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EXHIBIT 99.30
FORM OF STANDBY NOTE
PURCHASE CREDIT FACILITY
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U.S. $
STANDBY NOTE PURCHASE CREDIT FACILITY
DATED AS OF
Among
THE DETROIT EDISON COMPANY
and
THE BANKS SIGNATORY HERETO
and
as Administrative Agent,
and
as Remarketing Agents
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TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . 2
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II.
COMMITMENTS; FAILED REMARKETINGS; PURCHASED NOTES . . . . . . . . . . . . 10
SECTION 2.01. The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.02. Reduction of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.03. Failed Remarketings; Purchases of Purchased Notes; Grant of
Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.04. Extension of Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.05. Company Mandatory and Optional Repurchase of Purchased Notes . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.06. Remarketing of Purchased Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III.
AMOUNTS AND TERMS OF THE ADVANCES. . . . . . . . . . . . . . . . . 14
SECTION 3.01. Making the Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.02. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.03. Repayment; Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.04. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.05. Conversion of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.06. Increased Costs; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.07. Additional Interest on Eurodollar Rate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.08. Interest Rate Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.09. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.10. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.11. Funding Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.12. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV.
CONDITIONS OF LENDING. . . . . . . . . . . . . . . . . . . . 21
SECTION 4.01. Condition Precedent to Initial Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.02. Conditions Precedent to Each Borrowing and Conversion . . . . . . . . . . . . . . . . . . . . . . . 22
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PAGE
ARTICLE V.
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.01. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI.
COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE ▇▇▇.▇▇▇▇▇▇ OF DEFAULT . . . . . . . . . . . . . . . . . . . 31
SECTION 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.02. Upon an Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII.
THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.02. Administrative Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.03. The Chase Manhattan Bank and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.04. Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.06. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IX.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 9.02. Notices, Etc.37
SECTION 9.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.04. Costs, Expenses, Taxes and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.05. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 9.06. Binding Effect; Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.07. Eligible Bank Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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PAGE
SECTION 9.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.09. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Schedule I - List of Domestic Lending Offices and Eurodollar Lending Offices
Exhibit A - Form of Notice of Failed Remarketing and Borrowing Request
Exhibit B - Form of Assignment and Acceptance Agreement
Exhibit C - Form of Opinion of Counsel to the Company
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STANDBY NOTE
PURCHASE CREDIT FACILITY
Dated as of
THE DETROIT EDISON COMPANY, a Michigan corporation (the "COMPANY"), the
banks (the "BANKS") listed on the signature pages hereof, as
administrative agent (the "ADMINISTRATIVE AGENT") for the Banks hereunder, and
, each as a Remarketing Agent (as hereinafter defined), agree as
follows:
PRELIMINARY STATEMENT
The Company expects to remarket $ aggregate principal
amount of its Multi-Mode Remarketed Secured Notes (the "NOTES") issued pursuant
to a Collateral Trust Indenture, dated as of as supplemented by a
First Supplemental Indenture, dated as of June 30, 1993, a Second Supplemental
Indenture, dated as of September 15, 1993, as amended by the First Amendment to
the Second Supplemental Indenture, dated as of August 15, 1996, a Third
Supplemental Indenture, dated as of August 15, 1994, as amended by the First
Amendment to the Third Supplemental Indenture, dated as of December 12, 1995, a
Fourth Supplemental Indenture, dated as of August 15, 1995, a Fifth Supplemental
Indenture, dated as of February 1, 1996 and a sixth supplemental Indenture
dated as of May 1, 1998(together, the "NOTE INDENTURE"), between the Company and
Bankers Trust Company, as trustee. Pursuant to the Note Indenture, the Notes are
and continue to be secured by general and refunding mortgage bonds of the
Company (the "PLEDGED BOND"), which were issued pursuant to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between the Company and Bankers
Trust Company, as amended and supplemented by various supplemental indentures,
including that certain Supplemental Indenture creating the Pledged Bond, dated
as of (as so amended and supplemented, and as further amended
and supplemented from time to time, the "MORTGAGE").
Pursuant to the terms and conditions of the Note Indenture, the Notes
may from time to time be tendered for purchase by the beneficial owners thereof
(each a "BENEFICIAL OWNER"), and, if so tendered, will be remarketed in
accordance with the terms and conditions of the Remarketing Agreement (as
hereinafter defined). In order to assure that adequate liquidity is available
in connection with the purchase upon tender and remarketing of the Notes, the
Company has requested that the Banks establish the credit facility provided for
hereunder for the making of Advances (as hereinafter defined) to the
Remarketing Agents under the circumstances hereinafter described. All Advances
will be utilized for the purchase of Notes which the applicable Remarketing
Agent has been unable to successfully remarket, coincident with their tender by
the holders thereof, in accordance with the terms of the Remarketing Agreement.
Any Notes the purchase of which is funded with the proceeds of Advances will be
purchased for the account of the Administrative Agent for the ratable benefit
of the Banks, and will be registered with DTC (as hereinafter defined) in the
name of the Administrative Agent or its nominee on behalf of the
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Banks. Such Notes shall constitute Purchased Notes (as hereinafter defined)
for all purposes of the Note Indenture, until such Notes are successfully
remarketed or repurchased by the Company and the proceeds thereof are paid to
the Administrative Agent for distribution to the Banks hereunder (all as
provided herein and in the Note Indenture). The Company will be required to
repurchase any Notes registered in the name of the Administrative Agent upon
any termination of the credit facility established hereunder.
The Banks are willing to make the Advances, and the Administrative
Agent has agreed to act as agent for the Banks, on the terms and conditions set
forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADVANCE" means an advance made by a Bank to any Remarketing Agent
pursuant to Article III, and refers to a Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "TYPE" of Advance.
"AGREEMENT" means this Standby Note Purchase Credit Facility, as
amended, modified, supplemented and in effect from time to time.
"APPLICABLE LENDING OFFICE" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of a Base Rate Advance and such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means % per annum.
"BASE RATE" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced by at its
principal office in from time to time as its prime commercial
lending rate; and
(b) percent per annum above the Federal Funds
Effective Rate in effect from time to time.
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Each change in the Base Rate shall take effect simultaneously with the
corresponding change or changes in the rates described in clause (i) or clause
(ii), above.
"BASE RATE ADVANCE" means any Advance which bears interest as provided
in Section 3.04(a).
"BENEFICIAL OWNER" has the meaning specified in the Preliminary
Statement.
"BORROWING" means a borrowing under this Agreement, initially
consisting of Base Rate Advances, but which subsequently may be Converted to
Eurodollar Rate Advances. Each Borrowing shall consist of Advances made or
Converted on the same day by the Banks.
"BUSINESS DAY" means a day of the year other than a Saturday or Sunday
on which banks are not required or authorized to close in New York City and, if
the applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"CODE" means the Internal Revenue Code of 1986 and the regulations
promulgated and rulings issued thereunder, each as amended, modified or
supplemented from time to time; or any successor legislation.
"COMMITMENT" has the meaning specified in Section 2.01.
"CONSOLIDATED NET WORTH" means the sum of the capital stock (excluding
treasury stock and capital stock subscribed for and unissued) and surplus
(including earned surplus, capital surplus and the balance of the current
profit and loss account not transferred to surplus) accounts of the Company and
its subsidiaries appearing on a consolidated balance sheet of the Company and
its subsidiaries prepared as of the date of determination in accordance with
generally accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 5.01(h), after
eliminating all intercompany transactions and all amounts properly attributable
to minority interests, if any, in the stock and surplus of subsidiaries.
"CONVERSION", "CONVERT" and "CONVERTED" each refers to a conversion
of Advances of one Type into another Type of Advances, or the selection of a
new, or the renewal of the same, Interest Period for Eurodollar Rate Advances.
"DEBT" means (i) indebtedness for borrowed money or for the deferred
purchase price of property or services, (ii) obligations as lessee under leases
that have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (iii) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the kinds referred to
in clauses (i) or (ii)
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above, and (iv) liabilities in respect of unfunded vested benefits under plans
covered by Title IV of ERISA.
"DOMESTIC LENDING OFFICE" means, with respect to any Bank, the office
of such Bank specified as its "DOMESTIC LENDING OFFICE" opposite its name on
Schedule I hereto or in the Assignment and Acceptance (substantially in the
form of Exhibit B) pursuant to which it became a Bank, or such other office of
such Bank as such Bank may from time to time specify to the Company and the
Administrative Agent.
"DTC" means The Depository Trust Company, as depositary of the Notes,
or any successor entity acting as depositary of the Notes hereunder.
"ELIGIBLE BANK" means a commercial bank or other financial institution
engaged generally in the business of extending credit or purchasing debt
instruments; provided, however, that (i) obligations such as those hereunder of
such Person are exempt from registration under the Securities Act of 1933, as
amended, (ii) such Person shall have senior long term debt ratings by Standard
& Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and
▇▇▇▇▇'▇ Investors Service, Inc. at least equal to those of the Company as of
the date of this Agreement, and (iii) such Person shall have combined capital
and surplus (as established in its most recent report of condition to its
primary regulator) of not less than $250,000,000 (or its equivalent in foreign
currency).
"ENVIRONMENTAL EVENT" means (i) the generation, storage, disposal,
removal, transportation or treatment of any "Hazardous Substances" (as defined
in any applicable Environmental Laws, and including asbestos and materials
containing asbestos) on any real property owned, occupied or operated by the
Company or on real property adjoining or in the vicinity of such real property,
which through soil or ground water migration could have come to be located at
or on such Property owned, occupied or operated by the Company or any Person
for whose conduct the Company is responsible (any or all of such other property
being "other affected property"); (ii) the receipt by the Company of any notice
or claim of any violation of any Environmental Law or of any action based upon
nuisance, negligence or other tort theory alleging liability on the basis of
improper generation, storage, disposal, removal, transportation or treatment of
Hazardous Substances on any Property owned, occupied or operated by the Company
or on any other affected property; or (iii) the presence or release of
Hazardous Substances at or from any Property owned, occupied or operated by the
Company or any other affected property that has resulted in contamination or
deterioration of any portion of such Property in a level of contamination
greater than the levels permitted or established by any governmental agency
having jurisdiction over the Company or any of such Property or other affected
property.
