1
EXHIBIT (4)(r)
--------------------------------------------------------------------------------
$450,000,000
CREDIT AGREEMENT
Dated as of June 18, 2001,
Among
CMS ENERGY CORPORATION
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
BARCLAYS BANK PLC
as Administrative Agent and Collateral Agent
and
BANK OF AMERICA, N.A.
and
THE CHASE MANHATTAN BANK
as Co-Syndication Agents
and
CITIBANK, N.A.
and
UNION BANK OF CALIFORNIA
as Documentation Agents
----------------------------
BARCLAYS CAPITAL
as Advisor, Arranger and Book Manager
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms..............................................................................1
SECTION 1.02. Computation of Time Periods; Construction.........................................................20
SECTION 1.03. Accounting Terms..................................................................................20
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments...................................................................................20
SECTION 2.02. Fees..............................................................................................21
SECTION 2.03. Reduction of the Commitments......................................................................21
SECTION 2.04. Computations of Outstandings......................................................................21
SECTION 2.05. Commitment Renewal................................................................................22
ARTICLE III
LOANS
SECTION 3.01. Loans.............................................................................................22
SECTION 3.02. Conversion of Loans...............................................................................24
SECTION 3.03. Interest Periods..................................................................................24
SECTION 3.04. Other Terms Relating to the Making and Conversion of Loans........................................24
SECTION 3.05. Repayment of Loans; Interest......................................................................27
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. Issuing Banks.....................................................................................27
SECTION 4.02. Letters of Credit.................................................................................28
SECTION 4.03. Issuing Bank Fees.................................................................................28
SECTION 4.04. Reimbursement to Issuing Banks....................................................................28
SECTION 4.05. Obligations Absolute..............................................................................29
SECTION 4.06. Liability of Issuing Banks and the Lenders........................................................30
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 5.01. Payments and Computations.........................................................................31
SECTION 5.02. Interest Rate Determination.......................................................................32
SECTION 5.03. Prepayments.......................................................................................32
SECTION 5.04. Yield Protection..................................................................................33
SECTION 5.05. Sharing of Payments, Etc..........................................................................35
SECTION 5.06. Taxes.............................................................................................35
i
3
TABLE OF CONTENTS (CONT'D)
SECTION PAGE
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Initial Extension of Credit...........................................37
SECTION 6.02. Conditions Precedent to Each Extension of Credit..................................................39
SECTION 6.03. Conditions Precedent to Certain Extensions of Credit..............................................39
SECTION 6.04. Reliance on Certificates..........................................................................40
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower....................................................40
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants.............................................................................43
SECTION 8.02. Negative Covenants................................................................................46
SECTION 8.03. Reporting Obligations.............................................................................50
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default.................................................................................53
SECTION 9.02. Remedies..........................................................................................55
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action.........................................................................55
SECTION 10.02. Indemnification..................................................................................57
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc..................................................................................58
SECTION 11.02. Notices, Etc.....................................................................................58
SECTION 11.03. No Waiver of Remedies............................................................................59
SECTION 11.04. Costs, Expenses and Indemnification..............................................................59
SECTION 11.05. Right of Set-off.................................................................................60
SECTION 11.06. Binding Effect...................................................................................61
SECTION 11.07. Assignments and Participation....................................................................61
SECTION 11.08. Confidentiality..................................................................................65
SECTION 11.09. Waiver of Jury Trial.............................................................................65
SECTION 11.10. Governing Law; Submission to Jurisdiction........................................................65
SECTION 11.11. Relation of the Parties; No Beneficiary..........................................................66
ii
4
TABLE OF CONTENTS (CONT'D)
SECTION PAGE
SECTION 11.12. Existing Banks' Waiver, Acknowledgment and Release...............................................66
SECTION 11.13. Execution in Counterparts........................................................................66
SECTION 11.14. Survival of Agreement............................................................................66
iii
5
Exhibits
--------
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Notice of Conversion
EXHIBIT C - Form of Cash Collateral Agreement
EXHIBIT D - Form of Opinion of Xxxxxxx X. XxxXxxxxx, Esq., counsel of the Borrower
EXHIBIT E - Form of Opinion of Sidley Xxxxxx Xxxxx & Xxxx, counsel to the Administrative Agent
EXHIBIT F - Form of Compliance Schedule
EXHIBIT G - Form of Lender Assignment
EXHIBIT H - Terms of Subordination (Junior Subordinated Debt)
EXHIBIT I - Terms of Subordination (Guaranty of Hybrid Preferred Securities)
Schedules
---------
SCHEDULE I Applicable Lending Offices
SCHEDULE II Certain Debt
iv
6
CREDIT AGREEMENT
Dated as of June 18, 2001
THIS
CREDIT AGREEMENT is made by and among:
(i)
CMS Energy Corporation, a Michigan corporation (the
"BORROWER"),
(ii) the banks (the "BANKS") listed on the signature pages hereof
and the other Lenders (as hereinafter defined) from time to
time party hereto,
(iii) Barclays Bank PLC ("BARCLAYS"), as administrative agent (the
"ADMINISTRATIVE AGENT") and collateral agent (the "COLLATERAL
AGENT") for the Lenders hereunder, and
(iv) Bank of America, N.A. and The Chase Manhattan Bank, as
co-syndication agents (the "CO-SYNDICATION AGENTS"), and
Citibank, N.A. and Union Bank of California, as documentation
agents (the "DOCUMENTATION AGENTS").
PRELIMINARY STATEMENTS
The Borrower has requested the Banks to provide the credit facility
hereinafter described in the amount and on the terms and conditions set forth
herein. The Banks have so agreed on the terms and conditions set forth herein,
and the Agents have agreed to act as agents for the Lenders on such terms and
conditions.
The parties hereto acknowledge and agree that neither Consumers (as
hereinafter defined) nor any of its Subsidiaries (as hereinafter defined) will
be a party to, or will in any way be bound by any provision of, this Agreement
or any other Loan Document (as hereinafter defined), and that no Loan Document
will be enforceable against Consumers or any of its Subsidiaries or their
respective assets.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Alternate
Base Rate.
"ABR LOAN" means a Loan that bears interest as provided in
Section 3.05(b)(i).
1
7
"ADJUSTED LIBO RATE" means, for each Interest Period for each
Eurodollar Rate Loan made as part of the same Borrowing, an interest
rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b)
the Statutory Reserve Rate.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to
all directors and officers of such Person), controlled by, or under
direct or indirect common control with such Person. A Person shall be
deemed to control another entity if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership
of voting securities, by contract, or otherwise.
"AGENT" means, as the context may require, the Administrative
Agent, the Collateral Agent, any Co-Syndication Agent or any
Documentation Agent, and "AGENTS" means any or all of the foregoing.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b)
the Base CD Rate in effect on such day and (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate
or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Base
CD Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, (i) such Lender's Domestic Lending Office, in the case of an
ABR Loan, and (ii) such Lender's Eurodollar Lending Office, in the case
of a Eurodollar Rate Loan.
"APPLICABLE MARGIN" means, on any date of determination with
respect to any Loans, the per annum rate specified in the table below
for such Loans, taking into account the Rating Level in effect on such
date of determination:
---------------------------------------------------------------------------------------------------
Rating Rating Rating Rating Rating
Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX Level V
---------------------------------------------------------------------------------------------------
ABR Loans 0.375% 0.625% 0.75% 0.875% 1.00%
---------------------------------------------------------------------------------------------------
Eurodollar
Rate Loans 1.375% 1.625% 1.75% 1.875% 2.00%
---------------------------------------------------------------------------------------------------
The Applicable Margins shall be increased or decreased in accordance
with this definition upon any change in the applicable ratings of the
Index Debt, and such increased or decreased Applicable Margins shall be
effective from the date of announcement of any such new ratings. The
Borrower agrees to notify the Administrative Agent promptly after each
change in any rating of the Index Debt.
2
8
"APPLICABLE RATE" means:
(i) in the case of each ABR Loan, a rate per annum
equal at all times to the sum of the Alternate Base Rate in
effect from time to time plus the Applicable Margin; and
(ii) in the case of each Eurodollar Rate Loan
comprising part of the same Borrowing, a rate per annum during
each Interest Period equal at all times to the sum of the
Adjusted LIBO Rate for such Interest Period plus the
Applicable Margin.
"ARRANGER" means Barclays Capital.
"ASSESSMENT RATE" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank
Insurance Fund classified as "well capitalized" and within supervisory
subgroup "B" (or a comparable successor risk classification) within the
meaning of 12 C.F.R. Part 327 (or any successor provision) to the
Federal Deposit Insurance Corporation for insurance by such Corporation
of time deposits made in Dollars at the offices of such member in the
United States; provided that if, as a result of any change in law, rule
or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate
as shall be determined by the Administrative Agent to be representative
of the cost of such insurance to the Lenders.
"AVAILABLE COMMITMENT" means, for each Lender on any day, the
unused portion of such Lender's Commitment, computed after giving
effect to all Extensions of Credit or prepayments to be made on such
day and the application of proceeds therefrom. "AVAILABLE COMMITMENTS"
means the aggregate of the Lenders' Available Commitments.
"BASE CD RATE" means the sum of (i) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (ii) the
Assessment Rate.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWER INTEREST EXPENSE" means at any date, the total
interest expense in respect of Debt of the Borrower for the four
calendar quarters immediately preceding such date, including, without
duplication, (i) interest expense attributable to capital leases, (ii)
amortization of debt discount, (iii) capitalized interest, (iv) cash
and noncash payments, (v) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) net costs under interest rate swap, "cap", "collar" or
other hedging agreements (including amortization of discount) and (vii)
interest expense in respect of obligations of Persons deemed to be Debt
of the Borrower under clause (viii) of the definition of Debt,
provided, however that Borrower Interest Expense shall exclude any
costs otherwise included in interest expense recognized on early
retirement of debt.
3
9
"BORROWING" means a borrowing consisting of Loans of the same
Type, having the same Interest Period and made or Converted on the same
day by the Lenders, ratably in accordance with their respective
Percentages. Any Borrowing consisting of Loans of a particular Type may
be referred to as being a Borrowing of such "TYPE". All Loans of the
same Type, having the same Interest Period and made or Converted on the
same day shall be deemed a single Borrowing hereunder until repaid or
next Converted.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in
New York City and Detroit, Michigan,
and, if the applicable Business Day relates to any Eurodollar Rate
Loan, on which dealings are carried on in the London interbank market.
"CASH COLLATERAL AGREEMENT" means the Cash Collateral
Agreement, dated as of the date hereof, between the Borrower and the
Collateral Agent, for the benefit of the Lenders, substantially in the
form of Exhibit C.
"CASH DIVIDEND INCOME" means, for any period, the amount of
all cash dividends received by the Borrower from its Subsidiaries
during such period that are paid out of the net income (without giving
effect to: any extraordinary gains in excess of $25,000,000, the amount
of any write-off or write-down of assets, and up to $200,000,000 of
other non-cash write-offs) of such Subsidiaries during such period.
"CHANGE OF CONTROL" means (a) any "person" or "group" within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act shall
become the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the then outstanding voting capital
stock of the Borrower, or (b) the majority of the board of directors of
the Borrower shall fail to consist of Continuing Directors, or (c) a
consolidation or merger of the Borrower shall occur after which the
holders of the outstanding voting capital stock of the Borrower
immediately prior thereto hold less than 50% of the outstanding voting
capital stock of the surviving entity, or (d) more than 50% of the
outstanding voting capital stock of the Borrower shall be transferred
to any entity of which the Borrower owns less than 50% of the
outstanding voting capital stock.
"CLOSING DATE" means the date of the initial Borrowing
hereunder. All transactions contemplated by the Closing Date shall take
place on or before June 27, 2001, or such other time as the parties
hereto may mutually agree.
"COLLATERAL" means the "Collateral" under the Cash Collateral
Agreement.
"COMMITMENT" means, for each Lender, the obligation of such
Lender to make Loans to the Borrower and to participate in Extensions
of Credit resulting from the issuance (or extension, modification or
amendment) of any Letter of Credit in an aggregate amount no greater
than the amount set forth opposite such Lender's name on the signature
pages hereof under the heading "Commitment" or, if such Lender has
entered into one or more Lender Assignments, set forth for such Lender
in the Register maintained by the Administrative Agent pursuant to
Section 11.07(c), in each such case as such amount may be reduced from
time to time pursuant to Section 2.03.
4
10
"COMMITMENTS" means the total of the Lenders' Commitments hereunder.
The Commitments shall in no event exceed $450,000,000.
"COMMITMENT FEE MARGIN" means, on any date of determination of
the commitment fee set forth in Section 2.02(a), the per annum rate
specified in the table below, taking into account the Rating Level in
effect on such date of determination:
---------------------------------------------------------------------------
Rating Rating Rating Rating Rating
Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX Level V
---------------------------------------------------------------------------
0.25% 0.30% 0.375% 0.425% 0.55%
---------------------------------------------------------------------------
The Commitment Fee Margin shall be increased or decreased in accordance
with this definition upon any change in the applicable ratings of the
Index Debt, and such increased or decreased Commitment Fee Margin shall
be effective from the date of announcement of any such new ratings.
"CONFIDENTIAL INFORMATION" has the meaning assigned to that
term in Section 11.08.
"CONSOLIDATED DEBT" means, without duplication, at any date of
determination, the sum of the aggregate Debt of the Borrower plus the
aggregate debt (as such term is construed in accordance with GAAP) of
the Consolidated Subsidiaries; provided, however, that:
(a) Consolidated Debt shall not include any Support
Obligation described in clause (iv) or (v) of the definition
thereof if such Support Obligation or the primary obligation
so supported is not fixed or conclusively determined or is not
otherwise reasonably quantifiable as of the date of
determination;
(b) Consolidated Debt shall not include (i) any
Junior Subordinated Debt owned by any Hybrid Preferred
Securities Subsidiary or (ii) any guaranty by the Borrower of
payments with respect to any Hybrid Preferred Securities,
provided that such guaranty is subordinated to the rights of
the Lenders hereunder and under the other Loan Documents
pursuant to terms of subordination substantially similar to
those set forth in Exhibit I, or pursuant to other terms and
conditions satisfactory to the Required Lenders;
(c) for purposes of this definition only, the
percentage of the Net Proceeds from any issuance of hybrid
debt/equity securities (other than Junior Subordinated Debt
and Hybrid Preferred Securities) by the Borrower or any
Consolidated Subsidiary that shall be considered Consolidated
Debt shall be agreed by the Administrative Agent and the
Borrower (and consented to by the Required Lenders) and shall
be based on, among other things, the treatment (if any) given
to such hybrid securities by the rating agencies;
5
11
(d) with respect to any Support Obligations provided
by the Borrower in connection with a purchase or sale by MS&T,
its Subsidiaries or PremStar Energy Canada Ltd. ("PREMSTAR")
of natural gas, natural gas liquids, gas condensates,
electricity, oil, propane, coal, any other commodity, weather
derivatives or any derivative instrument with respect to any
commodity with any other Person (a "COUNTERPARTY"),
Consolidated Debt shall include only the excess, if any, of
(A) the aggregate amount of any Support Obligations provided
by the Borrower in respect of MS&T's, any of its Subsidiary's
or PremStar's obligations under any such purchase or sale
transaction (a "COVERING TRANSACTION") entered into by MS&T,
any of its Subsidiaries or PremStar in connection with such
purchase or sale over (B) the aggregate amount of (i) any
Support Obligations provided by the direct or indirect parent
company of such Counterparty (the "COUNTERPARTY GUARANTOR")
and (ii) any irrevocable letter of credit provided by any
financial institution for the account of such Counterparty or
Counterparty Guarantor, in each case for the benefit of MS&T,
any of its Subsidiaries or PremStar in support of such
Counterparty's payment obligations to MS&T, such Subsidiary or
PremStar arising from such purchase or sale, provided that (x)
the senior, unsecured, non-credit enhanced indebtedness of
such Counterparty Guarantor or such financial institution (as
the case may be) is rated BBB- (or its equivalent) or higher
by any two of S&P, Fitch and Moody's, provided that in the
event that such Counterparty Guarantor has no such rated
indebtedness, Dun & Bradstreet Inc. has rated such
Counterparty Guarantor at least investment grade, (y) no
default by such Counterparty Guarantor in respect of any such
Support Obligations provided by such Counterparty Guarantor
has occurred and is continuing and (z) such Counterparty
Guarantor is not the Borrower or any Affiliate of the Borrower
or any of its Subsidiaries;
(e) Consolidated Debt shall not include any Project
Finance Debt of the Borrower or any Consolidated Subsidiary;
and
(f) Consolidated Debt shall not include the principal
amount of any Securitized Bonds.
"CONSOLIDATED EBITDA" means, with reference to any period, the
pretax operating income of the Borrower and its Subsidiaries ("PRETAX
OPERATING INCOME") for such period plus, to the extent deducted in
determining Pretax Operating Income (without duplication), (i)
depreciation, depletion and amortization, and (ii) any non-cash
write-offs and write-downs contained in the Borrower's Pretax Operating
Income, all calculated for the Borrower and its Subsidiaries on a
consolidated basis for such period; provided, however that Consolidated
EBITDA shall not include any operating income attributable to that
portion of the revenues of Consumers dedicated to the repayment of the
Securitized Bonds.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary whose accounts
are or are required to be consolidated with the accounts of the
Borrower in accordance with GAAP.
6
12
"CONSUMERS" means Consumers Energy Company, a Michigan
corporation, all of whose common stock is on the date hereof owned by
the Borrower.
"CONSUMERS DIVIDEND RESTRICTION" means any restriction enacted
or imposed after October 1, 1992 upon the ability of Consumers to pay
cash dividends to the Borrower in respect of Consumers' capital stock,
whether such restriction is imposed by statute, regulation, decisions
or rulings by the Michigan Public Service Commission or the Federal
Energy Regulatory Commission (or any successor agency or agencies),
final judgments of any court of competent jurisdiction, indentures,
agreements, contracts or restrictions to which Consumers is a party or
by which it is bound or otherwise; provided, that no restriction on
such dividends existing on October 1, 1992 shall be a Consumers
Dividend Restriction at any time.
"CONTINUING DIRECTOR" means, as of any date of determination,
any member of the board of directors of the Borrower who (a) was a
member of such board of directors on the Closing Date, or (b) was
nominated for election or elected to such board of directors with the
approval of the Continuing Directors who were members of such board of
directors at the time of such nomination or election.
"CONVERSION", "CONVERT" or "CONVERTED" refers to a conversion
of Loans of one Type into Loans of another Type, or to the selection of
a new, or the renewal of the same, Interest Period for Loans, as the
case may be, pursuant to Section 3.02 or 3.03.
"DEBT" means, for any Person, without duplication, any and all
indebtedness, liabilities and other monetary obligations of such Person
(whether for principal, interest, fees, costs, expenses or otherwise,
and whether contingent or otherwise) (i) for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments,
(ii) to pay the deferred purchase price of property or services (except
trade accounts payable arising in the ordinary course of business which
are not overdue), (iii) as lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases, (iv)
under reimbursement or similar agreements with respect to letters of
credit issued thereunder, (v) under any interest rate swap, "cap",
"collar" or other hedging agreements; provided, however, for purposes
of the calculation of Debt for this clause (v) 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,
(vi) to pay rent or other amounts under leases entered into in
connection with sale and leaseback transactions involving assets of
such Person being sold in connection therewith, (vii) arising from any
accumulated funding deficiency (as defined in Section 412(a) of the
Internal Revenue Code of 1986, as amended) for a Plan, (viii) arising
in connection with any withdrawal liability under ERISA to any
Multiemployer Plan and (ix) arising from (A) direct or indirect
guaranties in respect of, and obligations to purchase or otherwise
acquire, or otherwise to warrant or hold harmless, pursuant to a
legally binding agreement, a creditor against loss in respect of, Debt
of others referred to in clauses (i) through (viii) above and (B) other
guaranty or similar financial obligations in respect of the performance
of others, including Support Obligations. Notwithstanding the
foregoing, solely for purposes of the calculation required under
Section 8.01(j)(ii), Debt
7
13
shall not include any Junior Subordinated Debt issued by the Borrower
and owned by any Hybrid Preferred Securities Subsidiary.
"DEFAULT" means an event that, with the giving of notice or
lapse of time or both, would constitute an Event of Default.
"DEFAULT RATE" means a rate per annum equal at all times to
(i) in the case of any amount of principal of any Loan that is not paid
when due, 2% per annum above the Applicable Rate required to be paid on
such Loan immediately prior to the date on which such amount became
due, and (ii) in the case of any amount of interest, fees or other
amounts payable hereunder that is not paid when due, 2% per annum above
the Applicable Rate for an ABR Loan in effect from time to time.
"DIVIDEND COVERAGE RATIO" means, at any date, the ratio of (i)
Pro Forma Dividend Amounts to (ii) Borrower Interest Expense.
"DOLLARS" and the sign "$" each means lawful money of the
United States.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office or affiliate of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the Lender
Assignment pursuant to which it became a Lender, or such other office
or affiliate of such Lender as such Lender may from time to time
specify in writing to the Borrower and the Administrative Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank or trust
company organized under the laws of the United States, or any State
thereof; (b) a commercial bank organized under the laws of any other
country that is a member of the OECD, or a political subdivision of any
such country, provided that such bank is acting through a branch or
agency located in the United States; (c) the central bank of any
country that is a member of the OECD; and (d) any other commercial bank
or other financial institution engaged generally in the business of
extending credit or purchasing debt instruments; provided, however,
that (A) any such Person shall also (i) have outstanding unsecured
indebtedness that is rated A- or better by S&P or A3 or better by
Moody's (or an equivalent rating by another nationally-recognized
credit rating agency of similar standing if neither of such
corporations is then in the business of rating unsecured indebtedness
of entities engaged in such businesses) or (ii) have combined capital
and surplus (as established in its most recent report of condition to
its primary regulator) of not less than $250,000,000 (or its equivalent
in foreign currency), (B) any Person described in clause (b), (c), or
(d) above, shall, on the date on which it is to become a Lender
hereunder, (1) be entitled to receive payments hereunder without
deduction or withholding of any United States Federal income taxes (as
contemplated by Section 5.06) and (2) not be incurring any losses,
costs or expenses of the type for which such Person could demand
payment under Section 5.04(a) or (c) (except to the extent that, in the
absence of the making of an assignment to such Person, the assigning
Lender would have incurred an equal or greater amount of such losses,
costs or expenses and such losses, costs or expenses would have been
payable by the Borrower to such assigning Lender hereunder), (C) any
Person described in clauses (a), (b), (c) and (d) above, which is not a
8
14
Lender shall, in addition, be acceptable to any Issuing Bank based upon
its then-existing credit criteria and (D) any Person described in
clause (d) above shall, in addition, be acceptable to the
Administrative Agent (which acceptance shall not be unreasonably
withheld or delayed).
"ENTERPRISES" means CMS Enterprises Company, a Michigan
corporation, all of whose common stock is on the date hereof owned by
the Borrower.
"ENTERPRISES SIGNIFICANT SUBSIDIARY" means CMS Oil & Gas Co.,
CMS Generation Co., CMS Gas Transmission and Storage Company, Panhandle
Eastern Pipe Line Company ("PANHANDLE"), any direct or indirect
subsidiary of Panhandle and any other direct subsidiary of Enterprises
having a net worth in excess of $50 million.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or
binding agreements issued, promulgated or entered into by any
governmental agency or authority, relating in any way to the
environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Substance or
to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any
of its Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any
Hazardous Substances, (c) exposure to any Hazardous Substances, (d) the
release or threatened release of any Hazardous Substances into the
environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"EQUITY DISTRIBUTIONS" shall mean, for any period, the
aggregate amount of cash received by the Borrower from its Subsidiaries
during such period that are paid out of proceeds from the sale of
common equity of Subsidiaries of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means, with respect to any Person, any trade
or business (whether or not incorporated) that is a "commonly
controlled entity" within the meaning of the regulations under Section
414 of the Internal Revenue Code of 1986, as amended.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted
LIBO Rate.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office or affiliate of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the Lender
Assignment pursuant to which it became a Lender (or,
9
15
if no such office or affiliate is specified, its Domestic Lending
Office), or such other office or affiliate of such Lender as such
Lender may from time to time specify in writing to the Borrower and the
Administrative Agent.
"EURODOLLAR RATE LOAN" means a Loan that bears interest as
provided in Section 3.05(b)(ii).
"EVENT OF DEFAULT" has the meaning specified in Section 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING BANKS" means the Banks party to the Existing
Credit
Agreement.
"EXISTING
CREDIT AGREEMENT" means the
Credit Agreement, dated
as of June 27, 2000, among the Borrower, the lenders party thereto, The
Chase Manhattan Bank, as Administrative Agent and Collateral Agent, and
the other co-agents party thereto, as the same may have been amended,
restated, supplemented or otherwise modified from time to time.
"EXTENSION OF CREDIT" means (i) the making of a Borrowing
(including any Conversion), (ii) the issuance of a Letter of Credit, or
(iii) the amendment of any Letter of Credit having the effect of
extending the stated termination date thereof, increasing the LC
Outstandings thereunder, or otherwise altering any of the material
terms or conditions thereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of
1%) of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve
Bank of
New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.
"FEE LETTER" has the meaning assigned to that term in Section
2.02(c).
"FITCH" means Fitch, Inc. or any successor thereto.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is
located. For purposes of this definition, the United States of America,
each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"GAAP" has the meaning assigned to that term in Section 1.03.
"GOVERNMENTAL APPROVAL" means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or
regulatory body, required in connection with either (i) the
10
16
execution, delivery, or performance of any Loan Document by the
Borrower, (ii) the grant and perfection of any Lien contemplated by the
Cash Collateral Agreement or (iii) the exercise by any Agent (on behalf
of the Lenders) of any right or remedy provided for under the Cash
Collateral Agreement.
