EXHIBIT 4(m)
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$300,000,000
FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 3, 2004
Among
CMS ENERGY CORPORATION
as a Borrower
CMS ENTERPRISES COMPANY
as a Borrower
THE BANKS NAMED HEREIN
as Banks
CITICORP USA, INC.
as Administrative Agent and Collateral Agent
WACHOVIA BANK, NATIONAL ASSOCIATION
as Syndication Agent
and
BANK ONE, NA
BARCLAYS BANK PLC AND
UNION BANK OF CALIFORNIA, N.A.
as Documentation Agents
----------------------------
CITIGROUP GLOBAL MARKETS INC.
AND WACHOVIA CAPITAL MARKETS LLC
as Joint Book Managers and Joint Lead Arrangers
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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; Construction. .................... 22
SECTION 1.03. Accounting Terms .............................................. 22
ARTICLE II
COMMITMENTS, LOANS, FEES, PREPAYMENTS AND OUTSTANDINGS
SECTION 2.01. Making Loans .................................................. 23
SECTION 2.02. Fees .......................................................... 23
SECTION 2.03. Commitments; Mandatory Prepayments ............................ 24
SECTION 2.04. Computations of Outstandings .................................. 25
ARTICLE III
LOANS
SECTION 3.01. Loans ......................................................... 25
SECTION 3.02. Conversion of Loans ........................................... 26
SECTION 3.03. Interest Periods .............................................. 26
SECTION 3.04. Other Terms Relating to the Making and Conversion of Loans .... 27
SECTION 3.05. Repayment of Loans; Interest .................................. 29
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. Issuing Banks ................................................. 29
SECTION 4.02. Letters of Credit. ............................................ 30
SECTION 4.03. Issuing Bank Fees ............................................. 31
SECTION 4.04. Reimbursement to Issuing Banks ................................ 31
SECTION 4.05. Obligations Absolute .......................................... 32
SECTION 4.06. Indemnification; Liability of Issuing Banks and the Lenders ... 33
SECTION 4.07. Currency Equivalents .......................................... 34
SECTION 4.08. Judgement Currency ............................................ 34
SECTION 4.09. Cash Collateral Agreement ..................................... 35
SECTION 4.10. Court Order ................................................... 35
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 5.01. Payments and Computations. .................................... 35
SECTION 5.02. Interest Rate Determination ................................... 37
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SECTION 5.03. Prepayments ................................................... 37
SECTION 5.04. Yield Protection. ............................................. 38
SECTION 5.05. Sharing of Payments, Etc ...................................... 40
SECTION 5.06. Taxes ......................................................... 40
SECTION 5.07. Apportionment of Payments. .................................... 41
SECTION 5.08. Proceeds of Collateral ........................................ 43
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Effectiveness of this Agreement ... 43
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 ...................................... 47
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrowers ............... 47
ARTICLE VIII
COVENANTS OF THE BORROWERS
SECTION 8.01. Affirmative Covenants ......................................... 52
SECTION 8.02. Negative Covenants ............................................ 54
SECTION 8.03. Reporting Obligations ......................................... 63
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default ............................................. 66
SECTION 9.02. Remedies ...................................................... 68
ARTICLE X
THE AGENTS
SECTION 10.01. Authorization and Action ..................................... 69
SECTION 10.02. Indemnification .............................................. 71
SECTION 10.03. Concerning the Collateral and the Loan Documents ............. 72
SECTION 10.04. Release of Guarantors ........................................ 73
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc .............................................. 73
SECTION 11.02. Notices, Etc ................................................. 74
SECTION 11.03. No Waiver of Remedies ........................................ 74
SECTION 11.04. Costs, Expenses and Indemnification. ......................... 75
ii
SECTION 11.05. Right of Set-off ............................................. 76
SECTION 11.06. Binding Effect ............................................... 76
SECTION 11.07. Assignments and Participation ................................ 77
SECTION 11.08. Confidentiality .............................................. 79
SECTION 11.09. Waiver of Jury Trial ......................................... 80
SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION .................... 80
SECTION 11.11. Relation of the Parties; No Beneficiary ...................... 81
SECTION 11.12. Execution in Counterparts .................................... 81
SECTION 11.13. Survival of Agreement ........................................ 81
SECTION 11.14. Platform ..................................................... 81
SECTION 11.15. USA Patriot Act .............................................. 83
ARTICLE XII
CO-BORROWER PROVISIONS
SECTION 12.01. Appointment .................................................. 83
SECTION 12.02. Separate Actions ............................................. 84
SECTION 12.03. Obligations Absolute and Unconditional ....................... 84
SECTION 12.04. Waivers and Acknowledgements. ................................ 84
SECTION 12.05. Contribution Among Borrowers. ................................ 85
SECTION 12.06. Subrogation; Reinstatement ................................... 86
SECTION 12.07. Subordination ................................................ 86
ARTICLE XIII
NO NOVATION; REFERENCES TO THIS AGREEMENT IN LOAN DOCUMENTS
SECTION 13.01. No Novation .................................................. 87
SECTION 13.02. References to This Agreement In Loan Documents ............... 87
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Exhibits
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Notice of Conversion
EXHIBIT C - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., counsel to the
Borrowers
EXHIBIT D - Form of Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel to the Borrowers
EXHIBIT E - Form of Compliance Schedule
EXHIBIT F - Form of Lender Assignment
EXHIBIT G - Terms of Subordination (Junior Subordinated Debt)
EXHIBIT H - Terms of Subordination (Guaranty of Hybrid Preferred Securities)
EXHIBIT I - Form of Amended and Restated Guaranty
EXHIBIT J - Form of Third Amended and Restated Pledge and Security Agreement
(Company)
EXHIBIT K - Form of Pledge and Security Agreement (Enterprises and Grantors)
EXHIBIT L - AIG Pledge Agreement
EXHIBIT M - Intercreditor Agreement
EXHIBIT N - Form of Cash Collateral Account Agreement
Schedules
COMMITMENT
SCHEDULE
SCHEDULE I Certain Debt
SCHEDULE II Pledged Ownership Interests
SCHEDULE III Transitional Letters of Credit
ATTACHMENT A Reaffirmation
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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 3, 2004
THIS FIFTH AMENDED AND RESTATED CREDIT AGREEMENT (the "AGREEMENT") is made
by and among:
(i) CMS Energy Corporation, a Michigan corporation (the "COMPANY"),
(ii) CMS Enterprises Company, a Michigan corporation ("ENTERPRISES" and,
together with the Company, the "BORROWERS"),
(iii) the banks (the "BANKS") listed on the signature pages hereof and the
other Lenders (as hereinafter defined) from time to time party
hereto,
(iv) Citicorp USA, Inc. ("CUSA"), as administrative agent (the
"ADMINISTRATIVE AGENT") for the Lenders hereunder and as collateral
agent (the "COLLATERAL AGENT") for the Lenders hereunder, and
(v) Wachovia Bank, National Association, as syndication agent (the
"SYNDICATION AGENT"), and Bank One, NA, Barclays Bank PLC and Union
Bank of California, N.A., as documentation agents (the
"DOCUMENTATION AGENTS").
PRELIMINARY STATEMENTS
The Borrowers have requested that the Banks amend and restate the Existing
Credit Agreement (as hereafter defined) to provide the credit facility
hereinafter described in the amount and on the terms and conditions set forth
herein. The Banks have so agreed on the terms and conditions set forth herein,
and the Agents have agreed to act as agents for the Lenders and the Issuing
Banks 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:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ABR LOAN" means a Loan that bears interest as provided in Section
3.05(b)(i).
"ACCOUNTING CHANGE" is defined in Section 1.03.
"ADJUSTED LIBO RATE" means, for each Interest Period for each
Eurodollar Rate Loan made as part of the same Borrowing, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control another entity if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract, or otherwise.
"AGENT" means, as the context may require, the Administrative Agent,
the Collateral Agent, the Syndication Agent or the Documentation Agents, and
"Agents" means any or all of the foregoing.
"AIG PLEDGE AGREEMENT" means that certain Pledge and Security
Agreement, dated as of January 8, 2003, by and among Enterprises and the other
grantors parties thereto in favor of American Home Assurance Company, as
collateral agent, a copy of which is attached hereto as Exhibit L, as amended,
restated, supplemented or otherwise modified from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the highest of (a) the Prime Rate in effect on such day, (b) 1/2 of one percent
above the CD Rate, and (c) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the
Prime Rate, the CD Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate, CD Rate
or the Federal Funds Effective Rate, respectively.
"ALTERNATIVE CURRENCY" means euro and Indian Rupees; provided, that
if with respect to any of the foregoing currencies (x) currency control or other
exchange regulations are
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imposed in the country in which such currency is issued with the result that
different types of such currency are introduced, (y) such currency is, in the
determination of the Administrative Agent, no longer readily available or freely
traded or (z) in the determination of the Administrative Agent, a Dollar
Equivalent of such currency is not readily calculable, the Administrative Agent
shall promptly notify the Lenders and the Company, and such currency shall no
longer be an Alternative Currency until such time as all of the Lenders agree to
reinstate such currency as an Alternative Currency.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, at
the address specified for such Lender on its signature page to this Agreement or
in the Lender Assignment pursuant to which it became a Lender, as applicable, or
at any office, branch, subsidiary or affiliate of such Lender specified in a
notice received by the Administrative Agent and the Borrowers from such Lender.
"APPLICABLE MARGIN" means, on any date of determination with respect
to any Loans, the per annum rate specified in the table below for such Loans:
Applicable Margin
-----------------
ABR Loans 1.75%
Eurodollar Rate Loans 2.75%
"APPLICABLE RATE" means:
(i) in the case of each ABR Loan, a rate per annum equal at all
times to the sum of the Alternate Base Rate in effect from time to time
plus the Applicable Margin; and
(ii) in the case of each Eurodollar Rate Loan comprising part of the
same Borrowing, a rate per annum during each Interest Period equal at all
times to the sum of the Adjusted LIBO Rate for such Interest Period plus
the Applicable Margin.
"ARRANGERS" means Citigroup Global Markets Inc. and Wachovia Capital
Markets LLC.
"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.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C. Sections 101 et seq.), as amended from time to time, and any successor
statute.
"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America.
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"BORROWING" means a borrowing consisting of Loans of the same Type,
having the same Interest Period and made or Converted on the same day by the
Lenders, ratably in accordance with their respective Percentages. Any Borrowing
consisting of Loans of a particular Type may be referred to as being a Borrowing
of such "TYPE". All Loans to the same Borrower 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 or Detroit, Michigan, and, if
the applicable Business Day relates to any Eurodollar Rate Loan, on which
dealings are carried on in the London interbank market and, if the applicable
Business Day relates to any Letter of Credit, a day of the year on which banks
are not required or authorized to close in the principal place of business of
the related Issuing Bank.
"CASH COLLATERAL ACCOUNT" means the "Account" as defined in the Cash
Collateral Agreement.
"CASH COLLATERAL AGREEMENT" means that certain Cash Collateral
Agreement, dated as of August 3, 2004, between the Borrowers, the Administrative
Agent and the Collateral Agent, for the benefit of the Lenders, substantially in
the form of Exhibit N, as amended, restated, supplemented or otherwise modified
from time to time.
"CASH COLLATERAL REQUIRED AMOUNT" means, as of any date of
determination, the difference of (i) one hundred five percent (105%) of the
Dollar Equivalent of the aggregate LC Outstandings at such time in respect of
undrawn Letters of Credit less (y) the amount of cash on deposit in the Cash
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations.
"CASH DIVIDEND INCOME" means, for any period, the amount of all cash
dividends received by the Company from its Subsidiaries during such period that
are paid out of the net income or loss (without giving effect to: any
extraordinary gains in excess of $25,000,000, the amount of any write-off or
write-down of assets, including, without limitation, write-offs or write-downs
related to the sale of assets, impairment of assets and loss on contracts, in
each case in accordance with GAAP consistently applied, and up to $200,000,000
of other non-cash write-offs) of such Subsidiaries during such period.
"CD RATE" means 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 on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve Bank of
New York or, if such publication shall be suspended or terminated, on the basis
of quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by Citibank, in
either case, adjusted to the nearest 1/16 of one percent or, if there is no
nearest 1/16 of one percent, to the next higher 1/16 of one percent.
4
"CHANGE OF CONTROL" means (a) any "person" or "group" within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act shall become the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 50% of the then outstanding voting capital stock of the Company, or (b) the
majority of the board of directors of the Company shall fail to consist of
Continuing Directors, or (c) a consolidation or merger of the Company shall
occur after which the holders of the outstanding voting capital stock of the
Company immediately prior thereto hold less than 50% of the outstanding voting
capital stock of the surviving entity, or (d) more than 50% of the outstanding
voting capital stock of the Company shall be transferred to any entity of which
the Company owns less than 50% of the outstanding voting capital stock or (e)
the Company shall cease to own, directly or indirectly, 80% of the outstanding
capital stock of Enterprises.
"CITIBANK" means Citibank, N.A., a national banking association.
"CITIGROUP PARTIES" means Citibank, CUSA, Citigroup Global Markets
Inc. and each of their respective Affiliates, and each of their respective
officers, directors, employees, agents, advisors, and representatives.
"CLOSING DATE" means August 3, 2004.
"CMS ERM" means CMS Energy Resource Management Company (formerly
known as CMS Marketing, Services and Trading Company), a Michigan corporation,
all of whose capital stock is on the Closing Date owned by Enterprises and its
permitted successors.
"CMS GENERATION" means CMS Generation Co., a Michigan corporation,
all of whose common stock is on the Closing Date owned by Enterprises and its
permitted successors.
"COLLATERAL" means all property and interests in property now owned
or hereafter acquired by any Loan Party upon which a Lien is granted under any
of the Loan Documents, including, without limitation, all "Collateral" under
(and as defined in) the Cash Collateral Agreement.
"COMMITMENT" means, for each Lender, the obligation of such Lender
to make Loans to the Borrowers 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 Commitment Schedule under the heading
"Commitment" or, if such Lender has entered into one or more Lender Assignments,
set forth for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 11.07(h), in each case as such amount may be modified from
time to time pursuant to Section 2.03. " COMMITMENTS" means the total of the
Lenders' Commitments hereunder. As of the Closing Date the aggregate of all of
the Lenders' Commitments equals $300,000,000.
"COMMITMENT FEE MARGIN" means a per annum rate equal to 0.50%.
"COMMITMENT SCHEDULE" means the Schedule identifying each Lender's
Commitment as of the Closing Date attached hereto and identified as such.
5
"COMMITMENT TERMINATION DATE" means the earlier of (i) the Maturity
Date and (ii) the date of termination or reduction in whole of the Commitments
pursuant to Section 2.03 or 9.02.
"COMMUNICATIONS" is defined in Section 11.14.
"COMPANY INTEREST EXPENSE" means at any date, the total interest
expense in respect of Debt of the Company for the four calendar quarters
immediately preceding such date, including, without duplication, (i) interest
expense attributable to capital leases, (ii) amortization of debt discount,
(iii) capitalized interest, (iv) cash and noncash payments, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs under interest rate swap, "cap",
"collar" or other hedging agreements (including amortization of discount) and
(vii) interest expense in respect of obligations of Persons deemed to be Debt of
the Company under clause (ix) of the definition of Debt, provided, however that
Company Interest Expense shall exclude (1) any costs (including, without
limitation, any prepayment or option premium or expenses incurred in connection
with the Company's (i) reset put securities due July 1, 2003 or (ii) debt
securities due January 15, 2005) otherwise included in interest expense
recognized on early retirement of debt and (2) any interest or dividends paid on
Hybrid Preferred Securities.
"CONFIDENTIAL INFORMATION" has the meaning assigned to that term in
Section 11.08.
"CONSOLIDATED DEBT" means, without duplication, as determined on a
consolidated basis in accordance with GAAP, at any date of determination, the
sum of the aggregate Debt of the Company plus the aggregate debt (as such term
is construed in accordance with GAAP) of the Consolidated Subsidiaries;
provided, however, that:
(a) Consolidated Debt shall not include any Support Obligation
described in clause (iv) or (v) of the definition thereof if such Support
Obligation or the primary obligation so supported is not fixed or
conclusively determined or is not otherwise reasonably quantifiable as of
the date of determination;
(b) Consolidated Debt shall not include (i) any Junior Subordinated
Debt owned by any Hybrid Preferred Securities Subsidiary or (ii) any
guaranty by the Company of payments with respect to any Hybrid Preferred
Securities, provided that such guaranty is subordinated to the rights of
the Lenders and Issuing Banks hereunder and under the other Loan Documents
pursuant to terms of subordination substantially similar to those set
forth in Exhibit H, or pursuant to other terms and conditions satisfactory
to the Required Lenders;
(c) Consolidated Debt shall not include any debt issued by the
Company that shall be (i) subordinated to the Obligations of the Loan
Parties on terms acceptable to the Administrative Agent and (ii) required
to be converted only into non-redeemable common stock of the Company;
(d) with respect to any Support Obligations provided by the Company
in connection with a purchase or sale by CMS ERM or its Subsidiaries of
natural gas,
6
natural gas liquids, gas condensates, electricity, oil, propane, coal, any
other commodity, weather derivatives or any derivative instrument with
respect to any commodity with any other Person (a "COUNTERPARTY"),
Consolidated Debt shall include only the excess, if any, of (A) the
aggregate amount of any Support Obligations provided by the Company in
respect of CMS ERM's or any of its Subsidiary's obligations under any such
purchase or sale transaction (a " COVERING TRANSACTION") entered into by
CMS ERM or any of its Subsidiaries in connection with such purchase or
sale over (B) the aggregate amount of (i) any Support Obligations provided
by the direct or indirect parent company of such Counterparty (the
"COUNTERPARTY GUARANTOR") and (ii) any irrevocable letter of credit
provided by any financial institution for the account of such Counterparty
or Counterparty Guarantor, in each case for the benefit of CMS ERM or any
of its Subsidiaries in support of such Counterparty's payment obligations
to CMS ERM or such Subsidiary arising from such purchase or sale,
provided, that (x) the senior, unsecured, non-credit enhanced indebtedness
of such Counterparty Guarantor or such financial institution (as the case
may be) is rated BBB- (or its equivalent) or higher by any two of S&P,
Fitch and Moody's, provided, that in the event that such Counterparty
Guarantor has no such rated indebtedness, Dun & Bradstreet Inc. has rated
such Counterparty Guarantor at least investment grade, (y) no default by
such Counterparty Guarantor in respect of any such Support Obligations
provided by such Counterparty Guarantor has occurred and is continuing and
(z) such Counterparty Guarantor is not the Company or any Affiliate of the
Company or any of its Subsidiaries;
(e) Consolidated Debt shall not include any Project Finance Debt of
the Company or any Consolidated Subsidiary; and
(f) Consolidated Debt shall not include the principal amount of any
Securitized Bonds.
"CONSOLIDATED EBITDA" means, with reference to any period, the
pretax operating income of the Company and its Subsidiaries ("PRETAX OPERATING
INCOME") for such period plus, to the extent deducted in determining Pretax
Operating Income (without duplication), (i) depreciation, depletion and
amortization, and (ii) any non-cash write-offs and write-downs contained in the
Company's Pretax Operating Income, including, without limitation, write-offs or
write-downs related to the sale of assets, impairment of assets and loss on
contracts, in each case in accordance with GAAP consistently applied, all
calculated for the Company and its Subsidiaries on a consolidated basis for such
period; provided, however, that Consolidated EBITDA shall not include any
operating income attributable to that portion of the revenues of Consumers
dedicated to the repayment of the Securitized Bonds.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Company in accordance
with GAAP.
"CONSUMERS" means Consumers Energy Company, a Michigan corporation,
all of whose common stock is on the Closing Date owned by the Company.
7
"CONSUMERS CREDIT FACILITY" means, collectively, Consumer's existing
(i) $140,000,000 term loan facility and (ii) $500,000,000 revolving loan
facility, as in effect on the date hereof.
"CONSUMERS DIVIDEND RESTRICTION" means any restriction enacted or
imposed after October 1, 1992 upon the ability of Consumers to pay cash
dividends to the Company 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; provided, further, that any such restriction
enacted or imposed by the Michigan Public Service Commission limiting such
dividends to an amount not less than $190,000,000 during any twelvemonth period
shall not be a Consumers Dividend Restriction at any time.
"CONTINUING DIRECTOR" means, as of any date of determination, any
member of the board of directors of the Company who (a) was a member of such
board of directors on the Closing Date, or (b) was nominated for election or
elected to such board of directors with the approval of the Continuing Directors
who were members of such board of directors at the time of such nomination or
election; provided that an individual who is so elected or nominated in
connection with a merger, consolidation, acquisition or similar transaction
shall not be a Continuing Director unless such individual was a Continuing
Director prior thereto.
"CONVERSION", "CONVERT " or "CONVERTED" refers to a conversion of
Loans of one Type into Loans of another Type, or to the selection of a new, or
the renewal of the same, Interest Period for Loans, as the case may be, pursuant
to Section 3.02 or 3.03.
"DEBT" means, for any Person, without duplication, any and all
indebtedness, liabilities and other monetary obligations of such Person (whether
for principal, interest, fees, costs, expenses or otherwise, and whether
contingent or otherwise) (i) for borrowed money or evidenced by bonds,
debentures, notes or other similar instruments, (ii) to pay the deferred
purchase price of property or services (except trade accounts payable arising in
the ordinary course of business which are not overdue), (iii) as lessee under
leases which shall have been or should be, in accordance with GAAP, recorded as
capital leases, (iv) under reimbursement or similar agreements with respect to
letters of credit issued thereunder (except reimbursement obligations and
letters of credit that are cash collateralized), (v) under any interest rate
swap, "cap", "collar" or other hedging agreements; provided, however, for
purposes of the calculation of Debt for this clause (v) only, the actual amount
of Debt of such Person shall be determined on a net basis to the extent such
agreements permit such amounts to be calculated on a net basis, (vi) to pay rent
or other amounts under leases entered into in connection with sale and leaseback
transactions involving assets of such Person being sold in connection therewith,
(vii) arising from any accumulated funding deficiency (as defined in Section
412(a) of the Internal Revenue Code of 1986, as amended) for a Plan, (viii)
arising in connection with any withdrawal liability under ERISA to any
Multiemployer Plan and (ix) arising from (A) direct or indirect guaranties in
respect of, and obligations to purchase or otherwise acquire, or otherwise to
warrant or hold harmless, pursuant to a legally binding agreement, a creditor
against loss in respect of, Debt of
8
others referred to in clauses (i) through (viii) above and (B) other guaranty or
similar financial obligations in respect of the performance of others, including
Support Obligations. Notwithstanding the foregoing, solely for purposes of the
calculation required under Section 8.01(j)(ii), Debt shall not include any
Junior Subordinated Debt issued by the Company and owned by any Hybrid Preferred
Securities Subsidiary.
"DEFAULT" means an event that, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
"DEFAULT RATE" means a rate per annum equal at all times to (i) in
the case of any amount of principal of any Loan that is not paid when due, 2%
per annum above the Applicable Rate required to be paid on such Loan immediately
prior to the date on which such amount became due, and (ii) in the case of any
amount of interest, fees or other amounts payable hereunder that is not paid
when due, 2% per annum above the Applicable Rate for an ABR Loan in effect from
time to time.
"DISCLOSED MATTERS" is defined in Section 7.01(f).
"DIVIDEND COVERAGE RATIO" means, at any date, the ratio of (i) Pro
Forma Dividend Amounts to (ii) Company Interest Expense.
"DOLLAR EQUIVALENT" means, as to Dollars, the amount thereof, and as
to any Alternative Currency, the Dollar equivalent of such Alternative Currency
as determined by the Administrative Agent in accordance with the provisions of
Section 4.07.
"DOLLARS" and the sign "$" each means the lawful currency of the
United States.
"ELIGIBLE BANK" means any state or federally chartered bank or any
state-licensed foreign bank branch or agency.
"ENTERPRISES" means CMS Enterprises Company, a Michigan corporation,
all of whose common stock is on the Closing Date owned by the Company and its
permitted successors.
"ENTERPRISES CREDIT AGREEMENT" means that certain $150,000,000
Credit Agreement, dated as of July 12, 2002, by and among Enterprises, as
borrower, the Borrower, the lenders from time to time parties thereto, and
Citicorp USA, Inc., as administrative agent and as collateral agent, which
agreement has been paid in full and terminated.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any governmental agency or
authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any
Hazardous Substance or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any of its
Subsidiaries directly or indirectly resulting from or based upon (a)
9
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Substances, (c)
exposure to any Hazardous Substances, (d) the release or threatened release of
any Hazardous Substances into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"EQUITY DISTRIBUTIONS" means, for any period, the aggregate amount
of cash received by the Company from its Subsidiaries during such period that
are paid out of proceeds from the sale of common equity of Subsidiaries of the
Company.
"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 member of a commonly controlled
trade or business under Sections 414(b), (c), (m) and (o) of the Internal
Revenue Code of 1986, as amended.
"EURO" means the euro referred to in Council Regulation (EC) No.
1103/97 dated June 17, 1997 passed by the Counsel of the European Union, or if
different, the lawful currency of the member states of the European Union that
participate in the third stage of the Economic and Monetary Union.
"EURO SUBLIMIT" means $40,000,000.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EURODOLLAR RATE LOAN" means a Loan that bears interest as provided
in Section 3.05(b)(ii).
"EVENT OF DEFAULT" is defined in Section 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING CREDIT AGREEMENT" means that certain $190,000,000 Fourth
Amended and Restated Credit Agreement, dated as of December 8, 2003, among the
Borrowers, the lenders from time to time parties thereto, and CUSA, as
administrative agent and as collateral agent, as the same may have been amended,
restated, supplemented or otherwise modified from time to time.
"EXTENSION OF CREDIT" means (i) the making of a Borrowing (including
any Conversion), (ii) the issuance of a Letter of Credit, or (iii) the amendment
of any Letter of Credit having the effect of extending the stated termination
date thereof, increasing the LC Outstandings thereunder, or otherwise altering
any of the material terms or conditions thereof.
