Change of Address ......................... 39
ARTICLE XV COUNTERPARTS .............................. 40
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SCHEDULES
Commitment Schedule
EXHIBITS
Exhibit A Form of Supplemental Indenture
Exhibit B-1 Required Opinions from Xxxxxxx X. XxxXxxxxx, Esq.
Exhibit B-2 Required Opinions from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Exhibit B-3 Required Opinions from Miller, Canfield, Paddock and Stone, P.L.C.
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Assumption Agreement
Exhibit E Terms of Subordination (Junior Subordinated Debt)
Exhibit F Terms of Subordination (Guaranty of Hybrid Preferred Securities)
Exhibit G Form of Bond Delivery Agreement
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AMENDED AND RESTATED
TERM LOAN AGREEMENT
This Amended and Restated Term Loan Agreement, dated as of September
26,2002, is among Consumers Energy Company, a Michigan corporation (the
"Company"), the financial institutions listed on the signature pages hereof
(together with their respective successors and assigns, the "Banks") and
Citicorp North America, Inc., a Delaware corporation, as Agent.
RECITALS
The Company, Citicorp North America, Inc., as a Bank, and Citicorp USA,
Inc., as Agent, are parties to that certain Term Loan Agreement dated as of July
12,2002 (the "Original Agreement"), pursuant to which Citicorp North America,
Inc. has made a term loan to the Company in the outstanding principal amount of
$300,000,000 (the "Outstanding Term Loan").
The parties hereto desire to amend and restate the Original Agreement
on the terms and conditions set forth herein, among other things to extend the
maturity thereof and to reflect that Citicorp USA, Inc. has resigned as Agent
and has been replaced by Citicorp North America, Inc.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement:
"Agent" means Citicorp in its capacity as administrative agent for the
Banks pursuant to Article XIII, and not in its individual capacity as a Bank,
and any successor Agent appointed pursuant to Article XIII.
"Agreement" means this Amended and Restated Term Loan Agreement, as
amended from time to time.
"Applicable Margin" means, with respect to Eurodollar Rate Loans at any
time, 4.50% per annum, and with respect to Floating Rate Loans at any time,
3.50% per annum; provided that so long as any Downgrade Event shall exist,
"Applicable Margin" shall mean, with respect to Eurodollar Rate Loans at such
time, 5.00% per annum, and with respect to Floating Rate Loans at such time,
4.00% per annum.
"Approved Fund" means, with respect to any Bank that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Bank or by an
affiliate of such investment advisor.
"Arranger" means Xxxxxxx Xxxxx Xxxxxx Inc., a New York corporation, and
its successors, in its capacity as Lead Arranger and Sole Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" - see Section 12.1(e).
"Banks" - see the preamble.
"Base Eurodollar Rate" means, with respect to any Interest Period
applicable to a Borrowing of Eurodollar Rate Loans, the per annum interest rate
determined by the offered rate per annum at which deposits in Dollars appears on
Telerate page 3750 (or any successor page) as of 11:00 a.m. (London time), or in
the event such offered rate is not available from the Telerate page, the rate
offered on deposits in Dollars by Citibank's London Office to prime banks in the
London interbank market at 11:00 a.m. (London time), on the Eurodollar Interest
Rate Determination Date for such Interest Period and in an amount substantially
equal to the amount of the Eurodollar Rate Loan to be outstanding from Citicorp
North America, Inc. for such Interest Period.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the highest of:
(i) the rate of interest announced publicly by Citibank
in New York, New York from time to time, as Citibank's base rate; and
(ii) the sum (adjusted to the nearest one-quarter of one
percent (0.25%)or, if there is no nearest one-quarter of one percent
(0.25%), to the next higher one-quarter of one percent (0.25%)) of (A)
one-half of one percent (0.50%) per annum plus (B) the rate per annum
obtained by dividing (I) the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average (adjusted to the basis of a year
of 360 days) being determined weekly on each Monday (or, if any such
day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday (or, if such day is not
a Business Day, on the next preceding Business Day) by Citibank on the
basis of such rates reported by certificate of deposit dealers to, and
published by, the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three (3) New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (II) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the FRB
for determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar nonpersonal
time deposits in the United States plus (C) the average during such
three- week period of the annual assessment rates estimated by Citibank
for determining the then current annual assessment payable by Citibank
to the Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. dollar deposits of Citibank in the United States; and
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(iii) the sum of (A) one-half of one percent (0.50%) per
annum plus (B) the Federal Funds Rate in effect from time to time
during such period.
"Bond Delivery Agreement" means a bond delivery agreement substantially
in the form of Exhibit G whereby the Agent (x) acknowledges delivery of the
Bonds and (y) agrees to hold the Bonds for the benefit of the Banks and to
distribute all payments made by the Company on account thereof to the Banks.
"Bonds" means a series of First Mortgage Bonds created under the
Supplemental Indenture issued in favor of, and in form and substance
satisfactory to, the Agent.
"Borrowing" means a borrowing consisting of Term Loans of the same Type
made, continued or converted on the same day and, in the case of Eurodollar Rate
Loans, having the same Interest Period.
"Building Lease" means the Master Lease and Lease Supplement, each
dated as of April 23, 2001, between Consumers Campus Holdings, LLC, a wholly
owned Subsidiary of the Company, as lessee, and Wilmington Trust Company, not in
its individual capacity but solely as owner Trustee of CEC Trust 2001-A, as
lessor, together with certain other related agreements.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in New York, New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in New York, New York for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made on the
Fedwire system.
"Capital Lease" means any lease which has been or would be capitalized
on the books of the lessee in accordance with GAAP.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" means Citicorp North America, Inc., a Delaware corporation,
in its individual capacity, and its successors and assigns.
"CMS" means CMS Energy Corporation, a Michigan corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment Schedule" means the Schedule identifying each Bank's Term
Loan Commitment as of the date hereof attached hereto and identified as such.
"Company" - see the preamble.
"Consolidated EBIT" means Consolidated Net Income plus (i) to the
extent deducted from revenues in determining Consolidated Net Income (without
duplication), (a) Consolidated
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Interest Expense, (b) expense for taxes paid or accrued, (c) any non-cash
write-offs and write-downs contained in the Company's Consolidated Net Income,
including, without limitation, write-offs or write-downs related to the sale of
assets, impairment of assets and loss on contracts, and (d) the pre-tax
write-off for the fiscal period ending December 31,2001 in an amount not to
exceed $126,000,000 arising from the loss on Power Purchase Agreement -MCV
Partnership, minus, (ii) to the extent included in Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all
calculated for the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means with respect to any period for
which the amount thereof is to be determined, an amount equal to interest
expense on Debt, including payments in the nature of interest under Capital
Leases, all calculated for the Company and its Subsidiaries on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Company in accordance
with GAAP.
"Conversion/Continuation Notice" - see Section 2.6(b).
"Credit Agreement" means that certain 364 Day Credit Agreement, dated
as of July 12, 2002, by and among the Company, the banks from time to time
parties thereto, and Bank One, NA, as agent thereunder, as amended, restated,
supplemented or otherwise modified from time to time.
"Debt" means, with respect to any Person, and without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person for the deferred purchase price of property or services (other than trade
accounts payable arising in the ordinary course of business which are not
overdue), (c) all Unfunded Vested Liabilities of such Person (if such Person is
not the Company, determined in a manner analogous to that of determining
Unfunded Vested Liabilities of the Company), (d) all obligations of such Person
arising under acceptance facilities, (e) all obligations of such Person as
lessee under Capital Leases, (f) all obligations of such Person arising under
any interest rate swap, "cap", "collar" or other hedging agreements; provided,
however, for purposes of the calculation of Debt for this clause (f) only, the
actual amount of Debt of such Person shall be determined on a net basis to the
extent such agreements permit such amounts to be calculated on a net basis, and
(g) all guaranties, endorsements (other than for collection in the ordinary
course of business) and other contingent obligations of such Person to assure a
creditor against loss (whether by the purchase of goods or services, the
provision of funds for payment, the supply of funds to invest in any Person or
otherwise) in respect of indebtedness or obligations of any other Person of the
kinds referred to in clauses (a) through (f) above.
"Default" means an event which but for the giving of notice or lapse of
time, or both, would constitute an Event of Default.
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"Designated Officer" means the Chief Financial Officer, the Treasurer,
an Assistant Treasurer, any Vice President in charge of financial or accounting
matters or the principal accounting officer of the Company.
"Downgrade Event" means that the Senior Debt is rated BB or below by
S&P or Ba2 or below by Moody's.
"Effective Date" means September 26,2002.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or is under common control (within
the meaning of Section 414(c) of the Code) with the Company.
"Eurodollar Interest Rate Determination Date" means the second Business
Day prior to the first day of each Interest Period.
"Eurodollar Rate" means, with respect to any Interest Period applicable
to a Eurodollar Rate Loan, an interest rate per annum equal to the sum of (i)
the quotient obtained by dividing (a) the Base Eurodollar Rate applicable to
that Interest Period by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to that Interest Period plus (ii) the Applicable Margin.
"Eurodollar Rate Loan" means a Term Loan which bears interest by
reference to the Eurodollar Rate.
"Event of Default" means an event described in Article IX.
"Excluded Taxes" means, in the case of each Bank or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Bank or the Agent is incorporated or organized or (ii) the jurisdiction in
which the Agent's or such Bank's principal executive office or such Bank's
applicable Lending Installation is located.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York, New York, for the next preceding
Business Day) in New York, New York by the Federal Reserve Bank of New York, or
if such rate is not so published for any day which is a Business Day in New
York, New York, the average of the 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 the fee letter dated July 12,2002 among the Company,
the Arranger, Citicorp USA, Inc. and Citicorp North America, Inc.
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"First Mortgage Bonds" means bonds issued by the Company pursuant to
the Indenture.
"Fitch" means Fitch, Inc. or any successor thereto.
"Floating Rate" means a rate per annum equal to (i) the Base Rate plus
(ii) the Applicable Margin, changing when and as the Base Rate changes.
"Floating Rate Loan" means a Term Loan which bears interest at the
Floating Rate.
"FRB" means the Board of Governors of the Federal Reserve System or any
successor thereto.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the date hereof, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 5.5 (except, for purposes of the financial statements required to be
delivered pursuant to Sections 6.7(b)and (c), for changes concurred in by the
Company's independent public accountants).