"ENVIRONMENTAL LAW" means any and all statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions relating to
the environment or the release of any materials into the environment.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder, in each case as in effect from time to time. References to
sections of ERISA also refer to any applicable successor provisions.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a member and
which is under common control within the meaning of Section 414 of the Code or
Section 4001 of ERISA.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Bank, the
office of such Bank specified as its "EURODOLLAR LENDING OFFICE" opposite its
name on Schedule I hereto (or, if no such office is specified, its Domestic
Lending Office) or in the Assignment and Acceptance (substantially in the form
of Exhibit B) pursuant to which it became a Bank, or such other office of such
Bank as such Bank may from time to time specify to the Company and the
Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for a Eurodollar Rate
Advance resulting from the same Borrowing, an interest rate per annum
calculated as of the first day of such Interest Period in the following manner:
(i) the Eurodollar Rate shall be the rate for deposits in
U.S. dollars for a period equal to such Interest Period that appears
on Telerate Page 3750 at approximately 11:00 A.M., London time, on the
second Business Day prior to the first day of such Interest Period, or
(ii) if no rate appears on Telerate Page 3750 on such day,
or if Telerate Page 3750 shall no longer exist, the Administrative
Agent will determine the applicable Eurodollar Rate for such Interest
Period by reference to the rate quoted by The Chase Manhattan Bank in
the London interbank market for deposits in U.S. dollars in the London
Interbank Market on the second Business Day prior to the first day of
such Interest Period for a period equal to such Interest Period;
provided, that if the Administrative Agent, in its sole discretion,
determines that it is not reasonably practicable to determine a
Eurodollar Rate for such Interest Period, then the Administrative
Agent shall not determine such a Eurodollar Rate, and the provisions
of Section 3.08 shall apply.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest as
provided in Section 3.04(b).
"EVENT OF DEFAULT" has the meaning specified in Section 7.01.
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A "FAILED REMARKETING" shall be deemed to have occurred on any
Interest Rate Adjustment Date (as defined in the Note Indenture) on which a
Remarketing Agent (and Standby Remarketing Agent, if any), by 12:00 noon (New
York City time), shall have failed to remarket, at a price equal to 100% of the
principal amount thereof, plus accrued interest, if any, any portion of the
Notes tendered for purchase to such Remarketing Agent by the Beneficial Owners
thereof on such date.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published 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 which is a Business Day, the
average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FISCAL YEAR" means the annual accounting period adopted by the
Company.
"GOVERNING BODY" of any specified Person means the board of directors
or board of trustees of such Person or any duly authorized committee of that
board, or if there shall be no board of trustees or board of directors, then
the Person or body that pursuant to law or the organizational documents of such
Person is vested with powers similar to those vested in a board of trustees or
a board of directors, and, with respect to the Company, its Board of Directors.
"GOVERNMENTAL AUTHORITY" means any foreign governmental authority, the
United States of America, any state of the United States and any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau or court or other judicial or administrative tribunal having
jurisdiction over the Administrative Agent, any Bank, any Remarketing Agent or
the Company, or over any Property of the Company.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance resulting
from the same Borrowing, the period commencing on the date of Conversion of a
Base Rate Advance or Eurodollar Rate Advance into such Eurodollar Rate Advance
and ending on the last day of the period selected by the Company pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Company may select; provided, however, that:
(i) the duration of any Interest Period which commences
before the Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date;
(ii) the duration of any Interest Period which would
otherwise end on a day later than the third Business Day following the
last day of the sixth month following the date of the Borrowing
resulting in such Eurodollar Rate Advance shall end on such day (such
date the "REQUIRED CONVERSION DATE" for such Advance);
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(iii) Interest Periods commencing on the same date for
Eurodollar Advances resulting from the same Borrowing shall be of the
same duration; and
(iv) 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 be extended to occur on the next succeeding
Business Day, unless such extension would cause the last day of such
Interest Period to occur in the next following calendar month, in
which event the last day of such Interest Period shall occur on the
next preceding Business Day.
"INTEREST RATE ADJUSTMENT DATE" has the meaning specified in the Note
Indenture.
"LEGAL REQUIREMENT" means any law, statute, ordinance, decree,
requirement, order, judgment, rule or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
"LIBOR RESERVE PERCENTAGE" of any Bank for the Interest Period for any
Eurodollar Rate Advance means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Bank with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"LIEN" means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exception (including any conditional sale or other title retention agreement,
any financing lease involving substantially the same economic effect as any of
the foregoing and filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction).
"MAJORITY BANKS" means at any time Banks holding at least 66-2/3% of
the Commitments.
"MAXIMUM RATE" means that rate of interest equal to fifteen percent
(15%) per annum or such higher rate as may be established from time to time by
the Board of Directors of the Company as the maximum rate of interest payable
by the Company hereunder.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
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"MULTIPLE EMPLOYER PLAN" means an employee benefit plan, other than a
Multiemployer Plan, subject to Title IV of ERISA to which the Company or any
ERISA Affiliate, and one or more employers other than the Company or an ERISA
Affiliate, is making or accruing an obligation to make contributions or, in the
event that any such plan has terminated, to which the Company or any ERISA
Affiliate made or accrued an obligation to make contributions during any of the
five plan years preceding the date of termination of such plan.
"NOTE" means any , issued by the Company
pursuant to the Note Indenture, and initially sold by, to or through ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated or ▇▇▇▇▇▇ Brothers Inc.
"NOTE INDENTURE" has the meaning specified in the Preliminary
Statement.
"NOTICE OF FAILED REMARKETING AND BORROWING REQUEST" has the meaning specified
in Section 3.01.
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company and delivered
to the Administrative Agent for the benefit of the Banks.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PERCENTAGE" means, for any Bank on any date of determination, the
percentage obtained by dividing such Bank's Commitment on such date by the
total of the Commitments on such date, and multiplying the quotient so obtained
by 100%.
"PERSON" means an individual or a corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, government (or an agency or political subdivision thereof) or any
entity of any kind.
"PLAN" means an employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any ERISA Affiliate and
covered by Title IV of ERISA.
"PLAN TERMINATION EVENT" means (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC
under such regulations), or (ii) the withdrawal of the Company or any ERISA
Affiliate from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination 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
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.
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"PLEDGED BOND" has the meaning specified in the Preliminary Statement.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PROSPECTUS" means the Prospectus relating to the Notes, dated
, as supplemented by the Prospectus Supplement, dated
, and as further amended, supplemented or otherwise
modified from time to time, together with the documents incorporated therein by
reference.
"PURCHASED NOTE" means any Note purchased by any Remarketing Agent
with the proceeds of an Advance.
"RELATED DOCUMENTS" means this Agreement, the Note Indenture, the
Notes, the Remarketing Agreement, the Mortgage, and any other agreement or
instrument relating hereto or thereto.
"REMARKETING AGENT" means each Person serving in the capacity of
Remarketing Agent pursuant to the Remarketing Agreement (including, without
limitation, any Standby Remarketing Agent), which initially shall be Citicorp
Securities, Inc. and ▇▇▇▇▇▇ Brothers Inc., and each such Person's successors
and assigns.
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of
, as amended, supplemented or otherwise modified from time to
time, among the Company, Citicorp Securities, Inc. and ▇▇▇▇▇▇ Brothers Inc.,
and any similar such agreement by the Company with any successor Remarketing
Agent.
"REQUIRED CONVERSION DATE" has the meaning specified in the definition
of "Interest Period" set forth in this Section 1.01.
"SECURITIES LAWS" means all Federal and state laws applicable to the
sale of Notes or other securities, including, without limitation, the
Securities Act of 1933, as amended, and all rules, regulations and
administrative interpretations thereof; provided, however, that the term
"Securities Laws" does not include the ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Act of 1933, as amended,
or any rules, regulations or administrative interpretations thereof.
"SENIOR SECURED INDEBTEDNESS" of the Company means mortgage bonds of
the Company issued under the Mortgage or, if at any relevant time no such
mortgage bonds shall be outstanding, senior debt of the Company outstanding at
such time carrying the highest applicable ratings assigned by any nationally
recognized rating organizations in the United States to any senior debt of the
Company at such time.
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"STANDBY REMARKETING AGENT" means any Person designated as a Standby
Remarketing Agent by the Company or otherwise serving in such capacity pursuant
to the Remarketing Agreement.
"TELERATE PAGE 3750" means the display designated as "Page 3750" on
the Telerate System Incorporated Service (or such other page as may replace
such page on such service for the purpose of displaying the rates at which U.S.
dollar deposits are offered by leading banks in the London interbank deposit
market).
"TERMINATION DATE" means the earlier to occur of ,
as such date may be extended pursuant to Section 2.04, and the date of
termination in whole of the Commitments pursuant to Section 2.02(b) or 7.02.
"UNREMARKETED NOTES" means any Notes tendered for remarketing, but not
successfully remarketed, in connection with the occurrence of a Failed
Remarketing.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistently applied, except as otherwise stated
or defined herein. All accounting terms shall be construed taking into account
changes in generally accepted accounting principles mandated by the Financial
Accounting Standards Board or any similar accounting authority of comparable
standing.
ARTICLE II
COMMITMENTS; FAILED REMARKETINGS; PURCHASED NOTES
SECTION 2.01. THE COMMITMENTS. Each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make Advances for the account of
the Company to one or more applicable Remarketing Agents for the purchase of
Unremarketed Notes, as provided herein, from time to time on any Interest Rate
Adjustment Date (as defined in the Note Indenture) during the period from the
date hereof until the Termination Date in an aggregate amount that, when added
to the aggregate outstanding principal amount of all Advances theretofore made
by such Bank and the principal amount of all Purchased Notes then outstanding
to such Bank, shall not exceed at any time outstanding the amount set opposite
such Bank's name on Schedule I hereto, as such amount may be reduced pursuant
to Section 2.02 (such Bank's "COMMITMENT"). Each Borrowing shall consist of
Advances made or Converted on the same day by the Banks ratably according to
their respective Commitments.
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SECTION 2.02. REDUCTION OF THE COMMITMENTS. (a) The Company may,
upon at least five Business Days' notice to the Administrative Agent, terminate
in whole or reduce ratably in part the unused portions of the respective
Commitments of the Banks; provided, however, 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. Commitments terminated or reduced by the Company
hereunder may not be reinstated.
(b) The Administrative Agent shall promptly notify the Banks upon
receipt of any notification from the Company of one or more amendments to or
modifications of any Related Documents. Within ten Business Days following
receipt by the Banks of any such notification from the Administrative Agent,
the Majority Banks may elect, upon 30 days' prior notice to the Company, to
terminate in whole or reduce ratably in part their Commitments; provided,
however, 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.
