EXHIBIT 4.1
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$1,000,000,000
CREDIT AGREEMENT
Dated as of March 7, 2005
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Among
CENTERPOINT ENERGY, INC.,
as Borrower,
THE BANKS PARTIES HERETO,
CITIBANK, N.A.,
as Syndication Agent,
BARCLAYS BANK PLC,
BANK OF AMERICA, N.A.
and
CREDIT SUISSE FIRST BOSTON,
as Co-Documentation Agents
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC. and
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Bookrunners
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS............................................ 1
SECTION 1.1. Certain Defined Terms................................................. 1
SECTION 1.2. Other Definitional Provisions......................................... 22
ARTICLE II AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT....................... 23
SECTION 2.1. The Commitments....................................................... 23
SECTION 2.2. Procedure for Revolving Loan Borrowing................................ 23
SECTION 2.3. Minimum Tranches...................................................... 25
SECTION 2.4. Letters of Credit..................................................... 25
ARTICLE III PROVISIONS RELATING TO ALL LOANS.......................................... 29
SECTION 3.1. Evidence of Loans..................................................... 29
SECTION 3.2. Fees.................................................................. 30
SECTION 3.3. Interest.............................................................. 30
SECTION 3.4. Reserve Requirements.................................................. 31
SECTION 3.5. Interest Rate Determination and Protection............................ 32
SECTION 3.6. Voluntary Interest Conversion or Continuation of Loans................ 32
SECTION 3.7. Funding Losses Relating to LIBOR Rate Loans........................... 33
SECTION 3.8. Change in Legality.................................................... 34
ARTICLE IV INCREASED COSTS, TAXES, PAYMENTS AND PREPAYMENTS........................... 34
SECTION 4.1. Increased Costs; Capital Adequacy..................................... 34
SECTION 4.2. Pro Rata Treatment and Payments and Computations...................... 36
SECTION 4.3. Taxes................................................................. 36
SECTION 4.4. Sharing of Payments, Etc.............................................. 38
SECTION 4.5. Optional Termination or Reduction of the Commitments.................. 39
SECTION 4.6. Voluntary Prepayments................................................. 39
SECTION 4.7. Mitigation of Losses and Costs........................................ 40
SECTION 4.8. Determination and Notice of Additional Costs and Other Amounts........ 40
ARTICLE V CONDITIONS OF LENDING....................................................... 41
SECTION 5.1. Conditions Precedent to Loans and Letters of Credit................... 41
SECTION 5.2. Conditions Precedent to Each Borrowing................................ 42
ARTICLE VI REPRESENTATIONS AND WARRANTIES............................................. 43
SECTION 6.1. Representations and Warranties of the Borrower........................ 43
ARTICLE VII AFFIRMATIVE AND NEGATIVE COVENANTS........................................ 47
SECTION 7.1. Affirmative Covenants................................................. 47
SECTION 7.2. Negative Covenants.................................................... 50
SECTION 7.3. Borrower's Accounting Reorganization.................................. 54
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ARTICLE VIII EVENTS OF DEFAULT........................................................ 55
SECTION 8.1. Events of Default..................................................... 55
SECTION 8.2. Cancellation/Acceleration............................................. 58
ARTICLE IX THE ADMINISTRATIVE AGENT................................................... 59
SECTION 9.1. Appointment........................................................... 59
SECTION 9.2. Delegation of Duties.................................................. 59
SECTION 9.3. Exculpatory Provisions................................................ 59
SECTION 9.4. Reliance by Administrative Agent...................................... 60
SECTION 9.5. Notice of Default..................................................... 60
SECTION 9.6. Non-Reliance on Administrative Agent and Other Banks.................. 60
SECTION 9.7. Indemnification....................................................... 61
SECTION 9.8. Agent in Its Individual Capacity...................................... 61
SECTION 9.9. Successor Administrative Agent........................................ 61
ARTICLE X MISCELLANEOUS............................................................... 62
SECTION 10.1. Amendments and Waivers............................................... 62
SECTION 10.2. Notices.............................................................. 63
SECTION 10.3. No Waiver; Cumulative Remedies....................................... 64
SECTION 10.4. Survival of Representations and Warranties........................... 64
SECTION 10.5. Payment of Expenses and Taxes; Indemnity............................. 64
SECTION 10.6. Effectiveness, Successors and Assigns, Participations; Assignments... 65
SECTION 10.7. Setoff............................................................... 68
SECTION 10.8. Counterparts......................................................... 69
SECTION 10.9. Severability......................................................... 69
SECTION 10.10. Integration......................................................... 69
SECTION 10.11. GOVERNING LAW....................................................... 69
SECTION 10.12. Submission to Jurisdiction; Waivers................................. 70
SECTION 10.13. Acknowledgments..................................................... 70
SECTION 10.14. Limitation on Agreements............................................ 70
SECTION 10.15. Removal of Bank..................................................... 71
SECTION 10.16. Officer's Certificates.............................................. 72
SECTION 10.17. USA Patriot Act..................................................... 72
ii
Schedules
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Schedule 1.1(A) - Schedule of Commitments and Addresses
Schedule 1.1(B) - Existing Letters of Credit
Schedule 6.1(p) - Ownership of Capital Stock of Subsidiaries; Significant
Subsidiaries
Exhibits
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Exhibit A - Notice of Borrowing
Exhibit B - Notice of Interest Conversion/Continuation
Exhibit C - Assignment and Acceptance
Exhibit D - Note
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This Credit Agreement (this "Agreement"), dated as of March 7, 2005,
among CenterPoint Energy, Inc., a Texas corporation (the "Borrower"), the banks
and other financial institutions from time to time parties hereto (individually,
a "Bank" and, collectively, the "Banks"), Citibank, N.A., as syndication agent
(in such capacity, the "Syndication Agent"), Barclays Bank PLC, Bank of America,
N.A. and Credit Suisse First Boston, as co-documentation agents (in such
capacities, the "Documentation Agents") and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, together with any successors thereto in
such capacity, the "Administrative Agent").
The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR" means for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/64 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" means
the rate of per annum publicly announced from time to time by JPMorgan
Chase Bank, N.A. as its prime rate in effect at its principal office in New
York City (the Prime Rate not being intended to be the lowest rate of
interest charged by JPMorgan Chase Bank, N.A. in connection with extensions
of credit to debtors). Any change in the ABR due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.
"ABR Loan" means a Loan that bears interest at the ABR as provided in
Section 3.3(a).
"Adjusted Interest Expense" means, for any period, (a) total interest
expense (including that attributable to Capital Lease obligations and
capitalized interest) determined in accordance with GAAP of the Borrower
and its Consolidated Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Consolidated Subsidiaries
(including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financings and net
costs under Swap Agreements in respect of interest rates to the extent such
net costs are allocable to such period in accordance with GAAP) less (b)
the sum of the following for such period (i) total interest income
determined in accordance with GAAP and (ii) but only to the extent included
in the amount calculated pursuant to clause (a) above, (x) interest expense
on Hybrid Preferred Securities, (y) interest expense in respect of the
securitization programs of the Borrower and its Consolidated Subsidiaries
and in respect of any other Securitization Securities and (z) amortization
of settlement payments previously made on forward-starting Swap Agreements
and of any upfront fees and other costs associated with financings for the
Borrower and its Consolidated Subsidiaries.
"Administrative Agent" has the meaning specified in the introduction
to this Agreement.
"Affiliate" means any Person that, directly or indirectly, Controls or
is Controlled by or is under common Control with another Person.
"Agents" means the collective reference to the Syndication Agent, the
Documentation Agents and the Administrative Agent.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Applicable Margin" means the rate per annum set forth below opposite
the Designated Rating from time to time in effect during the period for
which payment is due:
DESIGNATED LIBOR RATE
RATING MARGIN ABR MARGIN
--------------- ---------- ----------
BBB+ or Baa1 or
higher 0.625% 0.000%
BBB or Baa2 0.750% 0.000%
BBB- or Baa3 0.875% 0.000%
BB+ or Ba1 1.000% 0.000%
BB or Ba2
or lower 1.250% 0.250%
In each row in the table set forth above, the first indicated rating
corresponds to that assigned by S&P and the second indicated rating
corresponds to that assigned by ▇▇▇▇▇'▇; the determination of which row of
such table is applicable at any time is set forth in the definition of
"Designated Rating".
"Application" means an application, in such form as an Issuing Bank
may specify from time to time, requesting such Issuing Bank to issue a
Letter of Credit.
"Assignment and Acceptance" has the meaning specified in Section
10.6(c).
"Available Commitment" means, as to any Bank at any time, an amount
equal to the excess, if any, of (a) such Bank's Commitment then in effect
over (b) such Bank's Outstanding Extensions of Credit then outstanding.
"Bank" and "Banks" have the meanings specified in the introduction to
this Agreement.
"Bank Affiliate" means, (a) with respect to any Bank, (i) an Affiliate
of such Bank that is a bank or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course of its business and is
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administered or managed by a Bank or an Affiliate of such Bank and (b) with
respect to any Bank that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and similar
extensions of credit and is managed by such Bank, an Affiliate of such Bank
or the same investment advisor as such Bank or by an Affiliate of such
investment advisor.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor thereto).
"Borrowed Money" of any Person means any Indebtedness of such Person
for or in respect of money borrowed or raised by whatever means (including
acceptances, deposits, lease obligations under Capital Leases, Mandatory
Payment Preferred Stock and synthetic leases); provided, however, that
Borrowed Money shall not include (a) any guarantees that may be incurred by
endorsement of negotiable instruments for deposit or collection in the
ordinary course of business or similar transactions, (b) any obligations or
guarantees of performance of obligations under a franchise, performance
bonds, franchise bonds, obligations to reimburse drawings under letters of
credit issued in accordance with the terms of any safe harbor lease or
franchise or in lieu of performance or franchise bonds or other obligations
incurred in the ordinary course of business that do not represent money
borrowed or raised, in each case to the extent that such reimbursement
obligations are payable in full within ten (10) Business Days after the
date upon which such obligation arises, (c) trade payables, (d) any
obligations of such Person under Swap Agreements, (e) customer advance
payments and deposits arising in the ordinary course of business or (f)
operating leases.
