<PAGE>
As filed with the Securities and Exchange Commission on January 12, 1996
Registration No. 33-60007
__________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
POST-EFFECTIVE AMENDMENT NO. 1
To
Form S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
________________
CMS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Michigan
(State or other jurisdiction of incorporation or organization)
4931 38-2726431
(Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(313) 436-9261
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
________________
Alan M. Wright
Senior Vice President and Chief Financial Officer
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
313-436-9560
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________
It is respectfully requested that the Commission send copies
of all notices, orders and communications to:
Denise M. Sturdy, Esq.
Assistant General Counsel
CMS Energy Corporation
212 W. Michigan Avenue
Jackson, Michigan 49201
(517) 788-0179
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of the Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.
X
---
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box.
---
CALCULATION OF REGISTRATION FEE
__________________________________________________________________________
Title of each Amount Proposed Proposed Amount of
class of securities being maximum maximum registration
to be registered registered (2) offering aggregate fee
price per offering
unit price
__________________________________________________________________________
Common Stock 3,000,000 $24.5625(1) $73,687,500(1) $25,409.48
$.01 par value
__________________________________________________________________________
[FN]
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average high and low sale
price per share of CMS Energy's Common Stock, par value $.01 per
share, as reported in the consolidated reporting system on June 2,
1995.
(2) Pursuant to Rule 429 of the Securities Act of 1933, as amended, the
prospectus contained herein also relates to the 2,000,000 shares of
Common Stock $.01 par value of the registrant contained in the
Registration Statement on Form S-4 (No. 33-55805) of which 851,000
shares remain outstanding and are being carried forward. The filing
fee associated with the securities carried forward and previously
paid with the earlier registration statement is $6199.09.
________________
This Post-Effective Amendment to the Registration Statement shall
become effective in accordance with Section 8(c) of the Securities Act of
1933 or on such date as the Commission, acting pursuant to said Section
8(c), may determine.
<PAGE>
<PAGE>
CMS ENERGY CORPORATION
CROSS-REFERENCE SHEET
BETWEEN
ITEMS IN FORM S-4 AND LOCATION IN PROSPECTUS
Form S-4 Item Number and Caption Location in Prospectus
- -------------------------------- ----------------------
A. Information About the Transaction
1. Forepart of Registration
Statement and Outside Front
Cover of Prospectus . . . . . . Facing Page; Cross-Reference
Sheet; Outside Front Cover Page
of Prospectus
2. Inside Front and Outside
Back Cover Pages of
Prospectus . . . . . . . . . . . Inside Front and Outside Back
Cover Pages of Prospectus
3. Risk Factors, Ratio of
Earnings to Fixed Charges
and Other Information . . . . . Documents Incorporated by
Reference; The Company;
Selected Consolidated Financial
Data
4. Terms of the Transaction . . . . *
5. Pro Forma Financial Information *
6. Material Contracts with the
Company Being Acquired . . . . . *
7. Additional Information Required
for Reoffering by Persons and
Parties Deemed to be Underwriters *
8. Interests of Named Experts and
Counsel . . . . . . . . . . . . *
9. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities . . . . . . . . *
B. Information About the Registrant
10. Information with Respect to S-3
Registrants . . . . . . . . . . Documents Incorporated by
Reference; The Company;
Dividends and Price Range of
Common Stock; Selected
Consolidated Financial Data;
Description of Capital Stock
11. Incorporation of Certain
Information by Reference . . . . Documents Incorporated by
Reference
12. Information with Respect to S-2
or S-3 Registrants . . . . . . . *
13. Incorporation of Certain
Information by Reference . . . . *
14. Information with Respect to
Registrants Other Than S-3
or S-2 Registrants . . . . . . . *
C. Information About the Company Being Acquired
15. Information with Respect to
S-3 Companies . . . . . . . . . *
16. Information with Respect to
S-2 or S-3 Companies . . . . . . *
17. Information with Respect to
Companies Other Than S-2 or
S-3 Companies . . . . . . . . . *
D. Voting and Management Information
18. Information If Proxies,
Consents or Authorizations
Are to be Solicited . . . . . . *
19. Information If Proxies,
Consents or Authorizations
Are Not to be Solicited or
in an Exchange Offer . . . . . . *
_____________
* Omitted since the answer is negative or the Item is not applicable
upon the date of filing of this Registration Statement. The
Registrant may be required to provide information (or further
information) in response to one or more of such Items under certain
circumstances by means of a post-effective amendment to this
Registration Statement or supplement to the prospectus contained
herein.<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH JURISDICTION.
SUBJECT TO COMPLETION
DATED January 12, 1996
3,851,000 SHARES
CMS ENERGY CORPORATION
COMMON STOCK
This Prospectus relates to 3,851,000 shares of common stock, par value
$.01 per share (the "CMS Energy Common Stock"), which may be offered and
issued by CMS Energy Corporation ("CMS Energy" or the "Company") from time
to time in connection with acquisitions of other businesses or properties.
As of January 11, 1996, 2,531,556 shares of CMS Energy Common Stock were
issued pursuant to this Prospectus.
It is anticipated that such acquisitions will consist principally of
businesses (or the assets thereof) complementary to and related to the
Company's current businesses. The consideration for acquisitions will
consist of shares of CMS Energy Common Stock, cash, notes or other evidences
of indebtedness, guarantees, assumption of liabilities or a combination
thereof, as determined from time to time by negotiations between the Company
and the owners or controlling persons of the businesses or properties to be
acquired. In addition, the Company may lease property from and enter into
management or consulting agreements and non-competition agreements with the
former owners and key executive personnel of the businesses to be acquired.
It is contemplated that the terms of an acquisition will be determined
by negotiations between the Company's representatives and the owners or
controlling persons of the businesses or properties to be acquired. Factors
taken into account in acquisitions include, among other relevant factors, the
quality and reputation of the business, its management and personnel, earning
power, cash flow, growth potential, patents, licenses, equipment, locations
of the business to be acquired and the market value of the CMS Energy Common
Stock when pertinent. It is anticipated that shares of CMS Energy Common
Stock issued in any such acquisition will be valued at a price reasonably
related to the current market value of the CMS Energy Common Stock, either
at the time the terms of the acquisition are tentatively agreed upon, or at
or about the time of closing, or during the period or periods prior to
delivery of the shares.
The CMS Energy Common Stock offered hereby is expected to be listed on
the New York Stock Exchange.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________
The date of this Prospectus is , 1996.
It is not expected that underwriting discounts or commissions will be
paid by CMS Energy except that finders fees may be paid to persons from time
to time in connection with specific acquisitions. Any person receiving any
such fees may be deemed to be an underwriter within the meaning of the
Securities Act of 1933.
No person is authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation should not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to purchase, the securities offered by
this Prospectus in any jurisdiction in which, or to or from any person to or
from whom, it is unlawful to make such an offer, or solicitations of an
offer. Neither the delivery of this Prospectus nor any distribution of the
securities offered pursuant to this Prospectus shall, under any
circumstances, create any implication that there has been no change in the
information set forth herein or in the affairs of the Company since the date
of this Prospectus or that the information herein is correct as of any time
subsequent to its date.
____________________
<PAGE>
<PAGE> 3
AVAILABLE INFORMATION
CMS Energy is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices located at 500 West Madison, 14th Floor,
Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New York,
New York 10048. Copies of such materials can be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The CMS Energy Common Stock is
listed on the New York Stock Exchange and reports, proxy statements and other
information concerning CMS Energy may also be inspected and copied at the
offices of such exchange at 20 Broad Street, New York, New York 10005.
____________________
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by CMS Energy with the Commission (File
No. 1-9513) pursuant to the Exchange Act are hereby incorporated by reference
in this Prospectus and shall be deemed to be a part hereof:
(1) CMS Energy's Annual Report on Form 10-K for the year ended
December 31, 1994;
(2) CMS Energy's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1995, June 30, 1995 and September 30,
1995; and
(3) CMS Energy's Current Reports on Form 8-K dated January 10, 1995,
February 2, 1995 and dated September 11, 1995.
All documents subsequently filed by CMS Energy pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference herein and shall be deemed to be a part hereof from
the date of filing of such documents (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
AS INDICATED ABOVE, THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. CMS ENERGY UNDERTAKES
TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED
TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR
SUCH COPIES SHOULD BE DIRECTED TO CMS ENERGY CORPORATION AT ITS PRINCIPAL
EXECUTIVE OFFICES LOCATED AT FAIRLANE PLAZA SOUTH, SUITE 1100, 330 TOWN
CENTER DRIVE, DEARBORN, MICHIGAN 48126, ATTENTION: INVESTOR RELATIONS
DEPARTMENT, TELEPHONE: (517) 788-2590. IN ORDER TO ENSURE TIMELY DELIVERY
OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY FIVE BUSINESS DAYS PRIOR TO
THE DATE TO WHICH THE FINAL INVESTMENT DECISION MUST BE MADE.
Certain information contained in this Prospectus summarizes, is based
upon, or refers to information and financial statements contained in one or
more Incorporated Documents; accordingly, such information contained herein
is qualified in its entirety by reference to such documents and should be
read in conjunction therewith.
____________________
TABLE OF CONTENTS
Page Page
Available Information 3 Dividends and Price Range of
Incorporation of Certain CMS Energy Common Stock 7
Documents by Reference 3 Selected Consolidated Financial
The Company 5 Data 8
Offered Securities 6 Description of Capital Stock 6
Use of Proceeds 6 Legal Opinions 13
Experts 14
____________________<PAGE>
<PAGE> 5
THE COMPANY
CMS Energy, incorporated in 1987, is the parent holding company of
Consumers Power Company ("Consumers") and CMS Enterprises Company
("Enterprises"). Consumers, a combination electric and gas utility company
serving most of Michigan's Lower Peninsula, is CMS Energy's largest
subsidiary. Consumers' customer base includes a mix of residential,
commercial and diversified industrial customers, the largest of which is the
automotive industry. Enterprises is engaged in several non-utility energy-
related businesses including: (i) oil and gas exploration and production,
(ii) development and operation of independent power production facilities,
(iii) gas marketing services to utility, commercial and industrial customers
and (iv) transmission and storage of natural gas.
CMS Energy conducts its principal operations through the following five
business segments: (i) electric utility operations; (ii) natural gas utility
operations; (iii) gas transmission and marketing; (iv) oil and gas
exploration and production operations; and (v) independent power production.
Consumers or Consumers' subsidiaries are engaged in two segments: electric
operations and gas operations. Consumers' electric and gas businesses are
principally regulated utility operations.
At December 31, 1994, CMS Energy had total consolidated assets of
$7,384 million. CMS Energy's 1994 consolidated operating revenue was $3,619
million. This consolidated operating revenue was derived from Consumers'
sales of electric energy (approximately 61% or $2,189 million), Consumers'
gas operations (approximately 32% or $1,151 million), gas transmission and
marketing (approximately 4% or $145 million), oil and gas exploration and
production activities (approximately 2% or $85 million) and independent power
production activities (approximately 1% or $45 million). Consumers'
consolidated operations in the electric and gas utility businesses account
for the major share of CMS Energy's total assets, revenue and income.
CMS Energy's share of 1994 unconsolidated non-utility independent power
production revenue was $385 million.
On May 30, 1995, Nomeco Oil & Gas Co. ("NOMECO"), an indirect wholly-
owned subsidiary of CMS Energy, executed a non-binding letter of intent which
called for a newly formed subsidiary of CMS Energy to merge with and into
Terra Energy, Ltd., a Michigan corporation ("Terra"). Terra was formerly a
privately held corporation primarily engaged in U.S. gas and oil exploration
and production and activities related thereto. This transaction was
completed in August 1995, making Terra a wholly owned subsidiary of NOMECO.
In connection with the acquisition, CMS Energy delivered $62.3 million of
CMS Energy Common, or 2,531,556 shares, and is expected to deliver an
additional $1.3 million of CMS Energy Common Stock, subject to post-closing
adjustments. This acquisition was not material to CMS Energy.
The foregoing information concerning CMS Energy and its subsidiaries
does not purport to be comprehensive. For additional information concerning
CMS Energy and its subsidiaries' business and affairs, including their
capital requirements and external financing plans, pending legal and
regulatory proceedings and descriptions of certain laws and regulations to
which those companies are subject, prospective purchasers should refer to the
Incorporated Documents. See "Incorporation of Certain Documents by
Reference."
OFFERED SECURITIES
The securities of CMS Energy which may be offered from time to time by
this Prospectus consist of up to 3,851,000 shares of CMS Energy Common Stock,
which CMS Energy proposes to issue in connection with acquisitions of other
businesses or properties. As of January 11, 1996, 2,531,556 shares of
CMS Energy Common Stock were issued pursuant to this Prospectus. The
CMS Energy Common Stock to be issued hereunder will be freely transferable
under the Securities Act of 1933, as amended (the "Securities Act"), except
for shares of CMS Energy Common Stock issued in connection with an
acquisition to any person deemed to be an affiliate of any acquired company
for purposes of Rule 145 under the Securities Act at the time of any such
acquisition. Generally, such affiliates may not sell their shares of
CMS Energy Common Stock acquired in connection with an acquisition except
pursuant to an effective registration statement under the Securities Act
covering such shares, or in compliance with Rule 145 under the Securities Act
or another applicable exemption from the registration requirements of the
Securities Act.
The consideration for any acquisition may consist of cash, notes or
other evidences of debt, assumptions of liabilities, equity securities, or
a combination thereof, as determined from time to time by negotiations
between CMS Energy and the owners of businesses or properties to be acquired.
CMS Energy will attempt to make acquisitions which are complementary to its
present operations. In general, the terms of any acquisitions will be
determined by direct negotiations between the representatives of CMS Energy
and the owners of the businesses or properties to be acquired or, in the case
of entities more widely held, through exchange offers to stockholders or
documents soliciting approval of statutory mergers, consolidations or sales
of assets. Underwriting discounts or commissions will generally not be paid
by CMS Energy. However, under some circumstances, the Company may issue
CMS Energy Common Stock covered by this Prospectus to pay brokers'
commissions incurred in connection with acquisitions.
USE OF PROCEEDS
This Prospectus relates to shares of CMS Energy Common Stock which may
be offered and issued by the Company from time to time in the acquisition of
other businesses or properties. Other than the business or properties
acquired, there will be no proceeds to the Company from these offerings.
____________________<PAGE>
<PAGE> 7
DIVIDENDS AND PRICE RANGE OF CMS ENERGY COMMON STOCK
CMS Energy Common Stock is listed on the New York Stock Exchange under
the symbol "CMS". CMS Energy has paid dividends on its Common Stock each
year since its inception except 1988. Future dividends will depend upon
CMS Energy's earnings, financial condition and other factors. Reference is
made to "Description of Capital Stock" regarding limitations upon payment of
dividends on the Company's Common Stock.
The following table indicates the high and low sales prices of the
CMS Energy Common Stock for the calendar quarters indicated, as reported in
The Wall Street Journal under "New York Stock Exchange Composite
Transactions," and the quarterly cash dividends declared per share of the
CMS Energy Common Stock, for the calendar quarters indicated.
Common Stock
-------------------------------
Calendar Period High Low Dividend
- --------------- ------ ----------------
1991
First Quarter . . . . . . . . . . . $33 $26 1/2 $.12
Second Quarter . . . . . . . . . . 30 3/4 23 3/4 .12
Third Quarter . . . . . . . . . . . 25 7/8 18 .12
Fourth Quarter . . . . . . . . . . 19 3/4 16 5/8 .12
1992
First Quarter . . . . . . . . . . . $22 3/4 $17 7/8 $.12
Second Quarter . . . . . . . . . . 21 7/8 14 7/8 .12
Third Quarter . . . . . . . . . . . 17 1/2 15 1/4 .12
Fourth Quarter . . . . . . . . . . 18 3/8 16 3/4 .12
1993
First Quarter . . . . . . . . . . . $20 7/8 $17 7/8 $.12
Second Quarter . . . . . . . . . . 25 1/2 19 1/2 .12
Third Quarter . . . . . . . . . . . 27 1/2 24 7/8 .18
Fourth Quarter . . . . . . . . . . 27 1/8 23 .18
1994
First Quarter . . . . . . . . . . . $25 $21 1/8 $.18
Second Quarter . . . . . . . . . . 22 7/8 19 5/8 .18
Third Quarter . . . . . . . . . . . 23 3/8 20 5/8 .21
Fourth Quarter . . . . . . . . . . 23 1/4 20 7/8 .21
1995
First Quarter . . . . . . . . . . . $24 3/4 $22 5/8 $.21
Second Quarter . . . . . . . . . . 25 3/8 22 1/2 .21
Third Quarter . . . . . . . . . . . 26 3/8 23 3/8 .24
Fourth Quarter. . . . . . . . . . . 30 26 .24
1996
First Quarter . . . . . . . . . . . 30 1/2 29 1/2 ---
(through January 10, 1996)
On January 10, 1996, the closing price of the CMS Energy Common Stock
on The New York Stock Exchange was $29 1/2 per share. On January 10, 1996,
there were 59,058 record holders of CMS Energy Common Stock.
<PAGE>
<PAGE> 8
SELECTED CONSOLIDATED FINANCIAL DATA
The following is a summary of certain financial information of the
Company and its consolidated subsidiaries and is qualified in its entirety
by, and should be read in conjunction with, the detailed information and
consolidated financial statements, including notes thereto, included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994,
and its Quarterly Report on Form 10-Q for the quarter ended September 30,
1995. The unaudited consolidated interim period financial statement
includes, in the opinion of the Company's management, all adjustments
necessary to present fairly the data for such period. The results of
operations for interim periods are not necessarily indicative of results to
be achieved for full fiscal years.
<TABLE>
<CAPTION>
Nine Months Ended
September 30 Year Ended December 31,
1995 1994 1994 1993 1992 1991 1990
(unaudited) (In Millions, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Operating Revenue . . . . . . . . . . . .$ 2,821 $ 2,701 $ 3,619 $ 3,482 $ 3,146 $ 2,998 $ 3,044
Pretax operating income . . . . . . . . .$ 479 $ 408 $ 504 $ 439 $ 231 $ 261 $ 506
Net income (loss) (1) . . . . . . . . . .$ 166 $ 148 $ 179 $ 155 $ (297) $ (276) $ (494)
Earnings (loss) per average
common share (1)
CMS Energy . . . . . . . . . . . . . .$ 1.90 $ 1.73 $ 2.09 $ 1.90 $ (3.72) $ (3.44) $ (6.07)
Class G. . . . . . . . . . . . . . . .$ (.17) ----- ----- ----- ----- ----- -----
Average common shares
outstanding (in thousands)
CMS Energy . . . . . . . . . . . . . .88,021 85,742 85,888 81,251 79,877 79,988 81,339
Class G. . . . . . . . . . . . . . . . 7,415 ----- ----- ----- ----- ----- -----
Cash dividends declared per
common share
CMS Energy . . . . . . . . . . . . . .$ .66 $ .57 $ .78 $ .60 $ .48 $ .48 $ .42
Class G. . . . . . . . . . . . . . . .$ .28 ---- ----- ----- ----- ----- -----
Balance Sheet Data:
Net plant and property . . . . . . . . .$ 4,961 $ 4,756 $ 4,814 $ 4,583 $ 4,326 $ 4,121 $ 4,033
Total assets . . . . . . . . . . . . . .$ 7,856 $ 7,165 $ 7,384 $ 6,964 $ 6,848 $ 6,194 $ 7,917
Long-term debt, excluding
current maturities . . . . . . . . . . .$ 2,763 $ 2,378 $ 2,709 $ 2,405 $ 2,725 $ 1,941 $ 3,321
Notes payable . . . . . . . . . . . . . .$ 474 $ 401 $ 339 $ 259 $ 215 $ 708 $ 337
Other liabilities . . . . . . . . . . . .$ 2,824 $ 2,943 $ 2,873 $ 3,171 $ 3,018 $ 2,322 $ 2,701
Preferred stock of subsidiary . . . . . .$ 356 $ 356 $ 356 $ 163 $ 163 $ 163 $ 156
Common stockholders' equity . . . . . . .$ 1,439 $ 1,087 $ 1,107 $ 966 $ 727 $ 1,060 $ 1,402
<FN>
(1) Amount in 1991 included an extraordinary loss of $14 million, after tax or $.18 per average common share.
</TABLE>
<PAGE>
<PAGE> 9
DESCRIPTION OF CAPITAL STOCK
The following outline of certain rights of the holders of CMS Energy
capital stock does not purport to be complete and is qualified in its
entirety by express reference to Article III of the Restated Articles of
Incorporation of CMS Energy (the "Articles of Incorporation"), the CMS Energy
Indenture dated as of September 15, 1992, as amended and supplemented (the
"Senior Debt Indenture") to NBD Bank, N.A., as Trustee, the Credit Agreement
dated as of November 21, 1995 (the "Credit Facility") among CMS Energy,
Citibank, N.A. and Union Bank, as co-agents, and certain banks named therein,
the Term Loan Agreement dated as of November 21, 1995 ("Term Loan") among
CMS Energy, Citibank, N.A. and Union Bank as Co-Agents and certain banks
named therein, and CMS Energy's Indenture dated as of January 15, 1994 (the
"GTN Indenture") to The Chase Manhattan Bank, N.A., as Trustee, copies of
which are filed as exhibits to the Registration Statement of which this
Prospectus is a part.
GENERAL
The Articles of Incorporation currently authorize 320 million shares
of capital stock, of which 250 million are shares of CMS Energy Common Stock,
par value $.01 per share, 60 million are shares of Class G Common Stock, no
par value ("Class G Common Stock"), and 10 million are shares of preferred
stock, $.01 par value ("Preferred Stock"). The CMS Energy Common Stock and
the Class G Common Stock are together referred to herein as the "Common
Stock." As of January 11, 1996, 91,642,501 shares of CMS Energy Common Stock
and 7,618,602 shares of Class G Common Stock were issued and outstanding and
there were no shares of Preferred Stock issued or outstanding. The
outstanding shares of the CMS Energy Common Stock are fully paid and non-
assessable, and the additional CMS Energy Common Stock offered hereby, when
issued and paid for, will be fully paid and non-assessable.
The shares of Common Stock may be issued from time to time as the Board
of Directors shall determine for such consideration as shall be fixed by the
Board of Directors.
Class G Common Stock is intended to reflect the separate performance
of the gas distribution, storage and transportation businesses conducted by
Consumers and Michigan Gas Storage, a subsidiary of Consumers (such
businesses, collectively, will be attributed to the "Consumers Gas Group").
Effective January 1, 1995, the management and operations of the Consumers Gas
Group were reorganized as a business unit separate from the electric utility
operations of the Consumers. CMS Energy Common Stock reflects the
performance of all of the businesses of CMS Energy and its subsidiaries,
including the business of the Consumers Gas Group, except for the interest
in the Consumers Gas Group attributable to the outstanding shares of Class G
Common Stock.
PREFERRED STOCK. The authorized Preferred Stock may be issued without
the approval of the holders of Common Stock in one or more series, from time
to time, with each such series to have such designation, powers, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated in
a resolution providing for the issue of any such series adopted by the Board
of Directors. The specific terms of Preferred Stock will be described in a
prospectus supplement relating thereto if, and when, issued. Unless
otherwise provided in a prospectus supplement, the holder of any shares of
any series of Preferred Stock shall be entitled to vote in the election of
directors or in respect of any other matter except as may be required by the
Michigan Business Corporation Act, as amended. Unless otherwise provided in
a prospectus supplement, holders of Preferred Stock will not have any
preemptive rights to subscribe for or purchase any additional shares of the
capital stock of CMS Energy of any class now or hereafter authorized, or any
Preferred Stock or other securities or other right or option convertible into
or exchangeable for or entitling the holder or owner to subscribe for or
purchase any shares of capital stock. The future issuance of Preferred Stock
may have the effect of delaying, deterring or preventing a change in control
of CMS Energy.
DIVIDEND RIGHTS AND POLICY
Dividends on the CMS Energy Common Stock will be paid at the discretion
of the Board of Directors based primarily upon the earnings and financial
condition of CMS Energy, including the Consumers Gas Group, except for the
interest in the Consumers Gas Group attributable to the outstanding shares
of the Class G Common Stock, and other factors. The holders of the Company's
Common Stock are entitled to receive dividends when and as declared by the
Board of Directors of the Company out of funds legally available therefor,
subject to the terms of any CMS Energy Preferred Stock which may in the
future be issued and at the time be outstanding. CMS Energy, in the sole
discretion of its Board of Directors, could pay dividends exclusively to the
holders of CMS Energy Common Stock, exclusively to the holders of Class G
Common Stock, or to the holders of both of such classes in equal or unequal
amounts.
CMS Energy is a legal entity separate and distinct from its various
subsidiaries. As a holding company with no significant operations of its
own, the principal sources of its funds are dividends or other distributions
from its operating subsidiaries, in particular, Consumers, borrowings and
sales of equity. The ability of Consumers and other subsidiaries of
CMS Energy to pay dividends or make distributions to CMS Energy, and
accordingly, the ability of CMS Energy to pay dividends on its capital stock
will depend on the earnings, financial requirements, contractual restrictions
of the subsidiaries of CMS Energy, in particular, Consumers, and other
factors. See "Primary Source of Funds of CMS Energy; Restrictions on Sources
of Dividends" below.
There are restrictions on CMS Energy's ability to pay dividends
contained in its Credit Facility, the Senior Debt Indenture and the GTN
Indenture.
The Credit Facility and the Term Loan each provide that CMS Energy will
not, and will not permit certain of its subsidiaries, directly or indirectly,
to (i) declare or pay any cash dividend or distribution on the capital stock
of CMS Energy or such subsidiaries, or (ii) purchase, redeem, retire or
otherwise acquire for value any such capital stock (a" Restricted Payment"),
unless: (1) no event of default under the Credit Facility, or event that with
the lapse of time or giving of notice would constitute such an event of
default, has occurred and is continuing, and (2) after giving effect to any
such Restricted Payment, the aggregate amount of all such Restricted
Payments, since September 30, 1993 shall not have exceeded the sum of: (a)
$120,000,000, (b) 100% of CMS Energy's consolidated net income (as defined
in the Senior Debt Indenture) since September 30, 1993 to the end of the most
recent fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such sum shall be a deficit, minus 100% of
the deficit), and (c) any net proceeds (as defined in the Senior Debt
Indenture) received by CMS Energy for the issuance or sale of its capital
stock subsequent to September 30, 1993. At September 30, 1995, CMS Energy
could pay cash dividends of $731 million pursuant to this restriction.
The First and Second Supplemental Indentures to the Senior Debt
Indenture, pursuant to which CMS Energy's Series A Senior Deferred Coupon
Notes due October 1, 1997 and Series B Senior Deferred Coupon Notes due
October 1, 1999 were issued, provide that so long as any of such Notes are
outstanding, CMS Energy will not, and will not permit certain of its
subsidiaries, directly or indirectly, to make a Restricted Payment, unless:
(1) no event of default under the Senior Debt Indenture, or event that with
the lapse of time or giving of notice would constitute such an event of
default, has occurred and is continuing, and (2) after giving effect to any
such Restricted Payment, the aggregate amount of all such Restricted Payments
since September 30, 1992 shall not have exceeded the sum of: (a) $40,000,000,
(b) 100% of CMS Energy's consolidated net income (as defined in the Senior
Debt Indenture) since September 30, 1992 to the end of the most recent fiscal
quarter ending at least 45 days prior to the date of such Restricted Payment
(or, in case such sum shall be a deficit, minus 100% of the deficit), and (c)
any net proceeds (as defined in the Senior Debt Indenture) received by
CMS Energy for the issuance or sale of its capital stock subsequent to
September 15, 1992. At September 30, 1995, CMS Energy could pay cash
dividends of $737 million pursuant to this restriction.
The GTN Indenture provides that, so long as any of the General Term
Notes, Series A (the "GTNs") issued thereunder are outstanding and are rated
below BBB- by Standard & Poor's or by Duff & Phelps, CMS Energy will not, and
will not permit certain of its subsidiaries, directly or indirectly, to make
any Restricted Payments, if at any time CMS Energy or such subsidiary makes
such Restricted Payment: (1) an Event of Default (as defined in the GTN
Indenture), or an event that with the lapse of time or the giving of notice
or both would constitute such an Event of Default, has occurred and is
continuing (or would result therefrom), or (2) the aggregate amount of such
Restricted Payment and all other Restricted Payments made since September 30,
1993, would exceed the sum of: (a) $120,000,000 plus 100% of consolidated net
income from September 30, 1993 to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted Payment (or, in
case such sum shall be a deficit, minus 100% of the deficit) and (b) the
aggregate net proceeds received by CMS Energy from the issue or sale of or
contribution with respect to its capital stock after September 30, 1993. At
September 30, 1995, CMS Energy could pay cash dividends of $731 million
pursuant to this restriction.
The foregoing provisions do not prohibit: (i) dividends or other
distributions paid by CMS Energy in respect of the capital stock issued in
connection with the acquisition of any business or assets by CMS Energy where
such payments are payable solely from the net earnings of such business or
assets; (ii) any purchase or redemption of capital stock made by exchange
for, or out of the proceeds of the substantially concurrent sale of, capital
stock; (iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividends would have complied
with the aforementioned limitations; or (iv) payments pursuant to the tax
sharing agreement among CMS Energy and its subsidiaries.
In addition, Michigan law prohibits payment of a dividend if, after
giving it effect, CMS Energy would not be able to pay its debts as they
become due in the usual course of business, or its total assets would be less
than the sum of its total liabilities plus, unless the articles permit
otherwise, the amount that would be needed, if CMS Energy were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to
those receiving the distribution. CMS Energy's net assets available for
payment of dividends under the Michigan Business Corporation Act at September
30, 1995 were $1,437 million.
VOTING RIGHTS
The holders of CMS Energy Common Stock will vote with the holders of
Class G Common Stock as a single class, except on matters which would be
required by law or the Articles of Incorporation to be voted on by class.
Each holder of Common Stock is entitled to one vote for each share of Common
Stock held by such holder on each matter voted upon by the shareholders.
Such right to vote is not cumulative. A majority of the votes cast by the
holders of shares entitled to vote thereon is sufficient for the adoption of
any question presented, except that certain provisions of the Articles of
Incorporation relating to special shareholder meetings, the removal,
indemnification and liability of the Board of Directors and the requirements
for amending these provisions may not be amended, altered, changed or
repealed unless such amendment, alteration, change or repeal is approved by
the affirmative vote of at least 75% of the outstanding shares entitled to
vote thereon.
Under Michigan law, the approval of the holders of a majority of the
outstanding shares of a class of Common Stock, voting as a separate class,
would be necessary for authorizing, effecting or validating the merger or
consolidation of CMS Energy into or with any other corporation if such merger
or consolidation would adversely affect the powers of special rights of such
class of stock, and to authorize any amendment to the Articles of
Incorporation that would increase or decrease the aggregate number of
authorized shares of such class or alter or change the powers, preferences
or special rights of the shares of such class so as to affect them adversely.
