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EXHIBIT 4
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$1,000,000,000
CREDIT AGREEMENT
Dated as of June 27, 2000,
Among
CMS ENERGY CORPORATION
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
THE CHASE MANHATTAN BANK
as Administrative Agent and Collateral Agent
and
BANK OF AMERICA, N.A.
and
BARCLAYS BANK PLC
as Co-Syndication Agents
and
CITIBANK, N.A.
as Documentation Agent
----------------------------
CHASE SECURITIES INC.
as Advisor, Arranger and Book Manager
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms............................................................1
SECTION 1.02. Computation of Time Periods; Construction.......................................18
SECTION 1.03. Accounting Terms................................................................19
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments.................................................................19
SECTION 2.02. Fees............................................................................19
SECTION 2.03. Reduction of the Commitments....................................................19
SECTION 2.04. Computations of Outstandings....................................................20
ARTICLE III
LOANS
SECTION 3.01. Loans...........................................................................20
SECTION 3.02. Conversion of Loans.............................................................22
SECTION 3.03. Interest Periods................................................................22
SECTION 3.04. Other Terms Relating to the Making and Conversion of Loans......................22
SECTION 3.05. Repayment of Loans; Interest....................................................25
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. Issuing Banks...................................................................25
SECTION 4.02. Letters of Credit...............................................................26
SECTION 4.03. Issuing Bank Fees...............................................................26
SECTION 4.04. Reimbursement to Issuing Banks..................................................26
SECTION 4.05. Obligations Absolute............................................................27
SECTION 4.06. Liability of Issuing Banks and the Lenders......................................28
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 5.01. Payments and Computations.......................................................29
SECTION 5.02. Interest Rate Determination.....................................................30
SECTION 5.03. Prepayments.....................................................................30
SECTION 5.04. Yield Protection................................................................31
SECTION 5.05. Sharing of Payments, Etc........................................................32
SECTION 5.06. Taxes...........................................................................33
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Initial Extension of Credit.........................34
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TABLE OF CONTENTS
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SECTION 6.02. Conditions Precedent to Each Extension of Credit................................36
SECTION 6.03. Conditions Precedent to Certain Extensions of Credit............................37
SECTION 6.04. Reliance on Certificates........................................................38
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower..................................38
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants...........................................................41
SECTION 8.02. Negative Covenants..............................................................43
SECTION 8.03. Reporting Obligations...........................................................47
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default...............................................................50
SECTION 9.02. Remedies........................................................................52
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action.......................................................53
SECTION 10.02. Indemnification................................................................54
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc................................................................55
SECTION 11.02. Notices, Etc...................................................................55
SECTION 11.03. No Waiver of Remedies..........................................................56
SECTION 11.04. Costs, Expenses and Indemnification............................................56
SECTION 11.05. Right of Set-off...............................................................57
SECTION 11.06. Binding Effect.................................................................58
SECTION 11.07. Assignments and Participation..................................................58
SECTION 11.08. Confidentiality................................................................62
SECTION 11.09. Waiver of Jury Trial...........................................................62
SECTION 11.10. Governing Law; Submission to Jurisdiction......................................62
SECTION 11.11. Relation of the Parties; No Beneficiary........................................63
SECTION 11.12. Existing Banks' Waiver, Acknowledgment and Release.............................63
SECTION 11.13. Execution in Counterparts......................................................63
SECTION 11.14. Survival of Agreement..........................................................63
ii
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TABLE OF CONTENTS (cont'd)
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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 Michael D.VanHemert, Esq., counsel of the
Borrower
EXHIBIT E - Form of Opinion of Sidley & Austin, 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
SCHEDULE III Existing Letters of Credit
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CREDIT AGREEMENT
Dated as of June 27, 2000
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) The Chase Manhattan Bank ("CHASE"), as administrative agent (the
"ADMINISTRATIVE AGENT") and collateral agent (the "COLLATERAL
AGENT") for the Lenders hereunder, and
(iv) Bank of America, N.A. and Barclays Bank plc, as co-syndication
agents (the "CO-SYNDICATION AGENTS"), and Citibank, N.A., as
documentation agent (the "DOCUMENTATION AGENT").