"Hybrid Preferred Securities" means any preferred securities issued by
a Hybrid Preferred Securities Subsidiary, where such preferred securities have
the following characteristics;
(i) such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of such preferred
securities to the Company or a wholly-owned direct or indirect
Subsidiary of the Company in exchange for Junior Subordinated Debt
issued by the Company or such wholly-owned direct or indirect
Subsidiary, respectively;
(ii) such preferred securities contain terms providing for
the deferral of interest payments corresponding to provisions providing
for the deferral of interest payments on the Junior Subordinated Debt;
and
(iii) the Company or a wholly-owned direct or indirect
Subsidiary of the Company (as the case may be) makes periodic interest
payments on the Junior Subordinated Debt, which interest payments are
in turn used by the Hybrid Preferred Securities Subsidiary to make
corresponding payments to the holders of the preferred securities.
"Hybrid Preferred Securities Subsidiary" means any Delaware business
trust (or similar entity) (i) all of the common equity interest of which is
owned (either directly or indirectly through one or more wholly-owned
Subsidiaries of the Company) at all times by the Company or a wholly-owned
direct or indirect Subsidiary of the Company, (ii) that has been formed for the
purpose of issuing Hybrid Preferred Securities and (iii) substantially all of
the assets of which consist at all times solely of Junior Subordinated Debt
issued by the Company or a wholly-owned direct or indirect Subsidiary of the
Company (as the case may be) and payments made from time to time on such Junior
Subordinated Debt.
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"Indenture" means the Indenture, dated as of September 1, 1945, as
supplemented and amended from time to time, from the Company to JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as successor Trustee.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months, or such shorter or longer period agreed to by
the Company and the Banks, commencing on a Business Day selected by the Company
pursuant to this Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter
(or such shorter or longer period agreed to by the Company and the Banks),
provided, however, that if there is no such numerically corresponding day in
such next, second, third or sixth succeeding month (or such shorter or longer
period, as applicable), such Interest Period shall end on the last Business Day
of such next, second, third or sixth succeeding month (or such shorter or longer
period, as applicable). If an Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided, however, that if said next succeeding Business Day falls
in a new calendar month, such Interest Period shall end on the immediately
preceding Business Day. The Company may not select any Interest Period that ends
after the Maturity Date.
"Junior Subordinated Debt" means any unsecured Debt of the Company or a
Subsidiary of the Company (i) issued in exchange for the proceeds of Hybrid
Preferred Securities and (ii) subordinated to the rights of the Banks hereunder
and under the other Loan Documents pursuant to terms of subordination
substantially similar to those set forth in Exhibit E. or pursuant to other
terms and conditions satisfactory to the Majority Banks.
"Lending Installation" means any office, branch, subsidiary or
affiliate of a Bank.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loan" means a Floating Rate Loan or a Eurodollar Rate Loan.
"Loan Documents" means this Agreement, the Supplemental Indenture and
the Bonds.
"Majority Banks" means, as of any date of determination, Banks whose
Pro Rata Shares, in the aggregate, are 51% or greater as of such date.
"Material Adverse Change" means any event, development or circumstance
that has had or could reasonably be expected to have a material adverse effect
on (a) the business, assets, property, financial condition, results of
operations or prospects of the Company and its Subsidiaries, considered as a
whole, (b) the Company's ability to perform its obligations under this Agreement
and the other Loan Documents or (c) the validity or enforceability of any Loan
Document or the rights or remedies of the Agent or the Banks thereunder.
"Maturity Date" means July 11,2004.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
thereto.
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"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds of Sale" means proceeds received by the Company in
cash (including cash, equivalents readily convertible into cash, and such
proceeds of any notes received as consideration of any other non-cash
consideration) from the sale, assignment or other disposition of (but not the
lease or license of) any Property, other than sales of inventory in the ordinary
course of business and sales of accounts receivable pursuant to the Receivables
Sale Agreement, net of (A) the costs of sale, assignment or other disposition,
(B) any income, franchise, transfer or other tax liability arising from such
transaction and (C) amounts applied to the repayment of Debt (other than the
Obligations) secured by a Lien permitted by Section 7.1 on the asset disposed
of, if such net proceeds arise from any individual sale, assignment or other
disposition or from any group of related sales, assignments or other
dispositions.
"Net Proceeds" means, with respect to any sale or issuance of
securities or incurrence of Debt by any Person, the excess of (i) the gross cash
proceeds received by or on behalf of such Person in respect of such sale,
issuance or incurrence (as the case may be) over (ii) customary underwriting
commissions, auditing and legal fees, printing costs, rating agency fees and
other customary and reasonable fees and expenses incurred by such Person in
connection therewith.
"Net Worth" means, with respect to any Person, the excess of such
Person's total assets over its total liabilities, total assets and total
liabilities each to be determined in accordance with GAAP consistently applied,
excluding, however, from the determination of total assets (i) goodwill,
organizational expenses, research and development expenses, trademarks, trade
names, copyrights, patents, patent applications, licenses and rights in any
thereof, and other similar intangibles, (ii) cash held in a sinking or other
analogous fund established for the purpose of redemption, retirement or
prepayment of capital stock or Debt, and (iii) any items not included in clauses
(i) or (ii) above, that are treated as intangibles in conformity with GAAP.
"Non-U.S. Bank" - see Section 4.5(d).
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Term Loans and all other obligations of the Company to the Banks
or to any Bank or the Agent or Arranger arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any sale and leaseback
transaction which is not a Capital Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capital Lease) by such Person as lessee.
"Original Agreement" - see the Recitals.
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"Other Taxes" - see Section 4.5(b).
"Outstanding Term Loan" - see the Recitals.
"Payment Date" means the second Business Day of each calendar quarter
occurring after the Effective Date.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"Plan" means any employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any ERISA Affiliate and
covered by Title IV of ERISA.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to any Bank, at any time, the
percentage obtained by dividing (i) the outstanding principal balance of such
Bank's Term Loan at such time by (ii) the outstanding principal balance of all
Term Loans.
"Receivables Sale Agreement" means the Amended and Restated Receivables
Sale Agreement among the Company, Asset Securitization Cooperative Corporation
and Canadian Imperial Bank of Commerce, dated as of April 1,2002.
"Regulation D" means Regulation D of the FRB from time to time in
effect and shall include any successor or other regulation or official
interpretation of said FRB relating to reserve requirements applicable to member
banks of the Federal Reserve System.
"Regulation U" means Regulation U of the FRB from time to time in
effect and shall include any successor or other regulation or official
interpretation of said FRB relating to the extension of credit by banks,
non-banks and non-broker-dealers for the purpose of purchasing or carrying
margin stocks.
"Reportable Event" has the meaning assigned to that term in Title IV of
ERISA.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard and Poor's Rating Services, a division of The
McGraw Hill Companies, Inc. or any successor thereto.
9
"SEC" means the Securities and Exchange Commission or any governmental
authority which may be substituted therefor.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Securitized Bonds" shall mean any nonrecourse bonds or similar
asset-backed securities issued by a special-purpose Subsidiary of the Company
which are payable solely from specialized charges authorized by the utility
commission of the relevant state in connection with the recovery of regulatory
assets or other stranded costs.
"Senior Debt" means the First Mortgage Bonds.
"Single Employer Plan" means a Plan maintained by the Company or any
ERISA Affiliate for employees of the Company or any ERISA Affiliate.
"Subsidiary" means, as to any Person, any corporation or other entity
of which at least a majority of the securities or other ownership interests
having ordinary voting power (absolutely or contingently) for the election of
directors or other Persons performing similar functions are at the time owned
directly or indirectly by such Person.
"Supplemental Indenture" means a supplemental indenture substantially
in the form of Exhibit A.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Termination Event" means (a) a Reportable Event described in Section
4043 of ERISA and the regulations issued thereunder (other than a Reportable
Event not subject to the provision for 30-day notice to the PBGC under such
regulations), or (b) the withdrawal of the Company or any of its ERISA
Affiliates from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001 (a) (2) of ERISA, or (c) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate a Plan by the PBGC or to appoint a trustee to administer any Plan.
"Term Loan Commitment" means, for each Bank other than Citicorp North
America, Inc., the obligation of such Bank to make a term loan to the Company on
the Effective Date in an amount not exceeding the amount set forth on the
Commitment Schedule as its Term Loan Commitment, and in the case of Citicorp
North America, Inc., the amount of the Outstanding Term Loan to be retained by
Citicorp North America, Inc. as of the Effective Date after giving effect to the
making of such term loans by the other Banks and the disbursement of the
proceeds thereof.
"Term Loans" - see Section 2.1.
10
"Total Consolidated Capitalization" means, at any date of
determination, the sum of (a) Total Consolidated Debt, (b) equity of the common
stockholders of the Company, (c) equity of the preference stockholders of the
Company and (d) equity of the preferred stockholders of the Company, in each
case determined at such date.
"Total Consolidated Debt" means, at any date of determination, the
aggregate Debt of the Company and its Consolidated Subsidiaries; provided, that
Total Consolidated Debt shall exclude (i) the principal amount of any
Securitized Bonds, (ii) any Junior Subordinated Debt owned by any Hybrid
Preferred Securities Subsidiary, (iii) any guaranty by the Company of payments
with respect to any Hybrid Preferred Securities, provided that such guaranty is
subordinated to the rights of the Banks hereunder and under the other Loan
Documents pursuant to terms of subordination substantially similar to those set
forth in Exhibit F, or pursuant to other terms and conditions satisfactory to
the Majority Banks, (iv) such percentage of the Net Proceeds from any issuance
of hybrid debt/equity securities (other than Junior Subordinated Debt and Hybrid
Preferred Securities) by the Company or any Consolidated Subsidiary as shall be
agreed to be deemed equity by the Agent and the Company prior to the issuance
thereof (which determination shall be based on, among other things, the
treatment (if any) given to such securities by the applicable rating agencies).
"Type" means, with respect to any Loan, the character of such Loan as a
Eurodollar Rate Loan or a Floating Rate Loan.
"Unfunded Vested Liabilities" means, (i) in the case of Single Employer
Plans, the amount (if any) by which the present value of all vested
nonforfeitable benefits under such Plan exceeds the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, and (ii) in the case of Multiemployer
Plans, the withdrawal liability of the Company and its ERISA Affiliates.
1.2 Singular and Plural. The foregoing definitions shall be
equally applicable to both the singular and plural forms of the defined terms.