"Borrower" has the meaning specified in the introduction to this
Agreement.
"Borrowing" means a borrowing consisting of Loans under Section 2.1 of
the same Type, and having, in the case of LIBOR Rate Loans, the same
Interest Period, made on the same day by the Banks.
"Borrowing Date" means any Business Day specified by the Borrower as a
date on which the Borrower requests the Banks to make Loans hereunder.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by
law to close; provided that when used in connection with a LIBOR Rate Loan,
the term "Business Day" shall also exclude any day on which commercial
banks are not open for dealings in Dollar deposits in the London interbank
market.
"Capital Lease" means a lease that, in accordance with GAAP, would be
recorded as a capital lease on the balance sheet of the lessee.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
and any and all equivalent ownership interests in a Person (other than a
corporation), including without limitation, partnership interests in
partnerships and member interests in limited liability
3
companies, and any and all warrants or options to purchase any of the
foregoing or securities convertible into any of the foregoing.
"Cash Equivalents" means (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of 270 days or less from the date
of acquisition issued by any Bank or by any commercial bank organized under
the laws of the United States or any state thereof having combined capital
and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-1 by S&P or P-1 by ▇▇▇▇▇'▇, or carrying an
equivalent rating by a nationally recognized rating agency, if both of the
two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within 270 days from the date of
acquisition; (d) repurchase obligations of any Bank or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days, with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of
which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least A
by S&P or A by ▇▇▇▇▇'▇; (f) securities with maturities of 270 days or less
from the date of acquisition backed by standby letters of credit issued by
any Bank or any commercial bank satisfying the requirements of clause (b)
of this definition; (g) money market mutual or similar funds that invest
exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition; or (h) money market funds that (i) comply with the
criteria set forth in SEC Rule 2a-7 under the Investment Company Act of
1940, as amended, (ii) are rated AAA by S&P and Aaa by ▇▇▇▇▇'▇ and (iii)
have portfolio assets of at least $5,000,000,000.
"CEHE Backstop Agreement" means the $1,310,000,000 Credit Agreement,
dated as of the date hereof, among CenterPoint Electric, as borrower,
Citibank, N.A., as administrative agent, and the other financial
institutions parties thereto, as amended, modified or supplemented from
time to time.
"CEHE Credit Agreement" means the $1,310,000,000 Credit Agreement,
dated as of November 12, 2002, among CenterPoint Electric, as borrower,
Credit Suisse First Boston, as administrative agent, and the other
financial institutions parties thereto, as amended, modified or
supplemented from time to time.
"CEHE Facility" means the credit facilities provided under the CEHE
Credit Agreement and under the CEHE Backstop Agreement.
"CenterPoint Electric" means CenterPoint Energy Houston Electric, LLC,
a Texas limited liability company, and a Wholly-Owned Subsidiary of the
Borrower.
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"Change in Control" means, with respect to the Borrower, the
acquisition by any Person or "group" (within the meaning of Rule 13d-5 of
the Exchange Act) of beneficial ownership (determined in accordance with
Rule 13d-3 of the Exchange Act) of Capital Stock of the Borrower, the
result of which is that such Person or group beneficially owns 50% or more
of the aggregate voting power of all then issued and outstanding Capital
Stock of the Borrower. For purposes of the foregoing, the phrase "voting
power" means, with respect to an issuer, the power under ordinary
circumstances to vote for the election of members of the board of directors
of such issuer.
"Closing Date" means the date, on or before March 31, 2005, all the
conditions set forth in Section 6.1 are satisfied (or waived) in accordance
with the terms hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute.
"Commitment" means, as to any Bank, the obligation of such Bank, if
any, to make Loans and participate in L/C Obligations in an aggregate
principal and/or face amount not to exceed the amount set forth under the
heading "Commitment" opposite such Bank's name on Schedule 1.1(A) and/or in
the Assignment and Acceptance pursuant to which such Bank became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof; and "Commitments" shall be the collective reference to the
Commitments of all of the Banks. The original amount of the Total
Commitments is $1,000,000,000.
"Commitment Fee" means, as to any Bank, the fee equal to the rate per
annum set forth below opposite the Designated Rating from time to time in
effect during the period for which payment is due on the Available
Commitment of such Bank:
DESIGNATED
RATING COMMITMENT FEE
--------------- --------------
BBB+ or Baa1 or
higher 0.125%
BBB or Baa2 0.150%
BBB- or Baa3 0.175%
BB+ or Ba1 0.200%
BB or Ba2
or lower 0.250%
In each row in the table set forth above, the first indicated rating
corresponds to that assigned by S&P and the second indicated rating
corresponds to that assigned by ▇▇▇▇▇'▇; the determination of which row of
such table is applicable at any time is set forth in the definition of
"Designated Rating".
"Commonly Controlled Entity" means an entity, whether or not
incorporated, that is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes the
Borrower and that is treated as a single employer under Section 414 of the
Code.
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"Confidential Information Memorandum" means the Confidential
Information Memorandum, dated January, 2005.
"Consolidated EBITDA" means, for any twelve-month period ending on the
date of determination, Consolidated Net Income for such period plus,
without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, distributions on Hybrid Preferred
Securities (to the extent not included in interest expense and to the
extent deducted to arrive at Consolidated Net Income), amortization or
writeoff of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans) of the Borrower and its Consolidated Subsidiaries and
amortization of settlement payments previously made on forward-starting
Swap Agreements, (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring
expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such
period, losses on sales of assets outside of the ordinary course of
business), and (f) any other non-cash charges, and minus, to the extent
included as income in the statement of such Consolidated Net Income for
such period, the sum of (a) interest income, (b) any extraordinary, unusual
or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income for such period, gains on the sales of assets outside of the
ordinary course of business), (c) any other non-cash income, (d) Transition
Charges Principal and Interest, (e) Pre-Tax Excess Mitigation Credit and
(f) the aggregate pre-tax principal amount of CTC Recoveries, all as
determined on a consolidated basis. For purposes of this definition, any
results of operations classified as "discontinued operations" in accordance
with GAAP will be included in the manner set forth above.
"Consolidated Indebtedness" means, as of any date of determination,
the sum of
(i) the total Indebtedness for Borrowed Money of the Borrower and
its Consolidated Subsidiaries as shown on the consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries, determined
without duplication of any Guarantee of Indebtedness of the Borrower
by any of its Consolidated Subsidiaries or of any Guarantee of
Indebtedness of any such Consolidated Subsidiary by the Borrower or
any other Consolidated Subsidiary of the Borrower, plus
(ii) any Mandatory Payment Preferred Stock, less
(iii) the amount of Indebtedness described in clause (i)
attributable to amounts then outstanding under receivables facilities
or arrangements to the extent that such amounts would not have been
shown as Indebtedness on a balance sheet prepared in accordance with
GAAP prior to January 1, 1997, less
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(iv) the aggregate amount of liabilities in respect of any
Indexed Debt Securities as shown on the consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries, less
(v) the present value of the projected recovery, pursuant to
applicable legislation and agreement, of (a) the net amount of true-up
recovery and (b) the Market Value of Nuclear Generating Assets,
provided that the Market Value of Nuclear Generating Assets shall only
be subtracted for purposes of this definition for dates of
determination occurring until the earliest of: (x) December 31, 2005,
and (y) consummation of the sale of all or substantially all of the
Texas Genco Stock or all or substantially all of the assets of the
Texas Genco Entities, in the case of the foregoing clause (a), to the
extent approved by the PUC pursuant to the True-Up Order and
designated by the PUC as eligible for securitization (it being
understood that any such projected recoveries that are subject to an
appeal from the True-Up Order by the Borrower or any of its
Consolidated Subsidiaries shall not be included for purposes of this
clause (v)), less
(vi) the present value of the net amount of CTC Recoveries to the
extent approved by the PUC pursuant to the True-Up Order and was not
designated by the PUC as eligible for securitization, less
(vii) the greater of (x) until the date that is six months after
the receipt thereof, cash and Cash Equivalents of the Borrower and its
Consolidated Subsidiaries on such date of determination constituting
Net Cash Proceeds of the True-Up Securitization and (y) until the date
of the final scheduled maturity of the CEHE Facility, the lesser of
(A) the aggregate amount of cash and Cash Equivalents of the Borrower
and its Consolidated Subsidiaries on such date of determination
constituting Net Cash Proceeds of the True-Up Securitization and (B)
the aggregate principal amount outstanding on such date under the CEHE
Facility.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Consolidated Subsidiary of the Borrower or
is merged into or consolidated with the Borrower or any of its Consolidated
Subsidiaries and (b) the income (or deficit) of any Person (other than a
Consolidated Subsidiary of the Borrower) in which the Borrower or any of
its Consolidated Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Borrower or such
Consolidated Subsidiary in the form of dividends or similar distributions.
"Consolidated Subsidiary" means, with respect to a specified Person at
any date, any Subsidiary or any other Person (other than with respect to
the Borrower, any Securitization Subsidiary or any Unrestricted
Subsidiary), the accounts of which under GAAP would be consolidated with
those of such specified Person in its consolidated financial statements as
of such date.
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"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any written agreement, instrument or
other written undertaking to which such Person is a party or by which it or
any of its property is bound.
"Controlled" means, with respect to any Person, the ability of another
Person (whether directly or indirectly and whether by the ownership of
voting securities, contract or otherwise) to appoint and/or remove the
majority of the members of the board of directors or other governing body
of that Person (and "Control" shall be similarly construed).