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.
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"ABR LOAN" means a Loan that bears interest as provided in
Section 3.05(b)(i).
"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 the
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 plus 1% 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, (i) 0.50% per annum in the case of ABR Loans and
(ii) 1.50% per annum in the case of Eurodollar Rate Loans.
Notwithstanding the foregoing, each of the foregoing
Applicable Margins shall be (i) 1.00% per annum in the case of ABR
Loans and 2.00% per annum in the case of Eurodollar Rate Loans, in the
event that, and at all times during which, the Index Debt shall be
rated BB- (or its equivalent) or lower by any two of S&P, Fitch,
Moody's and D&P, provided that one of such two rating agencies is S&P
or Moody's, and (ii) 0.25% per annum in the case of ABR Loans and 1.25%
per annum in the case of Eurodollar Rate Loans, in the event that, and
at all times during which, the Index Debt shall be rated BBB- (or its
equivalent) or higher by any two of S&P, Fitch, Moody's and D&P,
provided that one of such two rating agencies is S&P or Moody's. 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
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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.
"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 Chase Securities Inc.
"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
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Expense shall exclude any costs otherwise included in interest expense
recognized on early retirement of debt.
"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.
"CLOSING DATE" means the date of the initial Borrowing
hereunder. All transactions contemplated by the Closing Date shall take
place on or before June 30, 2000, 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. "COMMITMENTS" means the total of
the Lenders' Commitments hereunder. The Commitments shall in no event
exceed $1,000,000,000.
"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
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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;
(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, Moody's and D&P (provided that one
of such two rating agencies is S&P or 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,
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(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; and
(e) Consolidated Debt shall not include any Project
Finance Debt of the Borrower or any Consolidated Subsidiary.
"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.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary whose accounts
are or are required to be consolidated with the accounts of the
Borrower in accordance with GAAP.
"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.
"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.
"D&P" means Duff & Phelps, Inc. or any successor thereto.
"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
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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 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
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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 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.
"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.
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"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, 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 July 2, 1997, among the Borrower, the lenders party thereto,
Chase, as Administrative Agent, and the other co-agents party thereto,
as the same may have been amended, restated, supplemented or otherwise
modified from time to time.
"EXISTING LETTERS OF CREDIT" means those letters of credit
identified on Schedule III hereto. The Existing Letters of Credit shall
each constitute a Letter of Credit hereunder.
"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.
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"FEE LETTER" has the meaning assigned to that term in Section
2.02(c).
"FITCH" means Fitch IBCA, 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 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
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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 January 13, 1998, the Seventh
Supplemental Indenture, dated as of January 25, 1999, the Eighth
Supplemental Indenture, dated as of February 3, 1999, and the Ninth
Supplemental Indenture, dated as of June 22, 1999, 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 (i) 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 and (ii) any other financial
institution that has issued an Existing Letter of Credit pursuant to an
Issuing Bank Agreement (provided, however, that unless such other
financial institution is a Lender hereunder, it shall not be permitted
to issue any Letters of Credit after the date hereof). As of the date
hereof, the Borrower has designated Chase 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).
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"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 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.
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"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 Moody's 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.
"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
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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 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
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<PAGE> 19
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).
"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 Chase 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,
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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.
"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 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.
"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,
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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.
"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 26,
2001 and (ii) the date of termination or reduction in whole of the
Commitments pursuant to Section 2.03 or 9.02.
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"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.
"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.
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.
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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.
SECTION 2.02. FEES.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee on the average daily amount of such
Lender's Available Commitment at the rate of 0.375% per annum, from the Closing
Date, 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, 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
Chase, such other fees as are provided for in that certain letter agreement,
dated May 12, 2000, among the Borrower, the Arranger and Chase (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.