1.3 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. If any changes in
generally accepted accounting principles are hereafter required or permitted and
are adopted by the Company or any of its Subsidiaries, or the Company or any of
its Subsidiaries shall change its application of generally accepted accounting
principles with respect to any Off-Balance Sheet Liabilities, in each case, with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("Accounting Changes"), the parties hereto agree, at the
Company's request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit neutral manner so as to reflect equitably such
changes with the desired result that the criteria for evaluating the Company's
and its Subsidiaries' financial condition shall be the same after such changes
as if such changes had not been made; provided, however, until such provisions
are amended in a manner reasonably satisfactory to the Agent, the Arranger and
the Majority Banks, no Accounting Change shall be given effect in such
calculations. In the event such amendment is entered into, all references in
this Agreement to GAAP shall mean generally accepted accounting principles as of
the date of such amendment.
11
ARTICLE II
THE TERM LOANS
2.1 The Term Loans. Each Bank (other than Citicorp North America,
Inc.) severally agrees, on the terms and conditions set forth in this Agreement,
to make a term loan to the Company on the Effective Date in an amount equal to
such Bank's Term Loan Commitment (each individually, a "Term Loan" and,
collectively, together with the portion of the Outstanding Term Loan held by
Citicorp North America, Inc. after giving effect to the disbursements of funds
by the Agent in accordance with Section 2.2, the "Term Loans"). The Term Loans
shall initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Rate Loans in the manner
provided in Section 2.6.
2.2 Making of Term Loans. Not later than 1:00 p.m. (New York time)
on the Effective Date, each Bank (other than Citicorp North America, Inc.) shall
make available its applicable Term Loan in funds immediately available in New
York to the Agent at its address specified pursuant to Section 14. No Bank's
obligation to make any Term Loan shall be affected by any other Bank's failure
to make any Term Loan. To the extent funds are received from the Banks, the
Agent shall disburse the proceeds of the Term Loans to Citicorp North America,
Inc. to reduce the outstanding principal amount of Citicorp North America Inc.'s
Outstanding Term Loan to the amount of its Term Loan Commitment. It is the
intention of the parties hereto that the making of the Term Loans and the
disbursement of the proceeds thereof in accordance with this Section 2.2 shall
not effect a payment or discharge of any portion of the Outstanding Term Loan,
but that the amount of the Outstanding Term Loan in excess of Citicorp North
America, Inc.'s Term Loan Commitment (the "Assigned Interest") shall be deemed
to have been assigned by Citicorp North America, Inc. to the other Banks on a
pro rata basis in accordance with their respective Term Loan Commitments.
Citicorp North America, Inc. represents and warrants that it is the legal and
beneficial owner of the Assigned Interest and that the Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim. The Company shall pay
to Citicorp North America, Inc. on the Effective Date any funding
indemnification required by Section 4.4 as a result of the transactions on the
Effective Date contemplated hereby.
2.3 Repayment of Term Loans. The Term Loans shall be paid in full
on the Maturity Date.
2.4 Optional Principal Payments. The Company may, upon at least
three (3) Business Days' prior written notice to the Agent (which the Agent
shall promptly transmit to each Bank), at any time and from time to time,
without penalty or premium, prepay the Term Loans which are Floating Rate Loans,
in whole or in part. Term Loans which are Eurodollar Rate Loans may be prepaid
in whole or in part upon at least five (5) Business Days' prior written notice
to the Agent (which the Agent shall promptly transmit to each Bank), (A) on the
expiration date of the then applicable Interest Period therefor, and (B) on any
other date upon payment of the amounts required by Section 4.4, but otherwise
without penalty or premium. Any notice of prepayment given to the Agent under
this Section 2.4 shall specify the date (which shall be a Business Day) of
prepayment, the aggregate principal amount of the prepayment and any allocation
of such amount among Floating Rate Loans and Eurodollar Rate Loans. When notice
of prepayment is delivered as provided herein, the principal amount of the Term
Loans specified in the notice shall become due and payable on the prepayment
date specified in such notice. Unless the aggregate
12
outstanding principal balance of the Term Loans is to be prepaid in full,
voluntary prepayments of the Term Loans shall be in an aggregate minimum amount
of $10,000,000 and integral multiples of $1,000,000 in excess of that amount.
Each voluntary prepayment of the Term Loans shall be allocated first to Term
Loans which are Floating Rate Loans until paid in full and then to Term Loans
which are Eurodollar Rate Loans. Amounts prepaid hereunder may not be
reborrowed. Upon any prepayment of the Term Loans pursuant to the terms of this
Section 2.4, the Agent shall, upon request of the Company, promptly surrender to
or upon the order of the Company one or more Bonds specified by the Company;
provided that the Company remains in compliance with Section 6.10.
2.5 Mandatory Prepayments. Within three Business Days after the
Company's receipt of any Net Cash Proceeds of Sale, the Company shall make a
written offer to the Banks to prepay the Term Loans by an amount equal to 50% of
such Net Cash Proceeds of Sale; provided, however, that (i) the Company may
retain up to an aggregate of $100,000,000 of such Net Cash Proceeds of Sale
during the term of this Agreement before it shall be required to make any such
mandatory offer, and (ii) the Company shall not be required to make any such
mandatory offer unless and until the aggregate amount of such mandatory offer
(on a cumulative basis) would be at least $1,000,000. Such offer shall be
transmitted by facsimile and by overnight courier to each Bank and shall be
deemed received on the Business Day following transmittal. Each Bank shall have
three Business Days following its receipt of such offer to submit a written
response to the Company's prepayment offer, and if any Bank shall not have
responded by the close of business on the third Business Day, it shall be deemed
to have accepted such offer. Payment shall be made to the Agent for the account
of all Banks that have accepted the prepayment offer on the fourth Business Day
following their receipt of the offer from the Company. If any Bank elects not to
accept its Pro Rata Share thereof, such prepayment shall be applied ratably to
the Term Loans of the Banks that have accepted such offer. Amounts prepaid
hereunder may not be reborrowed. Upon any prepayment of the Term Loans pursuant
to the terms of this Section 2.5, the Agent shall, upon request of the Company,
promptly surrender to or upon the order of the Company one or more Bonds
specified by the Company; provided that the Company remains in compliance with
Section 6.10.
2.6 Conversion or Continuation. (a) The Company shall have the
option (A) to convert at any time all or any part of outstanding Floating Rate
Loans to Eurodollar Rate Loans; (B) to convert all or any part of outstanding
Eurodollar Rate Loans having Interest Periods which expire on the same date to
Floating Rate Loans on such expiration date; or (C) to continue all or any part
of outstanding Eurodollar Rate Loans having Interest Periods which expire on the
same date as Eurodollar Rate Loans, and the succeeding Interest Period of such
continued Loans shall commence on such expiration date; provided, however, no
such outstanding Loan may be continued as, or be converted into, a Eurodollar
Rate Loan (i) if the continuation of, or the conversion into, would violate any
of the provisions of this Agreement or (ii) if a Default or Event of Default
would occur or has occurred and is continuing. Any conversion into or
continuation of Eurodollar Rate Loans under this Section 2.6 shall be in a
minimum amount of $10,000,000 and in integral multiples of $1,000,000 in excess
of that amount.
(b) To convert or continue a Loan under Section 2.6(a), the
Company shall deliver an irrevocable notice (a "Conversion/continuation Notice")
to the Agent no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed
13
Conversion/continuation date. A Conversion/Continuation Notice shall specify (A)
the proposed conversion/continuation date (which shall be a Business Day), (B)
the principal amount of the Loan to be converted/continued, (C) whether such
Loan shall be converted and/or continued, and (D) in the case of a conversion
to, or continuation of, a Eurodollar Rate Loan, the requested Interest Period.
Promptly after receipt of a Conversion/Continuation Notice under this Section
2.6(b) (or telephonic notice in lieu thereof), the Agent shall notify each Bank
by telex or telecopy, or other similar form of transmission, of the proposed
conversion/continuation. Any Conversion/Continuation Notice for conversion to,
or continuation of, a Loan (or telephonic notice in lieu thereof) shall be
irrevocable, and the Company shall be bound to convert or continue in accordance
therewith.
2.7 Interest Rates, Interest Payment Dates. (a) Subject to Section
2.8, each Term Loan shall bear interest as follows:
(i) if it is a Floating Rate Loan, at a rate per annum
equal to the Floating Rate from time to time in effect; and
(ii) if it is a Eurodollar Rate Loan, at a rate per annum
equal to the Eurodollar Rate for each applicable Interest Period
therein.
Changes in the rate of interest on that portion of any Term Loan maintained as a
Floating Rate Loan will take effect simultaneously with each change in the
Floating Rate.
(b) Interest accrued on each Floating Rate Loan shall be payable
on each Payment Date and at maturity. Interest accrued on each Eurodollar Rate
Loan shall be payable on the last day of its applicable Interest Period, on any
date on which such Eurodollar Rate Loan is prepaid and at maturity. Interest
accrued on each Eurodollar Rate Loan having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period. Interest on all Term Loans shall be calculated for actual
days elapsed on the basis of a 360-day year. In computing interest on any Term
Loan, the date of the making of the Term Loan or the first day of an Interest
Period, as the case may be, shall be included and the date of payment or the
expiration date an Interest Period, as the case may be, shall be excluded;
provided, however, if a Term Loan is repaid on the same day on which it is made,
one (1) day's interest shall be paid on such Term Loan. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.8 Rate after Maturity. Any Term Loan not paid by the Company at
maturity, whether by acceleration or otherwise, shall bear interest until paid
in full at a rate per annum equal to the higher of the rate otherwise applicable
thereto plus 2% or the Floating Rate plus 2%. All other Obligations that are not
paid when due (including, without limitation, overdue interest beyond the
applicable grace period) shall bear interest until paid in full at a rate per
annum equal to the Floating Rate plus 2%. In addition, in the case of overdue
interest beyond the applicable grace period, until such overdue interest is paid
in full, the principal amount to which such interest relates shall also bear
interest at a rate per annum equal to the higher of the rate otherwise
applicable thereto plus 2% or the Floating Rate plus 2%.