"CTC Recoveries" means the competition transition charges to be paid
to CenterPoint Electric by retail electric providers in respect of stranded
costs and certain power market price and fuel cost recovery true-ups.
"Default" means any event that, with the lapse of time or giving of
notice, or both, or any other condition, would constitute an Event of
Default.
"Default Rate" means with respect to any overdue amount owed
hereunder, a rate per annum equal to (a) in the case of overdue principal
with respect to any Loan, the sum of the interest rate in effect at such
time with respect to such Loan under Section 3.3, plus 2%; provided that in
the case of overdue principal with respect to any LIBOR Rate Loan, after
the end of the Interest Period with respect to such Loan, the Default Rate
shall equal the rate set forth in clause (c) below, (b) in the case of
overdue principal with respect to any Reimbursement Obligations, the sum of
the interest rate per annum in effect at such time with respect to ABR
Loans under Section 3.3, plus 2%, and (c) in the case of overdue interest
with respect to any Loan, Commitment Fees, Utilization Fees or other
amounts payable hereunder, the sum of the interest rate per annum in effect
at such time with respect to ABR Loans, plus 2%.
"Designated Rating" means (a) the higher of the Ratings and (b) if the
difference in the Rating issued by S&P and ▇▇▇▇▇'▇ is greater than one
level, the Rating that is one level higher than the lower of such Ratings
shall apply. Any change in the calculation of the Applicable Margin with
respect to the Borrower that is caused by a change in the Designated Rating
will become effective on the date of the change in the Designated Rating.
If the rating system of any Rating Agency shall change, or if either S&P or
Moody's shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Administrative Agent shall negotiate in
good faith if necessary to amend this definition and the definitions of
"Rating" and "Rating Agencies" to reflect such changed rating system or the
unavailability of Ratings from such Rating Agencies and, pending the
effectiveness of any such amendment, the Designated Rating shall be
determined by reference to the Rating most recently in effect prior to such
change or cessation.
"Disposition" means with respect to any Property (excluding cash and
Cash Equivalents), any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition thereof outside the ordinary
course of business. The terms "Dispose" and "Disposed of" shall have
correlative meanings.
8
"Documentation Agents" has the meaning specified in the introduction
to this Agreement.
"Dollars" and the symbol "$" mean the lawful currency of the United
States.
"Early Funding ABR Loan" has the meaning specified in Section 2.2(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" has the meaning specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" means the $2,350,000,000 Credit Agreement,
dated as of October 7, 2003, among the Borrower, the Administrative Agent
and other financial institutions parties thereto, as heretofore amended,
modified or supplemented.
"Existing Credit Facility" means the credit facility provided under
the Existing Credit Agreement.
"Existing Issuing Banks" means each of JPMorgan Chase Bank, N.A. and
Citibank, N.A., in their respective capacities as issuers of the Existing
Letters of Credit.
"Existing Letters of Credit" means the letters of credit issued under
the Existing Credit Facility described on Schedule 1.1(B).
"Facility" means the Commitments and the extensions of credit made
thereunder.
"Federal Funds Effective Rate" means, for any day, a fluctuating rate
per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such
day for such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by the Borrower.
"Funding Office" means the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from
time to time by the Administrative Agent as its funding office by written
notice to the Borrower and the Banks.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America.
"General Mortgage Indenture" means the General Mortgage Indenture,
dated as of October 10, 2002, between CenterPoint Electric and JPMorgan
Chase Bank, N.A. (as
9
successor to JPMorgan Chase Bank), as trustee, as amended, modified or
supplemented from time to time.
"Global Coordinators" means ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Citigroup
Global Markets Inc., in their capacities as global coordinators.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee" means, as to any Person (the "guaranteeing person"), any
obligation of (a) the guaranteeing Person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the
creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any principal of any Indebtedness for Borrowed Money
(the "primary obligation") of any other third Person in any manner, whether
directly or indirectly, including, without limitation, any obligation of
the guaranteeing Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds for the purchase or
payment of any such primary obligation or (iii) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof. The amount of any Guarantee of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee, unless
such primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case the
amount of such Guarantee shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith (and "guaranteed" and "guarantor" shall be construed
accordingly).
"Highest Lawful Rate" means, with respect to each Bank, the maximum
nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received with respect to
any Loan or on other amounts, if any, due to such Bank pursuant to this
Agreement or any other Loan Document under applicable law. "Applicable law"
as used in this definition means, with respect to each Bank, that law in
effect from time to time that permits the charging and collection by such
Bank of the highest permissible lawful, nonusurious rate of interest on the
transactions herein contemplated including, without limitation, the laws of
each State that may be held to be applicable, and of the United States, if
applicable.
"Hybrid Preferred Securities" means preferred securities issued by any
Hybrid Preferred Securities Subsidiary.
"Hybrid Preferred Securities Subsidiary" means any Delaware business
trust (or similar entity) (i) all of the common equity interest of which is
owned (either directly or indirectly through one or more Wholly-Owned
Subsidiaries) at all times by the Borrower,
10
(ii) that has been formed for the purpose of issuing Hybrid Preferred
Securities and (iii) substantially all of the assets of which consist at
all times solely of the Junior Subordinated Debt and payments made from
time to time on the Junior Subordinated Debt.
"Indebtedness" of any Person means the sum of (a) all items (other
than Capital Stock, capital surplus, retained earnings, other comprehensive
income, treasury stock and any other items that would properly be included
in shareholder equity) that, in accordance with GAAP consistently applied,
would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person as at the date on which
the Indebtedness is to be determined, (b) all obligations of such Person,
contingent or otherwise, as account party or applicant (or equivalent
status) in respect of any standby letters of credit or equivalent
instruments, and (c) without duplication, the amount of Guarantees by such
Person of items described in clauses (a) and (b); provided, however, that
Indebtedness of a Person shall not include (i) any Junior Subordinated Debt
owned by any Hybrid Preferred Securities Subsidiary, (ii) any Guarantee by
the Borrower or its Subsidiaries of payments with respect to any Hybrid
Preferred Securities, (iii) any Securitization Securities or (iv) any
Hybrid Preferred Securities.
"Indexed Debt Securities" means (i) the ▇▇▇▇ and (ii) any other
security issued by the Borrower or any Consolidated Subsidiary of the
Borrower that (a) in accordance with GAAP, is shown on the consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as
Indebtedness or a liability and (b) the obligations at maturity of which
may under certain circumstances be satisfied completely by the delivery of,
or the amount of such obligations are determined by reference to, (1) an
equity security owned by the Borrower or any of its Consolidated
Subsidiaries which is issued by an issuer other than the Borrower or any
such Consolidated Subsidiary or (2) an underlying commodity or security
owned by the Borrower or any of its Consolidated Subsidiaries.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA (and "Insolvent" shall be construed accordingly for such purposes).
"Interest Period" means, for each LIBOR Rate Loan comprising part of
the same Borrowing, the period commencing on the date of such LIBOR Rate
Loan or the date of the conversion of any Loan into such LIBOR Rate Loan,
as the case may be, and ending on the last day of the period selected by
the Borrower pursuant to Section 2.2 or 3.6, as the case may be, and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to Section 3.6. The duration of
each such Interest Period shall be one, two, three, six or, if available to
all Banks under the Facility, nine or twelve months or periods shorter than
one month, as Borrower may select by notice pursuant to Section 2.2 or 3.6
hereof, provided, however, that:
(i) any Interest Period in respect of a Loan that would otherwise
extend beyond the Termination Date shall end on the Termination Date;
11
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day; provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day, and
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Investment" has the meaning specified in Section 7.2(g).
"Issuing Bank" means (i) the Existing Issuing Banks, (ii) JPMorgan
Chase Bank, N.A., and Citibank, N.A., each in its capacity as issuer of any
Letter of Credit; provided, however, that neither JPMorgan Chase Bank, N.A.
nor Citibank, N.A. shall be required to issue Letters of Credit in excess
of $100,000,000 at any time outstanding for each such Issuing Bank, and
(iii) any other Bank, in such capacity, selected to be an Issuing Bank by
the Borrower with the consent of the Administrative Agent, which shall not
be unreasonably withheld, and such Bank. Any reference to an Issuing Bank
herein means the applicable institution issuing the applicable Letter of
Credit.
"Junior Subordinated Debt" means subordinated debt of the Borrower or
any Subsidiary of the Borrower (i) that is issued at par to a Hybrid
Preferred Securities Subsidiary in connection with the issuance of Hybrid
Preferred Securities, (ii) the payment of the principal of which and
interest on which is subordinated (with certain exceptions) to the prior
payment in full in cash or its equivalent of all senior indebtedness of the
obligor thereunder and (iii) that has an original tenor no earlier than 30
years from the issuance thereof.
"L/C Commitment" means the amount of $200,000,000.
"L/C Fee Payment Date" means the last day of each March, June,
September and December while the L/C Commitment remains in effect and the
Termination Date.
"L/C Obligations" means, at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired face amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to
Section 2.4.
"L/C Participants" means the collective reference to all the Banks
other than the Issuing Bank in their respective capacities as participants
in L/C Obligations.
"Lead Arrangers" means ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Citigroup
Global Markets Inc., in their capacities as joint lead arrangers and
bookrunners.
"Letters of Credit" has the meaning assigned to such term in Section
2.4(a)(ii).
12
"LIBOR Rate" means, with respect to each day during each Interest
Period pertaining to a LIBOR Rate Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first days of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), the "LIBOR Rate" shall be determined
by reference to such other comparable publicly available service for
displaying eurodollar rates as may be selected by the Administrative Agent
or, in the absence of such availability, by reference to the rate at which
the Administrative Agent is offered Dollar deposits at or about 11:00 A.M.,
New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where its eurodollar and
foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein.