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(b) On each date that the Borrower repurchases Senior Notes from any
Noteholder as the result of a Change in Control (as defined in the Indenture),
the Commitments of the Lenders shall automatically be ratably reduced by an
amount equal in the aggregate to the product of (i) the Commitments on such date
(whether used or unused) and (ii) the percentage obtained by dividing (A) the
aggregate principal amount of such Senior Notes being repurchased by (B) the
aggregate principal amount of the Senior Note Debt then outstanding.
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 to the unused
portion of any Lender's Commitment under this Agreement shall refer to such
Lender's Percentage of the unused Commitments hereunder.
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 1 Chase Manhattan
Plaza, 8th Floor, New York, New York, 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, to the Borrower at the Administrative Agent's
aforesaid address for general corporate purposes. Notwithstanding the
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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 (including after
assignment pursuant to Section 11.07) be represented by one or more Promissory
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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 total amount of the
Available Commitments on such date, after giving effect to all other
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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 more than fifteen (15) different Borrowings
comprising Eurodollar Rate Loans be outstanding hereunder;
(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 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
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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 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
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(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 five 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.
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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
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
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 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 $200,000,000.
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.
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(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 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;
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(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.
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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 1 Chase Manhattan Plaza, 8th Floor, New
York, New York, 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 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.
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(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 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
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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
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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 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.
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) 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
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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 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
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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 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 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.
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:
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(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:
(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) Michael D. VanHemert, 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
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(B) Sidley & Austin, 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.
(ix) A letter from The Chase Manhattan Bank, confirming that the
participation obligations of each Existing Bank have been terminated
with respect to each Existing Letter of Credit.
(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 (other than Existing Letters of Credit) 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
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
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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 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.
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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 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, 1999, 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 Arthur Andersen LLP included in the Borrower's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999, and the
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unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at March 31, 2000, 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, 2000, 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, 2000, 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, 1999, the Borrower's Quarterly Report on
Form 10-Q for the period ended March 31, 2000 and the Current Report on Form 8-K
filed by the Borrower on June 5, 2000, 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.
(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.
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(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 2000-2004 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 2000, 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 are 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).
(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).
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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 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.
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(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:
<TABLE>
<CAPTION>
PERIOD RATIO
-------------------- ----------------
<S> <C>
Closing Date through
September 30, 2000 5.5 to 1
October 1, 2000 and 5.4 to 1
thereafter
</TABLE>
(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)
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accrued by the Borrower in respect of all Debt during such period of not less
than 1.5 to 1.0; 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.
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;
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(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.
(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.
(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.
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(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 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
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<PAGE> 50
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.
(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
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<PAGE> 51
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 of the common stock of Enterprises shall be applied to prepay the
principal amount 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 (A) accrued interest to the date of such prepayment on the
principal amount repaid and (B) in the case of prepayments of Eurodollar Rate
Loans, any amount payable to the Lenders pursuant to Section 5.04(b), and
provided, further that after giving effect to each such transaction the Borrower
shall be in compliance with Section 8.01(i), and (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, provided that after giving effect to each 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:
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(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 of the Borrower and its Subsidiaries as at the end of
such quarter and consolidated statements of income and retained earnings and of
cash flows of the Borrower and its Subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter (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 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 Arthur Andersen LLP or another nationally-recognized independent
public accounting firm, together with a schedule in form satisfactory to the
Required Lenders of (A) the computations used by such accounting firm in
determining, as of the end 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;
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(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 of the Borrower as at the end of such quarter and statements of income and
retained earnings and of cash flows of the Borrower 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;
(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
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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
(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
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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, 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
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(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 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.
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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 Agent) as its
agent and authorizes each such Agent to take such actions on its behalf and to
exercise such powers as are 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 the Documentation Agent shall have any duties or
obligations in such capacity under any of the Loan Documents.
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(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.
(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
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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 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 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) 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
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delivered, (i) if to the Borrower, at its address at Fairlane Plaza South, 330
Town Center Drive, Suite 1100, Dearborn, Michigan 48126, Attention: Rodger A.