14
2.9 Method of Payment. All payments of principal, interest and
fees hereunder shall be made in immediately available funds to the Agent at its
address specified on its signature page to this Agreement (or at any other
Lending Installation of the Agent specified in writing by the Agent to the
Company) not later than 1:00 p.m. (New York time) on the date when due and
shall be applied ratably by the Agent among the Banks. Funds received after such
time shall be deemed received on the following Business Day unless the Agent
shall have received from, or on behalf of, the Company a Federal Reserve
reference number with respect to such payment before 1:00 p.m. (New York time)
on the date of such payment. Each payment delivered to the Agent for the account
of any Bank shall be delivered promptly by the Agent in the same type of funds
received by the Agent to such Bank at the address specified for such Bank on its
signature page to this Agreement or at any Lending Installation specified in a
notice received by the Agent from such Bank. The Agent is hereby authorized to
charge the account of the Company maintained with Citicorp, if any, for each
payment of principal, interest and fees as such payment becomes due hereunder.
2.10 Evidence of Obligation: Telephonic Notices.
(a) The obligation of the Company to repay the Obligations shall
be evidenced by one or more Bonds.
(b) Each Bank shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Bank
resulting from each Term Loan made by such Bank from time to time, including the
amounts of principal and interest payable and paid to such Bank from time to
time hereunder.
(c) The Agent shall also maintain accounts in which it will record
(i) the amount of each Term Loan made hereunder, the Type thereof and the
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Company to each
Bank hereunder, and (iii) the amount of any sum received by the Agent hereunder
from the Company and each Bank's share thereof.
(d) The entries maintained in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Bank to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Company to repay the Obligations
in accordance with their terms.
(e) The Company hereby authorizes the Banks and the Agent to make,
convert or continue Term Loans based on telephonic notices made by any person or
persons the Agent or any Bank in good faith believes to be acting on behalf of
the Company. The Company agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by a Designated Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Banks, the records of the Agent and the Banks shall govern
absent manifest error.
2.11 Lending Installations. Subject to the provisions of Section
4.6, each Bank may book its Term Loans at any Lending Installation selected by
such Bank and may change its
15
Lending Installation from time to time. All terms of this Agreement shall apply
to any such Lending Installation and the Term Loans shall be deemed held by the
applicable Bank for the benefit of such Lending Installation. Each Bank may, by
written or facsimile notice to the Company, designate a Lending Installation
through which Term Loans will be made by it and for whose account payments on
the Term Loans are to be made.
2.12 Non-Receipt of Funds by the Agent. Unless a Bank or the
Company, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Bank, the
proceeds of a Term Loan or (ii) in the case of the Company, a payment of
principal, interest or fees to the Agent for the account of the Banks, that it
does not intend to make such payment, the Agent may assume that such payment has
been made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Bank or the Company, as the case may be, has not in fact made such payment
to the Agent, the recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (i) in the case of payment by a Bank, the Federal Funds
Rate for such day or (ii) in the case of payment by the Company, the interest
late applicable to the relevant Term Loan.
ARTICLE III
RESERVED.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. (a) If any change in law or any governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof by any agency or authority having
jurisdiction over any Bank,
(i) subjects any Bank or any applicable Lending
Installation to any increased tax, duty, charge or withholding on or
from payments due from the Company (excluding taxation measured by or
attributable to the overall net income of such Bank or applicable
Lending Installation, whether overall or in any geographic area), or
changes the rate of taxation of payments to any Bank in respect of its
Term Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by any Bank or any applicable Lending Installation (including,
without limitation, any reserve costs under Regulation D with respect
to Eurocurrency liabilities (as defined in Regulation D)), or
(iii) imposes any other condition the result of which is to
increase the cost to any Bank or any applicable Lending Installation of
making, funding or maintaining Term Loans, or reduces any amount
receivable by any Bank or any applicable Lending
16
Installation in connection with Term Loans or requires any Bank or any
applicable Lending Installation to make any payment calculated by
reference to its Term Loans or interest received by it, by an amount
deemed material by such Bank, or
(iv) affects the amount of capital required or expected to
be maintained by any Bank or Lending Installation or any corporation
controlling any Bank and such Bank determines the amount of capital
required is increased by or based upon the existence of this Agreement
or its obligation to make Term Loans hereunder or of commitments of
this type,
then, upon presentation by such Bank to the Company of a certificate (as
referred to in the immediately succeeding sentence of this Section 4.1) setting
forth the basis for such determination and the additional amounts reasonably
determined by such Bank for the period of up to 90 days prior to the date on
which such certificate is delivered to the Company and the Agent, to be
sufficient to compensate such Bank in light of such circumstances, the Company
shall within 30 days of such delivery of such certificate pay to the Agent for
the account of such Bank the specified amounts set forth on such certificate.
The affected Bank shall deliver to the Company and the Agent a certificate
setting forth the basis of the claim and specifying in reasonable detail the
calculation of such increased expense, which certificate shall be prima facie
evidence as to such increase and such amounts. An affected Bank may deliver more
than one certificate to the Company during the term of this Agreement. In making
the determinations contemplated by the above-referenced certificate, any Bank
may make such reasonable estimates, assumptions, allocations and the like that
such Bank in good faith determines to be appropriate, and such Bank's selection
thereof in accordance with this Section 4.1 shall be conclusive and binding on
the Company, absent manifest error.
(b) No Bank shall be entitled to demand compensation or be
compensated hereunder to the extent that such compensation relates to any period
of time more than 90 days prior to the date upon which such Bank first notified
the Company of the occurrence of the event entitling such Bank to such
compensation (unless, and to the extent, that any such compensation so demanded
shall relate to the retroactive application of any event so notified to the
Company).
4.2 Replacement Bank. If any Bank shall make a demand for payment
under Section 14.1 then within 30 days after such demand, the Company may, with
the approval of the Agent (which approval shall not be unreasonably withheld)
and provided that no Default or Event of Default shall then have occurred and be
continuing, demand that such Bank assign to one or more financial institutions
designated by the Company and approved by the Agent all (but not less than all)
of such Bank's outstanding Term Loans within the period ending on the later of
such 30th day and the last day of the longest of the then current Interest
Periods or maturity dates for such outstanding Term Loans. It is understood that
such assignment shall be consummated on terms satisfactory to the Company, the
Agent and the assigning Bank, provided that such assigning Bank's consent to
such an assignment shall not be unreasonably withheld.
4.3 Availability of Eurodollar Rate Loans. If
17
(i) any Bank determines that maintenance of a Eurodollar
Rate Loan at a suitable Lending Installation would violate any
applicable law, rule, regulation or directive, whether or not having
the force of law, or
(ii) the Majority Banks determine that (A) deposits of a
type and maturity appropriate to match fund Eurodollar Rate Loans are
not available or (B) the Base Eurodollar Rate does not accurately
reflect the cost of making or maintaining a Eurodollar Rate Loan,
then the Agent shall suspend the availability of Eurodollar Rate Loans and, in
the case of clause (i), require any Eurodollar Rate Loans to be converted to
Floating Rate Loans on such date as is required by the applicable law, rule,
regulation or directive.
4.4 Funding Indemnification. If any payment of a Eurodollar Rate
Loan occurs on a date which is not the last day of an applicable Interest
Period, whether because of prepayment or otherwise, or a Eurodollar Rate Loan is
not made on the date specified by the Company for any reason other than default
by the Banks, the Company will indemnify each Bank for any loss or cost (but not
lost profits) incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Rate Loan; provided that the Company shall not be
liable for any of the foregoing to the extent they arise because of acceleration
by any Bank.
4.5 Taxes.
(a) All payments by the Company to or for the account of any Bank
or the Agent hereunder or under any Bond shall be made free and clear of and
without deduction for any and all Taxes. If the Company shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any Bank
or the Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 45) such Bank 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 Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (iv) the Company shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(b) In addition, the Company hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Bond or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Bond ("Other Taxes").
(c) The Company hereby agrees to indemnify the Agent and each Bank
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section 4.5) paid by
the Agent or such Bank and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent or such Bank
makes demand therefor pursuant to Section 4.6.
18
(d) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Bank") agrees that
it will, not more than ten Business Days after the date hereof, or, if later,
not more than ten Business Days after becoming a Bank hereunder, (i) deliver to
each of the Company and the Agent two (2) duly completed copies of United States
Internal Revenue Service Form W8BEN or W8EC1, certifying in either case that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, and (ii) deliver to
each of the Company and the Agent a United States Internal Revenue Form W-8 or
W-9, as the case may be, and certify that it is entitled to an exemption from
United States backup withholding tax. Each Non-U.S. Bank further undertakes to
deliver to each of the Company and the Agent (x) renewals or additional copies
of such form (or any successor form) on or before the date that such form
expires or becomes obsolete, and (y) after the occurrence of any event requiring
a change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Company or the Agent.
All forms or amendments described in the preceding sentence shall certify that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form or amendment with respect
to it and such Bank advises the Company and the Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.
(e) For any period during which a Non-U.S. Bank has failed to
provide the Company with an appropriate form pursuant to clause (d), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Bank shall not be entitled to
indemnification under this Section 4.5 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Bank which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (d) above, the
Company shall take such steps as such Non-U.S. Bank shall reasonably request to
assist such Non-U.S. Bank to recover such Taxes.
(f) Any Bank that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Bond
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Company (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(g) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Bank (because the appropriate form was
not delivered or properly completed, because such Bank failed to notify the
Agent of a change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Bank shall indemnify the Agent fully
for
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all amounts paid, directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Agent under this
subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Agent, which attorneys may
be employees of the Agent). The obligations of the Banks under this Section 4.5
(g) shall survive the payment of the Obligations and termination of this
Agreement.
4.6 Bank Certificates. Survival of Indemnity. To the extent
reasonably possible, each Bank shall designate an alternate Lending Installation
with respect to Eurodollar Rate Loans to reduce any liability of the Company to
such Bank under Section 4.1 or to avoid the unavailability of Eurodollar Rate
Loan under Section 4.3, so long as such designation is not disadvantageous to
such Bank. A certificate of such Bank as to the amount due under Section 4.1,
4.4 or 4.5 shall be final, conclusive and binding on the Company in the absence
of manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Rate Loan shall be calculated as though each Bank
funded each Eurodollar Rate Loan through the purchase of a deposit of the type
and maturity corresponding to the deposit used as a reference in determining the
Base Eurodollar Rate applicable to such Eurodollar Rate Loan whether in fact
that is the case or not. Unless otherwise provided herein, the amount specified
in any certificate shall be payable on demand after receipt by the Company of
such certificate. The obligations of the Company under Sections 4.1, 4.4 and 4.5
shall survive payment of the Obligations and termination of this Agreement,
provided, that no Bank shall be entitled to compensation to the extent that such
compensation relates to any period of time more than 90 days after the
termination of this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants that:
5.1 Incorporation and Good Standing. The Company is duly
incorporated, validly existing and in good standing under the laws of the State
of Michigan.