The Articles of Incorporation also provide that unless the vote or consent
of a greater number of shares shall then be required by law, the vote or
consent of the holders of a majority of all the shares of either class of
Common Stock then outstanding, voting as a separate class, will be necessary
for authorizing, effecting or validating the merger or consolidation of
CMS Energy into or with any other entity if such merger or consolidation
would adversely affect the powers or special rights of such class of Common
Stock, either directly by amendment to the Articles of Incorporation or
indirectly by requiring the holders of such class to accept or retain, in
such merger or consolidation, anything other than (i) shares of such class
or (ii) shares of the surviving or resulting corporation, having, in either
case, powers and special rights identical to those of such class prior to
such merger or consolidation. In the event that there is more than one class
of Common Stock, the effect of these provisions may be to permit the holders
of a majority of the outstanding shares of either class of Common Stock to
block any such merger or amendment which would adversely affect the powers
or special rights of holders of such class of Common Stock.
PREEMPTIVE RIGHTS
Holders of Common Stock have no preemptive rights to subscribe for or
purchase any additional shares of the capital stock of CMS Energy of any
class now or hereafter authorized, or Preferred Stock, bonds, debentures, or
other obligations or rights or options convertible into or exchangeable for
or entitling the holder or owner to subscribe for or purchase any shares of
capital stock, or any rights to exchange shares issued for shares to be
issued.
LIQUIDATION RIGHTS
In the event of the dissolution, liquidation or winding up of the
Company, whether voluntary or involuntary, after payment or provision for
payment of the debts and other liabilities of the Company and after there
shall have been paid or set apart for the holders of Preferred Stock the
full preferential amounts (including any accumulated and unpaid dividends)
to which they are entitled, the holders of Class G Common Stock and
CMS Energy Common Stock shall be entitled to receive, on a per share basis,
the same portion of all of the assets of the Corporation remaining for
distribution to the holders of Common Stock, regardless of whether or not any
of such assets were attributed to the Consumers Gas Group. Neither the
merger or consolidation of the Company into or with any other corporation,
nor the merger or consolidation of any other corporation into or with the
Company nor any sale, transfer or lease of all or any part of the assets of
the Company, shall be deemed to be a dissolution, liquidation or winding up.
Because the Company has subsidiaries which have debt obligations and
other liabilities of their own, the Company's rights and the rights of its
creditors and its stockholders to participate in the distribution of assets
of any subsidiary upon the latter's liquidation or recapitalization will be
subject to prior claims of the subsidiary's creditors, except to the extent
that the Company may itself be a creditor with recognized claims against the
subsidiary.
REGISTRAR
CMS Energy Common Stock is transferrable at Consumers Power Company,
212 W. Michigan Avenue, Jackson, MI 49201. The registrar for CMS Energy
Common Stock is Consumers Power Company.
PRIMARY SOURCE OF FUNDS FOR THE COMPANY'S COMMON STOCK; RESTRICTIONS ON
SOURCES OF DIVIDENDS
The ability of CMS Energy to pay (i) dividends on its capital stock and
(ii) its indebtedness depends and will depend substantially upon timely
receipt of sufficient dividends or other distributions from its subsidiaries,
in particular Consumers. Consumers' ability to pay dividends on its common
stock depends upon its revenues, earnings and other factors. Consumers'
revenues and earnings will depend substantially upon rates authorized by the
Michigan Public Service Commission (the "MPSC").
Consumers' ability to pay dividends is restricted by its First Mortgage
Bond Indenture (the"Mortgage Indenture") and its Articles of Incorporation
(the "Articles"). The Mortgage Indenture provides that Consumers can only
pay dividends on its common stock out of retained earnings accumulated
subsequent to September 30, 1945, provided that upon such payment, there
shall remain of such retained earnings an amount equivalent to any deficiency
in maintenance and replacement expenditures as compared with maintenance and
replacement requirements since December 31, 1945. Because of restrictions
in its Articles and Mortgage Indenture, Consumers was prohibited from paying
dividends on its common stock from June 1991 to December 31, 1992. However,
as of December 31, 1992, Consumers effected a quasi-reorganization in which
Consumers' accumulated deficit of $574 million was eliminated against other
paid-in capital. With the accumulated deficit eliminated, Consumers
satisfied the requirements under its Mortgage Indenture and resumed paying
dividends on its common stock in May 1993.
Consumers' Articles also provide two restrictions on its payment of
dividends on its common stock. First, prior to the payment of any common
stock dividend, Consumers must reserve retained earnings after giving effect
to such dividend payment of at least (i) $7.50 per share on all then
outstanding shares of its preferred stock; (ii) in respect to its Class A
Preferred Stock, 7.5% of the aggregate amount established by its Board of
Directors to be payable on the shares of each series thereof in the event of
involuntary liquidation of Consumers; and (iii) $7.50 per share on all then
outstanding shares of all other stock over which its preferred stock and
Class A Preferred Stock do not have preference as to the payment of dividends
and as to assets. Second, dividend payments during the 12 month period
ending with the month the proposed payment is to be paid are limited to: (i)
50% of net income available for the payment of dividends during the base
period (hereinafter defined) if the ratio of common stock and surplus to
total capitalization and surplus for 12 consecutive calendar months within
the 14 calendar months immediately preceding the proposed dividend payment
(the "base period"), adjusted to reflect the proposed dividend, is less than
20%; and (ii) 75% of net income available for the payment of dividends during
the base period if the ratio of common stock and surplus to total
capitalization and surplus for the base period, adjusted to reflect the
proposed dividend, is at least 20% but less than 25%.
Consumers' Articles also prohibit the payment of cash dividends on its
common stock if Consumers is in arrears on preferred stock dividend payments.
In addition, Michigan law prohibits payment of a dividend if, after
giving it effect, Consumers would not be able to pay its debts as they become
due in the usual course of business, or its total assets would be less than
the sum of its total liabilities plus, unless the articles permit otherwise,
the amount that would be needed, if Consumers were to be dissolved at the
time of the distribution, to satisfy the preferential rights upon dissolution
of shareholders whose preferential rights are superior to those receiving the
distribution. Consumers' net assets available for payment of dividends under
the Michigan Business Corporation Act at September 30, 1995 were $1,531
million.
Under the most restrictive of these conditions, at September 30, 1995,
$75 million of Consumers' retained earnings were available to pay cash
dividends on its common stock. Currently it is Consumers' policy to pay
annual dividends equal to 80% of its annual consolidated net income.
Consumers' Board of Directors reserves the right to change this policy at any
time.
Consumers paid dividends on its common stock of $69.9 million on May
19, 1995.
LEGAL OPINIONS
An opinion as to the legality of the CMS Energy Common Stock will be
rendered for CMS Energy by Denise M. Sturdy, Esq., Assistant General Counsel
of CMS Energy.
EXPERTS
The consolidated financial statements and schedule of CMS Energy as of
December 31, 1994 and 1993, and for each of the five years in the period
ended December 31, 1994 incorporated by reference in this Prospectus, have
been audited by Arthur Andersen LLP (formerly Arthur Andersen & Co.),
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
With respect to the unaudited interim consolidated financial
information for the quarterly periods ended March 31, June 30, and September
30, 1994 and 1995, incorporated by reference in this Prospectus, Arthur
Andersen LLP has applied limited procedures in accordance with professional
standards for a review of such information. However, their separate report
thereon states that they did not audit and they did not express an opinion
on that interim consolidated financial information. Accordingly, the degree
of reliance on their report on that information should be restricted in light
of the limited nature of the review procedures applied. In addition, the
accountants are not subject to the liability provisions of Section 11 of the
Securities Act, for their report on the unaudited interim consolidated
financial information because that report is not a "report" or a "part" of
the registration statement prepared or certified by the accountants within
the meaning of Sections 7 and 11 of the Securities Act.
Future consolidated financial statements of CMS Energy and the reports
thereon of Arthur Andersen LLP also will be incorporated by reference in this
Prospectus in reliance upon the authority of that firm as experts in giving
those reports to the extent that said firm has audited said consolidated
financial statements and consented to the use of their reports thereon.
<PAGE>
<PAGE> II-1
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following resolution was adopted by the Board of Directors of
CMS Energy on May 6, 1987:
RESOLVED: That effective March 1, 1987 the Corporation shall
indemnify to the full extent permitted by law every person (including
the estate, heirs and legal representatives of such person in the event
of the decease, incompetency, insolvency or bankruptcy of such person)
who is or was a director, officer, partner, trustee, employee or agent
of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, against all liability, costs, expenses, including
attorneys' fees, judgments, penalties, fines and amounts paid in
settlement, incurred by or imposed upon the person in connection with
or resulting from any claim or any threatened, pending or completed
action, suit or proceeding whether civil, criminal, administrative,
investigative or of whatever nature, arising from the person's service
or capacity as, or by reason of the fact that the person is or was, a
director, officer, partner, trustee, employee or agent of the
Corporation or is or was serving at the request of the Corporation as
a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
Such right of indemnification shall not be deemed exclusive of any
other rights to which the person may be entitled under statute, bylaw,
agreement, vote of shareholders or otherwise.
CMS Energy's Bylaws provide:
The Corporation may purchase and maintain liability insurance, to the
full extent permitted by law, on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such
person in any such capacity.
Article VIII of the Articles of Incorporation reads:
A director shall not be personally liable to the Corporation or its
shareholders for monetary damages for breach of duty as a director except
(i) for a breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for a violation
of Section 551(1) of the Michigan Business Corporation Act, and (iv) any
transaction from which the director derived an improper personal benefit.
No amendment to or repeal of this Article VIII, and no modification to its
provisions by law, shall apply to, or have any effect upon, the liability or
alleged liability of any director of the Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment,
repeal or modification.
Article IX of the Articles of Incorporation reads:
Each director and each officer of the Corporation shall be indemnified
by the Corporation to the fullest extent permitted by law against expenses
(including attorneys' fees), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
the defense of any proceeding in which he or she was or is a party or is
threatened to be made a party by reason of being or having been a director
or an officer of the Corporation. Such right of indemnification is not
exclusive of any other rights to which such director or officer may be
entitled under any now or thereafter existing statute, any other provision
of these Articles, bylaw, agreement, vote of shareholders or otherwise. If
the Business Corporation Act of the State of Michigan is amended after
approval by the shareholders of this Article IX to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Business Corporation Act of the State of
Michigan, as so amended. Any repeal or modification of this Article IX by
the shareholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
Sections 561 through 571 of the Michigan Business Corporation Act provide as
follows:
Sec. 561. A corporation has the power to indemnify a person who was
or is a party or is threatened to be made a party to a threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal, other than
an action by or in the right of the corporation, by reason of the fact that
he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, or other
enterprise, whether for profit or not, against expenses, including attorneys'
fees, judgments, penalties, fines, and amounts paid in settlement actually
and reasonably incurred by him or her in connection with the action, suit,
or proceeding, if the person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders, and with respect to a criminal action or
proceeding, if the person had no reasonable cause to believe his or her
conduct was unlawful. The termination of an action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, does not, of itself, create a presumption that the person
did not act in good faith and in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the corporation or its
shareholders, and, with respect to a criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
Sec. 562. A corporation has the power to indemnify a person who was
or is a party or is threatened to be made a party to a threatened, pending,
or completed action or suit by or in the right of the corporation to procure
a judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise, whether for profit
or not, against expenses, including attorneys' fees, and amounts paid in
settlement actually and reasonably incurred by the person in connection with
the action or suit, if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of
the corporation or its shareholders. Indemnification shall not be made for
a claim, issue, or matter in which the person has been found liable to the
corporation except to the extent authorized in Section 564c.
Sec. 563. To the extent that a director, officer, employee, or agent
of a corporation has been successful on the merits or otherwise in defense
of an action, suit, or proceeding referred to in Section 561 or 562, or in
defense of a claim, issue, or matter in the action, suit, or proceeding, he
or she shall be indemnified against actual and reasonable expenses, including
attorneys' fees, incurred by him or her in connection with the action, suit,
or proceeding and an action, suit, or proceeding brought to enforce the
mandatory indemnification provided in this section.
Section 564a. (1) An indemnification under Section 561 or 562, unless
ordered by the court, shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the director,
officer, employee, or agent is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Sections 561 and 562
and upon an evaluation of the reasonableness of expenses and amounts paid in
settlement. This determination and evaluation shall be made in any of the
following ways:
(a) By a majority vote of a quorum of the board consisting of
directors who are not parties or threatened to be made parties to the action,
suit, or proceeding.
(b) If a quorum cannot be obtained under subdivision (a), by majority
vote of a committee duly designated by the board and consisting solely of 2
of more directors not at the time parties or threatened to be made parties
to the action, suit, or proceeding.
(c) By independent legal counsel in a written opinion, which counsel
shall be selected in 1 of the following ways:
(i) By the board or its committee in the manner prescribed in
subdivision (a) or (b).
(ii) If a quorum of the board cannot be obtained under
subdivision (a) and a committee cannot be designated under subdivision
(b), by the board.
(d) By all independent directors who are not parties or threatened
to be made parties to the action, suit, or proceeding.
(e) By the shareholders, but shares held by directors, officers,
employees, or agents who are parties or threatened to be made parties of the
action, suit, or proceeding may not be voted.
(2) In the designation of a committee under subsection (1)(b) or in
the selection of independent legal counsel under subsection (1)(c)(ii), all
directors may participate.
(3) If a person is entitled to indemnification under Section 561 or
562 for a portion of expenses, including reasonable attorneys' fees,
judgments, penalties, fines, and amounts paid in settlement, but not for the
total amount, the corporation may indemnify the person for the portion of the
expenses, judgments, penalties, fines, or amounts paid in settlement for
which the person is entitled to be indemnified.
Sec. 564b. (1) A corporation may pay or reimburse the reasonable
expenses incurred by a director, officer, employee, or agent who is a party
or threatened to be made a party to an action, suit, or proceeding in advance
of final disposition of the proceeding if all of the following apply:
(a) The person furnishes the corporation a written affirmation of his
or her good faith belief that he or she has met the applicable standard of
conduct set forth in Sections 561 and 562.
(b) The person furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay the advance if it is
ultimately determined that he or she did not meet the standard of conduct.
(c) A determination is made that the facts then known to those making
the determination would not preclude indemnification under this act.
(2) The undertaking required by subsection (1)(b) must be an
unlimited general obligation of the person but need not be secured.
(3) Determinations and evaluations under this section shall be made
in the manner specified in Section 564a.
Section 564c. A director, officer, employee, or agent of the
corporation who is a party or threatened to be made a party to an action,
suit, or proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court after giving any notice it considers necessary may
order indemnification if it determines that the person is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not he or she met the applicable standard of
conduct set forth in Sections 561 and 562 or was adjudged liable as described
in Section 562, but if he or she was adjudged liable, his or her
indemnification is limited to reasonable expenses incurred.
Sec. 565. (1) The indemnification or advancement of expenses provided
under Sections 561 to 564c is not exclusive of other rights to which a person
seeking indemnification or advancement of expenses may be entitled under the
articles of incorporation, bylaws, or a contractual agreement. The total
amount of expenses advanced or indemnified from all sources combined shall
not exceed the amount of actual expenses incurred by the person seeking
indemnification or advancement of expenses.
(2) The indemnification provided for in Sections 561 to 565
continues as to a person who ceases to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, personal representatives,
and administrators of the person.
Sec. 567. A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, partner, trustee, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise against any liability asserted against him or her and incurred by
him or her in any such capacity or arising out of his or her status as such,
whether or not the corporation would have power to indemnify him or her
against liability under Sections 561 to 565.
Sec. 569. For purposes of Sections 561 to 567, "corporation" includes
all constituent corporations absorbed in a consolidation or merger and the
resulting or surviving corporation, so that a person who is or was a
director, officer, partner, trustee, employee, or agent of the constituent
corporation or is or was serving at the request of the constituent
corporation as a director, officer, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, or other enterprise
whether for profit or not shall stand in the same position under the
provisions of this section with respect to the resulting or surviving
corporation as the person would if he or she had served the resulting or
surviving corporation in the same capacity.
Sec. 571. For the purposes of Sections 561 to 567:
(a) "Fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan.
(b) "Other enterprises" shall include employee benefit plans.
(c) "Serving at the request of the corporation" shall include any
service as a director, officer, employee, or agent of the corporation which
imposes duties on, or involves services by, the director, officer, employee,
or agent with respect to an employee benefit plan, its participants, or its
beneficiaries.
(d) A person who acted in good faith and in a manner he or she
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be considered to have acted
in a manner "not opposed to the best interests of the corporation or its
shareholders" as referred to in Sections 561 and 562.
Officers and directors are covered within specified monetary limits by
insurance against certain losses arising from claims made by reason of their
being directors or officers of the Corporation or of the Corporation's
subsidiaries and the Corporation's officers and directors are indemnified
against such losses by reason of their being or having been directors or
officers of another corporation, partnership, joint venture, trust or other
enterprise at the Corporation's request. In addition, the Corporation has
indemnified each of its present directors by contracts that contain
affirmative provisions essentially similar to those in Sections 561 through
571 of the Michigan Business Corporation Act cited above.
<PAGE>
<PAGE>
ITEM 21. EXHIBITS.
EXHIBIT NO.
* (3)(i) - Restated Articles of Incorporation of CMS Energy, as filed
with the Michigan Department of Commerce on June 6, 1995.
*(3)(ii) - Copy of the By-Laws of CMS Energy. (Designated in
CMS Energy's Form 10-K for the year ended December 31,
1994, File No. 1-9513, as Exhibit (3)(b).)
*(4)(i) - Indenture dated as of September 15, 1992 between
CMS Energy Corporation and NBD Bank, National Association,
as Trustee. (Designated in CMS Energy's Form S-3
Registration Statement filed May 1, 1992, File No.
33-47629, as Exhibit (4)(a).)
*(4)(i)(A) - First Supplemental Indenture dated as of October 1, 1992
between CMS Energy Corporation and NBD Bank, National
Association, as Trustee. (Designated in CMS Energy's Form
8-K dated October 1, 1992, File No. 1-9513, as Exhibit
(4).)
*(4)(i)(B) - Second Supplemental Indenture dated as of October 1, 1992
between CMS Energy Corporation and NBD Bank, National
Association, as Trustee. (Designated in CMS Energy's Form
8-K dated October 1, 1992, File No. 1-9513, as Exhibit
(4).)
(4)(ii) - Credit Agreement dated as of November 21, 1995, among
CMS Energy Corporation, the Banks, the Co-Agents, the
Documentation Agent, the Operational Agent and the Co-
Manager, all as defined therein, and the Exhibits thereto.
(4)(ii)(A) - Term Loan Agreement dated as of November 21, 1995 among
CMS Energy Corporation, the Banks, the Co-Agents, the
Documentation Agent, the Operational Agent and the Co-
Managers, all as defined therein, and the Exhibits
thereto.
*(4)(iii) - Indenture dated as of January 15, 1994 between CMS Energy
and The Chase Manhattan Bank, National Association, as
Trustee. (Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as Exhibit (4)(a).)
*(4)(iii)(A) - First Supplemental Indenture dated as of
January 20, 1994 between CMS Energy and The Chase
Manhattan Bank, National Association, as Trustee.
(Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as Exhibit
(4)(b).)
*(5) - Opinion of Counsel.
(15) - Letter on unaudited interim financial information.
*(21) - Subsidiaries of the registrant. (Designated in
CMS Energy's Form 10-K for the year ended December 31,
1994, File No. 1-9513 as Exhibit (21)(a).)
(23)(i) - Consent of Arthur Andersen LLP.
*(23)(ii) - Consent of Counsel is contained in Exhibit 5 hereto.
*(24) - Powers of Attorney.
_________________
* Previously filed.
Exhibits listed above which have been filed with the Securities and
Exchange Commission are incorporated herein by reference with the same effect
as if filed with this registration statement.
<PAGE>
<PAGE> II-6
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933; (ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement; (iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; provided, however, that (i) and (ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) The undersigned registrant hereby undertakes as follows: prior
to any public reoffering of the securities registered hereunder through use
of a prospectus which is a part of this registration statement, by any person
or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other Items of the applicable form.
(d) The undersigned registrant undertakes that every prospectus
(i) that is filed pursuant to the immediately preceding paragraph or
(ii) that purports to meet the requirements of Section 10(a)(3) of the
Securities Act and is used in connection with the offering of securities
subject to Rule 415 will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 20 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(f) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the request.
(g) The undersigned registrant hereby undertakes to supply by means
of a post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective, except where
the transaction in which the securities being offered pursuant to this
registration statement (i) would itself qualify for an exemption from
Section 5 of the Securities Act of 1993, absent the existence of other
similar (prior or subsequent) transactions, and (ii) would not be material
to the Registrant.
_______________________________________
<PAGE>
<PAGE> II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Dearborn, and State of Michigan, on the 10th day of January, 1996.
CMS ENERGY CORPORATION
By /s/A. M. Wright
A. M. Wright
Senior Vice President,
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 10th day of January, 1996.
Name Title
(i) Principal executive officer: Chairman of the Board,
Chief Executive Officer
/s/William T. McCormick, Jr. and Director
-------------------------------
(William T. McCormick, Jr.)
(ii) Principal financial officer:
Senior Vice President,
/s/A. M. Wright Chief Financial Officer
--------------------------------- and Treasurer
(A. M. Wright)
(iii) Controller or principal
accounting officer:
Vice President, Controller
/s/P. D. Hopper and Chief Accounting Officer
-------------------------------
(P. D. Hopper)
<PAGE>
<PAGE> II-9
Name Title
* Director
- -----------------------------
(S. Kinnie Smith, Jr.)
* Director
- ----------------------------
(Victor J. Fryling)
* Director
- ----------------------------
(James J. Duderstadt)
* Director
- ----------------------------
(Kathleen R. Flaherty)
* Director
- ----------------------------
(Earl D. Holton)
* Director
- ----------------------------
(Lois A. Lund)
* Director
- ----------------------------
(Frank H. Merlotti)
Director
- -----------------------------
(William U. Parfet)
* Director
- -----------------------------
(Percy A. Pierre)
* Director
- ------------------------------
(Kenneth Whipple)
* Director
- -----------------------------
(John B. Yasinsky)
*By /s/A. M. Wright
A. M. Wright
Attorney-in-fact
<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CMS ENERGY CORPORATION
EXHIBITS
<PAGE>
<PAGE>
EXHIBIT INDEX
Page
----
* (3)(i) - Restated Articles of Incorporation
of CMS Energy, as filed with the
Michigan Department of Commerce on
June 6, 1995.
*(3)(ii) - Copy of the By-Laws of CMS Energy.
(Designated in CMS Energy's
Form 10-K for the year ended
December 31, 1994, File No. 1-9513,
as Exhibit (3)(b).)
*(4)(i) - Indenture dated as of September 15,
1992 between CMS Energy Corporation
and NBD Bank, National Association,
as Trustee. (Designated in CMS
Energy's Form S-3 Registration
Statement filed May 1, 1992,
File No. 33-47629, as Exhibit (4)(a).)
*(4)(i)(A) - First Supplemental Indenture dated
as of October 1, 1992 between CMS
Energy Corporation and NBD Bank,
National Association, as Trustee.
(Designated in CMS Energy's
Form 8-K dated October 1, 1992,
File No. 1-9513, as Exhibit (4).)
*(4)(i)(B) - Second Supplemental Indenture dated
as of October 1, 1992 between CMS
Energy Corporation and NBD Bank,
National Association, as Trustee.
(Designated in CMS Energy's
Form 8-K dated October 1, 1992,
File No. 1-9513, as Exhibit (4).)
(4)(ii) - Credit Agreement dated as of November 21,
1995, among CMS Energy Corporation, the
Banks, the Co-Agents, the Documentation
Agent, the Operational Agent and the
Co-Manager, all as defined therein, and
the Exhibits thereto.
(4)(ii)(A) - Term Loan Agreement dated as of November 21,
1995 among CMS Energy Corporation, the Banks,
the Co-Agents, the Documentation Agent, the
Operational Agent and the Co-Managers, all as
defined therein, and the Exhibits thereto.
*(4)(iii) - Indenture dated as of January 15, 1994
between CMS Energy and The Chase Manhattan
Bank, National Association, as Trustee.
(Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as
Exhibit (4)(a).)
*(4)(iii)(A)- First Supplemental Indenture dated as of
January 20, 1994 between CMS Energy and
The Chase Manhattan Bank, National
Association, as Trustee. (Designated in
CMS Energy's Form 8-K dated March 29,
1994, File No. 1-9513, as Exhibit (4)(b).)
*(5) - Opinion of Counsel.
(15) - Letter on unaudited interim financial
information.
*(21) - Subsidiaries of the registrant.
(Designated in CMS Energy's Form 10-K
for the year ended December 31, 1994,
File No. 1-9513 as Exhibit (21)(a).)
(23)(i) - Consent of Arthur Andersen LLP.
*(23)(ii) - Consent of Counsel is contained in
Exhibit 5 hereto.
*(24) - Powers of Attorney.
_________________
* Previously filed.
Exhibits listed above which have been filed with the Securities and
Exchange Commission are incorporated herein by reference with the same effect
as if filed with this registration statement.
<PAGE>
EXHIBIT (4)(ii)
<PAGE>
<PAGE>
[EXECUTION COPY]
- --------------------------------------------------------------------------
$450,000,000
CREDIT AGREEMENT
Dated as of November 21, 1995,
Among
CMS ENERGY CORPORATION
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A. and
UNION BANK
as Co-Agents
- --------------------------------------------------------------------------
<PAGE>
<PAGE> ii
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . 2
SECTION 1.02. Computation of Time Periods . . . . . . . . . . . . 21
SECTION 1.03. Accounting Terms . . . . . . . . . . . . . . . . . . 21
ARTICLE II COMMITMENTS
SECTION 2.01. The Commitments . . . . . . . . . . . . . . . . . . 21
SECTION 2.02. Fees . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.03. Reduction of the Commitments . . . . . . . . . . . . 24
SECTION 2.04. Computations of Outstandings . . . . . . . . . . . . 24
SECTION 2.05. Extension of Termination Date . . . . . . . . . . . 24
ARTICLE III ADVANCES
SECTION 3.01. Advances . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.02. Conversion of Advances . . . . . . . . . . . . . . . 27
SECTION 3.03. Interest Periods . . . . . . . . . . . . . . . . . . 27
SECTION 3.04. Other Terms Relating to the Making and
Conversion of Advances . . . . . . . . . . . . . . 28
SECTION 3.05. Repayment of Advances . . . . . . . . . . . . . . . 31
ARTICLE IV LETTERS OF CREDIT
SECTION 4.01. LC Banks . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.02. Letters of Credit . . . . . . . . . . . . . . . . . 32
SECTION 4.03. LC Bank Fees . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.04. Reimbursement to LC Banks . . . . . . . . . . . . . 33
SECTION 4.05. Obligations Absolute . . . . . . . . . . . . . . . . 34
SECTION 4.06. Liability of LC Banks and the Lenders . . . . . . . 35
ARTICLE V PAYMENTS, COMPUTATIONS ANDYIELD PROTECTION
SECTION 5.01. Payments and Computations . . . . . . . . . . . . . 36
SECTION 5.02. Interest Rate Determination . . . . . . . . . . . . 38
SECTION 5.03. Prepayments . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.04. Yield Protection . . . . . . . . . . . . . . . . . . 39
SECTION 5.05. Sharing of Payments, Etc. . . . . . . . . . . . . . 41
SECTION 5.06. Taxes . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VI CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Initial Extension of
Credit . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.02. Conditions Precedent to Each Extension of Credit . . 46
SECTION 6.03. Conditions Precedent to Certain Extensions of
Credit . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.04. Reliance on Certificates . . . . . . . . . . . . . . 48
ARTICLE VII REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower . . . 48
ARTICLE VIII COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants . . . . . . . . . . . . . . . 52
SECTION 8.02. Negative Covenants . . . . . . . . . . . . . . . . . 55
SECTION 8.03. Reporting Obligations . . . . . . . . . . . . . . . 61
ARTICLE IX DEFAULTS
SECTION 9.01. Events of Default . . . . . . . . . . . . . . . . . 65
SECTION 9.02. Remedies . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE X THE AGENTS
SECTION 10.01. Authorization and Action . . . . . . . . . . . . . 68
SECTION 10.02. Agents' Reliance, Etc. . . . . . . . . . . . . . . 69
SECTION 10.03. Citibank, Union Bank and Affiliates . . . . . . . . 69
SECTION 10.04. Lender Credit Decision . . . . . . . . . . . . . . 69
SECTION 10.05. Indemnification . . . . . . . . . . . . . . . . . . 70
SECTION 10.06. Successor Agents . . . . . . . . . . . . . . . . . 70
ARTICLE XI MISCELLANEOUS
SECTION 11.01. Amendments, Etc. . . . . . . . . . . . . . . . . . 71
SECTION 11.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . 72
SECTION 11.03. No Waiver of Remedies . . . . . . . . . . . . . . . 72
SECTION 11.04. Costs, Expenses and Indemnification . . . . . . . . 72
SECTION 11.05. Right of Set-off . . . . . . . . . . . . . . . . . 74
SECTION 11.06. Binding Effect . . . . . . . . . . . . . . . . . . 75
SECTION 11.07. Assignments and Participation . . . . . . . . . . . 75
SECTION 11.08. Confidentiality . . . . . . . . . . . . . . . . . . 79
SECTION 11.09. Waiver of Jury Trial . . . . . . . . . . . . . . . 80
SECTION 11.10. Governing Law . . . . . . . . . . . . . . . . . . . 80
SECTION 11.11. Relation of the Parties; No Beneficiary . . . . . . 81
SECTION 11.12. Existing Banks' Waiver, Acknowledgment
and Release . . . . . . . . . . . . . . . . . . . 81
SECTION 11.13. Execution in Counterparts . . . . . . . . . . . . . 81
SECTION 11.14. Survival of Agreement . . . . . . . . . . . . . . 81
<PAGE>
<PAGE> v
Exhibits
- --------
EXHIBIT A - Form of Note
EXHIBIT B - Form of Notice of Borrowing
EXHIBIT C - Form of Notice of Conversion
EXHIBIT D - Form of Cash Collateral Agreement
EXHIBIT E - Form of Opinion of Denise M. Sturdy, Esq., Counsel of the
Borrower
EXHIBIT F - Form of Opinion of King & Spalding, counsel to the Agents
EXHIBIT G - Form of Compliance Schedule
EXHIBIT H - Form of Lender Assignment
Schedules
- ---------
SCHEDULE I Applicable Lending Offices
SCHEDULE II Certain Debt
<PAGE>
<PAGE> 1
CREDIT AGREEMENT
Dated as of November 21, 1995
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) Citibank, N.A. ("Citibank") and Union Bank ("Union Bank"),
as co-administrative agents (individually a "Co-Agent" and
collectively, the "Co-Agents") for the Lenders hereunder,
(iv) Citibank, as documentation agent (the "Documentation
Agent") for the Lenders hereunder,
(v) Union Bank, as operational agent (the "Operational Agent")
for the Lenders hereunder, and
(vi) Bank of America Illinois, BZW Division of Barclays Bank
PLC, The Chase Manhattan Bank, N.A., The First National
Bank of Boston and The First National Bank of Chicago, as
co-managers (individually, the "Co-Manager" and,
collectively, the "Co-Managers").