"LIBOR Rate Loan" means a Loan that bears interest at the LIBOR Rate
as provided in Section 3.3(b).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, charge, security interest, encumbrance or
lien of any kind whatsoever (including any Capital Lease).
"Loans" means the loans made by the Banks to the Borrower pursuant to
this Agreement.
"Loan Documents" means this Agreement, any Notes and any document or
instrument executed in connection with the foregoing.
"Majority Banks" means, at any time, Banks having in excess of 50% of
the Total Commitments then in effect or, if the Commitments shall have
terminated, the Total Outstanding Extensions of Credit then outstanding.
"Mandatory Payment Preferred Stock" means any preference or preferred
stock of the Borrower or of any Consolidated Subsidiary (other than (x) any
preference or preferred stock issued to the Borrower or its Subsidiaries,
(y) Hybrid Preferred Securities and (z) Junior Subordinated Debt) that is
subject to mandatory redemption, sinking fund or retirement provisions
(regardless of whether any portion thereof is due and payable within one
year).
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Market Value of Nuclear Generating Assets" means the market value of
the Borrower's direct or indirect interest in the nuclear generating
assets, which is deemed to be $700,000,000.
"Material Adverse Effect" means any material adverse effect on the
ability of the Borrower to perform its obligations under the Loan Documents
on a timely basis (it being
13
understood that Material Adverse Effect shall not include the effect of any
True-Up Litigation).
"Maturity Date" means March 7, 2010.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
rating agency.
"Multiemployer Plan" means a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, in connection with any True-Up
Securitization, the cash proceeds received from such securitization, net of
attorneys' fees, investment banking fees, accountants' fees, underwriting
discounts, escrow fees, reserves, related swap costs and commissions and
other customary fees and expenses actually incurred in connection therewith
and other similar payment obligations resulting therefrom that are required
to be paid concurrently or otherwise as a result of such securitization.
"Net Tangible Assets" means the total assets of the Borrower, its
Consolidated Subsidiaries and the Unrestricted Subsidiaries, minus goodwill
and other intangible assets as shown on the balance sheet of the Borrower,
its Consolidated Subsidiaries and the Unrestricted Subsidiaries delivered
pursuant to Section 7.1(a) in respect of the most recently ended fiscal
quarter of the Borrower.
"Notes" means the collective reference to any promissory note
evidencing Loans.
"Notice of Borrowing" has the meaning specified in Section 2.2.
"Notice of Interest Conversion/Continuation" has the meaning specified
in Section 3.6(a).
"Original Mortgage" means the Mortgage and Deed of Trust, dated as of
November 1, 1944, by CenterPoint Electric to South Texas Commercial
National Bank of Houston, as Trustee (JPMorgan Chase Bank, N.A., as
successor Trustee), as amended, modified or supplemented from time to time.
"Other Taxes" has the meaning specified in Section 4.3(b).
"Outstanding Extensions of Credit" means, as to any Bank at any time,
an amount equal to the sum of (a) the aggregate principal amount of all
Loans made by such Bank then outstanding and (b) such Bank's Revolving
Percentage of the L/C Obligations then outstanding.
"Participant" has the meaning specified in Section 10.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
14
"Permitted Liens" means with respect to any Person:
(a) Liens for current taxes, assessments or other governmental
charges that are not delinquent or remain payable without any penalty,
or the validity or amount of which is contested in good faith by
appropriate proceedings, provided, however, that adequate reserves
with respect thereto are maintained on the books of such Person in
accordance with GAAP, and provided, further, that any right to
seizure, levy, attachment, sequestration, foreclosure or garnishment
with respect to Property of such Person or any Subsidiary of such
Person by reason of such Lien has not matured, or has been, and
continues to be, effectively enjoined or stayed;
(b) landlord Liens for rent not yet due and payable and Liens for
materialmen, mechanics, warehousemen, carriers, employees, workmen,
repairmen and other similar nonconsensual Liens imposed by operation
of law, for current wages or accounts payable or other sums not yet
delinquent, in each case arising in the ordinary course of business or
if overdue, that are being contested in good faith by appropriate
proceedings, provided, however, that any right to seizure, levy,
attachment, sequestration, foreclosure or garnishment with respect to
Property of such Person or any Subsidiary of such Person by reason of
such Lien has not matured, or has been, and continues to be,
effectively enjoined or stayed;
(c) Liens (other than any Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Code, ERISA or any environmental law,
order, rule or regulation) incurred or deposits made, in each case, in
the ordinary course of business, (i) in connection with workers'
compensation, unemployment insurance and other types of social
security or (ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, performance or payment bonds, purchase,
construction, sales contracts and other similar obligations, in each
case not incurred or made in connection with the borrowing of money,
the obtaining of advances or the payment of the deferred purchase
price of property;
(d) Liens arising out of or in connection with any litigation or
other legal proceeding that is being contested in good faith by
appropriate proceedings; provided, however, that adequate reserves
with respect thereto are maintained on the books of such Person in
accordance with GAAP; and provided, further, that, subject to Section
8.1(i) (so long as such Lien is discharged or released within 60 days
of attachment thereof), any right to seizure, levy, attachment,
sequestration, foreclosure or garnishment with respect to Property of
such Person or any Subsidiary of such Person by reason of such Lien
has not matured, or has been, and continues to be, effectively
enjoined or stayed;
(e) precautionary filings under the applicable Uniform Commercial
Code made by a lessor with respect to personal property leased to such
Person or any Subsidiary of such Person;
15
(f) other non-material Liens or encumbrances none of which
secures Indebtedness for Borrowed Money of the Borrower or any of its
Subsidiaries or interferes materially with the use of the Property
affected in the ordinary conduct of Borrower's or its Subsidiaries'
business and which individually or in the aggregate do not have a
Material Adverse Effect;
(g) easements, rights-of-way, restrictions and other similar
encumbrances and exceptions to title existing or incurred in the
ordinary course of business that, in the aggregate, do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower and its Subsidiaries, taken as a whole;
(h) (i) Liens created by Capital Leases, provided that the Liens
created by any such Capital Lease attach only to the Property leased
to the Borrower or one of its Subsidiaries pursuant thereto, (ii)
purchase money Liens securing Indebtedness of the Borrower or any of
its Subsidiaries (including such Liens securing such Indebtedness
incurred within twelve months of the date on which such Property was
acquired), provided that all such Liens attach only to the Property
purchased with the proceeds of the Indebtedness secured thereby and
only secure the Indebtedness incurred to finance such purchase, (iii)
Liens on receivables, customer charges, notes, ownership interests,
contracts or contract rights created in connection with a sale,
securitization or monetization of such receivables, customer charges,
notes, ownership interests, contracts or contract rights, and Liens on
rights of the Borrower or any Subsidiary related to such receivables,
customer charges, notes, ownership interests, contracts or contract
rights which are transferred to the purchaser of such receivables,
customer charges, notes, ownership interests, contracts or contract
rights in connection with such sale, securitization or monetization,
provided that such Liens secure only the obligations of the Borrower
or any of its Subsidiaries in connection with such sale,
securitization or monetization and (iv) Liens created by leases that
do not constitute Capital Leases at the time such leases are entered
into, provided that the Liens created thereby attach only to the
Property leased to the Borrower or one of its Subsidiaries pursuant
thereto;
(i) Liens on cash and short-term investments (i) deposited by the
Borrower or any of its Subsidiaries in accounts with or on behalf of
futures contract brokers or other counterparties or (ii) pledged by
the Borrower or any of its Subsidiaries, in the case of clause (i) or
(ii) to secure its obligations with respect to contracts (including
without limitation, physical delivery, option (whether cash or
financial), exchange, swap and futures contracts) for the purchase or
sale of any energy-related commodity or interest rate or currency rate
management contracts;
(j) Liens on (i) Property owned by a Project Financing Subsidiary
or (ii) equity interests in a Project Financing Subsidiary (including
in each case a pledge of a partnership interest, common stock or a
membership interest in a
16
limited liability company) securing Indebtedness of the Borrower or
any of its Subsidiaries incurred in connection with a Project
Financing; and
(k) Liens on equity interests in an Unrestricted Subsidiary
(including in each case a pledge of a partnership interest, common
stock or a membership interest in a limited liability company)
securing, subject to Section 7.2(g), Indebtedness of such Unrestricted
Subsidiary.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, government (or any political subdivision or agency thereof)
or any other entity of whatever nature.
"Plan" means, at a particular time with respect to the Borrower, any
employee benefit plan that is covered by ERISA and in respect of which
Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" as defined in Section 3(5) of ERISA.
"Pre-Tax Excess Mitigation Credit" means the amount of the credit, if
any, (including the interest component) provided to retail electric
customers under order of the PUC to reflect the refund of an amount equal
to estimated cumulative excess earnings applicable to the years 1998
through 2001 which were used to accelerate depreciation on electric
generation assets in order to reduce or mitigate exposure to stranded costs
associated with electric generation assets or any other credit provided to
customers that will be recovered through securitization or CTC Recoveries.
"Project Financing" means any Indebtedness or lease obligations that
do not constitute Capital Leases at the time such leases are entered into,
in each case that are incurred to finance a project or group of projects
(including any construction financing) to the extent that such Indebtedness
(or other obligations) expressly are not recourse to the Borrower or any of
its Restricted Subsidiaries (other than a Project Financing Subsidiary) or
any of their respective Property other than the Property of a Project
Financing Subsidiary and equity interests in a Project Financing Subsidiary
(including in each case a pledge of a partnership interest, common stock or
a membership interest in a limited liability company).
"Project Financing Subsidiary" means any Restricted Subsidiary of the
Borrower (or any other Person in which Borrower directly or indirectly owns
a 50% or less interest) whose principal purpose is to incur Project
Financing or to become an owner of interests in a Person so created to
conduct the business activities for which such Project Financing was
incurred, and substantially all the fixed assets of which Subsidiary or
Person are those fixed assets being financed (or to be financed) in whole
or in part by one or more Project Financings.