"FAIR MARKET VALUE" means, with respect to any asset, the value of
the consideration obtainable in a sale of such asset in the open market,
assuming a sale by a willing
10
seller to a willing purchaser dealing at arm's length and arranged in an orderly
manner over a reasonable period of time, each having reasonable knowledge of the
nature and characteristics of such asset, neither being under any compulsion to
act, and, if in excess of $50,000,000, as determined in good faith by the Board
of Directors of the Company.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEE LETTERS" is defined in Section 2.02(b).
"FITCH" means Fitch, Inc. or any successor thereto.
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrowers are located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FOREIGN SUBSIDIARY" is defined in Section 8.01(l).
"GAAP" is defined 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 (i) the execution, delivery, or performance of any Loan Document by any
Loan Party, (ii) the grant and perfection of any Lien in favor of the Collateral
Agent contemplated by the Loan Documents, or (iii) the exercise by any Agent (on
behalf of the Lenders) of any right or remedy provided for under the Loan
Documents.
"GRANTING LENDER" is defined in Section 11.07(f).
"GRANTOR(s)" means each Guarantor and each of the following
Subsidiaries of Enterprises: CMS Capital, L.L.C., a Michigan limited liability
company, CMS Electric & Gas, L.L.C. (formerly known as CMS Electric and Gas
Company), a Michigan limited liability company, CMS ERM, CMS International
Ventures, L.L.C., a Michigan limited liability company, Dearborn Industrial
Energy, L.L.C., a Michigan limited liability company, Dearborn Industrial
Generation, L.L.C., a Michigan limited liability company, and CMS Generation
Michigan Power L.L.C., a Michigan limited liability company.
"GUARANTOR" means CMS Generation, CMS Gas Transmission Company, a
Michigan corporation, and each other Restricted Subsidiary that has delivered,
or shall be obligated to deliver, a guaranty under and pursuant to the terms of
Section 8.01(l).
11
"GUARANTY" means that certain Amended and Restated Guaranty (and any
and all supplements thereto) executed from time to time by each Guarantor in
favor of the Collateral Agent for the benefit of itself and the Lenders, in
substantially the form of Exhibit I attached hereto, as amended, restated,
supplemented or otherwise modified from time to time.
"HAZARDOUS SUBSTANCE" means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency, department,
commission, board, bureau, or instrumentality of the United States or of the
State or locality in which the same is located having or exercising jurisdiction
over such waste, substance or material.
"HYBRID PREFERRED SECURITIES" means any preferred securities issued
by a Hybrid Preferred Securities Subsidiary, where such preferred securities
have the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary lends substantially
all of the proceeds from the issuance of such preferred securities to the
Company or a wholly-owned direct or indirect Subsidiary of the Company in
exchange for Junior Subordinated Debt issued by the Company or such
wholly-owned direct or indirect Subsidiary, respectively;
(ii) such preferred securities contain terms providing for the
deferral of interest payments corresponding to provisions providing for
the deferral of interest payments on the Junior Subordinated Debt; and
(iii) the Company or a wholly-owned direct or indirect Subsidiary of
the Company (as the case may be) makes periodic interest payments on the
Junior Subordinated Debt, which interest payments are in turn used by the
Hybrid Preferred Securities Subsidiary to make corresponding payments to
the holders of the preferred securities.
"HYBRID PREFERRED SECURITIES SUBSIDIARY" means any Delaware
statutory trust (or similar entity) (i) all of the common equity interest of
which is owned (either directly or indirectly through one or more wholly-owned
Subsidiaries of the Company or Consumers) at all times by the Company or a
wholly-owned direct or indirect Subsidiary of the Company, (ii) that has been
formed for the purpose of issuing Hybrid Preferred Securities and (iii)
substantially all of the assets of which consist at all times solely of Junior
Subordinated Debt issued by the Company or a wholly-owned direct or indirect
Subsidiary of the Company (as the case may be) and payments made from time to
time on such Junior Subordinated Debt.
"INDEMNIFIED PERSON" is defined in Section 11.04(b).
"INDENTURE" means that certain Indenture, dated as of September 15,
1992, between the Company and the Trustee, as supplemented by the First
Supplemental Indenture, dated as of October 1, 1992, the Second Supplemental
Indenture, dated as of October 1, 1992, the Third Supplemental Indenture, dated
as of May 6, 1997, the Fourth Supplemental Indenture, dated as of September 26,
1997, the Fifth Supplemental Indenture, dated as of November 4, 1997, the Sixth
Supplemental Indenture, dated as of January 13, 1998, the Seventh Supplemental
Indenture, dated as of January 25, 1999, the Eighth Supplemental Indenture,
dated as of February
12
3, 1999, the Ninth Supplemental Indenture, dated as of June 22, 1999, the Tenth
Supplemental Indenture, dated as of October 12, 2000, the Eleventh Supplemental
Indenture, dated as of March 29, 2001, and the Twelfth Supplemental Indenture,
dated as of July 2, 2001, as said Indenture may be further amended or otherwise
modified from time to time in accordance with its terms.
"INDIAN RUPEE" means the lawful currency of India.
"INDIAN RUPEE SUBLIMIT" means $3,000,000.
"INTER-BORROWER DEBT" is defined in Section 12.07.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor and Lien
Subordination Agreement, dated as of January 8, 2003, by and among Citicorp USA,
Inc., as senior collateral agent, American Home Assurance Company, individually
and as junior collateral agent, and St. ▇▇▇▇ Fire and Marine Insurance Company,
individually, a copy of which is attached hereto as Exhibit M, as amended,
restated, supplemented or otherwise modified from time to time.
"INTEREST PERIOD" is defined in Section 3.03.
"ISSUING BANK" means any Lender designated by the Company in
accordance with Section 4.01(a) as the issuer of a Letter of Credit pursuant to
an Issuing Bank Agreement.
"ISSUING BANK AGREEMENT" means an agreement between an Issuing Bank
and the applicable Borrower, in form and substance satisfactory to the
Administrative Agent, providing for the issuance of one or more Letters of
Credit, in form and substance satisfactory to the Administrative Agent, in
support of a general corporate activity of such Borrower.
"JUNIOR SUBORDINATED DEBT" means any unsecured Debt of the Company
or a Subsidiary of the Company (i) issued in exchange for the proceeds of Hybrid
Preferred Securities and (ii) subordinated to the rights of the Lenders
hereunder and under the other Loan Documents pursuant to terms of subordination
substantially similar to those set forth in Exhibit G, or pursuant to other
terms and conditions satisfactory to the Required Lenders.
"LC PAYMENT NOTICE" is defined in Section 4.04(b).
"LC OUTSTANDINGS" means, for any Letter of Credit on any date of
determination, the maximum amount available to be drawn under such Letter of
Credit (assuming the satisfaction of all conditions for drawing enumerated
therein) plus any amount which has been drawn on such Letter of Credit which has
neither been reimbursed by a Borrower nor converted into an ABR Loan pursuant to
the terms of Section 4.04.
"LENDER ASSIGNMENT" is defined in Section 11.07(e).
"LENDERS" means the Banks listed on the signature pages hereof,
together with their successors and permitted assigns and, if and to the extent
so provided in Section 4.04(c), each Issuing Bank.
13
"LETTER OF CREDIT" means (i) a letter of credit issued by an Issuing
Bank pursuant to Section 4.02(a) or (ii) a Transitional Letter of Credit deemed
issued by an Issuing Bank on the Closing Date pursuant to Section 4.02(b), in
each case as such letter of credit may from time to time be amended, modified or
extended in accordance with the terms of this Agreement and the Issuing Bank
Agreement to which it relates.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" means any lien, security interest, or other charge or
encumbrance (including the lien or retained security title of a conditional
vendor) of any kind, or any other type of arrangement intended or having the
effect of conferring upon a creditor a preferential interest upon or with
respect to any of its properties of any character (including capital stock and
other equity interests, intercompany obligations and accounts).
"LIQUIDITY" means, as of any date, the aggregate of (i) the amount
of Unrestricted Cash held by the Company and its Consolidated Subsidiaries as of
such date and (ii) the unused portion of the Commitments hereunder as of such
date.
"LOAN" means a loan by a Lender to a Borrower pursuant to Section
2.01, and refers to an ABR Loan or a Eurodollar Rate Loan (each of which shall
be a "TYPE" of Loan). All Loans by a Lender to the same Borrower of the same
Type having the same Interest Period and made or Converted on the same day shall
be deemed to be a single Loan by such Lender until repaid or next Converted.
"LOAN DOCUMENTS" means this Agreement, any Promissory Notes, the Fee
Letters, the Issuing Bank Agreement(s), the Guaranty, the Pledge Agreements, the
Intercreditor Agreement, the Cash Collateral Agreement and all other agreements,
instruments and documents now or hereafter executed and/or delivered pursuant
hereto or thereto.
"LOAN PARTY" is defined in Section 6.01(a)(i).
"MATERIAL ADVERSE CHANGE" means any event, development or
circumstance that has had or could reasonably be expected to have a material
adverse effect on (a) the business, assets, property, financial condition,
results of operations or prospects of the Company and its
14
Subsidiaries, considered as a whole, (b) the Borrowers' and the Guarantors'
ability, taken as a whole, to perform their obligations under this Agreement or
any other Loan Document to which it is or will be a party or (c) the validity or
enforceability of any Loan Document or the rights or remedies of any Agent or
the Lenders thereunder; provided that the occurrence of any Restatement Event
shall not constitute a Material Adverse Change.
"MATURITY DATE" means August 3, 2007.
"MEASUREMENT QUARTER" is defined in Section 8.01(i).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any sale, assignment or other
disposition of (but not the lease or license of) any property, or with respect
to any sale or issuance of securities or incurrence of Debt, by any Person,
gross cash proceeds received by such Person or any Subsidiary of such Person
from such sale, assignment, disposition, issuance or incurrence (including cash
received as consideration for the assumption or incurrence of liabilities
incurred in connection with or in anticipation of such transaction) after (i)
provision for all income or other taxes measured by or resulting from such
transaction, (ii) payment of all customary underwriting commissions, auditing
and legal fees, printing costs, rating agency fees and other customary and
reasonable fees and expenses incurred by such Person in connection with such
transaction, (iii) all amounts used to repay Debt (and any premium or penalty
thereon) secured by a Lien on any asset disposed of in such sale, assignment or
other disposition or which is or may be required (by the express terms of the
instrument governing such Debt or by applicable law) to be repaid in connection
with such sale, assignment, or other disposition, and (iv) deduction of
appropriate amounts to be provided by such Person or a Subsidiary of such Person
as a reserve, in accordance with GAAP consistently applied, against any
liabilities associated with the assets sold, transferred or disposed of in such
transaction and retained by such Person or a Subsidiary of such Person after
such transaction, provided that "Net Proceeds" shall include on a
dollar-for-dollar basis all amounts remaining in such reserve after such
liability shall have been satisfied in full or terminated; provided, however,
that notwithstanding the foregoing, "Net Proceeds" shall exclude (a) any amounts
received or deemed to be received by the Company for the purchase of the
Company's capital stock in connection with the Company's dividend reinvestment
program and (b) amounts received by the Company or any Subsidiary of the Company
pursuant to any transaction with the Company or any Subsidiary of the Company
otherwise permitted hereunder.
"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, escrow or
other analogous fund established for the
15
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.
"NOTICE OF BORROWING" is defined in Section 3.01(a).
"NOTICE OF CONVERSION" is defined in Section 3.02.
"OBLIGATIONS" means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Outstandings, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Borrowers and
other Loan Parties to any of the Agents, the Arrangers, the Lenders, the Issuing
Banks or any other indemnified party arising under the Loan Documents.
"OECD" means the Organization for Economic Cooperation and
Development.
"OFF-BALANCE SHEET LIABILITY" of a Person shall mean any of the
following obligations not appearing on such Person's consolidated balance sheet:
(i) all lease obligations, leveraged leases, sale and leasebacks and other
similar lease arrangements of such Person, (ii) any liability under any so
called "synthetic lease" or "tax ownership operating lease" transaction entered
into by such Person, and (iii) any obligation arising with respect to any other
transaction if and to the extent that such obligation is the functional
equivalent of borrowing but that does not constitute a liability on the
consolidated balance sheet of such Person.
"OTHER TAXES" is defined in Section 5.06(b).
"OWNERSHIP INTEREST" of the Company 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 Company 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 Company and the Consolidated
Subsidiaries) on such date. Notwithstanding anything to the contrary set forth
above, if the "Ownership Interest," calculated as set forth above, is 50% or
less, such percentage shall be deemed to equal 0%.
"PARTICIPANT" is defined in Section 11.07(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
"PERCENTAGE" means, for any Lender on any date of determination (a)
prior to the Commitment Termination Date, the percentage obtained by dividing
such Lender's Commitment on such day by the total of the Lenders' Commitments on
such date, and multiplying the quotient so obtained by 100%, and (b) from and
after the Commitment Termination Date, the percentage obtained by dividing (i)
the sum of (A) the aggregate outstanding principal amount of such Lender's Loans
on such day plus (B) the Dollar Equivalent of such Lender's obligation to
purchase participations in LC Outstandings on such day by (ii) the Total
Outstandings on such date, and multiplying the quotient so obtained by 100%.
16
"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);
(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); and
(vi) interests in any money market mutual fund which at the date of
investment in such fund has the highest fund rating by each of Moody's and
S&P which has issued a rating for such fund (which, for S&P, shall mean a
rating of AAAm or AAAmg).
17
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means, with respect to any Person, an "employee benefit plan"
as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) maintained
for employees of such Person or any ERISA Affiliate of such Person that is
subject to Title IV of ERISA and has "unfunded benefit liabilities" as
determined under Section 4001(a)(18) of ERISA.
"PLAN TERMINATION EVENT" means, (i) with respect to any Plan, a
"reportable event" within the meaning of 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 a
"reportable event" for which the provision for the 30-day notice to the PBGC
under such regulations has been waived), or (ii) the withdrawal by the Company
or any of its ERISA Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA resulting in
liability to the Company or any of its ERISA Affiliates under Section 4063 or
4064 of ERISA, or (iii) the filing of a notice of intent to terminate a Plan or
the termination 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.
"PLATFORM" is defined in Section 11.14
"PLEDGE AGREEMENTS" means each of (i) that certain Third Amended and
Restated Pledge and Security Agreement, dated as of December 8, 2003, by and
between the Company and the Collateral Agent, in substantially the form of
Exhibit J attached hereto, and (ii) that certain Pledge and Security Agreement,
dated as of July 12, 2002, by and among Enterprises, the Grantors and the
Collateral Agent in substantially the form of Exhibit K hereto, in each case as
the same may be amended, restated, supplemented or otherwise modified from time
to time.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by Citibank as its base rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"PRO FORMA DIVIDEND AMOUNT" means, from and after any date of any
Consumers Dividend Restriction, the sum of (a) the aggregate amount which
Consumers could have paid to the Company during the four calendar quarters
immediately preceding such date had such Consumers Dividend Restriction been in
effect during such quarters plus (b) cash dividends received by the Company from
any other Subsidiary during such quarters.
"PROJECT FINANCE DEBT" means Debt of any Person that is non-recourse
to such Person (unless such Person is a special-purpose entity) and each
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.
18
"PROJECT FINANCE EQUITY" means, at any date of determination,
consolidated equity of the common, preference and preferred stockholders of the
Company and the Consolidated Subsidiaries relating to any obligor with respect
to Project Finance Debt.
"PROMISSORY NOTE" means any promissory note of the Borrowers payable
to the order of a Lender (and, if requested, its registered assigns) issued
pursuant to Section 3.01(c); and "PROMISSORY NOTES" means any or all of the
foregoing.
"PROSPECTIVE LENDER" is defined in Section 3.04(d).
"RECIPIENT" is defined in Section 11.08.
"REGISTER" is defined in Section 11.07(h).
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUEST FOR ISSUANCE" is defined in Section 4.02(a).
"REQUIRED LENDERS" means, on any date of determination, Lenders
that, collectively, on such date hold (i) more than 50% of the Commitments of
all Lenders or (ii) if the Commitments have been terminated, interests in the
Total Outstandings in excess of 50% of the Total Outstandings. Any determination
of those Lenders constituting the Required Lenders shall be made by the
Administrative Agent and shall be conclusive and binding on all parties absent
manifest error.
"RESTATEMENT" means the restatement of the financial statements of
the Company or its Subsidiaries for any fiscal quarter of 2001, as well as any
adjustment of previously announced quarterly results, but only if made to
reflect the restatement of such quarters.
"RESTATEMENT EVENT" means (i) the Restatement, (ii) any lawsuit or
other action previously or hereafter brought against the Company, any of its
Subsidiaries or any of their Affiliates or any present or former officer or
director of the Company, any of its Subsidiaries or any of their Affiliates
involving or arising out of the Restatement, and any settlement thereof, or
other development with respect thereto, or (iii) the occurrence of any default
or event of default under any indenture, instrument or other agreement or
contract, or the exercise of any remedy in respect thereof, that arises directly
or indirectly as a result of any of the matters described in any of the
foregoing clauses (i) or (ii) or this clause (iii); provided, however, that, for
purposes of the definition of "Material Adverse Change", (a) the foregoing
clause (ii) shall be inapplicable if such lawsuit or other action, settlement
(in an amount in the aggregate together with all other settlements of such
lawsuits or actions) or other development described in such clause (ii) could
reasonably be expected, in each case, to result in liability to such Person in
excess of $10,000,000 and (b) the foregoing clause (iii) shall be inapplicable
if any such event described in such clause (iii) would constitute an Event of
Default under Section 9.01(e).
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company or
Enterprises (other than Consumers and its Subsidiaries) that, on a consolidated
basis with any of its
19
Subsidiaries as of any date of determination, accounts for more than 10% of the
consolidated assets of the Company and its Consolidated Subsidiaries.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor thereto.
"SECURITIZED BONDS" means any nonrecourse bonds or similar
asset-backed securities issued by a special-purpose Subsidiary of Consumers
which are payable solely from specialized charges authorized by the utility
commission of the relevant state in connection with the recovery of regulatory
assets, expenditures pursuant to the Clean Air Act, 42 U.S.C. Section 7401 et
seq., or other qualified costs.
"SOLVENT", when used with respect to any Person, means that at the
time of determination:
(i) the fair market value of its assets is in excess of the total
amount of its liabilities (including, without limitation, net contingent
liabilities); and
(ii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as
they mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of this definition, the amount of contingent liabilities at any
time shall be computed as the amount that, in light of all the facts and
circumstances known to such Person at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SPC" is defined in Section 11.07(f).
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Rate Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"SUBSIDIARY" means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
at the time capital stock (or comparable interest) of any other class or classes
of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
said Person (whether directly or through one or more other Subsidiaries). In the
case
20
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 OBLIGATION" means, for any Person, without duplication, any
financial obligation, contingent or otherwise, of such Person guaranteeing or
otherwise supporting any Debt or other obligation of any other Person in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect (including, but not limited to, letters of credit and
surety bonds in connection therewith), (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.
"TAKORADI PROJECT" means the construction and operation of Takoradi
2, a power plant currently consisting of two 110 megawatt simple-cycle units
built near Aboadze, Ghana by one or more Subsidiaries of the Company and the
government of Ghana's Volta River Authority.
"TAX SHARING AGREEMENT" means the Amended and Restated Agreement for
the Allocation of Income Tax Liabilities and Benefits, dated as of January 1,
1994, by and among the Company, each of the members of the Consolidated Group
(as defined therein), and each of the corporations that become members of the
Consolidated Group.
"TAXES" is defined in Section 5.06(a).
"TOTAL OUTSTANDINGS" means, as of any date of determination, the sum
of (i) the aggregate principal amount of all Loans outstanding as of such date
plus (ii) the Dollar Equivalent of the aggregate LC Outstandings of all Letters
of Credit outstanding as of such date, after giving effect to all Extensions of
Credit to be made on such date and the application of the proceeds thereof.
"TRANSITIONAL LETTER OF CREDIT" is defined in Section 4.02(b).
"TRUSTEE" has the meaning assigned to that term in the Indenture.
"TYPE" has the meaning assigned to such term (i) in the definition
of "Loan" when used in such context and (ii) in the definition of "Borrowing"
when used in such context.
"UNRESTRICTED CASH" means cash and Permitted Investments, in each
case not subject to a Lien (including, without limitation, any Lien permitted
hereunder), setoff (other than ordinary course setoff rights of a depository
bank arising under a bank depository agreement for customary fees, charges and
other account-related expenses due to such depository bank thereunder),
counterclaim, recoupment, defense or other right in favor of any Person.
21
"USA PATRIOT ACT" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as amended.
SECTION 1.02. COMPUTATION OF TIME PERIODS; CONSTRUCTION.
(a) Unless otherwise indicated, each reference in this Agreement to
a specific time of day is a reference to New York City time. In the computation
of periods of time under this Agreement, any period of a specified number of
days or months shall be computed by including the first day or month occurring
during such period and excluding the last such day or month. In the case of a
period of time "from" a specified date "to" or "until" a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
(b) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes", and "including" shall be deemed
to be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (v)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 7.01(e) ("GAAP"), it being
understood that the financial covenants set forth in Sections 8.01(i) and (j)
shall be calculated exclusive of all debt (i) of any Affiliate of the Borrowers
(other than a Subsidiary) that is (a) consolidated on the financial statements
of the Company solely as a result of the effect and application of Financial
Accounting Standards Board Interpretation No. 46 and of Accounting Research
Bulletin No. 51, Consolidated Financial Statements, as modified by Statement of
Financial Accounting Standards No. 94, and (b) non-recourse to any Borrower or
any Guarantor or (ii) that is re-categorized as debt from certain lease
obligations pursuant to Emerging Issues Task Force ("EITF") Issue No. 01-8, any
subsequent EITF Issue or recommendation or any other interpretation, bulletin or
other similar document by the Financial Accounting Standards Board on or related
to such re-categorization. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the Company or
any of its Subsidiaries, or the Company or any of its Subsidiaries shall change
its application of generally accepted accounting principles with respect to any
Off-Balance Sheet
22
Liabilities, including, but not limited to, the application of Financial
Accounting Standards Board Interpretation Nos. 45 and 46 and Financial
Accounting Standards Board Statement No. 150, in each case, with the agreement
of its independent certified public accountants, and such changes result in a
change in the method of calculation or the results of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("ACCOUNTING CHANGES"), the parties hereto agree, at the
Borrowers' request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit neutral manner so as to reflect equitably such
changes with the desired result that the criteria for evaluating the Company's
and its Subsidiaries' financial condition shall be the same after such changes
as if such changes had not been made; provided, however, until such provisions
are amended in a manner reasonably satisfactory to the Administrative Agent and
the Required Lenders, no Accounting Change shall be given effect in such
calculations. In the event such amendment is entered into, all references in
this Agreement to GAAP shall mean generally accepted accounting principles as of
the date of such amendment. Notwithstanding the foregoing, all financial
statements to be delivered by the Company pursuant to Section 8.03 shall be
prepared in accordance with generally accepted accounting principles in effect
at such time.
ARTICLE II
COMMITMENTS, LOANS, FEES, PREPAYMENTS AND OUTSTANDINGS
SECTION 2.01. MAKING LOANS. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make revolving loans in Dollars to the
Borrowers and to participate in the issuance of Letters of Credit (and the LC
Outstandings thereunder) denominated in Dollars or any Alternative Currency
during the period from the Closing Date until the Commitment 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 Borrowers may request Extensions of Credit hereunder, prepay
Loans or reduce or cancel Letters of Credit, and use the resulting increase in
the Available Commitments for further Extensions of Credit in accordance with
the terms hereof.
SECTION 2.02. FEES.
(a) The Borrowers jointly and severally agree to pay to the
Administrative Agent for the account of each Lender a commitment fee equal to
the product of (i) the average daily amount of such Lender's Available
Commitment from the Closing Date, in the case of each Bank, and from the
effective date specified in the Lender Assignment pursuant to which it became a
Lender, in the case of each other Lender, until the Commitment Termination Date
multiplied by (ii) the Commitment Fee Margin. Such fees shall be payable
quarterly in arrears on the last day of each March, June, September and
December, commencing the first such date to occur following the Closing Date,
and on the Commitment Termination Date.
(b) In addition to the fees provided for in subsection (a) above,
the Company shall pay to the Administrative Agent and/or the Arrangers, as the
case may be, the fees set forth in (i) that certain letter agreement, dated June
28, 2004, among the Company, the Administrative Agent, the Arrangers and the
other parties thereto and (ii) that certain letter agreement, dated
23
June 28, 2004, among the Company, the Administrative Agent and the other parties
thereto (collectively, the "FEE LETTERS"), in the amounts and at the times
specified therein.
(c) The Borrowers agree to pay to the Administrative Agent, for the
account of each Lender, a letter of credit fee on the daily aggregate amount of
the LC Outstandings from the Closing Date, in the case of each Bank, and from
the effective date specified in the Lender Assignment pursuant to which it
became a Lender, in the case of each other Lender, until the Commitment
Termination Date at a rate per annum equal to the Applicable Margin with respect
to Eurodollar Rate Loans, payable quarterly in arrears on the last day of each
March, June, September and December, commencing on the first such date to occur
following the Closing Date, and on the Commitment Termination Date.
SECTION 2.03. COMMITMENTS; MANDATORY PREPAYMENTS.
(a) Reduction of Commitments. The Borrowers may (and shall provide
notice thereof to the Administrative Agent not later than 10:00 a.m. (New York
City time) on the date of termination or reduction, and the Administrative Agent
shall promptly distribute copies thereof to the Lenders) terminate in whole or
reduce ratably in part the unused portions of the Commitments; provided that any
such partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(b) Change of Control. Upon the occurrence of a Change of Control
the Commitments shall be reduced to zero, the principal amount outstanding
hereunder, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents shall become and be forthwith due and
payable and all of the LC Obligations shall be cash collateralized in accordance
with the terms of Section 9.02, in each case without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrowers.