PRELIMINARY STATEMENTS
The Borrower has requested the Banks to provide the credit
facilities hereinafter described in the amounts 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 (such meanings to be
applicable to the singular and plural forms of the terms defined):
"Advance" means an Advance by a Lender to the Borrower
pursuant to Section 3.01 (or deemed made pursuant to Section
4.04(d)), and refers to a Base Rate Advance or a Eurodollar Rate
Advance (each of which shall be a "Type" of Advance). All
Advances 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 Advance by such Lender until repaid or next Converted.
"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 Co-Agents, the
Operational Agent or the Documentation Agent; and "Agents" means
any or all of the foregoing.
"Alternate Base Rate" means a fluctuating interest rate per
annum equal at all times to the highest of:
(a)the rate of interest announced publicly by Union Bank
in Los Angeles, California, from time to time, as the Union
Bank Reference Rate;
(b)1/2 of one percent per annum above the latest
three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average being determined weekly by the
Operational Agent on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such
rates received by the Operational Agent from three New York
certificate of deposit dealers of recognized standing selected
by the Operational Agent, in either case adjusted to the
nearest 1/4 of one percent or, if there is no nearest 1/4 of
one percent, to the next higher 1/4 of one percent; and
(c)1/2 of one percent per annum above the Federal Funds
Rate.
Each change in the Alternate Base Rate shall take effect
concurrently with any change in such base rate, moving average, or
Federal Funds Rate.
"Applicable Lending Office" means, with respect to each
Lender, (i) such Lender's Domestic Lending Office, in the case of
a Base Rate Advance, and (ii) such Lender's Eurodollar Lending
Office, in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, on any date of determination, (i)
for a Base Rate Advance, 0.00% per annum, and (ii) for a
Eurodollar Rate Advance, 1.25% per annum.
Notwithstanding the foregoing, (i) each of the foregoing
Applicable Margins shall be increased by 0.50% per annum in the
event that, and at all times during which, the Senior Notes shall
be rated BB- (or its equivalent) or lower by (A) any three of S&P,
Fitch, Moody's and D&P, or (B) both S&P and Moody's, and (ii) the
foregoing Applicable Margin applicable to Eurodollar Rate Advances
shall be decreased by 0.25% per annum in the event that, and at
all times during which, the Senior Notes shall be rated BBB- (or
its equivalent) or higher by (x) any three of S&P, Fitch, Moody's
and D&P, or (y) both S&P and Moody's. The Applicable Margins
shall be increased or decreased in accordance with this definition
upon any change in the applicable ratings, and such increased or
decreased Applicable Margins shall be effective from the date of
announcement of any such new ratings. The Borrower agrees to
notify the Operational Agent promptly after each change in any
rating of the Senior Notes. For purposes of this definition only,
if the Senior Notes shall no longer be outstanding or shall no
longer be rated by any three of S&P, Fitch, Moody's and D&P or by
both Moody's and S&P, "Senior Notes" shall mean such other senior
unsecured Debt of the Borrower that is both outstanding and so
rated. In the event that no Senior Notes are outstanding and so
rated, the Applicable Margins will be such amount or amounts as
may be mutually agreed by the Borrower and all the Lenders.
"Applicable Rate" means:
(i)in the case of each Base Rate Advance, 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 in effect
from time to time; and
(ii)in the case of each Eurodollar Rate Advance comprising
part of the same Borrowing, a rate per annum during each
Interest Period equal at all times to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable
Margin in effect from time to time during such Interest
Period.
"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 hereunder.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 3.05(b)(i).
"Borrowing" means a borrowing consisting of Advances 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 Advances of a
particular Type may be referred to as being a Borrowing of such
"Type". All Advances 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, Los Angeles,
California and Detroit, Michigan, and, if the applicable Business
Day relates to any Eurodollar Rate Advance, 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 Operational Agent, for the benefit of the Lenders,
substantially in the form of Exhibit D.
"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 $5,000,000)
of such Subsidiaries during such period; provided, however, that
for the fiscal year ending December 31, 1995, "Cash Dividend
Income" shall also include an amount equivalent to 80% of
Consumers' consolidated net income for such year to the extent
that such consolidated net income has not been paid in cash
dividends by Consumers to the Borrower.
"Closing Date" means the date upon which each of the
conditions precedent enumerated in Section 6.01 has been fulfilled
to the satisfaction of the Lenders, the Co-Agents and the
Borrower. All transactions contemplated by the Closing Date shall
take place on or before November 21, 1995, at the offices of King
& Spalding, 120 West 45th Street, New York, New York 10036, at
10:00 A.M., or such other time as the parties hereto may mutually
agree.
"Commitment" means, for each Lender, the obligation of such
Lender to make Advances 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 or, if such Lender has entered
into one or more Lender Assignments, set forth for such Lender in
the Register maintained by the Documentation 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 $450,000,000 million.
"Confidential Information" has the meaning assigned to that
term in Section 11.08.
"Consolidated Capital" means, at any date of determination,
the sum of (a) Consolidated Debt, (b) consolidated equity of the
common stockholders of the Borrower and the Consolidated
Subsidiaries, (c) consolidated equity of the preference
stockholders of the Borrower and the Consolidated Subsidiaries,
and (d) consolidated equity of the preferred stockholders of the
Borrower and the Consolidated Subsidiaries, in the case of clauses
(b) through (d) above, determined at such date in accordance with
GAAP; provided, however, that Consolidated Capital shall include
Project Finance Equity of the Borrower and the Consolidated
Subsidiaries in any Consolidated Subsidiary only to the extent of
the Borrower's Ownership Interest in such Consolidated Subsidiary.
"Consolidated Debt" means, without duplication, at any date of
determination, the sum of the aggregate Debt of the Borrower plus
the aggregate debt (as such term is construed in accordance with
GAAP) of the Consolidated Subsidiaries, provided, however, that
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; provided, further,
that for purposes of this definition only, Debt of the Borrower
shall (a) include only 50% of the aggregate principal amount of
Subordinated Debt and Preferred Securities described in clause (b)
of the definition thereof, subject to a maximum exclusion of
$100,000,000 in the aggregate, and (b) not include Subordinated
Debt or Preferred Securities if such Subordinated Debt or
Preferred Securities, as the case may be, is mandatorily
convertible into common stock of the Borrower upon terms and
conditions satisfactory to the Majority Lenders; and provided,
further, that for purposes of this definition only, debt of any
Consolidated Subsidiary shall include Project Finance Debt of such
Consolidated Subsidiary only to the extent of the Borrower's
Ownership Interest in such Consolidated Subsidiary.
"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 Power 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 Advances of one Type into Advances of another Type, or to the
selection of a new, or the renewal of the same, Interest Period
for Advances, as the case may be, pursuant to Section 3.02.
"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 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, and (viii) 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 (vii) above and
(B) other guaranty or similar financial obligations in respect of
the performance of others, including, without limitation, Support
Obligations.
"Default Rate" means a rate per annum equal at all times to
the higher of (i) 2% per annum above the higher, from time to
time, of (A) the Applicable Rate for Eurodollar Rate Advances
immediately prior to such Default Rate becoming applicable and
(B) the Applicable Rate in effect from time to time for Base Rate
Advances, and (ii) the highest rate per annum payable pursuant to
the Indenture with respect to any principal amount of the Senior
Notes that is not paid when due.
"Dividend Coverage Ratio" means, at any date, the ratio of (i)
Pro Forma Dividend Amounts to (ii) Issuer Interest Expense, as
such terms are defined in the Indenture as in effect on the date
hereof.
"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
Operational Agent.
"Eligible Assignee" means (a) a commercial bank or trust
company organized under the laws of the United States, or any
State thereof; (b) a commercial bank organized under the laws of
any other country that is a member of the OECD, or a political
subdivision of any such country, provided that such bank is acting
through a branch or agency located in the United States; (c) the
central bank of any country that is a member of the OECD; and
(d) any other commercial bank or other financial institution
engaged generally in the business of extending credit or
purchasing debt instruments; provided, however, that (A) any such
Person shall also (i) have outstanding unsecured indebtedness that
is rated A- or better by S&P or A3 or better by Moody's (or an
equivalent rating by another nationally-recognized credit rating
agency of similar standing if neither of such corporations is then
in the business of rating unsecured indebtedness of entities
engaged in such businesses) or (ii) have combined capital and
surplus (as established in its most recent report of condition to
its primary regulator) of not less than $250,000,000 (or its
equivalent in foreign currency), (B) any Person described in
clause (b), (c), or (d) above, shall, on the date on which it is
to become a Lender hereunder, (1) be entitled to receive payments
hereunder without deduction or withholding of any United States
Federal income taxes (as contemplated by Section 5.06) and (2) not
be incurring any losses, costs or expenses of the type for which
such Person could demand payment under Section 5.04(a) or (d)
(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 LC Bank
based upon its then-existing credit criteria and (D) any Person
described in clause (d) above shall, in addition, be acceptable to
the Co-Agents.
"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 Nomeco,
CMS Generation Co., CMS Gas Transmission and Storage Company and
any other direct subsidiary of Enterprises having a net worth in
excess of $50 million.
"Equity Distributions" shall mean, for any period, the
aggregate amount of cash received by the Borrower from its
Subsidiaries during such period that are paid out of proceeds from
the sale of common equity of Subsidiaries of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) that is a "commonly
controlled entity" within the meaning of the regulations under
Section 414 of the Internal Revenue Code of 1986, as amended.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office 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 Operational Agent.
"Eurodollar Rate" means, for each Interest Period for each
Eurodollar Rate Advance made as part of the same Borrowing, an
interest rate per annum equal to the average (rounded upward to
the nearest whole multiple of 1/16 of 1% per annum, if such
average is not such a multiple) of the rate per annum at which
deposits in U.S. dollars are offered by the principal office of
each of the Reference Banks in London, England to prime banks in
the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an
amount substantially equal to such Reference Bank's Eurodollar
Rate Advance made as part of such Borrowing and for a period equal
to such Interest Period. The Eurodollar Rate for the Interest
Period for each Eurodollar Rate Advance made as part of the same
Borrowing shall be determined by the Operational Agent on the
basis of applicable rates furnished to and received by the
Operational Agent from the Reference Banks two Business Days
before the first day of such Interest Period, subject, however, to
the provisions of Sections 3.04(c) and 5.02.
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 3.05(b)(ii).
"Eurodollar Reserve Percentage" of any Lender for each
Interest Period for each Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period (or if more than
one such percentage shall be so applicable, the daily average of
such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under Regulation
D or other regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Event of Default" has the meaning specified in Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Agreement" means the Credit Agreement, dated as of
July 29, 1994, among the Borrower, the lenders named therein, the
Co-Agents, the Documentation Agent and the Operational Agent.
"Existing Banks" means the Banks party to the Existing
Agreement.
"Existing Letters of Credit" means, (i) the irrevocable
standby letter of credit, dated April 29, 1994, issued by The Bank
of Tokyo, Ltd. in favor of New York State Electric & Gas
Corporation, bearing letter of credit number 165-LCS-916840, and
(ii) the irrevocable standby letter of credit, dated December 8,
1994, issued by The Bank of Tokyo, Ltd., in favor of Banco Latino
Americano de Exportaciones, S.A., bearing letter of credit number
165-LCS-917216. The Existing Letters of Credit shall each
constitute a Letter of Credit hereunder.
"Extension of Credit" means (i) the making of a Borrowing
(including, without limitation, 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 Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the
Operational Agent from three Federal funds brokers of recognized
standing selected by the Operational Agent.
"Fee Letter" has the meaning assigned to that term in
Section 2.02(d).
"Fitch" means Fitch's Investors Services or any successor
thereto.
"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.
"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, and the Second Supplemental Indenture, dated as
of October 1, 1992, as said Indenture may be further amended or
otherwise modified from time to time in accordance with its terms.
"Interest Period" has the meaning assigned to that term in
Section 3.03.
"LC Bank" means a Lender or other financial institution
designated by the Borrower, and acceptable to the Documentation
Agent and the Operational Agent, in accordance with Section
4.01(a), as the issuer of a Letter of Credit pursuant to an LC
Bank Agreement. It is understood and agreed that each Lender
shall be deemed to be acceptable to the Documentation Agent and
the Operational Agent for such purposes. As of the date hereof,
the Borrower has designated Union Bank, The Bank of Tokyo, Ltd.
and The Chase Manhattan Bank, N.A. as LC Banks, and the Agents
have accepted such designees pursuant to Section 4.01.
"LC Bank Agreement" means an agreement between an LC Bank and
the Borrower, in form and substance satisfactory to the
Documentation Agent and the Operational Agent, providing for the
issuance of one or more Letters of Credit, in form and substance
satisfactory to the Documentation Agent and the Operational Agent,
in support of a general corporate activity of the Borrower.
"LC Payment Notice" has the meaning assigned to that term in
Section 4.04(b).
"LC Outstandings" means, for any Letter of Credit on any date
of determination, the maximum amount available to be drawn under
such Letter of Credit (assuming the satisfaction of all conditions
for drawing enumerated therein).
"Lender Assignment" means an assignment and agreement entered
into by a Lender and an Eligible Assignee, and accepted by the
Documentation Agent, in substantially the form of Exhibit H.
"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 LC Bank.
"Letter of Credit" means a letter of credit issued by an LC
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 LC Bank Agreement to which it
relates.
"Lien" has the meaning assigned to that term in Section
8.02(a).
"Loan Documents" means this Agreement, the Notes, the Fee
Letter, the Cash Collateral Agreement, the LC Bank Agreement(s)
and all other agreements, instruments and documents now or
hereafter executed and/or delivered pursuant hereto or thereto.
"Majority Lenders" means, on any date of determination,
Lenders that, collectively, on such date (i) have Percentages in
the aggregate of at least 66-2/3% and (ii) if the Commitments have
been terminated, hold at least 66-2/3% of the then aggregate
unpaid principal amount of the Advances owing to Lenders. Any
determination of those Lenders constituting the Majority Lenders
shall be made by the Co-Agents and shall be conclusive and binding
on all parties absent manifest error.
"Measurement Quarter" has the meaning assigned to that term in
Section 8.01(j).
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"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.
"Nomeco" means NOMECO Oil & Gas Co., a Michigan corporation,
all of whose capital stock is on the date hereof owned by
Enterprises.
"Note" means a promissory note of the Borrower payable to the
order of a Lender, in substantially the form of Exhibit A.
"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).
"OECD" means the Organization for Economic Cooperation and
Development.
"Ownership Interest" of the Borrower in any Consolidated
Subsidiary means, at any date of determination, the percentage
determined by dividing (i) the aggregate amount of Project Finance
Equity in such Consolidated Subsidiary owned or controlled,
directly or indirectly, by the Borrower and any other Consolidated
Subsidiary on such date, by (ii) the aggregate amount of Project
Finance Equity in such Consolidated Subsidiary owned or
controlled, directly or indirectly, by all Persons (including the
Borrower and the Consolidated Subsidiaries) on such date.
Notwithstanding anything to the contrary set forth above, if the
"Ownership Interest," calculated as set forth above, is 50% or
less, such percentage shall be deemed to equal 0%.
"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 Commitments on such
date, and multiplying the quotient so obtained by 100%.
"Permitted Investments" means each of the following so long as
no such Permitted Investment shall have a final maturity later
than six months from the date of investment therein:
(i)direct obligations of the United States, or of any
agency thereof, or obligations guaranteed as to principal and
interest by the United States or any agency thereof;
(ii)certificates of deposit or bankers' acceptances
issued, or time deposits held, or investment contracts
guaranteed, by any Lender, any nationally-recognized
securities dealer or any other commercial bank, trust company,
savings and loan association or savings bank organized under
the laws of the United States, or any State thereof, or of any
other country which is a member of the OECD, or a political
subdivision of any such country, and in each case having
outstanding unsecured indebtedness that (on the date of
acquisition thereof) is rated AA- or better by S&P or Aa3 or
better by Moody's (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating unsecured bank indebtedness);
(iii)obligations with any Lender, any other bank or trust
company described in clause (ii), above, or any nationally-
recognized securities dealer, in respect of the repurchase of
obligations of the type described in clause (i), above,
provided that such repurchase obligations shall be fully
secured by obligations of the type described in said clause
(i) and the possession of such obligations shall be
transferred to, and segregated from other obligations owned
by, such Lender, such other bank or trust company or such
securities dealer;
(iv)commercial paper rated (on the date of acquisition
thereof) A-1 or P-1 or better by S&P or Moody's, respectively
(or an equivalent rating by another nationally-recognized
credit rating agency of similar standing if neither of such
corporations is then in the business of rating commercial
paper); and
(v)any eurodollar certificate of deposit issued by any
Lender or any other commercial bank, trust company, savings
and loan association or savings bank organized under the laws
of the United States, or any State thereof, or of any country
which is a member of the OECD, or a political subdivision of
any such country, and in each case having outstanding
unsecured indebtedness that (on the date of acquisition
thereof) is rated AA- or better by S&P or Aa3 or better by
Moody's (or an equivalent rating by another nationally-
recognized credit rating agency of similar standing if neither
of such corporations is then in the business of rating
unsecured bank indebtedness).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock 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.
"Preferred Securities" means (a) any preferred securities
issued by a financing entity (i.e., partnership, trust, limited
liability company) used exclusively to raise capital for the
Borrower, where such financing transaction and preferred
securities have the following characteristics:
(i)the financing entity lends substantially all of the
proceeds from the issuance of the preferred securities to the
Borrower in exchange for Subordinated Debt, which preferred
securities contain terms providing for the deferral of
interest payments corresponding to provisions providing for
the deferral of interest payments on the Subordinated Debt;
and
(ii)the Borrower makes periodic interest payments on the
Subordinated Debt, which interest payments are in turn used by
the financing entity to make corresponding payments to the
holders of the preferred securities; and
(b) any other preferred securities issued by the Borrower,
provided that (A) the Borrower requests such preferred securities
be treated as "preferred securities" for the purpose of clause (a)
of the second proviso of Consolidated Debt and (B) such preferred
securities are on terms and conditions satisfactory to the
Majority Lenders.
"Project Finance Debt" means Debt of any Person that is non-
recourse to such Person (unless such Person is a special-purpose
entity) and any Affiliate of such Person, other than with respect
to the interest of the holder of such Debt in the collateral, if
any, securing such Debt.
"Project Finance Equity" means, at any date of determination,
consolidated equity of the common, preference and preferred
stockholders of the Borrower and the Consolidated Subsidiaries
relating to any obligor with respect to Project Finance Debt.
"Recipient" has the meaning assigned to that term in Section
11.08.
"Reference Banks" means Citibank, Union Bank and Bank of
America Illinois, or any additional or substitute Lenders as may
be selected from time to time to act as Reference Banks hereunder
by the Operational Agent, the Majority Lenders and the Borrower.
"Register" has the meaning specified in Section 11.07(c).
"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 Advances owing
to Lenders and (ii) if no Advances 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 Co-Agents 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 Rating Group 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 Series A Senior Deferred Coupon Notes
Due 1997 and the Series B Senior Deferred Coupon Notes Due 1999
issued by the Borrower pursuant to the Indenture.
"Subordinated Debt" means, for any Person, unsecured Debt of
such Person (i) issued in exchange for the proceeds of Preferred
Securities and (ii) subordinated to the rights of the Lenders
hereunder and under the Notes on terms and conditions satisfactory
to the Majority Lenders, including, without limitation, (A) terms
providing for the deferral of interest payments on such Debt
corresponding to provisions providing for the deferral of interest
payments on the Preferred Securities and (B) the maturity thereof.
"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, without limitation, 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 Agreement for the Allocation
of Income Tax Liabilities and Benefits, dated as of January 1,
1990, 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 30,
1998 or such later date to which the Termination Date is extended
in accordance with Section 2.05 and (ii) the date of termination
or reduction in whole of the Commitments pursuant to Section 2.03
or 9.02.
"Trustee" has the meaning assigned to that term in the
Indenture.
"Type" has the meaning assigned to such term (i) in the
definition of "Advance" when used in such context and (ii) in the
definition of "Borrowing" when used in such context.
"Unmatured Default" means an event that, with the giving of
notice or lapse of time or both, would constitute an Event of
Default.
SECTION 1.02. Computation of Time Periods. 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".
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 Advances 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 Advances, 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
Operational 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 date hereof, in the case of each Bank, and from
the effective date specified in the Lender Assignment pursuant to which it
became a Lender, in the case of each other Lender, until the Termination
Date, 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 Operational Agent for
the account of each Bank a participation fee equal to .075% of such Bank's
Commitment, such fee to be payable on the Closing Date.
(c) The Borrower agrees to pay to the Operational Agent for
the account of each Lender a commission on the average daily aggregate
amount of the LC Outstandings from the date hereof until the Termination
Date at a rate per annum equal to the Applicable Margin with respect to
Eurodollar Rate Advances from time to time, payable quarterly in arrears
on the last day of each January, April, July and October, commencing on
January 31, 1996, and on the Termination Date; provided, however, that
with respect to Letters of Credit that support only performance
obligations of the Borrower or any of its Subsidiaries, such commission
shall be at a rate per annum equal to 50% of the Applicable Margin with
respect to Eurodollar Rate Advances from time to time. The determination
(the "Initial Determination") of whether a particular Letter of Credit
supports only performance obligations of the Borrower or any of its
Subsidiaries shall be made by the Co-Agents prior to the issuance of such
Letter of Credit, and the foregoing Letter of Credit commission shall,
subject to clauses (i) and (ii) below, be payable in accordance with such
Initial Determination. The Documentation Agent shall promptly give notice
of the Initial Determination to the Borrower and each Lender. If the
Initial Determination of the Co-Agents is that, for capital requirements
purposes, such Letter of Credit supports only performance obligations of
the Borrower or any of its Subsidiaries, then each Lender shall, within 90
days after its receipt of notice of the Initial Determination from the
Documentation Agent, provide written notice to the Documentation Agent
stating whether it concurs with and approves the Initial Determination.
The failure of any Lender to so respond within such 90-day period shall be
deemed to constitute an approval by such Lender of the Initial
Determination. If the Majority Lenders do not concur with and approve the
Initial Determination within such period, (i) the Borrower shall pay to
the Operational Agent for the account of each Lender an amount equal to
the excess, if any, of (A) the Letter of Credit commission that would have
been payable by the Borrower pursuant to the first sentence of this
subsection (c) (without giving effect to the proviso thereto) with respect
to such Letter of Credit over (B) the actual Letter of Credit commission
paid by the Borrower pursuant to this subsection (c) with respect to such
Letter of Credit, such amount to be payable immediately upon the
Borrower's receipt of notice from the Documentation Agent stating that the
Majority Lenders failed to concur with and approve the Initial
Determination, and (ii) the Letter of Credit commission payable by the
Borrower with respect to such Letter of Credit shall be at the rate
specified in the first sentence of this subsection (c) (without giving
effect to the proviso thereto). If the Initial Determination of the Co-
Agents is that, for capital requirements purposes, a particular Letter of
Credit supports only financial obligations of the Borrower or any of its
Subsidiaries and, within 30 days after the Documentation Agent gives
notice of such Initial Determination to the Borrower and each Lender, the
Co-Agents determine that such Letter of Credit in fact supports only
performance obligations of the Borrower or any of its Subsidiaries, the
Documentation Agent shall promptly notify the Borrower and each Lender of
such determination (the "Final Determination") and each Lender shall,
within 90 days after its receipt of notice of the Final Determination from
the Documentation Agent, provide written notice to the Documentation Agent
stating whether it concurs with and approves the Final Determination. The
failure of any Lender to so respond within such 90-day period shall be
deemed to constitute an approval by such Lender of the Final
Determination. If the Majority Lenders concur with and approve the Final
Determination within such period, (1) an amount equal to the excess, if
any, of (x) the actual Letter of Credit commission paid by the Borrower
pursuant to this subsection (c) with respect to such Letter of Credit over
(y) the Letter of Credit commission that would have been payable by the
Borrower pursuant to the proviso to the first sentence of this subsection
(c) with respect to such Letter of Credit, shall be set off and deducted
by the Borrower from all subsequent Letter of Credit commissions payable
pursuant to this subsection (c) until such amount has been set off and
deducted in full, and (2) the Letter of Credit commission payable by the
Borrower with respect to such Letter of Credit shall be at the rate
specified in the proviso to the first sentence of this subsection (c). In
connection with the Lenders' review of each Initial Determination and
Final Determination, the Borrower shall provide to each Lender all
supporting information regarding the applicable Letter of Credit and such
other information as any Lender, through the Documentation Agent, may
reasonably request.
(d) In addition to the fees provided for in subsections (a),
(b) and (c) above, the Borrower shall pay to the Operational Agent, for
the account of the Co-Agents, such other fees as are provided for in that
certain letter agreement between the Borrower and the Co-Agents (the "Fee
Letter") entered into separately herefrom and dated the date hereof.
SECTION 2.03. Reduction of the Commitments. (a) The Borrower
may, upon at least five Business Days' notice to each Co-Agent, terminate
in whole or reduce ratably in part the unused portions of the Commitments;
provided that any such partial reduction shall be in the aggregate amount
of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) 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 (after giving effect to all Extensions of
Credit to be made on such date and the application of the proceeds
thereof) 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 Advances outstanding on such date 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. References to the unused portion
of the Commitments shall refer to the excess, if any, of the Commitments
over the principal amount outstanding hereunder; and references to the
unused portion of any Lender's Commitment shall refer to such Lender's
Percentage of the unused Commitments.
SECTION 2.05. Extension of Termination Date. At least 30 but not
more than 90 days prior to each anniversary of the date of the Closing
Date (but in any event no later than 60 days prior to the then-scheduled
Termination Date), the Borrower may, by delivering a written notice to
such effect to the Operational Agent (each such request being
irrevocable), request that each Lender consent to a one-year extension of
the Termination Date. Upon receipt of any such notice, the Operational
Agent shall promptly communicate such request to the Lenders. Within 30
days following the giving of such notice by the Borrower, the Lenders
shall indicate to the Operational Agent whether the Borrower's request to
so extend the then-scheduled Termination Date is acceptable to the Lenders
(and, if so, the conditions, if any, relating to such acceptance), it
being understood that the unanimous written consent of the Lenders shall
be required to effect any such request, that the determination by each
Lender will be in its sole and absolute discretion and that the failure of
any Lender to so respond within such period shall be deemed to constitute
a refusal by such Lender to consent to such request (with the result being
that such request is denied). The Operational Agent shall promptly notify
the Borrower and the Lenders of the result of such request, and if such
request shall have been consented to by all of the Lenders, the
Termination Date shall be extended to the first anniversary of the then-
scheduled Termination Date; provided, however, that the Termination Date
shall be so extended notwithstanding the existence of one or more Lenders
(the "Nonextending Lenders") that have elected not to extend (or failed to
notify the Operational Agent of its (or their) consent to extend) if (i)
such Nonextending Lender(s) has (or have) been replaced in the full amount
of its (or their) Commitment(s) pursuant to Section 11.07(g) and (ii) no
Event of Default or Unmatured Default shall then have occurred and be
continuing. If a Nonextending Lender is not so replaced pursuant to
Section 11.07(g), the Commitments of all of the Lenders shall
automatically terminate on the then-scheduled Termination Date.
ARTICLE III
ADVANCES
SECTION 3.01. Advances.(a) The Borrower may request a Borrowing
(other than a Conversion) by delivering a notice (a "Notice of Borrowing")
to the Operational Agent no later than 12:00 noon (New York City time) on
the fourth Business Day or, in the case of Base Rate Advances, on the
first Business Day, prior to the date of the proposed Borrowing. The
Operational Agent shall give each Lender prompt notice of each Notice of
Borrowing. Each Notice of Borrowing shall be in substantially the form of
Exhibit B and shall specify the requested (i) date of such Borrowing,
(ii) Type of Advances to be made in connection with such Borrowing and
(iii) Interest Period, if any, for such Advances. Each proposed Borrowing
shall conform to the requirements of Sections 3.03 and 3.04.
(b) Each Lender shall, before 12:00 noon (New York City time)
on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Operational Agent at the Operational
Agent's address referred to in Section 11.02, in same day funds, such
Lender's Percentage of such Borrowing. After the Operational Agent's
receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article VI, the Operational Agent will make such funds
available to the Borrower at the Operational Agent's aforesaid address;
provided, however, that the proceeds of the initial Extension of Credit
shall be applied first directly by the Operational Agent on the Closing
Date to the prepayment in full of all outstanding principal, accrued
interest and other amounts then owing under the Existing Agreement, and
then, to the extent the proceeds of such initial Extension of Credit
exceed 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 Operational Agent's aforesaid address
for general corporate purposes. Notwithstanding the foregoing, unless the
Operational Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Operational Agent such Lender's Percentage of such Borrowing, the
Operational Agent may assume that such Lender has made such Percentage
available to the Operational Agent on the date of such Borrowing in
accordance with the first sentence of this subsection (b), and the
Operational 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 Operational 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 Operational 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
Operational Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to Advances made in connection with such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. Within the
limits of each Lender's Available Commitment hereunder and subject to the
other terms and conditions set forth in this Agreement for the making of
Advances, the Borrower may request (and the Lenders shall honor) one or
more additional Borrowings from the performing Lenders to fund such
repayment to the Operational Agent. If a non-performing Lender shall
repay to the Operational Agent such corresponding amount in full (with
interest as above provided), (x) the Operational Agent shall apply such
corresponding amount and interest to the repayment to the Operational
Agent (or repayment of Advances made to fund such repayment to the
Operational Agent), and shall make any remainder available to the Borrower
and (y) such amount so repaid shall be deemed to constitute such Lender's
Advance, made as part of such Borrowing for purposes of this Agreement as
if funded concurrently with the other Advances 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 Operational Agent of Percentages, Commitments and
payments hereunder shall be made without regard to the Commitments, or
outstanding Advances, of such non-performing Lender, and any amounts paid
to the Operational Agent for the account of such non-performing Lender
shall be held by the Operational 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 Advance to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to
make its Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
SECTION 3.02. Conversion of Advances. The Borrower may from time
to time Convert any Advance (or portion thereof) of any Type to one or
more Advances of the same or any other Type by delivering a notice of such
Conversion (a "Notice of Conversion") to the Operational Agent no later
than 12:00 noon (New York City time) on (x) the fourth Business Day prior
to the date of any proposed Conversion into a Eurodollar Rate Advance and
(y) the first Business Day prior to the date of any proposed Conversion
into a Base Rate Advance. The Operational Agent shall give each Lender
prompt notice of each Notice of Conversion. Each Notice of Conversion
shall be in substantially the form of Exhibit C and shall specify the
requested (i) date of such Conversion, (ii) Type of, and Interest Period,
if any, applicable to, the Advances (or portions thereof) proposed to be
Converted, (iii) Type of Advances to which such Advances (or portions
thereof) are proposed to be Converted, (iv) initial Interest Period, if
any, to be applicable to the Advances resulting from such Conversion and
(v) aggregate amount of Advances (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 Advance and the date of payment in full of such
Advance shall be divided into successive periods of months or days
("Interest Periods") for purposes of computing interest applicable
thereto. The initial Interest Period for each such Advance shall begin on
the day such Advance is made, and each subsequent Interest Period shall
begin on the last day of the immediately preceding Interest Period for
such Advance. 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 that ends
after the Termination Date; and
(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.