SECTION 2.03. FAILED REMARKETINGS; PURCHASES OF PURCHASED NOTES;
GRANT OF AUTHORITY. (a) The Company hereby irrevocably authorizes and directs
each Remarketing Agent to (i) notify the Administrative Agent and the Company
by 12:00 noon (New York City time) upon the occurrence of any Failed
Remarketing involving Unremarketed Notes tendered to that Remarketing Agent,
and (ii) request and receive the proceeds of Advances made by the Banks
hereunder, and apply such proceeds for the purpose of purchasing such
Unremarketed Notes at a price equal to 100% of the outstanding principal amount
thereof. The authorization of each Remarketing Agent by the Company pursuant
to this subsection is coupled with an interest and is irrevocable.
(b) Upon (and only upon) receipt by the Trustee of (i) the
proceeds of Advances and (ii) all accrued and unpaid interest, if any, due from
the Company with respect to Unremarketed Notes subject to a Failed Remarketing,
the applicable Remarketing Agent, in accordance with the terms and conditions
of the Remarketing Agreement, will (A) make or cause the Trustee to make
payment to the DTC Participant (as defined in the Note Indenture) of each
tendering Beneficial Owner of such Unremarketed Notes, by book entry through
DTC against delivery of such Beneficial Owner's tendered Notes, of the purchase
price of such tendered Notes, and (B) arrange or cause the Trustee to arrange
for the crediting through DTC for the account of the Administrative Agent (or
such other account or accounts at DTC as the Administrative Agent may direct)
of such Unremarketed Notes, which shall be registered in the name of the
Administrative Agent or its nominee for the ratable benefit of the Banks, and
which shall be Purchased Notes in accordance with the terms of this Agreement
and the Note Indenture.
SECTION 2.04. EXTENSION OF TERMINATION DATE. Unless the Commitments
shall have been terminated in whole or an Event of Default or an event which,
with the giving of notice or the passage of time, or both, would constitute an
Event of Default shall have occurred and then be continuing, at least 30 days
but not more than 60 days prior to the then-effective Termination Date, the
Company, by written notice to the Administrative Agent, may request the Banks
to
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consent to an extension of the Termination Date to the last Business Day
occurring not more than 364 days after the Termination Date then in effect.
Each Bank may, in its sole and absolute discretion, determine whether to
consent to such request and shall notify the Administrative Agent of its
determination not earlier than 30 days prior to the then-effective Termination
Date. Failure by any Bank to respond by the tenth day prior to the
then-effective Termination Date shall be deemed to be a denial of the Company's
request by such Bank. If such request shall have been consented to by all of
the Banks, the Administrative Agent shall notify the Company in writing of such
Banks' unanimous consent, and such extension shall become effective upon the
then-effective Termination Date if the Company shall have delivered (on or
prior to the then- effective Termination Date) to the Administrative Agent and
each Bank, a certificate, dated on or as of the then-effective Termination
Date, of a duly authorized officer of the Company as to the accuracy, both
before and after giving effect to such proposed extension, of the
representations and warranties set forth in Section 5.01, and as to the
absence, both before and after giving effect to such proposed extension, of any
Event of Default or event which with the giving of notice of or the passage of
time, or both, would constitute an Event of Default.
SECTION 2.05. COMPANY MANDATORY AND OPTIONAL REPURCHASE OF PURCHASED
NOTES.
(a) On the Termination Date, whether scheduled or resulting from
the termination in whole of the Commitments pursuant to Section 2.02(b) or
7.02, and on any date on which the interest rate applicable to any Advance
would exceed the Maximum Rate pursuant to Section 3.04, the Company shall be
required to purchase all outstanding Purchased Notes from the Banks; provided,
however, if and for so long as (i) no Event of Default shall have occurred and
be continuing and (ii) the interest rate applicable to any Advance shall not
have exceeded the Maximum Rate, the Company may, by written notice delivered to
the Administrative Agent no less than 5 Business Days prior to the Termination
Date (which notice shall be promptly provided to each Bank by the
Administrative Agent), extend, for a period of up to one year following the
date of any Borrowing resulting in the purchase of Purchased Notes, the date
for the performance of its obligation to purchase such Purchased Notes from the
Banks under this subsection (a).
(b) The Company may, at its option, purchase all outstanding
Purchased Notes from the Banks at any time prior to being required to do so
pursuant to clause (a) of this Section 2.05 upon written notice to the
Administrative Agent not less than three (3) Business Days prior to the date of
such purchase; provided, however, that no Bank shall be required to tender any
Purchased Note to the Company for any such purchase unless (i) in the opinion
of such Bank in its sole and absolute discretion, (A) such tender and purchase
would not violate any material law, rule or regulation applicable to such Bank
at the time of such tender and purchase and (B) such tender and purchase of
such Purchased Notes will not violate any Securities Laws in effect at such
time, and (ii) such Bank shall have received, in form and substance
satisfactory to such Bank in its sole and absolute discretion, an opinion of
counsel to the Company that all necessary actions shall have been taken in
order that such tender and purchase will be in compliance with all applicable
Securities Laws in effect at such time, and as to such other matters as such
Bank may reasonably request.
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(c) Any purchase by the Company of Purchased Notes from the Banks
pursuant to this Section 2.05 shall be made without recourse to or warranty
from the Banks, for a price equal to 100% of the outstanding principal amount
thereof plus (i) all accrued and unpaid interest, if any, thereon and (ii) any
payment required to be made pursuant to Section 3.11. The payment of the
purchase price for the Purchased Notes by the Company shall not be contingent
on any receipt by the Company of the proceeds of any subsequent remarketing of
such Purchased Notes. Such price shall be paid by crediting the account of the
Administrative Agent at DTC (or such other account or accounts at DTC as the
Administrative Agent may direct) with immediately available funds, in return
for which the Administrative Agent or its nominee will instruct DTC to credit
the account of the Company at DTC (or such other account or accounts at DTC as
the Company may direct) with the Purchased Notes.
SECTION 2.06. REMARKETING OF PURCHASED NOTES. Notwithstanding any
provision of this Agreement, any Related Document, or any other agreement or
instrument whatsoever to the contrary, no Bank shall be required to tender any
Purchased Note to any Remarketing Agent for remarketing (and no Purchased Note
shall be deemed to have been tendered to a Remarketing Agent for remarketing
pursuant to the provisions of such Purchased Note or otherwise) unless, (i) in
the opinion of such Bank in its sole and absolute discretion, (A) such tender
and remarketing would not violate any material law, rule or regulation
applicable to such Bank at the time of such tender and remarketing and (B) such
tender and remarketing will not violate any Securities Laws in effect at such
time, and (ii) such Bank shall have received, in form and substance
satisfactory to such Bank in its sole and absolute discretion, an opinion of
counsel to the Company that all necessary actions shall have been taken in
order that such tender and remarketing will be in compliance with all
applicable Securities Laws as in effect at such time and as to such other
matters as such Bank may reasonably request. Each Bank shall promptly notify
the Company and each Remarketing Agent upon its receipt in accordance with the
preceding sentence of the required legal opinion. The Company hereby agrees
(1) to indemnify each Bank, its shareholders, affiliates, officers, directors,
employees and agents from and against any and all claims, damages, losses,
liabilities and expenses that may be incurred by or asserted against any of
such parties with respect to any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in any offering document filed with the Securities and Exchange
Commission or otherwise used in connection with the remarketing of Purchased
Notes tendered by such Bank to the applicable Remarketing Agents and (2) in the
event that the foregoing indemnification shall be unavailable under applicable
Securities Laws, that the Company and such Bank shall each contribute to the
satisfaction of any such claims, damages, losses, liabilities and expenses in
proportion to their relative benefits received from the offering of the Notes
(provided, that the relative benefits from any remarketing shall be deemed to
be such that such Bank shall be responsible for that portion of the aggregate
claims, damages, losses, liabilities and expenses represented by the ratio of
the interest earned by such Bank on Purchased Notes included in such
remarketing to the aggregate principal amount of all Notes outstanding at the
time of such remarketing, and the Company shall be responsible for the
balance). Nothing in this Section 2.06 shall in any way impair the Company's
obligations to repurchase Purchased Notes pursuant to
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Section 2.05(a), above. The Company's indemnification obligations under this
Section 2.06 shall survive the repayment of all amounts owing to the
Administrative Agent and the Banks under the Related Documents and the
termination of the Commitments.
ARTICLE III
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 3.01. MAKING THE ADVANCES. (a) Each Borrowing shall consist
solely of Base Rate Advances and shall be made on notice, given not later than
12:00 noon (New York City time) on the Interest Rate Adjustment Date of the
proposed Borrowing, by the applicable Remarketing Agent to the Administrative
Agent (with a copy to the Company), which shall give to each Bank prompt notice
thereof by telephone or telecopier, telex or cable. Each such notice (a
"NOTICE OF FAILED REMARKETING AND BORROWING REQUEST") shall be by telephone or
telecopier, confirmed in writing, in substantially the form of Exhibit A
hereto, and shall (i) specify the principal amount of Unremarketed Notes
tendered to the applicable Remarketing Agent in the Failed Remarketing, (ii)
confirm that the applicable Remarketing Agent has received, or has informed the
Company of its need to receive, from the Company all accrued and unpaid
interest on such Unremarketed Notes, and (iii) identify the requested date and
aggregate amount of the requested Borrowing. Each Bank shall, before 2:00 P.M.
(New York City time) on the date of such Borrowing, make available for the
account of its Domestic Lending Office to the Administrative Agent at its
address referred to in Section 9.02, in same day funds, such Bank's ratable
portion of such Borrowing. Subject to the fulfillment of the applicable
conditions set forth in Article IV, promptly following receipt of such funds by
the Administrative Agent, but no later than 3:00 p.m. (New York City time) on
the date of such Borrowing, the Administrative Agent will transfer, in
same-day funds, such funds to such account as may from time to time be
identified in a notice delivered by the Trustee to the Administrative Agent
(with copies of such notice to the Borrower and the Remarketing Agents).
(b) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's ratable portion of such
Borrowing, the Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 3.01 and the Administrative
Agent may, in reliance upon such assumption, make available to the applicable
Remarketing Agent on such date a corresponding amount. If and to the extent
that such Bank shall not have so made such ratable portion available to the
Administrative Agent, such Bank and the Company severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the applicable Remarketing Agent until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Company, the interest rate
applicable at the time to the Purchased Notes purchased with the proceeds of
the Advances comprising such Borrowing (or, if no Purchased Notes were
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purchased with such proceeds, the interest rate applicable at the time to
Advances comprising such Borrowing), and (ii) in the case of such Bank, the
Federal Funds Effective Rate. If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Advance as part of such Borrowing for purposes of this Agreement.
(c) The failure of any Bank to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Bank of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Bank
shall be responsible for the failure of any other Bank to make the Advance to
be made by such other Bank on the date of any Borrowing.