5.2 Corporate Power and Authority: No Conflicts. The execution,
delivery and performance by the Company of the Loan Documents are within the
Company's corporate powers, have been duly authorized by all necessary corporate
action and do not (i) violate the Company's charter, bylaws or any applicable
law, or (ii) breach or result in an event of default under any indenture or
material agreement, and do not result in or require the creation of any Lien
upon or with respect to any of its properties (except the lien of the Indenture
securing the Bonds).
5.3 Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Company of any Loan Document, except for the authorization to issue, sell or
guarantee secured and/or unsecured long-term debt granted by the Federal Energy
Regulatory Commission, which authorization has been obtained and is in full
force and effect.
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5.4 Legally Enforceable Agreements. Each Loan Document constitutes
a legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, subject to (a) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
5.5 Financial Statements. The audited balance sheet of the Company
and its Consolidated Subsidiaries as at December 31, 2001, and the related
statements of income and cash flows of the Company and its Consolidated
Subsidiaries for the fiscal year then ended, as set forth in the Company's
Annual Report on Form 10-K (copies of which have been furnished to each Bank),
and the unaudited balance sheets of the Company and its Consolidated
Subsidiaries as at March 31, 2002 and June 30, 2002, and the related statements
of income and cash flows of the Company and its Consolidated Subsidiaries for
the three-month and six-month periods, respectively, then ended (copies of which
have been furnished to each Bank), fairly present the financial condition of the
Company and its Consolidated Subsidiaries as at such dates and the results of
operations of the Company and its Consolidated Subsidiaries for the periods
ended on such dates, all in accordance with GAAP, and since December 31, 2001,
there has been no Material Adverse Change (except to the extent described in the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 as
filed with the SEC, copies of which have been furnished to each Bank).
5.6 Litigation. Except (i) to the extent described in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001,
Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, and Current
Reports on Form 8-K filed by the Company on May 29, 2002, July 30, 2002 and
September 8,2002, in each case as filed with the SEC, copies of which have been
furnished to each Bank, and (ii) such other similar actions, suits and
proceedings predicated on the occurrence of the same events giving rise to any
actions, suits and proceedings described in the Reports filed with the SEC set
forth in clause (i) hereof, there is no pending or threatened action or
proceeding against the Company or any of its Consolidated Subsidiaries before
any court, governmental agency or arbitrator, which, if adversely determined,
might reasonably be expected to materially adversely affect the financial
condition, results of operations, business, Property or prospects of the Company
and its Consolidated Subsidiaries, taken as a whole, or that would materially
adversely affect the Company's ability to perform its obligations under any Loan
Document. As of the Effective Date, there is no litigation challenging the
validity or the enforceability of any of the Loan Documents.
5.7 Margin Stock. The Company is not engaged in the business of
extending credit for the purpose of buying or carrying margin stock (within the
meaning of Regulation U), and no proceeds of any Term Loan will be used to buy
or carry any margin stock or to extend credit to others for the purpose of
buying or carrying any margin stock.
5.8 ERISA. No Termination Event has occurred or is reasonably
expected to occur with respect to any Plan. Neither the Company nor any of its
ERISA Affiliates is an employer under a Multiemployer Plan.
5.9 Insurance. All insurance required by Section 6.2 is in full
force and effect.
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5.10 Taxes. The Company and its Subsidiaries have filed all tax
returns (Federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties, or, to the extent the
Company or any of its Subsidiaries is contesting in good faith an assertion of
liability based on such returns, has provided adequate reserves for payment
thereof in accordance with GAAP.
5.11 Investment Company Act. The Company is not an investment
company (within the meaning of the Investment Company Act of 1940, as amended).
5.12 Public Utility Holding Company Act. The Company is exempt from
the registration requirements of the Public Utility Holding Company Act of 1935,
as amended, 15 USC 79, et seq.
5.13 Bonds. The issuance to the Agent of Bonds as evidence of the
Obligations (i) will not violate any provision of the Indenture or any other
agreement or instrument, or any law or regulation, or judicial or regulatory
order, judgment or decree, to which the Company or any of its Subsidiaries is a
party or by which any of the foregoing is bound and (ii) will provide the Banks,
as beneficial holders of the Bonds through the Agent, the benefit of the Lien of
the Indenture equally and ratably with the holders of other First Mortgage
Bonds.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Obligations shall remain unpaid, the Company shall:
6.1 Payment of Taxes, Etc. Pay and discharge before the same shall
become delinquent, (a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property, and (b) all lawful claims which, if
unpaid, might by law become a Lien upon its property, provided that the Company
shall not be required to pay or discharge any such tax, assessment, charge or
claim (i) which is being contested by it in good faith and by proper procedures
or (ii) the non-payment of which will not materially adversely affect the
financial condition or results of operations of the Company and its Consolidated
Subsidiaries, taken as a whole.
6.2 Maintenance of Insurance. Maintain insurance in such amounts
and covering such risks with respect to its business and properties as is
usually carried by companies engaged in similar businesses and owning similar
properties, either with reputable insurance companies or, in whole or in part,
by establishing reserves or one or more insurance funds, either alone or with
other corporations or associations.
6.3 Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights and franchises, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is necessary in view of its business and operations or the
ownership of its properties, provided that the Company shall not be required to
preserve any such right or franchise or to remain so qualified unless the
failure to do so would have a material adverse effect on the financial condition
or results of operations of the Company and its
22
Consolidated Subsidiaries, taken as a whole, or the ability of the Company to
enter into, or to perform its obligations under, any Loan Document.
6.4 Compliance with Laws. Etc. Comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
the non-compliance with which would materially adversely affect the financial
condition or results of operations of the Company and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations under any Loan Document.
6.5 Visitation Rights. Subject to any necessary approval from the
Nuclear Regulatory Commission, at any reasonable time and from time to time,
permit the Agent, any of the Banks or any agents or representatives thereof to
examine and make copies of and abstracts from its records and books of account,
visit its properties and discuss its affairs, finances and accounts with any of
its officers,
6.6 Keeping of Books. Keep, and cause each Consolidated Subsidiary
to keep, adequate records and books of account, in which full and correct
entries shall be made of all of its financial transactions and its assets and
business so as to permit the Company and its Consolidated Subsidiaries to
present financial statements in accordance with GAAP.
6.7 Reporting Requirements. Furnish to the Agent, with sufficient
copies for each of the Banks:
(a) as soon as practicable and in any event within five Business
Days after becoming aware of the occurrence of any Default or Event of Default,
a statement of a Designated Officer as to the nature thereof, and as soon as
practicable and in any event within five Business Days thereafter, a statement
of a Designated Officer as to the action which the Company has taken, is taking
or proposes to take with respect thereto;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
at the end of such quarter, and the related consolidated statements of income,
cash flows and common stockholder's equity of the Company and its Consolidated
Subsidiaries as at the end of and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
date or period of the preceding fiscal year, or statements providing
substantially similar information (which requirement shall be deemed satisfied
by the delivery of the Company's quarterly report on Form 10-Q for such
quarter), all in reasonable detail and duly certified (subject to the absence of
footnotes and to year-end audit adjustments) by a Designated Officer as having
been prepared in accordance with GAAP, together with (i) a certificate of a
Designated Officer (which certificate shall also accompany the financial
statements delivered pursuant to clause (c) below) stating that such officer has
no knowledge (having made due inquiry with respect thereto) that a Default or
Event of Default has occurred and is continuing, or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the actions which the Company has taken, is taking or proposes to take with
respect thereto, and (ii) a certificate of a Designated Officer, in
substantially the form of Exhibit C hereto, setting forth the Company's
computation
23
of the financial ratios specified in Sections 8.1 and 8.2 as of the end of the
immediately preceding fiscal quarter or year, as the case may be, of the
Company;
(c) as soon as available and in any event within 120 days after
the end of each fiscal year of the Company, a copy of the Annual Report on Form
10-K (or any successor form) for the Company for such year, including therein
the consolidated balance sheet of the Company and its Consolidated Subsidiaries
as at the end of such year and the consolidated statements of income, cash flows
and common stockholder's equity of the Company and its Consolidated Subsidiaries
as at the end of and for such year, or statements providing substantially
similar information, in each case certified by independent public accountants of
recognized national standing selected by the Company (and not objected to by the
Majority Banks), together with a certificate of such accounting firm addressed
to the Banks stating that, in the course of its examination of the consolidated
financial statements of the Company and its Consolidated Subsidiaries, which
examination was conducted by such accounting firm in accordance with GAAP, (1)
such accounting firm has obtained no knowledge that an Event of Default, insofar
as such Event of Default related to accounting or financial matters, has
occurred and is continuing, or if, in the opinion of such accounting firm, such
an Event of Default has occurred and is continuing, a statement as to the nature
thereof, and (2) such accounting firm has examined a certificate prepared by the
Company setting forth the computations made by the Company in determining, as of
the end of such fiscal year, the ratios specified in Sections 8.1 and 8.2 which
certificate shall be attached to the certificate of such accounting firm, and
such accounting firm confirms that such computations accurately reflect such
ratio;
(d) promptly after the sending or filing thereof, copies of all
proxy statements which the Company sends to its stockholders, copies of all
regular, periodic and special reports (other than those which relate solely to
employee benefit plans) which the Company files with the SEC and notice of the
sending or filing of (and, upon the request of the Agent or any Bank, a copy of)
any final prospectus filed with the SEC;
(e) as soon as possible and in any event (i) within 30 days after
the Company or any of its ERISA Affiliates knows or has reason to know that any
Termination Event described in clause (a) of the definition of Termination Event
with respect to any Plan has occurred and (ii) within ten days after the Company
or any of its ERISA Affiliates knows or has reason to know that any other
Termination Event with respect to any Plan has occurred, a statement of the
Chief Financial Officer of the Company describing such Termination Event and the
action, if any, which the Company or such ERISA Affiliate, as the case may be,
proposes to take with respect thereto;
(f) promptly upon becoming aware thereof, notice of any upgrading
or downgrading of the rating of the Senior Debt by Fitch, Xxxxx'x or S&P;
(g) as soon as possible and in any event within five (5) days
after the occurrence of any material default under any material agreement to
which the Company or any of its Subsidiaries is a party, which default would
materially adversely affect the financial condition, business, results of
operations, Property or prospects of the Company and its Subsidiaries,
considered as a whole, any of which is continuing on the date of such
certificate, a certificate of the president or chief financial officer of the
Company setting forth the details of such material
24
default and the action which the Company or any such Subsidiary proposes to take
with respect thereto; and
(h) such other information respecting the business, properties or
financial condition of the Company as the Agent or any Bank through the Agent
may from time to time reasonably request.