SECTION 3.04. Other Terms Relating to the Making and Conversion
of Advances. (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 Extensions of Credit to be made on such date),
and shall consist of Advances 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 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 ten different Borrowings
comprising Eurodollar Rate Advances be outstanding hereunder;
(iv)no Eurodollar Rate Advance may be Converted on a date
other than the last day of the Interest Period applicable to such
Advance unless the corresponding amounts, if any, payable to the
Lenders pursuant to Section 5.04(c) 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 Advances
or fail, in any Notice of Conversion that has been timely given,
to select the duration of any Interest Period for Advances to be
Converted into Eurodollar Rate Advances in accordance with Section
3.03, such Advances shall, on the last day of the then existing
Interest Period therefor, automatically Convert into, or remain
as, as the case may be, Base Rate Advances; and
(vi)if, on the date of any proposed Conversion, any Event of
Default or Unmatured Default shall have occurred and be
continuing, all Advances then outstanding shall, on such date,
automatically Convert into, or remain as, as the case may be, Base
Rate Advances; provided, however, that with respect to any
Unmatured 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 Advances may be Converted into
Eurodollar Rate Advances with an Interest Period not to exceed
three months in duration.
(b) If any Lender shall notify the Operational 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 Advances hereunder, (i) the
obligation of such Lender to make, or to Convert Advances into, Eurodollar
Rate Advances 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 Advances, and (ii) if the maintenance of Eurodollar Rate Advances
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
Advances 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 Operational Agent (but the failure to do so shall impose no
liability upon such Lender). Promptly upon receipt of such notice from
such Lender (or upon such Lender's assigning all of its Commitments,
Advances, participation and other rights and obligations hereunder to an
Eligible Assignee), the Operational Agent shall deliver notice thereof to
the Borrower and the Lenders and such suspension shall terminate.
(c) If (i) only one, or none, of the Reference Banks furnishes
timely information to the Operational Agent for determining the Eurodollar
Rate for Eurodollar Rate Advances to be made in connection with any
proposed Borrowing or (ii) the Majority Lenders shall, at least one
Business Day before the date of any requested Borrowing, notify the
Operational Agent that the Eurodollar Rate for Eurodollar Rate Advances to
be made in connection with such Borrowing will not adequately reflect the
cost to such Majority Lenders of making, funding or maintaining their
respective Eurodollar Rate Advances for such Borrowing, the right of the
Borrower to select Eurodollar Rate Advances for such Borrowing and any
subsequent Borrowing shall be suspended until the Operational Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Advance to be made or Converted in
connection with such Borrowing shall be a Base Rate Advance.
(d) If any Lender shall have delivered a notice to the
Operational 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 Co-Agents may demand that such
Lender assign in accordance with Section 11.07, to one or more Eligible
Assignees designated by the Borrower or the Co-Agents, all (but not less
than all) of such Lender's Commitment, Advances, participation and other
rights and obligations hereunder; provided that any such demand by the
Borrower during the continuance of an Event of Default or Unmatured
Default shall be ineffective without the consent of the Majority Lenders.
If, within 30 days following any such demand by the Co-Agents 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 Co-Agents shall have failed to designate
any such Eligible Assignee, then such demand by the Borrower or the Co-
Agents 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 I 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 Operational Agent).
(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 Advances, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill, on or before the date specified in such
Notice of Borrowing or Notice of Conversion for such Borrowing, the
applicable conditions (if any) set forth in this Article III (other than
failure pursuant to the provisions of Section 3.04(b) or (c) hereof) or in
Article VI, including, without limitation, 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 Advance to be made by such Lender when such Advance, as
a result of such failure, is not made on such date.
SECTION 3.05. Repayment of Advances. (a) Principal. The
Borrower shall repay the principal amount of the Advances on the
Termination Date.
(b) Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from the date of
such Advance until such principal amount shall be paid in full, at the
Applicable Rate for such Advance (except as otherwise provided in this
subsection (b)), payable as follows:
(i) Base Rate Advances. If such Advance is a Base Rate
Advance, 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 Base Rate Advance and on the date such
Base Rate Advance 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 Advances. If such Advance is a Eurodollar
Rate Advance, interest thereon shall be payable on the last day of
such Interest Period and, if the Interest Period for such Advance
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. LC Banks. Subject to the terms and conditions
hereof, the Borrower may from time to time identify and arrange for one or
more financial institutions to act as LC Banks hereunder. Any such
designation by the Borrower shall be notified to the Documentation Agent
and the Operational Agent at least five Business Days prior to the first
date upon which the Borrower proposes that such LC Bank issue its first
Letter of Credit, so as to provide adequate time for such proposed LC Bank
to be approved by such Agents hereunder. In that regard, the Borrower
agrees to use its best efforts to so identify and arrange for Lenders to
serve in such capacity, provided that nothing contained herein shall be
deemed to require any Lender to agree to act as an LC Bank, if it does not
so desire. Within two Business Days following the receipt of any such
designation of a proposed LC Bank (other than any Lender so designated),
the Documentation Agent and the Operational Agent shall notify the
Borrower as to whether such designee is acceptable to such Agents.
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 Operational Agent (which shall promptly distribute
copies thereof to the Lenders) and the relevant LC 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 Termination Date),
(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 LC 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 (New York City time) 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 LC Bank Agreement, such
LC Bank shall issue (or extend, amend or modify) such Letter of Credit and
provide notice and a copy thereof to the Operational Agent, which shall
promptly furnish copies thereof to the Lenders.
(b) Each Lender severally agrees with such LC 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 LC Bank
and each Lender of such participation in such amount.
SECTION 4.03. LC Bank Fees. The Borrower shall pay directly to
each LC Bank the letter of credit fees, if any, specified to be paid
pursuant to the terms of the LC Bank Agreement to which such LC Bank is a
party at the times, and in the manner, specified in such LC Bank
Agreement.
SECTION 4.04. Reimbursement to LC Banks. (a) The Borrower hereby
agrees to pay to the Operational Agent for the account of each LC Bank, on
demand made by such LC Bank to the Borrower and the Operational Agent, on
and after each date on which such LC Bank shall pay any amount under the
Letter of Credit issued by such LC Bank, a sum equal to the amount so paid
plus interest on such amount from the date so paid by such LC Bank until
repayment to such LC Bank in full at a fluctuating interest rate per annum
equal at all times to the interest rate hereunder for Base Rate Advances.
(b) If any LC Bank shall not have been reimbursed in full for
any payment made by such LC Bank under the Letter of Credit issued by such
LC Bank on the date of such payment, such LC Bank shall give the
Operational Agent and each Lender prompt notice thereof (an "LC Payment
Notice") no later than 12:00 noon (New York City time) on the Business Day
immediately succeeding the date of such payment by such LC Bank. Each
Lender severally agrees to purchase a participation in the reimbursement
obligation of the Borrower to such LC Bank under subsection (a) above, by
paying to the Operational Agent for the account of such LC Bank an amount
equal to such Lender's Percentage of such unreimbursed amount paid by such
LC Bank, plus interest on such amount at a rate per annum equal to the
Federal Funds Rate from the date of such payment by such LC Bank to the
date of payment to such LC Bank by such Lender. Each such payment by a
Lender shall be made not later than 3:00 P.M. (New York City time) on the
later to occur of (i) the Business Day immediately following the date of
such payment by such LC Bank and (ii) the Business Day on which such
Lender shall have received an LC Payment Notice from such LC Bank. Each
Lender's obligation to make each such payment to the Operational Agent for
the account of such LC Bank shall be several and shall not be affected by
the occurrence or continuance of an Unmatured 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
Operational Agent for the account of an LC 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 Operational Agent for the account of an LC 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 LC 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 an Advance in an amount equal to the outstanding principal
amount due and payable by such Lender to the Operational Agent for the
account of such LC Bank pursuant to subsection (b) above.
(d) Each participation purchased by a Lender under
subsection (b) above, shall constitute a Base Rate Advance deemed made by
such Lender to the Borrower on the date of such payment by the relevant LC
Bank under the Letter of Credit issued by such LC Bank (irrespective of
the Borrower's noncompliance, if any, with the conditions precedent for
Advances hereunder); and all such payments by the Lenders in respect of
any one such payment by such LC 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 Advance 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, without limitation, 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;
(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 LC 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 LC Bank under the Letter of
Credit issued by such LC 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 LC 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 LC 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 LC 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 LC Bank, and such LC 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 LC Bank's
wilful misconduct or gross negligence, including such LC Bank's wilful
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 LC Bank may accept sight drafts and accompanying certificates
presented under the Letter of Credit issued by such LC 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 LC Bank's wilful 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 wilful misconduct of any LC Bank.
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 11:00 A.M. (New York City time) on the day when due in U.S. Dollars
to the Operational Agent at its address referred to in Section 11.02 in
same day funds; any payment received after 2:00 P.M. (New York City time)
shall be deemed to have been received at the start of business on the next
succeeding Business Day, unless the Operational Agent shall have received
from, or on behalf of, the Borrower a Federal Reserve reference number
with respect to such payment before 3:00 P.M. (New York City time). The
Operational 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 Operational Agent on the date
such payment was received by the Operational Agent, the Operational 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 Rate,
from the date of such payment by the Borrower to the Operational Agent to
the date of payment in full by the Operational Agent to such Lender of
such unpaid amount. Upon the Operational 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 Operational Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such 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 Operational Agent, each
Lender and each LC Bank, if and to the extent payment owed to the
Operational Agent, such Lender or such LC Bank, as the case may be, is not
made when due hereunder (or, in the case of a Lender, under the Note held
by such Lender), to charge from time to time against any or all of the
Borrower's accounts with the Operational Agent, such Lender or such LC
Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base
Rate and of fees payable pursuant to Section 2.02(a) shall be made by the
Operational 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 Eurodollar Rate and the Federal
Funds Rate) shall be made by the Operational 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 Operational Agent or a Lender shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under any other Loan
Document shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of
payment of interest and fees hereunder; provided, however, that if such
extension would cause payment of interest on or principal of Eurodollar
Rate Advances 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 Operational 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 Operational Agent may assume that the Borrower has made such payment
in full to the Operational Agent on such date, and the Operational 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 Operational Agent, such Lender shall repay to the
Operational 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 Operational Agent, at the Federal Funds Rate.
(f) Any amount payable by the Borrower hereunder or under any
of the 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.
SECTION 5.02. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Operational Agent timely information for the
purpose of determining the Eurodollar Rate for each Interest Period. If
any one or more of the Reference Banks shall not furnish such timely
information to the Operational Agent for the purpose of determining any
such interest rate, the Operational Agent shall determine such interest
rate on the basis of timely information furnished by the remaining
Reference Banks, subject to Section 3.04(c).
(b) The Operational Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Operational Agent for purposes of Section 3.05(b)(i) or (ii), and the
Eurodollar Rate, if any, furnished by each Reference Bank for the purpose
of determining the applicable interest rate under Section 3.05(b)(ii).
SECTION 5.03. Prepayments. The Borrower shall have no right to
prepay any principal amount of any Advances other than as provided in
subsections (a) and (b) below.
(a) The Borrower may, upon at least five Business Days' notice
to the Operational Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given, the Borrower shall,
prepay the outstanding principal amounts of Advances made as part of the
same Borrowing, in whole or ratably in part, together with (i) accrued
interest to the date of such prepayment on the principal amount prepaid
and (ii) in the case of Eurodollar Rate Advances, any amount payable to
the Lenders pursuant to Section 5.04(c); 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 under this
Agreement as shall be necessary in order that such aggregate principal
amount outstanding 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 Advances, any amount payable to the Lenders
pursuant to Section 5.04(c). Any prepayments required by this subsection
(b) shall be applied to outstanding Base Rate Advances up to the full
amount thereof before they are applied, first, to outstanding Eurodollar
Rate Advances 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 Advances, or of participating in the issuance,
maintenance or funding of any Letter of Credit, or (B) the cost to any LC
Bank of issuing or maintaining any Letter of Credit, then the Borrower
shall from time to time, upon demand by such Lender or LC Bank, as the
case may be (with a copy of such demand to the Operational Agent), pay to
the Operational Agent for the account of such Lender or LC Bank, as the
case may be, additional amounts sufficient to compensate such Lender or LC
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 Operational Agent by such
Lender or such LC Bank, as the case may be, shall constitute such demand
and shall be conclusive and binding for all purposes, absent manifest
error.
(b) Eurodollar Reserves. The Borrower shall pay to the
Operational Agent for the account of each Lender, so long as such Lender
shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional
interest on the unpaid principal amount of each Eurodollar Rate Advance of
such Lender, from the date of such Advance until such principal amount is
paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Advance from (ii) the rate obtained by dividing such
Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Reserve
Percentage of such Lender for such Interest Period, payable on each date
on which interest is payable on such Advance. Such additional interest
shall be determined by such Lender and notified to the Borrower and the
Operational Agent. A certificate as to the amount of such additional
interest, submitted to the Borrower and the Operational Agent by such
Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(c) Breakage. If, due to any prepayment pursuant to Section
5.03, an acceleration of maturity of the Advances pursuant to Section
9.02, or any other reason, any Lender receives payments of principal of
any Eurodollar Rate Advance other than on the last day of the Interest
Period relating to such Advance, or if the Borrower shall Convert any
Eurodollar Rate Advances on any day other than the last day of the
Interest Period therefor, the Borrower shall, promptly after demand by
such Lender (with a copy of such demand to the Operational Agent), pay to
the Operational Agent for the account of such Lender any amounts required
to compensate such Lender for additional losses, costs, or expenses
(including anticipated lost profits) that such Lender may reasonably incur
as a result of such payment or Conversion, including, without limitation,
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 Advance. For purposes of this subsection (c), 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
Operational Agent by such Lender, shall constitute such demand and shall
be conclusive and binding for all purposes, absent manifest error.
(d) Capital. If any Lender or LC 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 LC Bank, whether directly,
or indirectly as a result of commitments of any corporation controlling
such Lender or LC Bank (but without duplication), and (ii) the amount of
such capital is increased by or based upon (1) the existence of such
Lender's or LC Bank's commitment to lend or issue or participate in any
Letter of Credit hereunder, or (2) the participation in or issuance or
maintenance of any Letter of Credit or Advance and (3) other similar such
commitments, then, upon demand by such Lender or LC Bank, the Borrower
shall immediately pay to the Operational Agent for the account of such
Lender or LC Bank from time to time as specified by such Lender or LC Bank
additional amounts sufficient to compensate such Lender or LC Bank in the
light of such circumstances, to the extent that such Lender or LC 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 Operational Agent by such Lender or LC
Bank, shall be conclusive and binding for all purposes, absent manifest
error.
(e) 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), (c) or (d) 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 (i) subsection (a), (c) or (d)
above, more than 90 days prior to the date that such Lender notifies the
Borrower in writing thereof, and (ii) subsection (b) above, more than 180
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.
(f) Survival of Obligations. Subject to subsection (e) 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 LC
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 Advances 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 Advances of such
Lenders, such Lender shall forthwith purchase from the other Lenders such
participation in the Advances owing to them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to
the proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 5.05 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. Notwithstanding the
foregoing, if any Lender shall obtain any such excess payment
involuntarily, such Lender may, in lieu of purchasing participations from
the other Lenders in accordance with this Section 5.05, on the date of
receipt of such excess payment, return such excess payment to the
Operational 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 LC 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, LC 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, LC 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, LC 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, LC Bank and Agent
for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and any Other Taxes imposed by any jurisdiction on
amounts payable under this Section 5.06) paid by such Lender, LC Bank or
Agent (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender, LC
Bank or Agent (as the case may be) makes written demand therefor;
provided, that such Lender, LC 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, LC 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 Documentation 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 Operational 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 Operational Agent, such Lender will
deliver to the Borrower and the Operational Agent 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 Operational Agent the form or forms referred to in the
two preceding sentences further undertakes to deliver to the Borrower and
the Operational Agent 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 Operational 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 Documentation 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 the Notes) in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the Board of
Directors, or of the Executive Committee of the Board of
Directors, of the Borrower authorizing the Borrower to enter into
this Agreement, the Notes 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, the Notes 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, the Notes 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 Co-
Agents.
(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 Agreement
effective automatically on such date upon the satisfaction (or
waiver) of the other conditions precedent set forth in this
Section 6.01.
(v) A Note, payable to the order of each Lender then party
hereto, 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 Co-Agents
and counsel for the Co-Agents, desirable to perfect the security
interests and liens created thereby.
(vii)The Fee Letter, duly executed by the Borrower.
(viii)A certified copy of Schedule II hereto, in form and
substance reasonably satisfactory to the Co-Agents 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.
(ix)Favorable opinions of:
(A)Denise M. Sturdy, Esq., Assistant General Counsel of
the Borrower, in substantially the form of Exhibit E and as to
such other matters as the Majority Lenders, through the
Documentation Agent, may reasonably request; and
(B)King & Spalding, counsel to the Agents, in
substantially the form of Exhibit F and as to such other
matters as the Majority Lenders, through the Documentation
Agent, may reasonably request.
(x) Letters from each LC Bank (as defined in the Existing
Agreement) confirming that the participation obligations of each
Existing Bank has 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 either canceled or replaced.
(c) The following statements shall be true and the
Documentation 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 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
an Unmatured Default or an Event of Default.
(d) The Borrower shall have paid all fees under or referenced
in Section 2.02 hereof, to the extent then due and payable; and
SECTION 6.02. Conditions Precedent to Each Extension of Credit.
The obligation of each Lender or LC Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit) shall be
subject to the further conditions precedent that, on the date of such
Extension of Credit and after giving effect thereto:
(a) the following statements shall be true (and each of the
giving of the applicable notice or request with respect thereto
and the making of such Extension of Credit without prior
correction by the Borrower shall (to the extent that such
correction has been previously consented to by the Lenders and the
LC 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 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 Documentation Agent shall have received such other
approvals, opinions and documents as any Lender or LC Bank,
through the Documentation 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 LC 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 LC 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 Unmatured Default has occurred and is continuing, or
would result from such Extension of Credit or the application of
the proceeds thereof; and
(b) the Documentation Agent shall have received such other
approvals, opinions and documents as any Lender or LC Bank, through the
Documentation Agent, may reasonably request.
SECTION 6.04. Reliance on Certificates. The Lenders, the LC
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 Documentation Agent may receive a
replacement certificate, in form acceptable to the Documentation Agent,
from an officer of such Person identified to the Documentation 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, 1994, 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 & Co. included in the
Borrower's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, and the unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as at September 30, 1995, and
the related unaudited consolidated statements of income, retained earnings
and cash flows for the nine-month period then ended, copies of each of
which have been furnished to each Lender, fairly present (subject, in the
case of such balance sheets and statements of income for the nine months
ended September 30, 1995, 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
December 31, 1994, except as disclosed in the Borrower's Quarterly Report
on Form 10-Q for the period ended September 30, 1995, there has been no
material adverse change in the business, financial condition or results of
operations of the Borrower and its Subsidiaries, considered as a whole, or
in 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; and
(iii) the Borrower has no material liabilities or obligations except as
reflected in the foregoing financial statements and in Schedule II hereto,
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 Quarterly Report on
Form 10-Q for the period ended September 30, 1995, 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 it
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 Majority 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 Majority 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.
(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 100% 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 CMS Energy Corporation 1995-1999 Financial Forecast,
dated August 21, 1995 (the "Projections"), copies of which have been
distributed to the Banks, is 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 Co-Agents 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 of Governors of the Federal
Reserve System), and no proceeds of any Advance 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 equity security of
a class that is registered pursuant to Section 12 of the Exchange Act.
(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 of Governors of
the Federal Reserve System).
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants. So long as any 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 without
limitation 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) the Co-Agents and their
respective 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) the Co-Agents, 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 Unmatured Default shall have occurred and be
continuing, at the expense of the Co-Agents, each of the Lenders, or their
respective agents and representatives, as the case may be.
(f) Keeping of Books. The Borrower shall keep, and each of
its Subsidiaries shall keep, proper records and books of account, in which
full and correct entries shall be made of all financial transactions of
the Borrower and its Subsidiaries and the assets and business of the
Borrower and its Subsidiaries, in accordance with GAAP.
(g) Maintenance of Properties, Etc. The Borrower shall
maintain, and each of its Restricted Subsidiaries shall maintain, in
substantial conformity with all laws and material contractual obligations,
good and marketable title to all of its properties which are used or
useful in the conduct of its business; provided, however, that the
foregoing shall not restrict the sale of any asset of the Borrower or any
Restricted Subsidiary to the extent not prohibited by Section 8.02(i). In
addition, the Borrower shall preserve, maintain, develop, and operate, and
each of its Subsidiaries shall preserve, maintain, develop and operate, in
substantial conformity with all laws and material contractual obligations,
all of its material properties which are used or useful in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.
(h) Use of Proceeds. The Borrower shall apply the proceeds of
the initial Extension of Credit, to the extent necessary, to the repayment
in full and termination of all outstanding obligations under the Existing
Agreement, whether for principal, interest, fees, or otherwise (and, in
furtherance thereof, the Borrower hereby expressly and irrevocably
authorizes the Operational 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
at all times a ratio of Consolidated Debt to Consolidated Capital of not
more than the amount set forth below during each corresponding period set
forth below:
Period Amount
Closing Date through 9/30/96 .70:1.0
10/1/96 through 9/30/97 .68:1.0
10/1/97 through 9/30/98 .66:1.0
Thereafter .64:1.0
(j) Cash Dividend Coverage Ratio. The Borrower shall
maintain, as of the last day of each fiscal quarter (in each case, the
"Measurement Quarter"), a ratio of (i) the sum of (A) Cash Dividend Income
for the immediately preceding four-fiscal-quarter period ending on the
last day of the fiscal quarter immediately preceding such Measurement
Quarter, plus (B) 25% of the amount of Equity Distributions received by
the Borrower during such period but in no event in excess of $10,000,000,
plus (C) all amounts received by the Borrower from its Subsidiaries and
Affiliates during such period constituting reimbursement of interest
expense (including commitment, guaranty and letter of credit fees) paid by
the Borrower on behalf of any such Subsidiary or Affiliate to
(ii) interest expense (including commitment, guaranty and letter of
credit fees) accrued by the Borrower in respect of all Debt during such
period of (1) not less than 2.1 to 1.0 for each such period from the
Closing Date until (and including) the fiscal quarter ending December 31,
1998 and (2) not less than 2.0 to 1.0 thereafter; provided, that the
Borrower shall be deemed not to be in breach of the foregoing covenant if,
during the Measurement Quarter, it has a) permanently reduced the
Commitments and the principal amount outstanding under this Agreement and
the 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 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/or b) increased Cash Dividend Income during such Measurement Quarter
such that the ratio of (x) Cash Dividend Income for the four-fiscal-
quarter period ending on the last day of the Measurement Quarter to
(y) the amount determined pursuant to clause (ii) above (as recalculated
pursuant to clause a) above), equals or exceeds (1) 2.1 to 1.0 for each
such period from the Closing Date until (and including) the fiscal quarter
ending December 31, 1998 and (2) 2.0 to 1.0 thereafter; and provided
further, that until the Borrower so reduces such Commitments and principal
amount outstanding under this Agreement and the 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 earlier to occur of (i) the
third anniversary of the date of any such refinancing and (ii) 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 Documentation
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 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 Majority 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,
without limitation, capital stock of Consumers, Enterprises, Nomeco and
any of the Borrower's other directly-owned Subsidiaries and accounts) (any
of the foregoing being referred to herein as a "Lien"), whether now owned
or hereafter acquired, or sign or file, or permit any of its Restricted
Subsidiaries to sign or file, under the Uniform Commercial Code of any
jurisdiction a financing statement which names the Borrower or any
Restricted Subsidiary as debtor, sign, or permit any of its Restricted
Subsidiaries to sign, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any of
its Restricted Subsidiaries to assign, accounts, excluding, however, from
the operation of the foregoing restrictions the Liens created under the
Loan Documents and the following:
(i) Liens for taxes, assessments or governmental charges or
levies to the extent not past due;
(ii)cash pledges or deposits to secure (A) obligations under
workmen's compensation laws or similar legislation, (B) public or
statutory obligations of the Borrower or any of its Restricted
Subsidiaries, or (C) Support Obligations of the Borrower; provided
that the aggregate amount of pledges or deposits securing such
Support Obligations shall not exceed $30 million at any one time
outstanding;
(iii)Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's liens and other similar Liens
arising in the ordinary course of business securing obligations
which are not overdue or which have been fully bonded and are
being contested in good faith; and
(iv)purchase money Liens or purchase money security interests
upon or in property acquired or held by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business to
secure the purchase price of such property or to secure
indebtedness incurred solely for the purpose of financing the
acquisition of any such property to be subject to such Liens or
security interests, or Liens or security interests existing on any
such property at the time of acquisition, or extensions, renewals
or replacements of any of the foregoing for the same or a lesser
amount, provided that no such Lien or security interest shall
extend to or cover any property other than the property being
acquired and no such extension, renewal or replacement shall
extend to or cover property not theretofore subject to the Lien or
security interest being extended, renewed or replaced, and
provided, further, that the aggregate principal amount of the Debt
at any one time outstanding secured by Liens permitted by this
clause (iv) shall not exceed $10,000,000.
(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); and
(iii)other debt of Enterprises outstanding on the Closing Date
set forth on Schedule II hereto;
(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 $10,000,000.
(d) Investments in Other Persons. Upon the occurrence and
during the continuance of an Event of Default or an Unmatured Default
(other than an Unmatured 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 Unmatured 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 Unmatured Default or Event of
Default shall have occurred and be continuing (or result therefrom), and
provided further that such dividends shall be included (without
duplication) in the calculation of the amount of Restricted Payments
permitted by this subsection (e); or (4) payments made by the Borrower or
any Restricted Subsidiary pursuant to the Tax Sharing Agreement. For
purposes of this subsection (e), the amount of any Restricted Payment not
in the form of cash shall be the fair market value of such Restricted
Payment as determined in good faith by the Board of Directors of the
Borrower, provided that if the value of the non-cash portion of such
Restricted Payment as determined by the Borrower's Board of Directors is
in excess of $25 million, such value shall be based on an opinion from a
nationally-recognized firm acceptable to the Co-Agents 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), (ii) terminate, or permit any ERISA
Affiliate to terminate, any Plan so as to result in any material (in the
opinion of the Majority 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 Majority Lenders) risk of such a termination by the PBGC of any 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 Nomeco 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) Nomeco may merge with or into
Enterprises or the Borrower; (3) Nomeco 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 an Unmatured
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 an Unmatured 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 an Unmatured
Default or an Event of Default, (B) Enterprises is the surviving
corporation, (C) Enterprises' Net Worth shall be equal to or greater than
its Net Worth immediately prior to such merger and (D) Enterprises shall
not be liable with respect to any Debt or allow its property to be subject
to any Lien which it could not become liable with respect to or allow its
property to become subject to under this Agreement or any other Loan
Document on the date of such transaction; provided, that after giving
effect to any merger described in clause (2), (3), or (5) above, the
Borrower shall be in compliance with Section 8.01(i).
(i) Sales, Etc., of Assets. Sell, lease, transfer, assign, or
otherwise dispose of all or any substantial part of its assets, or permit
any of its Restricted Subsidiaries to sell, lease, transfer, or otherwise
dispose of all or any substantial part of its assets, except to give
effect to a transaction permitted by subsection (h) above or subsection
(j) below.
(j) Maintenance of Ownership of Subsidiaries. Sell, transfer,
assign or otherwise dispose of any shares of capital stock of any of its
Restricted Subsidiaries or Consumers (other than preferred or preference
stock of Consumers) or any warrants, rights or options to acquire such
capital stock, or permit any Restricted Subsidiary or Consumers to issue,
sell, transfer, assign or otherwise dispose of any shares of its capital
stock (other than preferred or preference stock of Consumers) or the
capital stock of any other Restricted Subsidiary or any warrants, rights
or options to acquire such capital stock, except to give effect to a
transaction permitted by subsection (h) above; provided, however, that
(i) the Borrower may sell, transfer, assign or otherwise dispose of not
more than 20% of the common stock of Consumers, provided that after giving
effect to such transaction the Borrower shall be in compliance with
Section 8.01(i) and (ii) 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 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 Note shall
remain unpaid, any Letter of Credit shall remain outstanding or any Lender
shall have any Commitment, the Borrower will, unless the Majority Lenders
shall otherwise consent in writing, furnish to each Lender, the following:
(a) as soon as possible and in any event within five days
after the Borrower knows or should have reason to know of the
occurrence of each Unmatured 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 Unmatured 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 G 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 Unmatured Default or
Event of Default has occurred and is continuing or, if an
Unmatured 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 & Co. or
another nationally-recognized independent public accounting firm,
together with a schedule in form satisfactory to the Majority
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;
(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, copies of
all proxy statements, financial statements and reports which the
Borrower sends to its public security holders (if any), copies of
all regular, periodic and special reports which the Borrower files
with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national
securities exchange, pursuant to the Exchange Act, and copies of
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 Majority Lenders may from time to time reasonably
request in writing.
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 Co-Agents
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
Note when due or (ii) any interest thereon within two Business Days after
such interest 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) or (j) or in Section 8.02
hereof (and the Borrower, each Lender and each Agent hereby agrees that an
Event of Default under this subsection (c) shall be given effect as if the
defaulting Subsidiary were a party to this Agreement); or
(d) The Borrower or any of its Subsidiaries shall fail to
perform or observe any other term or covenant on its part to be performed
or observed contained in any Loan Document and any such failure shall
remain unremedied, after written notice thereof shall have been given to
the Borrower by the Documentation 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 evidenced by the Notes) (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 without limitation the entry of an order for relief against the
Borrower, a Restricted Subsidiary or Consumers or the appointment of a
receiver, trustee, custodian or other similar official for the Borrower,
such Restricted Subsidiary or Consumers or any of its property) shall
occur; or (iii) the Borrower, any Restricted Subsidiary or Consumers shall
take any corporate or other action to authorize any of the actions set
forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess
of $6,000,000 shall be rendered against the Borrower or its properties and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) Any material provision of any Loan Document, after
execution hereof or delivery thereof under Article VI, shall for any
reason other than the express terms hereof or thereof cease to be valid
and binding on any party thereto; or the Borrower shall so assert in
writing; or
(i) The Cash Collateral Agreement after delivery under Article
VI hereof 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, ceases to create a valid and perfected first priority Lien (to
the extent purported to be granted by the Cash Collateral Agreement) in
any of the Collateral described therein; or
(j) At any time any LC 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 LC 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 LC 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 Co-Agents 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
Advances (other than Advances under Section 4.04 hereof) and of any LC
Bank to issue a Letter of Credit to be terminated, whereupon the same
shall forthwith terminate, (ii) declare the Notes, all interest thereon
and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, 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 Co-Agents 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 Advances and
of any LC Bank to issue any Letter of Credit shall automatically be
terminated and (B) the Notes, 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 Co-Agents
pursuant to this Section 9.02 shall affect (i) the obligation of any LC
Bank to make any payment under any Letter of Credit issued by such LC Bank
in accordance with the terms of such Letter of Credit or (ii) the
participatory interest of each Lender in each such payment.