"HAZARDOUS SUBSTANCE" means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau, or instrumentality of the United
States or of the State or locality in which the same is located having
or exercising jurisdiction over such waste, substance or material.
"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 Borrower or a wholly-owned direct
or indirect Subsidiary of the Borrower in exchange for Junior
Subordinated Debt issued by the Borrower 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 Borrower or a wholly-owned direct or
indirect Subsidiary of the Borrower (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 Borrower or Consumers) at all
times by the Borrower or a wholly-owned direct or indirect Subsidiary
of the Borrower, (ii) that has been formed for the purpose of issuing
Hybrid Preferred Securities and (iii) substantially all of the assets
of which consist at all times solely of Junior Subordinated Debt issued
by the Borrower or a wholly-owned direct or indirect Subsidiary of the
Borrower (as the case may be) and payments made from time to time on
such Junior Subordinated Debt.
"INDEMNIFIED PERSON" has the meaning assigned to that term in
Section 11.04(b).
"INDENTURE" means that certain Indenture, dated as of
September 15, 1992, between the Borrower and the Trustee, as
supplemented by the First Supplemental Indenture, dated as of October
1, 1992, the Second Supplemental Indenture, dated as of October 1,
1992, the Third Supplemental Indenture, dated as of May 6, 1997, the
Fourth Supplemental Indenture, dated as of September 26, 1997, the
Fifth Supplemental Indenture, dated as of November 4, 1997, the Sixth
Supplemental Indenture, dated as of
11
17
January 13, 1998, the Seventh Supplemental Indenture, dated as of
January 25, 1999, the Eighth Supplemental Indenture, dated as of
February 3, 1999, the Ninth Supplemental Indenture, dated as of June
22, 1999, the Tenth Supplemental Indenture, dated as of October 12,
2000, and the Eleventh Supplemental Indenture, dated as of March 29,
2001, as said Indenture may be further amended or otherwise modified
from time to time in accordance with its terms.
"INDEX DEBT" means senior, unsecured indebtedness for borrowed
money of the Borrower that is not guaranteed by any other Person or
subject to any other credit enhancement.
"INTEREST PERIOD" has the meaning assigned to that term in
Section 3.03.
"ISSUING BANK" means any Lender designated by the Borrower in
accordance with Section 4.01(a) as the issuer of a Letter of Credit
pursuant to an Issuing Bank Agreement. As of the date hereof, the
Borrower has designated Barclays as an Issuing Bank, and the
Administrative Agent has accepted such designee pursuant to Section
4.01.
"ISSUING BANK AGREEMENT" means an agreement between an Issuing
Bank and the Borrower, in form and substance satisfactory to the
Administrative Agent, providing for the issuance of one or more Letters
of Credit, in form and substance satisfactory to the Administrative
Agent, in support of a general corporate activity of the Borrower.
"JUNIOR SUBORDINATED DEBT" means any unsecured Debt of the
Borrower or a Subsidiary of the Borrower (i) issued in exchange for the
proceeds of Hybrid Preferred Securities and (ii) subordinated to the
rights of the Lenders hereunder and under the other Loan Documents
pursuant to terms of subordination substantially similar to those set
forth in Exhibit H, or pursuant to other terms and conditions
satisfactory to the Required Lenders.
"LC PAYMENT NOTICE" has the meaning assigned to that term in
Section 4.04(b).
"LC OUTSTANDINGS" means, for any Letter of Credit on any date
of determination, the maximum amount available to be drawn under such
Letter of Credit (assuming the satisfaction of all conditions for
drawing enumerated therein) plus any amount which has been drawn on
such Letter of Credit which has neither been reimbursed by the Borrower
nor converted into an ABR Loan pursuant to the terms of Section 4.04.
"LENDER ASSIGNMENT" means an assignment and agreement entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit G.
"LENDERS" means the Banks listed on the signature pages
hereof, each Eligible Assignee that shall become a party hereto
pursuant to Section 11.07 and, if and to the extent so provided in
Section 4.04(c), each Issuing Bank.
"LETTER OF CREDIT" means a letter of credit issued by an
Issuing Bank pursuant to Section 4.02, as such letter of credit may
from time to time be amended, modified or
12
18
extended in accordance with the terms of this Agreement and the Issuing
Bank Agreement to which it relates.
"LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing
rate quotations comparable to those currently provided on such page of
such Service, as determined by the Administrative Agent from time to
time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with
respect to such Eurodollar Borrowing for such Interest Period shall be
the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London
office of the Administrative Agent in immediately available funds in
the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"LIEN" has the meaning assigned to that term in Section
8.02(a).
"LOAN" means a loan by a Lender to the Borrower, and refers to
an ABR Loan or a Eurodollar Rate Loan (each of which shall be a "TYPE"
of Loan). All Loans by a Lender of the same Type having the same
Interest Period and made or Converted on the same day shall be deemed
to be a single Loan by such Lender until repaid or next Converted.
"LOAN DOCUMENTS" means this Agreement, any Promissory Notes,
the Cash Collateral Agreement, the Fee Letter, the Issuing Bank
Agreement(s) and all other agreements, instruments and documents now or
hereafter executed and/or delivered pursuant hereto or thereto.
"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 or results of operations of the Borrower and its
Subsidiaries, considered as a whole, (b) the Borrower's ability to
perform its obligations under this Agreement or any other Loan Document
to which it is or will be a party or (c) the validity or enforceability
of any Loan Document or the rights and remedies of any Agent or the
Lenders thereunder.
"MEASUREMENT QUARTER" has the meaning assigned to that term in
Section 8.01(i).
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any
successor thereto.
"MS&T" means CMS Marketing, Services and Trading Company, a
Michigan corporation, all of whose capital stock is on the date hereof
owned by Enterprises.
13
19
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"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.
"NOTEHOLDERS" means, collectively, the owners of record from
time to time of the Senior Notes.
"NOTICE OF BORROWING" has the meaning assigned to that term in
Section 3.01(a).
"NOTICE OF CONVERSION" has the meaning assigned to that term
in Section 3.02.
"OECD" means the Organization for Economic Cooperation and
Development.
"OWNERSHIP INTEREST" of the Borrower in any Consolidated
Subsidiary means, at any date of determination, the percentage
determined by dividing (i) the aggregate amount of Project Finance
Equity in such Consolidated Subsidiary owned or controlled, directly or
indirectly, by the Borrower and any other Consolidated Subsidiary on
such date, by (ii) the aggregate amount of Project Finance Equity in
such Consolidated Subsidiary owned or controlled, directly or
indirectly, by all Persons (including the Borrower and the Consolidated
Subsidiaries) on such date. Notwithstanding anything to the contrary
set forth above, if the "Ownership Interest," calculated as set forth
above, is 50% or less, such percentage shall be deemed to equal 0%.
"PARTICIPANT" has the meaning assigned to that term in Section
11.07(e).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
"PERCENTAGE" means, for any Lender on any date of
determination, the percentage obtained by dividing such Lender's
Commitment on such day by the total of the Lenders' Commitments on such
date, and multiplying the quotient so obtained by 100%. In the event
that the Commitments have been terminated, each Lender's Percentage
shall be
14
20
calculated on the basis of the Commitments in effect immediately prior
to such termination.
"PERMITTED INVESTMENTS" means each of the following so long as
no such Permitted Investment shall have a final maturity later than six
months from the date of investment therein:
(i) direct obligations of the United States, or of
any agency thereof, or obligations guaranteed as to principal
and interest by the United States or any agency thereof;
(ii) certificates of deposit or bankers' acceptances
issued, or time deposits held, or investment contracts
guaranteed, by any Lender, any nationally-recognized
securities dealer or any other commercial bank, trust company,
savings and loan association or savings bank organized under
the laws of the United States, or any State thereof, or of any
other country which is a member of the OECD, or a political
subdivision of any such country, and in each case having
outstanding unsecured indebtedness that (on the date of
acquisition thereof) is rated AA- or better by S&P or Aa3 or
better by Moody's (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating unsecured bank indebtedness);
(iii) obligations with any Lender, any other bank or
trust company described in clause (ii), above, or any
nationally-recognized securities dealer, in respect of the
repurchase of obligations of the type described in clause (i),
above, provided that such repurchase obligations shall be
fully secured by obligations of the type described in said
clause (i) and the possession of such obligations shall be
transferred to, and segregated from other obligations owned
by, such Lender, such other bank or trust company or such
securities dealer;
(iv) commercial paper rated (on the date of
acquisition thereof) A-1 or P-1 or better by S&P or Moody's,
respectively (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating commercial paper); and
(v) any eurodollar certificate of deposit issued by
any Lender or any other commercial bank, trust company,
savings and loan association or savings bank organized under
the laws of the United States, or any State thereof, or of any
country which is a member of the OECD, or a political
subdivision of any such country, and in each case having
outstanding unsecured indebtedness that (on the date of
acquisition thereof) is rated AA- or better by S&P or Aa3 or
better by Moody's (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating unsecured bank indebtedness).
15
21
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, limited liability
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PLAN" means, with respect to any Person, an employee benefit
plan (other than a Multiemployer Plan) maintained for employees of such
Person or any ERISA Affiliate of such Person and covered by Title IV of
ERISA.
"PLAN TERMINATION EVENT" means, with respect to any Person,
(i) 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 (ii) the withdrawal of such Person 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
(iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate a Plan by the PBGC, or (v) any
other event or condition which is reasonably likely to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by Barclays as its prime rate in effect at
its principal office in
New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly
announced as being effective.
"PRO FORMA DIVIDEND AMOUNT" means, from and after any date of
any Consumers Dividend Restriction, the sum of (a) the aggregate amount
which Consumers could have paid to the Borrower during the four
calendar quarters immediately preceding such date had such Consumers
Dividend Restriction been in effect during such quarters plus (b) cash
dividends received by the Borrower from any other Subsidiary during
such quarters.
"PROJECT FINANCE DEBT" means Debt of any Person that is
non-recourse to such Person (unless such Person is a special-purpose
entity) and any Affiliate of such Person, other than with respect to
the interest of the holder of such Debt in the collateral, if any,
securing such Debt.
"PROJECT FINANCE EQUITY" means, at any date of determination,
consolidated equity of the common, preference and preferred
stockholders of the Borrower and the Consolidated Subsidiaries relating
to any obligor with respect to Project Finance Debt.
"PROMISSORY NOTE" means any promissory note of the Borrower
payable to the order of a Lender (and, if requested, its registered
assigns) issued pursuant to Section 3.01(d); and "PROMISSORY NOTES"
means any or all of the foregoing.
"RATING LEVEL" means, on any date of determination with
respect to the Applicable Margin or the Commitment Fee Margin on such
date of determination, any of
16
22
Rating Level I, Rating Level II, Rating Level III, Rating Level IV or
Rating Level V, as described below:
RATING LEVEL I shall be deemed to exist at all times during
which the Index Debt shall be rated BBB- (or its equivalent)
or higher by any two of S&P, Fitch and Xxxxx'x.
RATING LEVEL II shall be deemed to exist at all times during
which (i) the Index Debt shall be rated BB+ (or its
equivalent) or higher by any two of S&P, Fitch and Xxxxx'x and
(ii) Rating Level I is not in effect.
RATING LEVEL III shall be deemed to exist at all times during
which (i) the Index Debt shall be rated BB (or its equivalent)
or higher by any two of S&P, Fitch and Xxxxx'x and (ii)
neither Rating Level I nor Rating Level II is in effect.
RATING LEVEL IV shall be deemed to exist at all times during
which (i) the Index Debt shall be rated BB- (or its
equivalent) or higher by any two of S&P, Fitch and Xxxxx'x and
(ii) none of Rating Level I, Rating Level II or Rating Level
III is in effect.
RATING LEVEL V shall be deemed to exist at all times during
which none of Rating Level I, Rating Level II, Rating Level
III or Rating Level IV is in effect.
The Rating Level in effect shall be modified in accordance with this
definition upon any change in the applicable ratings of the Index Debt,
and such modification to the Rating Level shall be effective from the
date of announcement of any such new ratings. The Borrower agrees to
notify the Administrative Agent promptly after each change in any
rating of the Index Debt.
"RECIPIENT" has the meaning assigned to that term in Section
11.08.
"REGISTER" has the meaning specified in Section 11.07(c).
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person's
Affiliates.
"REQUEST FOR ISSUANCE" has the meaning assigned to that term
in Section 4.02(a).
"REQUIRED LENDERS" means, on any date of determination,
Lenders that, collectively, on such date (i) hold at least 51% of the
then aggregate unpaid principal amount of the Loans owing to Lenders
and (ii) if no Loans are then outstanding, have Percentages in the
aggregate of at least 51%. Any determination of those Lenders
constituting the Required Lenders shall be made by the Administrative
Agent and shall be conclusive and binding on all parties absent
manifest error.
"RESTRICTED SUBSIDIARY" means (i) Enterprises and (ii) any
other Subsidiary of the Borrower (other than Consumers and its
Subsidiaries) that, on a consolidated basis with
17
23
any of its Subsidiaries as of any date of determination, accounts for
more than 10% of the consolidated assets of the Borrower and its
Consolidated Subsidiaries.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor thereto.
"SECURITIZED BONDS" shall mean any nonrecourse bonds or
similar asset-backed securities issued by a special-purpose subsidiary
of Consumers 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 NOTE DEBT" means, collectively, all principal
indebtedness of the Borrower to the Noteholders now or hereafter
existing under the Senior Notes, together with interest and premiums,
if any, thereon and other amounts payable in respect thereof or in
connection therewith in accordance with the terms of the Senior Notes
or the Indenture.
"SENIOR NOTES" means the 8-1/8% Senior Unsecured Notes Due
2002, issued by the Borrower pursuant to the Indenture.
"STATUTORY RESERVE RATE" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject (a) with respect to the Base CD Rate,
for new negotiable nonpersonal time deposits in Dollars of over
$100,000 with maturities approximately equal to three months and (b)
with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Rate Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under
such Regulation D or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"SUBSIDIARY" means, with respect to any Person, any
corporation or unincorporated entity of which more than 50% of the
outstanding capital stock (or comparable interest) having ordinary
voting power (irrespective of whether at the time capital stock (or
comparable interest) of any other class or classes of such corporation
or entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by said Person
(whether directly or through one or more other Subsidiaries). In the
case of an unincorporated entity, a Person shall be deemed to have more
than 50% of interests having ordinary voting power only if such
Person's vote in respect of such interests comprises more than 50% of
the total voting power of all such interests in the unincorporated
entity.
18
24
"SUPPORT OBLIGATIONS" means, for any Person, without
duplication, any financial obligation, contingent or otherwise, of such
Person guaranteeing or otherwise supporting any Debt or other
obligation of any other Person in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such
Debt, (ii) to purchase property, securities or services for the purpose
of assuring the owner of such Debt of the payment of such Debt, (iii)
to maintain working capital, equity capital, available cash or other
financial statement condition of the primary obligor so as to enable
the primary obligor to pay such Debt, (iv) to provide equity capital
under or in respect of equity subscription arrangements (to the extent
that such obligation to provide equity capital does not otherwise
constitute Debt), or (v) to perform, or arrange for the performance of,
any non-monetary obligations or non-funded debt payment obligations of
the primary obligor.
"TAX SHARING AGREEMENT" means the Amended and Restated
Agreement for the Allocation of Income Tax Liabilities and Benefits,
dated as of January 1, 1994, by and among the Borrower, each of the
members of the Consolidated Group (as defined therein), and each of the
corporations that become members of the Consolidated Group.
"TERMINATION DATE" means the earlier to occur of (i) June 17,
2002, as such date may be extended pursuant to Section 2.05 and (ii)
the date of termination or reduction in whole of the Commitments
pursuant to Section 2.03 or 9.02.
"THREE-MONTH SECONDARY CD RATE" means, for any day, the
secondary market rate for three-month certificates of deposit reported
as being in effect on such day (or, if such day is not a Business Day,
the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of
New York
(which rate will, under the current practices of the Board, be
published in the Federal Reserve Statistical Release H.15(519) during
the week following such day) or, if such rate is not so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in
New York City received at approximately
10:00 a.m. on such day (or, if such day is not a Business Day, on the
next preceding Business Day) by the Administrative Agent from three
negotiable certificate of deposit dealers of recognized standing
selected by it.
"THREE YEAR FACILITY" means that certain $300,000,000
Credit
Agreement dated as of the date hereof by and among the Borrower, the
Banks and the Agents, as the same may amended, restated, supplemented
or otherwise modified from time to time.
"TRUSTEE" has the meaning assigned to that term in the
Indenture.
"TYPE" has the meaning assigned to such term (i) in the
definition of "Loan" when used in such context and (ii) in the
definition of "Borrowing" when used in such context.
19
25
SECTION 1.02. COMPUTATION OF TIME PERIODS; CONSTRUCTION.
(a) Unless otherwise indicated, each reference in this
Agreement to a specific time of day is a reference to
New York City time. In the
computation of periods of time under this Agreement, any period of a specified
number of days or months shall be computed by including the first day or month
occurring during such period and excluding the last such day or month. In the
case of a period of time "from" a specified date "to" or "until" a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
(b) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes", and "including" shall be deemed
to be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (v)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 7.01(e) ("GAAP").
ARTICLE II
COMMITMENTS
SECTION 2.01. THE COMMITMENTS. Each Lender severally agrees, on the
terms and conditions hereinafter set forth to make Loans to the Borrower and to
participate in the issuance of Letters of Credit (and the LC Outstandings
thereunder) during the period from the Closing Date until the Termination Date
in an aggregate outstanding amount not to exceed on any day such Lender's
Available Commitment (after giving effect to all Extensions of Credit to be made
on such day and the application of the proceeds thereof). Within the limits
hereinafter set forth, the Borrower may request Extensions of Credit hereunder,
prepay Loans or reduce or cancel Letters of Credit, and use the resulting
increase in the Available Commitments for further Extensions of Credit in
accordance with the terms hereof.
20
26
SECTION 2.02. FEES.
(a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee equal to the product of (i) the
average daily amount of such Lender's Available Commitment from the date hereof,
in the case of each Bank, and from the effective date specified in the Lender
Assignment pursuant to which it became a Lender, in the case of each other
Lender, until the Termination Date multiplied by (ii) the Commitment Fee Margin
in effect as of the date upon which such fee is payable. Such fees shall be
payable quarterly in arrears on the last day of each January, April, July and
October, commencing the first such date to occur following the date hereof, and
on the Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commission on the average daily aggregate amount of
the LC Outstandings from the Closing Date until the Termination Date at a rate
per annum equal to the Applicable Margin with respect to Eurodollar Rate Loans,
payable quarterly in arrears on the last day of each January, April, July and
October, commencing on the first such date to occur following the date hereof,
and on the Termination Date;
(c) In addition to the fees provided for in subsections (a)
and (b) above, the Borrower shall pay to the Administrative Agent, for the
account of Barclays and the other Persons entitled thereto, such other fees as
are provided for in that certain letter agreement, dated June 8, 2001 among the
Borrower, the Arranger and Barclays (the "FEE LETTER"), in the amounts and at
the times specified therein.
SECTION 2.03. REDUCTION OF THE COMMITMENTS.
(a) The Borrower may, upon at least three (3) Business Days'
notice to the Administrative Agent (which shall promptly distribute copies
thereof to the Lenders), terminate in whole or reduce ratably in part the unused
portions of the Commitments; provided that any such partial reduction shall be
in the aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof.
(b) Upon the occurrence of a Change of Control the Commitments
shall be reduced to zero and the principal amount outstanding hereunder, all
interest thereon and all other amounts payable under this Agreement and the
other Loan Documents shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower.
SECTION 2.04. COMPUTATIONS OF OUTSTANDINGS. Whenever reference is made
in this Agreement to the principal amount outstanding on any date under this
Agreement, such reference shall refer to the sum of (i) the aggregate principal
amount of all Loans outstanding on such date under this Agreement plus (ii) the
aggregate LC Outstandings of all Letters of Credit outstanding on such date, in
each case after giving effect to all Extensions of Credit to be made on such
date and the application of the proceeds thereof. At no time shall the principal
amount outstanding under this Agreement exceed the aggregate amount of the
Commitments hereunder. References to the unused portion of the Commitments under
this Agreement shall refer to the excess, if any, of the Commitments hereunder
over the principal amount outstanding hereunder; and references
21
27
to the unused portion of any Lender's Commitment under this Agreement shall
refer to such Lender's Percentage of the unused Commitments hereunder.
SECTION 2.05. COMMITMENT RENEWAL. If the Borrower so requests, the
Administrative Agent agrees to seek the renewal of the Commitment of each Lender
not more than 60 and not less than 45 days prior to the then scheduled
Termination Date, for an additional period of not more than 364 days, with
responses to any such renewal request to be due not less than 30 days prior to
the then scheduled Termination Date; provided, that the Borrower may not request
an extension any earlier than 60 days, and the Lenders may not provide their
consent to an extension any earlier than 45 days, prior to the then scheduled
Termination Date; provided, further, that if any Lender fails to deliver such a
response, it shall be deemed not to have consented to such renewal. The
Administrative Agent shall, promptly after becoming aware thereof, give to the
Borrower written notice of any notification delivered by any Lender to the
effect that such Lender is not agreeing to an extension of the Termination Date.
The Termination Date may only be extended with the consent of each Lender;
provided, however, that notwithstanding the failure of any Lender to consent to
any such requested extension, the Termination Date shall be extended pursuant to
this Section 2.05 if (a) the Commitment of each such non-consenting Lender shall
have been assigned to an Eligible Assignee in accordance with Section 11.07 and
(b) no Default or Event of Default shall have occurred and be continuing.
ARTICLE III
LOANS
SECTION 3.01. LOANS.
(a) The Borrower may request a Borrowing (other than a
Conversion) by delivering a notice (a "NOTICE OF BORROWING") to the
Administrative Agent no later than 12:00 noon on the third Business Day or, in
the case of ABR Loans, on the first Business Day, prior to the date of the
proposed Borrowing. The Administrative Agent shall give each Lender prompt
notice of each Notice of Borrowing. Each Notice of Borrowing shall be in
substantially the form of Exhibit A and shall specify the requested (i) date of
such Borrowing, (ii) Type of Loans to be made in connection with such Borrowing,
(iii) Interest Period, if any, for such Loans and (iv) amount of such Borrowing.
Each proposed Borrowing shall conform to the requirements of Sections 3.03 and
3.04.
(b) Each Lender shall, before 12:00 noon on the date of such
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's offices at 000 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, in same day funds, such Lender's
Percentage of such Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article VI,
the Administrative Agent will make such funds available to the Borrower at the
Administrative Agent's aforesaid address; provided, however, that the proceeds
of the initial Extension of Credit shall be applied first directly by the
Administrative Agent on the Closing Date to the prepayment in full of all
outstanding principal, accrued interest and other amounts then owing under the
Existing
Credit Agreement and then, to the extent the proceeds of such initial
Extension of Credit exceeds the amount necessary to prepay in full all
outstanding principal, accrued interest and other amounts then owing under the
Existing
Credit Agreement,
22
28
to the Borrower at the Administrative Agent's aforesaid address for general
corporate purposes. Notwithstanding the foregoing, unless the Administrative
Agent shall have received notice from a Lender prior to the date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's Percentage of such Borrowing, the Administrative Agent may assume
that such Lender has made such Percentage available to the Administrative Agent
on the date of such Borrowing in accordance with the first sentence of this
subsection (b), and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
(c) If and to the extent that any Lender (a "NON-PERFORMING
LENDER") shall not have made available to the Administrative Agent, in
accordance with subsection (b) above, such Lender's Percentage of any Borrowing,
the non-performing Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand corresponding amounts, together with
interest thereon for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, the interest rate applicable at the time to
Loans made in connection with such Borrowing and (ii) in the case of such
Lender, the Federal Funds Effective Rate. Within the limits of each Lender's
Available Commitment and subject to the other terms and conditions set forth in
this Agreement for the making of Loans (including Section 8.01(h)), the Borrower
may request (and the Lenders shall honor) one or more additional Borrowings from
the performing Lenders to fund such repayment to the Administrative Agent. If a
non-performing Lender shall repay to the Administrative Agent such corresponding
amount in full (with interest as above provided), (x) the Administrative Agent
shall apply such corresponding amount and interest to the repayment to the
Administrative Agent (or repayment of Loans made to fund such repayment to the
Administrative Agent), and shall make any remainder available to the Borrower
and (y) such amount so repaid shall be deemed to constitute such Lender's Loan,
made as part of such Borrowing for purposes of this Agreement as if funded
concurrently with the other Loans made as part of such Borrowing, and such
Lender shall forthwith cease to be deemed a non-performing Lender; if and so
long as such non-performing Lender shall not repay such amount, and unless and
until an Eligible Assignee shall have assumed and performed the obligations of
such non-performing Lender, all computations by the Administrative Agent of
Percentages, Commitments and payments hereunder shall be made without regard to
the Commitment, or outstanding Loans, of such non-performing Lender, and any
amounts paid to the Administrative Agent for the account of such non-performing
Lender shall be held by the Administrative Agent in trust for such
non-performing Lender in a non-interest-bearing special purpose account. Nothing
herein shall in any way limit, waive or otherwise reduce any claims that any
party hereto may have against any non-performing Lender. The failure of any
Lender to make the Loan to be made by it as part of any Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its Loan
on the date of such Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender on
the date of any Borrowing.
(d) Any Lender may request that Loans made by it be evidenced
by a Promissory Note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a Promissory Note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such Promissory Note and interest thereon shall at all times
23
29
(including after assignment pursuant to Section 11.07) be represented by one or
more Promissory Notes in such form payable to the order of the payee named
therein (or, if such Promissory Note is a registered note, to such payee and its
registered assigns).