SECTION 3.02. FEES. (a) The Company agrees to pay to the
Administrative Agent for the account of each Bank a commitment fee on the
average daily unused portion of such Bank's Commitment from the date hereof, in
the case of each Bank listed on the signature pages hereto, and from the
effective date specified in the Assignment and Acceptance substantially in the
form of Exhibit B hereto pursuant to which it became a Bank pursuant to Section
9.06 hereof, in the case of any other Bank, until the Termination Date, payable
on the last day of each March, June, September and December during the term of
such Bank's Commitment, commencing , and on the Termination
Date, at the rate of % per annum.
(b) The Company agrees to pay the Administrative Agent, for its
own account, such fees at such times and in such amounts as agreed upon in a
letter agreement between the Company and the Administrative Agent (or as
otherwise agreed in writing by the Company and the Administrative Agent from
time to time). The fees described in this Section 3.02(b) shall not be
refundable under any circumstances.
SECTION 3.03. REPAYMENT; PREPAYMENTS. (a) The Company shall repay
the unpaid principal amount of each Advance made by each Bank in accordance
with the terms of the Purchased Notes acquired with the proceeds of such
Advance. The purchase of a Purchased Note with the proceeds of any Advance,
coupled with the crediting through DTC for the account of the Administrative
Agent or its nominee of such Purchased Note, shall, for all purposes, be deemed
to constitute repayment of the principal amount of such Advance.
(b) In the event that Purchased Notes are not, for any reason,
purchased with the proceeds of any Advance and credited through DTC for the
account of the Administrative Agent or its nominee, such Advance shall become
immediately due and payable by the Company hereunder, together with interest
thereon, as hereinafter provided.
(c) If and to the extent that the aggregate principal amount of
Advances owed to the Banks on any date shall exceed the aggregate amount of the
Commitments on such date, the Company shall prepay on such date, either
directly or by effecting purchases of Purchased Notes, an amount at least equal
to such excess.
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SECTION 3.04. INTEREST. The Company shall pay interest on the unpaid
principal amount of each Advance made by each Bank from the date of such
Advance until such principal amount shall be paid in full, at the following
interest rates per annum:
(a) BASE RATE ADVANCES. If such Advance is a Base Rate Advance
(including, without limitation, a Base Rate Advance Converted from a Eurodollar
Rate Advance), a rate per annum equal at all times to the Base Rate in effect
from time to time. Such interest shall be payable by the Company on the last
day of each March, June, September and December (or on such other dates as the
Company and the Banks may agree from time to time), commencing on the first
such date to occur following the date hereof as the case may be, and shall be
payable on the Termination Date, any date of Conversion of such Base Rate
Advance into a Eurodollar Rate Advance and, as provided in subsection (d),
below, on any other date on which the Purchased Notes purchased with such
Advance shall be remarketed by a Remarketing Agent.
(b) EURODOLLAR RATE ADVANCES. If such Advance is a Eurodollar
Rate Advance, a rate per annum equal at all times during the Interest Period
for such Eurodollar Rate Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin, payable on the last day of such
Interest Period (and, in the case of any Interest Period of six months, on the
last day of the third month of such Interest Period).
(c) OVERDUE PRINCIPAL PAYMENTS. Notwithstanding the foregoing,
any amount of principal of any Advance which 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 greater of (i) % per
annum above the Base Rate in effect from time to time and (ii) % per annum
above the rate per annum required to be paid on such Advance immediately prior
to the date on which such amount became due; provided, however, that at no time
shall the interest rate per annum applicable to the Advances exceed the Maximum
Rate. The Company promptly shall repurchase Purchased Notes purchased with any
Advance pursuant to Section 2.05(a) if the interest rate applicable to such
Advance would exceed the Maximum Rate but for the prohibition contained in the
preceding sentence.
(d) INTEREST PAYMENTS ON PURCHASED NOTES. This Agreement
constitutes the entire agreement of the Company and the Banks with respect to
the interest rates and interest payment terms applicable to any Purchased
Notes. All payments of interest by the Company with respect to and in
accordance with the terms of any Purchased Note and this Agreement shall, for
all purposes, satisfy the obligations of the Company to pay such interest on
the unpaid principal amount of the Advance which was utilized by the applicable
Remarketing Agent to purchase such Purchased Note. The Company shall pay all
accrued and unpaid interest on the unpaid principal amount of each Purchased
Note prior to any remarketing thereof by a Remarketing Agent.
SECTION 3.05. CONVERSION OF ADVANCES. (a) Subject to subsections (c)
and (d), below, the Company may on any Business Day, upon notice given to the
Administrative Agent not later
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than 11:00 A.M. (New York City time) on the third Business Day prior to the
date of the proposed Conversion and subject to the provisions of Sections 3.08,
3.12 and 4.02, Convert all Advances of one Type resulting from the same
Borrowing into Advances of another Type or, in the case of Eurodollar Rate
Advances, select a new or renew the same Interest Period for such Eurodollar
Rate Advances; provided, however, that any Conversion of Eurodollar Rate
Advances into Base Rate Advances shall be made on, and only on, the last day of
an Interest Period for such Eurodollar Rate Advances. Each such notice of a
Conversion shall specify (i) the date of such Conversion, (ii) the Advances to
be Converted, and (iii) if such Conversion is into, or with respect to,
Eurodollar Rate Advances, the duration of the Interest Period for such
Eurodollar Rate Advances.
(b) If the Company shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "INTEREST PERIOD" in Section 1.01 and
subsection (a) above, the Administrative Agent will forthwith so notify the
Company and the Banks and such Advances will automatically, on the last day of
the then existing Interest Period therefor, Convert into Base Rate Advances.
(c) Any Eurodollar Rate Advance outstanding on the Required
Conversion Date for such Eurodollar Rate Advance shall be Converted to a Base
Rate Advance on such day; provided, however, that if such Conversion would
result in a reduction of the interest rate per annum payable by the Company
with respect to such Advance, the Company and the Banks shall negotiate a
substitute interest rate to apply to such Eurodollar Rate Advance following
such Conversion to a Base Rate Advance to their mutual satisfaction (which
substitute interest rate shall be an all-in rate not lower than the rate
applicable to such Eurodollar Rate Advance immediately prior to such
substitution).
(d) No Base Rate Advance shall be Converted to a Eurodollar Rate
Advance following the Required Conversion Date with respect thereto.
SECTION 3.06. INCREASED COSTS; CAPITAL ADEQUACY. (a) In the event
that after the date hereof the implementation of or any change in any law or
regulation, or any guideline or directive (whether or not having the force of
law) or the interpretation or administration thereof, in each case by any
court, central bank or administrative or governmental authority charged with
the administration thereof shall:
(i) subject any Bank to any tax of any kind with respect
to this Agreement or its Advances or the transactions contemplated
hereby or shall change the basis of taxation of such Bank (other than
a change in the rate of tax on the overall net income of such Bank);
or
(ii) impose, modify or deem applicable any reserve,
special deposit, capital adequacy or similar requirement (other than,
in the case of Eurodollar Rate Advances, any
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change by way of imposition or increase of reserve requirements,
included in the LIBOR Reserve Percentage); or
(iii) impose on such Bank any other condition;
and as a result of any of the foregoing, in the sole opinion of such Bank,
there shall be any increase in the cost to any Bank of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances, then the Company shall
from time to time, upon demand by such Bank (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Bank additional amounts sufficient to compensate such Bank for such increased
cost. A certificate as to the amount of such increased cost, submitted to the
Company and the Administrative Agent by such Bank, shall be conclusive and
binding for all purposes, absent manifest error.
(b) In the event that the application of any existing law, rule,
regulation or the interpretation thereof by any court, central bank or
governmental authority or any adoption of or change in any applicable law, rule
or regulation or the interpretation thereof by any court or governmental
authority or the compliance by any Bank with any request, guideline, order or
directive of any court, central bank or governmental authority, in each case
whether or not having the force of law, or the introduction of any such new
laws, rules or regulations (including, without limitation, the issuance of any
final rule, regulation or guideline) shall impose, modify or deem applicable
capital adequacy or similar requirements respecting assets (funded or
contingent), of, or credit extended by or commitments to extend credit by, any
Bank, or otherwise deem applicable to the obligations of any Bank under this
Agreement, capital adequacy or similar requirements, and the net result of any
of the foregoing is to reduce the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that which such Bank
would have received but for the imposition of such requirement (taking into
consideration such Bank's capital adequacy policies), then the Company shall
from time to time upon the demand by such Bank (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Bank additional amounts to compensate such Bank for such reduced rate of
return. A certificate as to the calculation of such additional amounts
submitted by such Bank to the Company and the Administrative Agent shall be
conclusive and binding for all purposes absent manifest error.
SECTION 3.07. ADDITIONAL INTEREST ON EURODOLLAR RATE ADVANCES. The
Company shall pay to each Bank, so long as such Bank shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid principal amount of
each Eurodollar Rate Advance of such Bank, from the date of such Advance until
such principal amount is paid in full, at an interest rate per annum equal at
all times to the difference obtained by subtracting (i) the Eurodollar Rate for
the Interest Period for such Eurodollar Rate Advance, from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the LIBOR Reserve Percentage of such Bank for such Interest Period or such
term,
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as the case may be, payable on each date on which interest is payable on such
Advance. Such additional interest shall be determined by such Bank and
notified to the Company through the Administrative Agent.
SECTION 3.08. INTEREST RATE DETERMINATION. The Administrative Agent
shall determine the Eurodollar Rate from time to time in accordance with the
provisions of this Agreement. If, for any reason, the Administrative Agent in
its sole discretion determines that it is unable to so determine the Eurodollar
Rate, the right of the Company to select Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Company and the Banks
that the circumstances causing such suspension no longer exist, and such
Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance.
SECTION 3.09. PAYMENTS AND COMPUTATIONS. (a) The Company shall make
each payment hereunder not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at its address
referred to in Section 9.02 in same day funds. Upon receipt of any payments of
principal, interest, commitment fees or other amounts payable hereunder or
under the Purchased Notes, the Administrative Agent will promptly cause to be
distributed like funds relating to such payments ratably (other than amounts
payable pursuant to Section 3.06) to the Banks for the account of their
respective Applicable Lending Offices, and like funds relating to the payment
of any other amount payable to any Bank to such Bank, for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement.
(b) All computations of interest based on the Base Rate, and all
computations of commitment fees, shall be made by the Administrative Agent on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or commitment fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder 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 or commitment fee, as the
case may be; provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the Banks
hereunder or under the Purchased Notes that the Company will not make such
payment in full, the Administrative Agent may assume that the
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Company 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 Bank on such due date an amount equal to the amount then
due such Bank. If and to the extent the Company shall not have so made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Effective Rate.