Kershner, Esq., General Counsel, with a copy to Laura L. Mountcastle, Vice
President, Investor Relations and Treasurer, 330 Town Center Drive, Suite 1100,
Dearborn, Michigan 48126; (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 address at Agent Bank
Services Group, 1 Chase Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention: Michael Cerniglia (Telecopy no. 212.552.5777), with a copy to The
Chase Manhattan Bank, 270 Park Avenue, 23rd Floor, New York, New York 10017,
Attention: Thomas L. Casey (Telecopy No. 212.270.3089); 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
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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 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.
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(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.
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 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 $10,000,000 and shall be an integral
multiple of $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (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 provided further, however, that the consent of the Borrower 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
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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 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
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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 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.
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(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 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
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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 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 (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,
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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 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 compliance by the Borrower with the requirement
contained in Section 5.03(b) of the Existing Credit Agreement for the Borrower
to provide, upon the termination in full of the "Commitments" under the Existing
Credit Agreement on the date hereof, cash collateral to secure LC Outstandings
with respect to the Existing Letters of Credit. The Lenders and each Issuing
Bank acknowledge and agree that each Existing Letter of Credit shall constitute
a Letter of Credit for all purposes under this Agreement. In addition, the
Existing Banks hereby release their Lien on all of the Collateral (as defined in
the "Cash Collateral Agreement" referred to in the Existing Credit Agreement),
if any, and direct the "Collateral Agent" (as defined in the Existing Credit
Agreement) to return all such Collateral to the Borrower. Furthermore, the
Existing Banks hereby waive the five 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.
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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/ Alan M. Wright
----------------------------------------
Name: Alan M. Wright
Title: Senior Vice President &
Chief Vice President
Commitment: THE CHASE MANHATTAN BANK, individually as
$88,500,000 a Lender, and as Administrative Agent and
Collateral Agent
By: /s/ Thomas L. Casey
----------------------------------------
Name: Thomas L. Casey
Title: Vice President
Commitment: BANK OF AMERICA, N.A., individually as
$82,500,000 a Lender and as Co-Syndication Agent
By: /s/ Gretchen P. Burud
----------------------------------------
Name: Gretchen P. Burud
Title: Principal
Commitment: BARCLAYS BANK PLC, individually as
$82,500,000 a Lender, and as Co-Syndication Agent
By: /s/ Sydney G. Dennis
----------------------------------------
Name: Sydney G. Dennis
Title: Director
Commitment: CITIBANK, N.A., individually as
$82,500,000 a Lender and as Documentation Agent
By: /s/ Cecilia Leyden
----------------------------------------
Name: Cecilia Leyden
Title: Vice President
Commitment: BANK ONE, N.A.
$70,000,000
By: /s/ Jane A. Bek
----------------------------------------
Name: Jane A. Bek
Title: Vice President
Commitment: BNP PARIBAS
$70,000,000
By: /s/ Dan Cozine
----------------------------------------
Name: Dan Cozine
Title: Managing Director
By: /s/ Andrew S. Platt
----------------------------------------
Name: Andrew S. Platt
Title: Vice President
Commitment: UNION BANK OF CALIFORNIA, N.A.