SECTION 3.02. CONVERSION OF LOANS. The Borrower may from time to time
Convert any Loan (or portion thereof) of any Type to one or more Loans of the
same or any other Type by delivering a notice of such Conversion (a "NOTICE OF
CONVERSION") to the Administrative Agent no later than 12:00 noon on (x) the
third Business Day prior to the date of any proposed Conversion into a
Eurodollar Rate Loan and (y) the first Business Day prior to the date of any
proposed Conversion into an ABR Loan. The Administrative Agent shall give each
Lender prompt notice of each Notice of Conversion. Each Notice of Conversion
shall be in substantially the form of Exhibit B and shall specify (i) the
requested date of such Conversion, (ii) the Type of, and Interest Period, if
any, applicable to, the Loans (or portions thereof) proposed to be Converted,
(iii) the requested Type of Loans to which such Loans (or portions thereof) are
proposed to be Converted, (iv) the requested initial Interest Period, if any, to
be applicable to the Loans resulting from such Conversion and (v) the aggregate
amount of Loans (or portions thereof) proposed to be Converted. Each proposed
Conversion shall be subject to the provisions of Sections 3.03 and 3.04.
SECTION 3.03. INTEREST PERIODS. The period between the date of each
Eurodollar Rate Loan and the date of payment in full of such Loan shall be
divided into successive periods of months ("INTEREST PERIODS") for purposes of
computing interest applicable thereto. The initial Interest Period for each such
Loan shall begin on the day such Loan is made, and each subsequent Interest
Period shall begin on the last day of the immediately preceding Interest Period
for such Loan. The duration of each Interest Period shall be 1, 2, 3, or 6
months, as the Borrower may, in accordance with Section 3.01 or 3.02, select;
provided, however, that:
(i) the Borrower may not select any Interest Period for a
Eurodollar Rate Loan that ends after the Termination Date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall occur on the next succeeding Business Day,
provided that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding Business
Day; and
(iii) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period)
shall end on the last Business Day of the last calendar month of such
Interest Period.
SECTION 3.04. OTHER TERMS RELATING TO THE MAKING AND CONVERSION OF
LOANS.
(a) Notwithstanding anything in Section 3.01 or 3.02 to the
contrary:
(i) each Borrowing (other than a Borrowing deemed made under
Section 4.04(d)) shall be in an aggregate amount not less than
$10,000,000, or an integral multiple of $1,000,000 in excess thereof
(or such lesser amount as shall be equal to the
24
30
total amount of the Available Commitments on such date, after giving
effect to all other Extensions of Credit to be made on such date), and
shall consist of Loans of the same Type, having the same Interest
Period and made or Converted on the same day by the Lenders ratably
according to their respective Percentages; provided, however, that the
initial Borrowing shall be in an aggregate amount sufficient to repay
in full all outstanding principal, accrued interest and other amounts
owing under the Existing
Credit Agreement as of the Closing Date;
(ii) the Borrower may request that more than one Borrowing be
made on the same day;
(iii) at no time shall the sum of (i) all Borrowings
comprising Eurodollar Rate Loans outstanding hereunder and (ii) all
"Borrowings" comprising "Eurodollar Rate Loans" under, and as such
terms are defined in, the Three Year Facility, be greater than fifteen
(15);
(iv) no Eurodollar Rate Loan may be Converted on a date other
than the last day of the Interest Period applicable to such Loan unless
the corresponding amounts, if any, payable to the Lenders pursuant to
Section 5.04(b) are paid contemporaneously with such Conversion;
(v) if the Borrower shall either fail to give a timely Notice
of Conversion pursuant to Section 3.02 in respect of any Loans or fail,
in any Notice of Conversion that has been timely given, to select the
duration of any Interest Period for Loans to be Converted into
Eurodollar Rate Loans in accordance with Section 3.03, such Loans
shall, on the last day of the then existing Interest Period therefor,
automatically Convert into, or remain as, as the case may be, ABR
Loans; and
(vi) if, on the date of any proposed Conversion, any Event of
Default or Default shall have occurred and be continuing, all Loans
then outstanding shall, on such date, automatically Convert into, or
remain as, as the case may be, ABR Loans; provided, however, that with
respect to any Default that occurs and is continuing as a result of the
failure of the Borrower to comply with the ratio set forth in Section
8.01(j), any such Loans may be Converted into Eurodollar Rate Loans
with an Interest Period not to exceed three months in duration.
(b) If any Lender shall notify the Administrative Agent that
the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Applicable Lending
Office to perform its obligations hereunder to make, or to fund or maintain,
Eurodollar Rate Loans hereunder, (i) the obligation of such Lender to make, or
to Convert Loans into, Eurodollar Rate Loans for such Borrowing or any
subsequent Borrowing from such Lender shall be forthwith suspended until the
earlier to occur of the date upon which (A) such Lender shall cease to be a
party hereto and (B) it is no longer unlawful for such Lender to make, fund or
maintain Eurodollar Rate Loans, and (ii) if the maintenance of Eurodollar Rate
Loans then outstanding through the last day of the Interest Period therefor
would cause such Lender to be in violation of such law, regulation or assertion,
the Borrower shall either prepay or Convert all
25
31
Eurodollar Rate Loans from such Lender within five days after such notice.
Promptly upon becoming aware that the circumstances that caused such Lender to
deliver such notice no longer exist, such Lender shall deliver notice thereof to
the Administrative Agent (but the failure to do so shall impose no liability
upon such Lender). Promptly upon receipt of such notice from such Lender (or
upon such Lender's assigning all of its Commitment, Loans, participation and
other rights and obligations hereunder to an Eligible Assignee), the
Administrative Agent shall deliver notice thereof to the Borrower and the
Lenders and such suspension shall terminate.
(c) If the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Administrative Agent that
the Adjusted LIBO Rate for Eurodollar Rate Loans to be made in connection with
such Borrowing will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Loans for such
Borrowing, or that they are unable to acquire funding in a reasonable manner so
as to make available Eurodollar Rate Loans in the amount and for the Interest
Period requested, or if the Administrative Agent shall determine that adequate
and reasonable means do not exist to be able to determine the Adjusted LIBO
Rate, then the right of the Borrower to select Eurodollar Rate Loans for such
Borrowing and any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Loan to be made
or Converted in connection with such Borrowing shall be an ABR Loan.
(d) If any Lender shall have delivered a notice to the
Administrative Agent described in Section 3.04(b), or shall become a
non-performing Lender under Section 3.01(c) or Section 4.04(c), and if and so
long as such Lender shall not have withdrawn such notice or corrected such
non-performance in accordance with said Section 3.04(b), Section 3.01(c) or
Section 4.04(c), the Borrower or the Administrative Agent may demand that such
Lender assign in accordance with Section 11.07, to one or more Eligible
Assignees designated by the Borrower or the Administrative Agent, all (but not
less than all) of such Lender's Commitment, Loans, participation and other
rights and obligations hereunder; provided that any such demand by the Borrower
during the continuance of an Event of Default or Default shall be ineffective
without the consent of the Required Lenders. If, within 30 days following any
such demand by the Administrative Agent or the Borrower, any such Eligible
Assignee so designated shall fail to consummate such assignment on terms
reasonably satisfactory to such Lender, or the Borrower and the Administrative
Agent shall have failed to designate any such Eligible Assignee, then such
demand by the Borrower or the Administrative Agent shall become ineffective, it
being understood for purposes of this provision that such assignment shall be
conclusively deemed to be on terms reasonably satisfactory to such Lender, and
such Lender shall be compelled to consummate such assignment forthwith, if such
Eligible Assignee (i) shall agree to such assignment in substantially the form
of the Lender Assignment attached hereto as Exhibit G and (ii) shall tender
payment to such Lender in an amount equal to the full outstanding dollar amount
accrued in favor of such Lender hereunder (as computed in accordance with the
records of the Administrative Agent), including, without limitation, all accrued
interest and fees and, to the extent not paid by the Borrower, any payments
required pursuant to Section 5.04(b).
(e) Each Notice of Borrowing and Notice of Conversion shall be
irrevocable and binding on the Borrower. In the case of any Borrowing which the
related Notice of Borrowing or Notice of Conversion specifies is to be comprised
of Eurodollar Rate Loans, the
26
32
Borrower shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill, on or before the date
specified in such Notice of Borrowing or Notice of Conversion for such
Borrowing, the applicable conditions (if any) set forth in this Article III
(other than failure pursuant to the provisions of Section 3.04(b) or (c) hereof)
or in Article VI, including any such loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Loan to be made
by such Lender when such Loan, as a result of such failure, is not made on such
date.
SECTION 3.05. REPAYMENT OF LOANS; INTEREST
(a) Principal. The Borrower shall repay the outstanding
principal amount of the Loans on the Termination Date.
(b) Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan owing to each Lender from the date of such Loan
until such principal amount shall be paid in full, at the Applicable Rate for
such Loan (except as otherwise provided in this subsection (b)), payable as
follows:
(i) ABR Loans. If such Loan is an ABR Loan, interest thereon
shall be payable quarterly in arrears on the last day of each January,
April, July and October, on the date of any Conversion of such ABR Loan
and on the date such ABR Loan shall become due and payable or shall
otherwise be paid in full; provided that any amount of principal that
is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest, from the date on which such amount is
due until such amount is paid in full, payable on demand, at a rate per
annum equal at all times to the Default Rate.
(ii) Eurodollar Rate Loans. If such Loan is a Eurodollar Rate
Loan, interest thereon shall be payable on the last day of such
Interest Period and, if the Interest Period for such Loan has a
duration of more than three months, on that day of each third month
during such Interest Period that corresponds to the first day of such
Interest Period (or, if any such month does not have a corresponding
day, then on the last day of such month); provided that any amount of
principal that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which
such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the Default Rate.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. ISSUING BANKS. Subject to the terms and conditions
hereof, the Borrower may from time to time identify and arrange for one or more
Lenders to act as Issuing Banks hereunder. Any such designation by the Borrower
shall be notified to the Administrative Agent at least three (3) Business Days
prior to the first date upon which the Borrower proposes that such Issuing Bank
issue its first Letter of Credit. Nothing contained herein shall be deemed to
require any Lender to agree to act as an Issuing Bank, if it does not so desire.
27
33
SECTION 4.02. LETTERS OF CREDIT.
(a) Each Letter of Credit shall be issued (or the stated
maturity thereof extended or terms thereof modified or amended) on not less than
three (3) Business Days' prior written notice thereof to the Administrative
Agent (which shall promptly distribute copies thereof to the Lenders) and the
relevant Issuing Bank. Each such notice (a "REQUEST FOR ISSUANCE") shall specify
(i) the date (which shall be a Business Day) of issuance of such Letter of
Credit (or the date of effectiveness of such extension, modification or
amendment) and the stated expiry date thereof (which shall be no later than the
date that is five (5) Business Days prior to the Termination Date, subject to
the other terms and conditions contained herein (including the satisfaction of
the conditions precedent set forth in Section 6.02), (ii) the proposed stated
amount of such Letter of Credit (which shall not be less than $500,000) and
(iii) such other information as shall demonstrate compliance of such Letter of
Credit with the requirements specified therefor in this Agreement and the
relevant Issuing Bank Agreement. Each Request for Issuance shall be irrevocable
unless modified or rescinded by the Borrower not less than two (2) days prior to
the proposed date of issuance (or effectiveness) specified therein. Not later
than 12:00 noon on the proposed date of issuance (or effectiveness) specified in
such Request for Issuance, and upon fulfillment of the applicable conditions
precedent and the other requirements set forth herein and in the relevant
Issuing Bank Agreement, such Issuing Bank shall issue (or extend, amend or
modify) such Letter of Credit and provide notice and a copy thereof to the
Administrative Agent, which shall promptly furnish copies thereof to the
Lenders.
(b) Each Lender severally agrees with such Issuing Bank to
participate in the Extension of Credit resulting from the issuance (or
extension, modification or amendment) of such Letter of Credit, in the manner
and the amount provided in Section 4.04(b), and the issuance of such Letter of
Credit shall be deemed to be a confirmation by such Issuing Bank and each Lender
of such participation in such amount.
(c) Notwithstanding anything herein to the contrary, the
aggregate stated amount of all Letters of Credit outstanding at any one time
shall not exceed $100,000,000.
SECTION 4.03. ISSUING BANK FEES. The Borrower shall pay directly to
each Issuing Bank such fees and expenses, if any, specified to be paid to such
Issuing Bank pursuant to the Issuing Bank Agreement to which it is a party, at
the times, and in the manner, specified in such Issuing Bank Agreement.
SECTION 4.04. REIMBURSEMENT TO ISSUING BANKS.
(a) The Borrower hereby agrees to pay to the Administrative
Agent for the account of each Issuing Bank, on demand made by such Issuing Bank
to the Borrower and the Administrative Agent, on and after each date on which
such Issuing Bank shall pay any amount under the Letter of Credit issued by such
Issuing Bank, a sum equal to the amount so paid plus interest on such amount
from the date so paid by such Issuing Bank until repayment to such Issuing Bank
in full at a fluctuating interest rate per annum equal at all times to the
Applicable Rate for ABR Loans.
28
34
(b) If any Issuing Bank shall not have been reimbursed in full
for any payment made by such Issuing Bank under the Letter of Credit issued by
such Issuing Bank on the date of such payment, such Issuing Bank shall give the
Administrative Agent and each Lender prompt notice thereof (an "LC PAYMENT
NOTICE") no later than 12:00 noon on the Business Day immediately succeeding the
date of such payment by such Issuing Bank. Each Lender severally agrees to
purchase from each Issuing Bank a participation in the reimbursement obligation
of the Borrower to such Issuing Bank under subsection (a) above, by paying to
the Administrative Agent for the account of such Issuing Bank an amount equal to
such Lender's Percentage of such unreimbursed amount paid by such Issuing Bank,
plus interest on such amount at a rate per annum equal to the Federal Funds
Effective Rate from the date of such payment by such Issuing Bank to the date of
payment to such Issuing Bank by such Lender. Each such payment by a Lender shall
be made not later than 3:00 P.M. on the later to occur of (i) the Business Day
immediately following the date of such payment by such Issuing Bank and (ii) the
Business Day on which such Lender shall have received an LC Payment Notice from
such Issuing Bank. Each Lender's obligation to make each such payment to the
Administrative Agent for the account of such Issuing Bank shall be several and
shall not be affected by the occurrence or continuance of any Default or Event
of Default or the failure of any other Lender to make any payment under this
Section 4.04. Each Lender further agrees that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
(c) The failure of any Lender to make any payment to the
Administrative Agent for the account of an Issuing Bank in accordance with
subsection (b) above, shall not relieve any other Lender of its obligation to
make payment, but no Lender shall be responsible for the failure of any other
Lender. If any Lender (a "NON-PERFORMING LENDER") shall fail to make any payment
to the Administrative Agent for the account of an Issuing Bank in accordance
with subsection (b) above, within five (5) Business Days after the LC Payment
Notice relating thereto, then, for so long as such failure shall continue, such
Issuing Bank shall be deemed, for purposes of Section 5.05 and Article IX hereof
and the Cash Collateral Agreement, to be a Lender hereunder owed a Loan in an
amount equal to the outstanding principal amount due and payable by such Lender
to the Administrative Agent for the account of such Issuing Bank pursuant to
subsection (b) above.
(d) Each participation purchased by a Lender under subsection
(b) above, shall constitute an ABR Loan deemed made by such Lender to the
Borrower on the date of such payment by the relevant Issuing Bank under the
Letter of Credit issued by such Issuing Bank (irrespective of the Borrower's
noncompliance, if any, with the conditions precedent for Loans hereunder); and
all such payments by the Lenders in respect of any one such payment by such
Issuing Bank shall constitute a single Borrowing hereunder.
SECTION 4.05. OBLIGATIONS ABSOLUTE. The payment obligations of each
Lender under Section 4.04(b) and of the Borrower under this Agreement in respect
of any payment under any Letter of Credit and any Loan made under Section
4.04(d) shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following circumstances:
(i) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto or to
such Letter of Credit;
29
35
(ii) any amendment or waiver of, or any consent to departure
from, all or any of the Loan Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any beneficiary,
or any transferee, of such Letter of Credit (or any Persons for whom
any such beneficiary or any such transferee may be acting), any Issuing
Bank, or any other Person, whether in connection with this Agreement,
the transactions contemplated herein or by such Letter of Credit, or
any unrelated transaction;
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment in good faith by any Issuing Bank under the Letter
of Credit issued by such Issuing Bank against presentation of a draft
or certificate which does not comply with the terms of such Letter of
Credit; or
(vi) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
SECTION 4.06. LIABILITY OF ISSUING BANKS AND THE LENDERS. The Borrower
assumes all risks of the acts and omissions of any beneficiary or transferee of
any Letter of Credit. Neither the Issuing Bank that has issued such Letter of
Credit, the Lenders nor any of their respective officers, directors, employees,
agents or Affiliates shall be liable or responsible for (a) the use that may be
made of such Letter of Credit or any acts or omissions of any beneficiary or
transferee thereof in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by such Issuing Bank against presentation of documents that
do not comply with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make payment
under such Letter of Credit, except that the Borrower shall have the right to
bring suit against such Issuing Bank, and such Issuing Bank shall be liable to
the Borrower and any Lender, to the extent of any direct, as opposed to
consequential, damages suffered by the Borrower or such Lender which the
Borrower or such Lender proves were caused by such Issuing Bank's willful
misconduct or gross negligence, including such Issuing Bank's willful failure to
make timely payment under such Letter of Credit following the presentation to it
by the beneficiary thereof of a draft and accompanying certificate(s) which
strictly comply with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, any Issuing Bank may accept
sight drafts and accompanying certificates presented under the Letter of Credit
issued by such Issuing Bank that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary. Notwithstanding the foregoing, no Lender shall be
obligated to indemnify the Borrower for damages caused by any Issuing Bank's
willful misconduct or gross negligence, and the obligation of the Borrower to
reimburse the Lenders hereunder shall be absolute and unconditional,
notwithstanding the gross negligence or willful misconduct of any Issuing Bank.
30
36
ARTICLE V
PAYMENTS, COMPUTATIONS AND
YIELD PROTECTION
SECTION 5.01. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under
the other Loan Documents not later than 2:00 P.M. on the day when due in Dollars
to the Administrative Agent at its offices at 000 Xxxxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, in same day funds, except payments to be made directly to
any Issuing Bank as expressly provided herein; any payment received after 3:00
P.M. shall be deemed to have been received at the start of business on the next
succeeding Business Day, unless the Administrative Agent shall have received
from, or on behalf of, the Borrower a Federal Reserve reference number with
respect to such payment before 4:00 P.M. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal, interest, fees or other amounts payable to the Lenders, to the
respective Lenders to which the same are payable, for the account of their
respective Applicable Lending Offices, in each case to be applied in accordance
with the terms of this Agreement. If and to the extent that any distribution of
any payment from the Borrower required to be made to any Lender pursuant to the
preceding sentence shall not be made in full by the Administrative Agent on the
date such payment was received by the Administrative Agent, the Administrative
Agent shall pay to such Lender, upon demand, interest on the unpaid amount of
such distribution, at a rate per annum equal to the Federal Funds Effective
Rate, from the date of such payment by the Borrower to the Administrative Agent
to the date of payment in full by the Administrative Agent to such Lender of
such unpaid amount. Upon the Administrative Agent's acceptance of a Lender
Assignment and recording of the information contained therein in the Register
pursuant to Section 11.07, from and after the effective date specified in such
Lender Assignment, the Administrative Agent shall make all payments hereunder
and under any Promissory Notes in respect of the interest assigned thereby to
the Lender assignee thereunder, and the parties to such Lender Assignment shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) The Borrower hereby authorizes the Administrative Agent,
each Lender and each Issuing Bank, if and to the extent payment owed to the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, is
not made when due hereunder (or, in the case of a Lender, under any Promissory
Note held by such Lender), to charge from time to time against any or all of the
Borrower's accounts with the Administrative Agent, such Lender or such Issuing
Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base
Rate (when the Alternate Base Rate is based on the Prime Rate) shall be made by
the Administrative Agent on the basis of a year of 365 or 366 days, as the case
may be. All other computations of interest and fees hereunder (including
computations of interest based on the Adjusted LIBO Rate, the Base CD Rate and
the Federal Funds Effective Rate) shall be made by the Administrative Agent on
the basis of a year of 360 days. In each such case, such computation shall be
made for the actual number of days (including the first day but excluding the
last day) occurring in the period for
31
37
which such interest or fees are payable. Each such determination by the
Administrative Agent or a Lender shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment hereunder or under any other Loan
Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest
and fees hereunder; provided, however, that if such extension would cause
payment of interest on or principal of Eurodollar Rate Loans to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day and such reduction of time shall in such case be included in the
computation of payment of interest hereunder.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date, and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender, together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Effective Rate.
(f) Any amount payable by the Borrower hereunder or under any
of the Promissory Notes that is not paid when due (whether at stated maturity,
by acceleration or otherwise) shall (to the fullest extent permitted by law)
bear interest, from the date when due until paid in full, at a rate per annum
equal at all times to the Default Rate, payable on demand.
(g) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto.
SECTION 5.02. INTEREST RATE DETERMINATION.
(a) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 3.05(b)(i) or (ii).
SECTION 5.03. PREPAYMENTS. The Borrower shall have no right to prepay
any principal amount of any Loans other than as provided in subsections (a) and
(b) below.
(a) The Borrower may, upon at least three (3) Business Days'
notice to the Administrative Agent stating the proposed date and the aggregate
principal amount of the prepayment, and if such notice is given, the Borrower
shall, prepay the outstanding principal
32
38
amounts of Loans made as part of the same Borrowing, in whole or ratably in
part, together with (i) accrued interest to the date of such prepayment on the
principal amount prepaid and (ii) in the case of Eurodollar Rate Loans, any
amount payable to the Lenders pursuant to Section 5.04(b); provided, however,
that each partial prepayment shall be in an aggregate principal amount of not
less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) On the date of any termination or optional or mandatory
reduction of the Commitments pursuant to Section 2.03, the Borrower shall pay or
prepay so much of the principal amount outstanding as shall be necessary in
order that the aggregate principal amount outstanding (after giving effect to
all Extensions of Credit to be made on such date and the application of the
proceeds thereof) will not exceed the Commitments following such termination or
reduction, together with (i) accrued interest to the date of such prepayment on
the principal amount repaid and (ii) in the case of prepayments of Eurodollar
Rate Loans, any amount payable to the Lenders pursuant to Section 5.04(b). Any
prepayments required by this subsection (b) shall be applied to outstanding ABR
Loans up to the full amount thereof before they are applied, first, to
outstanding Eurodollar Rate Loans and second, as cash collateral, pursuant to
the Cash Collateral Agreement, to secure LC Outstandings.
SECTION 5.04. YIELD PROTECTION.
(a) Increased Costs. If, due to either (i) the introduction of
or any change in or in the interpretation of any law or regulation after the
date hereof, or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) issued or made after the date hereof, there shall be reasonably incurred
any increase in (A) the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans, or of participating in the
issuance, maintenance or funding of any Letter of Credit, or (B) the cost to any
Issuing Bank of issuing or maintaining any Letter of Credit, then the Borrower
shall from time to time, upon demand by such Lender or Issuing Bank, as the case
may be (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender or Issuing Bank, as the case
may be, additional amounts sufficient to compensate such Lender or Issuing Bank,
as the case may be, for such increased cost. A certificate as to the amount of
such increased cost and giving a reasonable explanation thereof, submitted to
the Borrower and the Administrative Agent by such Lender or such Issuing Bank,
as the case may be, shall constitute such demand and shall be conclusive and
binding for all purposes, absent manifest error.
(b) Breakage. If, due to any prepayment pursuant to Section
5.03, an acceleration of maturity of the Loans pursuant to Section 9.02, or any
other reason, any Lender receives payments of principal of any Eurodollar Rate
Loan other than on the last day of the Interest Period relating to such Loan or
if the Borrower shall Convert any Eurodollar Rate Loans on any day other than
the last day of the Interest Period therefor, or if the Borrower shall fail to
prepay a Eurodollar Rate Loan on the date specified in a notice of prepayment,
the Borrower shall, promptly after demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for
additional losses, costs, or expenses (including anticipated lost profits) that
such Lender may reasonably incur as a result of such payment, Conversion or
failure to prepay, including any loss, cost or expense incurred by reason of the
liquidation or
33
39
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Loan. For purposes of this subsection (b), a certificate setting
forth the amount of such additional losses, costs, or expenses and giving a
reasonable explanation thereof, submitted to the Borrower and the Administrative
Agent by such Lender, shall constitute such demand and shall be conclusive and
binding for all purposes, absent manifest error.
(c) Capital. If any Lender or Issuing Bank determines that (i)
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be
maintained by such Lender or Issuing Bank, whether directly, or indirectly as a
result of commitments of any corporation controlling such Lender or Issuing Bank
(but without duplication), and (ii) the amount of such capital is increased by
or based upon (A) the existence of such Lender's or Issuing Bank's commitment to
lend or issue or participate in any Letter of Credit hereunder, or (B) the
participation in or issuance or maintenance of any Letter of Credit or Loan and
(C) other similar such commitments, then, upon demand by such Lender or Issuing
Bank, the Borrower shall immediately pay to the Administrative Agent for the
account of such Lender or Issuing Bank from time to time as specified by such
Lender or Issuing Bank additional amounts sufficient to compensate such Lender
or Issuing Bank in the light of such circumstances, to the extent that such
Lender or Issuing Bank reasonably determines such increase in capital to be
allocable to the transactions contemplated hereby. A certificate as to such
amounts and giving a reasonable explanation thereof (to the extent permitted by
law), submitted to the Borrower and the Administrative Agent by such Lender or
Issuing Bank, shall be conclusive and binding for all purposes, absent manifest
error.