SECTION 3.10. SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances made by it or the Purchased
Notes held for its benefit (other than pursuant to Section 3.06 or 3.07) in
excess of its ratable share of payments on account of the Advances or the
Purchased Notes obtained by all the Banks, such Bank shall forthwith purchase
from the other Banks such participations in the Advances made by them and the
Purchased Notes held for their benefit as shall be necessary to cause such
purchasing Bank 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 Bank, such purchase from each Bank
shall be rescinded and such Bank shall repay to the purchasing Bank the
purchase price to the extent of such recovery together with an amount equal to
such Bank's ratable share (according to the proportion of (i) the amount of
such Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company
agrees that any Bank so purchasing a participation from another Bank pursuant
to this Section 3.10 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 Bank were the direct creditor of the Company
in the amount of such participation.
SECTION 3.11. FUNDING INDEMNITY. The Company agrees to indemnify and
hold harmless the Administrative Agent and the Banks from any loss or expense
which they or any of them may sustain or incur as a result of:
(a) the repayment or prepayment of any Eurodollar Rate
Advance in whole or in part other than on the last day of the Interest
Period applicable thereto; or
(b) the failure of the Company to pay the principal of or
interest on any Advance when due (whether at stated maturity, upon
acceleration or otherwise); or
(c) the failure of the Company to Convert any Base Rate
Advance on the date specified for such Conversion in a notice
delivered to the Administrative Agent by the Company pursuant to
Section 3.05(a);
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including but not limited to any such loss or expense arising from interest,
fees or other amounts payable by the Administrative Agent or any of the Banks
to lenders of funds obtained by them in order to make and maintain the Advances
hereunder.
SECTION 3.12. ILLEGALITY. Notwithstanding any other provision of
this Agreement, if any Bank 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 any central bank or other governmental
authority asserts that it is unlawful, for any Bank or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, (i) all Eurodollar Rate
Advances shall be Converted into Base Rate Advances and (ii) the obligation of
the Banks to make, or to Convert Base Rate Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Company and the Banks that the circumstances causing such suspension no longer
exist.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. CONDITION PRECEDENT TO INITIAL ADVANCES. The
obligation of each Bank to make its initial Advance is subject to the condition
precedent that the Administrative Agent shall have received, on or before the
date hereof, the following, each dated such date (except as otherwise provided
herein), in form and substance satisfactory to the Administrative Agent and in
sufficient copies for each Bank:
(a) Counterparts of this Agreement, duly executed and delivered by
the Company, the Administrative Agent, the Banks listed on the signature pages
hereto and each Remarketing Agent.
(b) Certified copies of the resolutions of the Board of Directors
of the Company approving the Related Documents, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to the Related Documents and the transactions contemplated thereby.
(c) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers of the
Company authorized to sign each Related Document and the other documents to be
delivered hereunder.
(d) Copies of the Certificate of Incorporation and by-laws of the
Company, together with all amendments thereto, certified by the Secretary or an
Assistant Secretary of the Company.
(e) An executed copy (or a duplicate copy thereof certified by the
Company in a manner satisfactory to the Administrative Agent to be a true and
correct copy) of the Remarketing Agreement, duly executed by the Company and
each Remarketing Agent.
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(f) An executed copy (or a duplicate copy thereof certified by the
Company in a manner satisfactory to the Administrative Agent to be a true and
correct copy) of the Note Indenture (including the Third Supplemental Indenture
thereto), duly executed by the Company and the trustee thereunder.
(g) An executed copy (or a duplicate copy thereof certified by the
Company in a manner satisfactory to the Administrative Agent to be a true and
correct copy) of the Mortgage (including the Supplemental Indenture dated as of
thereto), duly executed by the Company and the trustee thereunder.
(h) A certified copy of the order of the Michigan Public Service
Commission (the "MPSC ORDER") authorizing the issuance and sale of the Notes
and the issuance and sale of the general and refunding mortgage bond under the
Mortgage as security for the obligations of the Company under the Indenture.
(i) A favorable opinion of the Company's General Counsel,
substantially in the form of Exhibit C hereto and as to such other matters as
any Bank through the Administrative Agent may reasonably request.
(j) Copies of the Prospectus used in connection with the offering
and remarketing of the Notes as in effect on such date, including any
amendments or supplements thereto.
(k) Such other approvals, opinions and documents as the Majority
Banks, through the Administrative Agent, may reasonably request as to the
legality, validity, binding effect or enforceability of this Agreement or any
Related Document or the financial condition, properties, operations or
prospects of the Company.
SECTION 4.02. CONDITIONS PRECEDENT TO EACH BORROWING AND CONVERSION.
The obligation of each Bank to make an Advance on the occasion of each
Borrowing (including the initial Borrowing), and the obligation of each Bank to
make each Conversion on the occasion thereof, shall be subject to the further
conditions precedent that on the date of such Borrowing or Conversion:
(a) the following statements shall be true (and each of the giving
of the applicable Notice of Failed Remarketing and Borrowing Request and the
making of such Advance, or the making of such Conversion, without prior
correction by the Company, shall constitute a representation and warranty by
the Company that, on the date of such Borrowing or Conversion, such statements
are true):
(i) The representations and warranties contained in
Section 5.01 of this Agreement (excluding subsections (e) and (h)
thereof) are correct on and as of the date of such Borrowing or
Conversion, as the case may be, before and after giving effect to such
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Borrowing and the application of the proceeds therefrom, or to such
Conversion, as the case may be, as though made on and as of such date,
and
(ii) No event has occurred and is continuing, or would
result from such Borrowing or from the application of the proceeds
therefrom, or from such Conversion, as the case may be, which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both;
(b) the Administrative Agent shall have received a Notice of
Failed Remarketing and Borrowing Request, signed by a duly authorized officer
of the applicable Remarketing Agent, dated the date of such Borrowing, or the
appropriate notice of Conversion delivered by the Company pursuant to Section
3.05(a), with respect to such Conversion; and
(c) the Administrative Agent shall have received such other
approvals, opinions or documents relating to the satisfaction of foregoing
conditions as any Bank through the Administrative Agent may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as follows:
(a) The Company is a corporation duly formed, validly existing and
in good standing under the laws of the State of Michigan. There is no other
jurisdiction where the conduct of its business or the ownership of its Property
requires the Company to qualify to do business. The Company has all requisite
power and authority to conduct its business, to own its Properties, and to
execute and deliver and perform all of its obligations under this Agreement and
each of the other Related Documents to which it is a party.
(b) The execution, delivery and performance by the Company of this
Agreement and the other Related Documents to which it is a party have been duly
authorized by all necessary corporate action, and do not, and will not,
contravene (i) any provision of the charter or by- laws of the Company, (ii)
law, or (iii) any contractual restriction binding on or affecting the Company,
and do not result in or require the creation of any Lien (except pursuant to,
or as contemplated by, this Agreement, the Note Indenture or the Mortgage) upon
or with respect to any of its Properties.
(c) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority is required for the due
execution, delivery and performance by the Company of this Agreement or any
other Related Document to which the Company is a party,
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except the MPSC Order, which has been duly obtained and is in full force and
effect, and such other authorizations, approvals, actions and notices as have
been duly obtained or made and are in full force and effect.
(d) This Agreement is, and each of the other Related Documents to
which the Company is a party when delivered hereunder will be, legal, valid and
binding obligations of the Company enforceable against the Company in
accordance with their respective terms.
(e) Except and to the extent specifically described in written
reports, copies of which have been furnished to the Banks, there is no pending
or threatened action, investigation or proceeding before any court,
governmental agency or arbitrator against or affecting the Company that would,
if adversely determined, have a material adverse effect on the financial
condition or operations of the Company or the ability of the Company to perform
its obligations hereunder or under any of the other Related Documents to which
it is, or is to be, a party, or that purports to affect the legality, validity
or enforceability of this Agreement or any other Related Document.
(f) The information provided by the Company about itself and under
the heading "The Company" in the Prospectus (the "COMPANY INFORMATION") was
accurate on and as of the date of the Prospectus in all material respects for
the purposes for which its use was authorized. The Company Information in the
Prospectus does not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made therein, in the
light of the circumstances under which they are or were made and as of the date
of the Prospectus, not misleading.
(g) The Company has filed all income tax returns and all other
material tax returns that are required to be filed by it and has paid all taxes
due pursuant to such returns or pursuant to any assessments received by it.
The charges, accruals and reserves on the books of the Company in respect of
taxes or other governmental charges are adequate in accordance with generally
accepted accounting principles.
(h) The balance sheet of the Company as of , and
the related statements of income and cash flows of the Company for the Fiscal
Year then ended, and the balance sheet of the Company as of , and
the related statements of income and cash flows of the Company for the three
months then ended, copies of which have been furnished to the Administrative
Agent for each Bank, fairly represent, subject, in the case of said balance
sheet as at , and of said statements of income and cash flows for
the three months then ended, to year-end audit adjustments, the financial
condition of the Company as of such dates and the periods ended on such dates,
all in accordance with generally accepted accounting principles consistently
applied, and there has been no material adverse change in such condition or
operations since , except such as may have occurred in the
ordinary course of business. The Company has no material liability, contingent
or otherwise, including material liabilities for taxes, for which it has not
provided adequate reserves in accordance with generally accepted accounting
principles.
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(i) The Company has good and marketable title to all of its
Property reflected on the balance sheet of the Company as of December 31, 1996,
as being owned by the Company, except for (A) such Property as has been
disposed of in the ordinary course of business, (B) pollution control
facilities being purchased by the Company under installment sales contracts and
the undivided ownership interest of the Michigan Public Power Agency in a
portion of the Belle River Power Plant, and (C) minor exceptions and minor
defects, irregularities and deficiencies that do not materially impair the use
of such Property for the purpose for which it is held by the Company.
(j) The Company is not in default under (and no event has occurred
that with the lapse of time or notice or action by a third party could result
in a default under) any instrument evidencing any Debt or under any agreement
relating thereto, or any indenture, mortgage, deed of trust, security
agreement, lease, franchise or other agreement or other instrument to which the
Company is a party or by which the Company or any of its Property is subject to
or bound.
(k) The Company is not in violation of any Legal Requirements to
which the Company is subject, nor has the Company failed to obtain any
licenses, permits, franchises, or other governmental authorizations necessary
to the ownership of its Property or to the conduct of its business, which
violation or failure to obtain materially adversely affects the business,
prospects, profits, Property or condition (financial or otherwise) of the
Company.