6.8 Use of Proceeds. The Company will use the proceeds of the Term
Loans for working capital and other general corporate purposes. The Company will
not, nor will it permit any Subsidiary to, use any of the proceeds of the Term
Loans to purchase or carry any "margin stock" (as defined in Regulation U).
6.9 Maintenance of Properties, Etc. The Company shall, and shall
cause each of its Subsidiaries to, maintain in all material respects all of its
respective owned and leased Property in good and safe condition and repair to
the same degree as other companies engaged in similar businesses and owning
similar properties, and not permit, commit or suffer any waste or abandonment of
any such Property, and from time to time shall make or cause to be made all
material repairs, renewals and replacements thereof, including, without
limitation, any capital improvements which may be required; provided, however,
that such Property may be altered or renovated in the ordinary course of
Company's or its Subsidiaries' business; and provided, further, that the
foregoing shall not restrict the sale of any asset of the Company or any
Subsidiary to the extent not prohibited by Section 7.2.
6.10 Bonds. Beginning on the Effective Date and continuing until
all Obligations have been paid in full, cause the aggregate amount of the Bonds
outstanding to at all times be equal to or greater than the aggregate
outstanding Term Loans.
6.11 Recordation of Supplemental Indenture. The Company shall (i)
within ten days after the Effective Date, deliver the Supplemental Indenture in
recordable form to the appropriate recording office in all applicable
jurisdictions for recording in the real estate records and deliver to the office
of the Secretary of State of Michigan a UCC-1 financing statement with the
Supplemental Indenture as an attachment thereto for filing in such office and
(ii) within 25 days after the Effective Date, deliver to the Agent a certificate
signed by a Designated Officer certifying that the actions required by the
foregoing clause (i) have been taken.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Obligations shall remain unpaid, the Company shall not:
7.1 Liens. Create, incur, assume or suffer to exist any Lien upon
or with respect to any of its properties, now owned or hereafter acquired,
except:
(a) Liens created pursuant to the Indenture securing the First
Mortgage Bonds;
(b) Liens securing pollution control bonds, or bonds issued to
refund or refinance pollution control bonds (including Liens securing
obligations (contingent or otherwise) of the
25
Company under letter of credit agreements or other reimbursement or similar
credit enhancement agreements with respect to pollution control bonds), provided
that the aggregate face amount of any such bonds so issued shall not exceed the
aggregate face amount of such pollution control bonds, as the case may be, so
refunded or refinanced;
(c) Liens in (and only in) assets acquired to secure Debt
incurred to finance the acquisition of such assets;
(d) Statutory and common law banker's Liens on bank deposits;
(e) Liens in respect of accounts receivable sold, transferred or
assigned by the Company;
(f) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;
(g) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue or
being contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;
(h) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(i) Judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment of
which is covered (subject to a customary deductible) by insurance;
(j) Zoning restrictions, easements, licenses, covenants,
reservations, utility company rights, restrictions on the use of real property
or minor irregularities of title incident thereto which do not in the aggregate
materially detract from the value of the property or assets of the Company or
materially impair the operation of its business;
(k) Liens arising in connection with the financing of the
Company's fuel resources, including, but not limited to, nuclear fuel;
(l) Liens arising pursuant to MCL 324.20138; provided that the
aggregate amount of all obligations secured by such Liens (excluding any such
Liens of which the Company has no knowledge or which are permitted by subsection
(f) above) shall not exceed $20,000,000;
(m) Liens arising in connection with the Securitized Bonds;
(n) Liens on the Facility LC Collateral Account (as defined in the
Credit Agreement) or any funds therein in favor of the agent under the Credit
Agreement;
26
(o) Liens on natural gas, oil and minerals, or on stock in trade,
materials or supplies manufactured or acquired for the purpose of sale and/or
resale in the usual course of business or consumable in the operation of any of
the properties of the Company; provided that (i) such liens secure obligations
not exceeding $300,000,000 in aggregate principal amount and (ii) such liens
shall also be permitted under the terms of the Credit Agreement; and
(p) Other Liens securing obligations in an aggregate amount not in
excess of $150,000,000.
7.2 Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of 15% or more of its assets, calculated with reference to total assets
as reflected on the Company's consolidated balance sheet as at June 30,2002.
7.3 Mergers, Etc. Merge with or into or consolidate with or into
any other Person, except that the Company may merge with any other Person,
provided that, in each case, immediately after giving effect thereto, (a) no
event shall occur and be continuing which constitutes a Default or Event of
Default, (b) the Company is the surviving corporation, (c) the Company shall not
be liable with respect to any Debt or allow its property to be subject to any
Lien which it could not become liable with respect to or allow its property to
become subject to under this Agreement on the date of such transaction and (d)
the Company's Net Worth shall be equal to or greater than its Net Worth
immediately prior to such merger.
7.4 Compliance with ERISA. Permit to exist any occurrence of any
Reportable Event, or any other event or condition which presents a material (in
the reasonable opinion of the Majority Banks) risk of a termination by the PBGC
of any Plan of the Company or any ERISA Affiliate, which termination will result
in any material (in the reasonable opinion of the Majority Banks) liability of
the Company or such ERISA Affiliate to the PBGC.
7.5 Change in Nature of Business. Make any material change in the
nature of its business as carried on as of the date hereof.
7.6 Restricted Payments. The Company: (a) will not declare or pay
any dividends or make any other distributions on its capital stock (other than
dividends payable solely in such capital stock) or redeem any such capital
stock; and (b) will not, and will not permit any Subsidiary to, purchase or
otherwise acquire or retire any of the Company's capital stock or make any loans
or advances to CMS or any Subsidiary thereof (other than the Company or any
Subsidiary thereof); provided that, so long as no Default or Event of Default
exists, the Company may pay dividends in an aggregate amount not to exceed
$300,000,000 during any calendar year.
7.7 Off-Balance Sheet Liabilities. Create, incur, assume or suffer
to exist, or permit any Subsidiary to create, incur, assume or suffer to exist,
Off-Balance Sheet Liabilities (exclusive of obligations pursuant to the
Receivables Sale Agreement and the Building Lease) in the aggregate in excess of
$150,000,000 at any time.
ARTICLE VIII
FINANCIAL COVENANTS
27
So long as any Obligations shall remain unpaid, the Company shall:
8.1 Debt to Capital Ratio. At all times, maintain a ratio of Total
Consolidated Debt to Total Consolidated Capitalization of not greater than 0.65
to 1.0.
8.2 Interest Coverage Ratio. Not permit the ratio, determined as
of the end of each of its fiscal quarters for the then most-recently ended four
fiscal quarters, of (i) Consolidated EBIT to (ii) Consolidated Interest Expense
to be less than 2.0 to 1.0.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default":
(a) The Company shall fail to pay (i) any principal of any Term
Loan when due and payable, or (ii) any interest on any Term Loan or any fee or
other Obligation payable hereunder within five (5) days after such interest or
fee or other Obligation becomes due and payable;
(b) Any representation or warranty made by the Company (or any of
its officers) in this Agreement or any other Loan Document or in any
certificate, document, report, financial or other written statement furnished at
any time pursuant to any Loan Document shall prove to have been incorrect in any
material respect on or as of the date made;
(c) The Company shall fail to perform or observe any term,
covenant or agreement contained in Section 6.10, Section 6.11(i), Article VII or
Article VIII: or the Company shall fail to perform or observe any other term,
covenant or agreement on its part to be performed or observed in this Agreement
or in any other Loan Document and such failure shall continue for 30 consecutive
days after notice thereof by means of facsimile, regular mail or written notice
delivered in person (or telephonic notice thereof confirmed in writing) shall
have been given to the Company by the Agent or the Majority Banks;
(d) The Company shall: (i) fail to pay any Debt (other than the
payment obligations described in subsection (a) above) in excess of $25,000,000,
or any interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the instrument
or agreement relating to such Debt; or (ii) fail to perform or observe any term,
covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such Debt, when required to be performed
or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, the maturity of such Debt, unless
the obligee under or holder of such Debt shall have waived in writing such
circumstance, or such circumstance has been cured, so that such circumstance is
no longer continuing; or (iii) any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), in each case in accordance with the terms of such agreement or
instrument, prior to the stated maturity thereof; or (iv) generally not, or
shall admit in writing its inability to, pay its debts as such debts become due;
28
(e) The Company: (i) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for it or a substantial part of its assets, or
(ii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect, or (iii) shall have had
any such petition or application filed or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered, or which petition, application or proceeding remains
undismissed for a period of 30 consecutive days or more; or (iv) by any act or
omission shall indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or order for relief or the appointment of a
custodian, receiver or trustee for all or any substantial part of its property;
or (v) shall suffer any such custodianship, receivership or trusteeship to
continue undischarged for a period of 30 days or more; or (vi) shall take any
corporate action to authorize any of the actions set forth above in this
subsection (e);
(f) One or more judgments, decrees or orders for the payment of
money in excess of $25,000,000 in the aggregate shall be rendered against the
Company and either (i) enforcement proceedings shall have been commenced by any
creditor upon any such judgment or order or (ii) there shall be any period of
more than 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;
(g) Any Termination Event with respect to a Plan shall have
occurred, and 30 days after notice thereof shall have been given to the Company
by the Agent, (i) such Termination Event (if correctable) shall not have been
corrected and (ii) the then present value of such Plan's vested benefits exceeds
the then current value of the assets accumulated in such Plan by more than the
amount of $25,000,000 (or in the case of a Termination Event involving the
withdrawal of a "substantial employer" (as defined in Section 4001(A)(2) of
ERISA), the withdrawing employer's proportionate share of such excess shall
exceed such amount); or
(h) Any Bond shall cease to be in full force and effect (except
for Bonds surrendered by the Agent pursuant to Section 2.4 or 2.5); or the
Company shall deny that it has any liability or obligation under any Bond or
purport to revoke, terminate, rescind or redeem any Bond (other than in
accordance with the terms of the Bonds and the Indenture).