"Property" means any interest or right in any kind of property or
asset, whether real, personal or mixed, owned or leased, tangible or
intangible and whether now held or hereafter acquired.
"Purchasing Banks" has the meaning specified in Section 10.6(c).
17
"PUC" means the Public Utility Commission of Texas.
"Rating" means the Borrower's corporate credit rating issued by S&P
and the Borrower's issuer rating issued by Moody's (it being understood
that a change in outlook status (e.g., watch status, negative outlook
status) is not a change in Rating as contemplated hereby).
"Rating Agencies" means (a) S&P and (b) Moody's.
"Register" has the meaning specified in Section 10.6(d) hereof.
"Regulation U" means Regulation U of the Board or any other regulation
hereafter promulgated by the Board to replace the prior Regulation U and
having substantially the same function.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Bank pursuant to Section 2.4(e) for amounts drawn
under Letters of Credit.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA and PBGC Reg. Section 4043, other than those events as to
which the thirty-day notice period is waived under PBGC Reg. Section 4043
or other regulations, notices or rulings issued by the PBGC.
"Requirement of Law" means, as to any Person, any law, statute,
ordinance, decree, requirement, order, judgment, rule or regulation of any
Governmental Authority.
"Resources" means CenterPoint Energy Resources Corp., a Delaware
corporation, and a Wholly-Owned Subsidiary of the Borrower.
"Responsible Officer" means, with respect to any Person, its chief
financial officer, chief accounting officer, assistant treasurer, treasurer
or controller of such Person or any other officer of such Person whose
primary duties are similar to the duties of any of the previously listed
officers of such Person.
"Restricted Subsidiaries" means all Subsidiaries of the Borrower other
than Securitization Subsidiaries and Unrestricted Subsidiaries.
"Revolving Percentage" means, as to any Bank at any time, a fraction
(expressed as a percentage) the numerator of which is the amount of such
Bank's Commitment or, if the Commitments shall have terminated, the
Outstanding Extensions of Credit of such Bank then outstanding, and the
denominator of which is the Total Commitments then in effect or, if the
Commitments shall have terminated, the Total Outstanding Extensions of
Credit then outstanding.
18
"S&P" means Standard & Poor's Ratings Group and any successor rating
agency.
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Secured Indebtedness" means, with respect to any Person, all
Indebtedness secured (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured) by any Lien on any
Property (including, without limitation, accounts and contract rights)
owned by such Person or any of its Subsidiaries, even though such Person
has not assumed or become liable for the payment of such Indebtedness.
"Securitization Securities" means transition bonds issued pursuant to
the Texas Electric Choice Plan if (and only if) no recourse may be had to
the Borrower or any of its Subsidiaries (or to their respective assets) for
the payment of such obligations, other than the issuer of the bonds and its
assets, provided that payment of transition charges by any retail electric
provider ("REP") in accordance with such legislation, whether or not such
REP has collected such charges from the retail electric customers, shall
not be deemed "recourse" hereunder, including any REP that is a Subsidiary
of the Borrower or a division of an Affiliate of the Borrower or any
Affiliate of the Borrower.
"Securitization Subsidiary" means a special purpose subsidiary created
to issue Securitization Securities.
"Significant Subsidiary" means (i) for the purposes of determining
what constitutes an "Event of Default" under Sections 8.1(f), (g), (h), (i)
and (j), a Subsidiary of the Borrower (other than a Project Financing
Subsidiary) whose total assets, as determined in accordance with GAAP,
represent at least 10% of the total assets of the Borrower, on a
consolidated basis, as determined in accordance with GAAP and (ii) for all
other purposes the "Significant Subsidiaries" shall be those Subsidiaries
of the Borrower whose total assets, as determined in accordance with GAAP,
represent at least 10% of the total assets of the Borrower on a
consolidated basis, as determined in accordance with GAAP for the
Borrower's most recently completed fiscal year and identified in the
certificate most recently delivered pursuant to Section 7.1(a)(iv)(C);
provided that no Securitization Subsidiary or Unrestricted Subsidiary shall
be deemed to be a Significant Subsidiary or subject to the restrictions,
covenants or Events of Default under this Agreement.
"Single Employer Plan" means any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which more than 50% of the
outstanding shares of Capital Stock or other ownership interests having
ordinary voting power (other than Capital Stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect directors or other managers of such corporation,
19
partnership or other entity are at the time owned, directly or indirectly,
through one or more Subsidiaries of such Person, by such Person; provided,
however, that no Securitization Subsidiary shall be deemed to be a
Subsidiary for purposes of this Agreement.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing
risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing for
payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or any of its
Subsidiaries shall be a "Swap Agreement".
"Syndication Agent" has the meaning specified in the introduction to
this Agreement.
"Taxes" has the meaning specified in Section 4.3(a).
"Termination Date" means the Maturity Date or any earlier date on
which (a) the Commitments have been terminated in accordance with this
Agreement or (b) all unpaid principal amounts of the Loans hereunder have
been declared due and payable in accordance with this Agreement.
"Texas Genco" means Texas Genco Holdings, Inc.
"Texas Genco Entities" means the collective reference to Texas Genco
and its Subsidiaries.
"Texas Genco Stock" means the Capital Stock of Texas Genco now owned
or hereafter acquired by Utility Holding, LLC, which, as of the date
hereof, constitutes 100% of the issued and outstanding Capital Stock of
Texas Genco.
"Total Commitments" means, at any time, the aggregate amount of the
Commitments of all Banks then in effect.
"Total Outstanding Extensions of Credit" means, at any time, the
aggregate amount of the Outstanding Extensions of Credit of all Banks
outstanding at such time.
"Tranche" means the collective reference to LIBOR Rate Loans, the
Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have
been made on the same day).
"Transferee" has the meaning specified in Section 10.6(f).
"Transfer Effective Date" has the meaning specified in Section
10.6(c).
20
"Transition Charges Principal and Interest" means the non-bypassable
transition charges billed to customers for payment of debt service on
Securitization Securities.
"Triggering Event" has the meaning specified in Section 4.8(b).
"True-Up Litigation" means any litigation or other proceeding in
connection with the determination by the PUC of the recovery by the
Borrower and its Subsidiaries of stranded costs and other amounts to be
recovered in the true-up process.
"True-Up Order" means the Order on Rehearing issued by the PUC on
December 17, 2004 in PUC Docket No. 29526.
"True-Up Securitization" means a sale or contribution of assets to a
Securitization Subsidiary or series of such transactions, together with the
issuance of Securitization Securities.
"TW Stock" means shares of common stock of Time Warner Inc. (and its
successors).
"Type" refers to the determination of whether a Loan is an ABR Loan or
a LIBOR Rate Loan (or a Borrowing comprised of such Loans).
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"United States" means the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower and its
direct or indirect Subsidiaries that is designated by a Responsible Officer
of the Borrower as an Unrestricted Subsidiary, but only if (x) the
aggregate amount of net tangible assets of all Unrestricted Subsidiaries at
the time of designation does not exceed, or would not exceed as a result of
such designation, 10% of the Net Tangible Assets, (y) such designation and
the Investment of the Borrower in such Subsidiary complies with the
limitations in Section 7.2(g) and (z) such Subsidiary: (i) has no
Indebtedness with recourse to the Borrower and the Restricted Subsidiaries
except that permitted under Section 7.2(g); (ii) is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Significant Subsidiary of the Borrower unless the terms of any such
agreement, contract, arrangement or understanding and related transactions
are substantially no less favorable to the Borrower or such Significant
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Borrower; (iii) is a Person with respect to which
neither the Borrower nor any of its Significant Subsidiaries has any direct
or indirect obligation that violates Section 7.2(g) (a) to subscribe for
additional Capital Stock of such Person or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and (iv) does not, either alone or
in the aggregate, operate, directly or indirectly, all or substantially all
of the business of the Borrower and its Subsidiaries.
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Any designation of a Subsidiary of the Borrower as an Unrestricted
Subsidiary shall be evidenced by a certificate of a Responsible Officer of
the Borrower giving effect to such designation and a certificate executed
by a Responsible Officer certifying that such designation complied with the
preceding conditions and was permitted by Section 7.2(g) delivered to the
Administrative Agent. If, at any time, any Unrestricted Subsidiary would
fail to meet the preceding requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of
this Agreement and any Indebtedness of such Subsidiary shall be deemed to
be incurred by a Significant Subsidiary of the Borrower as of such date
and, if such Indebtedness is not permitted to be incurred as of such date
under Section 7.2(g), the Borrower shall be in default of such covenant. A
Responsible Officer of the Borrower may at any time designate any
Unrestricted Subsidiary to be a Subsidiary of the Borrower that is not an
Unrestricted Subsidiary; provided that such designation shall be deemed to
be an incurrence of Indebtedness by such Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall
only be permitted if (1) such Indebtedness is permitted under this
Agreement calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period; and (2) no
Default or Event of Default would be in existence following such
designation.
"Utility Holding, LLC" means Utility Holding, LLC, a Delaware limited
liability company, a Wholly-Owned Subsidiary of the Borrower and the direct
parent of Texas Genco.
"Utilization Fee" has the meaning specified in Section 3.2(b).
"Wholly-Owned" means, with respect to any Subsidiary of any Person,
all the outstanding Capital Stock (other than directors' qualifying shares
required by law) or other ownership interest of such Subsidiary which are
at the time owned by such Person or by one or more Wholly-Owned
Subsidiaries of such Person, or both.
"▇▇▇▇" means the 2.0% Zero-Premium Exchangeable Subordinated Notes due
2029 issued pursuant to the ▇▇▇▇ Indenture by the Borrower in an initial
aggregate face amount of $999,999,943.25 and the obligations at maturity of
which may be determined by reference to shares of TW Stock.