(c) Prepayment upon Issuance or Sale of Consumers Stock. The Company
shall make a mandatory prepayment promptly and in any event within 3 Business
Days after the Company's receipt of any Net Proceeds from the issuance, sale,
assignment or other disposition of any capital stock or other equity interest in
Consumers (other than the issuance of preferred securities of Consumers in
respect of which the Net Proceeds received by Consumers for all such securities
do not exceed $200,000,000 in the aggregate and such Net Proceeds shall not be
distributed to the Company), together with (i) accrued interest to the date of
such prepayment on the principal amount prepaid and (ii) in the case of
Eurodollar Rate Loans, any amount payable to the Lenders pursuant to Section
5.04(b), and the Commitments shall be reduced, pro rata, in an aggregate amount
equal to such Net Proceeds. Nothing in this Section 2.03(c) shall be construed
to constitute the Lenders' consent to any transaction referenced in this clause
(c) which is not expressly permitted by Article VIII. The Company shall give the
Administrative Agent prior written notice or telephonic notice promptly
confirmed in writing (each of which the Administrative Agent shall promptly
transmit to each Lender) of when a prepayment required by this Section 2.03(c)
will be made (which date of prepayment shall be no later than the date on which
such prepayment becomes due and payable pursuant to this Section 2.03(c)). All
such prepayments shall be applied first to repay outstanding ABR Loans, then to
repay outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans which
have earlier expiring Interest
24
Periods being repaid prior to those which have later expiring Interest Periods
and then as cash collateral pursuant to the Cash Collateral Agreement, to secure
LC Outstandings.
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 Total Outstandings. References to
the unused portion of the Commitments shall refer to the excess, if any, of the
Commitments hereunder over the Total Outstandings; and references to the unused
portion of any Lender's Commitment shall refer to such Lender's Percentage of
the unused Commitments.
ARTICLE III
LOANS
SECTION 3.01. LOANS.
(a) A Borrower may request a Borrowing (other than a Conversion) by
delivering a notice (a "NOTICE OF BORROWING") to the Administrative Agent no
later than 12:00 noon (New York City time) on the third Business Day prior to
the proposed Borrowing or, in the case of ABR Loans, no later than 11:00 a.m.
(New York City time) on the date of the proposed Borrowing. The Administrative
Agent shall give each Lender prompt notice of each Notice of Borrowing. Each
Notice of Borrowing shall be in substantially the form of Exhibit A and shall
specify the requested (i) date of such Borrowing, (ii) Type of Loans to be made
in connection with such Borrowing, (iii) Interest Period, if any, for such
Loans, (iv) amount of such Borrowing and (v) identity of the applicable
Borrower. Each proposed Borrowing shall conform to the requirements of Sections
3.03 and 3.04.
(b) Each Lender shall, before 1:00 p.m. (New York City time) on the
date of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's offices at ▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, in same day funds, such Lender's
Percentage of such Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article VI,
the Administrative Agent will make such funds available to the applicable
Borrower at the Administrative Agent's aforesaid address. Notwithstanding the
foregoing, unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's Percentage of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Percentage available to the Administrative Agent on the date of such Borrowing
in accordance with the first sentence of this subsection (b), and the
Administrative Agent may, in reliance upon such assumption, make available to
the applicable Borrower on such date a corresponding amount.
(c) The Extensions of Credit made by each Lender shall be evidenced
by one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Extensions of Credit made by the
Lenders to the Borrowers and the interest and payments thereon. Any failure to
so record or any error in doing so shall not, however, limit or otherwise affect
the obligation of
25
the Borrowers hereunder to pay any amount owing with respect to the Obligations.
In the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Any Lender may request that Loans made by it
be evidenced by a Promissory Note. In such event, the Borrowers shall prepare,
execute and deliver to such Lender a Promissory Note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such Promissory Note and interest thereon shall at all times
(including after assignment pursuant to Section 11.07) be represented by one or
more Promissory Notes in such form payable to the order of the payee named
therein, except to the extent that any such Lender subsequently returns any such
Promissory Note for cancellation and requests that such Loans once again be
evidenced as described in the first sentence of this Section 3.01(c).
SECTION 3.02. CONVERSION OF LOANS. Each Borrower may from time to time
Convert any of its Loans (or portions thereof) of any Type to one or more Loans
of the same or any other Type by delivering a notice of such Conversion (a
"NOTICE OF CONVERSION") to the Administrative Agent (x) no later than 12:00 noon
(New York City time) on the third Business Day prior to the date of any proposed
Conversion into a Eurodollar Rate Loan and (y) no later than 11:00 a.m. (New
York City time) on the date of any proposed Conversion into an ABR Loan. The
Administrative Agent shall give each Lender prompt notice of each Notice of
Conversion. Each Notice of Conversion shall be in substantially the form of
Exhibit B and shall specify (i) the requested date of such Conversion, (ii) the
Type of, and Interest Period, if any, applicable to, the Loans (or portions
thereof) proposed to be Converted, (iii) the requested Type of Loans to which
such Loans (or portions thereof) are proposed to be Converted, (iv) the
requested initial Interest Period, if any, to be applicable to the Loans
resulting from such Conversion, (v) the aggregate amount of Loans (or portions
thereof) proposed to be Converted and (vi) the identity of the applicable
Borrower. Each proposed Conversion shall be subject to the provisions of
Sections 3.03 and 3.04.
SECTION 3.03. INTEREST PERIODS. The period between the date of each
Eurodollar Rate Loan and the date of payment in full of such Loan shall be
divided into successive periods of months ("INTEREST PERIODS") for purposes of
computing interest applicable thereto. The initial Interest Period for each such
Loan shall begin on the day such Loan is made, and each subsequent Interest
Period shall begin on the last day of the immediately preceding Interest Period
for such Loan. The duration of each Interest Period shall be 1, 2, 3, or 6
months, as the applicable Borrower may, in accordance with Section 3.01 or 3.02,
select; provided, however, that:
(i) the Borrowers may not select any Interest Period for a
Eurodollar Rate Loan that ends after the Maturity Date;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall occur on the next succeeding Business Day, provided that if
such extension would cause the last day of such Interest Period to occur
in the next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
26
(iii) any Interest Period that commences on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period)
shall end on the last Business Day of the last calendar month of such
Interest Period.
SECTION 3.04. OTHER TERMS RELATING TO THE MAKING AND CONVERSION OF LOANS.
(a) Notwithstanding anything in Section 3.01 or 3.02 to the
contrary:
(i) each Borrowing shall be in an aggregate amount not less than
$5,000,000, 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 Loans to the same
Borrower 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;
(ii) at no time shall the number of Borrowings comprising Eurodollar
Rate Loans outstanding hereunder be greater than ten (10);
(iii) no Eurodollar Rate Loan may be Converted on a date other than
the last day of the Interest Period applicable to such Loan unless the
corresponding amounts, if any, payable to the Lenders pursuant to Section
5.04(b) are paid contemporaneously with such Conversion;
(iv) if any Borrower shall either fail to give a timely Notice of
Conversion pursuant to Section 3.02 in respect of any of its Loans or
fail, in any Notice of Conversion that has been timely given, to select
the duration of any Interest Period for any of its Loans to be Converted
into Eurodollar Rate Loans in accordance with Section 3.03, such Loans
shall, on the last day of the then existing Interest Period therefor,
automatically Convert into, or remain as, as the case may be, ABR Loans;
and
(v) if, on the date of any proposed Conversion, any Event of Default
or Default shall have occurred and be continuing, all Loans then
outstanding shall, on such date, automatically Convert into, or remain as,
as the case may be, ABR Loans.
(b) If any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Applicable Lending
Office to perform its obligations hereunder to make, or to fund or maintain,
Eurodollar Rate Loans hereunder, (i) the obligation of such Lender to make, or
to Convert Loans into, Eurodollar Rate Loans for any Borrowing from such Lender
shall be forthwith suspended until the earlier to occur of the date upon which
(A) such Lender shall cease to be a party hereto and (B) it is no longer
unlawful for such Lender to make, fund or maintain Eurodollar Rate Loans, and
(ii) if the maintenance of Eurodollar Rate Loans then outstanding through the
last day of the Interest Period therefor would cause such Lender to be in
violation of such law, regulation or assertion, the Borrowers shall either
prepay or Convert all Eurodollar Rate Loans from such Lender within five days
after such notice. Promptly upon becoming aware that the
27
circumstances that caused such Lender to deliver such notice no longer exist,
such Lender shall deliver notice thereof to the Administrative Agent (but the
failure to do so shall impose no liability upon such Lender). Promptly upon
receipt of such notice from such Lender (or upon such Lender's assigning all of
its Commitment, Loans, participation and other rights and obligations hereunder
pursuant to Section 11.07), the Administrative Agent shall deliver notice
thereof to the Borrowers and the Lenders and such suspension shall terminate.
(c) If the Required Lenders shall, at least one Business Day before
the date of any requested Borrowing, notify the Administrative Agent that the
Adjusted LIBO Rate for Eurodollar Rate Loans to be made in connection with such
Borrowing will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Loans for such
Borrowing, or that they are unable to acquire funding in a reasonable manner so
as to make available Eurodollar Rate Loans in the amount and for the Interest
Period requested, or if the Administrative Agent shall determine that adequate
and reasonable means do not exist to be able to determine the Adjusted LIBO
Rate, then the right of the Borrowers to select Eurodollar Rate Loans for such
Borrowing and any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrowers and the Lenders that the
circumstances causing such suspension no longer exist, and each Loan to be made
or Converted in connection with such Borrowing shall be an ABR Loan.
(d) If any Lender shall have delivered a notice to the
Administrative Agent described in Section 3.04(b), and if and so long as such
Lender shall not have withdrawn such notice in accordance with said Section
3.04(b), the Borrowers or the Administrative Agent may demand that such Lender
assign in accordance with Section 11.07, to one or more Eligible Banks
designated by the Borrowers or the Administrative Agent (each a "PROSPECTIVE
LENDER"), all (but not less than all) of such Lender's Commitment, Loans,
participation and other rights and obligations hereunder; provided, that any
such demand by the Borrowers during the continuance of an Event of Default or
Default shall be ineffective without the consent of the Required Lenders. If,
within 30 days following any such demand by the Administrative Agent or the
Borrowers, any such Prospective Lender so designated shall fail to consummate
such assignment on terms reasonably satisfactory to such Lender, or the
Borrowers and the Administrative Agent shall have failed to designate any such
Prospective Lender, then such demand by the Borrowers or the Administrative
Agent shall become ineffective, it being understood for purposes of this
provision that such assignment shall be conclusively deemed to be on terms
reasonably satisfactory to such Lender, and such Lender shall be compelled to
consummate such assignment forthwith, if such Prospective Lender (i) shall agree
to such assignment in substantially the form of the Lender Assignment attached
hereto as Exhibit F and (ii) shall tender payment to such Lender in an amount
equal to the full outstanding dollar amount accrued in favor of such Lender
hereunder (as computed in accordance with the records of the Administrative
Agent), including, without limitation, all accrued interest and fees and, to the
extent not paid by the Borrowers, any payments required pursuant to Section
5.04(b).
(e) Each Notice of Borrowing and Notice of Conversion shall be
irrevocable and binding on the applicable Borrower. In the case of any Borrowing
which the related Notice of Borrowing or Notice of Conversion specifies is to be
comprised of Eurodollar Rate Loans, the applicable 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
28
Borrowing or Notice of Conversion for such Borrowing, the applicable conditions
(if any) set forth in this Article III (other than failure pursuant to the
provisions of Section 3.04(b) or (c) hereof) or in Article VI, including any
such loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Loan to be made by such Lender when such Loan, as a
result of such failure, is not made on such date.
SECTION 3.05. REPAYMENT OF LOANS; INTEREST
(a) Principal. Each Borrower shall repay the outstanding principal
amount of its Loans on the Maturity Date (or such earlier date as may be
required pursuant to Section 2.03 or 9.02).
(b) Interest. All Loans shall bear interest on the unpaid principal
amount thereof from the date of such Loan until such principal amount shall be
paid in full, at the Applicable Rate for such Loan (except as otherwise provided
in this subsection (b)), payable as follows:
(i) ABR Loans. If such Loan is an ABR Loan, interest thereon shall
be payable quarterly in arrears on the last day of each March, June,
September and December, on the date of any Conversion of such ABR Loan and
on the date such ABR Loan shall become due and payable or shall otherwise
be paid in full; provided that any amount of principal that is not paid
when due (whether at stated maturity, by acceleration or otherwise) shall
bear interest, from the date on which such amount is due until such amount
is paid in full, payable on demand, at a rate per annum equal at all times
to the Default Rate.
(ii) Eurodollar Rate Loans. If such Loan is a Eurodollar Rate Loan,
interest thereon shall be payable on the last day of such Interest Period
and, if the Interest Period for such Loan has a duration of more than
three months, on that day of each third month during such Interest Period
that corresponds to the first day of such Interest Period (or, if any such
month does not have a corresponding day, then on the last day of such
month); provided that any amount of principal that is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until such amount is
paid in full, payable on demand, at a rate per annum equal at all times to
the Default Rate.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. ISSUING BANKS. Subject to the terms and conditions hereof,
the Company may from time to time identify and arrange for one or more Lenders
reasonably satisfactory to the Administrative Agent to act as Issuing Banks
hereunder. Any such designation by the Company shall be notified to the
Administrative Agent at least three (3) Business Days prior to the first date
upon which the Company proposes that such Issuing Bank issue its first Letter of
Credit. Nothing contained herein shall be deemed to require any Lender
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to agree to act as an Issuing Bank, if it does not so desire. In the event of
any conflict between any Issuing Bank Agreement and this Agreement, the terms of
this Agreement shall control.
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) for the account of the
Company, Enterprises or a Subsidiary of Enterprises (in which case each Borrower
and such Subsidiary shall be co-applicants with respect to such Letter of
Credit) on not less than three (3) Business Days' prior written notice thereof
to the Administrative Agent (which shall promptly distribute copies thereof to
the Lenders) and the relevant Issuing Bank and shall be denominated in Dollars
or in an Alternative Currency. Each such notice (a "REQUEST FOR ISSUANCE") shall
be delivered no later than 12:00 noon (New York City time) on the third Business
Day prior to the proposed date of issuance, extension, modification or amendment
and 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 earlier of the date that is five (5) Business Days (or, in the
case of any commercial Letter of Credit, thirty (30) Business Days) prior to the
Commitment Termination Date and the date which is one year after the requested
date of issuance, provided that any Letter of Credit with a one year tenor may
provide for the renewal thereof for additional periods of up to one year which
shall in no event extend beyond the date which is five (5) Business Days (or, in
the case of any commercial Letter of Credit, thirty (30) Business Days) prior to
the Commitment Termination Date), (ii) the proposed stated amount of such Letter
of Credit (which shall not be less than $100,000 (or the Dollar Equivalent
thereof in an Alternative Currency) unless otherwise agreed by the applicable
Issuing Bank), (iii) the currency in which such Letter of Credit shall be
denominated (which currency shall be Dollars or an Alternate Currency), (iv) the
identity of the applicable Borrower and (v) such other information as shall
demonstrate compliance of such Letter of Credit with the requirements specified
therefor in this Agreement and the relevant Issuing Bank Agreement. Each Request
for Issuance shall be irrevocable unless modified or rescinded by the applicable
Borrower in writing not less than two (2) Business 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 Issuing Bank Agreement, such Issuing Bank shall issue (or extend, amend
or modify) such Letter of Credit and provide notice and a copy thereof to the
Administrative Agent, which shall promptly furnish copies thereof to the
Lenders.
(b) Schedule III contains a schedule of certain letters of credit
issued for the account of the Company prior to the Closing Date. Subject to the
satisfaction of the applicable conditions contained in Article VI, from and
after the Closing Date such letters of credit shall be deemed to be Letters of
Credit issued pursuant to this Article IV for all purposes hereunder (each such
Letter of Credit, a "TRANSITIONAL LETTER OF CREDIT"). For purposes of
clarification, each term or provision applicable to the issuance of a Letter of
Credit (including conditions applicable thereto) shall be deemed to include the
deemed issuance of the Transitional Letters of Credit on the Closing Date.
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(c) Each Lender severally agrees with each Issuing Bank to
participate in the Extension of Credit resulting from the issuance or deemed
issuance (or extension, modification or amendment) of each Letter of Credit
issued or deemed issued (or extended, amended or modified) pursuant to this
Section 4.02 in the manner and the amount provided in Section 4.04(b), and the
issuance or deemed issuance of such Letter of Credit shall be deemed to be a
confirmation by each Issuing Bank and each Lender of such participation in such
amount.
(d) Notwithstanding anything herein to the contrary, no Issuing Bank
shall have any obligation to, and no Issuing Bank shall, issue, extend, amend or
modify any Letter of Credit if on the date of such issuance, extension,
amendment or modification, before or after giving effect thereto, (i) the Total
Outstandings at such time would exceed the Commitments, (ii) the Dollar
Equivalent of the aggregate LC Outstandings with respect to Letters of Credit
denominated in euros would exceed the Euro Sublimit or (iii) the Dollar
Equivalent of the aggregate LC Outstandings with respect to Letters of Credit
denominated in Indian Rupees would exceed the Indian Rupee Sublimit.
SECTION 4.03. ISSUING BANK FEES. Each Borrower shall pay directly to each
Issuing Bank such fees and expenses, if any, specified to be paid to such
Issuing Bank pursuant to each Issuing Bank Agreement to which it is a party, at
the times, and in the manner, specified in such Issuing Bank Agreement.
SECTION 4.04. REIMBURSEMENT TO ISSUING BANKS.
(a) Each Borrower hereby agrees to pay to the Administrative Agent
for the account of each Issuing Bank, on demand made by such Issuing Bank to the
Borrowers and the Administrative Agent, on and after each date on which such
Issuing Bank shall pay any amount under any Letter of Credit issued by such
Issuing Bank, a sum in Dollars equal to the Dollar Equivalent of the amount so
paid (calculated as of the date of such payment by such Issuing Bank) plus
interest on such Dollar Equivalent of such amount from the date so paid by such
Issuing Bank until repayment to such Issuing Bank in full at a fluctuating
interest rate per annum equal at all times to the Applicable Rate for ABR Loans.
(b) If any Issuing Bank shall not have been reimbursed in full by
the Borrowers for any payment made by such Issuing Bank under a Letter of Credit
issued by such Issuing Bank on the date of such payment, such Issuing Bank shall
give the Administrative Agent and each Lender prompt notice thereof (an "LC
PAYMENT NOTICE") no later than 12:00 noon (New York City time) on the Business
Day immediately succeeding the date of such payment by such Issuing Bank. Each
Lender severally agrees to purchase from each Issuing Bank a participation in
the reimbursement obligation of the Borrowers to such Issuing Bank under
subsection (a) above, by paying to the Administrative Agent for the account of
such Issuing Bank an amount in Dollars equal to such Lender's Percentage of the
Dollar Equivalent of such unreimbursed amount paid by such Issuing Bank
(calculated as of the date of such payment by such Issuing Bank), plus interest
on such Dollar Equivalent of such amount at a rate per annum equal to the
Federal Funds Effective Rate from the date of such payment by such Issuing Bank
to the date of payment to such Issuing Bank by such Lender. Each such payment by
a Lender shall be made not later than 3:00 p.m. (New York City time) on the
later to occur of (i) the Business Day immediately following the date of such
payment by such Issuing Bank and
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(ii) the Business Day on which such Lender shall have received an LC Payment
Notice from such Issuing Bank. Each Lender's obligation to make each such
payment to the Administrative Agent for the account of such Issuing Bank shall
be several and shall not be affected by the occurrence or continuance of any
Default or Event of Default or the failure of any other Lender to make any
payment under this Section 4.04. Each Lender further agrees that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(c) The failure of any Lender to make any payment to the
Administrative Agent for the account of an Issuing Bank in accordance with
subsection (b) above, shall not relieve any other Lender of its obligation to
make payment, but no Lender shall be responsible for the failure of any other
Lender. If any Lender shall fail to make any payment to the Administrative Agent
for the account of an Issuing Bank in accordance with subsection (b) above,
within five (5) Business Days after the LC Payment Notice relating thereto,
then, for so long as such failure shall continue, such Issuing Bank shall be
deemed, for purposes of Section 5.05 and Article IX hereof and the Cash
Collateral Agreement, to be a Lender hereunder owed a Loan in an outstanding
principal amount equal to the amount due and payable by such Lender to the
Administrative Agent for the account of such Issuing Bank pursuant to subsection
(b) above.
(d) Each participation purchased by a Lender under subsection (b)
above, shall constitute an ABR Loan in the amount in Dollars paid by such Lender
to the Administrative Agent for the account of the applicable Issuing Bank and
shall be deemed made by such Lender to the Borrowers on the date of the related
payment by the relevant Issuing Bank under the applicable Letter of Credit
issued by such Issuing Bank (irrespective of the Borrowers' noncompliance, if
any, with the conditions precedent for Loans hereunder); and all such payments
by the Lenders in respect of any one such payment by such Issuing Bank shall
constitute a single Borrowing hereunder.
SECTION 4.05. OBLIGATIONS ABSOLUTE. The payment obligations of each Lender
under Section 4.04(b) and of the Borrowers under this Agreement in respect of
any payment under any Letter of Credit and any Loan made under Section 4.04(d)
shall be unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including the
following circumstances:
(i) any lack of validity or enforceability of any Loan Document or
any other agreement or instrument relating thereto or to such Letter of
Credit;
(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 Borrowers may have at any time against any beneficiary, or any
transferee, of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank, or
any other Person, whether in connection with this Agreement, the
transactions contemplated herein or by such Letter of Credit, or any
unrelated transaction;
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(iv) any statement or any other document presented under such Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment in good faith by any Issuing Bank under a Letter of
Credit issued by such Issuing Bank against presentation of a draft or
certificate which does not comply with the terms of such Letter of Credit;
or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
SECTION 4.06. INDEMNIFICATION; LIABILITY OF ISSUING BANKS AND THE LENDERS.
(a) In addition to amounts payable as elsewhere provided in this
Agreement, the Borrowers hereby agree to pay and to protect, indemnify, and save
harmless each Indemnified Person from and against any and all liabilities and
costs that any such Indemnified Person may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance, execution and delivery or
transfer of or payment or failure to pay under any Letter of Credit or (ii) the
failure of any Issuing Bank to honor a demand for payment under any Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority, in
each case other than to the extent solely as a result of the (x) gross
negligence or willful misconduct of such Indemnified Person as determined by a
court of competent jurisdiction by final and nonappealable judgment or (y) any
Issuing Bank's failure to pay under any Letter of Credit after the presentation
to it of a request strictly complying with the terms and conditions of such
Letter of Credit.
(b) The Borrowers assume all risks of the acts and omissions of any
beneficiary or transferee of any Letter of Credit. Neither the Issuing Bank that
has issued such Letter of Credit, nor any other Indemnified Person, shall be
liable or responsible for (i) 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; (ii) 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; (iii) payment by such
Issuing Bank against presentation of documents that do not comply with the terms
of such Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; or (iv) any other
circumstances whatsoever in making or failing to make payment under such Letter
of Credit, except that the Borrowers shall have the right to bring suit against
such Issuing Bank, and such Issuing Bank shall be liable to the applicable
Borrower and any Lender, to the extent of any direct, as opposed to
consequential, damages suffered by the applicable Borrower or such Lender which
the applicable Borrower or such Lender proves were caused by such Issuing Bank's
willful misconduct or gross negligence as determined by a court of competent
jurisdiction by final and nonappealable judgment, including such Issuing Bank's
willful failure to make timely payment under such Letter of Credit following the
presentation to it by the beneficiary thereof of a draft and accompanying
certificate(s) which strictly comply with the terms and conditions of such
Letter of Credit. In furtherance and not in limitation of the foregoing, any
Issuing Bank may accept sight drafts and accompanying certificates presented
under any Letter of Credit issued by such Issuing Bank that appear on their face
to be in order,
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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 applicable Borrower for damages caused by any Issuing
Bank's willful misconduct or gross negligence, and the obligation of the
Borrowers to reimburse the Lenders hereunder shall be absolute and
unconditional, notwithstanding the gross negligence or willful misconduct of any
Issuing Bank.
(c) The Borrowers' other obligations under this Section 4.06 shall
survive the repayment of all amounts owing to the Lenders, the Issuing Banks and
the Agents under the Loan Documents and the termination of the Commitments. If
and to the extent that the obligations of any Borrower under this Section 4.06
are unenforceable for any reason, the Borrowers jointly and severally agree to
make the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 4.07. CURRENCY EQUIVALENTS. The Dollar Equivalent of any amount
denominated in any Alternative Currency shall be determined by the Issuing Bank
in accordance with prevailing exchange rates, as set forth in the applicable
Issuing Bank Agreement, and notice of such amount shall be provided to the
Administrative Agent, in each case on the applicable date. The Dollar Equivalent
of the stated amount of each Letter of Credit outstanding made in an Alternative
Currency and of the amount of each participation purchased by a Lender under
Section 4.04(b) shall be recalculated hereunder on (i) each date that it shall
be necessary to determine the unused portion of each Lender's Commitment, or the
outstanding amount of any or all Loans, LC Outstandings or any Extension of
Credit, or (ii) on any such other date which the Administrative Agent deems such
recalculation necessary or advisable or is otherwise directed to make such
recalculation by the Required Lenders, but in any event at least monthly. The
Administrative Agent agrees to provide notice to the Lenders of the relevant
Dollar Equivalent determined pursuant to each such determination and each such
recalculation as soon as practicable following such determination or
recalculation, as the case may be.
SECTION 4.08. JUDGEMENT CURRENCY. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder or under
the Promissory Notes in any currency (the "ORIGINAL CURRENCY") into another
currency (the "OTHER CURRENCY") the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the Original Currency with the Other Currency at the
Administrative Agent's main office in New York, New York on the Business Day
immediately preceding that on which final judgment is given. The obligation of
any Borrower in respect of any sum due in the Original Currency from it to any
Lender, any Issuing Bank, the Collateral Agent or Administrative Agent hereunder
or under any other Loan Document shall, notwithstanding any judgment in any
Other Currency, be discharged only to the extent that on the Business Day
following receipt by such Lender, Issuing Bank, Collateral Agent or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such Other Currency such Lender, Issuing Bank, Collateral Agent or
Administrative Agent (as the case may be) may in accordance with normal banking
procedures purchase the Original Currency with such Other Currency; if the
amount of the Original Currency so purchased is less than the sum originally due
to such Lender, Issuing Bank, Collateral Agent or Administrative Agent (as the
case may be) in the Original Currency, the applicable Borrower agrees, as a
separate obligation and notwithstanding
34
any such judgment, to indemnify such Lender, Issuing Lender, Collateral Agent or
Administrative Agent (as the case may be) against such loss, and if the amount
of the Original Currency so purchased exceeds the sum originally due in the
Original Currency to any Lender, Issuing Lender, Collateral Agent or
Administrative Agent (as the case may be), such Lender, Issuing Lender,
Collateral Agent or Administrative Agent (as the case may be) agrees to remit to
the applicable Borrower such excess.