9.2 Remedies.
If any Event of Default shall occur and be continuing, the
Agent shall upon the request, or may with the consent, of the Majority Banks, by
notice to the Company, declare the Obligations to be forthwith due and payable,
whereupon the Obligations 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 Company, provided that in the case of an Event of
Default referred to in Section 9.1(e) above, the Obligations shall automatically
become due and payable without notice, presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company.
ARTICLE X
WAIVERS, AMENDMENTS AND REMEDIES
29
10.1 Amendments. Subject to the provisions of this Article X, the
Majority Banks (or the Agent with the consent in writing of the Majority Banks)
and the Company may enter into written agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Banks or the Company hereunder or waiving any
Event of Default hereunder, provided that no such supplemental agreement shall,
without the consent of all of the Banks:
(a) Extend the maturity of any Term Loan or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest or
fees thereon.
(b) Modify the percentage specified in the definition of Majority
Banks.
(c) Increase the amount of the Term Loan Commitment of any Bank
hereunder, or permit the Company to assign its rights under this Agreement.
(d) Amend Section 6.10, Section 12.12 or this Section 10.1.
The Agent, as holder of the Bonds, shall not consent to or vote in favor of a
release of all or substantially all of the property subject to the lien of the
Indenture without the consent of all of the Banks. No amendment of any provision
of this Agreement relating to the Agent shall be effective without the written
consent of the Agent.
10.2 Preservation of Rights. No delay or omission of the Banks or
the Agent to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of a Term Loan notwithstanding the
existence of a Default or Event of Default or the inability of the Company to
satisfy the conditions precedent to such Term Loan shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such right shall
not preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Banks required pursuant to Section 10.1, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent and the Banks until the Obligations have been paid in full.
ARTICLE XI
CONDITIONS PRECEDENT
11.1 Delivery of Documents. This Agreement shall not become
effective and the Banks shall not be required to make the Term Loans hereunder
on the Effective Date unless the Company has furnished to the Agent with
sufficient copies for the Banks:
(a) A certificate, signed by a Designated Officer of the Company,
stating that on the Effective Date no Default or Event of Default has occurred
and is continuing.
30
(b) Evidence satisfactory to the Agent of the issuance of the
Bonds in the form set forth in the Supplemental Indenture and in an aggregate
principal amount of $300,000,000 pursuant to the Bond Delivery Agreement.
(c) Favorable opinions of:
(i) Xxxxxxx X. XxxXxxxxx, Esq., Deputy General Counsel of
CMS, as to the matters set forth in Exhibit B-1 and as to such other
matters as the Agent may reasonably request;
(ii) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special
counsel to the Company, as to the matters set forth in Exhibit B-2 and
as to such other matters as the Agent may reasonably request; and
(iii) Miller, Canfield, Paddock and Stone, P.L.C., special
counsel to the Company, as to the matters set forth in Exhibit B-3 and
as to such other matters as the Agent may reasonably request.
Such opinions shall be addressed to the Agent and the Banks and shall be
satisfactory in form and substance to the Agent.
(d) Evidence, in form and substance satisfactory to the Agent,
that the Company has obtained all governmental approvals, if any, necessary for
it to enter into the Loan Documents.
(e) Such other documents as the Agent or any Bank may reasonably
request.
11.2 Payment of Fees. It shall be a further condition precedent to
the making of the Term Loans on the Effective Date that the Company shall have
paid (i) to the Agent for the account of the Banks the fees required to be paid
on the Effective Date pursuant to the Fee Letter and (ii) to Citicorp North
America, Inc. all accrued and unpaid Commitment Fee (as defined in the Original
Agreement) to but not including the Effective Date.
11.3 No Default, Etc. No Bank shall be required to make any Term
Loan on the Effective Date unless (i) no Default or Event of Default then
exists, (ii) the representations and warranties contained in Article V are true
and correct as of the Effective Date and (iii) all legal matters incident to the
making of such Term Loan are satisfactory to such Bank and its counsel. The
Company represents and warrants that the conditions contained in subsections (i)
and (ii) above will be satisfied on the Effective Date.
ARTICLE XII
GENERAL PROVISIONS
12.1 Successors and Assigns. (a) The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Company and
the Banks and their respective successors and assigns, except that the Company
shall not have the right to assign its rights under the Loan Documents. Any Bank
may sell participations in all or a portion of its rights and
31
obligations under this Agreement pursuant to subsection (b) below and any Bank
may assign all or any part of its rights and obligations under this Agreement
pursuant to subsection (c) below.
(b) Any Bank may sell participations to one or more banks or other
entities (each a "Participant") in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Term Loan Commitment and its outstanding Term Loan), provided
that (i) such Bank's obligations under this Agreement (including, without
limitation, its Term Loan Commitment to the Company hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain the
holder of the Term Loans of such Bank for all purposes of this Agreement and
(iv) the Company shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement. Each
Bank shall retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with respect to any
Term Loan or Term Loan Commitment in which such Participant has an interest
which would require consent of all of the Banks pursuant to the terms of Section
10.1 or of any other Loan Document. The Company agrees that each Participant
shall be deemed to have the right of setoff provided in Section 12.11 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Bank under the Loan Documents, provided that each Bank shall retain
the right of setoff provided in Section 12.11 with respect to the amount of
participating interests sold to each Participant. The Banks agree to share with
each Participant, and each Participant, by exercising the right of setoff
provided in Section 12.11, agrees to share with each Bank, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.11 as if each Participant were a Bank. The Company
further agrees that each Participant shall be entitled to the benefits of
Sections 4.1, 4.3, 4.4 and 4.5 to the same extent as if it were a Bank and had
acquired its interest by assignment pursuant to Section 12.1(c); provided that
(i) a Participant shall not be entitled to receive any greater payment under
Section.4.1, 4.3, 4.4 or 4.5 than the Bank who sold the participating interest
to such Participant would have received had it retained such interest for its
own account, unless the sale of such interest to such Participant is made with
the prior written consent of the Company, and (ii) any Participant not
incorporated under the laws of the United States of America or any State thereof
agrees to comply with the provisions of Section 4.5 to the same extent as if it
were a Bank.
(c) Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more financial
institutions all or any part of its rights and obligations under this Agreement,
provided that the minimum principal amount of any such assignment (other than
assignments to a Federal Reserve Bank, or to any other Bank or affiliate or
Approved Fund of a Bank, or to any direct or indirect contractual counterparties
in swap agreements relating to the Term Loans to the extent required in
connection with the physical settlement of any Bank's obligations pursuant
thereto) shall be $1,000,000 (or such lesser amount consented to by the Agent);
provided that, unless such Bank is assigning all of its rights and obligations
hereunder, after giving effect to such assignment the assigning Bank shall have
Term Loans in the aggregate of not less than $1,000,000 (unless otherwise
consented to by the Agent).
32
(d) Any Bank may, in connection with any sale or participation or
proposed sale or participation pursuant to this Section 12.1 disclose to the
purchaser or participant or proposed purchaser or participant any information
relating to the Company furnished to such Bank by or on behalf of the Company,
provided that prior to any such disclosure of non-public information, the
purchaser or participant or proposed purchaser or participant (which purchaser
or participant is not an affiliate of a Bank) shall agree to preserve the
confidentiality of any confidential information (except any such disclosure as
may be required by law or regulatory process) relating to the Company received
by it from such Bank.
(e) Assignments under this Section 12.1 shall be made pursuant to
an agreement (an "Assignment Agreement") substantially in the form of Exhibit D
hereto or in such other form as may be agreed to by the parties thereto and
shall not be effective until a $3,500 fee has been paid to the Agent by the
assignee, which fee shall cover the cost of processing such assignment,
provided, that such fee shall not be incurred in the event of an assignment by
any Bank of all or a portion of its rights under this Agreement to (i) a Federal
Reserve Bank or (ii) a Bank or an affiliate or Approved Fund of the assigning
Bank or (iii) to any direct or indirect contractual counterparties in swap
agreements relating to the Term Loans to the extent required in connection with
the physical settlement of any Bank's obligations pursuant thereto.
(f) Notwithstanding anything to the contrary contained herein, any
Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Bank to
the Agent and the Company, the option to provide to the Company all or any part
of any Term Loan that such Granting Bank is obligated to make to the Company
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Term Loan, (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Term
Loan, the Granting Bank shall remain obligated to make such Term Loan pursuant
to the terms hereof, (iii) the Company shall not be required to pay any amount
under Section 4.5 that is greater than the amount which it would have been
required to pay had there been no grant to an SPC and (iv) any SPC (or assignee
of an SPC) will comply, if applicable, with the provisions contained in Section
4.5. No grant by any Granting Bank to an SPC agreeing to provide a Term Loan or
the making of such Term Loan by such SPC shall operate to relieve such Granting
Bank of its liabilities and obligations hereunder, except to the extent of the
making of such Term Loan by such SPC. The making of a Term Loan by an SPC
hereunder shall utilize the Term Loan Commitment of the Granting Bank to the
same extent, and as if, such Term Loan were made by such Granting Bank. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Bank). In addition, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that any SPC
may (i) with notice to, but without the prior written consent of, the Company
and the Agent and without paying any processing fee therefor, assign all or a
portion of its interests in any Term Loans to the Granting Bank or to any
financial institutions (consented to by the Agent in its sole discretion)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Term Loans and (ii) disclose on a
confidential basis any non-public information relating to its Term Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. This Section 12.1(f) may not be
amended without the written consent of any SPC that holds an option to provide
Term Loans. No recourse under any obligation, covenant, or
33
agreement of the SPC contained in this Agreement shall be had against any
shareholder, officer, agent or director of the SPC as such, by the enforcement
of any assessment or by any proceeding, by virtue of any statute or otherwise;
it being expressly agreed and understood that this Agreement is a corporate
obligation of the SPC and no personal liability shall attach to or be incurred
by any officer, agent or member of the SPC as such, or any of them under or by
reason of any of the obligations, covenants or agreements of the SPC contained
in this Agreement, or implied therefrom, and that any and all personal liability
for breaches by the SPC of any such obligations, covenants or agreements, either
at law or by statute or constitution, of every such shareholder, officer, agent
or director is hereby expressly waived by all parties to this Agreement as a
condition of and consideration for the SPC entering into this Agreement;
provided, however, that the foregoing shall not relieve any such person or
entity of any liability they might otherwise have as a result of fraudulent
actions or omissions taken by them. All parties to this Agreement acknowledge
and agree that the SPC shall only be liable for any claims that each of them may
have against the SPC only to the extent of the SPC's assets. The provisions of
this clause shall survive the termination of this Agreement.