(d) Notices. Each Lender hereby agrees to use its best efforts
to notify the Borrower of the occurrence of any event referred to in subsection
(a), (b) or (c) of this Section 5.04 promptly after becoming aware of the
occurrence thereof. The failure of any Lender to provide such notice or to make
demand for payment under said subsection shall not constitute a waiver of such
Lender's rights hereunder; provided that, notwithstanding any provision to the
contrary contained in this Section 5.04, the Borrower shall not be required to
reimburse any Lender for any amounts or costs incurred under subsection (a), (b)
or (c) above, more than 90 days prior to the date that such Lender notifies the
Borrower in writing thereof, in each case unless, and to the extent that, any
such amounts or costs so incurred shall relate to the retroactive application of
any event notified to the Borrower which entitles such Lender to such
compensation. If any Lender shall subsequently determine that any amount
demanded and collected under this Section 5.04 was done so in error, such Lender
will promptly return such amount to the Borrower.
(e) Survival of Obligations. Subject to subsection (d) above,
the Borrower's obligations under this Section 5.04 shall survive the repayment
of all other amounts owing to the Lenders, the Agents and the Issuing Banks
under the Loan Documents and the termination of the Commitments. If and to the
extent that the obligations of the Borrower under this Section 5.04 are
unenforceable for any reason, the Borrower agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
34
40
SECTION 5.05. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans owing to it (other than pursuant
to Section 5.04 or Section 5.06) in excess of its ratable share of payments
obtained by all the Lenders on account of the Loans of such Lenders, such Lender
shall forthwith purchase from the other Lenders such participation in the Loans
owing to them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 5.05 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
Notwithstanding the foregoing, if any Lender shall obtain any such excess
payment involuntarily, such Lender may, in lieu of purchasing participations
from the other Lenders in accordance with this Section 5.05, on the date of
receipt of such excess payment, return such excess payment to the Administrative
Agent for distribution in accordance with Section 5.01(a).
SECTION 5.06. TAXES.
(a) All payments by the Borrower hereunder and under the other
Loan Documents shall be made in accordance with Section 5.01, free and clear of
and without deduction for all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender, each Issuing Bank and each Agent, taxes
imposed on its overall net income, and franchise taxes imposed on it by the
jurisdiction under the laws of which such Lender, Issuing Bank or Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Lender, taxes imposed on its overall net income, and franchise taxes
imposed on it by the jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any other Loan Document to
any Lender, Issuing Bank or Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.06) such Lender,
Issuing Bank or Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery
35
41
or registration of, or otherwise with respect to, this Agreement or any other
Loan Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower will indemnify each Lender, Issuing Bank and
Agent for the full amount of Taxes and Other Taxes (including any Taxes and any
Other Taxes imposed by any jurisdiction on amounts payable under this Section
5.06) paid by such Lender, Issuing Bank or Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30) days
from the date such Lender, Issuing Bank or Agent (as the case may be) makes
written demand therefor; provided, that such Lender, Issuing Bank or Agent (as
the case may be) shall not be entitled to demand payment under this Section 5.06
for an amount if such demand is not made within one year following the date upon
which such Lender, Issuing Bank or Agent (as the case may be) shall have been
required to pay such amount.
(d) Within thirty (30) days after the date of any payment of
Taxes, the Borrower will furnish to the Administrative Agent, at its address
referred to in Section 11.02, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Bank represents and warrants that either (i) it is
organized under the laws of a jurisdiction within the United States or (ii) it
has delivered to the Borrower or the Administrative Agent duly completed copies
of such form or forms prescribed by the United States Internal Revenue Service
indicating that such Bank is entitled to receive payments without deduction or
withholding of any United States federal income taxes, as permitted by the
Internal Revenue Code of 1986, as amended. Each other Lender agrees that, on or
prior to the date upon which it shall become a party hereto, and upon the
reasonable request from time to time of the Borrower or the Administrative
Agent, such Lender will deliver to the Borrower and the Administrative Agent (to
the extent that it is not prohibited by law from doing so) either (A) a
statement that it is organized under the laws of a jurisdiction within the
United States or (B) duly completed copies of such form or forms as may from
time to time be prescribed by the United States Internal Revenue Service,
indicating that such Lender is entitled to receive payments without deduction or
withholding of any United States federal income taxes, as permitted by the
Internal Revenue Code of 1986, as amended. Each Bank that has delivered, and
each other Lender that hereafter delivers, to the Borrower and the
Administrative Agent the form or forms referred to in the two preceding
sentences further undertakes to deliver to the Borrower and the Administrative
Agent, to the extent that it is not prohibited by law from doing so, further
copies of such form or forms, or successor applicable form or forms, as the case
may be, as and when any previous form filed by it hereunder shall expire or
shall become incomplete or inaccurate in any respect. Each Lender represents and
warrants that each such form supplied by it to the Administrative Agent and the
Borrower pursuant to this subsection (e), and not superseded by another form
supplied by it, is or will be, as the case may be, complete and accurate.
36
42
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT.
The obligation of each Lender to make its initial Extension of Credit is subject
to the fulfillment of the following conditions precedent:
(a) The Administrative Agent shall have received, on or before
the day of the initial Extension of Credit, the following, each dated such day
(except where specified otherwise below), in form and substance satisfactory to
each Lender (except where otherwise specified below) and (except for any
Promissory Notes) in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the Board of
Directors, or of the Executive Committee of the Board of Directors, of
the Borrower authorizing the Borrower to enter into this Agreement and
the other Loan Documents to which it is, or is to be, a party, and of
all documents evidencing other necessary corporate action and
Governmental Approvals, if any, with respect to this Agreement and such
Loan Documents.
(ii) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names, true signatures and incumbency of
(A) the officers of the Borrower authorized to sign this Agreement and
the other Loan Documents to which it is, or is to be, a party, and the
other documents to be delivered hereunder and thereunder and (B) the
representatives of the Borrower authorized to sign notices to be
provided under this Agreement and the other Loan Documents to which it
is, or is to be, a party, which representatives shall be acceptable to
the Administrative Agent.
(iii) Copies of the Certificate of Incorporation (or
comparable charter document) and by-laws of the Borrower, together with
all amendments thereto, certified by the Secretary or an Assistant
Secretary of the Borrower.
(iv) An irrevocable notice from the Borrower requesting
termination of the "Commitments" under the Existing Credit Agreement
effective automatically on such date upon the satisfaction (or waiver)
of the other conditions precedent set forth in this Section 6.01.
(v) The Promissory Notes (if requested by any Lender pursuant
to Section 3.01(d)), duly executed by the Borrower.
(vi) The Cash Collateral Agreement duly executed by the
Borrower together with evidence of the completion of all other actions
as may be necessary or, in the opinion of the Administrative Agent and
counsel for the Administrative Agent, desirable to perfect the security
interests and liens created thereby.
(vii) A certified copy of Schedule II hereto, in form and
substance reasonably satisfactory to the Administrative Agent setting
forth:
37
43
(A) all Project Finance Debt of the Consolidated
Subsidiaries, together with the Borrower's Ownership Interest
in each such Consolidated Subsidiary; and
(B) debt (as such term is construed in accordance
with GAAP) of Enterprises as of the Closing Date.
(viii) Favorable opinions of:
(A) Xxxxxxx X. XxxXxxxxx, Esq., Assistant General
Counsel of the Borrower, in substantially the form of Exhibit
D and as to such other matters as the Required Lenders,
through the Administrative Agent, may reasonably request; and
(B) Sidley Xxxxxx Xxxxx & Xxxx, counsel to the
Administrative Agent, in substantially the form of Exhibit E
and as to such other matters as the Administrative Agent may
reasonably request.
(b) The Existing Credit Agreement has been (or will have been,
upon the first Extension of Credit and the application of the proceeds thereof)
paid in full, the commitments thereunder terminated and all letters of credit
issued thereunder either cash collateralized, canceled or replaced.
(c) The following statements shall be true and the
Administrative Agent shall have received a certificate of a duly authorized
officer of the Borrower, dated the Closing Date and in sufficient copies for
each Lender stating that:
(i) the representations and warranties set forth in Section
7.01 of this Agreement and Section 7 of the Cash Collateral Agreement
are true and correct on and as of the Closing Date as though made on
and as of such date, and
(ii) no event has occurred and is continuing that constitutes
a Default or an Event of Default.
(d) The Borrower shall have paid all fees under or referenced
in Section 2.02 and all expenses referenced in Section 11.04(a), in each case to
the extent then due and payable.
(e) All Governmental Approvals necessary in connection with
the Loan Documents and the transactions contemplated thereby shall have been
obtained and be in full force and effect. All third party approvals necessary
or, in the judgment of the Administrative Agent, advisable in connection with
the Loan Documents and the transactions contemplated thereby shall have been
obtained and be in full force and effect.
(f) The Lenders shall have received (i) audited consolidated
financial statements of the Borrower for the two most recent fiscal years ended
prior to the Closing Date as to which such financial statements are available
and (ii) unaudited financial statements of the Borrower for each fiscal
quarterly period ended subsequent to the date of the latest financial statements
delivered pursuant to clause (i) of this paragraph as to which such financial
statements
38
44
are available. The business, assets, property and financial condition of the
Borrower and its Subsidiaries as reflected in such financial statements shall be
satisfactory to the Lenders.
SECTION 6.02. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The
obligation of each Lender or Issuing Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit) shall be subject
to the further conditions precedent that, on the date of such Extension of
Credit and after giving effect thereto:
(a) The following statements shall be true (and each of the
giving of the applicable notice or request with respect thereto and the making
of such Extension of Credit without prior correction by the Borrower shall (to
the extent that such correction has been previously consented to by the Lenders
and the Issuing Banks) constitute a representation and warranty by the Borrower
that, on the date of such Extension of Credit, such statements are true):
(i) the representations and warranties contained in Section
7.01 of this Agreement (other than those contained in subsections
(e)(ii) and (f) thereof) and in Section 7 of the Cash Collateral
Agreement are correct on and as of the date of such Extension of
Credit, before and after giving effect to such Extension of Credit and
to the application of the proceeds thereof, as though made on and as of
such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Extension of Credit or the
application of the proceeds thereof.
(b) The Administrative Agent shall have received such other
approvals, opinions and documents as any Lender or Issuing Bank, through the
Administrative Agent, may reasonably request as to the legality, validity,
binding effect or enforceability of the Loan Documents or the financial
condition, results of operations, properties or business of the Borrower and its
Consolidated Subsidiaries.
SECTION 6.03. CONDITIONS PRECEDENT TO CERTAIN EXTENSIONS OF CREDIT. The
obligation of each Lender or Issuing Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit) that would
(after giving effect to all Extensions of Credit on such date and the
application of proceeds thereof) increase the principal amount outstanding
hereunder, or to make an Extension of Credit of the type described in clause
(ii) or (iii) of the definition thereof (except any amendment of a Letter of
Credit the sole effects of which are to extend the stated termination date
thereof and/or to make nonmaterial modifications thereto), shall be subject to
the further conditions precedent that, on the date of such Extension of Credit
and after giving effect thereto:
(a) the following statements shall be true (and each of the
giving of the applicable notice or request with respect thereto and the making
of such Extension of Credit without prior correction by the Borrower shall (to
the extent that such correction has been previously consented to by the Lenders
and the Issuing Banks) constitute a representation and warranty by the Borrower
that, on the date of such Extension of Credit, such statements are true):
(i) the representations and warranties contained in
subsections (e)(ii) and (f) of Section 7.01 of this Agreement are
correct on and as of the date of such Extension of
39
45
Credit, before and after giving effect to such Extension of Credit and
to the application of the proceeds thereof, as though made on and as of
such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Extension of Credit or the
application of the proceeds thereof; and
(b) the Administrative Agent shall have received such other
approvals, opinions and documents as any Lender or Issuing Bank, through the
Administrative Agent, may reasonably request.
SECTION 6.04. RELIANCE ON CERTIFICATES. The Lenders, the Issuing Banks
and each Agent shall be entitled to rely conclusively upon the certificates
delivered from time to time by officers of the Borrower as to the names,
incumbency, authority and signatures of the respective persons named therein
until such time as the Administrative Agent may receive a replacement
certificate, in form acceptable to the Administrative Agent, from an officer of
such Person identified to the Administrative Agent as having authority to
deliver such certificate, setting forth the names and true signatures of the
officers and other representatives of such Person thereafter authorized to act
on behalf of such Person.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) Each of the Borrower, Consumers and each of the Restricted
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and is duly qualified
to do business in, and is in good standing in, all other jurisdictions where the
nature of its business or the nature of property owned or used by it makes such
qualification necessary.
(b) The execution, delivery and performance by the Borrower of
each Loan Document to which it is or will be a party (i) are within the
Borrower's corporate powers, (ii) have been duly authorized by all necessary
corporate action and (iii) do not and will not (A) require any consent or
approval of the stockholders of the Borrower, (B) violate any provision of the
charter or by-laws of the Borrower or of law, (C) violate any legal restriction
binding on or affecting the Borrower, (D) result in a breach of, or constitute a
default under, any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected, or (E) result in or require the creation of
any Lien (other than pursuant to the Loan Documents) upon or with respect to any
of its properties.
(c) No Governmental Approval is required.
(d) This Agreement is, and each other Loan Document to which
the Borrower will be a party when executed and delivered hereunder will be,
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms; subject to the
qualification, however, that the enforcement of the rights and remedies
40
46
herein and therein is subject to bankruptcy and other similar laws of general
application affecting rights and remedies of creditors and the application of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
(e) (i) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 2000, and the related consolidated
statements of income, retained earnings and cash flows of the Borrower and its
Consolidated Subsidiaries for the fiscal year then ended, together with the
report thereon of Xxxxxx Xxxxxxxx LLP included in the Borrower's Annual Report
on Form 10-K for the fiscal year ended December 31, 2000, and the unaudited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
at March 31, 2001, and the related unaudited consolidated statements of income,
retained earnings and cash flows for the three-month period then ended, copies
of each of which have been furnished to each Lender, fairly present (subject, in
the case of such balance sheet and statement of income for the three months
ended March 31, 2001, to year-end adjustments) the financial condition of the
Borrower and its Consolidated Subsidiaries as at such dates and the results of
operations of the Borrower and its Consolidated Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted accounting
principles consistently applied; (ii) since March 31, 2001, there has been no
Material Adverse Change; and (iii) the Borrower has no material liabilities or
obligations except as reflected in the foregoing financial statements and in
Schedule II, as evidenced by the Loan Documents and as may be incurred, in
accordance with the terms of this Agreement, in the ordinary course of business
(as presently conducted) following the date of this Agreement.
(f) Except as disclosed in the Borrower's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, the Borrower's Quarterly
Report on Form 10-Q for the period ended March 31, 2001, and the Current Report
on Form 8-K filed by the Borrower on May 17, 2001, there are no pending or
threatened actions, suits or proceedings against or, to the knowledge of the
Borrower, affecting the Borrower or any of its Subsidiaries or the properties of
the Borrower or any of its Subsidiaries before any court, governmental agency or
arbitrator, that would, if adversely determined, reasonably be expected to
materially adversely affect the financial condition, properties, business or
operations of the Borrower and its Subsidiaries, considered as a whole, or
affect the legality, validity or enforceability of this Agreement or any other
Loan Document.
(g) All insurance required by Section 8.01(b) is in full force
and effect.
(h) No Plan Termination Event has occurred nor is reasonably
expected to occur with respect to any Plan of the Borrower or any of its ERISA
Affiliates which would result in a material liability to the Borrower, except as
disclosed and consented to by the Required Lenders in writing from time to time.
Since the date of the most recent Schedule B (Actuarial Information) to the
annual report of the Borrower (Form 5500 Series), if any, there has been no
material adverse change in the funding status of the Plans referred therein and
no "prohibited transaction" has occurred with respect thereto which is
reasonably expected to result in a material liability to the Borrower. Neither
the Borrower nor any of its ERISA Affiliates has incurred nor reasonably expects
to incur any material withdrawal liability under ERISA to any Multiemployer
Plan, except as disclosed and consented to by the Required Lenders in writing
from time to time.
41
47
(i) No fire, explosion, accident, strike, lockout or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (except for any such circumstance, if any, which
is covered by insurance which coverage has been confirmed and not disputed by
the relevant insurer) affecting the properties, business or operations of the
Borrower, Consumers or any Restricted Subsidiary has occurred that could
reasonably be expected to have a material adverse effect on the business,
financial condition or results of operations of (A) the Borrower and its
Subsidiaries, considered as a whole, or (B) Consumers and its Subsidiaries,
considered as a whole.
(j) The Borrower 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
Borrower 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.
(k) No extraordinary judicial, regulatory or other legal
constraints exist which limit or restrict Consumers' ability to declare or pay
cash dividends with respect to its capital stock.
(l) The Borrower owns not less than 80% of the outstanding
shares of common stock of Enterprises.
(m) The Borrower owns not less than 80% of the outstanding
shares of common stock of Consumers.
(n) The Consolidated 2001-2005 Projections of Consumers,
Enterprises and the Borrower (the "PROJECTIONS"), copies of which have been
distributed to the Banks in the Confidential Information Memorandum dated May
2001, are based upon assumptions that the Borrower believed were reasonable at
the time the Projections were delivered, and all other financial information
previously delivered by the Borrower to the Administrative Agent and the Banks
is true and correct in all material respects as at the dates and for the periods
indicated therein.
(o) The executed and delivered Cash Collateral Agreement
creates a valid, perfected, first priority Lien in the Collateral (other than
the "Account", as such term is defined therein) described therein, subject only
to Liens permitted by Section 8.02(a), and all filings and other actions
necessary to perfect and protect such security interests have been taken.
(p) The Borrower is not engaged in the business of extending
credit for the purpose of buying or carrying margin stock (within the meaning of
Regulation U issued by the Board), and no proceeds of any Loan or any drawing
under any Letter of Credit 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.
(q) The Borrower is not an investment company (within the
meaning of the Investment Company Act of 1940, as amended).
42
48
(r) No proceeds of any Extension of Credit or any drawing
under any Letter of Credit will be used to acquire any security in any
transaction without the approval of the board of directors of the Person issuing
such security if (i) the acquisition of such security would cause the Borrower
to own 5.0% or more of any outstanding class of securities issued by such
Person, or (ii) such security is being acquired in connection with a tender
offer.
(s) Following application of the proceeds of each Extension of
Credit, not more than 25 percent of the value of the assets of the Borrower and
its Subsidiaries on a consolidated basis will be margin stock (within the
meaning of Regulation U issued by the Board).
(t) Borrower and Consumers are exempt from the registration
requirements of the Public Utility Holding Company Act of 1935, as amended, 15
USC 79 et seq.
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. AFFIRMATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment:
(a) Payment of Taxes, Etc. The Borrower shall pay and
discharge, and each of its Subsidiaries shall pay and discharge, before the same
shall become delinquent, all taxes, assessments and governmental charges,
royalties or levies imposed upon it or upon its property except, in the case of
taxes, to the extent the Borrower or any Subsidiary, as the case may be, is
contesting the same in good faith and by appropriate proceedings and has set
aside adequate reserves for the payment thereof in accordance with GAAP.
(b) Maintenance of Insurance. The Borrower shall maintain, and
each of its Restricted Subsidiaries and Consumers shall maintain, insurance
covering the Borrower, each of its Restricted Subsidiaries, Consumers and their
respective properties in effect at all times in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general geographical area in which the
Borrower, its Restricted Subsidiaries and Consumers operates, either with
reputable insurance companies or, in whole or in part, by establishing reserves
of one or more insurance funds, either alone or with other corporations or
associations.
(c) Preservation of Existence, Etc. The Borrower shall
preserve and maintain, and each of its Restricted Subsidiaries and Consumers
shall preserve and maintain, its corporate existence, material rights (statutory
and otherwise) and franchises, and take such other action as may be necessary or
advisable to preserve and maintain its right to conduct its business in the
states where it shall be conducting its business.
(d) Compliance with Laws, Etc. The Borrower shall comply, and
each of its Restricted Subsidiaries and Consumers shall comply, in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, including any such laws, rules,
regulations and orders relating to zoning, environmental
43
49
protection, use and disposal of Hazardous Substances, land use, construction and
building restrictions, and employee safety and health matters relating to
business operations.
(e) Inspection Rights. Subject to the requirements of laws or
regulations applicable to the Borrower or its Subsidiaries, as the case may be,
and in effect at the time, at any time and from time to time upon reasonable
notice, the Borrower shall permit (i) each Agent and its agents and
representatives to examine and make copies of and abstracts from the records and
books of account of, and the properties of, the Borrower or any of its
Subsidiaries and (ii) each Agent, each Issuing Bank, each of the Lenders, and
their respective agents and representatives to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with the Borrower and its
Subsidiaries and their respective officers, directors and accountants, in each
case, to the extent that any out-of-pocket expenses are incurred in connection
therewith at such time as no Event of Default or Default shall have occurred and
be continuing, at the expense of such Agent, such Issuing Bank, such Lender, or
their respective agents and representatives, as the case may be.
(f) Keeping of Books. The Borrower shall keep, and each of its
Subsidiaries shall keep, proper records and books of account, in which full and
correct entries shall be made of all financial transactions of the Borrower and
its Subsidiaries and the assets and business of the Borrower and its
Subsidiaries, in accordance with GAAP.
(g) Maintenance of Properties, Etc. The Borrower shall
maintain, and each of its Restricted Subsidiaries shall maintain, in substantial
conformity with all laws and material contractual obligations, good and
marketable title to all of its properties which are used or useful in the
conduct of its business; provided, however, that the foregoing shall not
restrict the sale of any asset of the Borrower or any Restricted Subsidiary to
the extent not prohibited by Section 8.02(i). In addition, the Borrower shall
preserve, maintain, develop, and operate, and each of its Subsidiaries shall
preserve, maintain, develop and operate, in substantial conformity with all laws
and material contractual obligations, all of its material properties which are
used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Use of Proceeds. The Borrower shall apply the proceeds of
the initial Extensions of Credit, to the extent necessary, to the repayment in
full and termination of all outstanding obligations under the Existing Credit
Agreement, whether for principal, interest, fees, or otherwise (and, in
furtherance thereof, the Borrower hereby expressly and irrevocably authorizes
the Administrative Agent to so apply such proceeds to such repayment), and use
all subsequent Extensions of Credit for general corporate purposes (subject to
the terms and conditions of this Agreement).
(i) Consolidated Leverage Ratio. The Borrower shall maintain,
as of the last day of each fiscal quarter (in each case, the "MEASUREMENT
QUARTER"), a maximum ratio of (i) Consolidated Debt for the immediately
preceding four-fiscal-quarter period ending on the last day of such Measurement
Quarter, to (ii) Consolidated EBITDA for such period, of not more than the
amount set forth below during each corresponding period set forth below:
44
50
PERIOD RATIO
--------------------------------- ----------------
Closing Date through June 17, 4.90 to 1
2002
June 18, 2002 through June 17, 4.75 to 1
2003
June 18, 2003 and thereafter 4.50 to 1
(j) Cash Dividend Coverage Ratio. The Borrower shall maintain,
as of the last day of each Measurement Quarter, a minimum ratio of (i) the sum
of (A) Cash Dividend Income for the immediately preceding four-fiscal-quarter
period ending on the last day of the fiscal quarter immediately preceding such
Measurement Quarter, plus (B) 25% of the amount of Equity Distributions received
by the Borrower during such period but in no event in excess of $10,000,000,
plus (C) all amounts received by the Borrower from its Subsidiaries and
Affiliates during such period constituting reimbursement of interest expense
(including commitment, guaranty and letter of credit fees) paid by the Borrower
on behalf of any such Subsidiary or Affiliate to (ii) interest expense
(including commitment, guaranty and letter of credit fees) accrued by the
Borrower in respect of all Debt during such period of not less than : (a) for
each Measurement Quarter ending on or prior to June 17, 2002, 1.50 to 1, (b) for
each Measurement Quarter ending after June 18, 2002 and on or prior to June 17,
2003, 1.75 to 1, and (c) for each Measurement Quarter ending after June 18,
2003, 1.90 to 1; provided, that the Borrower shall be deemed not to be in breach
of the foregoing covenant if, during the Measurement Quarter, it has permanently
reduced the Commitments and the principal amount outstanding under this
Agreement and the Promissory Notes such that the amount determined pursuant to
clause (ii) above, when recalculated on a pro forma basis assuming that the
amount of such reduced Commitments and principal amount outstanding under this
Agreement and the Promissory Notes were in effect at all times during such
four-fiscal-quarter period, would result in the Borrower being in compliance
with such ratio; and provided further, that until the Borrower so reduces such
Commitments and principal amount outstanding under this Agreement and the
Promissory Notes and/or increases Cash Dividend Income during such Measurement
Quarter, the Borrower may not request any additional Extensions of Credit (other
than Conversions).
(k) Refinancing of Senior Note Debt. In connection with any
refinancings of the Senior Note Debt, the Borrower shall cause the maturity
thereof to be no sooner than the then-scheduled maturity date of the Senior
Notes being refinanced.
(l) Further Assurances. The Borrower shall promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or that any Lender through the Administrative Agent may
reasonably request in order to give effect to the transactions contemplated by
this Agreement and the other Loan Documents. In addition, the Borrower will use
all reasonable efforts to duly obtain or make Governmental Approvals required
from time to time on or prior to such date as the same may become legally
required.