SECTION 4.09. CASH COLLATERAL AGREEMENT. Each Borrower agrees that the
Company will, on behalf of itself and Enterprises, maintain pursuant to the Cash
Collateral Agreement a cash collateral account, in the name of the Company but
under the sole dominion and control of the Collateral Agent, for the benefit of
itself, the Administrative Agent, the LC Issuers and the Lenders. Each Borrower
hereby pledges, assigns and grants to the Collateral Agent, for the benefit of
itself, the Administrative Agent, the LC Issuers and the Lenders, a security
interest in all of such Borrower's right, title and interest in and to all funds
which may from time to time be on deposit in such account to secure the prompt
and complete payment and performance of all reimbursement obligations of the
Borrowers now or hereafter existing with respect to LC Obligations.
SECTION 4.10. COURT ORDER. If at any time any Issuing Bank shall have been
served with or otherwise subjected to a court order, injunction, or other
process or decree issued or granted at the instance of any Borrower restraining
or seeking to restrain such Issuing Bank from paying any amount under any Letter
of Credit issued by it (other than pursuant to any action or proceeding based on
Section 5-109 of the Uniform Commercial Code) and either (i) there has been a
drawing under such Letter of Credit which such Issuing Bank would otherwise be
obligated to pay or (ii) the stated expiration date or any reduction of the
stated amount of such Letter of Credit has occurred but the right of the
beneficiary to draw thereunder has been extended in connection with the pendency
of the related court action or proceeding, the Borrowers shall provide cash
collateral pursuant to the Cash Collateral Agreement in an amount equal to one
hundred five percent (105%) of the Dollar Equivalent of the LC Outstandings at
such time in respect of such Letter of Credit.
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 5.01. PAYMENTS AND COMPUTATIONS.
(a) Each Borrower shall make each payment hereunder and under the
other Loan Documents not later than 2:00 p.m. (New York City time) on the day
when due in Dollars to the Administrative Agent at its offices at ▇ ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, in same day funds, except payments to be made
directly to any Issuing Bank as expressly provided herein; any payment received
after 3:00 p.m. (New York City time) shall be deemed to have been received at
the start of business on the next succeeding Business Day, unless the
Administrative Agent shall have received from, or on behalf of, the applicable
Borrower a Federal Reserve reference number with respect to such payment before
4:00 p.m. (New York City time). The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal, interest, fees or other amounts payable to the Lenders, to the
respective Lenders to which the same are payable, for the account of their
respective Applicable
35
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 a
Borrower required to be made to any Lender pursuant to the preceding sentence
shall not be made in full by the Administrative Agent on the date such payment
was received by the Administrative Agent, the Administrative Agent shall pay to
such Lender, upon demand, interest on the unpaid amount of such distribution, at
a rate per annum equal to the Federal Funds Effective Rate, from the date of
such payment by the applicable Borrower to the Administrative Agent to the date
of payment in full by the Administrative Agent to such Lender of such unpaid
amount. Upon the Administrative Agent's acceptance of a Lender Assignment and
recording of the information contained therein in the Register pursuant to
Section 11.07, from and after the effective date specified in such Lender
Assignment, the Administrative Agent shall make all payments hereunder and under
any Promissory Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Lender Assignment shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) Each Borrower hereby authorizes the Administrative Agent, each
Lender and each Issuing Bank, if and to the extent payment owed to the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, is
not made when due hereunder (or, in the case of a Lender, under any Promissory
Note held by such Lender), to charge from time to time against any or all of
such Borrower's accounts with the Administrative Agent, such Lender or such
Issuing Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate
(when the Alternate Base Rate is based on the Prime Rate) shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be. All other computations of interest and fees hereunder (including
computations of interest based on the Adjusted LIBO Rate, the CD Rate and the
Federal Funds Effective Rate) shall be made by the Administrative Agent on the
basis of a year of 360 days. In each such case, such computation shall be made
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are payable. Each
such determination by the Administrative Agent or a Lender shall be conclusive
and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under any other Loan Document
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest and fees
hereunder; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Loans to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day and such reduction of time shall in such case be included in the
computation of payment of interest hereunder.
(e) Unless the Administrative Agent shall have received notice from
the applicable Borrower prior to the date on which any payment is due to the
Lenders hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date, and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
36
extent such Borrower shall not have so made such payment in full to the
Administrative Agent, such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender, together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Effective Rate.
(f) Any amount payable by any Borrower hereunder or under any of the
Promissory Notes that is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall (to the fullest extent permitted by law) bear
interest, from the date when due until paid in full, at a rate per annum equal
at all times to the Default Rate, payable on demand.
(g) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied, subject to Section 5.07,
(i) first, toward payment of interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward payment of principal then due
hereunder, ratably among the parties entitled thereto.
SECTION 5.02. INTEREST RATE DETERMINATION. The Administrative Agent shall
give prompt notice to the Borrowers and the Lenders of the applicable interest
rate determined by the Administrative Agent for purposes of Section 3.05(b)(i)
or (ii).
SECTION 5.03. PREPAYMENTS. The Borrowers shall have no right to prepay any
principal amount of any Loans other than as follows:
(a) A Borrower may (and shall provide notice thereof to the
Administrative Agent not later than 10:00 a.m. (New York City time) on the date
of prepayment, and the Administrative Agent shall promptly distribute copies
thereof to the Lenders), and if such notice is given, such Borrower shall,
prepay the outstanding principal amounts of its Loans made as part of the same
Borrowing, in whole or ratably in part; provided, however, that each partial
prepayment shall be in an aggregate principal amount of not less than $5,000,000
or an integral multiple of $1,000,000 in excess thereof (or such lesser amount
as shall be equal to the total amount of Loans outstanding to such Borrower).
(b) On any date on which (i) any termination or optional or
mandatory reduction of the Commitments shall occur pursuant to Section 2.03(a)
or (b), (ii) the Total Outstandings shall exceed the aggregate amount of the
Commitments, (iii) the aggregate Dollar Equivalent of all LC Outstandings
denominated in euros shall exceed the Euro Sublimit, or (iv) all LC Outstandings
denominated in Indian Rupees shall exceed the Indian Rupee Sublimit, the
Borrowers shall first, pay or prepay the principal outstanding on the Loans
and/or all LC Outstandings that represent amounts that have been drawn under
Letters of Credit but have neither been reimbursed by the Borrowers nor
converted into ABR Loans, second, if all of the Loans and all of such
unreimbursed amounts constituting LC Outstanding shall have been paid in full,
provide cash collateral pursuant to the Cash Collateral Agreement, to secure
remaining LC Outstandings, and third, cause an amount of Letters of Credit to be
cancelled (if necessary after taking into account the payments and provision of
cash collateral in the immediately preceding clauses), in each case, in an
aggregate amount equal to the excess, as applicable, of (A)(i) the
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Total Outstandings over (ii) the aggregate amount of the sum of the Commitments
(following such termination or reduction, if any) and any cash collateral on
deposit in the Cash Collateral Account or (B)(i)(x) the aggregate Dollar
Equivalent of all LC Outstandings denominated in euro, over (y) the sum of the
Euro Sublimit and, without duplication, such cash collateral or (ii)(x) the
aggregate Dollar Equivalent of all LC Outstandings denominated in Indian Rupees,
over (y) the sum of the Indian Rupee Sublimit and, without duplication, such
cash collateral. Any payments and prepayments required by clause "first" of this
subsection (b) shall be applied to outstanding ABR Loans up to the full amount
thereof before they are applied to outstanding Eurodollar Rate Loans.
(c) Any prepayment pursuant to this Section 4.03 shall be
accompanied by (i) accrued interest to the date of such prepayment on the
principal amount repaid and (ii) in the case of prepayments of Eurodollar Rate
Loans, any amount payable to the Lenders pursuant to Section 5.04(b). In the
event that the Borrowers request the release of any cash collateral pursuant to
the terms of the Cash Collateral Agreement and on the date of such request or at
any time prior to the time of such release, there has become, or there becomes,
due and payable any prepayment of any Loans under this Agreement, the Borrowers
hereby direct the Administrative Agent to apply the proceeds of such release of
cash collateral to such prepayment of such Loans and agrees that any such
request is a confirmation of such direction.
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
Closing Date, 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 Closing Date, there shall be reasonably incurred
any increase in (A) the cost to any Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans, or of participating in the
issuance, maintenance or funding of any Letter of Credit, or (B) the cost to any
Issuing Bank of issuing or maintaining any Letter of Credit, then the Borrowers
shall from time to time, upon demand by such Lender or Issuing Bank, as the case
may be (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender or Issuing Bank, as the case
may be, additional amounts sufficient to compensate such Lender or Issuing Bank,
as the case may be, for such increased cost. A certificate as to the amount of
such increased cost and giving a reasonable explanation thereof, submitted to
the Borrowers and the Administrative Agent by such Lender or such Issuing Bank,
as the case may be, shall constitute such demand and shall be conclusive and
binding for all purposes, absent manifest error.
(b) Breakage. If, due to any prepayment pursuant to Section 2.03, an
acceleration of maturity of the Loans pursuant to Section 9.02, or any other
reason, any Lender receives payments of principal of any Eurodollar Rate Loan
other than on the last day of the Interest Period relating to such Loan or if
any Borrower shall Convert any Eurodollar Rate Loans on any day other than the
last day of the Interest Period therefor, or if any Borrower shall fail to
prepay a Eurodollar Rate Loan on the date specified in a notice of prepayment,
the Borrowers shall, promptly after demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for
additional losses, costs, or expenses (including anticipated lost
38
profits) that such Lender may reasonably incur as a result of such payment,
Conversion or failure to prepay, including any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain such Loan. For purposes of this subsection (b),
a certificate setting forth the amount of such additional losses, costs, or
expenses and giving a reasonable explanation thereof, submitted to the Borrowers
and the Administrative Agent by such Lender, shall constitute such demand and
shall be conclusive and binding for all purposes, absent manifest error.
(c) Capital. If any Lender or Issuing Bank determines that (i)
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be
maintained by such Lender or Issuing Bank, whether directly, or indirectly as a
result of commitments of any Person controlling such Lender or Issuing Bank (but
without duplication), and (ii) the amount of such capital is increased by or
based upon (A) the existence of such Lender's or such Issuing Bank's commitment
to lend or issue or participate in any Letter of Credit hereunder, (B) the
participation in or issuance or maintenance of any Letter of Credit or Loan or
(C) other similar such commitments, then, upon demand by such Lender or Issuing
Bank, the Borrowers jointly and severally agree immediately to pay to the
Administrative Agent for the account of such Lender or Issuing Bank from time to
time as specified by such Lender or Issuing Bank additional amounts sufficient
to compensate such Lender or Issuing Bank in the light of such circumstances, to
the extent that such Lender or Issuing Bank reasonably determines such increase
in capital to be allocable to the transactions contemplated hereby. A
certificate as to such amounts and giving a reasonable explanation thereof (to
the extent permitted by law), submitted to the Borrowers and the Administrative
Agent by such Lender or Issuing Bank, shall be conclusive and binding for all
purposes, absent manifest error.
(d) Notices. Each Lender and Issuing Bank hereby agrees to use its
best efforts to notify the Borrowers of the occurrence of any event referred to
in subsection (a), (b) or (c) of this Section 5.04 promptly after becoming aware
of the occurrence thereof. The failure of any Lender or any Issuing Bank to
provide such notice or to make demand for payment under said subsection shall
not constitute a waiver of such Lender's or such Issuing Bank's (as the case may
be) rights hereunder; provided that, notwithstanding any provision to the
contrary contained in this Section 5.04, the Borrowers shall not be required to
reimburse any Lender or any Issuing Bank for any amounts or costs incurred under
subsection (a), (b) or (c) of this Section 5.04 more than 90 days prior to the
date that such Lender or such Issuing Bank's (as the case may be) notifies the
Borrowers 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 Borrowers which entitles such Lender or such Issuing
Bank (as the case may be) to such compensation. If any Lender or any Issuing
Bank shall subsequently determine that any amount demanded and collected under
this Section 5.04 was done so in error, such Lender or such Issuing Bank (as the
case may be) will promptly return such amount to the Borrowers.
(e) Survival of Obligations. Subject to subsection (d) above, the
Borrowers' obligations under this Section 5.04 shall survive the repayment of
all other amounts owing to the Lenders, the Agents and the Issuing Banks under
the Loan Documents and the termination of the Commitments. If and to the extent
that the obligations of the Borrowers under this Section 5.04
39
are unenforceable for any reason, the Borrowers agree to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 5.05. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans owing to it (other than pursuant
to Section 5.04 or Section 5.06) in excess of its ratable share of payments
obtained by all the Lenders on account of the Loans of such Lenders, such Lender
shall forthwith purchase from the other Lenders such participation in the Loans
owing to them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrowers agree 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 Borrowers in the amount of such participation.
Notwithstanding the foregoing, if any Lender shall obtain any such excess
payment involuntarily, such Lender may, in lieu of purchasing participations
from the other Lenders in accordance with this Section 5.05, on the date of
receipt of such excess payment, return such excess payment to the Administrative
Agent for distribution in accordance with Section 5.01(a).
SECTION 5.06. TAXES.
(a) All payments by the Borrowers hereunder and under the other Loan
Documents shall be made in accordance with Section 5.01, free and clear of and
without deduction for all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender, each Issuing Bank and each Agent, taxes imposed on its
overall net income, and franchise taxes imposed on it by the jurisdiction under
the laws of which such Lender, Issuing Bank or Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender,
taxes imposed on its overall net income, and franchise taxes imposed on it by
the jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "TAXES").
If any Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any other Loan Document to any Lender,
Issuing Bank or Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.06) such Lender,
Issuing Bank or Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) such Borrower
shall make such deductions and (iii) such Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
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(b) In addition, each Borrower jointly and severally 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) Each Borrower jointly and severally agrees to indemnify each
Lender, Issuing Bank and Agent for the full amount of Taxes and Other Taxes
(including any Taxes and any Other Taxes imposed by any jurisdiction on amounts
payable under this Section 5.06) paid by such Lender, Issuing Bank or Agent (as
the case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within thirty (30) days from the date such Lender, Issuing Bank or Agent (as the
case may be) makes written demand therefor; provided, that such Lender, Issuing
Bank or Agent (as the case may be) shall not be entitled to demand payment under
this Section 5.06 for an amount if such demand is not made within one year
following the date upon which such Lender, Issuing Bank or Agent (as the case
may be) shall have been required to pay such amount.
(d) Within thirty (30) days after the date of any payment of Taxes,
the applicable Borrower will furnish to the Administrative Agent, at its address
referred to in Section 11.02, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Bank represents and warrants that either (i) it is
organized under the laws of a jurisdiction within the United States or (ii) it
has delivered to the Borrowers or the Administrative Agent duly completed copies
of such form or forms prescribed by the United States Internal Revenue Service
indicating that such Bank is entitled to receive payments without deduction or
withholding of any United States federal income taxes, as permitted by the
Internal Revenue Code of 1986, as amended. Each other Lender agrees that, on or
prior to the date upon which it shall become a party hereto, and upon the
reasonable request from time to time of a Borrower or the Administrative Agent,
such Lender will deliver to the Borrowers and the Administrative Agent (to the
extent that it is not prohibited by law from doing so) either (A) a statement
that it is organized under the laws of a jurisdiction within the United States
or (B) duly completed copies of such form or forms as may from time to time be
prescribed by the United States Internal Revenue Service, indicating that such
Lender is entitled to receive payments without deduction or withholding of any
United States federal income taxes, as permitted by the Internal Revenue Code of
1986, as amended. Each Bank that has delivered, and each other Lender that
hereafter delivers, to the Borrowers and the Administrative Agent the form or
forms referred to in the two preceding sentences further undertakes to deliver
to the Borrowers and the Administrative Agent, to the extent that it is not
prohibited by law from doing so, further copies of such form or forms, or
successor applicable form or forms, as the case may be, as and when any previous
form filed by it hereunder shall expire or shall become incomplete or inaccurate
in any respect. Each Lender represents and warrants that each such form supplied
by it to the Administrative Agent and the Borrowers 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.
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SECTION 5.07. APPORTIONMENT OF PAYMENTS.
(a) Subject to the provisions of Section 2.03, Section 5.03(b) and
Section 5.07(b), all payments of principal and interest in respect of
outstanding Loans, all payments in respect of unpaid reimbursement obligations
under Section 4.04(a), all payments of fees and all other payments in respect of
any other Obligations hereunder, shall be allocated among such of the Lenders
and the Issuing Banks as are entitled thereto, ratably or otherwise as expressly
provided herein. Except as provided in Section 5.07(b) with respect to payments
and proceeds of Collateral received after the occurrence of an Event of Default,
all such payments and any other amounts received by the Administrative Agent
from or for the benefit of any Borrower shall be applied:
(i) first, to pay principal of and interest on any portion of the
Loans which the Administrative Agent may have advanced on behalf of any
Lender other than Citibank for which the Administrative Agent has not then
been reimbursed by such Lender or any Borrower;
(ii) second, to pay interest on and then the principal of the Loans
then due and payable (in the order described hereinbelow);
(iii) third to pay principal of and interest on all unpaid
reimbursement obligations under Section 4.04(a);
(iv) fourth, to the Cash Collateral Account, to secure outstanding
Letters of Credit to the extent required pursuant to this Agreement;
(v) fifth, to pay all other Obligations of any Loan Party under any
Loan Document then due and payable, ratably; and
(vi) sixth, as the Borrowers so designate.
All such principal and interest payments in respect of the Loans shall be
applied first to repay outstanding ABR Loans and then to repay outstanding
Eurodollar Rate Loans with those Eurodollar Rate Loans which have earlier
expiring Interest Periods being repaid prior to those which have later expiring
Interest Periods.
(b) During the continuance of an Event of Default and after
declaration thereof by written notice from the Administrative Agent to the
Borrowers, the Administrative Agent shall apply all payments in respect of
Loans, unpaid reimbursement obligations under Section 4.04(a) or any other
Obligations, and the Collateral Agent shall deliver all proceeds of Collateral
to the Administrative Agent for application, in the following order:
(i) first, to pay principal of and interest on any portion of the
Loans which the Administrative Agent may have advanced on behalf of any
Lender other than Citibank for which the Administrative Agent has not then
been reimbursed by such Lender or the Borrowers;
(ii) second, to pay any fees, expense reimbursements or indemnities
then due to the Agents under any of the Loan Documents;
42
(iii) third, to the ratable payment of any fees, expense
reimbursements or indemnities then due to the Lenders and the Issuing
Banks under any of the Loan Documents;
(iv) fourth, to the ratable payment of interest due in respect of
the Loans, in accordance with the Lenders' respective Percentages;
(v) fifth, to the ratable payment or prepayment of principal
outstanding on all Loans, in accordance with the Lenders' respective
Percentages;
(vi) sixth, to pay principal of and interest on all unpaid
reimbursement obligations under Section 4.04(a);
(vii) seventh, to the Cash Collateral Account to secure LC
Obligations in respect of outstanding Letters of Credit, in an amount
equal to the Cash Collateral Required Amount; and
(viii) eighth, to the ratable payment of all other Obligations of
the Loan Parties then outstanding under the Loan Documents.
The order of priority set forth in this Section 5.07(b) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agents and the Lenders as among themselves.
SECTION 5.08. Proceeds of Collateral. During the continuance of an Event
of Default and after declaration thereof by written notice from the
Administrative Agent to the Borrowers, the Borrowers shall cause all proceeds of
Collateral (other than Collateral in respect of which the Collateral Agent
and/or the Administrative Agent shall have a prior security interest on behalf
of the Lenders hereunder) to be deposited pursuant to arrangements for the
collection of such amounts established by the Borrowers and the Administrative
Agent (or the Collateral Agent, as applicable) for application pursuant to
Section 5.07. All collections of proceeds of Collateral which are received
directly by the Company or any Subsidiary of the Company shall be deemed to have
been received by the Company or such Subsidiary of the Company as the Collateral
Agent's trustee and, during the continuance of an Event of Default and after
declaration thereof by written notice from the Administrative Agent to the
Borrowers, upon the Company's or such Subsidiary's receipt thereof, the
Borrowers shall immediately transfer or cause to be transferred all such amounts
to the Administrative Agent for application pursuant to Section 5.07. All other
proceeds of Collateral received by the Collateral Agent and/or the
Administrative Agent, whether through direct payment or otherwise, will be
deemed received by such Agent, will be the sole property of such Agent, and will
be held by such Agent, for the benefit of the Lenders for application pursuant
to Section 5.07.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.
The effectiveness of this Agreement is subject to the fulfillment of the
following conditions precedent:
43
(a) The Administrative Agent shall have received, on or before the
Closing Date, the following, in form and substance satisfactory to each Lender
(except where otherwise specified below) and (except for any Promissory Notes)
in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the Board of Directors,
or of the Executive Committee of the Board of Directors (or persons
performing similar functions), of each Borrower, each Guarantor and each
other Grantor (each a "LOAN PARTY") authorizing each such Loan Party to
enter into each Loan Document to which it is, or is to be, a party, and of
all documents evidencing other necessary corporate or other action and
Governmental Approvals, if any, with respect to each such Loan Document.
(ii) A certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the names, true signatures and incumbency of
(A) the officers of such Loan Party authorized to sign the 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 such
Loan Party authorized to sign notices to be provided under the Loan
Documents to which it is, or is to be, a party, which representatives
shall be acceptable to the Administrative Agent.
(iii) Copies of the Certificate of Incorporation and by-laws (or
comparable constitutive documents) of each Loan Party, together with all
amendments thereto, certified by the Secretary or an Assistant Secretary
of each such Loan Party.
(iv) Good Standing Certificates (or other similar certificate) for
each of the Loan Parties, issued by the Secretary of State of the
jurisdiction of organization of each such Loan Party as of a recent date.
(v) The Guaranty, duly executed by each Guarantor.
(vi) The Pledge Agreements, duly executed by the Borrowers and each
Grantor, as applicable.
(vii) The Cash Collateral Agreement, duly executed by each Borrower.
(viii) A certified copy of Schedule I hereto, in form and substance
reasonably satisfactory to the Administrative Agent setting forth:
(A) all Project Finance Debt of the Company and the
Consolidated Subsidiaries, as of June 30, 2004; and
(B) debt (as such term is construed in accordance with GAAP)
of the Loan Parties as of June 30, 2004.
(ix) A certificate, executed by a duly authorized officer of the
Company, certifying that as of June 30, 2004 the Company was in compliance
with the requirements of Section 4.4 of the AIG Pledge Agreement (which
certificate shall set forth in reasonable detail the calculations upon
which the Company determined such compliance).
44
(x) Favorable opinions of: (A) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., Deputy
General Counsel of the Company and counsel for the other Loan Parties, in
substantially the form of Exhibit C and as to such other matters as the
Required Lenders, through the Administrative Agent, may reasonably request
and (B) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the
Loan Parties, in substantially the form of Exhibit D and as to such other
matters as the Required Lenders, through the Administrative Agent, may
reasonably request.
(xi) Duly executed copies of a Reaffirmation in the form of
Attachment A attached hereto from each of the Company's Subsidiaries
identified thereon.
(b) The following statements shall be true and the Administrative
Agent shall have received a certificate of a duly authorized officer of each
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 with respect to such Borrower on and
as of the Closing Date as though made on and as of such date,
(ii) no event has occurred and is continuing that constitutes a
Default or an Event of Default, and
(iii) all Governmental Approvals necessary in connection with the
Loan Documents and the transactions contemplated thereby and the
continuing operations of such Borrower and its Subsidiaries have been
obtained and are in full force and effect, and all third party approvals
necessary or advisable in connection with the Loan Documents and the
transactions contemplated thereby and the continuing operations of such
Borrower and its Subsidiaries have been obtained and are in full force and
effect, other than filings necessary to create or perfect security
interests in the Collateral or as may be required under applicable energy,
antitrust or securities laws in connection with the exercise of remedies
with respect to certain Collateral.
(c) The Administrative Agent shall have received evidence
satisfactory to it that all financing statements relating to the Collateral have
been completed for filing or recording and/or filed, and all certificates
representing capital stock or other ownership interests included in the
Collateral (including, without limitation, certificates, if any, representing
the capital stock or other ownership interests identified on Schedule II hereto)
have been delivered to the Collateral Agent (with duly executed stock powers).
(d) The Borrowers shall have paid, on or before the Closing Date,
all fees under or referenced in Section 2.02(b) and all expenses referenced in
Section 11.04(a), in each case to the extent due and payable as of the Closing
Date.
(e) The Administrative Agent shall have received each of the
following on or before the Closing Date, in each case in form and substance
satisfactory to it with sufficient copies for each Lender:
45
(i) A certificate, executed by the chief executive officer and the
chief financial officer of the Company and Consumers, as applicable, in
favor of the Agents and the Lenders with respect to the financial
statements described in Sections 7.01(e)(i), (ii), (iii) and (iv)
certifying that such financial statements have been prepared in accordance
with GAAP and are true and correct as of the date of such certificate;
(ii) Copies of the financial statements described in Sections
7.01(e)(i), (ii), (ii) and (iv); and
(iii) Copies of the Company's Annual Report on Form 10-K/A for the
fiscal year ended December 31, 2003.
(f) The Administrative Agent shall have received evidence
satisfactory to it that on the Closing Date (i) all "Loans" under (and as
defined in) the Existing Credit Agreement and all other amounts due under the
Existing Credit Agreement have been paid in full by the Company and (ii) that
certain Credit Agreement, dated as of May 22, 2003, among the Company, the
financial institutions party thereto, Union Bank of California, N.A., as
documentation agent, and Bank One, NA, as administrative agent, has been or
concurrently with the Closing Date is being terminated and all Liens securing
obligations under such agreement have been or concurrently with the Closing Date
are being released.