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action. Each Lender and LC Bank
hereby appoints and authorizes each of the Agents to take such action as
agent on its behalf and to exercise such powers under this Agreement as
are delegated to such Agents by the terms hereof, together with such
powers as are reasonably incidental thereto. The Operational Agent is
hereby expressly authorized on behalf of each Lender and each LC Bank,
without hereby limiting any implied authority, to receive on behalf of
each of the Lenders any payment of principal of, or interest on, the Notes
and all other amounts accrued thereunder or hereunder paid to the
Operational Agent, and promptly to distribute in accordance with Section
5.01(a) to each Lender its proper share of all payments so received. Each
Agent is hereby expressly authorized on behalf of each Lender and each LC
Bank, without hereby limiting any implied authority, to distribute to each
Lender copies of all notices, agreements and other materials as provided
for in this Agreement and any other Loan Document received by such Agent.
As to any matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of the Notes), the Agents
shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all
Lenders, all LC Banks and all holders of Notes; provided, however, that
the Agents shall not be required to take any action that exposes any Agent
to personal liability or that is contrary to this Agreement or applicable
law. Each Agent agrees to give to each Lender prompt notice of each
notice given to it by the Borrower pursuant to the terms of this
Agreement.
SECTION 10.02. Agents' Reliance, Etc. Neither any Agent nor any
of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection
with any Loan Document, except for its or their own gross negligence or
wilful misconduct. Without limitation of the generality of the foregoing:
(i) each Agent may treat the payee of any Note as the holder thereof until
the Documentation Agent receives and accepts a Lender Assignment entered
into by the Lender which is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 11.07; (ii) each
Agent may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts;
(iii) the Agents make no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with any Loan Document; (iv) no
Agent shall have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of any Loan
Document on the part of the Borrower or to inspect any property (including
the books and records) of the Borrower; (v) no Agent shall be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document; and (vi) no Agent
shall incur liability under or in respect of any Loan Document by acting
upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, cable, telex, telecopy or other
teletransmission) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 10.03. Citibank, Union Bank and Affiliates. With respect
to its Commitment and the Note issued to it, each of Citibank and Union
Bank shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not an Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include Citibank and Union Bank each in its individual
capacity. Citibank and Union Bank and their respective Affiliates may
accept deposits from, lend money to, act as trustee under indentures of,
and generally engage in any kind of business with, the Borrower, any of
its Subsidiaries, its Affiliates and any Person who may do business with
or own securities of the Borrower or any such Subsidiary or Affiliate, all
as if Citibank and Union Bank were not an Agent and without any duty to
account therefor to the Lenders.
SECTION 10.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agents or any
other Lender and based on the financial information referred to in Section
7.01(e) and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 10.05. Indemnification. The Lenders agree to indemnify
the Agents (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Notes then held by
each of them (or if no Notes are at the time outstanding or if any Notes
are held by Persons which are not Lenders, ratably according to the
respective Percentages of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agents in
any way relating to or arising out of this Agreement or any action taken
or omitted by the Agents 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 the Agents' gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agents 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, 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.
SECTION 10.06. Successor Agents. Each Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Majority Lenders,
with any such resignation or removal to become effective only upon the
appointment of a successor Agent in such capacity, pursuant to this
Section 10.06. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Agent in such capacity which
shall be a Lender or another commercial bank or trust company reasonably
acceptable to the Borrower organized under the laws of the United States,
or of any State thereof. If no successor Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent in such capacity, which shall be a Lender or shall be another
commercial bank or trust company organized under the laws of the United
States or of any State thereof reasonably acceptable to the Borrower.
Upon the acceptance of any appointment as an Agent hereunder by a
successor Agent and the execution and delivery by the Borrower and the
successor Agent of an agreement relating to the fees to be paid to the
successor Agent under Section 2.02(d) hereof in connection with its acting
as an Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as an Agent, the provisions of this
Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Agent in such capacity under this
Agreement.
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 Majority 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, the
Notes, any Applicable Margin or any fees or other amounts payable
hereunder (other than fees payable to the Operational Agent pursuant to
Section 2.02(d)), (iv) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts
payable hereunder (other than fees payable to the Operational Agent
pursuant to Section 2.02(d)), (v) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, 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 Section
2.03(b) or this Section 11.01, or (viii) release any collateral or change
any provision of the Cash Collateral Agreement providing for the release
of collateral; 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 Note. Any request from the Borrower
for any amendment, waiver or consent under this Section 11.01 shall be
addressed to the Documentation Agent.
SECTION 11.02. Notices, Etc. All notices and other
communications provided for hereunder and under the other Loan Documents
shall be in writing (including telegraphic, facsimile, telex or cable
communication) and mailed, telegraphed, telecopied, telexed, cabled or
delivered, (i) if to the Borrower, at its address at Fairlane Plaza South,
330 Town Center Drive, Suite 1100, Dearborn, Michigan 48126, Attention:
Denise M. Sturdy, Esq., Assistant General Counsel, with a copy to Doris F.
Galvin, Vice President and Treasurer, 212 West Michigan Avenue, Jackson,
Michigan 49201; (ii) if to any Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; (iii) if to any LC Bank,
at its address specified in the LC 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;
(v) if to the Operational Agent, at its address at 445 South Figueroa
Street, 15th Floor, Los Angeles, California 90071, Attention: Utilities
Department Head; and (vi) if to the Documentation Agent, at its address at
399 Park Avenue, New York, New York 10043, Attention: Utilities
Department Head; 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 LC Bank or any Agent to exercise, and no
delay in exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 11.04. Costs, Expenses and Indemnification. (a) The
Borrower agrees to (i) reimburse on demand all reasonable costs and
expenses of each Agent (including, without limitation, reasonable fees and
expenses of counsel to the Agents) in connection with (A) the preparation,
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 Notes become or are 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,
without limitation, 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 enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes
and the other documents to be delivered hereunder.
(b) The Borrower hereby agrees to indemnify and hold each
Lender, each Agent, each LC Bank and their respective officers, directors,
employees, professional advisors and affiliates (each, an "Indemnified
Person") harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable attorney's fees and
expenses, whether or not such Indemnified Person is named as a party to
any proceeding or is otherwise subjected to judicial or legal process
arising from any such proceeding) which any of them may incur or which may
be claimed against any of them by any Person:
(i) by reason of or in connection with the execution, delivery
or performance of any of the Loan Documents or any transaction
contemplated thereby, or the use by the Borrower of the proceeds
of any Extension of Credit;
(ii)in connection with any documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of any of the Loan Documents; or
(iii)in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation, release
or ownership of any Hazardous Substance (i) at, upon or under any
property of the Borrower or any of its Affiliates or (ii) by or on
behalf of the Borrower or any of its Affiliates at any time and in
any place;
provided, however, that nothing contained in this subsection (b) shall
constitute a relinquishment or waiver of the Borrower's rights to any
independent claim that the Borrower may have against any Indemnified
Person for such Indemnified Person's gross negligence or wilful
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.
(c) The Borrower's other obligations under this Section 11.04
shall survive the repayment of all amounts owing to the Lenders, the LC
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 Co-Agents to declare the Notes due and payable pursuant to
the provisions of Section 9.02, each Lender and LC 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 LC 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 Note held by such Lender or the LC Bank Agreement to which such LC
Bank is a party, as the case may be, irrespective of whether or not such
Lender or LC Bank shall have made any demand under this Agreement or such
Note or such LC Bank Agreement and although such obligations may be
unmatured. Each Lender and LC Bank agrees to notify promptly the Borrower
after any such set-off and application made by such Lender or LC 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
LC Bank under this Section 11.05 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which
such Lender and LC Bank may have.
(b) The Borrower agrees that it shall have no right of
off-set, deduction or counterclaim in respect of its obligations
hereunder, and that the obligations of the Lenders hereunder are several
and not joint. Nothing contained herein shall constitute a relinquishment
or waiver of the Borrower's rights to any independent claim that the
Borrower may have against any Agent or any Lender for such Agent's or such
Lender's, as the case may be, gross negligence or wilful 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 Documentation 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 (such consent not to be unreasonably
withheld or delayed), 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, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or 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 Documentation Agent (with a copy to the Operational Agent),
for its acceptance and recording in the Register, a Lender Assignment,
together with any Note or Notes subject to such assignment and a
processing and recordation fee of $2,500; and provided further, however,
that the consent of the Borrower 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 (iii), above, shall not apply if an Event
of Default shall have occurred and be continuing and the Co-Agents shall
have declared all Advances to be immediately due and payable hereunder.
The Documentation 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 Advances 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 Co-Agents shall have declared all
Advances 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 Documentation 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 Advances 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 and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(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 any Note or Notes subject to such assignment, the
Documentation Agent shall, if such Lender Assignment has been completed
and is in substantially the form of Exhibit H, (i) accept such Lender
Assignment, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Documentation Agent in exchange
for the surrendered Note or Notes a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to
such Lender Assignment and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in
an amount equal to the Commitment retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Lender Assignment and shall otherwise be in
substantially the form of Exhibit A.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations
under the Loan Documents (including, without limitation, all or a portion
of its Commitment, the Advances owing to it and the Note or Notes held by
it); provided, however, that (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of this Agreement, and (iv) the Borrower, the Agents 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.
(f) 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.
(g) If any Lender (or any bank or other entity to which such
Lender has sold a participation) shall (i) make any demand for payment
under Section 5.04(a) or (d), or (ii) determine not to extend the
Termination Date in response to any request by the Borrower pursuant to
Section 2.05, then (A) in the case of any demand made under clause (i)
above, within 30 days after any such demand (if, but only if, such
demanded payment has been made by the Borrower) or notice, and (B) in the
case of the occurrence of the event described in clause (ii) above, within
20 days after such occurrence, the Borrower may, with the approval of the
Agents (which approval shall not be unreasonably withheld) and provided
that no Event of Default or Unmatured Default shall then have occurred and
be continuing, demand that such Lender assign 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 Advances
owing to it within the period ending on the later to occur of (x) the last
day in the period described in clause (A) or (B) above, as applicable, and
(y) the last day of the longest of the then current Interest Periods for
such Advances. 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 Advances, then
such demand by the Borrower shall become ineffective; it being understood
for purposes of this subsection (g) 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 the Note made by the Borrower to such Lender, whether for principal,
interest, fees, costs or expenses (other than the demanded payment
referred to in clause (i) above, and payable by the Borrower as a
condition to the Borrower's right to demand such assignment) or otherwise.
In addition, in the case of any amount demanded for payment by any Lender
(or such a participant) pursuant to Section 5.04(a) or (d), the Borrower
may, in the case of any such Lender, with the approval of the Agents
(which approval shall not be unreasonably withheld) and provided that no
Event of Default or Unmatured 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 Advances 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 the Note 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 hereof (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 Advances of all Lenders then
outstanding does not exceed the then remaining Commitments of the Lenders.
Notwithstanding anything set forth above in this subsection (g) 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
Advances or terminate and prepay the Commitment and Advances 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 Advances so as to
eliminate the further incurrence of such increased cost. In furtherance
of the foregoing, any such Lender demanding payment or giving notice as
provided above agrees to use reasonable efforts to so change its
Applicable Lending Office if, to do so, would not result in the incurrence
by such Lender of additional costs or expenses which it deems material or,
in the sole judgment of such Lender, be inadvisable for regulatory,
competitive or internal management reasons.
(h) 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 Advances owing to it to any Federal Reserve Bank
(and its transferees) as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System 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 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 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 prospective participant's
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 (i) by a regulatory agency or
otherwise in connection with an examination of the Recipient's records by
appropriate authorities, (ii) pursuant to court order, subpoena or other
legal process or (iii) otherwise, as required by law; in the event of any
required disclosure under clause (ii) or (iii), 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 CO-MANAGER, THE LC 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. This Agreement and the Notes shall
be governed by, and construed in accordance with, the laws of the State of
New York. The Borrower, the Lenders, the LC Banks, the Co-Manager 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.
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 Agreement for
the Borrower to provide, upon the termination in full of the "Commitments"
under the Existing Agreement on the date hereof, cash collateral to secure
LC Outstandings with respect to the Existing Letters of Credit. The
Lenders and each LC 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 Existing Agreement) and direct
the Documentation Agent to return all such Collateral to the Borrower.
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 the Notes evidencing the Extensions of Credit and shall continue in
full force and effect so long as any Note or any amount due hereunder is
outstanding and unpaid or any Commitment of any Lender has not been
terminated.
<PAGE>
<PAGE> S-1
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/ A. M. Wright
------------------------------------
Senior Vice President and
Chief Financial Officer
<PAGE>
<PAGE> S-2
Commitment
$30,000,000 CITIBANK, N.A.,
as Co-Agent, Documentation Agent and Bank
By /s/ Paul Addison
------------------------------------
Title: Attorney in Fact
<PAGE>
<PAGE> S-3
Commitment
$30,000,000 UNION BANK,
as Co-Agent, Operational Agent and Bank
By /s/ John M. Edmonston
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-4
Commitment
$25,000,000 BANK OF AMERICA ILLINOIS,
as Co-Manager and Bank
By /s/ Felipi A. Gomez
------------------------------------
Title: Authorized Officer <PAGE>
<PAGE> S-5
Commitment
$25,000,000 BZW DIVISION OF
BARCLAYS BANK PLC,
as Co-Manager and Bank
By /s/ Sydney G. Dennis
------------------------------------
Title: Associate Director
<PAGE>
<PAGE> S-6
Commitment
$25,000,000 THE FIRST NATIONAL BANK
OF BOSTON, as Co-Manager and Bank
By /s/ Richard A. Low
------------------------------------
Title: Division Executive
<PAGE>
<PAGE> S-7
Commitment
$25,000,000 THE FIRST NATIONAL BANK
OF CHICAGO, as Co-Manager and Bank
By /s/ Susan Verback
------------------------------------
Title: Assistant Vice President
<PAGE>
<PAGE> S-8
Commitment
$25,000,000 THE CHASE MANHATTAN BANK,
N.A., as Co-Manager and Bank
By /s/ Thomas L. Casey
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-9
Commitment
$30,000,000 BANK OF SCOTLAND
By /s/ Catherine M. Oniffrey
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-10
Commitment
$20,000,000 BHF-BANK AKTIENGESELLSCHAFT
By /s/ David Fraenkel
------------------------------------
Title: Vice President
By /s/ Linda Pace
------------------------------------
Title: Assistant Vice President
<PAGE>
<PAGE> S-11
Commitment
$20,000,000 THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY
By /s/ S. C. Schumacher
------------------------------------
Title: Senior Vice President
and Chief Manager
<PAGE>
<PAGE> S-12
Commitment
$25,000,000 NATIONSBANK, N.A.
By /s/ James Ford
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-13
Commitment
$20,000,000 TORONTO DOMINION (TEXAS), INC.
By /s/ Lisa Allison
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-14
Commitment
$15,000,000 BANK OF MONTREAL
By /s/ Howard H. Turner
------------------------------------
Title: Director
<PAGE>
<PAGE> S-15
Commitment
$15,000,000 CIBC INC.
By /s/ Joel W. Peterson
------------------------------------
Title: Managing Director
<PAGE>
<PAGE> S-16
Commitment
$15,000,000 CREDIT LYONNAIS CHICAGO BRANCH
By /s/ Attila Koc
------------------------------------
Title: Vice President and Group Head
<PAGE>
<PAGE> S-17
Commitment
$15,000,000 THE FUJI BANK, LIMITED
By /s/ Peter L. Chinnici
------------------------------------
Title: Joint General Manager
<PAGE>
<PAGE> S-18
Commitment
$15,000,000 MICHIGAN NATIONAL BANK
By /s/ Mark S. Aben
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-19
Commitment
$15,000,000 THE SANWA BANK LIMITED,
CHICAGO BRANCH
By /s/ Richard H. Ault
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-20
Commitment
$15,000,000 NATIONAL WESTMINSTER BANK PLC
By /s/ Marilyn A. Windsor
------------------------------------
Title: Vice President
NATIONAL WESTMINSTER BANK PLC,
NASSAU BRANCH
By /s/ Marilyn A. Windsor
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-21
Commitment
$15,000,000 SOCIETE GENERALE
By /s/ Albert H. Tune
------------------------------------
Title: Vice President and Manager
By /s/ Petrus J. Mare
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-22
Commitment
$15,000,000 THE BANK OF NEW YORK
By /s/ Dennis Pidherny
------------------------------------
Title: Vice President
<PAGE>
<PAGE> S-23
Commitment
$15,000,000 THE SUMITOMO BANK, LTD.,
CHICAGO BRANCH
By /s/ H. Iwami
------------------------------------
Title: Joint General Manager
By
------------------------------------
Title:
____________________________
Total: $450,000,000<PAGE>
<PAGE>
SCHEDULE I
CMS ENERGY CORPORATION
Credit Agreement, dated as of November 21, 1995
among CMS Energy Corporation, the Banks named therein,
Citibank, N.A. and Union Bank, as Co-Agents
Name of Bank Domestic Lending Office Eurodollar Lending Office
- ------------------- -------------------------- ------------------------
Citibank, N.A. 399 Park Avenue, 4th Floor - same -
New York, New York 10043
Attention: Philip Kron
Telephone: 212/559-1500
Telecopier: 212/793-6130
Union Bank 445 South Figueroa Street - same -
Los Angeles, California 90071
Attention: John M. Edmonston
Telephone: 213/236-5809
Telecopier: 213/236-4096
Bank of America
Illinois 200 West Jackson Boulevard - same -
Chicago, Illinois 60697
Attention: Debbie Aguillar
Telephone: 312/828-3793
Telecopier: 312/974-9626
BZW Division of
Barclays Bank PLC 222 Broadway, 11th Floor - same -
New York, New York 10038
Attention: Sydney G. Dennis
Telephone: 212/412-2470
Telecopier: 212/412-6709
The First National
Bank of Boston 100 Federal Street - same -
Mail Stop 01-08-02
Boston, Massachusetts 02110
Attention: Frank T. Smith
Telephone: 617/434-6625
Telecopier: 617/434-3652
The First National
Bank of Chicago One First National Bank Plaza - same -
Suite 0363
Chicago, Illinois 60670
Attention: Mr. Michael K. Murphy
Telephone: 312/732-5443
Telecopier: 312/732-3055
The Chase Manhattan
Bank, N.A. 1 Chase Manhattan Plaza, 3rd Floor- same -
Global Power Group
New York, New York 10081
Attention: Thomas L. Casey
Telephone: 212/552-7518
Telecopier: 212/552-6276
Bank of Scotland 565 Fifth Avenue, 1st Floor - same -
New York, New York 10017
Attention: James Halley
Telephone: 212/450-0831
Telecopier: 212/682-5720
BHF-Bank
Aktiengesellschaft 590 Madison Avenue - same -
New York, New York 10022
Attention: John Sykes
Telephone: 212/756-5939
Telecopier: 212/756-5536
The Mitsubishi Trust
and Banking Corp- 801 S. Figueroa Street, Suite 500- same -
ation/Los Angeles Los Angeles, California 90017
Agency Attention: Rachel Ono
Telephone: 213/896-4665
Telecopier: 213/687-4631
NationsBank, N.A. Utility Finance Division - same -
100 N. Tryon Street
Charlotte, North Carolina 28255
Attention: James Ford
Telephone: 704/388-1258
Telecopier: 704/386-1270
Toronto Dominion
(Texas), Inc. Houston Agency - same -
Suite 1700
909 Fannin
Houston, Texas 77010
Attention: Neva Nesbitt
Telephone: 713/653-8261
Telecopier: 713/951-9921
Bank of Montreal 115 South LaSalle Street, 12th Floor- same -
Chicago, Illinois 60603
Attention: Michael J. Linton
Telephone: 312/750-4370
Telecopier: 312/750-4314
CIBC Inc. 2727 Paces Ferry Road - same -
Suite 1200
Atlanta, Georgia 30339
Attention: Debra Quintero
Telephone: 770/319-4823
Telecopier: 770/319-4950
Credit Lyonnais
Chicago Branch 227 West Monroe Street, #3800 - same -
Chicago, Illinois 60606
Attention: Rose Liptak
Telephone: 312/220-7319
Telecopier: 312/641-0527
The Fuji Bank,
Limited 225 West Wacker Drive, Suite 2000- same -
Chicago, Illinois 60606
Attention: Christine Lee
Telephone: 312/621-0390
Telecopier: 312/621-0539
Michigan National
Bank 124 West Allegan Street - same -
Michigan National Tower
Lansing, Michigan 48933
Attention: Mark S. Aben
Telephone: 517/377-3368
Telecopier: 517/377-3102
The Sanwa Bank,
Ltd. 10 South Wacker Drive, 31st Floor- same -
Chicago, Illinois 60606
Attention: Richard Ault
Telephone: 312/368-3011
Telecopier: 312/346-6677
National Westminster
Bank Plc/National c/o 175 Water Street - same -
Westminster Bank New York, New York 10038
Plc, Nassau Branch Attention: Gary Tenner
Telephone: 212/602-4180
Telecopier: 212/602-4118
The Bank of New
York 1 Wall Street, 19th Floor - same -
New York, New York 10286
Attention: Dennis Pidherny
Telephone: 212/635-7547
Telecopier: 212/635-7923
The Sumitomo Bank,
Ltd., Chicago 223 South Wacker Drive, Suite 7117- same -
Branch Chicago, Illinois 60606
Attention: Gertrand Wolters
Telephone: 312/876-7794
Telecopier: 312/876-6436
Societe Generale 181 West Madison, Suite 3400 - same -
Chicago, Illinois 60602
Attention: Albert Tune
Telephone: 312/578-5060
Telecopier: 312/578-5099
<PAGE>
<PAGE>
SCHEDULE II
TO THE CREDIT AGREEMENT
As of November 21, 1995
Project Finance Debt:
Jackson Pipeline Company Partnership Debt $ 5,378,948
-----------
Borrowers Ownership Interest 75%
Centrales Termica's Mendoza Debt $23,048,968
Borrowers Ownership Interest 51%
Debt (according to GAAP) of Enterprises -0-
---
<PAGE>
<PAGE>
EXHIBIT A
FORM OF PROMISSORY NOTE
U.S.$__________ Dated: ____________, 19__
FOR VALUE RECEIVED, the undersigned, CMS ENERGY CORPORATION, a
Michigan corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order
of ____________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to
below) the principal sum of U.S.$[amount of the Lender's Commitment in
figures] or, if less, the aggregate principal amount of all Advances (as
defined below) made by the Lender to the Borrower pursuant to the Credit
Agreement outstanding on the Termination Date (as defined in the Credit
Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates, and payable at such times,
as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Union Bank, as Operational Agent, at its
offices at 445 South Figueroa Street, 15th Floor, Los Angeles, California
90071, in same day funds. Each Advance made by the Lender to the Borrower
pursuant to the Credit Agreement, and all payments made on account of the
principal amount thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of
this Promissory Note, provided that the failure to so record any Advance
or any payment on account thereof shall not affect the payment obligations
of the Borrower hereunder or under the Credit Agreement.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement, dated as of
November __, 1995 (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 Lender and certain other Lenders parties thereto, the Co-Agents, the
Documentation Agent and the Operational Agent, and the Loan Documents
referred to therein and entered into pursuant thereto. The Credit
Agreement, among other things, (i) provides for the making of advances
(the "Advances") by the Lender to the Borrower from time to time in an
aggregate amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such
Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.
CMS ENERGY CORPORATION
By
-----------------------------------
Senior Vice President and
Chief Financial Officer<PAGE>
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
- -------------------------------------------------------------------------
Amount of
Principal Unpaid
Amount of Paid or Principal Notation
Date Advance Prepaid Balance Made By
- -------------------------------------------------------------------------
<PAGE>
<PAGE>
EXHIBIT B
FORM OF NOTICE OF BORROWING
[Date]
Union Bank, as Operational
Agent for the Lenders parties
to the Credit Agreement
referred to below
Attention: Paula Maguire Reese
Assistant Vice President
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Credit
Agreement, dated as of November ____, 1995 (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 Co-Agents,
the Documentation Agent and the Operational 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 ______________,
19__.
(ii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$ .
1[(iv) The initial Interest Period for each Advance made as part
of the Proposed Borrowing is ____ months.]
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:
- ------------------
1 To be included for a Proposed Borrowing comprised of
Eurodollar Rate Advances.
<PAGE>
<PAGE>
EXHIBIT C
FORM OF NOTICE OF CONVERSION
[Date]
Union Bank, as Operational
Agent for the Lenders parties
to the Credit Agreement
referred to below
Attention: Paula Maguire Reese
Assistant Vice President
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Credit
Agreement, dated as of November ____, 1995 (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 Co-Agents,
the Documentation Agent and the Operational 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:
(iii) The Business Day of the Proposed Conversion is
______________.
(iv) The Type of Advances comprising the Proposed Conversion is
[Base Rate Advances] [Eurodollar Rate Advances].
(v) The aggregate amount of the Proposed Conversion is
$__________.
(vi) The Type of Advances to which such Advances are proposed
to be Converted is [Base Rate Advances] [Eurodollar Rate Advances].
(vii) The Interest Period for each Advance made as part of the
Proposed Conversion is ____ month(s).1
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 Unmatured Default [(other than
an Unmatured Default resulting from the failure of the Borrower to comply
with the ratio set forth in Section 8.01(j) of the Credit Agreement)]2 has
occurred and is continuing].3
Very truly yours,
CMS ENERGY CORPORATION
By
-----------------------
Name:
Title:
- -------------------
1 Delete for Base Rate Advances
2 Include only if an Unmatured 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 Advances with an Interest Period not to
exceed three months in duration is permitted pursuant to
Section 3.04(a)(vi) of the Credit Agreement.
3 Delete if Conversion is into Base Rate Advances.<PAGE>
<PAGE>
EXHIBIT D
FORM OF CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT, dated as of November 21, 1995, made by
CMS ENERGY CORPORATION, a Michigan corporation (the "Pledgor"), to Union
Bank ("Union Bank"), as operational agent (the "Operational Agent") for
the lenders (the "Lenders") parties to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS
(1) Citibank, N.A. and Union Bank, as Co-Agents, and the
Lenders have entered into a Credit Agreement, dated as of November 21,
1995 (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
Base Rate Advances up to the full amount thereof before they are applied,
first, to outstanding Eurodollar Rate Advances 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 Operational Agent in a special
non-interest-bearing cash collateral account (the "Account") with the
Operational Agent at its office at 445 South Figueroa Street, 15th Floor,
Los Angeles, California 90071, Account No. 2200412004 (or at such other
office of the Operational Agent as the Operational Agent may, from time to
time, notify the Pledgor), in the name of the Pledgor but under the sole
control and dominion of the Operational 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 Operational 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 Operational Agent for its benefit and the ratable benefit
of the Lenders, and grants to the Operational Agent for its benefit and
the ratable benefit of the Lenders a security interest in, the following
collateral (the "Collateral"):
(i) the Account, all funds held therein and all certificates
and instruments, if any, from time to time representing or evidencing the
Account;
(ii) all Investments (as hereinafter defined) from time to
time, and all certificates and instruments, if any, from time to time
representing or evidencing the Investments;
(iii) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time hereafter delivered to or
otherwise possessed by the Operational 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 Operational Agent or the Lenders under the Credit Agreement
and the Notes but for the fact that they are unenforceable or not
allowable due to of 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 Operational 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 Operational Agent.
The Operational Agent shall have the right, at any time upon the
occurrence and during the continuance of an Event of Default or an
Unmatured Default, in its discretion and without notice to the Pledgor, to
transfer to or to register in the name of the Operational Agent or any of
its nominees any or all of the Collateral. In addition, the Operational
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 or any Note shall remain unpaid:
(a) The Pledgor will maintain the Account with the Operational
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 Operational Agent and the Lenders) from the Account.
The Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as
may now or hereafter be in effect.
SECTION 5. Investing of Amounts in the Account. If requested by
the Pledgor, the Operational 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 Operational 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
Operational 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 Unmatured Default shall have occurred and be continuing, the
Operational 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 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 Operational Agent of its rights
and remedies hereunder.
(d) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
(e) The Pledgor has, independently and without reliance upon
the Operational 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 Operational Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or
to enable the Operational 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. Operational Agent Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Operational 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
Unmatured Default or otherwise to the extent that the Operational Agent
shall reasonably deem any action to be necessary in order to maintain its
security interest in the Collateral, in the Operational Agent's
discretion, to take any action and to execute any instrument which the
Operational 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. Operational Agent May Perform. If the Pledgor fails
to perform any agreement contained herein, the Operational Agent may
itself perform, or cause performance of, such agreement, and the expenses
of the Operational Agent incurred in connection therewith shall be payable
by the Pledgor under Section 14.
SECTION 12. The Operational Agent's Duties. The powers
conferred on the Operational 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 Operational 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 Operational 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 Operational 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 Operational Agent accords its own
property.
SECTION 13. Remedies upon Default. If any Event of Default shall
have occurred and be continuing:
(a) The Operational 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 Operational 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 Operational Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Operational 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 Operational Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Operational 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 Operational Agent as Collateral and
all cash proceeds received by the Operational 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 Operational Agent, be held by the
Operational Agent as collateral for, and/or then or at any time thereafter
be applied (after payment of any amounts payable to the Operational Agent
pursuant to Section 14) in whole or in part by the Operational Agent for
the ratable benefit of the Lenders against, all or any part of the
Obligations in such order as the Operational Agent shall elect. Any
surplus of such cash or cash proceeds held by the Operational 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
Operational 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 Operational 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
Operational 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 Operational Agent, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, facsimile, telex or cable 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: Denise M. Sturdy, Esq., with a copy
to Doris F. Galvin, Vice President and Treasurer, 212 West Michigan
Avenue, Jackson, Michigan 49201, and if to the Operational 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, (ii) be binding upon the Pledgor, its
successors and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Operational 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 Advances owing to it and any Note 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, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Pledgor. Upon any such termination, the
Operational 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>
<PAGE>
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:
UNION BANK, as Operational Agent
By
--------------------------
Vice President
<PAGE>
<PAGE>
EXHIBIT E
FORM OF OPINION
OF COUNSEL FOR THE BORROWER
November __, 1995
To each of the Lenders parties to the Credit Agreement referred to below,
and to Citibank, N.A. and Union Bank, as Agents under the Credit
Agreement
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 6.01(a)(ix)(A)
of the Credit Agreement, dated as of November 21, 1995 (the "Credit
Agreement"), among CMS Energy Corporation (the "Borrower"), the Banks
parties thereto and the other Lenders from time to time parties thereto,
Citibank, N.A. and Union Bank, as Co-Agents, Citibank, N.A., as
Documentation Agent, and Union Bank, as Operational 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 Notes;
(c) The Cash Collateral Agreement;
(d) The Articles of Incorporation of the Borrower and all
amendments thereto (the "Charter") and
(e) The by-laws of the Borrower and all amendments thereto
(the "By-laws").
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 their respective 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) through (c)
above by all parties to such document (other than the Borrower), (ii) the
authenticity of all such documents submitted to us as originals, (ii) 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, the Notes 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 By-laws, (a) any provision of applicable law or (b) 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 Notes and the Cash Collateral Agreement have
been duly executed and delivered on behalf of the Borrower.
3. Except as disclosed in the Borrower's Quarterly Report on Form
10-Q for the period ended September 30, 1995, 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 to which the
Borrower is, or is to be, a party.