45
51
SECTION 8.02. NEGATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower shall not, without the written consent of the Required
Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Restricted Subsidiaries to create, incur, assume or suffer to
exist, any lien, security interest, or other charge or encumbrance (including
the lien or retained security title of a conditional vendor) of any kind, or any
other type of arrangement intended or having the effect of conferring upon a
creditor a preferential interest upon or with respect to any of its properties
of any character (including capital stock of Consumers, Enterprises, CMS Oil &
Gas Co. and any of the Borrower's other directly-owned Subsidiaries, and
accounts) (any of the foregoing being referred to herein as a "LIEN"), whether
now owned or hereafter acquired, or sign or file, or permit any of its
Restricted Subsidiaries to sign or file, under the Uniform Commercial Code of
any jurisdiction a financing statement which names the Borrower or any
Restricted Subsidiary as debtor, sign, or permit any of its Restricted
Subsidiaries to sign, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any of its
Restricted Subsidiaries to assign, accounts, excluding, however, from the
operation of the foregoing restrictions the Liens created under the Loan
Documents and the following:
(i) Liens for taxes, assessments or governmental charges or
levies to the extent not past due;
(ii) cash pledges or deposits to secure (A) obligations under
workmen's compensation laws or similar legislation, (B) public or
statutory obligations of the Borrower or any of its Restricted
Subsidiaries, or (C) Support Obligations of the Borrower; provided that
the aggregate amount of pledges or deposits securing such Support
Obligations shall not exceed $30 million at any one time outstanding;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's liens and other similar Liens
arising in the ordinary course of business securing obligations which
are not overdue or which have been fully bonded and are being contested
in good faith; and
(iv) purchase money Liens or purchase money security interests
upon or in property acquired or held by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business to secure
the purchase price of such property or to secure indebtedness incurred
solely for the purpose of financing the acquisition of any such
property to be subject to such Liens or security interests, or Liens or
security interests existing on any such property at the time of
acquisition, or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that no such Lien
or security interest shall extend to or cover any property other than
the property being acquired and no such extension, renewal or
replacement shall extend to or cover property not theretofore subject
to the Lien or security interest being extended, renewed or replaced,
and provided, further, that the aggregate principal amount of the Debt
at any one time outstanding secured by Liens permitted by this clause
(iv) shall not exceed $10,000,000.
46
52
(b) Enterprises Debt. Permit Enterprises to create, incur,
assume or suffer to exist any debt (as such term is construed in accordance with
GAAP) other than:
(i) debt arising by reason of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of Enterprises' business;
(ii) in the form of indemnities in respect of unfiled
mechanics' liens and Liens affecting Enterprises' properties permitted
under Section 8.02(a)(iii);
(iii) other debt of Enterprises outstanding on the Closing
Date set forth on Schedule II; and
(iv) unsecured, subordinated debt owed to the Borrower or CMS
Capital Corp. (or any successor by merger to CMS Capital Corp.).
(c) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Restricted Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee for the rental or hire of real or
personal property of any kind under leases or agreements to lease (other than
leases which constitute Debt) having an original term of one year or more which
would cause the aggregate direct or contingent liabilities of the Borrower and
its Restricted Subsidiaries in respect of all such obligations payable in any
period of 12 consecutive calendar months to exceed $50,000,000.
(d) Investments in Other Persons. Upon the occurrence and
during the continuance of an Event of Default or a Default (other than a Default
that occurs and is continuing prior to the last day of any Measurement Quarter
resulting from the failure of the Borrower to comply with the ratio set forth in
Section 8.01(j)), make, or permit any of its Restricted Subsidiaries to make,
any loan or advance to any Person or purchase or otherwise acquire any capital
stock, obligations or other securities of, make any capital contribution to, or
otherwise invest in, any Person, other than Permitted Investments.
(e) Restricted Payments. Declare or pay, or permit any of its
Restricted Subsidiaries to declare or pay, directly or indirectly, any dividend,
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any share of any class of capital stock of the
Borrower or any of its Restricted Subsidiaries (other than (1) stock splits and
dividends payable solely in nonconvertible equity securities of the Borrower and
(2) distributions made to the Borrower or a Restricted Subsidiary), or purchase,
redeem, retire, or otherwise acquire for value, or permit any of its Restricted
Subsidiaries to purchase, redeem, retire, or otherwise acquire for value, any
shares of any class of capital stock of the Borrower or any of its Restricted
Subsidiaries or any warrants, rights, or options to acquire any such shares, now
or hereafter outstanding, or make, or permit any of its Restricted Subsidiaries
to make, any distribution of assets to any of its shareholders (other than
distributions to the Borrower or a Restricted Subsidiary) (any such dividend,
payment, distribution, purchase, redemption, retirement or acquisition being
hereinafter referred to as a "RESTRICTED PAYMENT"), unless (i) no Default or
Event of Default has occurred and is continuing or would occur as a result of
such Restricted Payment, and (ii) after giving effect thereto, the aggregate
amount of all such
47
53
Restricted Payments made since September 30, 1993 shall not have exceeded the
sum of (A) $120,000,000, (B) 100% of Consolidated Net Income (as defined in the
Indenture in effect on the date hereof) accrued during the period (treated as
one accounting period) from September 30, 1993 to the end of the most recent
fiscal quarter of the Borrower ending at least 45 days prior to the date of such
Restricted Payment (or, in case such amount shall be a deficit, minus 100% of
such deficit), and (C) the aggregate Net Proceeds (as defined in the Indenture
in effect on the date hereof) received by the Borrower from any issuance or sale
of, or contribution with respect to, its capital stock subsequent to September
30, 1993; provided, however, that the foregoing shall not prohibit (1) any
purchase or redemption of capital stock of the Borrower made by exchange for, or
out of the proceeds of the substantially concurrent sale of, capital stock of
the Borrower (other than Redeemable Stock or Exchangeable Stock (as such terms
are defined in the Indenture in effect on the date hereof)), provided that such
purchase or redemption shall be excluded from the calculation of the amount of
Restricted Payments permitted by this subsection (e); (2) dividends or other
distributions paid in respect of any class of the Borrower's capital stock
issued in respect of the acquisition of any business or assets by the Borrower
or a Restricted Subsidiary where the dividends or other distributions with
respect to such capital stock are payable solely from the net earnings of such
business or assets; (3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would have
complied with this subsection (e), provided that at the time of payment of such
dividend, no Default or Event of Default shall have occurred and be continuing
(or result therefrom), and provided further that such dividends shall be
included (without duplication) in the calculation of the amount of Restricted
Payments permitted by this subsection (e); or (4) payments made by the Borrower
or any Restricted Subsidiary pursuant to the Tax Sharing Agreement. For purposes
of this subsection (e), the amount of any Restricted Payment not in the form of
cash shall be the fair market value of such Restricted Payment as determined in
good faith by the Board of Directors of the Borrower, provided that if the value
of the non-cash portion of such Restricted Payment as determined by the
Borrower's Board of Directors is in excess of $25 million, such value shall be
based on an opinion from a nationally-recognized firm acceptable to the
Administrative Agent experienced in the appraisal of similar types of property
or transactions.
(f) Compliance with ERISA. (i) Permit to exist any
"accumulated funding deficiency" (as defined in Section 412(a) of the Internal
Revenue Code of 1986, as amended), (ii) terminate, or permit any ERISA Affiliate
to terminate, any Plan or withdraw from, or permit any ERISA Affiliate to
withdraw from, any Multiemployer Plan, so as to result in any material (in the
opinion of the Required Lenders) liability of the Borrower, any Restricted
Subsidiary or Consumers to the PBGC, or (iii) permit to exist any occurrence of
any Reportable Event (as defined in Title IV of ERISA), or any other event or
condition, which presents a material (in the opinion of the Required Lenders)
risk of such a termination by the PBGC of any Plan or withdrawal from any
Multiemployer Plan and such a material liability to the Borrower, any Restricted
Subsidiary or Consumers.
(g) Transactions with Affiliates. Enter into, or permit any of
its Subsidiaries to enter into, any transaction with any of its Affiliates
unless such transaction is on terms no less favorable to the Borrower or such
Subsidiary than if the transaction had been negotiated in good faith on an
arm's-length basis with a non-Affiliate.
48
54
(h) Mergers, Etc. Merge with or into or consolidate with or
into, or permit any of its Restricted Subsidiaries, Consumers or CMS Oil & Gas
Co. to merge with or into or consolidate with or into, any other Person, except
that (1) any Restricted Subsidiary (other than Enterprises) may merge into any
other Restricted Subsidiary; (2) CMS Oil & Gas Co. may merge with or into
Enterprises or the Borrower; (3) CMS Oil & Gas Co. may merge with or into any
other Person, provided that, in connection with such merger, Enterprises shall
have received fair consideration (as determined by the Board of Directors of
Enterprises or the Borrower); (4) any Restricted Subsidiary may merge with or
into the Borrower, and the Borrower may merge with any other Person, provided
that, immediately after giving effect to any such merger, (A) no event shall
occur and be continuing which constitutes a Default or an Event of Default, (B)
the Borrower is the surviving corporation, and (C) the Borrower 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 or any other Loan Document on the date of such
transaction; (5) Consumers may merge with any other Person, provided that,
immediately after giving effect thereto, (w) no event shall occur and be
continuing which constitutes a Default or an Event of Default, (x) Consumers is
the surviving corporation, (y) the Borrower shall continue to own not less than
80% of the outstanding shares of common stock of Consumers and (z) Consumers'
Net Worth shall be equal to or greater than its Net Worth immediately prior to
such merger; and (6) any Person (other than the Borrower and its Affiliates) may
merge with or into Enterprises, provided that, immediately after giving effect
thereto, (A) no event shall occur and be continuing which constitutes a Default
or an Event of Default, (B) Enterprises is the surviving corporation, (C)
Enterprises' Net Worth shall be equal to or greater than its Net Worth
immediately prior to such merger and (D) Enterprises 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 or any other Loan Document on the date of such
transaction; provided, that after giving effect to any merger described in
clause (2), (3), or (5) above, the Borrower shall be in compliance with Section
8.01(i).
(i) Sales, Etc., of Assets. Sell, lease, transfer, assign, or
otherwise dispose of all or any substantial part of its assets, or permit any of
its Restricted Subsidiaries to sell, lease, transfer, or otherwise dispose of
all or any substantial part of its assets, except to give effect to a
transaction permitted by subsection (h) above or subsection (j) below.
(j) Maintenance of Ownership of Subsidiaries. Sell, transfer,
assign or otherwise dispose of any shares of capital stock of any of its
Restricted Subsidiaries or Consumers (other than preferred or preference stock
of Consumers) or any warrants, rights or options to acquire such capital stock,
or permit any Restricted Subsidiary or Consumers to issue, sell, transfer,
assign or otherwise dispose of any shares of its capital stock (other than
preferred or preference stock of Consumers) or the capital stock of any other
Restricted Subsidiary or any warrants, rights or options to acquire such capital
stock, except to give effect to a transaction permitted by subsection (h) above;
provided, however, that (i) the Borrower may sell, transfer, assign or otherwise
dispose of not more than 20% of the common stock of Consumers, provided that
after giving effect to each such transaction the Borrower shall be in compliance
with Section 8.01(i), (ii) the Borrower may sell, transfer, assign or otherwise
dispose of not more than 20% of the common stock of Enterprises; provided, that
any proceeds in the form of cash from such sale, transfer, assignment or other
disposal shall be applied to prepay (A) the principal amount
49
55
outstanding hereunder (it being understood that any prepayment required by this
clause (ii) shall be applied to outstanding ABR Loans up to the full amount
thereof before they are applied to outstanding Eurodollar Rate Loans) together
with (1) accrued interest to the date of such prepayment on the principal amount
repaid and (2) in the case of prepayments of Eurodollar Rate Loans, any amount
payable to the Lenders pursuant to Section 5.04(b) or (B) the principal amount
outstanding under the Three Year Facility, in accordance with Section 8.02(j)
(ii) of the Three Year Facility and provided, further, that after giving effect
to each such transaction the Borrower shall be in compliance with Section
8.01(i), (iii) Enterprises may, and the Borrower may permit Enterprises to,
sell, transfer, assign or otherwise dispose of not more than 49% of the common
stock of any Enterprises Significant Subsidiary other than CMS Oil & Gas Co.,
provided that after giving effect to each such transaction the Borrower shall be
in compliance with Section 8.01(i) , and (iv) Enterprises may, and the Borrower
may permit Enterprises to, sell, transfer, assign or otherwise dispose of not
more than 60% of the common stock of CMS Oil & Gas Co., provided that after
giving effect to such transaction the Borrower shall be in compliance with
Section 8.01(i).
(k) Amendment of Tax Sharing Agreement. Directly or
indirectly, amend, modify, supplement, waive compliance with, seek a waiver
under, or assent to noncompliance with, any term, provision or condition of the
Tax Sharing Agreement if the effect of such amendment, modification, supplement,
waiver or assent is to (i) reduce materially any amounts otherwise payable to,
or increase materially any amounts otherwise owing or payable by, the Borrower
thereunder, or (ii) change materially the timing of any payments made by or to
the Borrower thereunder.
SECTION 8.03. REPORTING OBLIGATIONS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower will, unless the Required Lenders shall otherwise
consent in writing, furnish to the Administrative Agent (with sufficient copies
for each Lender), the following:
(a) as soon as possible and in any event within five days
after the Borrower knows or should have reason to know of the occurrence of each
Default or Event of Default continuing on the date of such statement, a
statement of the chief financial officer or chief accounting officer of the
Borrower setting forth details of such Default or Event of Default and the
action that the Borrower 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 Borrower,
a consolidated balance sheet and consolidated statements of income and retained
earnings and of cash flows of the Borrower and its Subsidiaries as at the end of
such quarter and for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter (which requirement shall be deemed
satisfied by the delivery of the Borrower's quarterly report on Form 10-Q for
such quarter), all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer or chief accounting officer of
the Borrower as having been prepared in accordance with GAAP, together with (A)
a schedule (substantially in the form of Exhibit F appropriately completed) of
(1) the computations used by the Borrower in determining compliance with the
covenants contained in Sections 8.01(i) and 8.01(j) and, after the enactment of
any Consumers
50
56
Dividend Restriction, the ratio set forth in Section 9.01(k), (2) all Project
Finance Debt of the Consolidated Subsidiaries, together with the Borrower's
Ownership Interest in each such Consolidated Subsidiary and (3) all Support
Obligations of the Borrower of the types described in clauses (iv) and (v) of
the definition of Support Obligations (whether or not each such Support
Obligation or the primary obligation so supported is fixed, conclusively
determined or reasonably quantifiable) to the extent such Support Obligations
have not been previously disclosed as "Consolidated Debt" pursuant to clause (1)
above, and (B) a certificate of said officer stating that no 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 action
that the Borrower proposes to take with respect thereto;
(c) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower and its Subsidiaries, a copy
of the Annual Report on Form 10-K (or any successor form) for the Borrower and
its Subsidiaries for such year, including therein a consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such fiscal year and
consolidated statements of income and retained earnings and of cash flows of the
Borrower and its Subsidiaries for such fiscal year, accompanied by a report
thereon of Xxxxxx Xxxxxxxx LLP or another nationally-recognized independent
public accounting firm, together with (1) a schedule in form satisfactory to the
Required Lenders of (A) the computations used by such accounting firm in
determining, as of the end of such fiscal year, compliance with the covenants
contained in Sections 8.01(i) and 8.01(j) and, after the enactment of any
Consumers Dividend Restriction, the ratio set forth in Section 9.01(k), (B) all
Project Finance Debt of the Consolidated Subsidiaries, together with the
Borrower's Ownership Interest in each such Consolidated Subsidiary and (C) all
Support Obligations of the Borrower of the types described in clauses (iv) and
(v) of the definition of Support Obligations (whether or not each such Support
Obligation or the primary obligation so supported is fixed, conclusively
determined or reasonably quantifiable) to the extent such Support Obligations
have not been previously disclosed as "Consolidated Debt" pursuant to clause (A)
above, and (2) a certificate of the chief financial officer or chief accounting
officer of the Borrower stating that no 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 action that the
Borrower proposes to take with respect thereto;
(d) 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 Borrower,
a balance sheet and statements of income and retained earnings and of cash flows
of the Borrower as at the end of such quarter and for the period commencing at
the end of the previous fiscal year and ending with the end of such quarter, all
in reasonable detail and duly certified (subject to year-end audit adjustments)
by the chief financial officer or chief accounting officer of the Borrower as
having been prepared in accordance with GAAP;
(e) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a balance sheet of the
Borrower as at the end of such fiscal year and statements of income and retained
earnings and of cash flows of the Borrower for such fiscal year, all in
reasonable detail and duly certified (subject to year-end audit adjustments) by
the chief financial officer or chief accounting officer of the Borrower as
having been prepared in accordance with GAAP;
51
57
(f) as soon as possible and in any event (A) within 30 days
after the Borrower knows or has reason to know that any Plan Termination Event
described in clause (i) of the definition of Plan Termination Event with respect
to any Plan of the Borrower or any ERISA Affiliate of the Borrower has occurred
and could reasonably be expected to result in a material liability to the
Borrower and (B) within 10 days after the Borrower knows or has reason to know
that any other Plan Termination Event with respect to any Plan of the Borrower
or any ERISA Affiliate of the Borrower has occurred and could reasonably be
expected to result in a material liability to the Borrower, a statement of the
chief financial officer or chief accounting officer of the Borrower describing
such Plan Termination Event and the action, if any, which the Borrower proposes
to take with respect thereto;
(g) promptly after receipt thereof by the Borrower or any of
its ERISA Affiliates from the PBGC copies of each notice received by the
Borrower or any such ERISA Affiliate of the PBGC's intention to terminate any
Plan or to have a trustee appointed to administer any Plan;
(h) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each Plan
(if any) to which the Borrower is a contributing employer;
(i) promptly after receipt thereof by the Borrower or any of
its ERISA Affiliates from a Multiemployer Plan sponsor, a copy of each notice
received by the Borrower or any of its ERISA Affiliates concerning the
imposition or amount of withdrawal liability in an aggregate principal amount of
at least $250,000 pursuant to Section 4202 of ERISA in respect of which the
Borrower is reasonably expected to be liable;
(j) promptly after the Borrower becomes aware of the
occurrence thereof, notice of all actions, suits, proceedings or other events of
the type described in Section 7.01(f);
(k) promptly after the sending or filing thereof, notice to
the Administrative Agent and each Lender of any sending or filing of all proxy
statements, financial statements and reports which the Borrower sends to its
public security holders (if any), all regular, periodic and special reports
which the Borrower files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any national
securities exchange, pursuant to the Exchange Act, and all final prospectuses
with respect to any securities issued or to be issued by the Borrower or any of
its Subsidiaries;
(l) as soon as possible and in any event within five days
after the occurrence of any material default under any material agreement to
which the Borrower or any of its Subsidiaries is a party, which default would
materially adversely affect the financial condition, business, results of
operations or property of the Borrower and its Subsidiaries, considered as a
whole, any of which is continuing on the date of such certificate, a certificate
of the chief financial officer of the Borrower setting forth the details of such
material default and the action which the Borrower or any such Subsidiary
proposes to take with respect thereto; and
52
58
(m) promptly after requested, such other information
respecting the business, properties, condition or operations, financial or
otherwise, of the Borrower and its Subsidiaries as any Agent or the Required
Lenders may from time to time reasonably request in writing.
The Borrower shall be deemed to have fulfilled its obligations pursuant to
clauses (b), (c), (d), (e) and (k) above to the extent the Administrative Agent
(and the Lenders, if applicable) receives an electronic copy of the requisite
document or documents in a format acceptable to the Administrative Agent,
provided that (1) an executed, tangible copy of any report required pursuant to
clause (e) above is delivered to the Administrative Agent at the time of any
such electronic delivery, and (2) a tangible copy of each requisite document
delivered electronically is made available by the Borrower promptly upon request
by any Agent or Lender.
ARTICLE IX
DEFAULTS
SECTION 9.01. EVENTS OF DEFAULT. If any of the following events (each
an "EVENT OF DEFAULT") shall occur and be continuing, the Administrative Agent
and the Lenders shall be entitled to exercise the remedies set forth in Section
9.02:
(a) The Borrower shall fail to pay (i) any principal of any
Loan when due or (ii) any interest thereon, fees or other amounts (other than
any principal of any Loan) payable hereunder within two Business Days after such
interest, fees or other amounts shall have become due; or
(b) Any representation or warranty made by or on behalf of the
Borrower in any Loan Document or certificate or other writing delivered pursuant
thereto shall prove to have been incorrect in any material respect when made or
deemed made; or
(c) The Borrower or any of its Subsidiaries shall fail to
perform or observe any term or covenant on its part to be performed or observed
contained in Section 8.01(c), (h), (i), (j) or (l) or in Section 8.02 hereof
(and the Borrower, each Lender and each Agent hereby agrees that an Event of
Default under this subsection (c) shall be given effect as if the defaulting
Subsidiary were a party to this Agreement); or
(d) The Borrower or any of its Subsidiaries shall fail to
perform or observe any other term or covenant on its part to be performed or
observed contained in any Loan Document and any such failure shall remain
unremedied, after written notice thereof shall have been given to the Borrower
by the Administrative Agent, for a period of 10 Business Days (and the Borrower,
each Lender and each Agent hereby agrees that an Event of Default under this
subsection (d) shall be given effect as if the defaulting Subsidiary were a
party to this Agreement); or
(e) The Borrower, any Restricted Subsidiary or Consumers shall
fail to pay any of its Debt (including any interest or premium thereon but
excluding Debt incurred under this Agreement) (i) aggregating, in the case of
the Borrower and each Restricted Subsidiary, $6,000,000 or more or, in the case
of Consumers, $25,000,000 or more, or (ii) arising under the Indenture or any
Senior Note, when due (whether by scheduled maturity, required prepayment,
53
59
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in any agreement or instrument
relating to such Debt; or any other default under any agreement or instrument
relating to any such Debt, or any other event, shall occur and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;
unless in each such case the obligee under or holder of such Debt shall have
waived in writing such circumstance so that such circumstance is no longer
continuing; or
(f) (i) The Borrower, any Restricted Subsidiary or Consumers
shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make an assignment
for the benefit of creditors; or (ii) any proceeding shall be instituted by or
against the Borrower, any Restricted Subsidiary or Consumers seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
its debts under any law relating to bankruptcy, insolvency, or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of a proceeding instituted
against the Borrower, either such proceeding shall remain undismissed or
unstayed for a period of 60 days or any of the actions sought in such proceeding
(including the entry of an order for relief against the Borrower, a Restricted
Subsidiary or Consumers or the appointment of a receiver, trustee, custodian or
other similar official for the Borrower, such Restricted Subsidiary or Consumers
or any of its property) shall occur; or (iii) the Borrower, any Restricted
Subsidiary or Consumers shall take any corporate or other action to authorize
any of the actions set forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess
of $6,000,000 shall be rendered against the Borrower or its properties and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(h) Any material provision of any Loan Document, after
execution hereof or delivery thereof under Article VI, shall for any reason
other than the express terms hereof or thereof cease to be valid and binding on
any party thereto; or the Borrower shall so assert in writing; or
(i) The Cash Collateral Agreement after execution and delivery
thereof under Article VI shall for any reason, except to the extent permitted by
the terms thereof or due to any failure by any Agent to take any action on its
part to be performed under applicable law in order to maintain such perfection,
cease to create a valid and perfected first priority Lien in any of the
Collateral described therein; or
(j) At any time any Issuing Bank shall have been served with
or otherwise subjected to a court order, injunction, or other process or decree
issued or granted at the instance of the Borrower restraining or seeking to
restrain such Issuing Bank from paying any amount
54
60
under any Letter of Credit issued by it and either (i) there has been a drawing
under such Letter of Credit which such Issuing Bank would otherwise be obligated
to pay or (ii) the stated expiration date or any reduction of the stated amount
of such Letter of Credit has occurred but the right of the beneficiary to draw
thereunder has been extended in connection with the pendency of the related
court action or proceeding; or
(k) There shall be imposed or enacted any Consumers Dividend
Restriction, the result of which is that the Dividend Coverage Ratio shall be
less than 1.15 to 1.0 at any time after the imposition of such Consumers
Dividend Restriction.
SECTION 9.02. REMEDIES. If any Event of Default has occurred and is
continuing, then the Administrative Agent shall at the request, or may with the
consent, of the Required Lenders, upon notice to the Borrower (i) declare the
Commitments and the obligation of each Lender to make or Convert Loans (other
than Loans under Section 4.04) and of any Issuing Bank to issue a Letter of
Credit to be terminated, whereupon the same shall forthwith terminate, (ii)
declare the principal amount outstanding hereunder, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the principal amount outstanding hereunder,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower, (iii) provide from the
proceeds of any Collateral (as defined in the Cash Collateral Agreement) for
cash collateralization of LC Outstandings, and (iv) exercise in respect of any
and all collateral, in addition to the other rights and remedies provided for
herein and in the Cash Collateral Agreement or otherwise available to the
Administrative Agent or the Lenders, all the rights and remedies of a secured
party on default under the Uniform Commercial Code in effect in the State of
New
York and in effect in any other jurisdiction in which collateral is located at
that time; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to the Borrower under the Federal Bankruptcy
Code, (A) the Commitments and the obligation of each Lender to make Loans and of
any Issuing Bank to issue any Letter of Credit shall automatically be terminated
and (B) the principal amount outstanding hereunder, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. Notwithstanding anything to the contrary
contained herein, no notice given or declaration made by the Administrative
Agent pursuant to this Section 9.02 shall affect (i) the obligation of any
Issuing Bank to make any payment under any Letter of Credit issued by such
Issuing Bank in accordance with the terms of such Letter of Credit or (ii) the
participatory interest of each Lender in each such payment.
ARTICLE X
THE AGENTS
SECTION 10.01. AUTHORIZATION AND ACTION.
(a) Each of the Lenders and the Issuing Banks hereby
irrevocably appoints each Agent (other than the Co-Syndication Agents and
Documentation Agents) as its agent and authorizes each such Agent to take such
actions on its behalf and to exercise such powers as are
55
61
delegated to such Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
(b) Any Lender serving as an Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such Lender and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any of its Subsidiaries or other Affiliate
thereof as if it were not an Agent hereunder.