SECTION 6.02. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The
obligation of each Lender or Issuing Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit (including the
deemed issuance of the Transitional Letters of Credit), but excluding the
Conversion of a Eurodollar Rate Loan into an ABR Loan) 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 applicable Borrower shall
(to the extent that such correction has been previously consented to by the
Lenders and the Issuing Banks) constitute a representation and warranty by such
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)(v) and (f)
thereof) are correct on and as of the date of such Extension of Credit,
before and after giving effect to such Extension of Credit and to the
application of the proceeds thereof, as though made on and as of such
date; and
(ii) no Default or Event of Default has occurred and is continuing,
or would result from such Extension of Credit or the application of the
proceeds thereof.
(b) The Administrative Agent shall have received such other
approvals, opinions and documents as any Lender or Issuing Bank, through the
Administrative Agent, may reasonably request as to the legality, validity,
binding effect or enforceability of the Loan
46
Documents or the business, assets, property, financial condition, results of
operations or prospects of the Company and its Consolidated Subsidiaries.
SECTION 6.03. CONDITIONS PRECEDENT TO CERTAIN EXTENSIONS OF CREDIT. The
obligation of each Lender or Issuing Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit (including the
deemed issuance of the Transitional Letters 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 applicable Borrower shall
(to the extent that such correction has been previously consented to by the
Lenders) constitute a representation and warranty by such Borrower that, on the
date of such Extension of Credit, such statements are true):
(i) the representations and warranties contained in subsections
(e)(v) and (f) of Section 7.01 of this Agreement are correct on and as of
the date of such Extension of Credit, before and after giving effect to
such Extension of Credit and to the application of the proceeds thereof,
as though made on and as of such date; and
(ii) no Default or Event of Default has occurred and is continuing,
or would result from such Extension of Credit or the application of the
proceeds thereof;
(b) the Administrative Agent shall have received such other
approvals, opinions and documents as any Lender or Issuing Bank, through the
Administrative Agent, may reasonably request.
SECTION 6.04. RELIANCE ON CERTIFICATES. The Lenders, the Issuing Banks and
each Agent shall be entitled to rely conclusively upon the certificates
delivered from time to time by officers of the Loan Parties as to the names,
incumbency, authority and signatures of the respective persons named therein
until such time as the Administrative Agent may receive a replacement
certificate, in form acceptable to the Administrative Agent, from an officer of
such Person identified to the Administrative Agent as having authority to
deliver such certificate, setting forth the names and true signatures of the
officers and other representatives of such Person thereafter authorized to act
on behalf of such Person.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. Each
Borrower represents and warrants as follows:
(a) Existence and Standing. Each of the Borrowers, Consumers and
each of the Restricted Subsidiaries is duly organized, validly existing and in
good standing under the
47
laws of the state of its organization 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) Authorization; No Conflicts. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is or will be a
party (i) are within such Loan Party's powers, (ii) have been duly authorized by
all necessary corporate or other organizational action or proceedings and (iii)
do not and will not (A) require any consent or approval of the stockholders (or
other applicable holder of equity) of such Loan Party (other than such consents
and approvals which have been obtained and are in full force and effect), (B)
violate any provision of the charter or by-laws (or other comparable
constitutive documents) of such Loan Party or of law, (C) violate any legal
restriction binding on or affecting such Loan Party, (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 such Loan Party 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 respective properties.
(c) Government Consent. No Governmental Approval is required, other
than filings necessary to create or perfect security interests in the Collateral
or as may be required under applicable energy, antitrust or securities laws in
connection with the exercise of remedies with respect to certain Collateral.
(d) Security Interests; Enforceability. Each Loan Document (i) where
applicable, creates valid and, upon filing of the financing statements delivered
on or prior to the Closing Date and described in Section 6.01(c), perfected
security interests in the Collateral covered thereby securing the payment of all
of the Loans and reimbursement obligations purported to be secured thereby,
which security interests shall be first priority perfected security interests,
subject to Liens permitted under Section 8.02(a), and (ii) is the legal, valid
and binding obligation of each Loan Party thereto enforceable against such Loan
Party in accordance with its 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) Financial Statements; Material Adverse Change. (i) The
consolidated balance sheets of the Company and its Consolidated Subsidiaries as
at December 31, 2002 and December 31, 2003, and the related consolidated
statements of income, retained earnings and cash flows of the Company and its
Consolidated Subsidiaries for the fiscal years then ended, included in the
Company's Annual Report on Form 10-K/A for the fiscal year ended December 31,
2003, copies of each of which have been furnished to the Administrative Agent
for distribution to each Lender, fairly present the financial condition of the
Company and its Consolidated Subsidiaries as at such dates and the results of
operations of the Company and its Consolidated Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted accounting
principles consistently applied; (ii) the consolidated balance sheets of
Consumers and its consolidated Subsidiaries as at December 31, 2002 and December
31, 2003, and the related consolidated statements of income, retained earnings
and cash flows of Consumers and its consolidated Subsidiaries for the fiscal
years then ended, included in the
48
Company's Annual Report on Form 10-K/A for the fiscal year ended December 31,
2003, copies of each of which have been furnished to the Administrative Agent
for distribution to each Lender, fairly present the financial condition of
Consumers and its consolidated Subsidiaries as at such dates and the results of
operations of Consumers and its consolidated Subsidiaries for the periods ended
on such dates, all in accordance with generally accepted accounting principles
consistently applied; (iii) the consolidated balance sheets of the Company and
its Consolidated Subsidiaries as at March 31, 2004 and the related consolidated
statements of income, retained earnings and cash flows of the Company and its
Consolidated Subsidiaries for the fiscal quarter ending on such date, copies of
each of which have been furnished to the Administrative Agent for distribution
to each Lender, fairly present (subject to year-end audit adjustments) the
financial condition of the Company and its Consolidated Subsidiaries as at such
date and the results of the Company and its Consolidated Subsidiaries for such
period, all in accordance with generally accepted accounting principles
consistently applied; (iv) the consolidated balance sheets of Consumers and its
Consolidated Subsidiaries as at March 31, 2004 and the related consolidated
statements of income, retained earnings and cash flows of Consumers and its
Consolidated Subsidiaries for the fiscal quarter ending on such date, copies of
each of which have been furnished to the Administrative Agent for distribution
to each Lender, fairly present (subject to year-end audit adjustments) the
financial condition of Consumers and its Consolidated Subsidiaries as at such
date and the results of Consumers and its Consolidated Subsidiaries for such
period, all in accordance with generally accepted accounting principles
consistently applied; (v) since December 31, 2003, except as disclosed in the
Company's Annual Report on Form 10-K/A for the fiscal year ended December 31,
2003 and the Company's Quarterly Report on Form 10-Q for the quarter ending
March 31, 2004 and Reports on Form 8-K filed with the Securities and Exchange
Commission since December 31, 2003 but prior to the Closing Date, there has been
no Material Adverse Change; and (vi) except as a result of any Restatement Event
(other than the Restatement itself), no Loan Party has any material liabilities
or obligations except as reflected in the foregoing financial statements and in
Schedule I, 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 Closing Date.
(f) Litigation. Except (i) as disclosed in the Company's Annual
Report on Form 10-K/A for the fiscal year ended December 31, 2003 and the
Company's Quarterly Report on Form 10-Q for the quarter ending March 31, 2004
and Reports on Form 8-K filed with the Securities and Exchange Commission since
December 31, 2003 but prior to the Closing Date, (ii) such other similar
actions, suits and proceedings predicated on the occurrence of the same events
giving rise to any actions, suits and proceedings described in the Reports filed
with the Securities and Exchange Commission set forth in clause (i) above (all
such matters in clauses (i) and (ii) being the "DISCLOSED MATTERS") and (iii)
any Restatement Event, there are no pending or threatened actions, suits,
investigations or proceedings against or, to the knowledge of such Borrower,
affecting the Company or any of its Subsidiaries or the properties of the
Company 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 Company and its Subsidiaries, considered as a whole, or affect
the legality, validity or enforceability of this Agreement or any other Loan
Document. There have been no material adverse developments with respect to the
Disclosed Matters that have had or could reasonably be expected to result in a
Material Adverse Change.
49
(g) Insurance. All insurance required by Section 8.01(b) is in full
force and effect.
(h) ERISA. No Plan Termination Event has occurred nor is reasonably
expected to occur with respect to any Plan of the Company or any of its ERISA
Affiliates which would result in a material liability to the Company, except as
disclosed and consented to by the Required Lenders in writing from time to time.
Except as disclosed in the Company's Annual Report on Form 10-K/A for the period
ended December 31, 2003, since the date of the most recent Schedule B (Actuarial
Information) to the annual report of the Company (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
Company. Neither the Company nor any of its ERISA Affiliates has incurred nor
reasonably expects to incur any material withdrawal liability under ERISA to any
Multiemployer Plan, except as disclosed and consented to by the Required Lenders
in writing from time to time.
(i) Casualty. 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 any
Borrower, Consumers or any Restricted Subsidiary has occurred that could
reasonably be expected to have a material adverse effect on the business,
assets, property, financial condition, results of operations or prospects of (A)
the Company and its Subsidiaries, considered as a whole, or (B) Consumers and
its Subsidiaries, considered as a whole.
(j) Taxes. The Company and its Subsidiaries have filed all tax
returns (Federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties, or, to the extent the
Company or any of its Subsidiaries is contesting in good faith an assertion of
liability based on such returns, has provided adequate reserves for payment
thereof in accordance with GAAP.
(k) Legal Constraints on Dividends. 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,
other than (i) pursuant to the Consumers Credit Facility and (ii) any such
restriction enacted or imposed by the Michigan Public Service Commission
limiting such dividends to an amount not less than $190,000,000 during any
twelvemonth period.
(l) Ownership of Certain Subsidiaries. The Company owns (i) not less
than 80% of the outstanding shares of common stock of Enterprises and (ii) not
less than 80% of the outstanding shares of common stock of Consumers.
(m) Accuracy of Disclosures. The Consolidated 2004-2008 Projections
of Consumers and the Borrowers (the "PROJECTIONS") are based upon assumptions
that the Borrowers believed were reasonable at the time the Projections were
delivered, and all other financial information delivered by the Borrowers to the
Administrative Agent and the Banks on
50
and after the Closing Date is true and correct in all material respects as at
the dates and for the periods indicated therein.
(n) Regulation U. (i) No Loan Party is 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), (ii) and no proceeds of any
Loan or any drawing under any Letter of Credit will be used to buy or carry any
margin stock or to extend credit to others for the purpose of buying or carrying
any margin stock and (iii) following application of the proceeds of each
Extension of Credit, not more than 25 percent of the value of the assets of the
Company and its Subsidiaries on a consolidated basis will be margin stock.
(o) Investment Company Act. No Loan Party is an "investment company"
(within the meaning of the Investment Company Act of 1940, as amended).
(p) Acquisition of Securities. No proceeds of any Loan or any
drawing under any Letter of Credit will be used to acquire any security in any
transaction without the approval of the board of directors of the Person issuing
such security if (i) the acquisition of such security would cause any Borrower
to own, directly or indirectly, 5.0% or more of any outstanding class of
securities issued by such Person, or (ii) such security is being acquired in
connection with a tender offer.
(q) PUHCA. No Loan Party is a registered "holding company" or a
"subsidiary" or an "affiliate" of a registered "holding company," as such terms
are defined in the Public Utility Holding Company Act of 1935, as amended, 15
USC 79 et seq.
(r) Material Adverse Change Information. The Borrowers have not
withheld any fact from the Administrative Agent, the Issuing Banks or the
Lenders in regard to the occurrence of any Material Adverse Change.
(s) Solvency. After giving effect to the Loans to be made or Letters
of Credit to be issued on the Closing Date or such other date as Loans or
Extensions of Credit requested hereunder are made, and the disbursement of the
proceeds of such Loans or Extensions of Credit pursuant to the applicable
Borrower's instructions, the Company and its Subsidiaries, taken as a whole, are
Solvent.
(t) Project Finance Debt. Schedule I sets forth as of June 30, 2004
(i) all Project Finance Debt of the Company and the Consolidated Subsidiaries,
and (ii) all debt (as such term is construed in accordance with GAAP) of the
Loan Parties, and, as of the Closing Date, there are no defaults in the payment
of principal or interest on any such Debt and no payments thereunder have been
deferred or extended beyond their stated maturity (except as disclosed on such
Schedule).
(u) OFAC. None of the Borrowers or any Subsidiary or Affiliate of
the Borrowers is named on the United States Department of the Treasury's
Specially Designated Nationals or Blocked Persons list available through
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇/▇▇▇▇▇▇.▇▇▇.
(v) or as otherwise published from time to time.
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ARTICLE VIII
COVENANTS OF THE BORROWERS
SECTION 8.01. AFFIRMATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment:
(a) Payment of Taxes, Etc. Each Borrower shall pay and discharge,
and shall cause each of its Subsidiaries to 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 such Borrower or any Subsidiary thereof, 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. Each Borrower shall maintain, and
shall cause each of the Restricted Subsidiaries and Consumers to maintain,
insurance covering the Borrowers and each of the Restricted Subsidiaries and
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 Borrowers and the Restricted Subsidiaries and Consumers operate,
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. Except as otherwise permitted by
Section 8.02, each Borrower shall preserve and maintain, and shall cause each of
the Restricted Subsidiaries and, in the case of the Company, Consumers to
preserve and maintain, its corporate or limited liability company 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. Each Borrower shall comply, and shall
cause each of the Restricted Subsidiaries and Consumers to comply, in all
material respects with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, including any such laws,
rules, regulations and orders relating to zoning, environmental protection, use
and disposal of Hazardous Substances, land use, construction and building
restrictions, and employee safety and health matters relating to business
operations.
(e) Inspection Rights. Subject to the requirements of laws or
regulations applicable to such 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, each Borrower shall permit (i) each Agent and its agents and
representatives to examine and make copies of and abstracts from the records and
books of account of, and the properties of, such Borrower or any of its
Subsidiaries and (ii) each Agent, each of the Issuing Banks, each of the
Lenders, and their respective agents and representatives to discuss the affairs,
finances and accounts of such Borrower and its Subsidiaries with such Borrower
and its Subsidiaries and their respective officers, directors and accountants.
Each such visitation and inspection described in the preceding sentence by or on
behalf of any Lender or Issuing Bank shall, unless occurring at a time when a
Default or Event of
52
Default shall be continuing, be at such Lender's or Issuing Bank's, as
applicable, expense; all other such inspections and visitations shall be at such
Borrower's expense.
(f) Keeping of Books. Each Borrower shall keep, and shall cause each
of its Subsidiaries to keep, proper records and books of account, in which full
and correct entries shall be made of all financial transactions of such Borrower
and its Subsidiaries and the assets and business of such Borrower and its
Subsidiaries, in accordance with GAAP.
(g) Maintenance of Properties, Etc. Each Borrower shall maintain,
and shall cause each of the Restricted Subsidiaries to 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 or transfer of any asset of the Borrowers or any Restricted
Subsidiary to the extent not otherwise prohibited by the terms of this
Agreement. In addition, each Borrower shall preserve, maintain, develop, and
operate, and shall cause each of its Subsidiaries to 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 Borrowers shall use all Extensions of
Credit for general corporate purposes (subject to the terms and conditions of
this Agreement).
(i) Consolidated Leverage Ratio. The Company shall maintain, as of
the last day of each fiscal quarter (in each case, the "MEASUREMENT QUARTER"), a
maximum ratio of (i) Consolidated Debt as of such day, to (ii) Consolidated
EBITDA for the immediately preceding four-fiscal-quarter period ending on such
day, of not more than 7.00 to 1.00, commencing with the Measurement Quarter
ending June 30, 2004.
(j) Cash Coverage Ratio. The Company shall maintain, as of the last
day of each Measurement Quarter, a minimum ratio of (i) the sum of (A) Cash
Dividend Income for the four-fiscal-quarter period ending on such day, plus (B)
the lesser of (x) 25% of the Net Proceeds received by the Company from the sale,
assignment or other disposition (but not the lease or license) of any property,
including without limitation, any sale of capital stock or other equity interest
in any of the Company's direct or indirect Subsidiaries during such period and
(y) $50,000,000 to (ii) an amount equal to (A) interest expense (excluding (1)
all arrangement, underwriting and other similar fees payable in connection with
this Agreement, (2) all arrangement, underwriting and upfront fees paid in
connection with the Borrowers' senior secured credit facility dated December 8,
2003, (3) all interest or dividends paid on Hybrid Preferred Securities and (4)
interest expense payable by the Company in respect of any Debt owing to any
Subsidiary thereof) accrued by the Company in respect of all Debt during such
period, minus (B) cash interest income received by the Company from Persons
other than any Subsidiary of the Company, during such period, minus (C) all
amounts received by the Company from its Subsidiaries and Affiliates during such
period constituting reimbursement of interest expense and commitment, guaranty
and letter of credit charges of the Company to such Subsidiary or Affiliate, of
not less than 1.20 to 1.00, commencing with the Measurement Quarter ending on
June 30, 2004; provided, that the Company shall be deemed not to be in breach of
the foregoing covenant if, during the Measurement Quarter, the Borrowers have
permanently
53
reduced the principal amount outstanding under this Agreement and the Promissory
Notes, such that the amount determined pursuant to clause (ii) above, when
recalculated on a pro forma basis assuming that the amount of such reduced
principal amount outstanding under this Agreement and the Promissory Notes were
in effect at all times during such four-fiscal-quarter period, would result in
the Company being in compliance with such ratio.
(k) Further Assurances. The Borrowers shall promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or that any Lender or any Issuing Bank through the
Administrative Agent may reasonably request in order to give effect to the
transactions contemplated by this Agreement and the other Loan Documents. In
addition, the Borrowers 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.
(l) Subsidiary Guarantees. The Borrowers will (i) with respect to
each Person that becomes a Restricted Subsidiary after the Closing Date (other
than (a) any Subsidiary of the Company organized under the laws of a
jurisdiction located other than in the United States (each a "FOREIGN
SUBSIDIARY") if the execution of the Guaranty by such Subsidiary would result in
any materially adverse tax consequences to the Company and (b) CMS ERM), subject
to any limitations under contractual restrictions as in effect as of the Closing
Date or applicable law with respect to each Foreign Subsidiary, cause each such
Restricted Subsidiary to execute the Guaranty pursuant to which it agrees to be
bound by the terms and provisions of the Guaranty, and (ii) cause such Persons
identified in clause (i) above to deliver resolutions, opinions of counsel and
such other constitutive documentation as the Administrative Agent may reasonably
request, all in form and substance reasonably satisfactory to the Administrative
Agent.
(m) Compliance with Fee Letters. The Borrowers shall comply with all
of their respective obligations under the Fee Letters.
(n) Payment of Declared Dividend. Each Borrower shall cause each of
its direct Subsidiaries to, and Enterprises shall, pay all dividends within 30
days after declaration thereof.
(o) Collateral. Each Borrower will cause, and will cause each of the
other Loan Parties to cause, all of such Person's right, title and interest in,
to and under the Collateral owned by it to be subject at all times to first
priority, perfected security interests in favor of the Collateral Agent for the
benefit of the Lenders to secure its respective Obligations, subject in any case
to Liens permitted under Section 8.02(a).
SECTION 8.02. NEGATIVE COVENANTS. So long as any Loan or any other amount
payable hereunder or under any Promissory Note shall remain unpaid, any Letter
of Credit shall remain outstanding or any Lender shall have any Commitment, each
Borrower agrees that it shall not, without the written consent of the Required
Lenders:
(a) Liens, Etc. (1) Create, incur, assume or suffer to exist, or
permit any of the Loan Parties to create, incur, assume or suffer to exist, any
Lien upon or with respect to any of its properties of any character (including
capital stock and other ownership interests of the
54
Borrowers' directly-owned Subsidiaries, intercompany obligations and accounts),
whether now owned or hereafter acquired, or (2) file, or permit any of the other
Loan Parties to file, under the Uniform Commercial Code of any jurisdiction a
financing statement which names either Borrower or any other Loan Party as
debtor (other than financing statements that do not evidence a Lien), or (3)
sign, or permit any of the other Loan Parties to sign, any security agreement or
other document authorizing any secured party thereunder to file any such
financing statement, or (4) assign, or permit any of the other Loan Parties 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 any of the other Loan Parties, (C) reimbursement
obligations of Enterprises, CMS Generation or CMS ERM with respect to
letters of credit issued by Bank of America, N.A. (or any of its
affiliates), in connection with the settlement of claims related to CMS
ERM's energy trading operations in an aggregate amount not to exceed
$40,000,000, (D) Support Obligations of any Borrower or any Loan Party,
(E) obligations of Enterprises or CMS ERM in respect of hedging
arrangements and commodity purchases and sales (including any cash margins
with respect thereto); provided, that with respect to clauses (D) and (E)
above the aggregate amount of cash pledges or deposits securing such
Support Obligations and such obligations of Enterprises or CMS ERM shall
not exceed $400,000,000 at any one time outstanding, and (F) obligations
of (x) the Company in respect of interest rate swap agreements and (y) any
Loan Party in respect of foreign exchange swap agreements, provided that
the aggregate amount of cash pledges or deposits securing such obligations
under this clause (F) shall not exceed $50,000,000 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;
(iv) Liens securing the obligations under the Loan Documents;
(v) Liens securing Off-Balance Sheet Liabilities (and all
refinancings and recharacterizations thereof permitted under Section
8.02(b)(iv)) in an aggregate amount not to exceed $775,000,000;
(vi) purchase money Liens or purchase money security interests upon
or in property acquired or held by any Borrower or any other Loan Party 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
55
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 (vi) shall not
exceed $15,000,000;
(vii) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do
not in any material way affect the marketability of the same or interfere
with the use thereof in the business of any Borrower or any other Loan
Party;
(viii) Liens existing on any capital asset of any Person at the time
such Person is merged or consolidated with or into, or otherwise acquired
by, any Borrower or any other Loan Party and not created in contemplation
of such event, provided that such Liens do not encumber any other property
or assets and such merger, consolidation or acquisition is otherwise
permitted under this Agreement;
(ix) Liens existing on any capital asset prior to the acquisition
thereof by any Loan Party and not created in contemplation thereof;
provided that such Liens do not encumber any other property or assets;
(x) Liens existing as of the Closing Date;
(xi) Liens securing Project Finance Debt otherwise permitted under
this Agreement;
(xii) Liens arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses (v), (viii), (ix), (x) or (xi); provided that (a) such
Debt is not secured by any additional assets, and (b) the amount of such
Debt secured by any such Lien is otherwise permitted under this Agreement;
(xiii) Liens on accounts receivable (other than intercompany
receivables) and other contract rights of CMS ERM and its Subsidiaries
arising on or after the Closing Date in favor of any Person (other than an
Affiliate of the Company or any of its Subsidiaries) that facilitates the
origination of such accounts receivable or other contract rights;
(xiv) Liens on accounts receivable (other than intercompany
receivables) of CMS ERM in favor of Bank of America, N.A. (or any of its
affiliates) to secure the reimbursement obligations of Enterprises, CMS
Generation and CMS ERM with respect to letters of credit issued by Bank of
America, N.A. (or any of its affiliates) in connection with the settlement
of claims related to CMS ERM's energy trading obligations in an aggregate
amount not to exceed $40,000,000;
56
(xv) subordinated Liens granted pursuant to the terms of the AIG
Pledge Agreement, which Liens shall be subordinated pursuant to the terms
of the Intercreditor Agreement, to secure certain surety bond obligations
as described in the AIG Pledge Agreement; and
(xvi) subordinated Liens on the capital stock of Enterprises and/or
Consumers securing Debt incurred by the Company in an aggregate amount not
to exceed $200,000,000; provided, that (i) such Liens are subordinated in
priority to the Liens securing the Obligations, (ii) the holders of such
Debt shall have no rights to direct or otherwise control at any time any
disposition of Collateral or any proceeds thereof so long as any
Obligations shall remain outstanding (all of which rights shall be waived
to the fullest extent permitted by applicable law) pursuant to an
intercreditor agreement on terms reasonably acceptable to the
Administrative Agent and (iii) such Debt has terms and conditions
(including maturity, amortization, interest rates, premiums, fees,
covenants, subordination, events of default and remedies) that are
reasonably acceptable to the Administrative Agent.
(b) Debt. Permit Enterprises or any Subsidiary of 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' or its Subsidiaries' business;
(ii) in the form of indemnities in respect of unfiled mechanics'
liens and Liens affecting Enterprises' or its Subsidiaries' properties
permitted under Section 8.02(a)(iii);
(iii) debt arising under the Loan Documents;
(iv) debt constituting Off-Balance Sheet Liabilities (including any
recharacterization thereof as debt pursuant to any changes in generally
accepted accounting principles hereafter required or permitted and which
are adopted by the Company or any of its Subsidiaries with the agreement
of its independent certified public accountants) to the extent permitted
by Section 8.02(o), and any extensions, renewals, refundings or
replacements thereof, provided that any such extension, renewal, refunding
or replacement is in an aggregate principal amount not greater than the
principal amount of, is an obligation of the same Person that is the
obligor in respect of, and has a weighted average life to maturity not
less than the weighted average life to maturity of, the debt so extended,
renewed, refunded or replaced;
(v) other debt of Enterprises and its Subsidiaries outstanding on
the Closing Date (including the debt of the Loan Parties as of June 30,
2004 as set forth on Schedule I), and any extensions, renewals, refundings
or replacements thereof, provided that any such extension, renewal,
refunding or replacement is in an aggregate principal amount not greater
than the principal amount of, is an obligation of the same Person that
57
is the obligor in respect of, and has a weighted average life to maturity
not less than the weighted average life to maturity of, the debt so
extended, renewed, refunded or replaced;
(vi) (a) unsecured, subordinated debt owed (i) to the Company by
Enterprises or CMS Capital, L.L.C. (or any successor by merger to CMS
Capital, L.L.C.), (ii) to Enterprises or CMS Capital, L.L.C. (or any
successor by merger to CMS Capital, L.L.C.) and (iii) to any Grantor by
any Loan Party, and (b) unsecured debt owed to any Subsidiary of
Enterprises (other than a Grantor) by CMS Capital, L.L.C. (or any
successor by merger to CMS Capital, L.L.C.), and (c) unsecured debt of any
Foreign Subsidiary of Enterprises owed to another Foreign Subsidiary of
Enterprises provided that the proceeds of any repayment of such debt are
remitted to a Loan Party;
(vii) Project Finance Debt of any Loan Party or any of its
Subsidiaries incurred for working capital purposes (including construction
or other capital expenditures) on or after the Closing Date;
(viii) capital lease obligations and other Debt secured by purchase
money Liens to the extent such Liens shall be permitted under Section
8.02(a)(vi);
(ix) (a) Project Finance Debt incurred by Takoradi International
Company in respect of the Takoradi Project (other than Project Finance
Debt permitted to be incurred pursuant to clause (vii) above) in an
aggregate principal amount not to exceed $30,000,000; provided, that
Takoradi International Company shall make a distribution of the Net
Proceeds therefrom and the Company shall receive not less than its ratable
share of such Net Proceeds; and
(x) reimbursement obligations of Enterprises, CMS Generation or CMS
ERM with respect to letters of credit issued by Bank of America, N.A. (or
any of its affiliates), in connection with the settlement of claims
related to CMS ERM's energy trading operations in an aggregate amount not
to exceed $40,000,000.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of the other Loan Parties 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 Borrowers and the
other Loan Parties in respect of all such obligations payable in any period of
12 consecutive calendar months to exceed $50,000,000.