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 (b) 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 (c) 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, the Notes 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, the Notes or any other Loan Document, as the case may
be, wherein the parties thereto agree that the Credit Agreement,
the Notes 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, the Notes 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, the Notes 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 King & Spalding in
their opinion to you of even date herewith delivered pursuant to Section
6.01(a)(ix)(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>
<PAGE>
EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE AGENTS
[Date]
To the Banks listed on Schedule A
hereto, and to Citibank, N.A. and
Union Bank, as Agents
CMS Energy Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to Citibank, N.A. and
Union Bank, individually and as Agents, 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 November 21, 1995 (the
"Credit Agreement"), among CMS Energy Corporation, the Banks parties
thereto and the other Lenders from time to time parties thereto, and
Citibank, N.A. and Union Bank, as Co-Agents. Terms defined in the Credit
Agreement are used herein as therein defined.
In this connection, we have examined the following documents:
1. a counterpart of the Credit Agreement, executed by the
parties thereto;
2. the Notes to the order of each Bank; and
3. the other documents furnished to the Agents pursuant to
Section 6.01(a) of the Credit Agreement, including (without
limitation) the opinion (the "Opinion") of Denise M. Sturdy, Esq.,
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 and have assumed without
independent investigation the correctness of the matters set forth
therein, our opinions expressed below being subject to the assumptions,
qualifications and limitations set forth in the Opinion.
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, the Notes and the other Loan
Documents are, and upon their completion, execution and delivery in
accordance with the terms of the Credit Agreement, Notes and the other
Loan Documents will be, 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 Operational 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 Notes and the other Loan Documents 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 Notes and the other Loan Documents 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
10.05 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.
(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 UCC of any jurisdiction to be
enforceable against third parties. Further, with respect to any
Collateral constituting "securities" within the meaning of Article 8 of
the UCC, a security interest in such Collateral is enforceable and can
attach only if such security is transferred to the Operational Agent or a
person designated by the Operational Agent pursuant to a provision of
Section 8-313(1) of the UCC.
(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>
<PAGE>
EXHIBIT G
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 November 21,
1995, among CMS Energy Corporation, the banks named therein, and Citibank,
N.A. and Union Bank, as Co-Agents)
I. SECTION 8.01(i) (Consolidated Leverage Ratio)
(i) Consolidated Debt
(a) Debt of the Borrower (See worksheet
set forth on Schedule I hereto) $_______
(b)1 Aggregate debt (as such term is
construed in accordance with GAAP)
of the Consolidated Subsidiaries $_______
Total Consolidated Debt $_______
========
(ii) Consolidated Capital
(a) Total Consolidated Debt (See (i) above) $_______
(b)2 Consolidated equity of the common
stockholders of the Borrower and the
Consolidated Subsidiaries $_______
- ---------------------
1 To the extent included, Project Finance Debt of any Consolidated
Subsidiary shall be included only to the extent of the Borrower's
Ownership Interest in such Consolidated Subsidiary.
2 To the extent included in (b), (c) or (d) above, Project Finance
Equity of the Borrower and the Consolidated Subsidiaries in any
Consolidated Subsidiary should be included only to the extent of
the Borrower's Ownership Interest in each such Consolidated
Subsidiary.
(c)2 Consolidated equity of the preference
stockholders of the Borrower and the
Consolidated Subsidiaries $_______
(d)2 Consolidated equity of the preferred
stockholders of the Borrower and the
Consolidated Subsidiaries $_______
Total Consolidated Capital $_______
========
(iii) Consolidated Leverage Ratio (i/ii) ____
========
Maximum Ratio - Section 8.01(i) ____
========
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)) ____
Maximum Ratio - Section 8.01(j) ____
III. SECTION Project Finance Debt3
IV. SECTION Support Obligations4
- ------------------
3 Set forth all Project Finance Debt of any Consolidated Subsidiary
and the Borrower's Ownership Interest in such Consolidated
Subsidiary.
4 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.
<PAGE>
<PAGE>
SCHEDULE I
TO EXHIBIT G
Computation of Aggregate Debt of the Borrower
Aggregate Debt of the Borrower (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):1
(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 $_______
- -------------------
1 Debt of the Borrower shall (a) include only 50% of the aggregate
principal amount of Subordinated Debt and Preferred Securities
described in clause (b) of the definition of Preferred Securities,
subject to a maximum exclusion of $100,000,000 in the aggregate,
and (b) not include Subordinated Debt or Preferred Securities if
such Subordinated Debt or Preferred Securities, as the case may
be, is mandatorily convertible into common stock of the Borrower
upon terms and conditions satisfactory to the Majority Lenders.
(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 $_______
(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)2 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) $_______
(E)2 to perform, or arrange for the
performance of, any non-monetary
obligations or non-funded debt
payment obligations of the primary
obligor $_______
(F) Other $_______
Total of Debt of the Borrower $_______
========
- ------------------
2 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>
<PAGE>
EXHIBIT H
FORM OF LENDER ASSIGNMENT
Dated _________, 19__
Reference is made to the Credit Agreement, dated as of
November ____, 1995 (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, the Co-Agents, the
Documentation Agent and the Operational Agent. Pursuant to the Credit
Agreement, ________________________________ (the "Assignor") has committed
to make advances ("Advances") to the Borrower, which Advances 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, the Advances owing
to the Assignor and the Note held by the Assignor. After giving effect to
such sale and assignment, the Assignee's Commitment and the amount of the
Advances owing to the Assignee 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 hereto (the "Effective Date").
2. On _______________, 19__, the Assignee will pay to the
Assignor, in same day funds, at such address and account as the Assignor
shall advise the Assignee, $___________, and 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.
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; and
(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.
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 and (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.
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>
<PAGE>
Schedule 1
to
Assignment Agreement
Dated ____________________, 19__
Section 1.
Percentage Interest: ______%
Section 2.
Assignee's Commitment: $______
Aggregate Outstanding
Principal Amount of
Advances owing to the Assignee: $______
Section 3.
Effective Date: _________, 19__
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By:
---------------------------------
Name:
Title:
Consented to: (1)
CMS ENERGY CORPORATION
By:
------------------------------
Name:
Title:
_______________________
(1) Consent of the Borrower 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>
<PAGE>
EXHIBIT (4)(ii)(A)
[EXECUTION COPY]
$125,000,000
TERM LOAN AGREEMENT
Dated as of November 21, 1995,
Among
CMS ENERGY CORPORATION
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A. and
UNION BANK
as Co-Agents
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<PAGE> (i)
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. . 5
SECTION 1.02. Computation of Time Periods 14
SECTION 1.03. Accounting Terms . . . . 14
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments. . . . . 14
SECTION 2.02. Fees . . . . . . . . . . 14
SECTION 2.03. Reduction of the Commitments 14
SECTION 2.04. Computations of Outstandings 15
ARTICLE III
ADVANCES
SECTION 3.01. Advances . . . . . . . . 15
SECTION 3.02. Conversion of Advances . 16
SECTION 3.03. Interest Periods . . . . 16
SECTION 3.04.Other Terms Relating to the Making and Conversion
of Advances. . . . . . . . . . 16
SECTION 3.05. Repayment of Advances. . 18
ARTICLE IV
PAYMENTS, COMPUTATIONS AND
YIELD PROTECTION
SECTION 4.01. Payments and Computations 18
SECTION 4.02. Interest Rate Determination 19
SECTION 4.03. Prepayments. . . . . . . 19
SECTION 4.04. Yield Protection . . . . 20
SECTION 4.05. Sharing of Payments, Etc. 21
SECTION 4.06. Taxes. . . . . . . . . . 21
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Drawdown 22
SECTION 5.02. Conditions Precedent to Each Conversion 23
SECTION 5.03. Reliance on Certificates 24
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Borrower 24
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01. Affirmative Covenants. . 26
SECTION 7.02. Negative Covenants . . . 27
SECTION 7.03. Reporting Obligations. . 30
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. . . . 32
SECTION 8.02. Remedies . . . . . . . . 33
ARTICLE IX
THE AGENTS
SECTION 9.01. Authorization and Action 33
SECTION 9.02. Agents' Reliance, Etc. . 34
SECTION 9.03. Citibank, Union Bank and Affiliates 34
SECTION 9.04. Lender Credit Decision . 34
SECTION 9.05. Indemnification. . . . . 34
SECTION 9.06. Successor Agents . . . . 35
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<PAGE>
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc.. . . . 35
SECTION 10.02. Notices, Etc. . . . . . 35
SECTION 10.03. No Waiver of Remedies . 36
SECTION 10.04. Costs, Expenses and Indemnification 36
SECTION 10.05. Right of Set-off. . . . 37
SECTION 10.06. Binding Effect. . . . . 37
SECTION 10.07. Assignments and Participation 37
SECTION 10.08. Confidentiality . . . . 39
SECTION 10.09. Waiver of Jury Trial. . 40
SECTION 10.10. Governing Law . . . . . 40
SECTION 10.11. Relation of the Parties; No Beneficiary 40
SECTION 10.12. Execution in Counterparts 40
SECTION 10.13. Survival of Agreement . 40
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<PAGE> v
EXHIBITS
EXHIBIT A - Form of Note
EXHIBIT B - Form of Notice of Borrowing
EXHIBIT C - Form of Notice of Conversion
EXHIBIT D - Form of Opinion of Denise M. Sturdy, Esq.,
Counsel of the Borrower
EXHIBIT E - Form of Opinion of King & Spalding, Counsel to the Agents
EXHIBIT F - Form of Compliance Schedule
EXHIBIT G - Form of Lender Assignment
SCHEDULES
SCHEDULE I Applicable Lending Offices
SCHEDULE II Certain Debt
<PAGE>
<PAGE>
TERM LOAN AGREEMENT
Dated as of November 21, 1995
THIS TERM LOAN 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)Citibank, N.A. ("Citibank") and Union Bank ("Union Bank"), as
co-administrative agents (individually a "Co-Agent" and
collectively, the "Co-Agents") for the Lenders hereunder,
(iv)Citibank, as documentation agent (the "Documentation Agent) for
the Lenders hereunder,
(v)Union Bank, as operational agent (the "Operational Agent") for
the Lenders hereunder, and
(vi)Bank of America Illinois, BZW Division of Barclays Bank PLC, The
Chase Manhattan Bank, N.A., The First National Bank of Boston
and The First National Bank of Chicago, as co-managers
(individually, the "Co-Manager" and, collectively, the "Co-
Managers").
PRELIMINARY STATEMENTS
The Borrower has requested the Banks to provide the credit facility
hereinafter described in the amounts 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 (such meanings to be
applicable to the singular and plural forms of the terms defined):
"Advance" means an Advance by a Lender to the Borrower pursuant
to Section 3.01, and refers to a Base Rate Advance or a Eurodollar
Rate Advance (each of which shall be a "Type" of Advance). All
Advances 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 Advance by such Lender until repaid or next Converted.
"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 Co-Agents, the
Operational Agent or the Documentation Agent; and "Agents" means any
or all of the foregoing.
"Alternate Base Rate" means a fluctuating interest rate per
annum equal at all times to the highest of:
(a) the rate of interest announced publicly by Union Bank
in Los Angeles, California, from time to time, as the Union Bank
Reference Rate;
(b) 1/2 of one percent per annum above the latest
three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average being determined weekly by the
Operational Agent on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such
rates received by the Operational Agent from three New York
certificate of deposit dealers of recognized standing selected
by the Operational Agent, in either case adjusted to the nearest
1/4 of one percent or, if there is no nearest 1/4 of one
percent, to the next higher 1/4 of one percent; and
(c) 1/2 of one percent per annum above the Federal Funds
Rate.
Each change in the Alternate Base Rate shall take effect concurrently
with any change in such base rate, moving average, or Federal Funds
Rate.
"Applicable Lending Office" means, with respect to each Lender,
(i) such Lender's Domestic Lending Office, in the case of a Base Rate
Advance, and (ii) such Lender's Eurodollar Lending Office, in the
case of a Eurodollar Rate Advance.
"Applicable Margin" means, on any date of determination, (i) for
a Base Rate Advance, 0.25% per annum, and (ii) for a Eurodollar Rate
Advance, 1.75% per annum.
Notwithstanding the foregoing, (i) the foregoing Applicable Margin
applicable to Base Rate Advances shall be increased by 0.50% per
annum in the event that, and at all times during which, the Senior
Notes shall be rated BB- (or its equivalent) or lower by (A) any
three of S&P, Fitch, Moody's and D&P, or (B) both S&P and Moody's,
(ii) the foregoing Applicable Margin applicable to Eurodollar Rate
Advances shall be increased by 0.25% per annum in the event that, and
at all times during which, the Senior Notes shall be rated BB- (or
its equivalent) or lower by (A) any three of S&P, Fitch, Moody's and
D&P, or (B) both S&P and Moody's, and (iii) the foregoing Applicable
Margin applicable to Eurodollar Rate Advances shall be decreased by
0.25% per annum in the event that, and at all times during which, the
Senior Notes shall be rated BBB- (or its equivalent) or higher by (x)
any three of S&P, Fitch, Moody's and D&P, or (y) both S&P and
Moody's. The Applicable Margins shall be increased or decreased in
accordance with this definition upon any change in the applicable
ratings, and such increased or decreased Applicable Margins shall be
effective from the date of announcement of any such new ratings. The
Borrower agrees to notify the Operational Agent promptly after each
change in any rating of the Senior Notes. For purposes of this
definition only, if the Senior Notes shall no longer be outstanding
or shall no longer be rated by any three of S&P, Fitch, Moody's and
D&P or by both Moody's and S&P, "Senior Notes" shall mean such other
senior unsecured Debt of the Borrower that is both outstanding and so
rated. In the event that no Senior Notes are outstanding and so
rated, the Applicable Margins will be such amounts as may be mutually
agreed by the Borrower and all the Lenders.
"Applicable Rate" means:
(i) in the case of each Base Rate Advance, 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 in effect
from time to time; and
(ii) in the case of each Eurodollar Rate Advance comprising
part of the same Borrowing, a rate per annum during each
Interest Period equal at all times to the sum of the Eurodollar
Rate for such Interest Period plus the Applicable Margin in
effect from time to time during such Interest Period.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 3.05(b)(i).
"Borrowing" means a borrowing consisting of Advances 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 Advances of a particular
Type may be referred to as being a Borrowing of such "Type". All
Advances 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, Los Angeles,
California and Detroit, Michigan, and, if the applicable Business Day
relates to any Eurodollar Rate Advance, on which dealings are carried
on in the London interbank market.
"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 $5,000,000) of such
Subsidiaries during such period; provided, however, that for the
fiscal year ending December 31, 1995, "Cash Dividend Income" shall
also include an amount equivalent to 80% of Consumers' consolidated
net income for such year to the extent that such consolidated net
income has not been paid in cash dividends by Consumers to the
Borrower.
"Closing Date" means the date upon which each of the conditions
precedent enumerated in Section 5.01 has been fulfilled to the
satisfaction of the Lenders, the Co-Agents and the Borrower. All
transactions contemplated by the Closing Date shall take place on or
before November 21, 1995, at the offices of King & Spalding, 120 West
45th Street, New York, New York 10036, at 10:00 A.M., or such other
time as the parties hereto may mutually agree.
"Commitment" means, for each Lender, the obligation of such
Lender to make Advances to the Borrower in an aggregate amount no
greater than the amount set forth opposite such Lender's name on the
signature pages hereof or, if such Lender has entered into one or
more Lender Assignments, set forth for such Lender in the Register
maintained by the Documentation Agent pursuant to Section 10.07(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$125,000,000 million.
"Confidential Information" has the meaning assigned to that term
in Section 10.08.
"Consolidated Capital" means, at any date of determination, the
sum of (a) Consolidated Debt, (b) consolidated equity of the common
stockholders of the Borrower and the Consolidated Subsidiaries,
(c) consolidated equity of the preference stockholders of the
Borrower and the Consolidated Subsidiaries, and (d) consolidated
equity of the preferred stockholders of the Borrower and the
Consolidated Subsidiaries, in the case of clauses (b) through (d)
above, determined at such date in accordance with GAAP; provided,
however, that Consolidated Capital shall include Project Finance
Equity of the Borrower and the Consolidated Subsidiaries in any
Consolidated Subsidiary only to the extent of the Borrower's
Ownership Interest in such Consolidated Subsidiary.
"Consolidated Debt" means, without duplication, at any date of
determination, the sum of the aggregate Debt of the Borrower plus the
aggregate debt (as such term is construed in accordance with GAAP) of
the Consolidated Subsidiaries, provided, however, that 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; provided, further, that for purposes of this
definition only, Debt of the Borrower shall (a) include only 50% of
the aggregate principal amount of Subordinated Debt and Preferred
Securities described in clause (b) of the definition thereof, subject
to a maximum exclusion of $100,000,000 in the aggregate, and (b) not
include Subordinated Debt or Preferred Securities if such
Subordinated Debt or Preferred Securities, as the case may be, is
mandatorily convertible into common stock of the Borrower upon terms
and conditions satisfactory to the Majority Lenders; and provided,
further, that for purposes of this definition only, debt of any
Consolidated Subsidiary shall include Project Finance Debt of such
Consolidated Subsidiary only to the extent of the Borrower's
Ownership Interest in such Consolidated Subsidiary.
"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 Power 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
Advances of one Type into Advances of another Type, or to the
selection of a new, or the renewal of the same, Interest Period for
Advances, as the case may be, pursuant to Section 3.02.
"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 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, and
(viii) 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 (vii) above and (B) other guaranty or similar
financial obligations in respect of the performance of others,
including, without limitation, Support Obligations.
"Default Rate" means a rate per annum equal at all times to the
higher of (i) 2% per annum above the higher, from time to time, of
(A) the Applicable Rate for Eurodollar Rate Advances immediately
prior to such Default Rate becoming applicable and (B) the Applicable
Rate in effect from time to time for Base Rate Advances, and (ii) the
highest rate per annum payable pursuant to the Indenture with respect
to any principal amount of the Senior Notes that is not paid when
due.
"Dividend Coverage Ratio" means, at any date, the ratio of (i)
Pro Forma Dividend Amounts to (ii) Issuer Interest Expense, as such
terms are defined in the Indenture as in effect on the date hereof.
"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 Operational Agent.
"Drawdown" shall mean the Borrowing made on the Closing Date,
in an aggregate amount not to exceed the Commitments on such date.
"Eligible Assignee" means (a) a commercial bank or trust company
organized under the laws of the United States, or any State thereof;
(b) a commercial bank organized under the laws of any other country
that is a member of the OECD, or a political subdivision of any such
country, provided that such bank is acting through a branch or agency
located in the United States; (c) the central bank of any country
that is a member of the OECD; and (d) any other commercial bank or
other financial institution engaged generally in the business of
extending credit or purchasing debt instruments; provided, however,
that (A) any such Person shall also (i) have outstanding unsecured
indebtedness that is rated A- or better by S&P or A3 or better by
Moody's (or an equivalent rating by another nationally-recognized
credit rating agency of similar standing if neither of such
corporations is then in the business of rating unsecured indebtedness
of entities engaged in such businesses) or (ii) have combined capital
and surplus (as established in its most recent report of condition to
its primary regulator) of not less than $250,000,000 (or its
equivalent in foreign currency), (B) any Person described in clause
(b), (c), or (d) above, shall, on the date on which it is to become a
Lender hereunder, (1) be entitled to receive payments hereunder
without deduction or withholding of any United States Federal income
taxes (as contemplated by Section 4.06) and (2) not be incurring any
losses, costs or expenses of the type for which such Person could
demand payment under Section 4.04(a) or (d) (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) and (C) any Person described in clause (d) above shall, in
addition, be acceptable to the Co-Agents.
"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 Nomeco,
CMS Generation Co., CMS Gas Transmission and Storage Company and any
other direct subsidiary of Enterprises having a net worth in excess
of $50 million.
"Equity Distributions" shall mean, for any period, the aggregate
amount of cash received by the Borrower from its Subsidiaries during
such period that are paid out of proceeds from the sale of common
equity of Subsidiaries of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) that is a "commonly
controlled entity" within the meaning of the regulations under
Section 414 of the Internal Revenue Code of 1986, as amended.
"Eurocurrency Liabilities" has the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office 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
Operational Agent.
"Eurodollar Rate" means, for each Interest Period for each
Eurodollar Rate Advance made as part of the same Borrowing, an
interest rate per annum equal to the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is
not such a multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the Reference
Banks in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to such
Reference Bank's Eurodollar Rate Advance made as part of such
Borrowing and for a period equal to such Interest Period. The
Eurodollar Rate for the Interest Period for each Eurodollar Rate
Advance made as part of the same Borrowing shall be determined by the
Operational Agent on the basis of applicable rates furnished to and
received by the Operational Agent from the Reference Banks two
Business Days before the first day of such Interest Period, subject,
however, to the provisions of Sections 3.04(c) and 4.02.
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 3.05(b)(ii).
"Eurodollar Reserve Percentage" of any Lender for each Interest
Period for each Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such
percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any
such percentage shall be so applicable) under Regulation D or other
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Agreement" means the Credit Agreement, dated as of
July 29, 1994, among the Borrower, the lenders named therein, the Co-
Agents, the Documentation Agent and the Operational Agent.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Operational Agent from three Federal
funds brokers of recognized standing selected by the Operational
Agent.
"Fee Letter" has the meaning assigned to that term in
Section 2.02(b).
"Fitch" means Fitch's Investors Services or any successor
thereto.
"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 the execution, delivery,
or performance of any Loan Document by the Borrower.
"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.
"Indemnified Person" has the meaning assigned to that term in
Section 10.04(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, and the Second Supplemental Indenture, dated as of October
1, 1992, as said Indenture may be further amended or otherwise
modified from time to time in accordance with its terms.
"Interest Period" has the meaning assigned to that term in
Section 3.03.
"Lender Assignment" means an assignment and agreement entered
into by a Lender and an Eligible Assignee, and accepted by the
Documentation 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 10.07.
"Lien" has the meaning assigned to that term in Section 7.02(a).
"Loan Documents" means this Agreement, the Notes, the Fee Letter
and all other agreements, instruments and documents now or hereafter
executed and/or delivered pursuant hereto or thereto.
"Majority Lenders" means, on any date of determination, Lenders
that, collectively, on such date (i) have Percentages in the
aggregate of at least 66-2/3% and (ii) if the Commitments have been
terminated, hold at least 66-2/3% of the then aggregate unpaid
principal amount of the Advances owing to Lenders. Any determination
of those Lenders constituting the Majority Lenders shall be made by
the Co-Agents and shall be conclusive and binding on all parties
absent manifest error.
"Measurement Quarter" has the meaning assigned to that term in
Section 7.01(j).
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"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.
"Nomeco" means NOMECO Oil & Gas Co., a Michigan corporation, all
of whose capital stock is on the date hereof owned by Enterprises.
"Note" means a promissory note of the Borrower payable to the
order of a Lender, in substantially the form of Exhibit A.
"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).
"OECD" means the Organization for Economic Cooperation and
Development.
"Ownership Interest" of the Borrower in any Consolidated
Subsidiary means, at any date of determination, the percentage
determined by dividing (i) the aggregate amount of Project Finance
Equity in such Consolidated Subsidiary owned or controlled, directly
or indirectly, by the Borrower and any other Consolidated Subsidiary
on such date, by (ii) the aggregate amount of Project Finance Equity
in such Consolidated Subsidiary owned or controlled, directly or
indirectly, by all Persons (including the Borrower and the
Consolidated Subsidiaries) on such date. Notwithstanding anything to
the contrary set forth above, if the "Ownership Interest," calculated
as set forth above, 50% or less, such percentage shall be deemed to
equal 0%.
"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 Commitments on such date, and multiplying the
quotient so obtained by 100%.
"Permitted Investments" means each of the following so long as
no such Permitted Investment shall have a final maturity later than
six months from the date of investment therein:
(i)direct obligations of the United States, or of any
agency thereof, or obligations guaranteed as to principal and
interest by the United States or any agency thereof;
(ii)certificates of deposit or bankers' acceptances
issued, or time deposits held, or investment contracts
guaranteed, by any Lender, any nationally-recognized securities
dealer or any other commercial bank, trust company, savings and
loan association or savings bank organized under the laws of the
United States, or any State thereof, or of any other country
which is a member of the OECD, or a political subdivision of any
such country, and in each case having outstanding unsecured
indebtedness that (on the date of acquisition thereof) is rated
AA- or better by S&P or Aa3 or better by Moody's (or an
equivalent rating by another nationally-recognized credit rating
agency of similar standing if neither of such corporations is
then in the business of rating unsecured bank indebtedness);
(iii)obligations with any Lender, any other bank or trust
company described in clause (ii), above, or any nationally-
recognized securities dealer, in respect of the repurchase of
obligations of the type described in clause (i), above, provided
that such repurchase obligations shall be fully secured by
obligations of the type described in said clause (i) and the
possession of such obligations shall be transferred to, and
segregated from other obligations owned by, such Lender, such
other bank or trust company or such securities dealer;
(iv)commercial paper rated (on the date of acquisition
thereof) A-1 or P-1 or better by S&P or Moody's, respectively
(or an equivalent rating by another nationally-recognized credit
rating agency of similar standing if neither of such
corporations is then in the business of rating commercial
paper); and
(v)any eurodollar certificate of deposit issued by any
Lender or any other commercial bank, trust company, savings and
loan association or savings bank organized under the laws of the
United States, or any State thereof, or of any country which is
a member of the OECD, or a political subdivision of any such
country, and in each case having outstanding unsecured
indebtedness that (on the date of acquisition thereof) is rated
AA- or better by S&P or Aa3 or better by Moody's (or an
equivalent rating by another nationally-recognized credit rating
agency of similar standing if neither of such corporations is
then in the business of rating unsecured bank indebtedness).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock 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.
"Preferred Securities" means (a) any preferred securities issued
by a financing entity (i.e., partnership, trust, limited liability
company) used exclusively to raise capital for the Borrower, where
such financing transaction and preferred securities have the
following characteristics:
(i)the financing entity lends substantially all of the
proceeds from the issuance of the preferred securities to the
Borrower in exchange for Subordinated Debt, which preferred
securities contain terms providing for the deferral of interest
payments corresponding to provisions providing for the deferral
of interest payments on the Subordinated Debt; and
(ii)the Borrower makes periodic interest payments on the
Subordinated Debt, which interest payments are in turn used by
the financing entity to make corresponding payments to the
holders of the preferred securities; and
(b)any other preferred securities issued by the Borrower,
provided that (A) the Borrower requests such preferred securities be
treated as "preferred securities" for the purpose of clause (a) of
the second proviso of Consolidated Debt and (B) such preferred
securities are on terms and conditions satisfactory to the Majority
Lenders.
"Project Finance Debt" means Debt of any Person that is non-
recourse to such Person (unless such Person is a special-purpose
entity) and any Affiliate of such Person, other than with respect to
the interest of the holder of such Debt in the collateral, if any,
securing such Debt.
"Project Finance Equity" means, at any date of determination,
consolidated equity of the common, preference and preferred
stockholders of the Borrower and the Consolidated Subsidiaries
relating to any obligor with respect to Project Finance Debt.
"Recipient" has the meaning assigned to that term in Section
10.08.
"Reference Banks" means Citibank, Union Bank and Bank of America
Illinois, or any additional or substitute Lenders as may be selected
from time to time to act as Reference Banks hereunder by the
Operational Agent, the Majority Lenders and the Borrower.
"Register" has the meaning specified in Section 10.07(c).
"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 Advances owing to Lenders
and (ii) if no Advances 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 Co-Agents 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 Rating Group 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 Series A Senior Deferred Coupon Notes
Due 1997 and the Series B Senior Deferred Coupon Notes Due 1999
issued by the Borrower pursuant to the Indenture.
"Subordinated Debt" means, for any Person, unsecured Debt of
such Person (i) issued in exchange for the proceeds of Preferred
Securities and (ii) subordinated to the rights of the Lenders
hereunder and under the Notes on terms and conditions satisfactory to
the Majority Lenders, including, without limitation, (A) terms
providing for the deferral of interest payments on such Debt
corresponding to provisions providing for the deferral of interest
payments on the Preferred Securities and (B) the maturity thereof.
"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, without limitation, 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 Agreement for the Allocation
of Income Tax Liabilities and Benefits, dated as of January 1, 1990,
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)
November 30, 2002 and (ii) the date of termination or reduction in
whole of the Commitments pursuant to Section 2.03 or 8.02.
"Trustee" has the meaning assigned to that term in the
Indenture.
"Type" has the meaning assigned to such term (i) in the
definition of "Advance" when used in such context and (ii) in the
definition of "Borrowing" when used in such context.
"Unmatured Default" means an event that, with the giving of
notice or lapse of time or both, would constitute an Event of
Default.
SECTION 1.02. Computation of Time Periods. 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".
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 6.01(e)
("GAAP").
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single Advance to
the Borrower on the Closing Date and to Convert Advances during the period
from the Closing Date until the Termination Date as provided in
Section 3.02, in each case in an aggregate outstanding amount not to
exceed on any day such Lender's Commitment.
SECTION 2.02. Fees. (a) The Borrower agrees to pay to the
Operational Agent for the account of each Bank a participation fee equal
to .375% of such Bank's Commitment, such fee to be payable on the Closing
Date.
(b)In addition to the fees provided for in subsection (a) above,
the Borrower shall pay to the Operational Agent, for the account of the
Co-Agents, such other fees as are provided for in that certain letter
agreement between the Borrower and the Co-Agents (the "Fee Letter")
entered into separately herefrom and dated the date hereof.
SECTION 2.03. Reduction of the Commitments. (a) The Borrower may,
upon at least five Business Days' notice to each Co-Agent, terminate in
whole or reduce ratably in part the Commitments; provided that any such
partial reduction shall be in the aggregate amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(b)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 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.
(c)On any Business Day following the Closing Date on which the sum
of the Commitments shall exceed the aggregate principal amount of Advances
outstanding hereunder, the Commitments of the Lenders shall automatically
and permanently reduce ratably by an amount equal to such excess. In
addition, on the date of any prepayment of the principal amount of the
Advances made hereunder, the Commitments of the Lenders shall
automatically and permanently reduce ratably by an amount equal to the
amount of principal so prepaid.
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 aggregate
principal amount of all Advances outstanding on such date. At no time
shall the principal amount outstanding under this Agreement exceed the
aggregate amount of the Commitments.
ARTICLE III
ADVANCES
SECTION 3.01. Advances. (a) The Drawdown shall be made by the
Borrower by delivering a notice (a "Notice of Borrowing") to the
Operational Agent no later than 12:00 noon (New York City time) on the
fourth Business Day or, in the case of Base Rate Advances, on the first
Business Day, prior to the Closing Date. The Operational Agent shall give
each Lender prompt notice of the Notice of Borrowing. The Notice of
Borrowing shall be in substantially the form of Exhibit B and shall
specify the requested (i) date of such Borrowing, (ii) Type of Advances to
be made in connection with such Borrowing and (iii) Interest Period, if
any, for such Advances. Each proposed Borrowing shall conform to the
requirements of Sections 3.03 and 3.04. Amounts borrowed under this
Section 3.01 and repaid or prepaid may not be reborrowed.