(c) No Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (i) no Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default or an Event of Default has occurred and
is continuing, (ii) no Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that such Agent is required
to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.01), and (iii) except as expressly set forth in the Loan
Documents, no Agent shall have any duty to disclose, or shall be liable for the
failure to disclose, any information relating to the Borrower or any of its
Subsidiaries or Affiliates that is communicated to or obtained by the Lender
serving as such Agent or any of its Affiliates in any capacity. No Agent shall
be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
11.01 or any other provision of this Agreement) or in the absence of its own
gross negligence or willful misconduct. Each Agent shall be deemed not to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender (in which case such
Agent shall promptly give a copy of such written notice to the Lenders and the
other Agents). No Agent shall be responsible for or have any duty to ascertain
or inquire into (A) any statement, warranty or representation made in or in
connection with any Loan Document, (B) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (C) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (D) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (E) the satisfaction of any condition set forth in
Article VI or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to such Agent. Neither any
Co-Syndication Agent nor any Documentation Agent shall have any duties or
obligations in such capacity under any of the Loan Documents.
(d) Each Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
56
62
(e) Each Agent may perform any and all its duties and exercise
its rights and powers by or through one or more sub-agents appointed by such
Agent. Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding subsections of this Section 10.01 shall
apply to any such sub-agent and to the Related Parties of each Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as an Agent.
(f) Subject to the appointment and acceptance of a successor
Agent as provided in this subsection (f), any Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor
Agent which shall be a Lender with an office in
New York,
New York, or an
Affiliate of any such Lender. Upon the acceptance of its appointment as an Agent
hereunder by a successor, such successor shall 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.
The fees payable by the Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Agent's resignation hereunder, the provisions of this
Article and Section 11.04 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as an Agent.
(g) Each Lender acknowledges that it has independently and
without reliance upon any Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
SECTION 10.02. INDEMNIFICATION. The Lenders agree to indemnify each
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective Percentages of the Lenders, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against such Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by such Agent under
this Agreement, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agents and the Arranger promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by the Agents in
connection with the preparation, syndication, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in
57
63
respect of rights or responsibilities under, this Agreement to the extent that
the Agents are entitled to reimbursement for such expenses pursuant to Section
11.04 but are not reimbursed for such expenses by the Borrower.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of any Loan Document, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (i) waive, modify or
eliminate any of the conditions specified in Article VI, (ii) increase the
Commitments of the Lenders that may be maintained hereunder or subject the
Lenders to any additional obligations, (iii) reduce the principal of, or
interest on, any Loan, any Applicable Margin, any Commitment Fee Margin or any
fees or other amounts payable hereunder (other than fees payable to the
Administrative Agent pursuant to Section 2.02(c)), (iv) postpone any date fixed
for any payment of principal of, or interest on, any Loan or any fees or other
amounts payable hereunder (other than fees payable to the Administrative Agent
pursuant to Section 2.02(c)), (v) change the definition of "Required Lenders"
contained in Section 1.01 or change any other provision that specifies the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans or the number of Lenders which shall be required for the Lenders or any of
them to take any action hereunder, (vi) amend any Loan Document in a manner
intended to prefer one or more Lenders over any other Lenders, (vii) amend,
waive or modify Section 2.03(b) or this Section 11.01, (viii) release any
collateral or change any provision of the Cash Collateral Agreement providing
for the release of Collateral, or (ix) except as otherwise permitted by Section
2.05, extend the Termination Date; and provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by each Agent in addition
to the Lenders required above to take such action, affect the rights or duties
of any Agent under this Agreement or any other Loan Document; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by each Issuing Bank in addition to the Lenders required above to take
such action, affect the rights or duties of any Issuing Bank under this
Agreement or any other Loan Document. Any request from the Borrower for any
amendment, waiver or consent under this Section 11.01 shall be addressed to the
Administrative Agent.
SECTION 11.02. NOTICES, ETC. All notices and other communications
provided for hereunder and under the other Loan Documents shall be in writing
(including telegraphic, facsimile, telex or cable communication) and mailed,
telegraphed, telecopied, telexed, cabled or delivered, (i) if to the Borrower,
at its address at Fairlane Plaza South, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq., General Counsel,
with a copy to Xxxxx X. Xxxxxxxxxxx, Vice President, Investor Relations and
Treasurer, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000; (ii) if
to any Bank, at its Domestic Lending Office specified opposite its name on
Schedule I; (iii) if to any Issuing Bank, at its address specified in the
Issuing Bank Agreement to which it is a party; (iv) if to any Lender other than
a Bank, at its Domestic Lending Office specified in the Lender Assignment
pursuant to which it became a Lender; and (v) if to the Administrative Agent or
the Collateral Agent, at its
58
64
address at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxx Xxxxxxxx, Customer
Service Unit, Telephone No. (000) 000-0000, Telecopy No. (000) 000-0000, with a
copy to such party at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Sydney X.
Xxxxxx, Power and Utilities Group, Telephone No. (000) 000-0000, Telecopy No.
(000) 000-0000 ; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telegraphed, telecopied, telexed
or cabled, be effective five days after when deposited in the mails, or when
delivered to the telegraph company, telecopied, confirmed by telex answerback or
delivered to the cable company, respectively, except that notices and
communications to any Agent pursuant to Article II, III, or X shall not be
effective until received by such Agent.
SECTION 11.03. NO WAIVER OF REMEDIES. No failure on the part of the
Borrower, any Lender, any Issuing Bank or any Agent to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 11.04. COSTS, EXPENSES AND INDEMNIFICATION.
(a) The Borrower agrees to (i) reimburse on demand all
reasonable costs and expenses of each Agent and the Arranger (including
reasonable fees and expenses of counsel to the Agents) in connection with (A)
the preparation, syndication, negotiation, execution and delivery of the Loan
Documents and (B) the care and custody of any and all collateral, and any
proposed modification, amendment, or consent relating to any Loan Document, and
(ii) to pay on demand all reasonable costs and expenses of each Agent and, on
and after the date upon which the principal amount outstanding hereunder becomes
or is declared to be due and payable pursuant to Section 9.02 or an Event of
Default specified in Section 9.01(a) shall have occurred and be continuing, each
Lender (including reasonable fees and expenses of counsel to the Agents, special
Michigan counsel to the Lenders and, from and after such date, counsel for each
Lender (including the allocated costs and expenses of in-house counsel)) in
connection with the workout, restructuring or enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the other Loan
Documents and the other documents to be delivered hereunder.
(b) The Borrower shall indemnify each Agent, the Arranger, the
Issuing Bank, each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "INDEMNIFIED PERSON") against, and
hold each Indemnified Person harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnified Person, incurred by or asserted
against any Indemnified Person arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby or thereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan,
Letter of Credit or other Extension of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not
59
65
strictly comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or release of any Hazardous Substance on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnified Person is a party
thereto; provided that such indemnity shall not, as to any Indemnified Person,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnified Person.
(c) The Borrower's other obligations under this Section 11.04
shall survive the repayment of all amounts owing to the Lenders, the Issuing
Banks and the Agents under the Loan Documents and the termination of the
Commitments. If and to the extent that the obligations of the Borrower under
this Section 11.04 are unenforceable for any reason, the Borrower agrees to make
the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 11.05. RIGHT OF SET-OFF.
(a) Upon (i) the occurrence and during the continuance of any
Event of Default and (ii) the making of the request or the granting of the
consent specified by Section 9.02 to authorize the Administrative Agent to
declare the principal amount outstanding hereunder to be due and payable
pursuant to the provisions of Section 9.02, each Lender and Issuing Bank is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or Issuing Bank to or for the credit or the
account of the Borrower, against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and the Promissory Notes held by
such Lender or the Issuing Bank Agreement to which such Issuing Bank is a party,
as the case may be, irrespective of whether or not such Lender or Issuing Bank
shall have made any demand under this Agreement, such Promissory Notes or such
Issuing Bank Agreement, as the case may be, and although such obligations may be
unmatured. Each Lender and Issuing Bank agrees to notify promptly the Borrower
after any such set-off and application made by such Lender or Issuing Bank,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender and Issuing Bank under
this Section 11.05 are in addition to other rights and remedies (including other
rights of set-off) which such Lender and Issuing Bank may have.
(b) The Borrower agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations hereunder, and
that the obligations of the Lenders hereunder are several and not joint. Nothing
contained herein shall constitute a relinquishment or waiver of the Borrower's
rights to any independent claim that the Borrower may have against any Agent or
any Lender for such Agent's or such Lender's, as the case may be, gross
negligence or willful misconduct, but no Lender shall be liable for any such
conduct on the part of any Agent or any other Lender, and no Agent shall be
liable for any such conduct on the part of any Lender.
60
66
SECTION 11.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agents and when the
Administrative Agent shall have been notified by each Bank that such Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agents and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.
SECTION 11.07. ASSIGNMENTS AND PARTICIPATION.
(a) Each Lender may, with the consent of the Borrower, each
Issuing Bank and the Administrative Agent (such consent not to be unreasonably
withheld or delayed and, in the case of the Borrower, shall not be required if
an Event of Default has occurred and is continuing), assign to one or more banks
or other entities all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including all or a portion of its
Commitment, the Loans owing to it and any Promissory Notes held by it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement, (ii) the amount of the Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date of
the Lender Assignment with respect to such assignment) shall in no event be less
than the lesser of the amount of such Lender's Commitment and $5,000,000 and
shall be an integral multiple of $1,000,000, (iii) each such assignment shall be
to an Eligible Assignee, (iv) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording in the
Register, a Lender Assignment, together with any Promissory Notes subject to
such assignment, an Administrative Questionnaire and a processing and
recordation fee of $3,500 and (v) after giving effect to such assignment, the
amount of the Commitment of the assigning Lender shall be not less than
$5,000,000 or such lesser amount as may be agreed to by the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrower; and provided further, however, that the consent of the Borrower, each
Issuing Bank and the Administrative Agent shall not be required for any
assignments by a Lender to any of its Affiliates or to any other Lender or any
of its Affiliates. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Lender Assignment, which
effective date shall be at least five Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Lender Assignment, have the rights and obligations of a Lender hereunder and (B)
the Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it to an Eligible Assignee pursuant to such
Lender Assignment, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of a Lender Assignment covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto); provided, however,
that the limitation set forth in clause (iv), above, shall not apply if an Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have declared all Loans to be, or all Loans shall have automatically
become, immediately due and payable hereunder. The Administrative Agent agrees
to give prompt notice to the Lenders and the Borrower of any assignment or
participation of its rights and obligations as a Bank hereunder. Notwithstanding
anything to the contrary contained in this Agreement, any Lender may at any time
assign all or any portion of the Loans owing to it to any Affiliate of such
Lender. The assigning Lender shall promptly notify the
61
67
Borrower of any such assignment. No such assignment, other than to an Eligible
Assignee, shall release the assigning Lender from its obligations hereunder.
(b) By executing and delivering a Lender Assignment, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Lender Assignment, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument or document furnished
pursuant thereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of each Loan Document, together with copies of the financial statements
referred to in Section 7.01(e) and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Lender Assignment; (iv) such assignee will, independently and without
reliance upon the Agents, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents; (v) such assignee confirms that it is an Eligible Assignee
(unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have declared all Loans to be immediately due and
payable hereunder, in which case no such confirmation is necessary); (vi) such
assignee appoints and authorizes each Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
each Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 11.02 a copy of each Lender Assignment delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "REGISTER"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower,
any Issuing Bank or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a Lender Assignment executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), any Promissory Notes subject to
such assignment, the processing and recordation fee referred to in subsection
(a) above and any written consent to such assignment required by subsection (a)
above, the Administrative Agent shall, if such Lender Assignment has been
completed and is in substantially the form of Exhibit G, (i) accept such Lender
Assignment, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to
62
68
the Borrower. New and/or replacement Promissory Notes payable to the assignee
and the assigning Lender (if the assigning Lender assigned less than all of its
rights and obligations hereunder) shall be issued upon request pursuant to
Section 3.01(d), and shall be dated the effective date of such Lender
Assignment.
(e) Each Lender may sell participations to one or more banks
or other entities (a "PARTICIPANT") in or to all or a portion of its rights
and/or obligations under the Loan Documents (including all or a portion of its
Commitment, the Loans owing to it and any Promissory Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of any such Promissory Notes for all purposes of this Agreement, and (iv) the
Borrower, the Agents, the Issuing Banks and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided, that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 11.01 that affects such Participant. Subject to
subsection (f) below, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 5.04 and 5.06 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to subsection
(a) above. To the extent permitted by law, each Participant shall also be
entitled to the benefits of Section 11.05(a) as though it were a Lender,
provided such Participant agrees to be subject to Section 5.05 as though it were
a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 5.04 or 5.06 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 5.06 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.06(e) as though it were a Lender.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.07, disclose to the assignee or Participant or proposed assignee or
Participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or Participant or proposed assignee or Participant shall agree, in
accordance with the terms of Section 11.08, to preserve the confidentiality of
any Confidential Information received by it from such Lender.
(h) If any Lender (or any Participant to which such Lender has
sold a participation) shall make any demand for payment under Section 5.04(a) or
(c), then in the case of any such demand, within 30 days after any such demand
(if, but only if, such demanded payment has been made by the Borrower) or
notice, the Borrower may, with the approval of the
63
69
Administrative Agent (which approval shall not be unreasonably withheld) and
provided that no Event of Default or Default shall then have occurred and be
continuing, demand that such Lender assign, at the sole cost and expense of the
Borrower, in accordance with this Section 11.07 to one or more Eligible
Assignees designated by the Borrower, all (but not less than all) of such
Lender's Commitment and the Loans owing to it within the period ending on the
later to occur of (x) the last day in the period described above, as applicable,
and (y) the last day of the longest of the then current Interest Periods for
such Loans. If any such Eligible Assignee designated by the Borrower shall fail
to consummate such assignment on terms acceptable to such Lender, or if the
Borrower shall fail to designate any such Eligible Assignees for all or part of
such Lender's Commitment or Loans, then such demand by the Borrower shall become
ineffective; it being understood for purposes of this subsection (h) that such
assignment shall be conclusively deemed to be on terms acceptable to such
Lender, and such Lender shall be compelled to consummate such assignment to an
Eligible Assignee designated by the Borrower, if such Eligible Assignee (1)
shall agree to such assignment by entering into a Lender Assignment with such
Lender and (2) shall offer compensation to such Lender in an amount equal to all
amounts then owing by the Borrower to such Lender hereunder and under any
Promissory Notes made by the Borrower to such Lender, whether for principal,
interest, fees, costs or expenses (other than the demanded payment referred to
above, and payable by the Borrower as a condition to the Borrower's right to
demand such assignment) or otherwise (including, without limitation, to the
extent not paid by the Borrower, any payments required pursuant to Section
5.04(b)). In addition, in the case of any amount demanded for payment by any
Lender (or such Participant) pursuant to Section 5.04(a) or (c), the Borrower
may, in the case of any such Lender, with the approval of the Administrative
Agent (which approval shall not be unreasonably withheld) and provided that no
Event of Default or Default shall then have occurred and be continuing,
terminate all (but not less than all) such Lender's Commitment and prepay all
(but not less than all) such Lender's Loans not so assigned, together with all
interest accrued thereon to the date of such prepayment and all fees, costs and
expenses and other amounts then owing by the Borrower to such Lender hereunder
and under any Promissory Notes made by the Borrower to such Lender, at any time
from and after such later occurring day in accordance with Sections 2.03 and
5.03 (but without the requirement stated therein for ratable treatment of the
other Lenders), if and only if, after giving effect to such termination and
prepayment, the sum of the aggregate principal amount of the Loans of all
Lenders then outstanding does not exceed the then remaining Commitments of the
Lenders. Notwithstanding anything set forth above in this subsection (h) to the
contrary, the Borrower shall not be entitled to compel the assignment by any
Lender demanding payment under Section 5.04(a) of its Commitment and Loans or
terminate and prepay the Commitment and Loans of such Lender if, prior to or
promptly following any such demand by the Borrower, such Lender shall have
changed or shall change, as the case may be, its Applicable Lending Office for
its Eurodollar Rate Loans so as to eliminate the further incurrence of such
increased cost. In furtherance of the foregoing, any such Lender demanding
payment or giving notice as provided above agrees to use reasonable efforts to
so change its Applicable Lending Office if, to do so, would not result in the
incurrence by such Lender of additional costs or expenses which it deems
material or, in the sole judgment of such Lender, be inadvisable for regulatory,
competitive or internal management reasons.
(i) Anything in this Section 11.07 to the contrary
notwithstanding, any Lender may assign and pledge all or any portion of its
Commitment and the Loans owing to it to any Federal Reserve Bank (and its
transferees) as collateral security pursuant to Regulation A of
64
70
the Board and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
SECTION 11.08. CONFIDENTIALITY. In connection with the negotiation and
administration of this Agreement and the other Loan Documents, the Borrower has
furnished and will from time to time furnish to the Agents, the Issuing Banks
and the Lenders (each, a "RECIPIENT") written information which is identified to
the Recipient when delivered as confidential (such information, other than any
such information which (i) was publicly available, or otherwise known to the
Recipient, at the time of disclosure, (ii) subsequently becomes publicly
available other than through any act or omission by the Recipient or (iii)
otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Borrower, being hereinafter referred to as "CONFIDENTIAL
INFORMATION"). The Recipient will not knowingly disclose any such Confidential
Information to any third party (other than to those persons who have a
confidential relationship with the Recipient), and will take all reasonable
steps to restrict access to such information in a manner designed to maintain
the confidential nature of such information, in each case until such time as the
same ceases to be Confidential Information or as the Borrower may otherwise
instruct. It is understood, however, that the foregoing will not restrict the
Recipient's ability to freely exchange such Confidential Information with its
Affiliates or with prospective participants in or assignees of the Recipient's
position herein, but the Recipient's ability to so exchange Confidential
Information shall be conditioned upon any such Affiliate's or prospective
participant's (as the case may be) entering into an agreement as to
confidentiality similar to this Section 11.08. It is further understood that the
foregoing will not prohibit the disclosure of any or all Confidential
Information if and to the extent that such disclosure may be required (1) by a
regulatory agency or otherwise in connection with an examination of the
Recipient's records by appropriate authorities, (2) pursuant to court order,
subpoena or other legal process or in connection with any proceeding, suit or
other action relating to any Loan Document or (3) otherwise, as required by law;
in the event of any required disclosure under clause (2) or (3), above, the
Recipient agrees to use reasonable efforts to inform the Borrower as promptly as
practicable to the extent not prohibited by law.
SECTION 11.09. Waiver of Jury Trial. THE BORROWER, THE AGENTS, THE
ISSUING BANKS AND THE LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and the Promissory Notes shall be governed by, and construed in
accordance with, the laws of the State of
New York (including Section 5-1401 of
the General Obligations Laws of the State of New York, but otherwise without
regard to conflicts of law principles). The Borrower, the Lenders, the Issuing
Banks and the Agents, each (i) irrevocably submits to the jurisdiction of any
New York State court or Federal court sitting in New York City in any action
arising out of any Loan Document, (ii) agrees that all claims in such action may
be decided in such court, (iii) waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum and (iv) consents to the service of
process by mail. A final judgment in any such action shall be conclusive and
65
71
may be enforced in other jurisdictions. Nothing herein shall affect the right of
any party to serve legal process in any manner permitted by law or affect its
right to bring any action in any other court.
SECTION 11.11. RELATION OF THE PARTIES; NO BENEFICIARY. No term,
provision or requirement, whether express or implied, of any Loan Document, or
actions taken or to be taken by any party thereunder, shall be construed to
create a partnership, association, or joint venture between such parties or any
of them. No term or provision of the Loan Documents shall be construed to confer
a benefit upon, or grant a right or privilege to, any Person other than the
parties hereto. The Borrower hereby acknowledges that neither any Agent nor any
Lender has any fiduciary relationship with or fiduciary duty to the Borrower
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Agents and the Lenders, on the one
hand, and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor.
SECTION 11.12. EXISTING BANKS' WAIVER, ACKNOWLEDGMENT AND RELEASE. The
Existing Banks hereby waive the three (3) Business Days' notice requirement for
termination of the "Commitments" (as defined in the Existing Credit Agreement)
under Section 2.03(a) of the Existing Credit Agreement.
SECTION 11.13. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement.
SECTION 11.14. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made herein and in the certificates pursuant
hereto shall be considered to have been relied upon by the Agents and the
Lenders and shall survive the making by the Lenders of the Extensions of Credit
and the execution and delivery to the Lenders of any Promissory Notes evidencing
the Extensions of Credit and shall continue in full force and effect so long as
any Promissory Note or any amount due hereunder is outstanding and unpaid or any
Commitment of any Lender has not been terminated.
[Signature pages follow.]
66
72
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CMS ENERGY CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
73
Commitment: BARCLAYS BANK PLC, individually as a
$50,700,000 Lender and as Administrative Agent and
Collateral Agent
By: /s/ Sydney X. Xxxxxx
------------------------------
Name: Sydney X. Xxxxxx
Title: Director
Signature Page to $450,000,000 Credit Agreement
74
Commitment: BANK OF AMERICA, N.A., individually as a
$34,500,000 a Lender and as a Co-Syndication Agent
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Managing Director
Signature Page to $450,000,000 Credit Agreement
75
Commitment: THE CHASE MANHATTAN BANK, individually
$34,500,000 as a Lender and as a Co-Syndication Agent
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
76
Commitment: CITIBANK, N.A., individually as a Lender
$34,500,000 and as a Documentation Agent
By: /s/ Xxxxx Xxxxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
77
Commitment: UNION BANK OF CALIFORNIA, N.A.,
$34,500,000 individually as a Lender and as a
Documentation Agent
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
78
Commitment: BNP PARIBAS
$28,500,000
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Director
Signature Page to $450,000,000 Credit Agreement
79
Commitment: BANK ONE, N.A.
$23,700,000
By: /s/ Xxxx X. Xxx
------------------------------
Name: Xxxx X. Xxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
80
Commitment: COMERICA BANK
$23,700,000
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
81
Commitment: CREDIT SUISSE FIRST BOSTON
$23,700,000
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
Signature Page to $450,000,000 Credit Agreement
82
Commitment: FLEET NATIONAL BANK
$23,700,000
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
Signature Page to $450,000,000 Credit Agreement
83
Commitment: AUSTRALIA AND NEW ZEALAND BANKING
$15,000,000 GROUP LIMITED
By: /s/ R. Xxxxx XxXxxxx
---------------------------------------
Name: R. Xxxxx XxXxxxx
Title: Head of Structured Finance &
Relationship Management-Americas
Signature Page to $450,000,000 Credit Agreement
84
Commitment: THE BANK OF NOVA SCOTIA
$15,000,000
By: /s/ F.C.H. Xxxxx
------------------------------
Name: F.C.H. Xxxxx
Title: Senior Manager Loan Operations
Signature Page to $450,000,000 Credit Agreement
85
Commitment: BANKERS TRUST COMPANY
$15,000,000
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
Signature Page to $450,000,000 Credit Agreement
86
Commitment: MICHIGAN NATIONAL BANK
$15,000,000
By: /s/ Xxxx Xxxx
------------------------------
Name: Xxxx Xxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
87
Commitment: THE ROYAL BANK OF SCOTLAND PLC
$15,000,000
By: /s/ Xxxxx XxXxxxx
------------------------------
Name: Xxxxx XxXxxxx
Title: Senior Vice President
Signature Page to $450,000,000 Credit Agreement
88
Commitment: SOCIETE GENERALE
$15,000,000
By: /s/ Xxxxxx Xxxxx
------------------------------
Name: Xxxxxx Xxxxx
Title: Director
Signature Page to $450,000,000 Credit Agreement
89
Commitment: SUMITOMO MITSUI BANKING CORPORATION
$15,000,000
By: /s/ Tamihiro Kawauchi
------------------------------
Name: Tamihiro Kawauchi
Title: Joint General Manager
Signature Page to $450,000,000 Credit Agreement
90
Commitment: TORONTO DOMINION (TEXAS), INC.
$15,000,000
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
91
Commitment: ARAB BANKING CORPORATION
$9,000,000
By: /s/ Xxxxx X. XxXxxxxx
------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Vice President
Signature Page to $450,000,000 Credit Agreement
92
Commitment: THE FUJI BANK, LIMITED
$9,000,000
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President & Group
Head
Signature Page to $450,000,000 Credit Agreement
93
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Barclays Bank PLC, as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention: ______________
Ladies and Gentlemen:
The undersigned,
CMS Energy Corporation (the "BORROWER"),
refers to the $450,000,000 Credit Agreement, dated as of June 18, 2001 (as
amended, modified or supplemented from time to time, the "CREDIT AGREEMENT", the
terms defined therein and not otherwise defined herein being used herein as
therein defined), among the Borrower, the Lenders named therein, Barclays Bank
PLC, as Administrative Agent and Collateral Agent, Bank of America, N.A. and The
Chase Manhattan Bank, as Co-Syndication Agents, and Citibank, N.A. and Union
Bank of California, as Documentation Agents, and hereby gives you notice,
irrevocably, pursuant to Section 3.01 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by Section 3.01(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ________ __,
20__.
(ii) The Type of Loans comprising the Proposed Borrowing is
[ABR Loans] [Eurodollar Rate Loans].
(iii) The aggregate amount of the Proposed Borrowing is
$________.
[(v) The initial Interest Period for each Loan made as part of
the Proposed Borrowing is ____ months.](1)
______________
(1) To be included for a Proposed Borrowing comprised of Eurodollar Rate Loans.
94
The undersigned hereby acknowledges that the delivery of this
Notice of Borrowing shall constitute a representation and warranty by the
Borrower that, on the date of the Proposed Borrowing, the statements contained
in Sections 6.02(a) and 6.03(a) of the Credit Agreement are true.