(d) Investments in Other Persons. Make, or permit any of the other
Loan Parties 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 (i)
Permitted Investments, (ii) pursuant to the contractual or contingent
obligations of such Borrower or any other Loan Party as in effect as of the
Closing Date and in amounts not to exceed the estimated amounts as set forth on
Schedule I hereto (whether such obligation is conditioned upon a change in the
ratings of the securities issued by such Person or otherwise) and, in each case,
in an amount not to exceed such contractual or contingent
58
obligation as in effect on the Closing Date, (iii) investments, directly or
indirectly, by any Loan Party (x) in the capital of any Subsidiary of the
Company that is a Loan Party and (y) in assets contributed to such Loan Party,
provided that if any such assets constitute Collateral prior to such
contribution, such assets shall remain Collateral after giving effect to such
contribution and prior to such contribution such Borrower shall, and shall cause
each applicable Subsidiary to, execute and deliver to the Administrative Agent
all agreements, instruments and documents as may be necessary or reasonably
requested by the Administrative Agent to perfect its security interest in such
Collateral, (iv) investments in the capital stock or other ownership interests
of any of the Company's Subsidiaries arising from the conversion of intercompany
indebtedness to equity, (v) intercompany loans and advances to the extent the
corresponding debt is permitted under Section 8.02(b)(vi), (vi) investments
constituting non-cash consideration received in connection with the sale of any
asset not otherwise prohibited under this Agreement, (vii) additional loans,
advances, purchases, contributions and other investments in an amount not to
exceed $340,000,000 in the aggregate at any time, (viii) intercompany loans and
advances by the Company to Consumers in an aggregate principal amount not to
exceed $250,000,000 at any time, and (ix) investments by the Company in the
capital stock of Consumers; provided, however, that investments described in
clause (iv) above (solely with respect to investments made in any Subsidiary
that is not a Loan Party) shall not be permitted to be made at a time when
either a Default or an Event of Default shall be continuing or would result
therefrom.
(e) Restricted Payments. Declare or pay, or permit any other Loan
Party 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 common stock of the Company or any share of
any class of capital stock or other ownership interests of any of the other Loan
Parties (other than (1) stock splits and dividends payable solely in
nonconvertible equity securities of the Company (other than Redeemable Stock or
Exchangeable Stock (as such terms are defined in the Indenture on the Closing
Date)) and (2) dividends and distributions made to such Borrower or a Loan
Party), or purchase, redeem, retire, or otherwise acquire for value, or permit
any of the other Loan Parties to purchase, redeem, retire, or otherwise acquire
for value, any shares of any class of common stock of the Company or any share
of any class of capital stock or other ownership interests of any of the other
Loan Parties or any warrants, rights, or options to acquire any such shares, now
or hereafter outstanding, or make, or permit any of the other Loan Parties to
make, any distribution of assets to any of its shareholders (other than
distributions to such Borrower or any other Loan Party) (any such dividend,
payment, distribution, purchase, redemption, retirement or acquisition being
hereinafter referred to as a "RESTRICTED PAYMENT") other than (i) pursuant to
the terms of any class of capital stock of the Company issued and outstanding
(and as in effect on) the Closing Date, any purchase or redemption of capital
stock of the Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, capital stock of the Company (other than
Redeemable Stock or Exchangeable Stock (as such terms are defined in the
Indenture on the Closing Date)); (ii) payments made by such Borrower or any
other Loan Party pursuant to the Tax Sharing Agreement; and (iii) any cash
dividend or cash distribution on common stock of the Company made after January
1, 2005; provided, that the amount of any cash dividend or cash distribution
made pursuant to the preceding clause (iii) shall not exceed, in the aggregate
with each other such cash dividend and cash distribution made during the
previous twelve-month period, (x) if after giving effect to such cash dividend
or cash distribution the Company shall have Liquidity equal to or greater than
$150,000,000, an amount equal to $75,000,000, (y) if
59
after giving effect to such cash dividend or cash distribution the Company shall
have Liquidity equal to or greater than $100,000,000 and less than $150,000,000,
an amount equal to $50,000,000 and (z) otherwise, zero.
(f) Compliance with ERISA. (i) Permit to exist any "accumulated
funding deficiency" (as defined in Section 412(a) of the Internal Revenue Code
of 1986, as amended), (ii) terminate, or permit any ERISA Affiliate to
terminate, any Plan or withdraw from, or permit any ERISA Affiliate to withdraw
from, any Multiemployer Plan, so as to result in any material (in the opinion of
the Required Lenders) liability of such Borrower, any other Loan Party or
Consumers to such Plan, Multiemployer Plan or the PBGC, or (iii) permit to exist
any occurrence of any Reportable Event (as defined in Title IV of ERISA), or any
other event or condition, which presents a material (in the opinion of the
Required Lenders) risk of such a termination by the PBGC of any Plan or
withdrawal from any Multiemployer Plan so as to result in a material liability
to such Borrower, any other Loan Party 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 such Borrower or such
Subsidiary than if the transaction had been negotiated in good faith on an
arm's-length basis with a non-Affiliate; provided that any transaction permitted
under Sections 8.02(b), 8.02(e) or 8.02(h) shall be permitted hereunder.
(h) Mergers, Etc. Merge with or into or consolidate with or into, or
permit any of the other Loan Parties or Consumers to merge with or into or
consolidate with or into, any other Person, except that (i) (x) any Loan Party
may merge with or into any other Loan Party, (y) any Subsidiary of a Loan Party
that is not a Loan Party may merge into such Loan Party or with or into any
other Subsidiary of any Loan Party, provided that (a) in any such merger with or
into a Borrower, such Borrower (or, in the case of a merger of the Company and
Enterprises, the Company) is the surviving corporation, (b) in any such merger
into a Loan Party under clause (y) above, the Loan Party is the survivor
thereof, (c) no Default or Event of Default shall be continuing or result
therefrom and (d) such Loan Party 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, and (ii) any Loan
Party may merge with or into any other Person, provided that (a) (x) such Loan
Party is the survivor thereof, or (y) in the case of any Loan Party that is a
corporation reconstituting itself as limited liability company, such limited
liability company shall be the survivor thereof and shall confirm its
obligations as successor to such Loan Party under the Loan Documents to which
such Loan Party is a party in form and substance reasonably acceptable to the
Administrative Agent (and any Loan Party that shall have pledged the capital
stock of such predecessor Loan Party shall reconfirm the pledge of such
survivor's ownership interests as Collateral under the Loan Documents) and such
survivor shall be thereafter deemed to be a Loan Party hereunder, (b) no Default
or Event of Default shall be continuing or result therefrom, (c) such Loan Party
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, and (d) immediately after giving effect to such
merger, the Net Worth of such Loan Party shall be equal to or greater than the
Net Worth of such Loan Party as of the last day of the fiscal quarter
immediately preceding the date of such merger.
60
(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
the other Loan Parties (other than CMS ERM) 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, provided, further, that neither such Borrower nor any of the other Loan
Parties (other than CMS ERM) shall sell, assign, transfer, lease, convey or
otherwise dispose of any property, whether now owned or hereafter acquired, or
any income or profits therefrom, or enter into any agreement to do so, except:
(A) the sale of property for consideration not less than the Fair
Market Value thereof so long as (i) any non-cash consideration resulting
from such sale shall be pledged or assigned to the Collateral Agent, for
the benefit of the Lenders, pursuant to an instrument in form and
substance reasonably acceptable to the Collateral Agent, (ii) cash
consideration resulting from such sale shall be (x) in an amount
determined by such Borrower for any sale the consideration of which is
$10,000,000 or less, or, together with all other such sales under this
clause (x), $25,000,000 or less, or (y) for all other sales, not less than
90% of the aggregate consideration resulting from such sale, and (iii)
such Borrower complies with the mandatory prepayment provisions set forth
in Section 2.03(c);
(B) the transfer of property from a Loan Party to any Loan Party;
(C) the transfer of property constituting an investment otherwise
permitted under Section 8.02(d);
(D) the sale of electricity and natural gas and other property in
the ordinary course of the Company's and its Subsidiaries respective
businesses consistent with past practice;
(E) any transfer of an interest in receivables and related security,
accounts or notes receivable on a limited recourse basis in connection
with the incurrence of Off-Balance Sheet Liabilities, provided, that such
transfer qualifies as a legal sale and as a sale under GAAP and the
incurrence of such Off-Balance Sheet Liabilities is permitted under
Section 8.02(o);
(F) the transfer of property constituting not more than two percent
(2%) of the ownership interests held by the Company and its Subsidiaries
as of the Closing Date in CMS International Ventures, L.L.C. to CMS Energy
Foundation and/or Consumers Foundation and/or any other third-party
501(c)(3) charitable organization; and
(G) the disposition of equipment if such equipment is obsolete or no
longer useful in the ordinary course of such Borrower's or such
Subsidiary's business.
(j) Maintenance of Ownership of Subsidiaries. Sell, transfer, assign
or otherwise dispose of any shares of capital stock or other ownership interests
of any of the Loan Parties or any warrants, rights or options to acquire such
capital stock or other ownership interests, or permit any other Loan Party to
issue, sell, transfer, assign or otherwise dispose of any shares of its capital
stock or other ownership interests or the capital stock or other ownership
61
interests of any other Loan Party or any warrants, rights or options to acquire
such capital stock or other ownership interests, except (i) to give effect to a
transaction permitted by subsection (d), (h) or (i) above, and (ii) in
connection with the foreclosure of any Liens permitted under Section
8.02(a)(iv).
(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, such Borrower thereunder,
or (ii) change materially the timing of any payments made by or to such Borrower
thereunder.
(l) Prepayments of Indebtedness. Make or agree to pay or make, or
permit any of the other Loan Parties to make or agree to pay or make, directly
or indirectly, any payment or other distribution (whether in cash, securities or
other property) of or in respect of principal of or interest on any Debt (other
than the obligations of the Loan Parties under the Loan Documents), or any
payment or other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any Debt
(other than the obligations of the Loan Parties under the Loan Documents), other
than (i) any payments on account of (a) any Debt when and as such payment was
due (including at the maturity thereof if the initial stated maturity thereof is
on or prior to the Maturity Date) pursuant to the mandatory payment provisions
applicable to such Debt at the time it was incurred (including, without
limitation, regularly scheduled payment dates for principal, interest, fees and
other amounts due thereon) or any extension thereof thereafter granted by the
holder of such Debt, (b) refinancings of Debt otherwise permitted under this
Agreement, (c) any Debt owed to the Company or any of its Subsidiaries, (d) Debt
secured by a Lien on assets subject to an asset sale not otherwise prohibited
under this Agreement and (e) the extinguishment of any intercompany Debt in
connection with a dividend or distributions permitted under Section 8.02(e),
(ii) payments constituting the exchange of the Company's common stock (other
than Redeemable Stock or Exchangeable Stock (as such terms are defined in the
Indenture on the Closing Date)) for the Company's outstanding Debt (and any cash
payments made in lieu of the issuance of fractional shares) to the extent such
exchange is permitted under the Exchange Act, and (iii) so long as no Loans or
other Obligations (other than any undrawn Letters of Credit) shall be
outstanding hereunder and the Company shall have Unrestricted Cash in excess of
$100,000,000 after giving effect thereto, any payment in respect of any other
Debt.
(m) Conduct of Business. Engage, or permit any Restricted Subsidiary
to engage, in any business other than (a) the business engaged in by the Company
and its Subsidiaries on the date hereof, and (b) any business or activities
which are substantially similar, related or incidental thereto.
(n) Organizational Documents. Amend, modify or otherwise change, or
permit any Restricted Subsidiary to amend, modify or otherwise change any of the
terms or provisions in any of their respective certificate of incorporation and
by-laws (or comparable
62
constitutive documents) as in effect on the Closing Date in any manner adverse
to the interests of the Lenders.
(o) Off-Balance Sheet Liabilities. Create, incur, assume or suffer
to exist, or permit any of its Subsidiaries (other than, in the case of the
Company, Consumers and its Subsidiaries) to create, incur, assume or suffer to
exist, Off-Balance Sheet Liabilities (exclusive of lease obligations otherwise
permitted under Section 8.02(c)) in the aggregate in excess of $775,000,000 at
any time.
SECTION 8.03. REPORTING OBLIGATIONS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Company will, unless the Required Lenders shall otherwise
consent in writing, furnish to the Administrative Agent (for delivery to each
Lender), the following:
(a) as soon as possible and in any event within five days after any
Borrower knows or should have reason to know of the occurrence of each Default
or Event of Default continuing on the date of such statement, a statement of the
chief financial officer or chief accounting officer of the Company setting forth
details of such Default or Event of Default and the action that the Borrowers
propose to take with respect thereto;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Company,
commencing with the fiscal quarter ending on June 30, 2004, (i) a consolidated
balance sheet and consolidated statements of income and retained earnings and of
cash flows of the Company and its Subsidiaries as at the end of such quarter and
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter (which requirement shall be deemed satisfied by the
delivery of the Company'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 Company as
having been prepared in accordance with GAAP, (ii) a consolidated balance sheet
and consolidated statements of income and retained earnings and of cash flows of
Consumers and its Subsidiaries as at the end of such quarter and for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter (which requirement shall be deemed satisfied by the delivery of the
Company'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 Consumers as having been
prepared in accordance with GAAP, (iii) a schedule (substantially in the form of
Exhibit E appropriately completed) of (1) for the periods ending June 30, 2004
and thereafter, the computations used by the Company in determining compliance
with the covenants contained in Sections 8.01(i) and 8.01(j) and the ratio set
forth in Section 9.01(j), (2) all Project Finance Debt of the Company and the
Consolidated Subsidiaries, together with the Company's Ownership Interest in
each such Consolidated Subsidiary and (3) all Support Obligations of the
Borrowers 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 (iv) a
certificate of the chief financial officer or chief accounting officer of the
Company stating that no Default or Event of
63
Default has occurred and is continuing or, if a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
that the Borrowers propose 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 Company and its Subsidiaries, commencing with the
fiscal year ending on December 31, 2004, a copy of the Annual Report on Form
10-K (or any successor form) for the Company and its Subsidiaries for such year,
including therein (i) a consolidated balance sheet of the Company 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 Company and its
Subsidiaries for such fiscal year, accompanied by a report thereon of a
nationally-recognized independent public accounting firm, and (ii) a
consolidated balance sheet of Consumers and its Subsidiaries as of the end of
such fiscal year and consolidated statements of income and retained earnings and
of cash flows of Consumers and its Subsidiaries for such fiscal year,
accompanied by a report thereon of a nationally-recognized independent public
accounting firm, together with (iii) a schedule in form satisfactory to the
Required Lenders of (1) the computations used by such accounting firm in
determining, as of the end of such fiscal year, compliance with the covenants
contained in Sections 8.01(i) and 8.01(j) and the ratio set forth in Section
9.01(j), (2) all Project Finance Debt of the Company and the Consolidated
Subsidiaries, together with the Company's Ownership Interest in each such
Consolidated Subsidiary and (3) all Support Obligations of the Borrowers 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 (iv) a certificate of the
chief financial officer or chief accounting officer of the Company stating that
no Default or Event of Default has occurred and is continuing or, if a Default
or Event of Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrowers propose to take with respect thereto;
(d) as soon as available and in any event within 60 days after the
end of each of the first three fiscal quarters of each fiscal year of
Enterprises, commencing with the fiscal quarter ending on June 30, 2004, a
consolidated balance sheet and consolidated statements of income and retained
earnings and of cash flows of Enterprises and its Subsidiaries as at the end of
such quarter and for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief financial officer
or chief accounting officer of Enterprises 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 Enterprises and its Subsidiaries, commencing with the
fiscal year ending on December 31, 2004, a consolidated balance sheet of
Enterprises and its Subsidiaries as of the end of such fiscal year and
consolidated statements of income and retained earnings and of cash flows of
Enterprises and its Subsidiaries for such fiscal year, all in reasonable detail
and duly certified by the chief financial officer or chief accounting officer of
Enterprises as having been prepared in accordance with GAAP;
64
(f) as soon as possible and in any event (A) within 30 days after
the Company 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 Company or any ERISA Affiliate of the Company has occurred
and could reasonably be expected to result in a material liability to the
Company and (B) within 10 days after the Company knows or has reason to know
that any other Plan Termination Event with respect to any Plan of the Company or
any ERISA Affiliate of the Company has occurred and could reasonably be expected
to result in a material liability to the Company, a statement of the chief
financial officer or chief accounting officer of the Company describing such
Plan Termination Event and the action, if any, which the Company proposes to
take with respect thereto;
(g) promptly after receipt thereof by the Company or any of its
ERISA Affiliates from the PBGC, copies of each notice received by the Company 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 Company is a contributing employer;
(i) promptly after receipt thereof by the Company or any of its
ERISA Affiliates from a Multiemployer Plan sponsor, a copy of each notice
received by the Company 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 Company is
reasonably expected to be liable;
(j) promptly after the Company becomes aware of the occurrence
thereof, notice of all actions, suits, proceedings or other events of the type
described in Section 7.01(f);
(k) promptly after the sending or filing thereof, notice to the
Administrative Agent and each Lender of any sending or filing of all proxy
statements, financial statements and reports which the Company sends to its
public security holders (if any), all regular, periodic and special reports
which the Company files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any national
securities exchange, pursuant to the Exchange Act, and all final prospectuses
with respect to any securities issued or to be issued by the Company 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
Company or any of its Subsidiaries is a party, which default would materially
adversely affect the business, assets, property, financial condition, results of
operations or prospects of the Company and its Subsidiaries, considered as a
whole, any of which is continuing on the date of such certificate, a certificate
of the chief financial officer of the Company setting forth the details of such
material default and the action which the Company or any such Subsidiary
proposes to take with respect thereto; and
65
(m) promptly after requested, such other information respecting the
business, properties, condition or operations, financial or otherwise, of the
Company and its Subsidiaries as any Agent or the Required Lenders may from time
to time reasonably request in writing.
The Company shall be deemed to have fulfilled its obligations pursuant to
clauses (b), (c), (d), (e), (j) and (k) above to the extent the Administrative
Agent (and the Lenders, if applicable) receives an electronic copy of the
requisite document or documents in a format reasonably acceptable to the
Administrative Agent, provided that a tangible copy of each requisite document
delivered electronically is made available by the Company promptly upon request
by any Agent or Lender.
ARTICLE IX
DEFAULTS
SECTION 9.01. EVENTS OF DEFAULT. If any of the following events (each an
"EVENT OF DEFAULT") shall occur and be continuing, the Administrative Agent and
the Lenders shall be entitled to exercise the remedies set forth in Section
9.02:
(a) The Borrowers shall fail to pay (i) any principal of any Loan
when due, (ii) any reimbursement obligation under Section 4.04(a) within one
Business Day after such amount shall have become due or (iii) any interest, fees
or other Obligations (other than any principal of any Loan or any reimbursement
obligation under Section 4.04(a)) payable hereunder within two Business Days
after such interest, fees or other amounts shall have become due; or
(b) Any representation or warranty made by or on behalf of any Loan
Party 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) Any Borrower or any of its Subsidiaries shall fail to perform or
observe any term or covenant on its part to be performed or observed contained
in Section 8.01(c), (h), (i), (j), (l) or (n) or in Section 8.02 (and the
Borrowers, 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) Any 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 Borrowers by the
Administrative Agent, for a period of 20 Business Days (and the Borrowers, 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) Any Borrower, any Restricted Subsidiary or Consumers shall fail
to pay any of its Debt (including any interest or premium thereon but excluding
Debt incurred under this Agreement) aggregating, in the case of the Borrowers
and each Restricted Subsidiary, $10,000,000 or more or, in the case of
Consumers, $25,000,000 or more, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure
66
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 (including any "amortization
event" or event of like import in connection with any Off-Balance Sheet
Liabilities), 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 (i) 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
(ii) with respect to any such event occurring in connection with any Off-Balance
Sheet Liabilities aggregating $10,000,000 or more, to terminate the reinvestment
of collections or proceeds of receivables and related security under any
agreements or instruments related thereto (other than a termination resulting
solely from the request of the Company or its Subsidiaries); or
(f) (i) Any 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
any 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 a Borrower,
either such proceeding shall remain undismissed or unstayed for a period of 60
days or any of the actions sought in such proceeding (including the entry of an
order for relief against a Borrower, a Restricted Subsidiary or Consumers or the
appointment of a receiver, trustee, custodian or other similar official for such
Borrower, such Restricted Subsidiary or Consumers or any of its property) shall
occur; or (iii) any 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
$10,000,000 shall be rendered against any Borrower, any Guarantor or any of
their respective 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 any Loan Party shall so assert in writing; or any Guarantor shall
terminate or revoke any of its obligations under the Guaranty; or
(i) Any "Event of Default" shall occur under and as defined in the
AIG Pledge Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time; or
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(j) 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; or
(k) At any time, for any reason (except to the extent permitted by
the terms of the Loan Documents or due to any failure by the Collateral Agent to
take any action on its part to be performed under applicable law in order to
maintain the perfection or priority of any such Liens), (i) the Liens intended
to be created under any of the Loan Documents with respect to Collateral having
a Fair Market Value of $10,000,000 or more become, or the Company or any of its
Subsidiaries seeks to render such Liens, invalid or unperfected, or (ii) Liens
in favor of the Collateral Agent for the benefit of the Lenders contemplated by
the Loan Documents with respect to Collateral having a Fair Market Value of
$10,000,000 or more shall, at any time, for any reason, be invalidated or
otherwise cease to be in full force and effect, or such Liens shall not have the
priority contemplated by this Agreement or the Loan Documents.
SECTION 9.02. REMEDIES. If any Event of Default has occurred and is
continuing, then the Administrative Agent or the Collateral Agent, as
applicable, shall at the request, or may with the consent, of the Required
Lenders, upon notice to the Borrowers (i) declare the Commitments and the
obligation of each Lender to make or Convert Loans (other than Loans under
Section 4.04) and of any Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, (ii) declare the
principal amount outstanding hereunder, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the principal amount outstanding hereunder,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by each Borrower, (iii) make demand on the
Borrowers to pay, and the Borrowers will be obligated to, upon such demand
without any further notice or act, pay to the Administrative Agent the Cash
Collateral Required Amount, which funds shall be deposited to the Cash
Collateral Account as security for the LC Outstandings and (iv) exercise in
respect of any and all Collateral, in addition to the other rights and remedies
provided for herein or otherwise available to the Administrative Agent, the
Collateral Agent or the Lenders, all the rights and remedies of a secured party
on default under the Uniform Commercial Code in effect in the State of New York
and in effect in any other jurisdiction in which Collateral is located at that
time; provided, however, that in the event of an actual or deemed entry of an
order for relief with respect to any Borrower or any Guarantor under the
Bankruptcy Code, (A) the Commitments and the obligation of each Lender to make
or Convert Loans and of any Issuing Bank to issue Letters of Credit shall
automatically be terminated, (B) the principal amount outstanding hereunder, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Borrower, and (C) the Administrative
Agent shall make demand on the Borrowers to pay, and the Borrowers shall be
obligated to, upon such demand without any further notice or act, pay to the
Administrative Agent the Cash Collateral Required Amount, which funds shall be
deposited to the Cash Collateral Account as security for the LC Outstandings.
Notwithstanding anything to the contrary contained herein, no notice given or
declaration made by the Administrative Agent pursuant to this Section 9.02 shall
affect (i) the obligation of any Issuing Bank to make any payment under any
Letter of Credit issued by such Issuing Bank in accordance with the terms of
such Letter of Credit or (ii) the participatory interest of each Lender in each
such payment. If at
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any time while any Event of Default is continuing, the Administrative Agent
determines that the Cash Collateral Required Amount is greater than zero, the
Administrative Agent may make demand on the Borrowers to pay, and the Borrowers
will be obligated to, upon such demand without any further notice or act, pay to
the Administrative Agent the Cash Collateral Required Amount, which funds shall
be deposited to the Cash Collateral Account as security for the LC Outstandings.
ARTICLE X
THE AGENTS
SECTION 10.01. AUTHORIZATION AND ACTION.
(a) Each of the Lenders and each of the Issuing Banks hereby
irrevocably appoints each Agent (other than the Syndication Agent and the
Documentation Agents) as its agent and authorizes each such Agent to take such
actions on its behalf and to exercise such powers as are delegated to such Agent
by the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto.
(b) Any Lender or Issuing Bank serving as an Agent hereunder shall
have the same rights and powers in its capacity as a Lender or an Issuing Bank
as any other Lender or Issuing Bank, as applicable, and may exercise the same as
though it were not an Agent, and such Lender or Issuing Bank, as applicable, and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Company or any of its Subsidiaries or other
Affiliate thereof as if it were not an Agent hereunder.