(l) The material Property used or to be used in the continuing
operations of the Company is in good repair, working order and condition as is
customary for a public utility.
(m) The Company is not an "investment company", or a company
"controlled" by an "investment company" (within the meaning of the Investment
Company Act of 1940, as amended). The Company is not a "holding company" but
is an "affiliate" of a "holding company" (within the meaning of the Public
Utility Holding Company Act of 1935, as amended ("PUHCA")), which holding
company is exempt from the provisions of PUHCA, other than Section 9(a)(2)
thereof, pursuant to Section 3(a)(2) thereof.
(n) No Plan Termination Event has occurred with respect to any
Plan or Multiple Employer Plan. Each Plan established or maintained by the
Company and its ERISA Affiliates is in compliance with all applicable
provisions of ERISA, and the Company and all of its ERISA Affiliates have filed
all reports required by ERISA and the Code to be filed with respect to each
Plan. The Company has no knowledge of any event that could result in a
liability of the Company or its ERISA Affiliates to the PBGC, whether under a
Plan, a Multiemployer Plan, or otherwise. The Company and all of its ERISA
Affiliates have met all requirements with respect to funding the Plans imposed
by ERISA or the Code. There have not been any nor are there now existing any
events or conditions that would permit any Plan to be terminated under
circumstances that would cause the lien provided under Section 4068 of ERISA to
attach to the Property of the Company or its ERISA Affiliates. The value of
the Plans' benefits guaranteed under Title IV of ERISA on the date hereof does
not exceed the value of such Plans' assets allocable to such
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benefits as of the date of this Agreement. No "Prohibited Transaction" within
the meaning of Section 406 of the Pension Reform Act, as amended, exists or
will exist upon the execution and delivery of this Agreement or any Related
Document.
(o) The Company carries insurance with reputable insurers or self
insurance, as is customary, in respect of its Property.
(p) In addition to the representations and warranties contained in
this Article V, all statements contained in any other Related Document or in
any agreement, document, instrument or certificate delivered by or on behalf of
the Company in connection with the transactions contemplated hereby and thereby
shall constitute representations and warranties made by the Company hereunder.
All representations and warranties made by or on behalf of the Company herein
shall survive the delivery of this Agreement, and any investigation at any time
made by or on behalf of the Administrative Agent or any Bank shall not diminish
its rights to rely thereon.
(q) No part of the proceeds of the Advances or the Notes will be
used directly or indirectly for the purpose of purchasing or carrying, or for
payment in full or in part of Debt that was incurred for the purposes of
purchasing or carrying, any margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), or to extend
credit to others for the purpose of purchasing or carrying any margin stock.
(r) The Company is in substantial compliance with all
Environmental Laws and no material Environmental Event has occurred.
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. AFFIRMATIVE COVENANTS. So long as the Banks shall have
any Commitment under this Agreement, or the Company shall have an obligation to
pay any amount to any Bank hereunder or under any Purchased Note, the Company
will, unless the Majority Banks shall otherwise consent in writing:
(a) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain its corporate existence and all rights, privileges and franchises
necessary and desirable in the normal conduct of its business and in the
performance of its obligations under the Related Documents and not dissolve or
otherwise discontinue its existence or operations.
(b) COMPLIANCE WITH LAWS, ETC. Comply with all Legal Requirements
applicable to the Company and its Property.
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(c) PAYMENT OF TAXES, ETC. Pay and discharge before the same
shall become delinquent (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its Property and (ii) all lawful claims that, if
unpaid, might by law become a lien upon the Company's Property; provided,
however, that the Company shall not be required to pay and discharge or cause
to be paid and discharged any such tax, assessment, governmental charge, or
claim to the extent that the amount, applicability, or validity thereof shall
currently be contested in good faith by appropriate proceedings, so long as no
tax sale can occur during such proceedings and the Company shall have
established and shall maintain adequate reserves on its books for the payment
of such amounts.
(d) VISITATION RIGHTS. At any reasonable time and from time to
time, upon reasonable notice, permit the Administrative Agent or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the Properties of, the Company and
to discuss the affairs, finances and accounts of the Company with any of its
officers.
(e) KEEPING OF BOOKS. Keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Company in accordance with generally accepted
accounting principles consistently applied.
(f) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve all of
its Properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(g) MAINTENANCE OF INSURANCE. Maintain insurance with responsible
and reputable insurance carriers, or self-insurance as is customary, 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 areas in
which the Company operates.
(h) PERFORMANCE AND COMPLIANCE WITH OTHER COVENANTS. Perform and
comply in all material respects with each of the covenants binding on the
Company set forth in the Note Indenture and the other Related Documents, as in
effect on the date hereof, or as such covenants may hereafter be amended or
supplemented in accordance with the terms of this Agreement or such Related
Document.
(i) REPORTING REQUIREMENTS. Furnish to the Administrative Agent,
with sufficient copies for each of the Banks, the following:
(i) as soon as possible and in any event within five days
after the Company knows or has reason to know of the occurrence of an
Event of Default or an event that, with the giving of notice or time
lapse, or both, would constitute an Event of Default continuing on the
date of such statement, an Officer's Certificate of the Company
setting
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forth details of such Event of Default or event and the action that
the Company proposes to take with respect thereto;
(ii) as soon as possible and in any event within five days
after the Company knows or has reason to know of the occurrence of any
material adverse change in the financial condition or operations of
the Company, an Officer's Certificate of the Company setting forth
details of such material adverse change and the action that the
Company proposes to take with respect thereto;
(iii) to the extent not otherwise to be disclosed by the
Company in a report on Form 10-K, Form 10-Q or Form 8-K to be filed
with the Securities and Exchange Commission, promptly after the
commencement thereof, notice of all actions, suits and proceedings
against the Company before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Company that may materially adversely affect
the financial condition or operations or prospects of the Company;
(iv) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal Year
of the Company, financial statements of the Company as of the end of
such quarter consisting of a balance sheet and the related statements
of income and changes in cash flow of the Company (or consisting of
such other financial information as is customary at the time of
preparation of such financial statements) for the portion of the
Fiscal Year ended at the end of such quarter, setting forth in the
case of statements of income and cash flows in comparative form the
figures for the corresponding quarter of the previous Fiscal Year,
and, in the event such financial statements have not been prepared in
accordance with generally accepted accounting principles consistently
applied, such financial statements shall be accompanied by a statement
of a responsible officer of the Company as to the reasons therefor;
and if an Event of Default or event that with notice or lapse of time,
or both, would constitute an Event of Default has occurred during such
quarter and is continuing, such financial statements shall be
accompanied by an Officer's Certificate of the Company containing a
statement as to the nature thereof and the action that the Company
proposes to take with respect thereto;
(v) as soon as available, and in any event within 90 days
after the end of each Fiscal Year, a copy of the annual report for
such year, including therein balance sheets of the Company as at the
end of such Fiscal Year, an income statement, and a cash flow
statement (or consisting of such other financial information as is
customary at the time of preparation of such financial statements) for
such Fiscal Year, setting forth in each case in comparative form the
figures for the previous year, in each case certified by independent
accountants of recognized standing, and if an Event of Default or an
event that, with notice or lapse of time or both, would constitute an
Event of Default, has occurred and is continuing, such annual report
shall be accompanied by an Officer's
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Certificate of the Company as to the nature thereof and detailing the
actions the Company proposes to take with respect thereto;
(vi) to the extent not otherwise to be disclosed by the
Company in a report on Form 10-K, Form 10-Q or Form 8-K to be filed
with the Securities and Exchange Commission, as soon as possible and
in any event within five days after occurrence of any material
Environmental Event, an Officer's Certificate of the Company setting
forth the details of such material Environmental Event and the action
that the Company proposes to take with respect thereto;
(vii) to the extent not otherwise to be disclosed by the
Company in a report on Form 10-K, Form 10-Q or Form 8-K to be filed
with the Securities and Exchange Commission, promptly upon becoming
aware thereof, notice of any Plan Termination Event or any event or
action that could result in the Company's or an ERISA Affiliate's
complete withdrawal, partial withdrawal or secondary liability for
withdrawal liability payments with respect to a Multiemployer Plan or
a Multiple Employer Plan, together with an Officer's Certificate of
the Company describing the event or the action taken and the reasons
therefor;
(viii) promptly after the sending or filing thereof, copies
of all material reports that the Company sends to its securityholders,
and copies of all reports on Form 10-K, Form 10-Q or Form 8-K that the
Company files with the Securities and Exchange Commission; and
(ix) such other information regarding the business,
Property or the condition or operations, financial or otherwise, of
the Company as the Administrative Agent may from time to time
reasonably request.
(j) MAINTENANCE OF STATUS. Maintain its status as a public
utility regulated by the Michigan Public Service Commission and the Federal
Energy Regulatory Commission.
(k) ERISA. Maintain, and cause each of its ERISA Affiliates to
maintain, Plan assets that are at least equal in value to Plan benefits
guaranteed under Title IV of ERISA, and not permit any "Prohibited Transaction"
within the meaning of Section 406 of ERISA to exist.
(l) FURTHER ASSURANCES. Execute and deliver, or cause to be
executed and delivered, to the Administrative Agent from time to time, promptly
upon request therefor, any and all other and further instruments, and take all
further action, that may be necessary or that any Bank through the
Administrative Agent may reasonably request, in order to cure any deficiency in
the execution and delivery of, and to give full effect to, this Agreement or
any Related Document to which it is a party, or to describe more fully
particular aspects of any of the Company's agreements and undertakings provided
in this Agreement or so intended to be. In addition, the
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Company will use all reasonable efforts to duly fulfill all Legal Requirements
from time to time on or prior to such date as the same may become legally
required.
(m) USE OF PROCEEDS. Use the proceeds of all Advances solely for
the purchase of Unremarketed Notes pursuant to the terms and conditions of this
Agreement and the other Related Documents.
(n) NOTIFICATION OF AMENDMENTS. Notify the Administrative Agent
of any proposed amendment to or modification of any Related Document prior to
the effective date of such amendment or modification.
(o) REMARKETING IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS. In
the event that the Company at any time shall remarket Purchased Notes purchased
from the Banks pursuant to Section 2.06 of this Agreement, such remarketing
shall be in full compliance with all applicable Securities Laws.