Very truly yours,
CMS ENERGY CORPORATION
By
------------------------------------------
Name:
Title:
95
EXHIBIT B
FORM OF NOTICE OF CONVERSION
[Date]
Barclays Bank PLC, as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention: ____________
Ladies and Gentlemen:
The undersigned,
CMS Energy Corporation (the "BORROWER"),
refers to the $450,000,000 Credit Agreement, dated as of June 18, 2001 (as
amended, modified or supplemented from time to time, the "CREDIT AGREEMENT", the
terms defined therein and not otherwise defined herein being used herein as
therein defined), among the Borrower, the Lenders named therein, Barclays Bank
PLC, as Administrative Agent and Collateral Agent, Bank of America, N.A. and The
Chase Manhattan Bank, as Co-Syndication Agents, and Citibank, N.A. and Union
Bank of California, as Documentation Agents, and hereby gives you notice,
irrevocably, pursuant to Section 3.02 of the Credit Agreement that the
undersigned hereby requests a Conversion under the Credit Agreement, and in that
connection sets forth below the information relating to such Conversion (the
"PROPOSED CONVERSION") as required by Section 3.02 of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is ________
__, 20__.
(ii) The Type of Loans comprising the Proposed Conversion is
[ABR Loans] [Eurodollar Rate Loans].
(iii) The aggregate amount of the Proposed Conversion is
$________.
(iv) The Type of Loans to which such Loans are proposed to be
Converted is [ABR Loans] [Eurodollar Rate Loans].
(v) The Interest Period for each Loan made as part of the
Proposed Conversion is ____ month(s).(1)
__________________
(1) Delete for ABR Loans.
96
The undersigned hereby certifies that the Borrower's request
for the Proposed Conversion is made in compliance with Sections 3.02, 3.03 and
3.04 of the Credit Agreement. The undersigned hereby acknowledges that the
delivery of this Notice of Conversion shall constitute a representation and
warranty by the Borrower that, on the date of the Proposed Conversion, [(i)] the
statements contained in Section 6.02(a) of the Credit Agreement are true and
[(ii) no Default [(other than a Default resulting from the failure of the
Borrower to comply with the ratio set forth in Section 8.01(j) of the Credit
Agreement)](2) has occurred and is continuing](3).
Very truly yours,
CMS ENERGY CORPORATION
By
----------------------------------
Name:
Title:
-----------------
(2) Include only if a Default has occurred and is continuing as the result of
the failure of the Borrower to comply with the ratio set forth in Section
8.01(j) of the Credit Agreement. In such case, a Conversion into Eurodollar Rate
Loans with an Interest Period not to exceed three months in duration is
permitted pursuant to Section 3.04(a)(vi) of the Credit Agreement.
(3) Delete if Conversion is into ABR Loans.
97
EXHIBIT C
FORM OF CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT, dated as of June 18, 2001, made by
CMS
ENERGY CORPORATION, a Michigan corporation (the "PLEDGOR"), to Barclays Bank PLC
("BARCLAYS"), as collateral agent (the "COLLATERAL AGENT") for the lenders (the
"LENDERS") parties to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
(1) Barclays, as Administrative Agent and Collateral Agent,
Bank of America, N.A. and The Chase Manhattan Bank, as Co-Syndication Agents,
and Citibank, N.A. and Union Bank of California, as Documentation Agents, and
the Lenders have entered into a $450,000,000 Credit Agreement, dated as of June
18, 2001 (said Agreement, as it may hereafter be amended or otherwise modified
from time to time, being the "CREDIT AGREEMENT", the terms defined therein and
not otherwise defined herein being used herein as therein defined), with the
Pledgor.
(2) Pursuant to Section 5.03(b) of the Credit Agreement, any
prepayments required by such subsection are to be applied to outstanding ABR
Loans up to the full amount thereof before they are applied, first, to
outstanding Eurodollar Rate Loans and, second, as cash collateral, pursuant to
this Agreement, to secure LC Outstandings.
(3) The cash collateral referenced in preliminary statement
(2), above, shall be deposited by the Collateral Agent in a special
non-interest-bearing cash collateral account (the "ACCOUNT") with the Collateral
Agent at its office at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No.
050797409 (or at such other office of the Collateral Agent as the Collateral
Agent may, from time to time, notify the Pledgor), in the name of the Pledgor
but under the sole control and dominion of the Collateral Agent and subject to
the terms of this Agreement.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor hereby agrees with the Collateral Agent for its
benefit and the ratable benefit of the Lenders as follows:
SECTION 1. PLEDGE AND ASSIGNMENT. The Pledgor hereby pledges
and assigns to the Collateral Agent for its benefit and the ratable benefit of
the Lenders, and grants to the Collateral Agent for its benefit and the ratable
benefit of the Lenders a security interest in, the following collateral (the
"COLLATERAL"):
(i) the Account, all funds held therein and all certificates
and instruments, if any, from time to time representing or evidencing
the Account;
(ii) all Investments (as hereinafter defined) from time to
time, and all certificates and instruments, if any, from time to time
representing or evidencing the Investments;
98
(iii) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Collateral Agent for or on behalf of the
Pledgor in substitution for or in addition to any or all of the then
existing Collateral;
(iv) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Collateral; and
(v) all proceeds of any and all of the foregoing Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures
the payment of all reimbursement obligations of the Pledgor now or hereafter
existing with respect to LC Outstandings, and all obligations of the Pledgor now
or hereafter existing under this Agreement (all such obligations of the Pledgor
being the "OBLIGATIONS"). Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts which constitute part of the
Obligations and would be owed by the Pledgor to the Collateral Agent or the
Lenders under the Credit Agreement and the Promissory Notes (if any) but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.
SECTION 3. DELIVERY OF COLLATERAL. All certificates or
instruments, if any, representing or evidencing the Collateral shall be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall have
the right, at any time upon the occurrence and during the continuance of an
Event of Default or a Default, in its discretion and without notice to the
Pledgor, to transfer to or to register in the name of the Collateral Agent or
any of its nominees any or all of the Collateral. In addition, the Collateral
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
SECTION 4. MAINTAINING THE ACCOUNT. So long as any Lender has
any Commitment under the Credit Agreement or interest thereon shall remain
unpaid:
(a) The Pledgor will maintain the Account with the Collateral
Agent.
(b) It shall be a term and condition of the Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Account and except as otherwise provided by
the provisions of Section 6 and Section 13, that no amount (including
interest on the Account, if any) shall be paid or released to or for
the account of, or withdrawn by or for the account of, the Pledgor or
any other Person (other than the Collateral Agent and the Lenders) from
the Account.
The Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
99
SECTION 5. INVESTING OF AMOUNTS IN THE ACCOUNT. If requested
by the Pledgor, the Collateral Agent will, subject to the provisions of Section
6 and Section 13, from time to time (a) invest amounts on deposit in the Account
in such Permitted Investments as the Pledgor may select and the Collateral Agent
may approve and (b) invest interest paid on the Permitted Investments referred
to in clause (a) above, and reinvest other proceeds of any such Permitted
Investments which may mature or be sold, in each case in such Permitted
Investments as the Pledgor may select and the Collateral Agent may approve (the
Permitted Investments referred to in clauses (a) and (b) above, being
collectively "INVESTMENTS"). Interest and proceeds that are not invested or
reinvested in Investments as provided above shall be deposited and held in the
Account.
SECTION 6. RELEASE OF AMOUNTS. So long as no Event of Default
or Default shall have occurred and be continuing, the Collateral Agent will pay
and release to the Pledgor or at its order, upon the request of the Pledgor, (a)
amounts of credit balance of the Account and of principal of any other
Collateral when matured or sold to the extent that (i) the sum of the credit
balance of the Account plus the aggregate outstanding principal amount of all
other Collateral exceeds (ii) the aggregate amount of LC Outstandings in respect
of all Letters of Credit and all other amounts owing by the Pledgor hereunder,
(b) all amounts in the Account if the Commitments under the Credit Agreement
exceed the aggregate amount of LC Outstandings in respect of all Letters of
Credit and all other amounts owing by the Pledgor hereunder and (c) all interest
and earnings on the Investments deposited and held in the Account.
SECTION 7. REPRESENTATIONS AND WARRANTIES. The Pledgor
represents and warrants as follows:
(a) The Pledgor is the legal and beneficial owner of the
Collateral free and clear of any lien, security interest, option or
other charge or encumbrance except for the security interest created by
this Agreement.
(b) The pledge and assignment of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Obligations.
(c) No consent of any other Person and no authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the
pledge and assignment by the Pledgor of the Collateral pursuant to this
Agreement or for the execution, delivery or performance of this
Agreement by the Pledgor, (ii) for the perfection or maintenance of the
security interest created hereby (including the first priority nature
of such security interest) or (iii) for the exercise by the Collateral
Agent of its rights and remedies hereunder.
(d) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
(e) The Pledgor has, independently and without reliance upon
the Collateral Agent or any Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement.
100
SECTION 8. FURTHER ASSURANCES. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
SECTION 9. TRANSFERS AND OTHER LIENS. The Pledgor agrees that
it will not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, or (ii)
create or permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Collateral, except for the
security interest under this Agreement.
SECTION 10. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. The
Pledgor hereby appoints the Collateral Agent the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time upon the occurrence and during the
continuance of an Event of Default or Default or otherwise to the extent that
the Collateral Agent shall reasonably deem any action to be necessary in order
to maintain its security interest in the Collateral, in the Collateral Agent's
discretion, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, indorse and collect
all instruments made payable to the Pledgor representing any interest payment,
dividend or other distribution in respect of the Collateral or any part thereof
and to give full discharge for the same.
SECTION 11. COLLATERAL AGENT MAY PERFORM. If the Pledgor fails
to perform any agreement contained herein, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Pledgor under Section 14.
SECTION 12. THE COLLATERAL AGENT'S DUTIES. The powers
conferred on the Collateral Agent hereunder are solely to protect its interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Collateral Agent or any
Lender has or is deemed to have knowledge of such matters, or as to the taking
of any necessary steps to preserve rights against any parties or any other
rights pertaining to any Collateral. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which the Collateral Agent accords its own property.
SECTION 13. REMEDIES UPON DEFAULT. If any Event of Default
shall have occurred and be continuing:
101
(a) The Collateral Agent may, without notice to the Pledgor
except as required by law and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Account against the
Obligations or any part thereof.
(b) The Collateral Agent may also exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code in effect in
the State of New York at that time (the "CODE") (whether or not the
Code applies to the affected Collateral), and may also, without notice
except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Collateral
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice to the
Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
(c) Any cash held by the Collateral Agent as Collateral and
all cash proceeds received by the Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Collateral Agent, be held
by the Collateral Agent as collateral for, and/or then or at any time
thereafter be applied (after payment of any amounts payable to the
Collateral Agent pursuant to Section 14) in whole or in part by the
Collateral Agent for the ratable benefit of the Lenders against, all or
any part of the Obligations in such order as the Collateral Agent shall
elect. Any surplus of such cash or cash proceeds held by the Collateral
Agent and remaining after payment in full of all the Obligations shall
be paid over to the Pledgor or to whomsoever may be lawfully entitled
to receive such surplus.
SECTION 14. EXPENSES. The Pledgor will upon demand pay to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent or the Lenders
hereunder or (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.
SECTION 15. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Pledgor
herefrom shall in any event be effective unless the same shall be in writing and
signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 16. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, facsimile, telex or cable
102
communication) and mailed, telegraphed, telecopied, telexed, cabled or
delivered, if to the Pledgor, at its address at Fairlane Plaza South, 000 Xxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxxx, Esq., with a copy to Xxxxx X. Xxxxxxxxxxx, Vice President, Investor
Relations and Treasurer, at the same address, and if to the Collateral Agent, at
its address specified in the Credit Agreement, or, as to either party, at such
other address as shall be designated by such party in a written notice to the
other party. All such notices and communications shall, when mailed,
telegraphed, telecopied, telexed or cabled, be effective five days after when
deposited in the mails, or when delivered to the telegraph company, telecopied,
confirmed by telex answerback or delivered to the cable company, respectively.
SECTION 17. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER
CREDIT AGREEMENT. This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Obligations and all other amounts payable under
this Agreement and (y) the expiration or termination of the Commitments under
the Credit Agreement, (ii) be binding upon the Pledgor, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Collateral Agent, the Lenders and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Loans owing to it and any Promissory Notes
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein or
otherwise, subject, however, to the provisions of Article X (concerning the
Agents) and Section 11.07 of the Credit Agreement. Upon the later of the payment
in full of the Obligations and all other amounts payable under this Agreement
and the expiration or termination of the Commitments under the Credit Agreement,
the security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Pledgor. Upon any such termination, the
Collateral Agent will, at the Pledgor's expense, return to the Pledgor such of
the Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof and execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
SECTION 18. GOVERNING LAW; TERMS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that perfection of the security interest hereunder, or
remedies hereunder, in respect of any particular Collateral are governed by the
laws of a jurisdiction other than the State of New York. Unless otherwise
defined herein or in the Credit Agreement, terms defined in Article 9 of the
Code are used herein as therein defined.
103
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
CMS ENERGY CORPORATION
By
---------------------------------------
Name:
Title:
ACCEPTED AND AGREED:
BARCLAYS BANK PLC,
as Collateral Agent
By
--------------------------------
Name:
Title:
104
EXHIBIT D
FORM OF OPINION
OF COUNSEL FOR THE BORROWER
June 18, 2001
To: Each of the Lenders parties to the Credit
Agreements referred to below, Barclays Bank PLC,
as a Administrative Agent and Collateral
Agent under the Credit Agreements, and the
Co-Syndication Agents and Documentation Agents
named therein
Ladies and Gentlemen:
This letter is furnished to you pursuant to (i) Section
6.01(a)(viii)(A) of the $300,000,000 Credit Agreement, dated as of June 18, 2001
(the "THREE YEAR CREDIT AGREEMENT"), among
CMS Energy Corporation (the
"BORROWER"), the Banks parties thereto and the other Lenders from time to time
parties thereto (the "LENDERS"), Barclays Bank PLC ("BARCLAYS"), as
Administrative Agent and as Collateral Agent, Bank of America, N.A. and The
Chase Manhattan Bank, as Co-Syndication Agents (the "CO-SYNDICATION AGENTS"),
and Citibank, N.A. and Union Bank of California, as Documentation Agents (the
"DOCUMENTATION AGENTS") and (ii) Section 6.01(a)(viii)(A) of the $450,000,000
Credit Agreement, dated as of June 18, 2001 (the "364 DAY CREDIT AGREEMENT" and,
together with the Three Year Credit Agreement, the "CREDIT AGREEMENTS"), among
the Borrower, the Lenders, Barclays, as Administrative Agent and as Collateral
Agent, the Co-Syndication Agents and the Documentation Agents. Capitalized terms
not defined herein have the meanings ascribed thereto in the Credit Agreements
and the other Loan Documents (as defined in the Credit Agreements).
I am Assistant General Counsel of the Borrower and I, or an
attorney or attorneys under my general supervision, have represented the
Borrower in connection with the preparation, execution and delivery of, and the
initial Extension of Credit made under, the Credit Agreements and other Loan
Documents.
In that capacity, I, or an attorney or attorneys under my
general supervision, have examined:
(a) The Credit Agreements;
(b) The Cash Collateral Agreements executed in connection
with the Credit Agreements;
(c) The Issuing Bank Agreements executed in connection
with the Credit Agreements;
105
(d) The Restated Articles of Incorporation of the
Borrower and all amendments thereto (the "CHARTER");
(e) The bylaws of the Borrower and all amendments thereto
(the "BYLAWS"); and
(f) The Promissory Notes executed and delivered by the
Borrower on the date hereof.
In addition, I, or an attorney or attorneys under my general
supervision, have examined the originals, or copies certified to my
satisfaction, of such other corporate records of the Borrower, certificates of
public officials and of officers of the Borrower, and agreements, instruments
and other documents, as I have deemed necessary as a basis for the opinions
expressed below. As to various questions of fact material to such opinions, I
have, when relevant facts were not independently established by me, relied upon
the representations of officers of the Borrower in the Loan Documents, and upon
certificates of the Borrower or its officers or of public officials.
I have assumed (i) the due execution and delivery, pursuant to
due authorization, of each document referred to in clauses (a), (b) and (c)
above by all parties to such document (other than the Borrower), (ii) the
authenticity of all such documents submitted to us as originals, (iii) the
genuineness of all signatures (other than those of the Borrower), and (iv) the
conformity to the originals of all such documents submitted to us as copies.
Based upon the foregoing and upon such investigation as we
have deemed necessary, I am of the following opinion:
1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Michigan.
2. The execution, delivery and performance by the Borrower of
the Credit Agreements and the other Loan Documents to which it is, or
is to be, a party, are within the corporate power and authority of the
Borrower, have been duly authorized by all necessary corporate action,
and do not contravene (a) the Charter or the Bylaws, (b) any provision
of applicable law or (c) any legal or contractual restriction binding
on the Borrower or its properties; and such execution, delivery and
performance do not result in or require the creation or imposition of
any mortgage, deed of trust, pledge, or Lien upon or with respect to
any of its properties (other than under the Cash Collateral
Agreements). The Credit Agreements, the Cash Collateral Agreements and
the Promissory Notes have been duly executed and delivered on behalf of
the Borrower.
3. Except as disclosed in the Borrower's Annual Report on Form
10-K for the fiscal year ended December 31, 2000, the Borrower's
Quarterly Report on Form 10-Q for the period ended March 31, 2001 and
the Current Report on Form 8-K filed by the Borrower on May 17, 2001,
there are no pending or threatened actions or proceedings against the
Borrower or its properties before any court, governmental agency or
arbitrator, that could, if adversely determined, reasonably be expected
to materially adversely affect the financial condition, properties,
business or operations of the
106
Borrower, the legality, validity or enforceability of any Credit
Agreement or any other Loan Document to which the Borrower is, or is to
be, a party, or the validity, enforceability, perfection or priority of
any Lien purported to be granted by or under any Cash Collateral
Agreement.
4. No authorization or approval or other action by, and no
notice to or filing with, any Michigan governmental authority or
regulatory body (including, without limitation, the Michigan Public
Service Commission) is required for (a) the valid execution, delivery
and performance by the Borrower of the Credit Agreements and the other
Loan Documents to which it is, or is to be, a party or (b) the creation
of any Lien purported to be granted or created pursuant to any Cash
Collateral Agreement.
5. In any action or proceeding arising out of or relating to
any Credit Agreement or any other Loan Document to which the Borrower
is, or is to be, a party in any Michigan state court or any Federal
court sitting in the State of Michigan, such court would recognize and
give effect to the provisions of such Credit Agreement or any other
Loan Document, as the case may be, wherein the parties thereto agree
that such Credit Agreement or such other Loan Document, as the case may
be, shall be governed by, and construed in accordance with, the laws of
the State of New York, except in the case of those provisions set forth
in the Credit Agreements and the other Loan Documents the enforcement
of which would contravene a fundamental policy of the State of
Michigan. In the course of our review of the Credit Agreements and the
other Loan Documents, nothing has come to my attention to indicate that
any of such provisions would do so.
The opinions expressed herein are limited to the laws of the
State of Michigan and the Federal laws of the United States of America.
I consent to the reliance on this opinion by Sidley Xxxxxx
Xxxxx & Xxxx in their opinion to you of even date herewith delivered pursuant to
Section 6.01(a)(viii)(B) of each Credit Agreement. Except as otherwise specified
herein, this opinion is being delivered solely for the benefit of the parties to
whom it is addressed. Accordingly, it may not be quoted, filed with any
governmental authority or otherwise circulated or utilized for any other purpose
without my prior written consent.
Very truly yours,
107
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE
ADMINISTRATIVE AGENT
June 18, 2001
To: Each of the Lenders parties to the Credit
Agreements referred to below, Barclays Bank
PLC, as a Administrative Agent and
Collateral Agent under the Credit
Agreements, and the Co-Syndication Agents
and Documentation Agents named therein
Re: CMS Energy Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to Barclays Bank
PLC, individually and as Administrative Agent, in connection with the execution
and delivery of, and the making of the initial Extensions of Credit on this date
under, (i) the $300,000,000 Credit Agreement, dated as of June 18, 2001 (the
"THREE YEAR CREDIT AGREEMENT"), among CMS Energy Corporation (the "BORROWER"),
the Banks parties thereto and the other Lenders from time to time parties
thereto (the "LENDERS"), Barclays Bank PLC ("BARCLAYS"), as Administrative Agent
and as Collateral Agent, Bank of America, N.A. and The Chase Manhattan Bank, as
Co-Syndication Agents (the CO-SYNDICATION AGENTS"), and Citibank, N.A. and Union
Bank of California, as Documentation Agents (the "DOCUMENTATION AGENTS") and
(ii) the $450,000,000 Credit Agreement, dated as of June 18, 2001 (the "364 DAY
CREDIT AGREEMENT" and, together with the Three Year Credit Agreement, the
"CREDIT AGREEMENTS"), among the Borrower, the Lenders, Barclays, as
Administrative Agent and as Collateral Agent, the Co-Syndication Agents and the
Documentation Agents. Terms defined in the Credit Agreement are used herein as
therein defined.
In this connection, we have examined the following documents:
1. a counterpart of each Credit Agreement, executed by
the parties thereto; and
2. the other documents furnished to the Administrative
Agent pursuant to Section 6.01(a) of each Credit
Agreement, including (without limitation) the opinion
of Xxxxxxx X. XxxXxxxxx, Assistant General Counsel of
the Borrower.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing such
documents and the conformity to the originals of all such documents submitted to
us as copies. We have further assumed that you have evaluated,
108
and are satisfied with, the creditworthiness of the Borrower and the business
and financial terms evidenced by the Loan Documents. We have relied, as to
factual matters, on the documents we have examined.
To the extent that our opinions expressed below involve
conclusions as to matters governed by law other than the law of the State of New
York, we have relied upon the opinion, dated the date hereof, of Xxxxxxx X.
XxxXxxxxx, Assistant General Counsel of the Borrower, and have assumed without
independent investigation the correctness of the matters set forth therein.
Based upon and subject to the foregoing, and subject to the
qualifications set forth below, we are of the following opinion:
1. The Credit Agreements, the Cash Collateral Agreements, the
Issuing Bank Agreements and the Promissory Notes delivered on the date
hereof pursuant to Section 6.01(a) of the Credit Agreements are the
legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.
2. Each Cash Collateral Agreement will, upon the deposit of
cash with the Collateral Agent pursuant thereto, create a valid
security interest in the Collateral (as defined therein, but excluding
the Account (as defined therein) and any other type of Collateral that
is not subject to Article 9 of the UCC) securing payment of the
Obligations (as defined therein).
Our opinion is subject to the following qualifications:
(a) The enforceability of the Borrower's obligations under the
Credit Agreements, the Cash Collateral Agreements, the Issuing Bank
Agreements and the Promissory Notes is subject to the effect of any
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar law affecting creditors' rights
generally.
(b) The enforceability of the Borrower's obligations under the
Credit Agreements, the Cash Collateral Agreements, the Issuing Bank
Agreements and the Promissory Notes is subject to the effect of general
principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law). Such
principles of equity are of general application, and, in applying such
principles, a court, among other things, might not allow a contracting
party to exercise remedies in respect of a default deemed immaterial,
or might decline to order an obligor to perform covenants.
(c) We note further that, in addition to the application of
equitable principles described above, courts have imposed an obligation
on contracting parties to act reasonably and in good faith in the
exercise of their contractual rights and remedies, and may also apply
public policy considerations in limiting the right of parties seeking
to obtain indemnification under circumstances where the conduct of such
parties is determined to have constituted negligence.
109
(d) We express no opinion herein as to (i) Section 11.05 of
either Credit Agreement, (ii) the enforceability of provisions
purporting to grant to a party conclusive rights of determination,
(iii) the availability of specific performance or other equitable
remedies, (iv) the enforceability of rights to indemnity under federal
or state securities laws or (v) the enforceability of waivers by
parties of their respective rights and remedies under law. In addition,
our opinion in paragraph 1 above is subject to the further
qualification that certain provisions of the Cash Collateral Agreements
are or may be unenforceable in whole or in part under the laws of the
State of New York, but the inclusion of such provisions does not affect
the validity of the Cash Collateral Agreements and each Cash Collateral
Agreement contains adequate provisions for the practical realization of
the rights and benefits afforded thereby, except for the economic
consequences of any delay which may be imposed thereby or result
therefrom.
(e) With respect to the opinions set forth in paragraph 2
above, we have assumed that the Borrower has not granted or permitted,
nor does there otherwise exist, any execution or attachment on any of
the Collateral or any other Lien therein or thereon which does not
require steps for perfection under the Uniform Commercial Code of any
jurisdiction to be enforceable against third parties.
(f) We express no opinion herein as to:
(i) the Borrower's rights in or title to any
Collateral, or the authenticity or enforceability thereof;
(ii) the perfection or priority of any security
interests.
(g) Our opinions expressed above are limited to the law of the
State of New York, and we do not express any opinion herein concerning
any other law.
The foregoing opinion is solely for your benefit and may not
be relied upon by any other person or entity, other than any Person that may
become a Lender under either Credit Agreement after the date hereof.
Very truly yours,
110
EXHIBIT F
COMPUTATIONS USED BY BORROWER
IN DETERMINING COMPLIANCE WITH COVENANTS
CONTAINED IN SECTIONS 8.01(I) AND 8.01(J)
(Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed thereto in the $450,000,000 Credit Agreement, dated as of June 18,
2001, among CMS Energy Corporation, the Banks named therein, Barclays Bank PLC,
as Administrative Agent and as Collateral Agent, Bank of America, N.A. and The
Chase Manhattan Bank, as Co-Syndication Agents, and Citibank, N.A. and Union
Bank of California, as Documentation Agents.)
I. SECTION 8.01(i) (Consolidated Leverage Ratio)
(i) Consolidated Debt
(a) Debt of the Borrower (See worksheet set
forth on Schedule 1 hereto), plus $
--------
(b) Aggregate debt of the Consolidated Subsidiaries (as
such term is construed in accordance with GAAP), less $
--------
(c) Project Finance Debt of the Borrower and the
Consolidated Subsidiaries $
--------
Total Consolidated Debt $
--------
(ii) Consolidated EBITDA
(a) Pretax Operating Income(1) $
--------
(b) Consolidated depreciation, depletion and amortization
of the Borrower and the Consolidated Subsidiaries $
--------
(c) Consolidated non-cash write-offs contained in
pre-tax operating income of the Borrower and
the Consolidated Subsidiaries $
--------
Total Consolidated EBITDA $
--------
(iii) Consolidated Leverage Ratio (i/ii)
--------
Maximum Ratio - Section 8.01(i)
--------
--------------
(1) Shall not include any operating income attributable to revenues of
Consumers which are dedicated to the repayment of the Securitized Bonds.