"▇▇▇▇ Indenture" means the Indenture entered into by the Borrower in
connection with the issuance of the ▇▇▇▇, together with all instruments and
other agreements entered into by the Borrower in connection therewith.
SECTION 1.2. Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have such defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to the Borrower or any of its Subsidiaries not defined in Section
1.1 and accounting terms partly
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defined in Section 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP, (ii) the words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation",
(iii) the word "incur" shall be construed to mean incur, create, issue, assume,
become liable in respect of or suffer to exist (and the words "incurred" and
"incurrence" shall have correlative meanings), (iv) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts, leasehold interests and contract
rights, and (v) references to agreements or other Contractual Obligations shall,
unless otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT
SECTION 2.1. The Commitments. (a) Each Bank severally agrees, on the terms
and subject to the conditions hereinafter set forth, to make revolving credit
Loans to the Borrower from time to time on any Business Day during the period
from the Closing Date until the Termination Date in an aggregate principal
amount outstanding, which, when added to such Bank's Revolving Percentage of the
then outstanding L/C Obligations, does not exceed at any time such Bank's
Commitment; provided that no Loan shall be made as a LIBOR Rate Loan with an
Interest Period ending after the Termination Date; and provided, further, that
in no event shall the Total Outstanding Extensions of Credit at any time exceed
the Total Commitments at such time.
(b) Each Borrowing by the Borrower shall be in an aggregate principal
amount not less than $10,000,000 (in the case of LIBOR Rate Loans) or $5,000,000
(in the case of ABR Loans), or an integral multiple of $1,000,000 in excess
thereof and shall consist of Loans of the same Type made on the same day by the
Banks ratably according to their respective Revolving Percentages. Within the
limits of the applicable Commitments, the Borrower may borrow, prepay pursuant
to Section 4.6 and reborrow under this Section 2.1. The principal amount
outstanding on the Loans shall be due and payable on the Termination Date,
together with accrued and unpaid interest thereon.
SECTION 2.2. Procedure for Revolving Loan Borrowing. (a) The Borrower may
borrow under the Commitments on any Business Day during the period from and
including the Closing Date to and excluding the Termination Date, provided that
the Borrower shall give the Administrative Agent irrevocable oral notice or
written notice pursuant to a notice of borrowing,
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in substantially the form of Exhibit A hereto ("Notice of Borrowing") which
shall be signed by the Borrower and shall specify therein the requested (i) date
of such Borrowing, (ii) Type of Loans comprising such Borrowing, (iii) aggregate
amount of such Borrowing and (iv) the Interest Period for each such Loan, in the
case of any LIBOR Rate Loan,:
(i) not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
LIBOR Rate Loan;
(ii) not later than 11:00 A.M. (New York City time) on the Business
Day immediately preceding the date of the proposed Borrowing in the case of
an Early Funding ABR Loan; and
(iii) not later than 11:00 A.M. (New York City time) on the same
Business Day of the proposed Borrowing in the case of any other ABR Loan.
With respect to any oral notice of borrowing given by the Borrower, the Borrower
shall promptly thereafter confirm such notice in writing pursuant to a Notice of
Borrowing. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Bank thereof. Each Bank shall, before 1:00 P.M. (New York
City time) on the date of such Borrowing, make available to the Administrative
Agent at the Funding Office, in immediately available funds, such Bank's
applicable Revolving Percentage of such Borrowing; provided, however, that, in
the event of a requested ABR Loan with respect to which the Borrower has
delivered its Notice of Borrowing on the Business Day immediately preceding the
requested Borrowing Date (an "Early Funding ABR Loan"), each Bank shall make its
applicable Revolving Percentage of such Borrowing available before 10:00 A.M.
(New York City time) on the requested Borrowing Date. The Administrative Agent
shall, no later than 2:00 P.M. (New York City time) on such date (or no later
than 11:00 A.M. (New York City time), in the case of an Early Funding ABR Loan),
make available to the Borrower the proceeds of the Loans received by the
Administrative Agent hereunder by crediting such account of the Borrower which
the Administrative Agent and the Borrower shall from time to time designate.
Each Notice of Borrowing shall be irrevocable and binding on the Borrower.
(b) Unless the Administrative Agent shall have received notice from a Bank
at least two hours prior to the applicable time described in clause (a) above by
which such Bank is required to deliver its funds to the Administrative Agent
with respect to any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's applicable Revolving Percentage 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 Section 2.2(a) and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such date of Borrowing, such Bank shall pay to the
Administrative Agent on demand an amount equal to the product of (i) the daily
average Federal Funds Effective Rate during such period, times (ii) the amount
of such Bank's applicable Revolving Percentage of such Borrowing, times (iii) a
fraction, the numerator of which is the number of days that elapse from and
including such date of Borrowing to the date on which such Bank's applicable
Revolving Percentage of such Borrowing shall have become immediately available
to the Administrative Agent and the denominator of which is 360. A
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certificate of the Administrative Agent submitted to any Bank with respect to
any amounts owing under this Section 2.2(b) shall be conclusive in the absence
of manifest error. If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Bank's Loan as
part of such Borrowing for purposes of this Agreement. If such Bank's applicable
Revolving Percentage of such Borrowing is not in fact made available to the
Administrative Agent by such Bank within one (1) Business Day of such date of
Borrowing, the Administrative Agent shall be entitled to recover such amount
with interest thereon at the rate per annum, equal to (i) the ABR (in the case
of ABR Loans) or (ii) the Federal Funds Effective Rate (in the case of LIBOR
Rate Loans), on demand, from the Borrower.
(c) The failure of any Bank to make the Loan 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 Loan on the date of such Borrowing, but no Bank shall be
responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on the date of any Borrowing.
SECTION 2.3. Minimum Tranches. All Borrowings, prepayments, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Tranche of LIBOR Rate Loans shall be equal to $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
SECTION 2.4. Letters of Credit. (a) L/C Commitment.
(i) Prior to the Closing Date, the Existing Issuing Banks have issued
the Existing Letters of Credit which from and after the Closing Date shall
constitute Letters of Credit hereunder.
(ii) Subject to the terms and conditions hereof, each Issuing Bank, in
reliance on the agreements of the other Banks set forth in Section 2.4(d),
agrees to issue standby letters of credit (together with the Existing
Letters of Credit, the "Letters of Credit") for the account of the Borrower
in support of obligations (including, without limitation, performance, bid
and similar bonding obligations and credit enhancement) of the Borrower and
its Affiliates on any Business Day on or after the Closing Date and prior
to the Termination Date in such form as may be approved from time to time
by such Issuing Bank; provided that no Issuing Bank shall have any
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (A) the L/C Obligations would exceed the L/C Commitment or (B)
the Total Outstanding Extensions of Credit then outstanding would exceed
the Total Commitments then in effect and provided, further, that neither
JPMorgan Chase Bank, N.A. nor Citibank, N.A. shall be required to issue
Letters of Credit in excess of $100,000,000 at any time outstanding for
each such Issuing Bank.
(iii) Each Letter of Credit shall be denominated in Dollars and shall
be a standby letter of credit issued to support obligations of the Borrower
or any of its Affiliates, contingent or otherwise, and expire no later than
the Maturity Date.
(iv) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
25
(v) No Issuing Bank shall at any time be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with, or cause such
Issuing Bank or any L/C Participant to exceed any limits imposed on such
Issuing Bank by, any applicable Requirement of Law.
(b) Procedure for Issuance of Letters of Credit. The Borrower may from time
to time request that an Issuing Bank issue a Letter of Credit by delivering to
such Issuing Bank at its address for notices specified herein an Application
therefor, completed to the satisfaction of such Issuing Bank, and such other
certificates, documents and other papers and information as such Issuing Bank
may reasonably request. Upon receipt of any Application, the Issuing Bank will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall any Issuing Bank be required to issue any Letter
of Credit earlier than two Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
in a form satisfactory to the Borrower to the beneficiary thereof or as
otherwise may be agreed by such Issuing Bank and Borrower. The relevant Issuing
Bank shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof and notify the Banks of the amount thereof.
(c) Fees, Commissions and Other Charges.
(i) The Borrower shall pay to the Administrative Agent, for the
account of the relevant Issuing Bank and the L/C Participants, a letter of
credit commission fee with respect to each Letter of Credit, computed for
the period from the last L/C Fee Payment Date (or, if later, the date of
issuance thereof) to the date upon which such payment is due hereunder at
the rate per annum equal to the Applicable Margin for LIBOR Rate Loans then
in effect, calculated on the basis of a 365- (or 366-, as the case may be)
day year, of the aggregate amount available to be drawn under such Letter
of Credit on the date on which such fee is calculated. The Borrower shall
pay to the Administrative Agent, for the account of the relevant Issuing
Bank, a fronting fee with respect to each Letter of Credit, computed for
the period from the last L/C Fee Payment Date to the date upon which such
payment is due hereunder at the rate per annum equal to 0.125%, calculated
on the basis of a 365- (or 366-, as the case may be) day year, of the
aggregate amount available to be drawn under such Letter of Credit on the
date on which such fee is calculated. Such commissions and fronting fees
shall be payable in arrears on each L/C Fee Payment Date and shall be
nonrefundable.
(ii) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse each Issuing Bank for such normal and customary
costs and reasonable expenses as are incurred or charged by such Issuing
Bank in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit.
(iii) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the relevant Issuing Bank and the L/C Participants
all fees and commissions received by the Administrative Agent for their
respective accounts pursuant to this Section 2.4(c).
26
(d) L/C Participations.