SECTION 6.02. NEGATIVE COVENANTS. So long as the Banks shall have
any Commitment under this Agreement, or the Company shall have any obligation
to pay any amount to any Bank hereunder or under any Purchased Note, the
Company will not, without the prior written consent of the Majority Banks:
(a) AMENDMENT OF NOTE INDENTURE OR LIQUIDITY PROVIDER NOTE. Enter
into or consent to any amendment to or modification of the Note Indenture, as
in effect on the date hereof, which amendment to or modification of the Note
Indenture affects the form of Liquidity Provider Note attached as an exhibit to
the Note Indenture or requires the consent of all Beneficial Owners.
(b) MERGER, CONSOLIDATION OR SALE OF ASSETS. Dissolve, sell or
otherwise dispose of all or substantially all of its assets or consolidate
with, or merge into, another corporation or permit one or more other
corporations to consolidate with or merge into it; provided, however, that the
Company may merge into, or consolidate with or transfer or otherwise dispose of
substantially all of its assets to any other Person and any Person may merge
into, or consolidate with, the Company provided in each case that (i) the
Company has given the Administrative Agent prior written notice of its
intention to consummate such a transaction setting forth the details thereof,
(ii) immediately after giving effect thereto (A) no event shall occur and be
continuing which constitutes an Event of Default or would, with the passage of
time or giving of notice, or both, constitute an Event of Default and (B) the
entity formed by or resulting from such consolidation shall have a Consolidated
Net Worth at least equal to that of the Company prior to any such merger or
consolidation and there otherwise shall have been no material adverse change in
the consolidated financial position of the Company, (iii) the entity formed by
any such consolidation or into which the Company shall be merged, or to which
the Company's assets shall be transferred shall assume in a writing satisfactory
to the Majority Banks the Company's obligations under this Agreement and the
Related Documents to which the Company is a party, and (iv) in all cases the
surviving entity or entity formed by such consolidation, or the entity to
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which assets shall be transferred, shall be a public utility regulated by a
state Public Service Commission or the Federal Energy Regulatory Commission.
(c) ALTERNATE CREDIT FACILITY. Cause a substitute credit facility
to be established for the Company without payment in full to the Banks of all
obligations hereunder through and including the Termination Date.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. The occurrence of any of the
following events shall be an "EVENT OF DEFAULT" hereunder:
(a) The Company shall fail to pay any amount payable hereunder or
under any of the other Related Documents on the date when due or shall fail to
perform or observe any of the covenants and agreements contained in Section
6.01(i)(i) or Section 6.02; or
(b) Any representation or warranty made or deemed made by the
Company (or any of its officers) herein or by the Company (or any of its
officers) in connection with this Agreement or any of the other Related
Documents shall prove to have been incorrect in any material respect when made
or deemed made; or
(c) The Company shall fail to perform or observe any other term,
covenant or agreement (other than a term, covenant, or agreement whose
performance or observance is dealt with specifically elsewhere in this Section
7.01) contained in this Agreement on its part to be performed or observed and
any such failure shall remain unremedied for 30 days after written notice
thereof by the Administrative Agent to the Company; or
(d) (i) The Company shall fail to pay any Debt in excess of an
aggregate amount of $ (excluding Debt under this Agreement), or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt, (ii) the Company shall fail to perform any
term, covenant, agreement or condition on its part to be performed or observed
under any agreement or instrument relating to any such Debt when required to be
performed or observed, and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt, or (iii) any such Debt shall be accelerated or 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; or
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(e) The Company shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Company
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or 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 any substantial part of its Property and, if instituted against the
Company shall remain undismissed for a period of 30 days or an "order for
relief" as defined in the United States Bankruptcy Reform Act of 1978, as
amended (the "FEDERAL BANKRUPTCY CODE"), shall be rendered prior to the
expiration of that 30-day period; or any judgment, writ, warrant of attachment
or execution or similar process shall be issued or levied against any
substantial part of the Property of the Company and shall not be released,
vacated or fully bonded within ten Business Days after its issue or levy, or
the Company shall take any action to authorize any of the actions set forth
above in this subsection (e); or
(f) One or more judgments, decrees or orders for the payment of
money the enforcement of which, in the aggregate, would have a material adverse
effect on the financial condition, results of operations, operations, Property
or prospects of the Company, shall be rendered against the Company, and either
(i) enforcement proceedings shall have been commenced by any creditor upon any
such judgment, decree or order, or (ii) there shall be any period of 30
consecutive days during which a stay of enforcement of any such judgment,
decree or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) Any Plan Termination Event with respect to a Plan that the
Administrative Agent determines in good faith might constitute grounds for the
termination of any Plan or for the appointment of a trustee to administer any
Plan shall have occurred, and, 10 days after notice thereof shall have been
given by the Administrative Agent to the Company, (i) such Plan Termination
Event (if correctable) shall not have been corrected, and (ii) the then present
value of such Plan's vested benefits exceeds the then current value of assets
accumulated in such Plan by an amount which the Administrative Agent determines
in good faith could have a material adverse effect on the financial condition
or operations of the Company; or
(h) The Company or any ERISA Affiliate shall receive a notice of
liability or demand for payment with respect to a Multiemployer Plan or a
Multiple Employer Plan that the Administrative Agent determines in good faith
could have a material adverse effect on the financial condition or operations
of such Person; or
(i) An Environmental Event shall have occurred that materially
adversely affects the financial condition, business or operations of the
Company; or
(j) Any provision of this Agreement shall at any time for any
reason cease to be valid and binding on the Company, or shall be declared to be
null and void, or the validity or enforceability thereof shall be contested by
the Company, or a proceeding shall be commenced
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by any Governmental Authority seeking to establish the invalidity or
unenforceability thereof, or the Company shall deny that it has any or further
liability or obligation under this Agreement; or
(k) Any "Event of Default", however defined, under the Note
Indenture or any other Related Document shall have occurred and be continuing;
or
(l) Any other Related Document shall for any reason cease to be
in full force and effect; or
(m) The security interest in and lien created under the Note
Indenture on the general and refunding mortgage bond issued as security for the
Notes under the Mortgage shall cease to be a valid and perfected first priority
security interest and lien and such cessation shall be deemed to be material by
the Administrative Agent.
SECTION 7.02. UPON AN EVENT OF DEFAULT. If any Event of Default
shall have occurred and be continuing beyond any applicable grace period, the
Administrative Agent (i) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Company, declare the obligation of each Bank
to make Advances to be terminated, whereupon the same shall forthwith
terminate, or (ii) if any Purchased Notes are at the time outstanding, shall at
the request, or may with the consent, of the Majority Banks, give notice to the
Company that all outstanding Purchased Notes are subject to immediate
repurchase by the Company pursuant to this Agreement, at a price equal to the
sum of the unpaid principal amount thereof plus all interest accrued and unpaid
thereon, whereupon the Company shall have an obligation, which obligation shall
be immediately due and owing, absolutely and unconditionally, to effect such
repurchase by paying such price to the Administrative Agent, along with all
other amounts due and payable under this Agreement, in immediately available
funds, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Company, and (iii) shall at the
request, or may with the consent, of the Majority Banks, by notice to the
Company, declare the outstanding principal amount of all other amounts owing or
to become owing under this Agreement to be forthwith due and payable, whereupon
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company; provided, however, that in the event of
an actual or deemed entry of an order for relief with respect to the Company or
any of its subsidiaries under the Federal Bankruptcy Code, (A) the obligation
of each Bank to make Advances shall automatically be terminated, (B) the
Company shall have an immediate obligation to purchase all outstanding
Purchased Notes at a price equal to the unpaid principal amount thereof plus
all interest accrued and unpaid thereon and (C) all amounts owing or to become
owing hereunder shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Company.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Bank hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement, the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Banks and such instructions shall be
binding upon all Banks and all holders of Purchased Notes; provided, however,
that the Administrative Agent shall not be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to
this Agreement or applicable law. The Administrative Agent agrees to give to
each Bank prompt notice of each notice given to it by the Company pursuant to
the terms of this Agreement. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Banks and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for the Company.
SECTION 8.02. ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may consult with legal counsel
(including counsel for the Company), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Company or to inspect the property (including the
books and records) of the Company; (iv) shall not be responsible to any Bank
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (v) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. THE CHASE MANHATTAN BANK AND AFFILIATES. With respect
to its Commitment, the Advances made by it and the Purchased Notes held for its
benefit, The Chase Manhattan Bank shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though it were
not the Administrative Agent; and the terms Bank
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and Banks shall, unless otherwise expressly indicated, include The Chase
Manhattan Bank in its individual capacity. The Chase Manhattan Bank and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Company,
any of its subsidiaries and any Person who may do business with or own
securities of the Company, or any such subsidiary, all as if The Chase
Manhattan Bank were not the Administrative Agent and without any duty to
account therefor to the Banks.
SECTION 8.04. BANK CREDIT DECISION. Each Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Bank and based on the financial statements referred to in Section 5.01
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 8.05. INDEMNIFICATION. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Company), ratably
according to the respective amounts of their Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Bank agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent that
the Administrative Agent is not reimbursed for such expenses by the Company.
SECTION 8.06. SUCCESSOR AGENT. (a) The Administrative Agent may
resign at any time by giving written notice thereof to the Banks and the
Company and may be removed at any time with cause by the Majority Banks. Upon
any such resignation or removal, the Majority Banks shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Majority Banks, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation or the Majority Banks' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$250,000,000.
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(b) So long as no Event of Default, or event which, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default, shall have occurred and be continuing, the Company may at any time
remove the Administrative Agent with or without cause; provided that prior to
such removal a Bank acceptable to the Majority Banks shall have agreed to
accept the Company's appointment as successor Administrative Agent hereunder.
(c) Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. (a) No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Banks, 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 Banks, do any of the following: (i) waive or
modify any of the conditions specified in Article IV, (ii) increase the
Commitments of the Banks or subject the Banks to any additional obligations,
(iii) reduce the principal of, or interest on, the Advances, the Purchased
Notes or any fees or other amounts payable hereunder, (iv) postpone any date
fixed for any payment of principal of, or interest on, the Advances, the
Purchased Notes or any fees or other amounts payable hereunder, (v) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Advances, the Purchased Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action hereunder, (vi) amend
this Section 9.01 or (vii) release any collateral securing the Purchased Notes
or change any provision of the Note Indenture providing for the release of any
collateral securing the obligations of the Company thereunder; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Banks required above to
take such action, affect the rights or duties of the Administrative Agent under
this Agreement or with respect to any Purchased Note.
(b) No amendment or waiver of any provision of this Agreement
affecting the rights or duties of any Remarketing Agent, nor consent to any
departure by any party therefrom, shall in any event be effective unless the
same shall be in writing and signed by such Remarketing
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Agent. Except as provided in the preceding sentence, the consent of any
Remarketing Agent shall not be required for the amendment or waiver of, or
consent to departure from, any provision of this Agreement.
SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Company, at its address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇.▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant Treasurer-Banking; if
to any Bank, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; and if to the Administrative Agent, at its address at
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, be effective
when deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Administrative Agent pursuant to
Article II, III or VIII shall not be effective until received by the
Administrative Agent.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any
Bank or the Administrative Agent to exercise, and no delay in exercising, any
right under any Related Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS, EXPENSES, TAXES AND INDEMNIFICATION. (a) The
Company agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Related Documents and the other documents to be delivered under the Related
Documents, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Administrative Agent with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under the Related Documents. The Company further agrees to
pay on demand all costs and expenses, if any (including, without limitation,
reasonable counsel fees and expenses of each Bank, including the allocated
costs of staff counsel), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of the Related Documents and the
other documents to be delivered under the Related Documents, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 9.04. In addition, the Company shall
pay any and all stamp and other taxes payable or determined to be payable in
connection with the execution, delivery, filing and recording of the Related
Documents and the other documents to be delivered under the Related Documents,
and agrees to save the Administrative Agent and each Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.
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(b) The Company hereby agrees to indemnify and hold the
Administrative Agent and the Banks and their respective officers, directors,
employees, professional advisors and affiliates (each, an "INDEMNIFIED PERSON")
harmless from and against any and all claims, damages, losses, liabilities,
costs or expenses (including reasonable attorney's fees and expenses, whether
or not such Indemnified Person is named as a party to any proceeding or
investigation or is otherwise subjected to judicial or legal process arising
from any such proceeding or investigation) which any of them may incur or which
may be claimed against any of them by any person or entity (except to the
extent such claims, damages, losses, liabilities, costs or expenses arise from
the gross negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution,
delivery or performance of any of the Related Documents or any
transaction contemplated thereby, or the use by the Company or any
Remarketing Agent of the proceeds of any Advance; or
(ii) by reason of any inaccuracy or alleged inaccuracy in
any material respect, or any untrue statement or alleged untrue
statement of any material fact, contained in any registration
statement relating to the Notes or in the Prospectus relating to the
Notes or any amendment or supplement thereto, except to the extent
contained in or arising from information in the Prospectus relating to
the Notes supplied in writing by and describing the Administrative
Agent or the Banks.
(c) The Company's obligations under this Section 9.04 shall
survive the repayment of all amounts owing to the Administrative Agent and the
Banks under the Related Documents and the termination of the Commitments. If
and to the extent that the obligations of the Company under this Section 9.04
are unenforceable for any reason, the Company agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 9.05. RIGHT OF SET-OFF. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of any request or
the granting of any consent specified by Section 7.02 to authorize the
Administrative Agent to demand a repurchase of Purchased Notes or to declare
Advances due and payable pursuant to the provisions of Section 7.02, each 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 Bank to or for the credit or the account
of the Company against any and all of the obligations of the Company now or
hereafter existing under any Related Document, whether or not such Bank shall
have made any demand under this Agreement and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Company after any such
set-off and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section 9.05 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Bank may have.
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SECTION 9.06. BINDING EFFECT; ASSIGNMENTS; PARTICIPATIONS (a) This
Agreement shall become effective when it shall have been executed by the
Company, the Administrative Agent, the Banks and the Remarketing Agents, and
thereafter shall be binding upon and inure to the benefit of the Company, the
Administrative Agent, each Remarketing Agent and each Bank and their respective
successors and assigns, except that: (i) the Company shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of the Banks, and (ii) the Banks shall not have the right to assign or
transfer any portion of their respective Commitments (except for assignments or
pledges to a Federal Reserve Bank) (A) without the prior written consent of the
Company (unless an Event of Default shall have occurred and be continuing, in
which event no such consent shall be required) and the Administrative Agent,
which consents shall not be unreasonably withheld, (B) to any assignee Bank
that is not an Eligible Bank and (C) unless the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording, an Assignment and Acceptance substantially in the form of Exhibit B,
and a processing and recordation fee of $3,500 payable by the assigning Bank
and/or the assignee Bank (such processing and recordation fee not to be payable
by the Company under any circumstances).
(b) Each Bank may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and its beneficial interest in any
Purchased Notes); provided, however, that (i) such Bank's obligations under
this Agreement (including, without limitation, its Commitment) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, and (iii) the Company, the
Administrative Agent, the Remarketing Agents and the other Banks shall continue
to deal solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement.
SECTION 9.07. ELIGIBLE BANK STATUS. Each Bank confirms that it
satisfies the requirements of an Eligible Bank on the date of this Agreement.
If at any time any Bank shall cease to satisfy the requirements of an Eligible
Bank, such Bank shall assign its Commitments to an Eligible Bank as promptly as
is practicable in compliance with terms and provisions of Section 9.06;
provided, however, that so long as any Bank satisfies the requirements set
forth in clause (i) of the definition of Eligible Bank and is in the process of
promptly (and in no event later than 10 Business Days following the date on
which such Bank ceased to satisfy the requirements of an Eligible Bank)
restoring its compliance with the other requirements for Eligible Bank status,
such Bank shall not be required to effect the assignment of its Commitments
otherwise required by this sentence.
SECTION 9.08. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
SECTION 9.09. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE DETROIT EDISON COMPANY
By
---------------------------------
as Administrative Agent and as Bank
By
---------------------------------
as Remarketing Agent
---------------------------------
as Remarketing Agent
---------------------------------
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EXHIBIT A
NOTICE OF FAILED REMARKETING
AND BORROWING REQUEST
as Administrative Agent,
for the Banks parties
to the Standby Note Purchase
Credit Facility referred to below
[Date]
Gentlemen:
The undersigned, (the "REMARKETING AGENT"), refers to the
Standby Note Purchase Credit Facility, dated as of (the "AGREEMENT",
the terms defined therein being used herein as therein defined), among The
Detroit Edison Company (the "COMPANY"), certain Banks parties thereto,
, as Administrative Agent for said Banks, the Remarketing Agent and .
Pursuant to Section 2.03 of the Agreement, the Company has authorized the
Remarketing Agent to notify you in the event of any Failed Remarketing and to
request a Borrowing in connection therewith. The Remarketing Agent hereby
represents and warrants that (i) it is a Remarketing Agent under the Remarketing
Agreement on and as of the date hereof, (ii) the Remarketing Agreement is in
full force and effect on the date hereof, (iii) a Failed Remarketing has
occurred on the date hereof with respect to $________ in outstanding principal
amount of Unremarketed Notes tendered to the Remarketing Agent and (iv) the
Remarketing Agent has received adequate funds to pay all accrued and unpaid
interest, if any, with respect to such Unremarketed Notes, or has informed the
Company of the Company's obligation to pay such accrued and unpaid interest on
the date hereof. The Remarketing Agent hereby gives you notice, irrevocably,
pursuant to Section 3.01 of the Agreement, that it requests a Borrowing under
the Agreement in connection with the Failed Remarketing described herein, and in
that connection sets forth below the information relating to such Borrowing as
required by Section 3.01(a) of the Agreement.
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(A) The Business Day of the requested Borrowing is ___________,
19__; and
(B) The aggregate amount of the requested Borrowing is $________.
Very truly yours,
By _________________________________
Name:
Title:
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EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Standby Note Purchase Credit Facility dated as
of (the "AGREEMENT") among The Detroit Edison Company, a Michigan
corporation (the "COMPANY"), the Banks (as defined in the Agreement), ,
as Administrative Agent for the Banks (the "ADMINISTRATIVE AGENT") and the
Remarketing Agents named therein as parties thereto. Terms defined in the
Agreement are used herein with the same meaning.
_______________________ (the "ASSIGNOR") and _____________________
(the "ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date as set forth in Schedule 1 hereto (the "EFFECTIVE DATE"), an
interest (the "ASSIGNED INTEREST") in and to the Assignor's rights and
obligations under the Agreement with respect to those credit facilities
contained in the Agreement as are set forth on Schedule 1 (individually, an
"ASSIGNED FACILITY"; collectively, the "ASSIGNED FACILITIES"), in a principal
amount and percentage for each Assigned Facility as set forth on Schedule 1.
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other Related
Document or any other instrument or document furnished pursuant thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Agreement, any other Related Document or any other instrument or
document furnished pursuant thereto, other than that it has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim; and (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company, any of its subsidiaries or any other
obligation or the performance or observance by the Company, any of its
subsidiaries or any other obligor of any of their respective obligations under
the Agreement or any other Related Document or any other instrument or document
furnished pursuant hereto or thereto.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Agreement, together with copies of the financial
statements referred to in Section 5.01(h) thereof, the financial statements
delivered pursuant to Section 6.01(i) thereof, if any, and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon
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the Assignor, the Administrative Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement, the other Related Documents or any other instrument or document
furnished pursuant hereto or thereto; (iv) confirms that it is an Eligible
Bank; (v) appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under the Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (vi) agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Agreement are required to be performed by it as a Bank; and (vii) specifies as
its Domestic Lending Office and its Eurodollar Lending Office the respective
offices set forth beneath its name on the signature pages hereof.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent pursuant to Section 9.06 of the Agreement, effective
as of the Effective Date (which date shall not, unless otherwise agreed to by
the Administrative Agent, be earlier than five Business Days after the date of
such acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignee which accrue subsequent to the Effective Date.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Agreement for periods prior to the Effective Date directly between
themselves.
6. From and after the Effective Date, (i) the Assignee shall be a
party to the Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and shall be
bound by the provisions thereof and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the law of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Assignment and
Acceptance by signing any such counterpart.
49
3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
[NAME OF ASSIGNOR]
By:_________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By:_________________________________
Name:
Title:
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
50
4
Accepted this ____ day
of ____________, 19__
, as
Administrative Agent
By:______________________________
Name:
Title:
[Consented to this _____ day
of __________, 19___
THE DETROIT EDISON COMPANY
By:______________________________]1
Name:
Title:
---------------------
1 To be included if required under Section 9.06(a) of the Facility
Agreement.
51
Schedule 1 to
Assignment and Acceptance
relating to the Standby Note Purchase Facility,
dated as of September 12, 1997,
among The Detroit Edison Company, the banks party thereto,
as , Administrative Agent for the Banks
(in such capacity, the "ADMINISTRATIVE AGENT")
and the Remarketing Agents party thereto
Name of Assignor: _________________________________
Name of Assignee: _________________________________
Effective Date of Assignment: _____________________
Facility Principal Percentage
-------- Amount Assigned Assigned
--------------- --------