(c) No Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (i) no Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default or an Event of Default has occurred and
is continuing, (ii) no Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that such Agent is required
to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.01), and (iii) except as expressly set forth in the Loan
Documents, no Agent shall have any duty to disclose, or shall be liable for the
failure to disclose, any information relating to the Company or any of its
Subsidiaries or Affiliates that is communicated to or obtained by the Lender
serving as such Agent or any of its Affiliates in any capacity. No Agent shall
be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
11.01 or any other provision of this Agreement) or in the absence of its own
gross negligence or willful misconduct. Each Agent shall be deemed not to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to such Agent by a Borrower or a Lender (in which case such
Agent shall promptly give a copy of such written notice to the Lenders and the
other Agents). No Agent shall be responsible for or have any duty to ascertain
or inquire into (A) any statement, warranty or representation made in or in
connection with any Loan Document, (B) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (C) the
performance or observance of any of the covenants, agreements or other terms
69
or conditions set forth in any Loan Document, (D) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (E) the satisfaction of any condition set forth in
Article VI or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to such Agent. Neither the Syndication
Agent nor the Documentation Agents shall have any duties or obligations in such
capacity under any of the Loan Documents.
(d) Each Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
(e) Each Agent may perform any and all its duties and exercise its
rights and powers by or through one or more sub-agents appointed by such Agent.
Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding subsections of this Section 10.01 shall
apply to any such sub-agent and to the Related Parties of each Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as an Agent.
(f) Subject to the appointment and acceptance of a successor Agent
as provided in this subsection (f), any Agent may resign at any time by
notifying the Lenders, the Issuing Banks and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor
Agent which shall be a Lender with an office in New York, New York, or an
Affiliate of any such Lender. Upon the acceptance of its appointment as an Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrowers to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrowers
and such successor. After an Agent's resignation hereunder, the provisions of
this Article and Section 11.04 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as an Agent.
(g) Each Lender acknowledges that it has independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or
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based upon this Agreement, any other Loan Document or any related agreement or
any document furnished hereunder or thereunder. Each Lender agrees (except as
provided in Section 11.05) that it will not take any legal action, nor institute
any actions or proceedings, against any Borrower or any other obligor hereunder
or with respect to any Collateral, without the prior written consent of the
Required Lenders. Without limiting the generality of the foregoing, no Lender
may accelerate or otherwise enforce its portion of the Loans, or unilaterally
terminate its Commitment except in accordance with Section 9.02.
(h) Each Lender acknowledges and agrees that neither such Lender,
nor any of its Affiliates, participants or assignees, may rely on the
Administrative Agent to carry out such Lender's, Affiliate's, participant's or
assignee's customer identification program, or other obligations required or
imposed under or pursuant to the USA Patriot Act or the regulations thereunder,
including the regulations contained in 31 C.F.R. 103.121 (as hereafter amended
or replaced, the "CIP Regulations"), or any other applicable laws, rules,
regulations or orders of any governmental authority, including any programs
involving any of the following items relating to or in connection with any of
the Borrowers, their Subsidiaries, their Affiliates or their agents, the Loan
Documents or the transactions hereunder or contemplated hereby: (a) any identity
verification procedures, (b) any recordkeeping, (c) comparisons with government
lists, (d) customer notices or (e) other procedures required under the CIP
Regulations or such other laws, rules, regulations or orders.
(i) Within 10 days after the Closing Date and at such other times as
are required under the USA Patriot Act, each Lender and each of its assignees
and participants that are not incorporated under the laws of the United States
of America or a state thereof (and is not excepted from the certification
requirement contained in Section 313 of the USA Patriot Act and the applicable
regulations because it is both (a) an affiliate of a depository institution or
foreign bank that maintains a physical presence in the United States or foreign
country, and (b) subject to supervision by a banking authority regulating such
affiliated depository institution or foreign bank) shall deliver to the
Administrative Agent the certification, or, if applicable, recertification,
certifying that such Lender is not a "shell" and certifying to other matters as
required by Section 313 of the USA Patriot Act and the applicable regulations.
SECTION 10.02. INDEMNIFICATION. The Lenders agree to indemnify each Agent
(to the extent not reimbursed by the Borrowers), ratably according to the
respective Percentages of the Lenders, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against such Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by such Agent under
this Agreement, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agents and the Arrangers promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by the
Agents and the Arrangers in connection with the preparation, syndication,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement to the
extent that the
71
Agents and the Arrangers are entitled to reimbursement for such expenses
pursuant to Section 11.04 but are not reimbursed for such expenses by the
Borrowers.
SECTION 10.03. CONCERNING THE COLLATERAL AND THE LOAN DOCUMENTS.
(a) Each Lender and Issuing Bank authorizes and directs the
Collateral Agent to enter into the Loan Documents relating to the Collateral for
the benefit of the Lenders and the Issuing Banks. Each Lender and Issuing Bank
agrees that any action taken by any Agent or the Required Lenders (or, where
required by the express terms of this Agreement, a greater proportion of the
Lenders) in accordance with the provisions of this Agreement or the other Loan
Documents, and the exercise by any Agent or the Required Lenders (or, where so
required, such greater proportion) of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders and the Issuing Banks. Without
limiting the generality of the foregoing, the Collateral Agent shall have the
sole and exclusive right and authority to (i) act as the disbursing and
collecting agent for the Lenders and the Issuing Banks with respect to all
payments and collections arising in connection with this Agreement and the Loan
Documents relating to the Collateral; (ii) execute and deliver each Loan
Document relating to the Collateral and accept delivery of each such agreement
delivered by any Borrower or any other Loan Party a party thereto; (iii) act as
collateral agent for the Lenders and the Issuing Banks for purposes of the
perfection of all Liens created by such agreements and all other purposes stated
therein; provided, however, the Collateral Agent hereby appoints, authorizes and
directs the other Agents, the Lenders and the Issuing Banks to act as collateral
sub-agent for the Collateral Agent, the Lenders and the Issuing Banks for
purposes of the perfection of all Liens with respect to any property of the
Company or any of its Subsidiaries at any time in the possession of such Agent,
such Lender or such Issuing Bank, including, without limitation, deposit
accounts maintained with, and cash held by, such Agent, such Lender or such
Issuing Bank; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the Liens created or purported to be created by the Loan Documents;
and (vi) except as may be otherwise specifically restricted by the terms of this
Agreement or any other Loan Document, exercise all remedies given to the
Collateral Agent, the Lenders or the Issuing Banks with respect to the
Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(b) The Administrative Agent, each Lender and each Issuing Bank
hereby directs, in accordance with the terms of this Agreement, the Collateral
Agent to release any Lien held by the Collateral Agent for the benefit of the
Lenders and the Issuing Banks:
(i) against all of the Collateral, upon payment in full of the
Obligations of all of the Loan Parties under the Loan Documents and
termination of this Agreement;
(ii) against any part of the Collateral sold or disposed of by the
Company or any of its Subsidiaries, if such sale or disposition is
otherwise permitted under this Agreement, as certified to the Collateral
Agent by the Borrowers, or is otherwise consented to by the Required
Lenders;
(iii) against any part of the Collateral consisting of a promissory
note, upon payment in full of the Debt evidenced thereby;
72
(iv) against any part of the "Collateral" (as defined in the Cash
Collateral Agreement) to the extent required pursuant to the Cash
Collateral Agreement; and/or
(v) against any of the Collateral and any Grantor upon the
occurrence of any event described in Section 8.10 of the Pledge Agreement
described in clause (i) of the definition of "Pledge Agreements" or in
Section 9.10 of the Pledge Agreement described in clause (ii) of the
definition of "Pledge Agreements".
The Administrative Agent, each Lender and each Issuing Bank hereby directs the
Collateral Agent to execute and deliver or file such termination and partial
release statements and do such other things as are necessary to release Liens to
be released pursuant to this Section 10.03(b) promptly upon the effectiveness of
any such release.
SECTION 10.04. RELEASE OF GUARANTORS. Upon (x) the liquidation or
dissolution of any Guarantor, or sale of all of the capital stock or other
ownership interests of any Guarantor, or the sale of assets of any Guarantor the
result of which is that such Guarantor no longer qualifies as a Restricted
Subsidiary, in each case which is permitted pursuant to the terms of any Loan
Document or consented to in writing by the Required Lenders or all of the
Lenders, as applicable, and upon at least five (5) Business Days' prior written
request by the Borrowers or (y) the occurrence of any event described in Section
11 of the Guaranty, the Collateral Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the applicable Guarantor from its obligations under the
Guaranty; provided, however, that (i) the Collateral Agent shall not be required
to execute any such document on terms which, in the Collateral Agent's opinion,
would expose the Collateral Agent to liability or create any obligation or
entail any consequence other than the release of such Guarantor without recourse
or warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Loans, any other Guarantor's obligations under the Guaranty, or, if
applicable, any obligations of any Borrower or any Subsidiary of any Borrower in
respect of the proceeds of any such sale retained by any Borrower or any
Subsidiary of any Borrower.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENTS, ETC. No amendment or waiver of any provision of
any Loan Document, nor consent to any departure by any Borrower or any other
Loan Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (i)
waive, modify or eliminate any of the conditions specified in Article VI, (ii)
increase the Commitments of the Lenders that may be maintained hereunder, (iii)
reduce or forgive the principal of, or interest on, any Loan, any Applicable
Margin, any Commitment Fee Margin or any fees or other amounts payable hereunder
(other than fees payable to the Administrative Agent pursuant to Section
2.02(b)), (iv) postpone any date fixed for any payment of principal of, or
interest on, any Loan or any fees or other amounts payable hereunder (other than
fees payable to the Administrative Agent pursuant to Section 2.02(b)) (except
with respect to any modifications of the provisions relating to amounts, timing
or application of prepayments of Loans and other
73
Obligations which modification shall require only the approval of the Required
Lenders), (v) change the definition of "Required Lenders" contained in Section
1.01 or change any other provision that specifies the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans or the
number of Lenders which shall be required for the Lenders or any of them to take
any action hereunder, (vi) amend, waive or modify Section 2.03(b) or this
Section 11.01, (vii) release the Collateral Agent's Lien on all of the
Collateral or any portion of the Collateral in excess of $50,000,000 (except as
provided in Section 10.03(b)), (viii) extend the Commitment Termination Date or
the Maturity Date, (ix) amend, waive or modify any provision of Section 5.01(g),
5.05 or 5.07 that provides for or ensures ratable distributions to the Lenders
or (x) amend, waive or modify any provision of Section 4.02 that requires each
Letter of Credit to have a stated expiry date no later than five (5) Business
Days (or, in the case of any commercial Letter of Credit, thirty (30) Business
Days) prior to the Commitment Termination Date; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by each
affected Agent in addition to the Lenders required above to take such action,
affect the rights or duties of any Agent under this Agreement or any other Loan
Document; and provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by each Issuing Bank in addition to the Lenders
required above to take such action, affect the rights or duties of any Issuing
Bank under this Agreement or any other Loan Document. Any request from the
Borrowers for any amendment, waiver or consent under this Section 11.01 shall be
addressed to the Administrative Agent.
SECTION 11.02. NOTICES, ETC. Subject to Section 11.14, all notices and
other communications provided for hereunder and under the other Loan Documents
shall be in writing and mailed, sent by courier service, telecopied or
delivered, (i) if to either Borrower, at its address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: S. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., General Counsel, with
a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Vice President, Investor Relations and
Treasurer, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (ii) if to any Bank, at
the address set forth on the signature page hereto with respect to such Bank;
(iii) if to any Issuing Bank, at its address specified in the Issuing Bank
Agreement to which it is a party; (iv) if to any Lender other than a Bank, at
its Applicable Lending Office specified in the Lender Assignment pursuant to
which it became a Lender; (v) if to the Administrative Agent with respect to
funding or payment of any amounts hereunder, at its address at ▇ ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, Telephone No. (302)
▇▇▇-▇▇▇▇, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; (vi) if to the Administrative Agent for
any other reason or to the Collateral Agent, at its address at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇, Telephone No. (212)
▇▇▇-▇▇▇▇, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
parties. Each such notice or other communication shall be effective (i) if given
by telecopy transmission, when transmitted to the telecopy number specified in
this Section 11.02 and confirmation of receipt is received, (ii) if given by
mail, 5 days after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered at the address specified in this Section 11.02, 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 any
Borrower, any Lender, any Issuing Bank or any Agent to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any
74
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 Borrowers jointly and severally agree to (i) reimburse on
demand all reasonable costs and expenses of each Agent and each Arranger
(including reasonable fees and expenses of counsel to the Agents) in connection
with (A) the preparation, syndication, negotiation, execution and delivery of
the Loan Documents and (B) the care and custody of any and all collateral, and
any proposed modification, amendment, or consent relating to any Loan Document,
and (ii) to pay on demand all reasonable costs and expenses of each Agent and,
on and after the date upon which the principal amount outstanding hereunder
becomes or is declared to be due and payable pursuant to Section 9.02 or an
Event of Default specified in Section 9.01(a) shall have occurred and be
continuing, each Lender (including fees and expenses of counsel to the Agents,
special Michigan counsel to the Lenders and, from and after such date, counsel
for each Lender (including the allocated costs and expenses of in-house
counsel)) in connection with the workout, restructuring or enforcement (whether
through negotiations, legal proceedings or otherwise) of this Agreement, the
other Loan Documents and the other documents to be delivered hereunder.
(b) The Borrowers jointly and severally agree to indemnify each
Agent, each Arranger, each Issuing Bank, each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an "INDEMNIFIED
PERSON") against, and hold each Indemnified Person harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnified
Person, incurred by or asserted against any Indemnified Person arising out of,
in connection with, or as a result of (i) the execution or delivery of any Loan
Document or any other agreement or instrument contemplated hereby or thereby,
the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or other Extension of Credit or the use or
proposed use of the proceeds therefrom, (iii) any actual or alleged presence or
release of any Hazardous Substance on or from any property owned or operated by
any Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to any Borrower or any of its Subsidiaries, (iv) the use of the
Platform as contemplated herein, or (v) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnified Person is a party thereto; provided, that such indemnity shall
not, as to any Indemnified Person, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnified Person. The
Borrower shall pay any civil penalty or fine assessed by the Office of Foreign
Assets Control against any Indemnified Person and all reasonable costs and
expenses (including reasonable fees and expenses of counsel to such Indemnified
Persons) incurred in connection with defense thereof, as a result of acts or
omissions of the Borrowers contrary to the representation made in Section
7.01(u).
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(c) The Borrowers' other obligations under this Section 11.04 shall
survive the repayment of all amounts owing to the Lenders, the Issuing Banks and
the Agents under the Loan Documents and the termination of the Commitments. If
and to the extent that the obligations of any Borrower under this Section 11.04
are unenforceable for any reason, the Borrowers jointly and severally agree to
make the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 11.05. RIGHT OF SET-OFF.
(a) Upon (i) the occurrence and during the continuance of any Event
of Default and (ii) the making of the request or the granting of the consent
specified by Section 9.02 to authorize the Administrative Agent to declare the
principal amount outstanding hereunder to be due and payable pursuant to the
provisions of Section 9.02, each Lender and Issuing Bank is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender or such Issuing Bank, as applicable, to or for the credit or the
account of any Borrower, against any and all of the obligations of such Borrower
now or hereafter existing under this Agreement and the Promissory Notes held by
such Lender or the Issuing Bank Agreement to which such Issuing Bank is a party,
as the case may be, irrespective of whether or not such Lender or such Issuing
Bank, as applicable, shall have made any demand under this Agreement or such
Promissory Notes or such Issuing Bank Agreement, as the case may be, and
although such obligations may be unmatured. Each Lender and Issuing Bank agrees
to notify promptly the applicable Borrower after any such set-off and
application made by such Lender or Issuing Bank, as the case may be, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender and Issuing Bank under this
Section 11.05 are in addition to other rights and remedies (including other
rights of set-off) which such Lender and Issuing Bank may have.
(b) Each 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 any Borrower's
rights to any independent claim that such Borrower may have against any Agent or
any Lender for such Agent's or such Lender's, as the case may be, gross
negligence or willful misconduct, but no Lender shall be liable for any such
conduct on the part of any Agent or any other Lender, and no Agent shall be
liable for any such conduct on the part of any Lender or any other Agent.
SECTION 11.06. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Borrowers and the Agents and when the
Administrative Agent shall have been notified by each Bank that such Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrowers, the Agents and each Lender and their respective successors and
assigns, except that, other than in connection with Enterprises reconstituting
itself as a limited liability company as permitted under Section 8.02(h),
neither Borrower shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
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SECTION 11.07. ASSIGNMENTS AND PARTICIPATION.
(a) Any Lender may sell participations in all or a portion of its
rights and obligations under this Agreement pursuant to subsection (b) below and
any Lender may assign all or any part of its rights and obligations under this
Agreement pursuant to subsection (c) below.
(b) Any Lender may sell participations to one or more banks or other
entities (each a "PARTICIPANT") in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and its outstanding Loan), provided that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment to the Borrowers 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 the Loans of
such Lender for all purposes of this Agreement and (iv) the Borrowers shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Each Lender shall retain
the sole right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which would require consent
of all of the Lenders pursuant to the terms of Section 11.01 or of any other
Loan Document. The Borrowers agree that each Participant shall be deemed to have
the right of set-off provided in Section 11.05 in respect of its participating
interest in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of set-off
provided in Section 11.05 with respect to the amount of participating interests
sold to each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of set-off provided in Section 11.05,
agrees to share with each Lender, any amount received pursuant to the exercise
of its right of set-off, such amounts to be shared in accordance with Section
11.05 as if each Participant were a Lender. The Borrowers further agree that
each Participant shall be entitled to the benefits of Sections 5.04 and 5.06 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 11.07(c); provided that (i) a Participant shall
not be entitled to receive any greater payment under Section 5.04 or 5.06 than
the Lender who sold the participating interest to such Participant would have
received had it retained such interest for its own account, unless the sale of
such interest to such Participant is made with the prior written consent of the
Borrowers, and (ii) any Participant not incorporated under the laws of the
United States of America or any State thereof agrees to comply with the
provisions of Section 5.06 to the same extent as if it were a Lender.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, with the consent of the Administrative Agent and
each Issuing Bank (such consent not to be unreasonably withheld or delayed), at
any time assign to any other Lender or to any Eligible Bank all or any part of
its rights and obligations under this Agreement, provided, that the aggregate of
the Commitments and the principal amount the Loans subject to any such
assignment (other than assignments to a Federal Reserve Bank, or to any other
Lender, or to any direct or indirect contractual counterparties in swap
agreements relating to the Loans to the extent required in connection with the
physical settlement of any Lender's obligations pursuant
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thereto) shall be $5,000,000 (or such lesser amount consented to by the
Administrative Agent); provided, that, unless such Lender is assigning all of
its rights and obligations hereunder, after giving effect to such assignment the
assigning Lender shall have Commitments and Loans in the aggregate of not less
than $5,000,000 (unless otherwise consented to by the Administrative Agent).
(d) Any Lender may, in connection with any sale or participation or
proposed sale or participation pursuant to this Section 11.07 disclose to the
purchaser or Participant or proposed purchaser or Participant any information
relating to the Borrowers furnished to such Lender by or on behalf of the
Borrowers, provided that prior to any such disclosure of non-public information,
the purchaser or Participant or proposed purchaser or Participant (which
Participant is not an affiliate of a Lender) shall agree to preserve the
confidentiality of any confidential information (except any such disclosure as
may be required by law or regulatory process) relating to the Borrowers received
by it from such Lender.
(e) Assignments under this Section 11.07 shall be made pursuant to
an agreement (a "LENDER ASSIGNMENT") substantially in the form of Exhibit F
hereto or in such other form as may be agreed to by the parties thereto and
shall not be effective until a $3,500 fee has been paid to the Administrative
Agent by the assignee, which fee shall cover the cost of processing such
assignment, provided, that such fee shall not be incurred in the event of an
assignment by any Lender of all or a portion of its rights under this Agreement
to (i) a Federal Reserve Bank, (ii) a Lender (iii) an affiliate of the assigning
Lender (which affiliate shall be an Eligible Bank) or (iv) to any direct or
indirect contractual counterparties in swap agreements relating to the Loans to
the extent required in connection with the physical settlement of any Lender's
obligations pursuant thereto.
(f) Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrowers, the option to provide to the
Borrowers all or any part of any Loan that such Granting Lender is obligated to
make to the Borrowers pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan, (ii) if an SPC
elects not to exercise such option or otherwise fails to provide all or any part
of such Loan, the Granting Lender shall remain obligated to make such Loan
pursuant to the terms hereof, (iii) the Borrowers shall not be required to pay
any amount under Section 5.06 that is greater than the amount which it would
have been required to pay had there been no grant to an SPC and (iv) any SPC (or
assignee of an SPC) will comply, if applicable, with the provisions contained in
Section 5.06. No grant by any Granting Lender to an SPC agreeing to provide a
Loan or the making of such Loan by such SPC shall operate to relieve such
Granting Lender of its liabilities and obligations hereunder, except to the
extent of the making of such Loan by such SPC. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In addition, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that any SPC may (i)
with notice to, but without the prior written consent of, the Borrowers and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion
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of its interests in any Loans to the Granting Lender or to any financial
institutions (consented to by the Administrative Agent in its sole discretion)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This Section 11.07(f) may not be amended
without the written consent of any SPC that holds an option to provide Loans. No
recourse under any obligation, covenant, or agreement of the SPC contained in
this Agreement shall be had against any shareholder, officer, agent or director
of the SPC as such, by the enforcement of any assessment or by any proceeding,
by virtue of any statute or otherwise; it being expressly agreed and understood
that this Agreement is a corporate obligation of the SPC and no personal
liability shall attach to or be incurred by any officer, agent or member of the
SPC as such, or any of them under or by reason of any of the obligations,
covenants or agreements of the SPC contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by the SPC of
any such obligations, covenants or agreements, either at law or by statute or
constitution, of every such shareholder, officer, agent or director is hereby
expressly waived by all parties to this Agreement as a condition of and
consideration for the SPC entering into this Agreement; provided, however, that
the foregoing shall not relieve any such person or entity of any liability they
might otherwise have as a result of fraudulent actions or omissions taken by
them. All parties to this Agreement acknowledge and agree that the SPC shall
only be liable for any claims that each of them may have against the SPC only to
the extent of the SPC's assets. The provisions of this clause shall survive the
termination of this Agreement.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided, that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(h) The Administrative Agent shall maintain at its address referred
to in Section 11.02 a copy of each Lender Assignment delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "REGISTER"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by any Borrower,
any Issuing Bank or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
SECTION 11.08. CONFIDENTIALITY. In connection with the negotiation and
administration of this Agreement and the other Loan Documents, the Borrowers
have furnished and will from time to time furnish to the Agents, the Issuing
Banks and the Lenders (each, a "RECIPIENT") written information which is
identified to the Recipient when delivered as confidential (such information,
other than any such information which (i) was publicly available, or otherwise
known to the Recipient, at the time of disclosure, (ii) subsequently becomes
publicly available other than through any act or omission by the Recipient or
(iii) otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in
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violation of his or its obligations to the Borrowers, 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 Borrowers may
otherwise instruct. It is understood, however, that the foregoing will not
restrict the Recipient's ability to freely exchange such Confidential
Information with its Affiliates, prospective Participants in or assignees of the
Recipient's position herein or direct or indirect counterparties (or their
advisors) to any swap, securitization or derivative transaction relating to the
Obligations, but the Recipient's ability to so exchange Confidential Information
shall be conditioned upon any such Person entering into an agreement as to
confidentiality similar to this Section 11.08. It is further understood that the
foregoing will not prohibit the disclosure of any or all Confidential
Information if and to the extent that such disclosure may be required (1) by a
regulatory agency, self-regulatory body or otherwise in connection with an
examination of the Recipient's records by appropriate authorities, (2) pursuant
to court order, subpoena or other legal process or in connection with any
proceeding, suit or other action relating to any Loan Document or (3) otherwise,
as required by law; in the event of any required disclosure under clause (2) or
(3), above, the Recipient agrees to use reasonable efforts to inform the
Borrowers as promptly as practicable to the extent not prohibited by law.
Notwithstanding any other provision of this Agreement, each party (and each
Participant pursuant to Section 11.07) (and each employee, representative or
other agent of such party (or Participant)) may disclose to any and all persons,
without limitation of any kind, the U.S. tax treatment and U.S. tax structure of
the transactions contemplated by the Loan Documents and all materials of any
kind (including opinions or other tax analyses) that are provided to such party
relating to such U.S. tax treatment and U.S. tax structure, other than any
information for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws.
SECTION 11.09. Waiver of Jury Trial. THE BORROWERS, THE AGENTS, THE
ISSUING BANKS AND THE LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
AND THE PROMISSORY NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES). THE BORROWERS, THE LENDERS, THE ISSUING BANKS AND
THE AGENTS, EACH (I) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT SITTING IN NEW YORK CITY IN ANY ACTION ARISING OUT
OF ANY LOAN DOCUMENT, (II) AGREES THAT ALL CLAIMS IN SUCH ACTION MAY BE DECIDED
IN SUCH COURT, (III) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM AND (IV) CONSENTS TO THE SERVICE OF PROCESS BY
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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. EACH BORROWER AGREES THAT THE AGENTS
SHALL HAVE THE RIGHT TO PROCEED AGAINST SUCH BORROWER OR ITS PROPERTY IN A COURT
IN ANY LOCATION TO ENABLE THE AGENTS, THE ISSUING BANKS AND THE LENDERS TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF ANY AGENT, ANY
ISSUING BANK OR ANY LENDER. EACH BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY ANY AGENT, ANY ISSUING
BANK OR ANY LENDER TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ANY
AGENT, ANY ISSUING BANK OR ANY LENDER. EACH BORROWER WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH ANY AGENT, ANY ISSUING BANK OR
ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
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 this Agreement or any other Loan Document shall be
construed to confer a benefit upon, or grant a right or privilege to, any Person
other than the parties hereto or thereto. Each Borrower hereby acknowledges that
none of the Agents, the Lenders or the Issuing Banks has any fiduciary
relationship with or fiduciary duty to such Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Agents, the Lenders and the Issuing Banks, on the one
hand, and such Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor.