$70,000,000
By: /s/ Jason DiNafoli
----------------------------------------
Name: Jason DiNafoli
Title: Vice President
Commitment: THE BANK OF NOVA SCOTIA
$48,500,000
By: /s/ F.C.H. Ashby
----------------------------------------
Name: F.C.H. Ashby
Title: Senior Manager - Loan Operations
Commitment: COMERICA BANK
$48,500,000
By: /s/ Dan M. Roman
----------------------------------------
Name: Dan M. Roman
Title: First Vice President
Commitment: NATIONAL AUSTRALIA BANK, NEW YORK
$48,500,000 BRANCH
By: /s/ Paul R. Morrision
----------------------------------------
Name: Paul R. Morrision
Title: Vice President
Commitment: THE SUMITOMO BANK, LIMITED
$48,500,000
By: /s/ John H. Kemper
----------------------------------------
Name: John H. Kemper
Title: Senior Vice President
Commitment: AUSTRALIA AND NEW ZEALAND BANKING
$25,000,000 GROUP LIMITED
By: /s/ Elizabeth M. Waters
----------------------------------------
Name: Elizabeth M. Waters
Title: Vice President
Commitment: BANK OF MONTREAL
$25,000,000
By: /s/ Kreston M. Bjornsson
----------------------------------------
Name: Kreston M. Bjornsson
Title: Director
Commitment: CANADIAN IMPERIAL BANK OF COMMERCE
$25,000,000
By: /s/ Sanjeeva Senanayake
----------------------------------------
Name: Sanjeeva Senanayake
Title: Executive Director
Commitment: DRESDNER BANK AG, NEW YORK AND GRAND
$25,000,000 CAYMAN BRANCHES
By: /s/ Adrew Schroeder
----------------------------------------
Name: Adrew Schroeder
Title: Assistant Vice President
By: /s/ Wendy C.H. Astell
----------------------------------------
Name: Wendy C.H. Astell
Title: Assistant Vice President
Commitment: FLEET NATIONAL BANK
$25,000,000
By: /s/ RITA M. CAHILL
----------------------------------------
Name: Rita M. Cahill
Title: Managing Director
Commitment: THE FUJI BANK, LIMITED
$25,000,000
By: /s/ Peter L. Chinnici
----------------------------------------
Name: Peter L. Chinnici
Title: Senior Vice President &
Group Head
Commitment: THE ROYAL BANK OF SCOTLAND PLC
$25,000,000
By: /s/ Jayne Seaford
----------------------------------------
Name: Jayne Seaford
Title: Vice President
Commitment: SOCIETE GENERALE, CHICAGO BRANCH
$25,000,000
By: /s/ Jose A. Moreno
----------------------------------------
Name: Jose A. Moreno
Title: Director
Commitment: THE MITSUBISHI TRUST AND BANKING
$20,000,000 CORPORATION, NEW YORK BRANCH
By: /s/ Akihito Watanabe
----------------------------------------
Name: Akihito Watanabe
Title: Vice President
Commitment: CHANG HWA COMMERCIAL BANK, LTD.,
$15,000,000 NEW YORK BRANCH
By: /s/ Wan-Tu Yeh
----------------------------------------
Name: Wan-Tu Yeh
Title: Vice President & General Manager
Commitment: FIRST COMMERCIAL BANK (INCORPORATED IN
$15,000,000 TAIWAN, R.O.C.), LOS ANGELES BRANCH
By: /s/ June-Shiong Lu
----------------------------------------
Name: June-Shiong Lu
Title: Senior Vice President &
General Manager
Commitment: NATIONAL CITY BANK
$10,000,000
By: /s/ Kenneth R. Ehrhardt
------------------------------------
Name: Kenneth R. Ehrhardt
Title: Senior Vice President
<PAGE> 69
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
The Chase Manhattan Bank, as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention: Michael Cerniglia
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Credit Agreement,
dated as of June 27, 2000 (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, The Chase Manhattan Bank, as Administrative Agent and
Collateral Agent, Bank of America, N.A. and Barclays Bank plc, as Co-Syndication
Agents, and Citibank, N.A. as Documentation Agent, 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.
<PAGE> 70
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:
<PAGE> 71
EXHIBIT B
FORM OF NOTICE OF CONVERSION
[Date]
The Chase Manhattan Bank, as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention: Michael Cerniglia
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Credit Agreement,
dated as of June 27, 2000 (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, The Chase Manhattan Bank, as Administrative Agent and
Collateral Agent, Bank of America, N.A. and Barclays Bank plc, as Co-Syndication
Agents, and Citibank, N.A. as Documentation Agent, 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).(2)
--------
(2) Delete for ABR Loans.
<PAGE> 72
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)](3)
has occurred and is continuing](4).
Very truly yours,
CMS ENERGY CORPORATION
By
------------------------------------------------
Name:
Title:
--------
(3) 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.