(b)Each Lender shall, before 12:00 noon (New York City time) on the
date of such Borrowing, make available for the account of its Applicable
Lending Office to the Operational Agent at the Operational Agent's address
referred to in Section 10.02, in same day funds, such Lender's Percentage
of such Borrowing. After the Operational Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article V,
the Operational Agent will make such funds available to the Borrower at
the Operational Agent's aforesaid address; provided, however, that the
proceeds of the Drawdown shall be applied first directly by the
Operational Agent on the Closing Date to the prepayment in full of all
outstanding principal, accrued interest and other amounts then owing under
the Existing Agreement (if any), and then, to the extent the proceeds of
such Drawdown exceed 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 Operational Agent's
aforesaid address for general corporate purposes. Notwithstanding the
foregoing, unless the Operational Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Operational Agent such Lender's Percentage of such
Borrowing, the Operational Agent may assume that such Lender has made such
Percentage available to the Operational Agent on the date of such
Borrowing in accordance with the first sentence of this subsection (b),
and the Operational 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 Operational 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
Operational 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 Operational
Agent, at (i) in the case of the Borrower, the interest rate applicable at
the time to Advances made in connection with such Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If a non-performing
Lender shall repay to the Operational Agent such corresponding amount in
full (with interest as above provided), (x) the Operational Agent shall
apply such corresponding amount and interest to the repayment to the
Operational Agent and shall make any remainder available to the Borrower
and (y) such amount so repaid shall be deemed to constitute such Lender's
Advance, made as part of such Borrowing for purposes of this Agreement as
if funded concurrently with the other Advances 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 Operational Agent of Percentages, Commitments and
payments hereunder shall be made without regard to the Commitments, or
outstanding Advances, of such non-performing Lender, and any amounts paid
to the Operational Agent for the account of such non-performing Lender
shall be held by the Operational 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 Advance to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to
make its Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
SECTION 3.02. Conversion of Advances. The Borrower may from time to
time Convert any Advance (or portion thereof) of any Type to one or more
Advances of the same or any other Type by delivering a notice of such
Conversion (a "Notice of Conversion") to the Operational Agent no later
than 12:00 noon (New York City time) on (x) the fourth Business Day prior
to the date of any proposed Conversion into a Eurodollar Rate Advance and
(y) the first Business Day prior to the date of any proposed Conversion
into a Base Rate Advance. The Operational Agent shall give each Lender
prompt notice of each Notice of Conversion. Each Notice of Conversion
shall be in substantially the form of Exhibit C and shall specify the
requested (i) date of such Conversion, (ii) Type of, and Interest Period,
if any, applicable to, the Advances (or portions thereof) proposed to be
Converted, (iii) Type of Advances to which such Advances (or portions
thereof) are proposed to be Converted, (iv) initial Interest Period, if
any, to be applicable to the Advances resulting from such Conversion and
(i) aggregate amount of Advances (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 Advance and the date of payment in full of such Advance
shall be divided into successive periods of months or days ("Interest
Periods") for purposes of computing interest applicable thereto. The
initial Interest Period for each such Advance shall begin on the day such
Advance is made, and each subsequent Interest Period shall begin on the
last day of the immediately preceding Interest Period for such Advance.
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 that
ends after the Termination Date; and
(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.
SECTION 3.04. Other Terms Relating to the Making and Conversion of
Advances. (a) Notwithstanding anything in Section 3.01 or 3.02 to the
contrary:
(i) each Borrowing shall be in an aggregate amount not
less than $10,000,000, or an integral multiple of $1,000,000 in
excess thereof and shall consist of Advances 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 Drawdown shall be in an
aggregate amount sufficient to repay in full all outstanding
principal, accrued interest and other amounts owing under the
Existing Agreement (if any) 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 five different Borrowings
comprising Eurodollar Rate Advances be outstanding hereunder;
(iv) no Eurodollar Rate Advance may be Converted on a date
other than the last day of the Interest Period applicable to
such Advance unless the corresponding amounts, if any, payable
to the Lenders pursuant to Section 4.04(c) 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
Advances or fail, in any Notice of Conversion that has been
timely given, to select the duration of any Interest Period for
Advances to be Converted into Eurodollar Rate Advances in
accordance with Section 3.03, such Advances shall, on the last
day of the then existing Interest Period therefor, automatically
Convert into, or remain as, as the case may be, Base Rate
Advances; and
(vi) if, on the date of any proposed Conversion, any Event
of Default or Unmatured Default shall have occurred and be
continuing, all Advances then outstanding shall, on such date,
automatically Convert into, or remain as, as the case may be,
Base Rate Advances; provided, however, that with respect to any
Unmatured Default that occurs and is continuing as a result of
the failure of the Borrower to comply with the ratio set forth
in Section 7.01(j), any such Advances may be Converted into
Eurodollar Rate Advances with an Interest Period not to exceed
three months in duration.
(b)If any Lender shall notify the Operational 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 Advances hereunder, (i) the
obligation of such Lender to make, or to Convert Advances into, Eurodollar
Rate Advances 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 Advances, and (ii) if the maintenance of Eurodollar Rate Advances
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
Advances 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 Operational Agent (but the failure to do so shall impose no
liability upon such Lender). Promptly upon receipt of such notice from
such Lender (or upon such Lender's assigning all of its Commitments,
Advances, participation and other rights and obligations hereunder to an
Eligible Assignee), the Operational Agent shall deliver notice thereof to
the Borrower and the Lenders and such suspension shall terminate.
(c)If (i) only one, or none, of the Reference Banks furnishes
timely information to the Operational Agent for determining the Eurodollar
Rate for Eurodollar Rate Advances to be made in connection with any
proposed Borrowing or (ii) the Majority Lenders shall, at least one
Business Day before the date of any requested Borrowing, notify the
Operational Agent that the Eurodollar Rate for Eurodollar Rate Advances to
be made in connection with such Borrowing will not adequately reflect the
cost to such Majority Lenders of making, funding or maintaining their
respective Eurodollar Rate Advances for such Borrowing, the right of the
Borrower to select Eurodollar Rate Advances for such Borrowing and any
subsequent Borrowing shall be suspended until the Operational Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Advance to be made or Converted in
connection with such Borrowing shall be a Base Rate Advance.
(d)If any Lender shall have delivered a notice to the Operational
Agent described in Section 3.04(b), or shall become a non-performing
Lender under Section 3.01(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) or Section 3.01(c), the Borrower or the Co-
Agents may demand that such Lender assign in accordance with Section
10.07, to one or more Eligible Assignees designated by the Borrower or the
Co-Agents, all (but not less than all) of such Lender's Commitment,
Advances, participation and other rights and obligations hereunder;
provided that any such demand by the Borrower during the continuance of an
Event of Default or Unmatured Default shall be ineffective without the
consent of the Majority Lenders. If, within 30 days following any such
demand by the Co-Agents 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 Co-Agents shall have
failed to designate any such Eligible Assignee, then such demand by the
Borrower or the Co-Agents 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 I 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 Operational Agent).
(e)The Notice of Borrowing and each 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 Advances, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill, on or before the date specified in such
Notice of Borrowing or Notice of Conversion for such Borrowing, the
applicable conditions (if any) set forth in this Article III (other than
failure pursuant to the provisions of Section 3.04(b) or (c) hereof) or in
Article V, including, without limitation, 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 Advance to be made by such Lender when such Advance, as
a result of such failure, is not made on such date.
SECTION 3.05. Repayment of Advances. (a) Principal. The Borrower
shall repay to the Operational Agent for the ratable account of the
Lenders the aggregate outstanding principal amount of the Advances in
sixteen (16) equal installments each in the amount of $7,812,500, on each
March 31, June 30, September 30 and December 31, commencing on March 31,
1999, and ending on the Termination Date.
(b) Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from the date of
such Advance until such principal amount shall be paid in full, at the
Applicable Rate for such Advance (except as otherwise provided in this
subsection (b)), payable as follows:
(i)Base Rate Advances. If such Advance is a Base Rate
Advance, 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 Base Rate Advance and on the date
such Base Rate Advance 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 Advances. If such Advance is a
Eurodollar Rate Advance, interest thereon shall be payable on
the last day of such Interest Period and, if the Interest Period
for such Advance 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
PAYMENTS, COMPUTATIONS AND
YIELD PROTECTION
SECTION 4.01. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the other Loan Documents not later
than 11:00 A.M. (New York City time) on the day when due in U.S. Dollars
to the Operational Agent at its address referred to in Section 10.02 in
same day funds; any payment received after 2:00 P.M. (New York City time)
shall be deemed to have been received at the start of business on the next
succeeding Business Day, unless the Operational Agent shall have received
from, or on behalf of, the Borrower a Federal Reserve reference number
with respect to such payment before 3:00 P.M. (New York City time). The
Operational 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 Operational Agent on the date
such payment was received by the Operational Agent, the Operational 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 Rate,
from the date of such payment by the Borrower to the Operational Agent to
the date of payment in full by the Operational Agent to such Lender of
such unpaid amount. Upon the Operational Agent's acceptance of a Lender
Assignment and recording of the information contained therein in the
Register pursuant to Section 10.07, from and after the effective date
specified in such Lender Assignment, the Operational Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such 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 Operational Agent and each
Lender, if and to the extent payment owed to the Operational Agent or such
Lender, as the case may be, is not made when due hereunder (or, in the
case of a Lender, under the Note held by such Lender), to charge from
time to time against any or all of the Borrower's accounts with the
Operational Agent or such Lender, as the case may be, any amount so due.
(c)All computations of interest based on the Alternate Base Rate
shall be made by the Operational 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 Eurodollar Rate
and the Federal Funds Rate) shall be made by the Operational 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 Operational Agent or a Lender
shall be conclusive and binding for all purposes, absent manifest error.
(d)Whenever any payment hereunder or under any other Loan Document
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest and fees hereunder; provided, however, that if such extension
would cause payment of interest on or principal of Eurodollar Rate
Advances 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 Operational 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
Operational Agent may assume that the Borrower has made such payment in
full to the Operational Agent on such date, and the Operational 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 Operational Agent, such Lender shall repay to the Operational 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
Operational Agent, at the Federal Funds Rate.
(f)Any amount payable by the Borrower hereunder or under any of the
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.
SECTION 4.02. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Operational Agent timely information for the
purpose of determining the Eurodollar Rate for each Interest Period. If
any one or more of the Reference Banks shall not furnish such timely
information to the Operational Agent for the purpose of determining any
such interest rate, the Operational Agent shall determine such interest
rate on the basis of timely information furnished by the remaining
Reference Banks, subject to Section 3.04(c).
(b)The Operational Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by the
Operational Agent for purposes of Section 3.05(b)(i) or (ii), and the
Eurodollar Rate, if any, furnished by each Reference Bank for the purpose
of determining the applicable interest rate under Section 3.05(b)(ii).
SECTION 4.03. Prepayments. The Borrower shall have no right to
prepay any principal amount of any Advances other than as provided in
subsections (a), (b) and (c) below.
(a)The Borrower may, upon at least five Business Days' notice to
the Operational Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given, the Borrower shall,
prepay the outstanding principal amounts of Advances made as part of the
same Borrowing, in whole or ratably in part, together with (ii) accrued
interest to the date of such prepayment on the principal amount prepaid
and (iii) in the case of Eurodollar Rate Advances, any amount payable to
the Lenders pursuant to Section 4.04(c); provided, however, that each
partial prepayment shall be in an aggregate principal amount of not less
$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 under this
Agreement as shall be necessary in order that such aggregate principal
amount outstanding 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 Advances, any amount payable to the Lenders
pursuant to Section 4.04(c).
(c)Any prepayments of the principal amount of Advances shall be
applied to the Borrower's obligations under Section 4.03(a) in inverse
order of maturity. To the extent consistent with the foregoing, any such
prepayments shall be applied to outstanding Base Rate Advances up to the
full amount thereof before they are applied to outstanding Eurodollar Rate
Advances.
SECTION 4.04. 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 the
cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Operational
Agent), pay to the Operational Agent for the account of such Lender
additional amounts sufficient to compensate such Lender 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
Operational Agent by such Lender shall constitute such demand and shall be
conclusive and binding for all purposes, absent manifest error.
(b)Eurodollar Reserves. The Borrower shall pay to the Operational
Agent for the account of each Lender, so long as such Lender shall be
required under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional interest
on the unpaid principal amount of each Eurodollar Rate Advance of such
Lender, from the date of such Advance until such principal amount is paid
in full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (iv) the Eurodollar Rate for the Interest Period
for such Advance from (v) the rate obtained by dividing such Eurodollar
Rate by a percentage equal to 100% minus the Eurodollar Reserve Percentage
of such Lender for such Interest Period, payable on each date on which
interest is payable on such Advance. Such additional interest shall be
determined by such Lender and notified to the Borrower and the Operational
Agent. A certificate as to the amount of such additional interest,
submitted to the Borrower and the Operational Agent by such Lender, shall
be conclusive and binding for all purposes, absent manifest error.
(c)Breakage. If, due to any prepayment pursuant to Section 4.03,
an acceleration of maturity of the Advances pursuant to Section 8.02, or
any other reason, any Lender receives payments of principal of any
Eurodollar Rate Advance other than on the last day of the Interest Period
relating to such Advance, or if the Borrower shall Convert any Eurodollar
Rate Advances on any day other than the last day of the Interest Period
therefor, the Borrower shall, promptly after demand by such Lender (with a
copy of such demand to the Operational Agent), pay to the Operational
Agent for the account of such Lender any amounts required to compensate
such Lender for additional losses, costs, or expenses (including
anticipated lost profits) that such Lender may reasonably incur as a
result of such payment or Conversion, including, without limitation, 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 Advance. For purposes of this subsection (c), 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
Operational Agent by such Lender, shall constitute such demand and shall
be conclusive and binding for all purposes, absent manifest error.
(d)Capital. If any Lender 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, whether directly, or indirectly as a result of
commitments of any corporation controlling such Lender, and (ii) the
amount of such capital is increased by or based upon (1) the existence of
such Lender's commitment to, or (2) the participation in or issuance or
maintenance of any Advance and (3) other similar such commitments, then,
upon demand by such Lender, the Borrower shall immediately pay to the
Operational Agent for the account of such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
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 Operational Agent by such Lender, shall
be conclusive and binding for all purposes, absent manifest error.
(e)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), (c) or (d) of this Section 4.04 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 4.04, the Borrower shall not be required to reimburse any Lender
for any amounts or costs incurred under (i) subsection (a), (c) or (d)
above, more than 90 days prior to the date that such Lender notifies the
Borrower in writing thereof, and (ii) subsection (b) above, more than 180
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 4.04 was done so in error, such Lender will
promptly return such amount to the Borrower.
(f)Survival of Obligations. Subject to subsection (e) above, the
Borrower's obligations under this Section 4.04 shall survive the repayment
of all other amounts owing to the Lenders, 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 4.04 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 4.05. 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 Advances owing to it
(other than pursuant to Section 4.04) in excess of its ratable share of
payments obtained by all the Lenders on account of the Advances of such
Lenders, such Lender shall forthwith purchase from the other Lenders such
participation in the Advances owing to them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to
the proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 4.05 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 4.05, on the date of
receipt of such excess payment, return such excess payment to the
Operational Agent for distribution in accordance with Section 4.01(a).
SECTION 4.06. Taxes. (a) All payments by the Borrower hereunder and
under the other Loan Documents shall be made in accordance with Section
4.01, 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
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 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 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 4.06)
such Lender 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 and Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes
and any Other Taxes imposed by any jurisdiction on amounts payable under
this Section 4.06) paid by such Lender or Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender or Agent (as the case may
be) makes written demand therefor; provided, that such Lender or Agent (as
the case may be) shall not be entitled to demand payment under this
Section 4.06 for an amount if such demand is not made within one year
following the date upon which such Lender 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 Documentation Agent, at its address referred
to in Section 10.02, 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 Operational 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 Operational Agent, such Lender will
deliver to the Borrower and the Operational Agent 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 Operational Agent the form or forms referred to in the
two preceding sentences further undertakes to deliver to the Borrower and
the Operational Agent 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 Operational 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 V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to the Drawdown. The obligation
of each Lender to make its Advance in connection with the Drawdown on the
Closing Date is subject to the fulfillment of the following conditions
precedent:
(a)The Documentation Agent shall have received, on or before the
Closing Date, 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 the Notes) in
sufficient copies for each Lender:
(i)Certified copies of the resolutions of the Board of
Directors, or of the Executive Committee of the Board of
Directors, of the Borrower authorizing the Borrower to enter
into this Agreement, the Notes 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, the Notes 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, the Notes 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 Co-Agents.
(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 Agreement
effective automatically on such date upon the satisfaction (or
waiver) of the other conditions precedent set forth in this
Section 5.01.
(v) A Note, payable to the order of each Lender then party
hereto, duly executed by the Borrower.
(vi) The Fee Letter, duly executed by the Borrower.
(vii) A certified copy of Schedule II hereto, in form and
substance reasonably satisfactory to the Co-Agents 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)Denise M. Sturdy, Esq., Assistant General Counsel
of the Borrower, in substantially the form of Exhibit D and
as to such other matters as the Majority Lenders, through
the Documentation Agent, may reasonably request; and
(B)King & Spalding, counsel to the Agents, in
substantially the form of Exhibit E and as to such other
matters as the Majority Lenders, through the Documentation
Agent, may reasonably request.
(b)The Existing Credit Agreement has been (or will have been, upon
the Drawdown and the application of the proceeds thereof) paid in full,
the commitments thereunder terminated and all letters of credit issued
thereunder either canceled or replaced.
(c)The following statements shall be true and the Documentation
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 6.01 of this 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 an Unmatured Default or an Event of Default.
(d)The Borrower shall have paid all fees under or referenced in
Section 2.02 hereof, to the extent then due and payable; and
SECTION 5.02. Conditions Precedent to Each Conversion. The
obligation of each Lender to make an Advance in connection with a
Conversion shall be subject to the further conditions precedent that, on
the date of such Conversion 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 Conversion without prior correction by the Borrower shall (to the
extent that such correction has been previously consented to by the
Lenders) constitute a representation and warranty by the Borrower that, on
the date of such Conversion, such statements are true):
(i)the representations and warranties contained in
Section 6.01 of this Agreement (other than those contained in
subsections (e)(ii) and (f) thereof) are correct on and as of
the date of such Conversion, before and after giving effect to
such Conversion and to the application of the proceeds thereof,
as though made on and as of such date; and
(ii)no Event of Default has occurred and is continuing, or
would result from such Conversion or the application of the
proceeds thereof; and
(b)the Documentation Agent shall have received such other
approvals, opinions and documents as any Lender through the Documentation
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 5.03. Reliance on Certificates. The Lenders 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 Documentation Agent may receive a replacement
certificate, in form acceptable to the Documentation Agent, from an
officer of such Person identified to the Documentation 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 VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. 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, 1994, 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 & Co. included in the
Borrower's Annual Report on Form 10-K for the fiscal year ended December
31, 1994, and the unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as at September 30, 1995, and the related
unaudited consolidated statements of income, retained earnings and cash
flows for the nine-month period then ended, copies of each of which have
been furnished to each Lender, fairly present (subject, in the case of
such balance sheets and statements of income for the nine months ended
September 30, 1995, 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 December
31, 1994, except as disclosed in the Borrower's Quarterly Report on Form
10-Q for the period ended September 30, 1995, there has been no material
adverse change in the business, financial condition or results of
operations of the Borrower and its Subsidiaries, considered as a whole, or
in 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; and
(iii) the Borrower has no material liabilities or obligations except as
reflected in the foregoing financial statements and in Schedule II hereto,
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 Quarterly Report on Form
10-Q for the period ended September 30, 1995, 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 7.01(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 Majority 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 Majority 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.
(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 100% 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 CMS Energy Corporation 1995-1999 Financial Forecast, dated
August 21, 1995 (the "Projections"), copies of which have been distributed
to the Banks, is 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 Co-
Agents are true and correct in all material respects as at the dates and
for the periods indicated therein.
(o)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 of Governors of the Federal Reserve
System), and no proceeds of any Advance 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.
(p)The Borrower is not an investment company (within the meaning of
the Investment Company Act of 1940, as amended).
(q)No proceeds of any Advance will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the
Exchange Act.
(r)Following application of the proceeds of each Advance, 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 of Governors of the Federal
Reserve System).
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01. Affirmative Covenants. So long as any Note shall
remain unpaid 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 without limitation 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) the Co-Agents and their
respective 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) the Co-Agents, 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 Unmatured Default shall have occurred and be
continuing, at the expense of the Co-Agents, each of the Lenders, or their
respective agents and representatives, as the case may be.
(f)Keeping of Books. The Borrower shall keep, and each of its
Subsidiaries shall keep, proper records and books of account, in which
full and correct entries shall be made of all financial transactions of
the Borrower and its Subsidiaries and the assets and business of the
Borrower and its Subsidiaries, in accordance with GAAP.
(g)Maintenance of Properties, Etc. The Borrower shall maintain,
and each of its Restricted Subsidiaries shall maintain, in substantial
conformity with all laws and material contractual obligations, good and
marketable title to all of its properties which are used or useful in the
conduct of its business; provided, however, that the foregoing shall not
restrict the sale of any asset of the Borrower or any Restricted
Subsidiary to the extent not prohibited by Section 7.02(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
Drawdown, to the extent necessary, to the repayment in full and
termination of all outstanding obligations under the Existing Agreement,
whether for principal, interest, fees, or otherwise (if any) (and, in
furtherance thereof, the Borrower hereby expressly and irrevocably
authorizes the Operational Agent to so apply such proceeds to such
repayment), and then for general corporate purposes (subject to the terms
and conditions of this Agreement).
(i)Consolidated Leverage Ratio. The Borrower shall maintain at all
times a ratio of Consolidated Debt to Consolidated Capital of not more
than the amount set forth below during each corresponding period set forth
below:
Period Amount
Closing Date through .70:1.0
9/30/96
10/1/96 through .68:1.0
9/30/97
10/1/97 through .66:1.0
9/30/98
Thereafter .64:1.0
(j)Cash Dividend Coverage Ratio. The Borrower shall maintain, as
of the last day of each fiscal quarter (in each case, the "Measurement
Quarter"), a 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 to (ii) interest expense
(including commitment, guaranty and letter of credit fees) accrued by the
Borrower in respect of all Debt during such period of (1) not less than
2.1 to 1.0 for each such period from the Closing Date until (and
including) the fiscal quarter ending December 31, 1998 and (2) not less
than 2.0 to 1.0 thereafter; provided, that the Borrower shall be deemed
not to be in breach of the foregoing covenant if, during the Measurement
Quarter, it has a) permanently reduced the Commitments and the principal
amount outstanding under this Agreement and the 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 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/or b) increased Cash
Dividend Income during such Measurement Quarter such that the ratio of
(x) Cash Dividend Income for the four-fiscal-quarter period ending on the
last day of the Measurement Quarter to (y) the amount determined pursuant
to clause (ii) above (as recalculated pursuant to clause a) above), equals
or exceeds (1) 2.1 to 1.0 for each such period from the Closing Date until
(and including) the fiscal quarter ending December 31, 1998 and (2) 2.0 to
1.0 thereafter.
(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 earlier to occur of (vi) the
third anniversary of the date of any such refinancing and (i) 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 Documentation
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 7.02. Negative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment, the Borrower shall not,
without the written consent of the Majority 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, without limitation,
capital stock of Consumers, Enterprises, Nomeco and any of the Borrower's
other directly-owned Subsidiaries and accounts) (any of the foregoing
being referred to herein as a "Lien"), whether now owned or hereafter
acquired, or sign or file, or permit any of its Restricted Subsidiaries to
sign or file, under the Uniform Commercial Code of any jurisdiction a
financing statement which names the Borrower or any Restricted Subsidiary
as debtor, sign, or permit any of its Restricted Subsidiaries to sign, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Restricted
Subsidiaries to assign, accounts, excluding, however, from the operation
of the foregoing restrictions the Liens created under the Loan Documents
and the following:
(i)Liens for taxes, assessments or governmental charges
or levies to the extent not past due;
(ii)cash pledges or deposits to secure (A) obligations
under workmen's compensation laws or similar legislation,
(B) public or statutory obligations of the Borrower or any of
its Restricted Subsidiaries, or (C) Support Obligations of the
Borrower; provided that the aggregate amount of pledges or
deposits securing such Support Obligations shall not exceed $30
million at any one time outstanding;
(iii)Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's liens and other
similar Liens arising in the ordinary course of business
securing obligations which are not overdue or which have been
fully bonded and are being contested in good faith; and
(iv)purchase money Liens or purchase money security
interests upon or in property acquired or held by the Borrower
or any of its Restricted Subsidiaries in the ordinary course of
business to secure the purchase price of such property or to
secure indebtedness incurred solely for the purpose of financing
the acquisition of any such property to be subject to such Liens
or security interests, or Liens or security interests existing
on any such property at the time of acquisition, or extensions,
renewals or replacements of any of the foregoing for the same or
a lesser amount, provided that no such Lien or security interest
shall extend to or cover any property other than the property
being acquired and no such extension, renewal or replacement
shall extend to or cover property not theretofore subject to the
Lien or security interest being extended, renewed or replaced,
and provided, further, that the aggregate principal amount of
the Debt at any one time outstanding secured by Liens permitted
by this clause (iv) shall not exceed $10,000,000.
(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 7.02(a)(iii); and
(iii)other debt of Enterprises outstanding on the Closing
Date set forth on Schedule II hereto;
(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 $10,000,000.
(d)Investments in Other Persons. Upon the occurrence and during
the continuance of an Event of Default or an Unmatured Default (other than
an Unmatured 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 7.01(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 Unmatured 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 Unmatured Default or Event of
Default shall have occurred and be continuing (or result therefrom), and
provided further that such dividends shall be included (without
duplication) in the calculation of the amount of Restricted Payments
permitted by this subsection (e); or (4) payments made by the Borrower or
any Restricted Subsidiary pursuant to the Tax Sharing Agreement. For
purposes of this subsection (e), the amount of any Restricted Payment not
in the form of cash shall be the fair market value of such Restricted
Payment as determined in good faith by the Board of Directors of the
Borrower, provided that if the value of the non-cash portion of such
Restricted Payment as determined by the Borrower's Board of Directors is
in excess of $25 million, such value shall be based on an opinion from a
nationally-recognized firm acceptable to the Co-Agents 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), (ii) terminate, or permit any ERISA Affiliate to terminate,
any Plan so as to result in any material (in the opinion of the Majority
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 Majority Lenders) risk of
such a termination by the PBGC of any 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 Nomeco 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) Nomeco may merge with or into Enterprises
or the Borrower; (3) Nomeco 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 an Unmatured 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 an Unmatured 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 an Unmatured Default or an Event of
Default, (B) Enterprises is the surviving corporation, (C) Enterprises'
Net Worth shall be equal to or greater than its Net Worth immediately
prior to such merger and (D) Enterprises shall not be liable with respect
to any Debt or allow its property to be subject to any Lien which it could
not become liable with respect to or allow its property to become subject
to under this Agreement or any other Loan Document on the date of such
transaction; provided, that after giving effect to any merger described in
clause (2), (3), or (5) above, the Borrower shall be in compliance with
Section 7.01(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 such transaction the Borrower shall be in compliance with
Section 7.01(i) and (ii) 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 such transaction the Borrower shall
be in compliance with Section 7.01(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 7.03. Reporting Obligations. So long as any Note shall
remain unpaid or any Lender shall have any Commitment, the Borrower will,
unless the Majority Lenders shall otherwise consent in writing, furnish to
each Lender, the following:
(a)as soon as possible and in any event within five days after the
Borrower knows or should have reason to know of the occurrence of each
Unmatured 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 Unmatured 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 7.01(i) and 7.01(j) and, after the enactment of any Consumers
Dividend Restriction, the ratio set forth in Section 8.01(i), (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 Unmatured Default or Event of Default has
occurred and is continuing or, if an Unmatured 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 & Co. or another
nationally-recognized independent public accounting firm, together with a
schedule in form satisfactory to the Majority 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
7.01(i) and 7.01(j) and, after the enactment of any Consumers Dividend
Restriction, the ratio set forth in Section 8.01(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;
(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 6.01(f);
(k)promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Borrower
sends to its public security holders (if any), copies of all regular,
periodic and special reports which the Borrower files with the Securities
and Exchange Commission or any governmental authority which may be
substituted therefor, or with any national securities exchange, pursuant
to the Exchange Act, and copies of 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 Majority Lenders may
from time to time reasonably request in writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default. If any of the following events
(each an "Event of Default") shall occur and be continuing, the Co-Agents
and the Lenders shall be entitled to exercise the remedies set forth in
Section 8.02:
(a)The Borrower shall fail to pay (i) any principal of any Note
when due or (ii) any interest thereon within two Business Days after such
interest 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 7.01(c), (h), (i) or (j) or in Section 7.02 hereof
(and the Borrower, each Lender and each Agent hereby agrees that an Event
of Default under this subsection (c) shall be given effect as if the
defaulting Subsidiary were a party to this Agreement); or
(d)The Borrower or any of its Subsidiaries shall fail to perform or
observe any other term or covenant on its part to be performed or observed
contained in any Loan Document and any such failure shall remain
unremedied, after written notice thereof shall have been given to the
Borrower by the Documentation 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 evidenced by the Notes) (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 without limitation 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 V, shall for any reason other
than the express terms hereof or thereof cease to be valid and binding on
any party thereto; or the Borrower shall so assert in writing; or
(i)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 8.02. Remedies. If any Event of Default has occurred and is
continuing, then the Co-Agents 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
Advances to be terminated, whereupon the same shall forthwith terminate,
and (ii) declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith
due and payable, whereupon the Notes, 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; 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 Advances shall automatically be
terminated and (B) the Notes, 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.
ARTICLE IX
THE AGENTS
SECTION 9.01. Authorization and Action. Each Lender hereby appoints
and authorizes each of the Agents to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated
to such Agents by the terms hereof, together with such powers as are
reasonably incidental thereto. The Operational Agent is hereby expressly
authorized on behalf of each Lender, without hereby limiting any implied
authority, to receive on behalf of each of the Lenders any payment of
principal of, or interest on, the Notes and all other amounts accrued
thereunder or hereunder paid to the Operational Agent, and promptly to
distribute in accordance with Section 4.01(a) to each Lender its proper
share of all payments so received. Each Agent is hereby expressly
authorized on behalf of each Lender, without hereby limiting any implied
authority, to distribute to each Lender copies of all notices, agreements
and other materials as provided for in this Agreement and any other Loan
Document received by such Agent. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or
collection of the Notes), the Agents shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Agents shall not be required to take any
action that exposes any Agent to personal liability or that is contrary to
this Agreement or applicable law. Each Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower pursuant
to the terms of this Agreement.
SECTION 9.02. Agents' Reliance, Etc. Neither any Agent nor any of
its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection
with any Loan Document, except for its or their own gross negligence or
wilful misconduct. Without limitation of the generality of the foregoing:
(i) each Agent may treat the payee of any Note as the holder thereof until
the Documentation Agent receives and accepts a Lender Assignment entered
into by the Lender which is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 10.07; (ii) each
Agent may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts;
(iii) the Agents make no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with any Loan Document; (iv) no
Agent shall have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of any Loan
Document on the part of the Borrower or to inspect any property (including
the books and records) of the Borrower; (v) no Agent shall be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document; and (vi) no Agent
shall incur liability under or in respect of any Loan Document by acting
upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, cable, telex, telecopy or other
teletransmission) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 9.03. Citibank, Union Bank and Affiliates. With respect to
its Commitment and the Note issued to it, each of Citibank and Union Bank
shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not an Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Citibank and Union Bank each in its individual capacity. Citibank
and Union Bank and their respective Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower, any of its Subsidiaries, its
Affiliates and any Person who may do business with or own securities of
the Borrower or any such Subsidiary or Affiliate, all as if Citibank and
Union Bank were not an Agent and without any duty to account therefor to
the Lenders.