SECTION 11.12. 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 11.13. 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, the Lenders
and the Issuing Banks and shall survive the making by the Lenders and the
Issuing Banks of the Extensions of Credit and the execution and delivery to the
Lenders of any Promissory Notes evidencing the Extensions of Credit and shall
continue in full force and effect so long as any Promissory Note or any amount
due hereunder is outstanding and unpaid, any Letter of Credit remains
outstanding or any Commitment of any Lender has not been terminated.
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SECTION 11.14. PLATFORM.
(a) Each Borrower shall use its commercially reasonable best efforts
to transmit to the Administrative Agent all information, documents and other
materials that it is obligated to furnish to the Administrative Agent pursuant
to this Agreement and the other Loan Documents, including, without limitation,
all notices, requests, financial statements, financial and other reports,
certificates and other information materials, but excluding any such
communication that (i) relates to a notice of borrowing or other extension of
credit or a conversion of an existing interest rate on any Loan or Borrowing
(including, without limitation, any Notice of Conversion), (ii) relates to the
payment of any principal or other amount due hereunder prior to the scheduled
date therefor, (iii) provides notice of any Default or Event of Default
hereunder or (iv) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any Extension of Credit hereunder
(all such non-excluded communications being referred to herein collectively as
"COMMUNICATIONS"), in an electronic/soft medium in a format reasonably
acceptable to the Administrative Agent to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ (or such
other e-mail address designated by the Administrative Agent from time to time).
In addition, each Borrower shall continue to provide the Communications to the
Administrative Agent in the manner specified in this Agreement but only to the
extent requested by the Administrative Agent. Each Lender, each Issuing Bank and
the Borrowers further agree that the Administrative Agent may make the
Communications available to the Lenders and the Issuing Banks by posting the
Communications on IntraLinks or a substantially similar electronic transmission
system (the "PLATFORM"); provided, however, that upon written notice to the
Administrative Agent and the Company, any Lender or any Issuing Bank (such
lender a "DECLINING LENDER") may decline to receive Communications via the
Platform and shall direct the Company to provide, and the Company shall so
provide, such Communications to such Declining Lender by delivery to such
Declining Lender's address set forth on the signature pages hereto, or as
specified in the Lender Assignment pursuant to which it became a Lender or as
otherwise directed in such notice. Subject to the conditions set forth in the
proviso in the immediately preceding sentence, nothing in this Section 11.14
shall prejudice the right of the Administrative Agent to make the Communications
available to the Lenders in any other manner specified herein.
(b) Each Lender and Issuing Bank (other than a Declining Lender)
agrees that e-mail notice to it (at the address provided pursuant to the next
sentence and deemed delivered as provided in the next paragraph) specifying that
Communications have been posted to the Platform shall constitute effective
delivery of such Communications to such Lender or such Issuing Bank, as
applicable, for purposes of this Agreement. Each Lender and Issuing Bank (other
than a Declining Lender) agrees (i) to notify the Administrative Agent in
writing (including by electronic communication) from time to time to ensure that
the Administrative Agent has on record an effective e-mail address for such
Lender or such Issuing Bank, as applicable, to which the foregoing notice may be
sent by electronic transmission and (ii) that the foregoing notice may be sent
to such e-mail address.
(c) Each party hereto (other than a Declining Lender) agrees that
any electronic communication referred to in this Section 11.14 shall be deemed
delivered upon the posting of a record of such communication as "sent" in the
e-mail system of the sending party or, in the case of any such communication to
the Administrative Agent, upon the posting of a record of such communication as
"received" in the e-mail system of the Administrative Agent, provided that if
such communication is not so received by the Administrative Agent during the
normal
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business hours of the Administrative Agent, such communication shall be deemed
delivered at the opening of business on the next business day for the
Administrative Agent.
(d) Each party hereto acknowledges that the distribution of material
through an electronic medium is not necessarily secure and there are
confidentiality and other risks associated with such distribution.
(e) EACH PARTY HERETO FURTHER ACKNOWLEDGES AND AGREES THAT:
(i) NONE OF THE ADMINISTRATIVE AGENT, ITS AFFILIATES NOR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, THE "CITIGROUP PARTIES") WARRANTS THE
ADEQUACY OF THE PLATFORM OR THE ACCURACY OR COMPLETENESS OF ANY
COMMUNICATIONS, AND EACH CITIGROUP PARTY EXPRESSLY DISCLAIMS LIABILITY FOR
ERRORS OR OMISSIONS IN ANY COMMUNICATIONS, AND
(ii) NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY CITIGROUP PARTY
IN CONNECTION WITH ANY COMMUNICATIONS OR THE PLATFORM.
(f) This Section 11.14 shall terminate on the date that neither CUSA
nor any of the Citigroup Parties is the Administrative Agent under this
Agreement.
SECTION 11.15. USA PATRIOT ACT. Each Lender hereby notifies the Borrowers
that pursuant to requirements of the USA Patriot Act , it is required to obtain,
verify and record information that identifies the Loan Parties, which
information includes the name and address of each Loan Party and other
information that will allow such Lender to identify such Loan Party in
accordance with the USA Patriot Act.
ARTICLE XII
CO-BORROWER PROVISIONS
SECTION 12.01. APPOINTMENT. Each of the Borrowers hereby irrevocably
designates, appoints and authorizes the other Borrower as its agent and
attorney-in-fact to take actions under this Agreement and the other Loan
Documents, together with such powers as are reasonably incidental thereto. The
Agents, the Issuing Banks and the Lenders shall be entitled to rely, and shall
be fully protected in relying, upon any communication from or to any Borrower as
having been delivered by or to all Borrowers. Any action taken by one Borrower
under this Agreement and the other Loan Documents shall be binding upon the
other Borrower. Each Borrower agrees that it is jointly and severally liable to
the Agents, the Issuing Banks and the Lenders for the payment of the Obligations
and that such liability is independent of the Obligations of the other Borrower
and whether such Obligations become unenforceable against the other Borrower.
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SECTION 12.02. SEPARATE ACTIONS. A separate action or actions may be
brought and prosecuted against any Borrower whether such action is brought
against the other Borrower or whether the other Borrower is joined in such
action or actions. Each Borrower authorizes the Administrative Agent, the
Issuing Banks and the Lenders to release the other Borrower without in any
manner or to any extent affecting the liability of such Borrower hereunder or
under the Loan Documents. Each Borrower waives any defense arising by reason of
any disability or other defense of the other Borrower, or the cessation for any
reason whatsoever of the liability of the other Borrower with respect to any of
the Obligations, or any claim that such Borrower's liability hereunder exceeds
or is more burdensome than the liability of the other Borrower.
SECTION 12.03. OBLIGATIONS ABSOLUTE AND UNCONDITIONAL . Each Borrower
hereby agrees that its Obligations hereunder and under the Loan Documents shall
be unconditional, irrespective of:
(a) the validity, enforceability, avoidance or subordination of any
of the Obligations or any of the Loan Documents as to the other Borrower;
(b) the absence of any attempt by, or on behalf of, any Agent, any
Issuing Bank or any Lender to collect, or to take any other action to enforce,
all or any part of the Obligations whether from or against the other Borrower;
(c) any borrowing or grant of a security interest by the other
Borrower or any receiver or assignee in relation to the other Borrower following
the occurrence of any event described in Section 9.01(f), pursuant to any
provision of applicable law comparable to Section 364 of the Bankruptcy Code;
(d) the disallowance, under any provision of applicable law
comparable to Section 502 of the Bankruptcy Code, of all or any portion of the
claims against the other Borrower held by any Lender, any Issuing Bank or any
Agent, for repayment of all or any part of the Obligations;
(e) the insolvency of the other Borrower; and
(f) any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of the other Borrower (other than payment in
full in cash of the Obligations and the termination of the Commitments).
SECTION 12.04. WAIVERS AND ACKNOWLEDGEMENTS.
(a) Except as otherwise expressly provided under any provision of
the Loan Documents or as required by any mandatory provision of applicable law,
each Borrower hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of receivership, insolvency or bankruptcy of
any Borrower or any other Person, protest or notice with respect to the
Obligations, all setoffs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor and notices of acceptance of this Agreement and the other Loan
Documents, and all other demands whatsoever (and shall not require that the same
be made on the other Borrower as a condition precedent to the other Borrower's
Obligations hereunder), and covenants that this Agreement
84
(and the joint and several liability of each Borrower under Section 12.01) will
not be discharged, except by payment in full in cash of the Obligations and the
termination of the Commitments. Each Borrower further waives all notices of the
existence, creation or incurrence of new or additional Debt, arising either from
additional loans extended to the other Borrower or otherwise, and also waives
all notices that the principal amount, or any portion thereof, and/or any
interest on any instrument or document evidencing all or any part of the
Obligations is due, notices of any and all proceedings to collect from the
maker, any endorser or any other guarantor of all or any part of the
Obligations, or from any other Person, and, to the extent permitted by law,
notices of exchange, sale, surrender or other handling of any security or
Collateral given to any Agent, any Issuing Bank or any Lender to secure payment
of all or any part of the Obligations.
(b) The Agents, the Issuing Banks and/or the Lenders are hereby
authorized, without notice or demand and without affecting the liability of the
Borrowers hereunder, from time to time, (i) to accept partial payments on all or
any part of the Obligations; (ii) to take and hold security or Collateral for
the payment of all or any part of the Obligations, this Agreement, or any other
guaranties of all or any part of the Obligations or other liabilities of the
Borrowers, and (iii) to settle, release, exchange, enforce, waive, compromise or
collect or otherwise liquidate all or any part of the Obligations, this
Agreement, any guaranty of all or any part of the Obligations, and, subject to
the terms of the Pledge Agreements, any security or Collateral for the
Obligations or for any such guaranty, irrespective of the effect on the
contribution or subrogation rights of the Borrowers. Any of the foregoing may be
done in any manner, without affecting or impairing the obligations of each
Borrower hereunder.
SECTION 12.05. CONTRIBUTION AMONG BORROWERS.
(a) To the extent that any payment is made on the Obligations by or
on behalf of any Borrower under or pursuant to this Article XII (a "BORROWER
PAYMENT") which, taking into account all other Borrower Payments then previously
or concurrently made by any other Borrower, exceeds the amount which otherwise
would have been paid by or attributable to such Borrower if each Borrower had
paid the aggregate Obligations satisfied by such Borrower Payment in the same
proportion as such Borrower's "Allocable Amount" (as defined below) (as
determined immediately prior to such Borrower Payment) bore to the aggregate
Allocable Amounts of each of the Borrower as determined immediately prior to the
making of such Borrower Payment, then, following payment in full in cash of the
Obligations and the termination or expiration of all Commitments, such Borrower
shall be entitled to receive contribution and indemnification payments from, and
be reimbursed by, the other Borrower for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Borrower Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim which could then be
recovered from such Borrower with respect to the Obligations without rendering
such claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 12.05 is intended only to define the relative
rights of the Borrowers, and nothing set forth in this Section 12.05 is intended
to or shall impair the
85
obligations of the Borrowers to pay any amounts as and when the same shall
become due and payable in accordance with the terms of this Agreement.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Borrower to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrower against the other
Borrower with respect to any payments on the Obligations shall be exercisable
upon the full payment of the Obligations in cash and the termination or expiry
of the Commitments.
SECTION 12.06. SUBROGATION; REINSTATEMENT. Until the Obligations shall
have been paid in full in cash and the Commitments shall have been terminated,
each Borrower hereby agrees that it (i) shall have no right of subrogation with
respect to such Obligations (under contract, Section 509 of the Bankruptcy Code
or any comparable provision of any other applicable law, or otherwise) or any
other right of indemnity, reimbursement or contribution, and (ii) hereby waives
any right to enforce any remedy which any Agent, any Issuing Bank or any Lender
may now have or may hereafter have against the other Borrower. The provisions of
this Article XII shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Obligations is rescinded or
must otherwise be returned by the Collateral Agent, the Administrative Agent,
any Issuing Bank or any Lender upon the insolvency, bankruptcy or reorganization
of either Borrower or otherwise, all as though such payment had not been made.
SECTION 12.07. SUBORDINATION. Each Borrower agrees that any and all claims
of such Borrower against the other Borrower, the Guarantors or any endorser or
other guarantor of all or any part of the Obligations, or against any of their
respective properties, shall be subordinated to all of the Obligations;
provided, that, for the avoidance of doubt, so long as no Event of Default shall
be continuing, each Borrower may make loans to and receive payments in the
ordinary course with respect to Inter-Borrower Debt (as hereinafter defined)
from the other Borrower to the extent not prohibited by the terms of this
Agreement and the other Loan Documents. Notwithstanding any right of any
Borrower to ask for, demand, ▇▇▇ for, take or receive any payment from the other
Borrower, all rights and Liens of such Borrower, whether now or hereafter
arising and howsoever existing, in any assets of the other Borrower (whether
constituting part of the Collateral or otherwise) shall be and hereby are
subordinated to the rights of the Agents, the Issuing Banks or the Lenders in
those assets. Such Borrower shall have no right to possession of any such asset
or to foreclose upon any such asset, whether by judicial action or otherwise,
unless and until all of the Obligations shall have been paid in full in cash, no
Letters of Credit remain outstanding and the Commitments shall have been
terminated. If all or any part of the assets of any Borrower, or the proceeds
thereof, are subject to any distribution, division or application to the
creditors of such Borrower, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, or if the business of any Borrower is dissolved or if substantially
all of the assets of any Borrower are sold, then, and in any such event, any
payment or distribution of any kind or character, either in cash, securities or
other property, which shall be payable or deliverable upon or with respect to
any Debt of any Borrower to the other Borrower ("INTER-BORROWER DEBT") shall be
paid or delivered directly to
86
the Administrative Agent for application to the Obligations, due or to become
due, until such Obligations shall have been paid in full in cash and no Letters
of Credit remain outstanding. Each Borrower irrevocably authorizes and empowers
the Administrative Agent, each of the Issuing Banks and each of the Lenders to
demand, ▇▇▇ for, collect and receive every such payment or distribution and give
acquittance therefor and to make and present for and on behalf of such Borrower
such proofs of claim and take such other action, in the Administrative Agent's,
such Issuing Bank's or such Lender's own name or in the name of such Borrower or
otherwise, as the Administrative Agent, any Issuing Bank or any Lender may deem
reasonably necessary or reasonably advisable for the enforcement of this
Agreement. After the occurrence and during the continuance of a Default or an
Event of Default, each Lender may vote, with respect to the Obligations owed to
it, such proofs of claim in any such proceeding, receive and collect any and all
dividends or other payments or disbursements made thereon in whatever form the
same may be paid or issued and apply the same on account of any of the
Obligations. Except as permitted under Sections 8.02(d) and (e), should any
payment, distribution, security or instrument or proceeds thereof be received by
any Borrower upon or with respect to the Inter-Borrower Debt during the
continuance of any Event of Default and prior to the payment in full in cash of
all of the Obligations, the termination or cancellation of each Letter of Credit
and the termination of the Commitments, such Borrower shall receive and hold the
same in trust, as trustee, for the benefit of the Agents, the Issuing Banks and
the Lenders and shall forthwith deliver the same to the Administrative Agent in
precisely the form received (accompanied by the endorsement or assignment of
such Borrower where necessary), for application to the Obligations, due or not
due, and, until so delivered, the same shall be held in trust by such Borrower
as the property of the Agents, the Issuing Banks and the Lenders. After the
occurrence and during the continuance of a Default or an Event of Default, if
any Borrower fails to make any such endorsement or assignment to the Agents, the
Issuing Banks or the Lenders, the Agents, the Issuing Banks or the Lenders (or
any of their respective officers or employees) are hereby irrevocably authorized
to make the same. Each Borrower agrees that until the Obligations have been paid
in full in cash, no Letters of Credit remain outstanding and the Commitments
have been terminated, such Borrower will not assign or transfer to any Person
any claim such Borrower has or may have against any other Borrower (other than
in favor of the Administrative Agent pursuant to the Loan Documents).
ARTICLE XIII
NO NOVATION; REFERENCES TO THIS AGREEMENT IN LOAN DOCUMENTS
SECTION 13.01. NO NOVATION. It is the express intent of the parties hereto
that this Agreement (i) shall re-evidence, in part, the Borrowers' indebtedness
under the Existing Credit Agreement, (ii) is entered into in substitution for,
and not in payment of, the obligations of the Borrowers under the Existing
Credit Agreement, and (iii) is in no way intended to constitute a novation of
any of the Borrowers' indebtedness which was evidenced by the Existing Credit
Agreement or any of the other Loan Documents.
SECTION 13.02. REFERENCES TO THIS AGREEMENT IN LOAN DOCUMENTS. Upon the
effectiveness of this Agreement, on and after the date hereof, each reference in
any other Loan Document to the Existing Credit Agreement (including any
reference therein to "the Credit Agreement," "thereunder," "thereof," "therein"
or words of like import referring thereto) shall mean and be a reference to this
Agreement.
87
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
CMS ENTERPRISES COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
Signature Page to
Fifth Amended and Restated Credit Agreement
CITICORP USA, INC., as Collateral Agent
and as Administrative Agent
By: /s/ ▇▇▇▇ ▇. [ILLEGIBLE]
-------------------------------------
Name: ▇▇▇▇ ▇. [ILLEGIBLE]
Title: Director
CITIBANK, N.A., as a Lender
By: /s/ ▇▇▇▇ ▇. [ILLEGIBLE]
-------------------------------------
Name: ▇▇▇▇ ▇. [ILLEGIBLE]
Title: Director
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent and a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Director
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
BANK ONE, NA, as a Documentation
Agent and a Lender
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Title: Director
Address: JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇/▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
BARCLAYS BANK PLC, as a Documentation
Agent and a Lender
By: /s/ Sydney ▇. ▇▇▇▇▇▇
-------------------------------------
Name: Sydney ▇. ▇▇▇▇▇▇
Title: Director
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Sydney ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
UNION BANK OF CALIFORNIA, N.A.,
as a Documentation Agent and a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
BNP PARIBAS, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Director
Deutsche Bank
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
NYC 60-4301
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
FOOTHILL INCOME TRUST II, L.P., as a Lender
BY FIT II GP, LLC, Its General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. #▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ / ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ / (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ / (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
KEYBANK NATIONAL ASSOCIATION, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇: ▇▇-▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
COMERICA BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Account Officer
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ([313]) [ ] ▇▇▇-▇▇▇-▇▇▇▇
Fax: ([ ]) [ ] ▇▇▇-▇▇▇-▇▇▇▇
Signature Page to
Fifth Amended and Restated Credit Agreement
COMMITMENT SCHEDULE
LENDER Commitment
------ ----------
CITIBANK, N.A $ 33,500,000
WACHOVIA BANK, NATIONAL ASSOCIATION $ 33,500,000
BANK ONE, NA $ 33,500,000
BARCLAYS BANK PLC $ 33,500,000
UNION BANK OF CALIFORNIA, N.A. $ 33,500,000
BNP PARIBAS $ 28,000,000
DEUTSCHE BANK TRUST COMPANY AMERICAS $ 28,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA $ 24,000,000
FOOTHILL INCOME TRUST II, L.P. $ 20,000,000
KEYBANK NATIONAL ASSOCIATION $ 20,000,000
COMERICA BANK $ 12,500,000
Total Commitments: $300,000,000
SCHEDULE II
Pledged Ownership Interests
GRANTOR PLEDGED SUBSIDIARIES
CMS Energy Corporation CMS Enterprises Company (100%)
Consumers Energy Company (100%)
CMS Enterprises Company CMS Generation Co. (100%)
CMS Gas Transmission Company (100%)
CMS Capital, L.L.C. (100%)
CMS Energy Resource Management Company (100%)
CMS International Ventures, L.L.C. (40.47%)
CMS International Ventures, L.L.C. CMS Electric & Gas, L.L.C. (100%)
CMS Generation Co. CMS International Ventures, L.L.C. (21.02%)
Dearborn Industrial Energy, L.L.C. (100%)
CMS Generation Michigan Power L.L.C. (100%)
Dearborn Industrial Energy, L.L.C. Dearborn Industrial Generation, L.L.C. (100%)
CMS Gas Transmission Company CMS International Ventures, L.L.C. (37.01%)
ATTACHMENT A
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy of
the foregoing Fifth Amended and Restated Credit Agreement dated as of
August____, 2004 by and among CMS ENERGY CORPORATION (the "COMPANY") and CMS
ENTERPRISES COMPANY ("ENTERPRISES"), the financial institutions from time to
time party thereto (the "LENDERS"), and CITICORP USA, INC., as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the Lenders and as
collateral agent (in such capacity, the "Collateral Agent") for the Lenders (as
amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"). Capitalized terms used in this Reaffirmation and not
defined herein shall have the meanings given to them in the Credit Agreement.
As used herein, (i) "ENTERPRISES PLEDGE SUPPLEMENT" means the Pledge
Supplement to the Pledge Agreement (as defined below), dated as of November 1,
2002, made by Enterprises, a Michigan corporation, in favor of the Collateral
Agent (as defined therein); (ii) "CMSGTC PLEDGE SUPPLEMENT" means the Pledge
Supplement to the Pledge Agreement (as defined below), dated as of November 1,
2002, made by CMS Gas Transmission Company, a Michigan corporation ("CMSGTC"),
in favor of the Collateral Agent (as defined therein); (iii) "CMSGC PLEDGE
SUPPLEMENT" means the Pledge Supplement to the Pledge Agreement (as defined
below), dated as of November 1, 2002, made by CMS Generation Co., a Michigan
corporation ('CMSGC"), in favor of the Collateral Agent (as defined therein);
(iv) "CMSIV PLEDGE SUPPLEMENT" means the Pledge Supplement to the Pledge
Agreement (as defined below), dated as of December 8, 2003, made by CMS
International Ventures, L.L.C., a Michigan limited liability company ("CMSIV"),
in favor of the Collateral Agent (as defined therein) and (v) "CMSEG PLEDGE
SUPPLEMENT" means the Pledge Supplement to the Pledge Agreement (as defined
below), dated as of December 8, 2003, made by CMS Electric & Gas, L.L.C.
("CMSEG"), a Michigan limited liability company, in favor of the Collateral
Agent (as defined therein).
Without in any way establishing a course of dealing by any Agent or
any Lender, the Company:
(a) reaffirms the grant of a security interest pursuant to that
certain Third Amended and Restated Pledge and Security Agreement, dated as of
December 8, 2003, made by the Company in favor of the Collateral Agent (as
defined therein) on behalf of and for the ratable benefit of the Lenders (the
"SECURITY AGREEMENT") and
(b) hereby grants a security interest to the Collateral Agent, in
all of the Company's right, title and interest, whether now owned or hereinafter
acquired, in the Collateral (as defined in the Security Agreement) to secure the
Secured Obligations (as defined in the Security Agreement).
Attachment A
1
Without in any way establishing a course of dealing by any Agent or
any Lender, each of Enterprises and the other entities that are signatories
hereto (other than the Company):
(a) reaffirms the grant of a security interest pursuant to that
certain Pledge and Security Agreement, dated as of July 12, 2002, made by
Enterprises and each other Grantor (as defined therein) in favor of the
Collateral Agent (as defined therein) on behalf of and for the ratable benefit
of the Lenders (the "PLEDGE AGREEMENT");
(b) hereby grants a security interest to the Collateral Agent, in
all of such Grantor's right, title and interest, whether no owner or hereinafter
acquired, in the Collateral (as defined in the Pledge Agreement) to secure the
Obligations (as defined in the Pledge Agreement);
(c) in the case of Enterprises, hereby grants a security interest to
the Collateral Agent, in all of its right, title and interest, whether no owner
or hereinafter acquired, in the collateral described on Schedule I to the
Enterprises Pledge Supplement;
(d) in the case of CMSGTC, hereby grants a security interest to the
Collateral Agent, in all of its right, title and interest, whether no owner or
hereinafter acquired, in the collateral described on Schedule I to the CMSGTC
Pledge Supplement;
(e) in the case of CMSGC, hereby grants a security interest to the
Collateral Agent, in all of its right, title and interest, whether no owner or
hereinafter acquired, in the collateral described on Schedule I to the CMSGC
Pledge Supplement;
(f) in the case of CMSIV, hereby grants a security interest to the
Collateral Agent, in all of its right, title and interest, whether no owner or
hereinafter acquired, in the collateral described on Schedule I to the CMSIV
Pledge Supplement;
(g) in the case of CMSEG, hereby grants a security interest to the
Collateral Agent, in all of its right, title and interest, whether no owner or
hereinafter acquired, in the collateral described on Schedule I to the CMSEG
Pledge Supplement;
(h) in the case of each Guarantor, reaffirms its unconditional
guaranty of the Obligations pursuant to the Guaranty and
(i) acknowledges and agrees that each such Loan Document executed by
the undersigned in connection with the Credit Agreement remains in full force
and effect and is hereby reaffirmed, ratified and confirmed. All references to
the Credit Agreement contained in the Security Agreement, the Pledge Agreement
and the Guaranty shall be a reference to the Credit Agreement as the same may
from time to time hereafter be amended, modified or restated.
Attachment A
2
THIS REAFFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES).
Dated as of August_________2004
CMS ENTERPRISES COMPANY CMS ENERGY CORPORATION
By:___________________________ By:___________________________
Name: Name:
Title: Title:
CMS GAS TRANSMISSION COMPANY CMS ELECTRIC & GAS, L.L.C.
(formerly known as CMS Electric and
Gas Company)
By:___________________________ By:___________________________
Name: Name:
Title: Title:
CMS GENERATION CO. CMS CAPITAL, L.L.C.
By:___________________________ By:___________________________
Name: Name:
Title: Title:
CMS ENERGY RESOURCE MANAGEMENT COMPANY CMS INTERNATIONAL VENTURES, L.L.C.
By:___________________________ By:___________________________
Name: Name:
Title: Title:
Attachment A
3
CMS GENERATION MICHIGAN POWER L.L.C. DEARBORN INDUSTRIAL ENERGY, L.L.C.
By:___________________________ By:___________________________
Name: Name:
Title: Title:
DEARBORN INDUSTRIAL GENERATION, L.L.C.
By:__________________________
Name:
Title:
Attachment A
4
AGREED AND ACKNOWLEDGED as of the date first written above.
CITICORP USA, INC., as Collateral Agent
By:___________________________
Its:
Attachment A
5