(4) Delete if Conversion is into ABR Loans.
<PAGE> 73
EXHIBIT C
FORM OF CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT, dated as of June 30, 2000, made by CMS ENERGY
CORPORATION, a Michigan corporation (the "PLEDGOR"), to The Chase Manhattan Bank
("CHASE"), as collateral agent (the "COLLATERAL AGENT") for the lenders (the
"LENDERS") parties to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
(1) Chase, as Administrative Agent and Collateral Agent, Bank of America,
N.A. and Barclays Bank plc, as Co-Syndication Agents, and Citibank, N.A. as
Documentation Agent, and the Lenders have entered into a Credit Agreement, dated
as of June 27, 2000 (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 1 Chase Manhattan Plaza, New York, New York 10081, Account No. 910-2-787398
(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;
<PAGE> 74
(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;
(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.
<PAGE> 75
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.
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 Loan 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.
<PAGE> 76
(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.
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.
<PAGE> 77
SECTION 13. REMEDIES UPON DEFAULT. If any Event of Default shall have
occurred and be continuing:
(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.
<PAGE> 78
SECTION 16. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, facsimile,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, if to the Pledgor, at its address at Fairlane Plaza South,
330 Town Center Drive, Suite 1100, Dearborn, Michigan 48126, Attention: Rodger
A. Kershner, Esq., with a copy to Laura L. Mountcastle, 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.
<PAGE> 79
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:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By
-------------------------------------------
Name:
Title:
<PAGE> 80
EXHIBIT D
FORM OF OPINION
OF COUNSEL FOR THE BORROWER
June 30, 2000
To: Each of the Lenders parties to the Credit Agreement
referred to below, The Chase Manhattan Bank, as a
Administrative Agent and Collateral Agent under the
Credit Agreement, and the Co-Syndication Agents and
Documentation Agent named therein
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 6.01(a)(viii)(A)
of the Credit Agreement, dated as of June 27, 2000 (the "CREDIT AGREEMENT"),
among CMS Energy Corporation (the "BORROWER"), the Banks parties thereto and the
other Lenders from time to time parties thereto, The Chase Manhattan Bank
("CHASE"), as Administrative Agent and as Collateral Agent, Bank of America,
N.A. and Barclays Bank plc, as Co-Syndication Agents, and Citibank, N.A. as
Documentation Agent. Capitalized terms not defined herein have the meanings
ascribed thereto in the Credit Agreement and the other Loan Documents (as
defined in the Credit Agreement).
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 Agreement and other Loan Documents.
In that capacity, I, or an attorney or attorneys under my general
supervision, have examined:
(a) The Credit Agreement;
(b) The Cash Collateral Agreement;
(c) The Issuing Bank Agreement;
(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
<PAGE> 81
(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 Agreement 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 Agreement). The Credit Agreement, the Cash
Collateral Agreement 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, 1999, the Borrower's Quarterly
Report on Form 10-Q for the period ended March 31, 2000 and the Current
Report on Form 8-K filed by the Borrower on June 5, 2000, 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
Borrower, the legality, validity or enforceability of the 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 the Cash Collateral Agreement.
<PAGE> 82
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 Agreement 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 the Cash Collateral Agreement.