(g) Any Bank may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Bank, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Bank from any of its obligations hereunder or
substitute any such pledgee or assignee for such Bank as a party hereto.
12.2 Survival of Representations. All representations and
warranties of the Company contained in this Agreement shall survive the making
of the Term Loans herein contemplated.
12.3 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Bank shall be obligated to extend credit to
the Company in violation of any limitation or prohibition provided by any
applicable statute or regulation.
12.4 Taxes. Any taxes (excluding income taxes) payable or ruled
payable by any Federal or State authority in respect of the execution of the
Loan Documents shall be paid by the Company, together with interest and
penalties, if any.
12.5 Choice of Law; Waiver of Jury Trial. THE LOAN DOCUMENTS SHALL
BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT
OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT AND THE COMPANY
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY HEREBY
WAIVES ANY RIGHT TO A JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING HEREUNDER OR UNDER ANY LOAN DOCUMENT.
34
12.6 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
12.7 Entire Agreement. The Loan Documents embody the entire
agreement and understanding between the Company, the Agent and the Banks and
supersede all prior agreements and understandings between the Company, the Agent
and the Banks relating to the subject matter thereof (other than those contained
in the fee letter described in Section 13.12 which shall survive and remain in
full force and effect during the term of this Agreement).
12.8 Expenses; Indemnification. The Company shall (a) reimburse the
Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for the Agent) paid or incurred by the Agent or the Arranger in
connection with the preparation, review, execution, delivery, syndication,
distribution (including, without limitation, via the internet), amendment and
modification of the Loan Documents and (b) reimburse the Agent, the Arranger and
each Bank for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' fees and time charges of attorneys for the
Agent or for such Bank) paid or incurred by the Agent, the Arranger or such Bank
in connection with the collection and enforcement of the Loan Documents. The
Company further agrees to indemnify the Agent, the Arranger and each Bank and
their respective directors, officers, employees, trustees, agents and advisors
against all losses, claims, damages, penalties, judgments, liabilities and
reasonable expenses (including, without limitation, all material expenses of
litigation or preparation therefor whether or not the Agent, the Arranger or any
Bank is a party thereto) which any of them may pay or incur arising out of or
relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Term Loan hereunder, provided that the
Company shall not be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Agent, the Arranger or
any Bank. The obligations of the Company under this Section shall survive the
termination of this Agreement.
12.9 [Intentionally Omitted.]
12.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
12.11 Setoff. In addition to, and without limitation of, any rights
of the Banks under applicable law, if the Company becomes insolvent, however
evidenced, or any Default or Event of Default occurs, any indebtedness from any
Bank to the Company (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Bank, whether or not the
Obligations, or any part hereof, shall then be due. The Company agrees that any
purchaser or participant under Section 12.1 may, to the fullest extent permitted
by law, exercise all its rights
35
of payment with respect to such purchase or participation as if it were the
direct creditor of the Company in the amount of such purchase or participation.
12.12 Ratable Payments. If any Bank, whether by setoff or otherwise,
has payment made to it upon its outstanding Term Loans in a greater proportion
than that received by any other Bank, such Bank agrees, promptly upon demand, to
purchase a portion of the aggregate outstanding Term Loans held by the other
Banks so that after such purchase each Bank will hold its Pro Rata Share of the
aggregate outstanding Term Loans. If any Bank, whether in connection with setoff
or amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Obligations or such amounts which may be subject to
setoff, such Bank agrees, promptly upon demand, to take such action necessary
such that all Banks share in the benefits of such collateral ratably in
proportion to their respective Pro Rata Share of the aggregate outstanding Term
Loans. In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
12.13 Nonliability of Banks. The relationship between the Company,
on the one hand, and the Banks and the Agent, on the other hand, shall be solely
that of borrower and lender Neither the Agent, the Arranger nor any Bank shall
have any fiduciary responsibilities to the Company. Neither the Agent, the
Arranger nor any Bank undertakes any responsibility to the Company to review or
inform the Company of any matter in connection with any phase of the Company's
business or operations. The Company shall rely entirely upon its own judgment
with respect to its business, and any review, inspection, supervision or
information supplied to the Company by the Banks is for the protection of the
Banks and neither the Company nor any third party is entitled to rely thereon.
The Company agrees that neither the Agent, the Arranger nor any Bank shall have
liability to the Company (whether sounding in tort, contract or otherwise) for
losses suffered by the Company in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by
the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non-appealable judgment by a
court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Agent, the Arranger nor any Bank shall have any liability with
respect to, and the Company hereby waives, releases and agrees not to xxx for,
any special, indirect, consequential or punitive damages suffered by the Company
in connection with, arising out of, or in any way related to the Loan Documents
or the transactions contemplated thereby.
36
ARTICLE XIII
THE AGENT
13.1 Appointment. Citicorp North America, Inc. is hereby appointed
Agent hereunder, and each of the Banks irrevocably authorizes the Agent to act
as the contractual representative on behalf of such Bank. The Agent agrees to
act as such upon the express conditions contained in this Article XIII. The
Agent shall not have a fiduciary relationship in respect of any Bank by reason
of this Agreement. The Agent hereby acknowledges and agrees that it shall hold
the Bonds for the ratable benefit of the Banks.
13.2 Powers. The Agent shall have and may exercise such powers
hereunder as are specifically delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. The Agent shall
not have any implied duties to the Banks or any obligation to the Banks to take
any action hereunder except any action specifically provided by this Agreement
to be taken by the Agent.
13.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Banks or any Bank for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith except for its or their own gross negligence or willful misconduct.
13.4 No Responsibility for Loans, Recitals, Etc. The Agent shall
not be responsible to the Banks for any recitals, reports, statements,
warranties or representations herein or in any Loan Document or be bound to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement.
13.5 Action on Instructions of Banks. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Majority Banks (or all of the Banks if required by Section 10.1), and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks. The Banks hereby acknowledge that the Agent shall
be under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Loan Document unless
it shall be requested in writing to do so by the Majority Banks. The Agent shall
be fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Banks pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
13.6 Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder by or through employees, agents and
attorneys-in-fact and shall not be answerable to the Banks, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agency hereby created and its duties hereunder.
13.7 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it
37
to be genuine and correct and to have been signed or sent by the proper person
or persons, and, in respect to legal matters, upon the opinion of counsel
selected by the Agent, which counsel may be employees of the Agent.
13.8 Agent's Reimbursement and Indemnification. The Banks agree to
reimburse and indemnify the Agent ratably in proportion to their respective Pro
Rata Shares (i) for any amounts not reimbursed by the Company for which the
Agent is entitled to reimbursement by the Company under the Loan Documents and
(ii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement or any other document
delivered in connection with this Agreement or the transactions contemplated
hereby or the enforcement of any of the terms hereof or of any such other
documents, provided that no Bank shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the Agent.
13.9 Rights as a Lender. With respect to its Term Loan Commitment,
if any, and any Term Loan made by it, Citicorp shall have the same rights and
powers hereunder as any Bank and may exercise the same as though it were not the
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include Citicorp in its individual capacity. Citicorp may accept
deposits from, lend money to, and generally engage in any kind of banking or
trust business with the Company or any Subsidiary as if it were not the Agent.
13.10 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
13.11 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Banks and the Company, and the Agent may be
removed at any time with or without cause by written notice received by the
Agent from the Majority Banks. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint, on behalf of the Banks, a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty days after
the retiring Agent's giving notice of resignation, then the retiring Agent may
appoint, on behalf of the Banks, a successor Agent. Such successor Agent shall
be a commercial bank having capital and retained earnings 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, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent hereunder.
38
13.12 Agent and Arranger Fees. The Company agrees to pay to the
Agent and the Arranger, for their respective accounts, the fees agreed to by the
Company, the Agent and the Arranger pursuant to that certain letter agreement
dated July 12, 2002, or as otherwise agreed from time to time.
ARTICLE XIV
NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.6
with respect to Conversion/Continuation Notices, all notices, requests and other
communications to any party hereunder shall be in writing (including electronic
transmission, facsimile transmission or similar writing) and shall be given to
such party; (x) in the case of the Company or the Agent, at its address or
facsimile number set forth on the signature pages hereof, except that
Conversion/Continuation Notices shall be sent to the Agent at 0 Xxxx'x Xxx,
Xxxxx 000, Xxx Xxxxxx, XX 00000, Attention: Xxxxx Xxxxx, telephone 000-000-0000,
fax 000-000-0000, or (y) in the case of any Bank, at its address or facsimile
number set forth in its Administrative Details Form provided to the Agent. Each
such notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
14.2 Change of Address. The Company and the Agent may each change
the address for service of notice upon it by a notice in writing to the other
parties hereto in accordance with Section 14.1. Any Bank may change the address
for service of notice upon it by a notice in writing to the Company and the
Agent in accordance with Section 14.1.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
39
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Company, the Agent
and the Banks and each party has notified the Agent by facsimile or telephone
that it has taken such action.
IN WITNESS WHEREOF, the Company, the Banks and the Agent have executed
this Agreement as of the date first above written.
CONSUMERS ENERGY COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxxx
-------------------------------------
Name : Xxxxx X. Xxxxxxxxxxx
Title: Vice President and Treasurer
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
Confirmation Telephone No: (000) 000-0000
E-Mail Address: xxxxxxxx@xxxxxxxxx.xxx
CITICORP NORTH AMERICA, INC., as
Agent and as a Bank
By: /s/ [ILLEGIBLE]
-------------------------------------
Name: [ILLEGIBLE]
Title: Vice President
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Confirmation No: (000) 000-0000
BANK HAPOALIM B.M.
By: /s/ Xxxxx Xxxx Xxxxx
-------------------------------------
Name: XXXXX XXXX XXXXX
Title: SENIOR VICE PRESIDENT &
CORPORATE MANAGER
4
THE FOOTHILL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
FOOTHILL INCOME TRUST, L.P.
By FIT GP, LLC, Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Managing Member
2
PROTECTIVE LIFE
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant VP
5
SOCIETE GENERALE
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Vice President
3
EXHIBIT A
[FORM OF SUPPLEMENTAL INDENTURE]