(i) Each Issuing Bank irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce each Issuing Bank to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from such Issuing Bank, on the
terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's
Revolving Percentage in each Issuing Bank's obligations and rights under
each Letter of Credit issued hereunder and the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to
Section 2.4(e). Each L/C Participant unconditionally and irrevocably agrees
with each Issuing Bank that, if a draft is paid under any Letter of Credit
for which such Issuing Bank is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay
to such Issuing Bank upon demand at such Issuing Bank's address for notices
specified herein an amount equal to such L/C Participant's Revolving
Percentage of the amount of such draft, or any part thereof, which is not
so reimbursed. Each Bank acknowledges and agrees that its obligation to
acquire participations pursuant to this Section 2.4(d)(i) in respect of
Letters of Credit is absolute and unconditional and shall not be affected
by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(ii) If any amount required to be paid by any L/C Participant to an
Issuing Bank pursuant to Section 2.4(d)(i) in respect of any unreimbursed
portion of any payment made by such Issuing Bank under any Letter of Credit
is not paid to such Issuing Bank within one Business Day after the date
such payment is due, such L/C Participant shall pay to such Issuing Bank on
demand an amount equal to the product of (A) such amount, times (B) the
daily average Federal Funds Effective Rate as quoted by the relevant
Issuing Bank, during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Bank, times (C) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If
any such amount required to be paid by any L/C Participant pursuant to
Section 2.4(d)(i) is not in fact made available to the relevant Issuing
Bank by such L/C Participant within three (3) Business Days after the date
such payment is due, such Issuing Bank shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the ABR. A certificate of the relevant
Issuing Bank submitted to any L/C Participant with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error.
(iii) Whenever, at any time after any Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 2.4(d)(i), such
Issuing Bank receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Bank), or any payment of interest on account
thereof, such Issuing Bank will distribute to such L/C Participant its
27
pro rata share thereof; provided, however, that in the event that any such
payment received by such Issuing Bank shall be required to be returned by
such Issuing Bank, such L/C Participant shall return to such Issuing Bank
the portion thereof previously distributed by such Issuing Bank to it.
(e) Reimbursement Obligation of the Borrower. (i) The Borrower shall
reimburse each Issuing Bank for any payment that such Issuing Bank makes under a
Letter of Credit on or before the date of such payment if the Borrower receives
notice of such payment on or before 10:00 a.m. (New York City time) on the date
such payment is made by such Issuing Bank; provided, however, that, if the
Borrower does not receive timely notice or reimburse such Issuing Bank under
this Section 2.4(e)(i), then Section 2.4(e)(ii) shall apply. Each such payment
shall be made to the relevant Issuing Bank at its address for notices specified
herein in Dollars and in immediately available funds.
(ii) Notwithstanding Section 5.2, each drawing under any Letter of
Credit shall be deemed to constitute a Borrowing of ABR Loans in the amount
of such drawing unless the Borrower has reimbursed the relevant Issuing
Bank under Section 2.4(e)(i). The Borrowing Date with respect to each such
borrowing shall be deemed to be the date of such drawing.
(f) Obligations Absolute.
(i) The Borrower's payment obligations under Section 2.4(e) shall be
absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment that the Borrower may
have or have had against the relevant Issuing Bank or any beneficiary of a
Letter of Credit other than a defense based upon the gross negligence or
willful misconduct of such Issuing Bank or violation of the standards of
care specified in the Uniform Commercial Code of the State of New York.
(ii) The Borrower also agrees with each Issuing Bank that no Issuing
Bank shall be responsible for, and the Borrower's Reimbursement Obligations
under Section 2.4(e) shall not be affected by, among other things, (i) the
validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or
forged, (ii) any dispute between or among the Borrower and any beneficiary
of any Letter of Credit or any other party to which such Letter of Credit
may be transferred or (iii) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.
(iii) No Issuing Bank shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by such Issuing Bank's gross
negligence or willful misconduct or in violation of the standards of care
specified in the Uniform Commercial Code of the State of New York.
28
(iv) The Borrower agrees that any action taken or omitted by any
Issuing Bank under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified
in the Uniform Commercial Code of the State of New York, shall be binding
on the Borrower and shall not result in any liability of such Issuing Bank
to the Borrower.
(g) Letter of Credit Payments. If any draft shall be presented for payment
under any Letter of Credit, the relevant Issuing Bank shall promptly notify the
Borrower by telephone (confirmed in writing) of the date and amount thereof and
whether such Issuing Bank has made or will make a payment thereunder. The
responsibility of such Issuing Bank to the Borrower in connection with any draft
presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
(h) Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 2.4, the provisions of this Section 2.4 shall control.
(i) Replacement of the Issuing Bank. Any Issuing Bank may be replaced at
any time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Banks of any such replacement of such Issuing Bank. At the time
any such replacement shall become effective, the Borrower shall pay all unpaid
fees accrued for the account of such replaced Issuing Bank pursuant to Section
2.4(c). From and after the effective date of any such replacement, (i) the
applicable successor Issuing Bank shall have all the rights and obligations of
such Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Issuing Bank" shall be
deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require. After
the replacement of an Issuing Bank hereunder, the applicable replaced Issuing
Bank shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
ARTICLE III
PROVISIONS RELATING TO ALL LOANS
SECTION 3.1. Evidence of Loans. (a) Each Bank shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Bank resulting from each Loan made by such Bank from time to
time, including, without limitation, the amounts of principal and interest
payable and paid to such Bank from time to time under this Agreement.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 10.6(d) and a subaccount therein for each Bank, in which shall be
recorded (i) the amount of each Loan made
29
by each Bank through the Administrative Agent hereunder, the type thereof and
each Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Bank hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Bank's share thereof.
(c) The entries made in the Register and the accounts of each Bank
maintained pursuant to Section 3.1(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amount of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Bank or the Administrative Agent to maintain the Register or any
such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans
actually made to the Borrower by such Bank in accordance with the terms of this
Agreement.
SECTION 3.2. Fees. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Bank the Commitment Fee, from the date hereof
until such date that the Loans and other obligations under this Agreement have
been paid in full, payable quarterly in arrears on the last day of each March,
June, September and December until such date that the Loans and other
obligations under this Agreement have been paid in full and on such date of
payment in full, commencing on the first such date to occur after the date
hereof.
(b) The Borrower agrees to pay to the Administrative Agent for the account
of each Bank a utilization fee (the "Utilization Fee") at a rate per annum equal
to 0.125% on the Outstanding Extensions of Credit of such Bank at any time that
the Total Outstanding Extensions of Credit outstanding shall exceed 50% of the
Total Commitments then in effect, payable quarterly in arrears on the last day
of each March, June, September and December, commencing on the first such date
to occur after the date hereof.
(c) The fees payable under Sections 3.2(a) and 3.2(b) shall be calculated
by the Administrative Agent on the basis of a 365- or 366-day year, as the case
may be, for the actual days (including the first day but excluding the last day)
occurring in the period for which such fee is payable.
(d) The Borrower shall pay to the Administrative Agent, for its own
account, the fees in the amounts and on the dates previously agreed to in
writing by the Borrower and the Administrative Agent.
SECTION 3.3. Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan made by each Bank from the date of such Loan until
such principal amount shall be paid in full, at the times and at the rates per
annum set forth below:
(a) ABR Loans. Each ABR Loan shall bear interest at a rate per annum equal
at all times to the lesser of (i) the ABR plus the Applicable Margin and (ii)
the Highest Lawful Rate, payable quarterly in arrears on the last day of each
March, June, September and December and on the Termination Date.
(b) LIBOR Rate Loans. Each LIBOR Rate Loan shall bear interest at a rate
per annum equal at all times to, in the case of each LIBOR Rate Loan, the lesser
of (A) the sum of the
30
LIBOR Rate for the applicable Interest Period for such Loan plus the Applicable
Margin and (B) the Highest Lawful Rate, payable on the last day of such Interest
Period and, with respect to Interest Periods of six, nine or twelve months, on
the ninetieth (90th) day after the commencement of the Interest Period and on
each succeeding ninetieth (90th) day during such Interest Period, and on the
Termination Date.
(c) Calculations. Interest that is determined by reference to the ABR shall
be calculated by the Administrative Agent on the basis of a 365- or 366-day
year, as the case may be, for the actual days (including the first day but
excluding the last day) occurring in the period in which such interest is
payable and otherwise shall be calculated by the Administrative Agent on the
basis of a 360-day year for the actual days (including the first day and
excluding the last day) occurring in the period for which such interest is
payable.
(d) Default Rate. Notwithstanding the foregoing, if all or a portion of (i)
the principal amount of any Loan or Reimbursement Obligation, (ii) any interest
payable thereon, or (iii) any Commitment Fee, Utilization Fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest, payable
from time to time on demand, at a rate per annum equal to the lesser of (A) the
Highest Lawful Rate and (B) the Default Rate, in each case from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(e) Determination Conclusive. Each determination of an interest rate by the
Administrative Agent pursuant to any provisions of this Agreement shall be
conclusive and binding on the Borrower and the Banks in the absence of manifest
error. The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing in reasonable detail the quotations used by
the Administrative Agent in determining the LIBOR Rate.