5. In any action or proceeding arising out of or relating to the
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 the Credit Agreement or any other Loan Document, as the case
may be, wherein the parties thereto agree that the 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 Agreement 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 Agreement 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 & Austin in their
opinion to you of even date herewith delivered pursuant to Section
6.01(a)(viii)(B) of the 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,
<PAGE> 83
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE
ADMINISTRATIVE AGENT
June 30, 2000
To: Each of the Lenders parties to the Credit Agreement
referred to below, The Chase Manhattan Bank, as a
Administrative Agent and Collateral Agent under the
Credit Agreement, and the Co-Syndication Agents and
Documentation Agent named therein
Re: CMS Energy Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to The Chase Manhattan Bank,
individually and as Administrative Agent, in connection with the execution and
delivery of, and the making of the initial Extension of Credit on this date
under, the Credit Agreement, dated as of June 27, 2000 (the "CREDIT AGREEMENT"),
among CMS Energy Corporation, the Banks parties thereto and the other Lenders
from time to time parties thereto, The Chase Manhattan Bank, as Administrative
Agent and as Collateral Agent, Bank of America, N.A. and Barclays Bank plc, as
Co-Syndication Agents, and Citibank, N.A. as Documentation Agent. 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 the Credit Agreement, executed by the parties
thereto; and
2. the other documents furnished to the Administrative Agent pursuant
to Section 6.01(a) of the Credit Agreement, including (without limitation)
the opinion of Michael D. VanHemert, 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, 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,
<PAGE> 84
dated the date hereof, of Michael D. VanHemert, 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 Agreement and the Cash Collateral Agreement, the Issuing
Bank Agreement and the Promissory Notes delivered on the date hereof
pursuant to Section 6.01(a) of the Credit Agreement are the legal, valid
and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms.
2. The 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
Agreement, the Cash Collateral Agreement, the Issuing Bank Agreement 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
Agreement, the Cash Collateral Agreement, the Issuing Bank Agreement 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.
(d) We express no opinion herein as to (i) Section 11.05 of the 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
<PAGE> 85
qualification that certain provisions of the Cash Collateral Agreement 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 Agreement and the 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 the Credit Agreement after the date hereof.
Very truly yours,
<PAGE> 86
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 Credit Agreement, dated as of June 27, 2000, among CMS
Energy Corporation, the Banks named therein, The Chase Manhattan Bank, as
Administrative Agent and as Collateral Agent, Bank of America, N.A. and Barclays
Bank plc, as Co-Syndication Agents, and Citibank, N.A. as Documentation Agent.)
<TABLE>
<S> <C> <C>
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 $
------
(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)
------
</TABLE>
<PAGE> 87
<TABLE>
<S> <C> <C>
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(5)
IV. Support Obligations(6)
V. Junior Subordinated Debt/Guaranties of Hybrid Preferred Securities(7)
VI. Other Hybrid Debt/Equity Securities(8)
</TABLE>
--------
(5) Set forth all Project Finance Debt of any Consolidated Subsidiary and the
Borrower's Ownership Interest in such Consolidated Subsidiary.
(6) 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.
(7) 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.
(8) 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.
<PAGE> 88
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):(9)
<TABLE>
<S> <C> <C>
(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 $
------
</TABLE>
--------
(9) See the definition of "Consolidated Debt" contained in the Credit Agreement
for certain exclusions from Debt of the Borrower.
<PAGE> 89
<TABLE>
<S> <C> <C>
(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(10) $
------
(E) to perform, or arrange for the performance of,
any non-monetary obligations or non-funded
debt payment obligations of the primary obligor(11) $
------
(F) Other $
------
Total of Debt of the Borrower $
-----
</TABLE>
--------
(10) 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.
(11) 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.
<PAGE> 90
Annex A
to
Schedule 1
Details Regarding MS&T Transactions(12)
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) $________
--------
(12) See subsection (d) of the definition of "Consolidated Debt" contained in
the Credit Agreement for the specific requirements of any offsetting Support
Obligations.
<PAGE> 91
EXHIBIT G
FORM OF LENDER ASSIGNMENT
Dated _______ ___, ____
Reference is made to the Credit Agreement, dated as of June
27, 2000 (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, The Chase Manhattan Bank, as Administrative
Agent and as Collateral Agent, Bank of America, N.A. and Barclays Bank plc, as
Co-Syndication Agents, and Citibank, N.A. as Documentation Agent. 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.
<PAGE> 92
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.
<PAGE> 93
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(13)
By:____________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:____________________________
Name:
Title:
--------
(13) 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.
<PAGE> 94
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.
<PAGE> 95
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
<PAGE> 96
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
<PAGE> 97
(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 ____,
<PAGE> 98
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
<PAGE> 99
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
<PAGE> 100
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 ____.
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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.