SECTION 9.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agents or any other
Lender and based on the financial information referred to in Section
6.01(e) and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 9.05. Indemnification. The Lenders agree to indemnify the
Agents (to the extent not reimbursed by the Borrower), ratably according
to the respective principal amounts of the Notes then held by each of them
(or if no Notes are at the time outstanding or if any Notes are held by
Persons which are not Lenders, ratably according to the respective
Percentages of the Lenders), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agents in any way
relating to or arising out of this Agreement or any action taken or
omitted by the Agents 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 the Agents' gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agents 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, 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 10.04
but are not reimbursed for such expenses by the Borrower.
SECTION 9.06. Successor Agents. Each Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrower and may
be removed at any time with or without cause by the Majority Lenders, with
any such resignation or removal to become effective only upon the
appointment of a successor Agent in such capacity, pursuant to this
Section 9.06. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Agent in such capacity which
shall be a Lender or another commercial bank or trust company reasonably
acceptable to the Borrower organized under the laws of the United States,
or of any State thereof. If no successor Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent in such capacity, which shall be a Lender or shall be another
commercial bank or trust company organized under the laws of the United
States or of any State thereof reasonably acceptable to the Borrower.
Upon the acceptance of any appointment as an Agent hereunder by a
successor Agent and the execution and delivery by the Borrower and the
successor Agent of an agreement relating to the fees to be paid to the
successor Agent under Section 2.02(b) hereof in connection with its acting
as an Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as an Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was an Agent in such capacity under this
Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. 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 Majority 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 V, (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, the
Notes, any Applicable Margin or any fees or other amounts payable
hereunder (other than fees payable to the Operational Agent pursuant to
Section 2.02(b)), (iv) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts
payable hereunder (other than fees payable to the Operational Agent
pursuant to Section 2.02(b)), (v) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, 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, or (vii) amend Section
2.03(b) or this Section 10.01; 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 Note. Any
request from the Borrower for any amendment, waiver or consent under this
Section 10.01 shall be addressed to the Documentation Agent.
SECTION 10.02. Notices, Etc. All notices and other communications
provided for hereunder and under the other Loan Documents shall be in
writing (including telegraphic, facsimile, telex or cable communication)
and mailed, telegraphed, telecopied, telexed, cabled or delivered, (vii)
if to the Borrower, at its address at Fairlane Plaza South, 330 Town
Center Drive, Suite 1100, Dearborn, Michigan 48126, Attention: Denise M.
Sturdy, Esq., Assistant General Counsel, with a copy to Doris F. Galvin,
Vice President and Treasurer, 212 West Michigan Avenue, Jackson, Michigan
49201; (i) if to any Bank, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; (ii) 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; (iii) if to the Operational Agent,
at its address at 445 South Figueroa Street, 15th Floor, Los Angeles,
California 90071, Attention: Utilities Department Head; and (iv) if to the
Documentation Agent, at its address at 399 Park Avenue, New York, New York
10043, Attention: Utilities Department Head; 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 IX shall not be effective until
received by such Agent.
SECTION 10.03. No Waiver of Remedies. No failure on the part of the
Borrower, any Lender or any Agent to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 10.04. Costs, Expenses and Indemnification. (a) The
Borrower agrees to (i) reimburse on demand all reasonable costs and
expenses of each Agent (including, without limitation, reasonable fees and
expenses of counsel to the Agents) in connection with (A) the preparation,
negotiation, execution and delivery of the Loan Documents and (B) 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 Notes become or are
declared to be due and payable pursuant to Section 8.02 or an Event of
Default specified in Section 8.01(a) shall have occurred and be
continuing, each Lender (including, without limitation, 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 enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement, the Notes and the other documents to be
delivered hereunder.
(b)The Borrower hereby agrees to indemnify and hold each Lender,
each Agent and their respective officers, directors, employees,
professional advisors and affiliates (each, an "Indemnified Person")
harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable attorney's fees and
expenses, whether or not such Indemnified Person is named as a party to
any proceeding or is otherwise subjected to judicial or legal process
arising from any such proceeding) which any of them may incur or which may
be claimed against any of them by any Person:
(i)by reason of or in connection with the execution,
delivery or performance of any of the Loan Documents or any
transaction contemplated thereby, or the use by the Borrower of
the proceeds of any Advance;
(ii)in connection with any documentary taxes, assessments
or charges made by any governmental authority by reason of the
execution and delivery of any of the Loan Documents; or
(iii)in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation,
release or ownership of any Hazardous Substance (i) at, upon or
under any property of the Borrower or any of its Affiliates or
(ii) by or on behalf of the Borrower or any of its Affiliates at
any time and in any place;
provided, however, that nothing contained in this subsection (b) shall
constitute a relinquishment or waiver of the Borrower's rights to any
independent claim that the Borrower may have against any Indemnified
Person for such Indemnified Person's gross negligence or wilful
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.
(c)The Borrower's other obligations under this Section 10.04 shall
survive the repayment of all amounts owing to the Lenders 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
10.04 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 10.05. 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 8.02 to
authorize the Co-Agents to declare the Notes due and payable pursuant to
the provisions of Section 8.02, each Lender 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 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 Note held by such Lender,
irrespective of whether or not such Lender shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees to notify promptly the Borrower after any
such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender under this Section 10.05 are
in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender may have.
(b)The Borrower agrees that it shall have no right of off-set,
deduction or counterclaim in respect of its obligations hereunder, and
that the obligations of the Lenders hereunder are several and not joint.
Nothing contained herein shall constitute a relinquishment or waiver of
the Borrower's rights to any independent claim that the Borrower may have
against any Agent or any Lender for such Agent's or such Lender's, as the
case may be, gross negligence or wilful 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 10.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agents
and when the Documentation 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 10.07. Assignments and Participation. (a) Each Lender may,
with the consent of the Borrower (such consent not to be unreasonably
withheld or delayed), 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, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or 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 Documentation Agent (with a copy to the Operational Agent),
for its acceptance and recording in the Register, a Lender Assignment,
together with any Note or Notes subject to such assignment and a
processing and recordation fee of $2,500; and provided further, however,
that the consent of the Borrower 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 (iii), above, shall not apply if an Event
of Default shall have occurred and be continuing and the Co-Agents shall
have declared all Advances to be immediately due and payable hereunder.
The Documentation 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 Advances 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 6.01(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 Co-Agents shall have declared all
Advances 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 Documentation Agent shall maintain at its address referred
to in Section 10.02 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 Advances 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 and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(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 any Note or Notes subject to such assignment, the
Documentation 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. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Documentation Agent in exchange
for the surrendered Note or Notes a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to
such Lender Assignment and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in
an amount equal to the Commitment retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Lender Assignment and shall otherwise be in
substantially the form of Exhibit A.
(e)Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations
under the Loan Documents (including, without limitation, all or a portion
of its Commitment, the Advances owing to it and the Note or Notes held by
it); provided, however, that (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of this Agreement, and (iv) the Borrower, the Agents 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.
(f)Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 10.07, 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 10.08, to preserve the confidentiality of any Confidential
Information received by it from such Lender.
(g)If any Lender (or any bank or other entity to which such Lender
has sold a participation) shall make any demand for payment under Section
4.04(a) or (d), then 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 Agents (which approval shall not be
unreasonably withheld) and provided that no Event of Default or Unmatured
Default shall then have occurred and be continuing, demand that such
Lender assign in accordance with this Section 10.07 to one or more
Eligible Assignees designated by the Borrower all (but not less than all)
of such Lender's Commitment and the Advances owing to it within the period
ending on the later to occur of (x) 30 days after any such demand or
notice by such Lender under Section 4.04(a) or (d) as applicable, and (y)
the last day of the longest of the then current Interest Periods for such
Advances. 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 Advances, then such demand by
the Borrower shall become ineffective; it being understood for purposes of
this subsection (g) 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 the Note made by the
Borrower to such Lender, whether for principal, interest, fees, costs or
expenses (other than any amount demanded for payment pursuant to clause
4.04(a) or (d), and payable by the Borrower as a condition to the
Borrower's right to demand such assignment) or otherwise. In addition, in
the case of any amount demanded for payment by any Lender (or such a
participant) pursuant to Section 4.04(a) or (d), the Borrower may, in the
case of any such Lender, with the approval of the Agents (which approval
shall not be unreasonably withheld) and provided that no Event of Default
or Unmatured 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 Advances 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 the Note made by the Borrower to such Lender,
at any time from and after such later occurring day in accordance with
Sections 2.03 and 4.03(a) hereof (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 Advances of all Lenders then outstanding does not
exceed the then remaining Commitments of the Lenders. Notwithstanding
anything set forth above in this subsection (g) to the contrary, the
Borrower shall not be entitled to compel the assignment by any Lender
demanding payment under Section 4.04(a) of its Commitment and Advances or
terminate and prepay the Commitment and Advances 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 Advances so as to eliminate the
further incurrence of such increased cost. In furtherance of the
foregoing, any such Lender demanding payment or giving notice as provided
above agrees to use reasonable efforts to so change its Applicable Lending
Office if, to do so, would not result in the incurrence by such Lender of
additional costs or expenses which it deems material or, in the sole
judgment of such Lender, be inadvisable for regulatory, competitive or
internal management reasons.
(h)Anything in this Section 10.07 to the contrary notwithstanding,
any Lender may assign and pledge all or any portion of its Commitment and
the Advances owing to it to any Federal Reserve Bank (and its transferees)
as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
SECTION 10.08. 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
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 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 prospective participant's
entering into an agreement as to confidentiality similar to this Section
10.08. 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 (i) by a regulatory agency or
otherwise in connection with an examination of the Recipient's records by
appropriate authorities, (ii) pursuant to court order, subpoena or other
legal process or (iii) otherwise, as required by law; in the event of any
required disclosure under clause (ii) or (iii), above, the Recipient
agrees to use reasonable efforts to inform the Borrower as promptly as
practicable to the extent not prohibited by law.
SECTION 10.09. Waiver of Jury Trial. THE BORROWER, THE AGENTS, THE
CO-MANAGER 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 10.10. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of
New York. The Borrower, the Lenders, the Co-Manager 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 10.11. 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.
SECTION 10.12. 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 10.13. 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
Advances and the execution and delivery to the Lenders of the Notes
evidencing the Advances and shall continue in full force and effect so
long as any Note or any amount due hereunder is outstanding and unpaid or
any Commitment of any Lender has not been terminated.
<PAGE>
<PAGE> S-1
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/A. M. Wright
A. M. Wright
Senior Vice President and
Chief Financial Officer
<PAGE>
<PAGE> S-2
Commitment
$10,000,000 CITIBANK, N.A.,
as Co-Agent, Documentation Agent and Bank
By /s/Paul Addison
Title: Attorney in Fact
<PAGE>
<PAGE> S-3
Commitment
$10,000,000 UNION BANK,
as Co-Agent, Operational Agent and Bank
By /s/John M. Edmonston
Title: V.P.
<PAGE>
<PAGE> S-4
Commitment
$10,000,000 BANK OF AMERICA ILLINOIS
as Co-Manager and Bank
By /s/Felipe A. Gomez
Title: Authorized Officer
<PAGE>
<PAGE> S-5
Commitment
$10,000,000 BZW DIVISION OF
BARCLAYS BANK PLC,
as Co-Manager and Bank
By /s/Sydney G. Dennis
Sydney G. Dennis
Title: Associate Director
<PAGE>
<PAGE> S-6
Commitment
$10,000,000 THE FIRST NATIONAL BANK
OF BOSTON, as Co-Manager and Bank
By /s/Richard A. Low
Richard A. Low
Title: Division Executive
<PAGE>
<PAGE> S-7
Commitment
$10,000,000 THE FIRST NATIONAL BANK
OF CHICAGO, as Co-Manager and Bank
By /s/Susan Verback
Title: Assistant Vice President
<PAGE>
<PAGE> S-8
Commitment
$10,000,000 THE CHASE MANHATTAN BANK,
N.A., as Co-Manager and Bank
By /s/Thomas Casey
Thomas L. Casey
Title: Vice President
<PAGE>
<PAGE> S-9
Commitment
$20,000,000 TORONTO DOMINION (TEXAS), INC.
By /s/Lisa Allison
Lisa Allison
Title: Vice President
<PAGE>
<PAGE> S-10
Commitment
$15,000,000 COMERICA BANK
By /s/Charles L. Weddell
Title: Vice President
<PAGE>
<PAGE> S-11
Commitment
$10,000,000 BANK OF MONTREAL
By /s/Howard H. Turner
Title: Director
<PAGE>
<PAGE> S-12
Commitment
$10,000,000 MICHIGAN NATIONAL BANK
By /s/Mark S. Aben
Title: Vice President
___________________________
Total: $125,000,000
<PAGE>
<PAGE>
EXHIBIT A
FORM OF PROMISSORY NOTE
U.S.$ Dated: November __, 1995
FOR VALUE RECEIVED, the undersigned, CMS ENERGY CORPORATION, a
Michigan corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order
of (the "Lender") for the account of its Applicable
Lending Office (as defined in the Agreement referred to below) the
principal sum of U.S.$[amount of the Lender's Commitment in figures] at
such times and in such installments as are specified in the Agreement;
provided, however, that the last such installment payable on the
Termination Date (as defined in the Agreement) shall be in an amount
necessary to repay in full the unpaid principal amount thereof.
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full,
at such interest rates, and payable at such times, as are specified in the
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Union Bank, as Operational Agent, at its offices at
445 South Figueroa Street, 15th Floor, Los Angeles, California 90071, in
same day funds. All payments made on account of the principal amount
thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this
Promissory Note, provided that the failure to so record any payment on
account thereof shall not affect the payment obligations of the Borrower
hereunder or under the Agreement.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Term Loan Agreement, dated as of
November 21, 1995 (as amended, modified or supplemented from time to time,
the "Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined), among the Borrower, the
Lender and certain other Lenders parties thereto, the Co-Agents, the
Documentation Agent and the Operational Agent, and the Loan Documents
referred to therein and entered into pursuant thereto. The Agreement,
among other things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof
upon the terms and conditions therein specified.
CMS ENERGY CORPORATION
By
Senior Vice President and
Chief Financial Officer<PAGE>
<PAGE>
PAYMENTS OF PRINCIPAL
Unpaid
Amount of Principal PrincipalNotation Made
Date Paid or Prepaid Balance By
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<PAGE>
<PAGE>
EXHIBIT B
FORM OF NOTICE OF BORROWING
[Date]
Union Bank, as Operational
Agent for the Lenders parties
to the Credit Agreement
referred to below
Attention:Paula Maguire Reese
Assistant Vice President
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Term
Loan Agreement, dated as of November 21, 1995 (as amended, modified or
supplemented from time to time, the "Agreement", the terms defined therein
and not otherwise defined herein being used herein as therein defined),
among the Borrower, the Lenders named therein, the Co-Agents, the
Documentation Agent and the Operational Agent, and hereby gives you
notice, irrevocably, pursuant to Section 3.01 of the Agreement that the
undersigned hereby requests a Borrowing under the Agreement, and in that
connection sets forth below the information relating to such Borrowing
(the "Proposed Borrowing") as required by Section 3.01(a) of the
Agreement:
(i) The Business Day of the Proposed Borrowing is
, 19 .
(ii) The Type of Advances comprising the Proposed Borrowing
is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$ .
1[(iv) The initial Interest Period for each Advance made as
part of the Proposed Borrowing is ____ months.]
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 Section 5.01(c) of the Agreement are true.
Very truly yours,
CMS ENERGY CORPORATION
By
Name:
Title:
- ------------------
1 To be included for a Proposed Borrowing comprised of
Eurodollar Rate Advances.
<PAGE>
<PAGE>
EXHIBIT C
FORM OF NOTICE OF CONVERSION
[Date]
Union Bank, as Operational
Agent for the Lenders parties
to the Credit Agreement
referred to below
Attention:Paula Maguire Reese
Assistant Vice President
Ladies and Gentlemen:
The undersigned, CMS Energy Corporation, refers to the Term
Loan Agreement, dated as of November 21, 1995 (as amended, modified or
supplemented from time to time, the "Agreement", the terms defined therein
and not otherwise defined herein being used herein as therein defined),
among the Borrower, the Lenders named therein, the Co-Agents, the
Documentation Agent and the Operational Agent, and hereby gives you
notice, irrevocably, pursuant to Section 3.02 of the Agreement that the
undersigned hereby requests a Conversion under the 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 Agreement:
(i) The Business Day of the Proposed Conversion is .
(ii)The Type of Advances comprising the Proposed Conversion
is [Base Rate Advances] [Eurodollar Rate Advances].
(iii)The aggregate amount of the Proposed Conversion is
$ .
(iv)The Type of Advances to which such Advances are proposed
to be Converted is [Base Rate Advances] [Eurodollar Rate Advances].
(v) The Interest Period for each Advance made as part of the
Proposed Conversion is ____ month(s).1
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 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 5.02(a) of the Agreement are
true and [(ii) no Unmatured Default [(other than an Unmatured Default
resulting from the failure of the Borrower to comply with the ratio set
forth in Section 7.01(j) of the Agreement)] 2 has occurred and is
continuing]3.
Very truly yours,
CMS ENERGY CORPORATION
By
Name:
Title:
- -------------------
1 Delete for Base Rate Advances.
2 Include only if an Unmatured Default has occurred and is
continuing as the result of the failure of the Borrower to comply
with the ratio set forth in Section 7.01(j) of the Agreement. In
such case, a Conversion into Eurodollar Rate Advances with an
Interest Period not to exceed three months in duration is
permitted pursuant to Section 3.04(a)(vi) of the Agreement.
3 Delete if Conversion is into Base Rate Advances.
>
EXHIBIT D
FORM OF OPINION
OF COUNSEL FOR THE BORROWER
November __, 1995
To each of the Lenders parties to the Term Loan Agreement referred to
below, and to Citibank, N.A. and Union Bank, as Agents under the Term
Loan Agreement
Ladies and Gentlemen:
This letter is furnished to you pursuant to
Section 5.01(a)(viii)(A) of the Term Loan Agreement, dated as of
November __, 1995 (the "Agreement"), among CMS Energy Corporation (the
"Borrower"), the Banks parties thereto and the other Lenders from time to
time parties thereto, Citibank, N.A. and Union Bank, as Co-Agents,
Citibank, N.A., as Documentation Agent, and Union Bank, as Operational
Agent. Capitalized terms not defined herein have the meanings ascribed
thereto in the Agreement and the other Loan Documents (as defined in the
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 Drawdown made under, the Agreement and other Loan Documents.
In that capacity, I, or an attorney or attorneys under my general
supervision, have examined:
(a) The Agreement;
(b) The Notes;
(c) The Articles of Incorporation of the Borrower and all
amendments thereto (the "Charter"); and
(d) The by-laws of the Borrower and all amendments thereto
(the "By-laws").
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 their respective 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) through (b)
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
Agreement, the Notes 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
By-laws, (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.
The Agreement and the Notes have been duly executed and delivered
on behalf of the Borrower.
3. Except as disclosed in the Borrower's Quarterly Report on Form
10-Q for the period ended September 30, 1995, 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 Agreement or any other Loan Document to
which the Borrower is, or is to be, a party.
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 the valid execution, delivery and
performance by the Borrower of the Agreement and the other Loan
Documents to which it is, or is to be, a party.
5. In any action or proceeding arising out of or relating to the
Agreement, the Notes 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
Agreement, the Notes or any other Loan Document, as the case may
be, wherein the parties thereto agree that the Agreement, the
Notes 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 Agreement, the Notes 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 Agreement,
the Notes 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 King & Spalding in
their opinion to you of even date herewith delivered pursuant to Section
5.01(a)(viii)(B) of the 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>
<PAGE>
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE AGENTS
November 21, 1995
To the Banks and other Lenders parties
to the Agreement herein referred to and
to Citibank, N.A. and Union Bank, as Agents
CMS Energy Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to Citibank, N.A. and
Union Bank, individually and as Agents, in connection with the execution
and delivery of, and the making of the Drawdown on this date under, the
Term Loan Agreement, dated as of November 21, 1995 (the "Agreement"),
among CMS Energy Corporation, the Banks parties thereto and the other
Lenders from time to time parties thereto, and Citibank, N.A. and Union
Bank, as Co-Agents. Terms defined in the Agreement are used herein as
therein defined.
In this connection, we have examined the following documents:
1. counterparts of the Agreement, executed by the parties
thereto;
2. the Notes to the order of each Bank; and
3. the other documents furnished to the Agents pursuant to
Section 5.01(a) of the Agreement, including (without limitation)
the opinion (the "Opinion") of Denise M. Sturdy, Esq., 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 and have assumed without
independent investigation the correctness of the matters set forth
therein, our opinions expressed below being subject to the assumptions,
qualifications and limitations set forth in the Opinion.
Based upon and subject to the foregoing, and subject to the
qualifications set forth below, we are of the opinion that the Agreement
and the other Loan Documents are, and upon delivery for value received,
the Notes will be, the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
respective terms.
Our opinion is subject to the following qualifications:
(a) The enforceability of the Borrower's obligations under the
Agreement, the Notes and the other Loan Documents 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
Agreement, the Notes and the other Loan Documents 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 involving securities laws or where the
conduct of such parties is determined to have constituted negligence.
(d) We express no opinion herein as to (i) Section 9.05 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.
(e) 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,
MEO:PICS:PSD
<PAGE>
<PAGE>
EXHIBIT F
COMPUTATIONS USED BY BORROWER
IN DETERMINING COMPLIANCE WITH COVENANTS
CONTAINED IN SECTIONS 7.01(i) AND 7.01(j)
(Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Term Loan Agreement dated as of
November 21, 1995, among CMS Energy Corporation, the banks named therein,
and Citibank, N.A. and Union Bank, as Co-Agents)
I. SECTION 7.01(i) (Consolidated Leverage Ratio)
(i) Consolidated Debt
(a) Debt of the Borrower (See worksheet
set forth on Schedule I hereto)$
------
(b)1 Aggregate debt (as such term is
construed in accordance with GAAP)
of the Consolidated Subsidiaries$
------
Total Consolidated Debt$
------
--------
(ii) Consolidated Capital
(a) Total Consolidated Debt (See (i) above)$
------
(b)2 Consolidated equity of the common
stockholders of the Borrower and the
Consolidated Subsidiaries$
------
(c)2 Consolidated equity of the preference
stockholders of the Borrower and the
Consolidated Subsidiaries$
------
(d)2 Consolidated equity of the preferred
stockholders of the Borrower and the
Consolidated Subsidiaries$
------
Total Consolidated Capital$
--------
(iii)Consolidated Leverage Ratio (i/ii)
---------------------------------------------------------
--------
Maximum Ratio - Section 7.01(i) ------
II. SECTION 7.01(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 $10,000,000)$
------
--------
- ---------------------
1 To the extent included, Project Finance Debt of any Consolidated
Subsidiary shall be included only to the extent of the Borrower's
Ownership Interest in such Consolidated Subsidiary.
2 To the extent included in (b), (c) or (d) above, Project Finance
Equity of the Borrower and the Consolidated Subsidiaries in any
Consolidated Subsidiary should be included only to the extent of
the Borrower's Ownership Interest in each such Consolidated
Subsidiary.
(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)) ------
Maximum Ratio - Section 7.01(j) ------
III. SECTION Project Finance Debt3
IV. SECTION Support Obligations4
- -----------------------
3 Set forth all Project Finance Debt of any Consolidated Subsidiary
and the Borrower's Ownership Interest in such Consolidated
Subsidiary.
4 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.<PAGE>
<PAGE>
SCHEDULE I
TO EXHIBIT F
Computation of Aggregate Debt of the Borrower
---------------------------------------------
Aggregate Debt of the Borrower1 (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):
(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 $
------
- -------------------
1 Debt of the Borrower shall (a) include only 50% of the aggregate
principal amount of Subordinated Debt and Preferred Securities
described in clause (b) of the definition of Preferred Securities,
subject to a maximum exclusion of $100,000,000 in the aggregate,
and (b) not include Subordinated Debt or Preferred Securities if
such Subordinated Debt or Preferred Securities, as the case may
be, is mandatorily convertible into common stock of the Borrower
upon terms and conditions satisfactory to the Majority Lenders.
(ix) other guaranty or similar financial
obligations in respect of the performance
of others, including, without limitation,
any financial obligation, contingent or
otherwise, of the Borrower guaranteeing
or otherwise supporting any Debt or other
obligation of any other Person in any
manner, whether directly or indirectly,
and including, without limitation, any
obligation of such Person, direct or indirect$
------
(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)2 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) $
------
(E)2 to perform, or arrange for the
performance of, any non-monetary
obligations or non-funded debt
payment obligations of the primary
obligor $
------
(F) Other $
------
Total of Debt of the Borrower$
------
------
- -----------------------
2 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>
<PAGE>
EXHIBIT G
FORM OF LENDER ASSIGNMENT
Dated , 19
Reference is made to the Term Loan Agreement, dated as of November
21, 1995 (said Agreement, as it may hereafter be amended or otherwise
modified from time to time, being the "Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein
defined), among the Borrower, the Lenders, the Co-Agents, the
Documentation Agent and the Operational Agent. Pursuant to the Agreement,
(the "Assignor") has committed to make
advances ("Advances") to the Borrower, which Advances 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 Agreement
as of the date hereof which represents the percentage interest specified
on Schedule 1 of all outstanding rights and obligations under the
Agreement (the "Assigned Interest"), including, without limitation, such
interest in the Assignor's Commitment, the Advances owing to the Assignor
and the Note held by the Assignor. After giving effect to such sale and
assignment, the Assignee's Commitment and the amount of the Advances owing
to the Assignee 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 hereto (the "Effective Date").
2. On , 19 , the Assignee will pay to the
Assignor, in same day funds, at such address and account as the Assignor
shall advise the Assignee, $ , and 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 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 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
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.
3. The Assignor (v) 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; (vi) makes
no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection
with the Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or any other instrument
or document furnished pursuant thereto; and (vii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower
of any of its obligations under the Agreement or any other instrument or
document furnished pursuant thereto. 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 (viii) confirms that it has received a copy
of the Agreement, together with copies of the financial statements
referred to in Section 6.01(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, (ix) 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 Agreement, (x) confirms that it
satisfies the requirements of an Eligible Assignee, (xi) 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 (xii) 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.
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>
<PAGE>
Schedule 1
to
Assignment Agreement
Dated , 19
Section 1.
- ---------
Percentage Interest: %
Section 2.
Assignee's Commitment: $
------
Aggregate Outstanding
Principal Amount of
Advances owing to the Assignee: $
------
Section 3.
Effective Date: , 19
[NAME OF ASSIGNOR]
By:
Name:
Title:
[NAME OF ASSIGNEE]
By:
Name:
Title:
Consented to:1
CMS ENERGY CORPORATION
By:
Name:
Title:
- ----------------------
1 Consent of the Borrower 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>
<PAGE>
SCHEDULE I
CMS ENERGY CORPORATION
Term Loan Agreement, dated as of November 21, 1995
among CMS Energy Corporation, the Banks named therein,
Citibank, N.A. and Union Bank, as Co-Agents
Name of Bank Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------
Citibank, N.A. 399 Park Avenue, - same -
Zone 23, 4th Floor
New York, New York 10043
Attention:Philip Kron
Telephone:212/559-1500
Telecopier:212/793-6130
Union Bank 445 South Figueroa Street - same -
Los Angeles, California 90071
Attention:John M. Edmonston
Telephone:213/236-5809
Telecopier:213/236-4096
Bank of America 200 West Jackson Boulevard - same -
Illinois Chicago, Illinois 60697
Attention:Debbie Aguillar
Telephone:312/828-3793
Telecopier:312/974-9626
BZW Division of 222 Broadway, 11th Floor - same -
Barclays Bank New York, New York 10038
PLC Attention:Sydney G. Dennis
Telephone:212/412-2470
Telecopier:212/412-6709
The First National 100 Federal Street - same -
Bank of Boston Mail Stop 01-08-02
Boston, Massachusetts 02110
Attention:Frank T. Smith
Telephone:617/434-6625
Telecopier:617/434-3652
The First National One First National Bank Plaza - same -
Bank of Chicago Suite 0363
Chicago, Illinois 60670
Attention:Mr. Michael K.
Murphy
Telephone:312/732-5443
Telecopier:312/732-3055
The Chase 1 Chase Manhattan Plaza, - same -
Manhattan 3rd Floor
Bank, N.A. New York, New York 10081
Attention:Thomas L. Casey
Telephone:212/552-7518
Telecopier:212/552-6276
Toronto Dominion Houston Agency - same -
(Texas), Inc. Suite 1700
909 Fannin
Houston, Texas 77010
Attention:Neva Nesbitt
Telephone:713/653-8261
Telecopier:713/951-9921
Comerica Bank One Detroit Center - same -
500 Woodward Avenue
Detroit, Michigan 48226
Attention:Charles L. Weddell
Telephone:313/222-7803
Telecopier:313/222-9514
Bank of Montreal 115 South LaSalle Street, - same -
12th Floor
Chicago, Illinois 60603
Attention:Michael J. Linton
Telephone:312/750-4370
Telecopier:312/750-4314
Michigan National 124 West Allegan Street - same -
Bank Michigan National Tower
Commercial Loan Document 98-03
Lansing, Michigan 48933
Attention:Mark S. Aben
Telephone:517/377-3368
Telecopier:517/377-3102
<PAGE>
<PAGE>
SCHEDULE II
TO THE TERM LOAN AGREEMENT
As of November 21, 1995
Project Finance Debt:
Jackson Pipeline Company Partnership Debt $ 5,378,948
-----------
Borrowers Ownership Interest 75%
Centrales Termica's Mendoza Debt $23,048,968
Borrowers Ownership Interest 51%
Debt (according to GAAP) of Enterprises -0-
---
<PAGE>
Exhibit (15)
ARTHUR ANDERSEN LLP
To CMS Energy Corporation:
We are aware that CMS Energy Corporation has incorporated by reference in
this registration statement its Form 10-Q for the quarter ended March 31,
1995, its Form 10-Q for the quarter ended June 30, 1995 and its Form 10-Q
for the quarter ended September 30, 1995, which include our reports dated
May 8, 1995, August 9, 1995 and November 9, 1995, respectively, covering
the unaudited interim financial information contained therein. Pursuant
to Regulation C of the Securities Act of 1933, those reports are not
considered a part of the registration statement prepared or certified by
our Firm or reports prepared or certified by our Firm within the meaning
of Sections 7 and 11 of the Act.
Arthur Andersen LLP
Detroit, Michigan,
January 10, 1996
<PAGE>
Exhibit (23)(i)
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated January
31, 1995 (except with respect to certain matters discussed in Notes 2, 3,
7 and 13 to the consolidated financial statements as to which the date is
June 9, 1995) included or incorporated by reference in CMS Energy
Corporation's Form 10-K for the year ended December 31, 1994, and to all
references to our Firm included in this registration statement.
Arthur Andersen LLP
Detroit, Michigan,
January 10, 1996
<PAGE>