111
II. SECTION 8.01(j) (Cash Dividend Coverage Ratio)
(i) Cash Dividend Income
(a) Cash Dividend Income $
--------
(b) 25% of Equity Distributions received by the
Borrower (not to exceed $10,000,000) $
--------
(c) All amounts received by the Borrower from its
Subsidiaries and Affiliates constituting
reimbursement of interest expense (including
commitment, guaranty and letter of credit fees) paid
by the Borrower on behalf of any such Subsidiary or
Affiliate $
--------
Total Cash Dividend Income $
--------
(ii) Interest expense (including commitment, guaranty and letter
of credit fees) accrued by the Borrower in respect of all Debt $
--------
(iii) Cash Dividend Income/Interest Expense Ratio ((i)/(ii))
--------
Minimum Ratio - Section 8.01(j)
--------
III. Project Finance Debt(2)
IV. Support Obligations(3)
V. Junior Subordinated Debt/Guaranties of Hybrid Preferred Securities(4)
VI. Other Hybrid Debt/Equity Securities(5)
---------------
(2) Set forth all Project Finance Debt of any Consolidated Subsidiary and the
Borrower's Ownership Interest in such Consolidated Subsidiary.
(3) Set forth all Support Obligations of the Borrower of the types described in
clauses (iv) and (v) of the definition of Support Obligations (whether or not
each such Support Obligation or the primary obligation so supported is fixed,
conclusively determined or reasonably quantifiable) unless such Support
Obligation is previously disclosed as "CONSOLIDATED DEBT" pursuant to Section I
or II above.
(4)Set forth all Junior Subordinated Debt owned by any Hybrid Preferred
Securities Subsidiary and all guaranties by the Borrower of payments with
respect to any Hybrid Preferred Securities.
(5) Set forth any hybrid debt/equity securities (other than Junior Subordinated
Debt and Hybrid Preferred Securities) issued by the Borrower or any Consolidated
Subsidiary and the amount of the Net Proceeds from each such issuance.
112
Schedule 1
to
Exhibit F
Computation of Aggregate Debt of the Borrower
Aggregate Debt of the Borrower shall include (without duplication) any and all
indebtedness, liabilities and other monetary obligations of the Borrower
(whether for principal, interest, fees, costs, expenses or otherwise, and
contingent or otherwise):(6)
(i) for borrowed money or evidenced by bonds,
debentures, notes or other similar instruments $
--------
(ii) to pay the deferred purchase price of property or services
(except trade accounts payable arising in the ordinary
course of business which are not overdue) $
--------
(iii) as lessee under leases which shall have been or should be,
in accordance with GAAP, recorded as capital leases $
--------
(iv) under reimbursement or similar agreements with respect to
letters of credit issued thereunder $
--------
(v) under any interest rate swap, "cap", "collar" or other hedging
agreements; provided, however, for purposes of the calculation
of Debt for this clause only, the actual amount of Debt of the
Borrower shall be determined on a net basis to the extent such
agreements permit such amounts to be calculated on a net basis $
--------
(vi) to pay rent or other amounts under leases entered into in
connection with sale and leaseback transactions involving
assets of the Borrower being sold in connection therewith $
--------
(vii) arising from any accumulated funding deficiency (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as
amended) for a Plan $
--------
(viii) direct or indirect guaranties in respect of, and obligations
to purchase or otherwise acquire, or otherwise to warrant or
hold harmless, pursuant to a legally binding agreement, a
creditor against loss in respect of, Debt of others referred
to in clauses (i) through (vii) above $
--------
--------------------
(6) See the definition of "Consolidated Debt" contained in the Credit Agreement
for certain exclusions from Debt of the Borrower.
113
(ix) other guaranty or similar financial obligations in respect
of the performance of others, including, without limitation,
any financial obligation, contingent or otherwise, of the
Borrower guaranteeing or otherwise supporting any Debt
or other obligation of any other Person in any manner,
whether directly or indirectly, and including, without
limitation, any obligation of such Person, direct or indirect $
--------
(A) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase
(or to advance or supply funds for the purchase of)
any security for the payment of such Debt $
--------
(B) to purchase property, securities or services for
the purpose of assuring the owner of such Debt
of the payment of such Debt $
--------
(C) to maintain working capital, equity capital,
available cash or other financial statement condition
of the primary obligor so as to enable the primary
obligor to pay such Debt $
--------
(D) to provide equity capital under or in respect of
equity subscription arrangements (to the extent that
such obligation to provide equity capital does not
otherwise constitute Debt)(7) $
--------
(E) to perform, or arrange for the performance of,
any non-monetary obligations or non-funded
debt payment obligations of the primary obligor(8) $
--------
(F) Other $
--------
Total of Debt of the Borrower $
---------
-----------------
(7) Set forth only the net amount of certain Support Obligations provided by the
Borrower in connection with the purchases and sales of natural gas, natural gas
liquids, gas condensates, electricity, oil, propane, coal, any other commodity,
weather derivatives or any derivative instrument by MS&T, as detailed in Annex A
to this Schedule 1.
(8) For purposes of this clause do not include Support Obligations if such
Support Obligation or the primary obligation so supported is not fixed or
conclusively determined or is not otherwise reasonably quantifiable as of the
date of determination.
114
Annex A
to
Schedule 1
Details Regarding MS&T Transactions(9)
Support Obligations Relating to Obligations
Aggregate amount of Support Obligations provided by the Borrower in
respect of MS&T's obligations under any Covering Transaction
(a) [List each such Support Obligation] $________
(b) $________
(c) $________
(d) $________
Less:
Aggregate amount of any Support Obligations provided by any
Counterparty Guarantor or any irrevocable letter of credit issued for
the account of any Counterparty or Counterparty Guarantor
(a) [List each such Support Obligation or
letter of credit that relates to the
corresponding subsection above] $________
(b) $________
(c) $________
(d) $________
_____________
(9) See subsection (d) of the definition of "Consolidated Debt" contained in the
Credit Agreement for the specific requirements of any offsetting Support
Obligations.
115
EXHIBIT G
FORM OF LENDER ASSIGNMENT
Dated _______ ___, ____
Reference is made to the $450,000,000 Credit Agreement, dated
as of June 18, 2001 (said Agreement, as it may hereafter be amended or otherwise
modified from time to time, being the "CREDIT AGREEMENT"), the terms defined
therein and not otherwise defined herein being used herein as therein defined),
among the Borrower, the Lenders named therein, Barclays Bank PLC, as
Administrative Agent and as Collateral Agent, Bank of America, N.A. and The
Chase Manhattan Bank, as Co-Syndication Agents, and Citibank, N.A. and Union
Bank of California, as Documentation Agents. Pursuant to the Credit Agreement,
________________ (the "ASSIGNOR") has committed to make loans ("LOANS") to the
Borrower[, which Loans are evidenced by a promissory note (the "NOTE") issued by
the Borrower to the Assignor].
The Assignor and ________________ (the "ASSIGNEE") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the date hereof which represents the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the Credit Agreement
(the "ASSIGNED INTEREST"), including, without limitation, such interest in the
Assignor's Commitment[,] [and] the Loans owing to the Assignor [and the Note
held by the Assignor]. After giving effect to such sale and assignment, the
Assignee's Commitments and the amount of the Loans owing to the Assignee in the
aggregate will be as set forth in Section 2 of Schedule 1. The effective date of
this sale and assignment shall be the date specified in Section 3 of Schedule 1
(the "EFFECTIVE DATE").
2. On ____________ ___, 20___, the Assignee will pay to the
Assignor, in same day funds, at such address and account as the Assignor shall
advise the Assignee, $____________, and (subject to the satisfaction of the
requirements set forth in Section 11.07(d) of the Credit Agreement) the sale and
assignment contemplated hereby shall thereupon become effective as of the
Effective Date. From and after the Effective Date, the Assignor agrees that the
Assignee shall be entitled to all rights, powers and privileges of the Assignor
under the Credit Agreement [and the Note] to the extent of the Assigned
Interest, including without limitation (i) the right to receive all payments in
respect of the Assigned Interest for the period from and after the Effective
Date, whether on account of principal, interest, fees, indemnities in respect of
claims arising after the Effective Date, increased costs, additional amounts or
otherwise, (ii) the right to vote and to instruct the Agents under the Credit
Agreement according to its Percentage based on the Assigned Interest, (iii) the
right to set-off and to appropriate and apply deposits of the Borrower as set
forth in the Credit Agreement and (iv) the right to receive notices, requests,
demands and other communications. The Assignor agrees that it will promptly
remit to the Assignee any amount received by it in respect of the Assigned
Interest (whether from the Borrower, any Agent or otherwise) in the same funds
in which such amount is received by the Assignor.
116
3. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) represents and warrants to the
Assignee and the Administrative Agent that it has duly executed and delivered
this Assignment and that the execution, delivery and performance by the Assignor
of this Assignment have been duly authorized by all necessary action (corporate
or otherwise). Except as specified in this Section 3, the assignment of the
Assigned Interest contemplated hereby shall be without recourse to the Assignor.
4. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 7.01(e)(i) thereof and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and purchase the Assigned Interest, (ii) agrees that it
will, independently and without reliance upon the Assignor and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, (iii) confirms that it satisfies the requirements of an Eligible
Assignee, (iv) appoints and authorizes each Agent to take such action as agent
on its behalf and to exercise such powers under the Loan Documents as are
delegated to each Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender and (vi) represents and warrants
to the Assignor and the Administrative Agent that it has duly executed and
delivered this Assignment and that the execution, delivery and performance by
the Assignor of this Assignment have been duly authorized by all necessary
action (corporate or otherwise).
5. This Assignment may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
6. This Assignment shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
117
Schedule 1
to
Assignment Agreement
Dated ____________ ___, 20___
Section 1.
Percentage Interest: ______%
Section 2.
Assignee's Commitment: $__________
Aggregate Outstanding Principal Amount of Loans owing
to the Assignee: $__________
Section 3.
Effective Date:
________ ___, 20___
[NAME OF ASSIGNOR]
By:__________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By:__________________________________
Name:
Title:
Consented to
CMS ENERGY CORPORATION(1)
By:____________________________
Name:
Title:
BARCLAYS BANK PLC,
as Administrative Agent
By:____________________________
Name:
Title:
______________________
(1) Consent of the Borrower and the Administrative Agent is required for all
assignments except for any assignment by a Lender to any of its Affiliates or to
any other Lender or any of its Affiliates.
118
EXHIBIT H
TERMS OF SUBORDINATION
(Junior Subordinated Debt)
ARTICLE ____
SUBORDINATION
Section ___.1 Applicability of Article; Securities
Subordinated to Senior Indebtedness. (a) This Article ____ shall apply only to
the Securities of any series which, pursuant to Section ___, are expressly made
subject to this Article. Such Securities are referred to in this Article ____ as
"Subordinated Securities."
(b) The Issuer covenants and agrees, and each Holder of
Subordinated Securities by his acceptance thereof likewise covenants and agrees,
that the indebtedness represented by the Subordinated Securities and the payment
of the principal and interest, if any, on the Subordinated Securities is
subordinated and subject in right, to the extent and in the manner provided in
this Article, to the prior payment in full of all Senior Indebtedness.
"Senior Indebtedness" means the principal of and premium, if
any, and interest on the following, whether outstanding on the date hereof or
thereafter incurred, created or assumed: (i) indebtedness of the Issuer for
money borrowed by the Issuer (including purchase money obligations) or evidenced
by debentures (other than the Subordinated Securities), notes, bankers'
acceptances or other corporate debt securities, or similar instruments issued by
the Issuer; (ii) all capital lease obligations of the Issuer; (iii) all
obligations of the Issuer issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Issuer and all obligations of
the Issuer under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) obligations with
respect to letters of credit; (v) all indebtedness of others of the type
referred to in the preceding clauses (i) through (iv) assumed by or guaranteed
in any manner by the Issuer or in effect guaranteed by the Issuer; (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons secured by any lien on any property or asset of the Issuer (whether or
not such obligation is assumed by the Issuer), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Subordinated Notes, as the case may be, including all other debt securities and
guaranties in respect of those debt securities, issued to any other trusts,
partnerships or other entities affiliated with the Issuer which act as a
financing vehicle of the Issuer in connection with the issuance of preferred
securities by such entity or other securities which rank pari passu with, or
junior to, the Preferred Securities, and (2) any indebtedness between or among
the Issuer and its affiliates; and/or (vii) renewals, extensions or refundings
of any of the indebtedness referred to in the preceding clauses unless, in the
case of any particular indebtedness, renewal, extension or refunding, under the
express provisions of the instrument creating or evidencing the same or the
assumption or guarantee of the same, or pursuant to which the same is
outstanding, such indebtedness or such renewal, extension or refunding thereof
is not superior in right of payment to the Subordinated Securities.
119
This Article shall constitute a continuing obligation to all
Persons who, in reliance upon such provisions become holders of, or continue to
hold, Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are made obligees hereunder and
they and/or each of them may enforce such provisions.
Section ___.2 Issuer Not to Make Payments with Respect to
Subordinated Securities in Certain Circumstances. (a) Upon the maturity of any
Senior Indebtedness by lapse of time, acceleration or otherwise, all principal
thereof and premium and interest thereon shall first be paid in full, or such
payment duly provided for in cash in a manner satisfactory to the holders of
such Senior Indebtedness, before any payment is made on account of the principal
of, or interest on, Subordinated Securities or to acquire any Subordinated
Securities or on account of any sinking fund provisions of any Subordinated
Securities (except payments made in capital stock of the Issuer or in warrants,
rights or options to purchase or acquire capital stock of the Issuer, sinking
fund payments made in Subordinated Securities acquired by the Issuer before the
maturity of such Senior Indebtedness, and payments made through the exchange of
other debt obligations of the Issuer for such Subordinated Securities in
accordance with the terms of such Subordinated Securities, provided that such
debt obligations are subordinated to Senior Indebtedness at least to the extent
that the Subordinated Securities for which they are exchanged are so
subordinated pursuant to this Article ____).
(b) Upon the happening and during the continuation of any
default in payment of the principal of, or interest on, any Senior Indebtedness
when the same becomes due and payable or in the event any judicial proceeding
shall be pending with respect to any such default, then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by the Issuer with respect to the principal of, or
interest on, Subordinated Securities or to acquire any Subordinated Securities
or on account of any sinking fund provisions of Subordinated Securities (except
payments made in capital stock of the Issuer or in warrants, rights, or options
to purchase or acquire capital stock of the Issuer, sinking fund payments made
in Subordinated Securities acquired by the Issuer before such default and notice
thereof, and payments made through the exchange of other debt obligations of the
Issuer for such Subordinated Securities in accordance with the terms of such
Subordinated Securities, provided that such debt obligations are subordinated to
Senior Indebtedness at least to the extent that the Subordinated Securities for
which they are exchanged are so subordinated pursuant to this Article ____).
(c) In the event that, notwithstanding the provisions of this
Section ___.2, the Issuer shall make any payment to the Trustee on account of
the principal of or interest on Subordinated Securities, or on account of any
sinking fund provisions of such Securities, after the maturity of any Senior
Indebtedness as described in Section ___.2(a) above or after the happening of a
default in payment of the principal of or interest on any Senior Indebtedness as
described in Section ___.2(b) above, then, unless and until all Senior
Indebtedness which shall have matured, and all premium and interest thereon,
shall have been paid in full (or the declaration of acceleration thereof shall
have been rescinded or annulled), or such default shall have been cured or
waived or shall have ceased to exist, such payment (subject to the provisions of
Sections ___.6 and ___.7) shall be held by the Trustee, in trust for the benefit
of, and shall be paid forthwith over and delivered to, the holders of such
Senior Indebtedness (pro rata as to each of such holders on the basis of the
respective amounts of Senior Indebtedness held by them) or
120
their representative or the trustee under the indenture or other agreement (if
any) pursuant to which such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all such
Senior Indebtedness remaining unpaid to the extent necessary to pay the same in
full in accordance with its terms, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness. The Issuer shall
give prompt written notice to the Trustee of any default in the payment of
principal of or interest on any Senior Indebtedness.
Section ___.3 Subordinated Securities Subordinated to Prior
Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization
of Issuer. Upon any distribution of assets of the Issuer in any dissolution,
winding up, liquidation or reorganization of the Issuer (whether voluntary or
involuntary, in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full of the principal thereof and
premium and interest due thereon, or provision shall be made for such
payment, before the Holders of Subordinated Securities are entitled to
receive any payment on account of the principal of or interest on such
Securities;
(b) any payment or distribution of assets of the Issuer of any
kind or character, whether in cash, property or securities (other than
securities of the Issuer as reorganized or readjusted or securities of
the Issuer or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in this Article ____ with respect to
Subordinated Securities, to the payment in full without diminution or
modification by such plan of all Senior Indebtedness), to which the
Holders of Subordinated Securities or the Trustee on behalf of the
Holders of Subordinated Securities would be entitled except for the
provisions of this Article ____ shall be paid or delivered by the
liquidating trustee or agent or other person making such payment or
distribution directly to the holders of Senior Indebtedness or their
representative, or to the trustee under any indenture under which
Senior Indebtedness may have been issued (pro rata as to each such
holder, representative or trustee on the basis of the respective
amounts of unpaid Senior Indebtedness held or represented by each), to
the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution or provision thereof to the holders of such Senior
Indebtedness; and
(c) in the event that notwithstanding the foregoing provisions
of this Section ___.3, any payment or distribution of assets of the
Issuer of any kind or character, whether in cash, property or
securities (other than securities of the Issuer as reorganized or
readjusted or securities of the Issuer or any other corporation
provided for by a plan of reorganization or readjustment the payment of
which is subordinate, at least to the extent provided in this Article
____ with respect to Subordinated Securities, to the payment in full
without diminution or modification by such plan of all Senior
Indebtedness), shall be received by the Trustee or the Holders of the
Subordinated Securities on account of principal of or interest on the
Subordinated Securities before all Senior Indebtedness is paid in full,
or effective provision made for its payment, such payment or
distribution
121
(subject to the provisions of Section ___.6 and ___.7) shall be
received and held in trust for and shall be paid over to the holders of
the Senior Indebtedness remaining unpaid or unprovided for or their
representative, or to the trustee under any indenture under which such
Senior Indebtedness may have been issued (pro rata as provided in
subsection (b) above), for application to the payment of such Senior
Indebtedness until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or distribution or
provision therefor to the holders of such Senior Indebtedness.
The Issuer shall give prompt written notice to the Trustee of
any dissolution, winding up, liquidation or reorganization of the Issuer.
The consolidation of the Issuer with, or the merger of the
Issuer into, another corporation or the liquidation or dissolution of the Issuer
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article ____ hereof shall not be deemed a
dissolution, winding up, liquidation or reorganization for the purposes of this
Section ___.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated such in
Article ____.
Section ___.4 Holders of Subordinated Securities to be
Subrogated to Right of Holders of Senior Indebtedness. Subject to the payment in
full of all Senior Indebtedness, the Holders of Subordinated Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Issuer applicable to the Senior
Indebtedness until all amounts owing on Subordinated Securities shall be paid in
full, and for the purposes of such subrogation no payments or distributions to
the holders of the Senior Indebtedness by or on behalf of the Issuer or by or on
behalf of the Holders of Subordinated Securities by virtue of this Article ____
which otherwise would have been made to the Holders of Subordinated Securities
shall, as between the Issuer, its creditors other than holders of Senior
Indebtedness and the Holders of Subordinated Securities, be deemed to be payment
by the Issuer to or on account of the Senior Indebtedness, it being understood
that the provisions of this Article ____ are and are intended solely for the
purpose of defining the relative rights of the Holders of the Subordinated
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
Section ___.5 Obligation of the Issuer Unconditional. Nothing
contained in this Article ____ or elsewhere in this Indenture or in any
Subordinated Security is intended to or shall impair, as among the Issuer, its
creditors other than holders of Senior Indebtedness and the Holders of
Subordinated Securities, the obligation of the Issuer, which is absolute and
unconditional, to pay to the Holders of Subordinated Securities the principal
of, and interest on, Subordinated Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of Subordinated Securities and
creditors of the Issuer other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the Holder of any
Subordinated Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article ____ of the holders of Senior Indebtedness in respect of
cash, property or securities of the Issuer received upon the exercise of any
such remedy. Upon any payment or distribution of assets of the Issuer referred
to in this Article ____,
122
the Trustee and Holders of Subordinated Securities shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or, subject to the provisions of Section ___ and ___, a certificate of
the receiver, trustee in bankruptcy, liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or the Holders of
Subordinated Securities, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article ____.
Nothing contained in this Article ____ or elsewhere in this
Indenture or in any Subordinated Security is intended to or shall affect the
obligation of the Issuer to make, or prevent the Issuer from making, at any time
except during the pendency of any dissolution, winding up, liquidation or
reorganization proceeding, and, except as provided in subsections (a) and (b) of
Section ___.2, payments at any time of the principal of, or interest on,
Subordinated Securities.
Section ___.6 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. The Issuer shall give prompt written notice to
the Trustee of any fact known to the Issuer which would prohibit the making of
any payment or distribution to or by the Trustee in respect of the Subordinated
Securities. Notwithstanding the provisions of this Article ____ or any provision
of this Indenture, the Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment or
distribution to or by the Trustee, unless at least two Business Days prior to
the making of any such payment, the Trustee shall have received written notice
thereof from the Issuer or from one or more holders of Senior Indebtedness or
from any representative thereof or from any trustee therefor, together with
proof satisfactory to the Trustee of such holding of Senior Indebtedness or of
the authority of such representative or trustee; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections ___
and ___, shall be entitled to assume conclusively that no such facts exist. The
Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a
representative or trustee on behalf of the holder) to establish that such notice
has been given by a holder of Senior Indebtedness (or a representative of or
trustee on behalf of any such holder). In the event that the Trustee determines,
in good faith, that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payments or
distribution pursuant of this Article ____, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, as to the extent to which
such Person is entitled to participate in such payment or distribution, and as
to other facts pertinent to the rights of such Person under this Article ____,
and if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment. The Trustee, however, shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness and nothing in this Article ____
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section ___.
Section ___.7 Application by Trustee of Monies or Government
Obligations Deposited with It. Money or Government Obligations deposited in
trust with the Trustee
123
pursuant to and in accordance with Section ____ shall be for the sole benefit of
Securityholders and, to the extent allocated for the payment of Subordinated
Securities, shall not be subject to the subordination provisions of this Article
____, if the same are deposited in trust prior to the happening of any event
specified in Section ___.2. Otherwise, any deposit of monies or Government
Obligations by the Issuer with the Trustee or any paying agent (whether or not
in trust) for the payment of the principal of, or interest on, any Subordinated
Securities shall be subject to the provisions of Section ___.1, ___.2 and ___.3
except that, if prior to the date on which by the terms of this Indenture any
such monies may become payable for any purposes (including, without limitation,
the payment of the principal of, or the interest, if any, on any Subordinated
Security) the Trustee shall not have received with respect to such monies the
notice provided for in Section ___.6, then the Trustee or the paying agent shall
have full power and authority to receive such monies and Government Obligations
and to apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary which may be received by it on or
after such date. This Section ___.7 shall be construed solely for the benefit of
the Trustee and paying agent and, as to the first sentence hereof, the
Securityholders, and shall not otherwise effect the rights of holders of Senior
Indebtedness.
Section ___.8 Subordination Rights Not Impaired by Acts or
Omissions of Issuer or Holders of Senior Indebtedness. No rights of any present
or future holders of any Senior Indebtedness to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Issuer or by any act or failure to act,
in good faith, by any such holders or by any noncompliance by the Issuer with
the terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Issuer may, at any time and
from time to time, without the consent of or notice to the Trustee or the
Holders of the Subordinated Securities, without incurring responsibility to the
Holders of the Subordinated Securities and without impairing or releasing the
subordination provided in this Article ____ or the obligations hereunder of the
Holders of the Subordinated Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection for such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Issuer, as the case may be, and any other
Person.
Section ___.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of Subordinated Securities by his
acceptance thereof authorizes and expressly directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article ____ and appoints the Trustee his
attorney-in-fact for such purpose, including in the event of any dissolution,
winding up, liquidation or reorganization of the Issuer (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise) the immediate filing of a claim for the unpaid balance
of his Subordinated Securities in the form required in said
124
proceedings and causing said claim to be approved. If the Trustee does not file
a proper claim or proof of debt in the form required in such proceeding prior to
30 days before the expiration of the time to file such claim or claims, then the
holders of Senior Indebtedness have the right to file and are hereby authorized
to file an appropriate claim for and on behalf of the Holders of said
Securities.
Section ___.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all of the rights
set forth in this Article ____ in respect of any Senior Indebtedness at any time
held by it to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Issuer, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article ____,
and no implied covenants or obligations with respect to the holders of such
Senior Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Sections ___.2 and ___.3,
the Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Holders of Subordinated Securities, the Issuer or
any other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article ____ or otherwise.
Section ___.11 Article ____ Not to Prevent Events of Defaults.
The failure to make a payment on account of principal or interest by reason of
any provision in this Article ____ shall not be construed as preventing the
occurrence of an Event of Default under Section ____.
125
EXHIBIT I
TERMS OF SUBORDINATION
(Guaranty of Hybrid Preferred Securities)
SECTION ___. This Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all other liabilities of the Guarantor and pari passu with any
guarantee now or hereafter entered into by the Guarantor in respect of the
securities representing common beneficial interests in the assets of the Issuer
or of any preferred or preference stock of any affiliate of the Guarantor.