SECTION 3.4. Reserve Requirements. (a) The Borrower agrees to pay to each
Bank that requests compensation under this Section 3.4 in accordance with the
provisions set forth in Section 4.8(b), so long as such Bank shall be required
to maintain reserves against "Eurocurrency liabilities" under Regulation D of
the Board (or, so long as such Bank shall be required by the Board or by any
other Governmental Authority to maintain reserves against any other category of
liabilities that includes deposits by reference to which the interest rate on
LIBOR Rate Loans is determined as provided in this Agreement or against any
category of extensions of credit or other assets of such Bank that includes any
LIBOR Rate Loans), an additional amount (determined by such Bank and notified to
the Borrower pursuant to the provisions set forth in Section 4.8(b))
representing such Bank's calculation or, if an accurate calculation is
impracticable, reasonable estimate (using such method of allocation to such
Loans of the Borrower as such Bank shall determine in accordance with Section
4.8(a)) of the actual costs, if any, incurred by such Bank during the relevant
Interest Period as a result of the applicability of the foregoing reserves to
such LIBOR Rate Loans, which amount in any event shall not exceed the product of
the following for each day of such Interest Period:
(i) the principal amount of the relevant LIBOR Rate Loans made by such
Bank outstanding on such day;
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(ii) the difference between (A) a fraction, the numerator of which is
the LIBOR Rate (expressed as a decimal) applicable to such LIBOR Rate Loan
(expressed as a decimal), and the denominator of which is one minus the
maximum rate (expressed as a decimal) at which such reserve requirements
are imposed by the Board or other Governmental Authority on such date,
minus (B) such numerator; and
(iii) a fraction, the numerator of which is one and the denominator of
which is 360.
(b) The agreements in this Section 3.4 shall survive the termination of
this Agreement and the payment of all amounts payable hereunder; provided,
however, that in no event shall the Borrower be obligated to reimburse or
compensate any Bank for amounts contemplated by this Section 3.4 for any period
prior to the date that is 90 days before the date upon which such Bank requests
in writing such reimbursement or compensation from the Borrower.
SECTION 3.5. Interest Rate Determination and Protection. (a) The rate of
interest for each LIBOR Rate Loan shall be determined by the Administrative
Agent two Business Days before the first day of each Interest Period applicable
to such Loan. The Administrative Agent shall give prompt notice to the Borrower
and the Banks of the applicable interest rate determined by the Administrative
Agent for purposes of Sections 3.3(a) and (b) hereof.
(b) If, with respect to any LIBOR Rate Loans, prior to the first day of an
Interest Period (i) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the London interbank market, adequate and reasonable
means do not exist for ascertaining the LIBOR Rate for such Interest Period or
(ii) the Administrative Agent shall have received notice from the Majority Banks
that the LIBOR Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Banks (as determined in good
faith and certified by such Banks) of making or maintaining their affected LIBOR
Rate Loans during such Interest Period, the Administrative Agent shall give
facsimile or telephonic notice thereof (with written notice to follow promptly)
to the Borrower and the Banks as soon as practicable thereafter. If such notice
is given, (A) any LIBOR Rate Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (B) any Loans that were to have been
converted on the first day of such Interest Period to LIBOR Rate Loans shall be
continued as ABR Loans and (C) any outstanding LIBOR Rate Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further LIBOR Rate
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Loans to LIBOR Rate Loans.
SECTION 3.6. Voluntary Interest Conversion or Continuation of Loans. (a)
The Borrower may on any Business Day, upon the Borrower's irrevocable oral or
written notice of interest conversion/continuation given by the Borrower to the
Administrative Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed interest conversion or
continuation in the case of a LIBOR Rate Loan, (i) convert Loans of one Type
into Loans of another Type; (ii) convert LIBOR Rate Loans for a specified
Interest Period into LIBOR Rate Loans for a different Interest Period; or (iii)
continue LIBOR Rate Loans for a specified Interest Period as LIBOR Rate Loans
for the same Interest Period-;
32
provided, however, that (A) any conversion of any LIBOR Rate Loans into LIBOR
Rate Loans for a different Interest Period, or into ABR Loans, or any
continuation of LIBOR Rate Loans for the same Interest Period shall be made on,
and only on, the last day of an Interest Period for such LIBOR Rate Loans; (B)
no Loan may be converted into or continued as a LIBOR Rate Loan by the Borrower
so long as an Event of Default has occurred and is continuing, and (C) no Loan
may be converted into or continued as a LIBOR Rate Loan if after giving effect
thereto, Section 2.3 would be contravened. With respect to any oral notice of
interest conversion/continuation given by the Borrower under this Section
3.6(a), the Borrower shall promptly thereafter confirm such notice in writing.
Each written notice of interest conversion/continuation given by the Borrower
under this Section 3.6(a) and each confirmation of an oral notice of interest
conversion/continuation given by the Borrower under this Section 3.6(a) shall be
in substantially the form of Exhibit B hereto ("Notice of Interest
Conversion/Continuation"). Each such Notice of Interest Conversion/Continuation
shall specify therein the requested (x) date of such interest conversion or
continuation; (y) the Loans to be converted or continued; and (z) if such
interest conversion or continuation is into LIBOR Rate Loans, the duration of
the Interest Period for each such LIBOR Rate Loan. Upon receipt of any such
Notice of Interest Conversion/Continuation, the Administrative Agent shall
promptly notify each Bank thereof. Each Notice of Interest Conversion/
Continuation shall be irrevocable and binding on the Borrower.
(b) If the Borrower shall fail to deliver to the Administrative Agent a
Notice of Interest Conversion/Continuation in accordance with Section 3.6(a)
hereof, or to select the duration of any Interest Period for the principal
amount outstanding under any LIBOR Rate Loan by 11:00 A.M. (New York City time)
on the third Business Day prior to the last day of the Interest Period
applicable to such Loan in accordance with Section 3.6(a), the Administrative
Agent will forthwith so notify the Borrower and the Banks (provided that the
failure to give such notice shall not affect the conversion referred to below)
and such Loans will automatically, on the last day of the then existing Interest
Period therefor, convert into LIBOR Rate Loans with a one month Interest Period.
SECTION 3.7. Funding Losses Relating to LIBOR Rate Loans. (a) The Borrower
agrees, without duplication of any other provision under this Agreement, to
indemnify each Bank and to hold each Bank harmless from any loss or expense that
such Bank may sustain or incur as a consequence of (i) default by the Borrower
in payment when due of the principal amount of or interest on any LIBOR Rate
Loan, (ii) default by the Borrower in making a borrowing of, conversion into or
continuation of any LIBOR Rate Loan after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (iii)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (iv) the
making of a prepayment of LIBOR Rate Loans or the conversion of LIBOR Rate Loans
into ABR Loans, on a day that is not the last day of an Interest Period with
respect thereto (excluding any prepayment made pursuant to Section 3.8) on a day
that is not the scheduled maturity date with respect thereto, including, without
limitation, in each case, any such loss or expense arising from the reemployment
of funds obtained by it or from fees payable to terminate the deposits from
which such funds were obtained. The calculation of all amounts payable to a Bank
under this Section 3.7(a) shall be made pursuant to the method described in
Section 4.8(a), but in no event shall such amounts payable with respect to any
LIBOR Rate Loan exceed the amounts that would have been payable assuming such
Bank had actually funded its relevant LIBOR Rate Loan through the purchase of a
deposit bearing
33
interest at the LIBOR Rate in an amount equal to the amount of such LIBOR Rate
Loan and having a maturity comparable to, with respect to any LIBOR Rate Loan,
the relevant Interest Period, provided, that each Bank may fund each of its
LIBOR Rate Loans in any manner it sees fit, and the foregoing assumption shall
be utilized only for the calculation of amounts payable under this Section
3.7(a).
(b) The agreements in this Section 3.7 shall survive the termination of
this Agreement and the payment of all amounts payable hereunder; provided,
however, that in no event shall the Borrower be obligated to reimburse or
compensate any Bank for amounts contemplated by this Section 3.7 for amounts
accruing prior to the date that is 90 days prior to the date upon which such
Bank requests in writing such reimbursement or compensation from the Borrower.
SECTION 3.8. Change in Legality. (a) Notwithstanding any other provision of
this Agreement, if any Bank shall notify the Administrative Agent that it has
determined in good faith that the introduction of or any change in or in the
interpretation or application of any law or regulation by any Governmental
Authority (in each case occurring after the date of this Agreement) makes it
unlawful, or any central bank or other Governmental Authority asserts after the
date of this Agreement that it is unlawful, for any Bank or its applicable
lending office to perform its obligations hereunder to make LIBOR Rate Loans or
to fund or maintain LIBOR Rate Loans hereunder, (i) the obligation of such Bank
to make, or to convert Loans into, or to continue LIBOR Rate Loans as, LIBOR
Rate Loans shall be suspended until the Administrative Agent shall notify the
Borrower that the circumstances causing such suspension no longer exist; (ii)
the Borrower shall, at its option, either prepay in full all LIBOR Rate Loans of
such Bank then outstanding, or convert all such Loans to ABR Loans, on the
respective last days of the then current Interest Periods with respect to such
Loans (or within such earlier period as required by law), accompanied, in the
case of any prepayments, by interest accrued thereon and any amounts payable
under Section 3.7(a). Each Bank agrees that it will use reasonable efforts to
designate a different lending office for the LIBOR Rate Loans due to it affected
by this Section 3.8, if such designation will avoid the illegality described in
this Section 3.8 so long as such designation will not be disadvantageous to such
Bank as determined by such Bank in its sole discretion acting in good faith.
(b) For purposes of this Section 3.8, a notice to the Borrower (with a copy
to the Administrative Agent) by any Bank pursuant to paragraph (a) above shall
be effective on the date of receipt thereof by the Borrower.
ARTICLE IV
INCREASED COSTS, TAXES, PAYMENTS
AND PREPAYMENTS
SECTION 4.1. Increased Costs; Capital Adequacy. (a) If after the date of
this Agreement the adoption of or any change in any law or regulation or in the
interpretation or application thereof by any Governmental Authority or
application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date of this Agreement:
34
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Bank that is not otherwise included in the determination of
the LIBOR Rate hereunder (except for amounts covered by Section 3.4 or any
other Section hereof); or
(ii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the actual cost to such
Bank, by an amount that such Bank deems to be material, of making, converting
into, continuing or maintaining LIBOR Rate Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Bank, upon
its demand in the manner set forth in Section 4.8(b), any additional amounts,
computed by such Bank in accordance with Section 4.8(a), necessary to compensate
such Bank for such actual increased cost or reduced amount receivable that is
attributable to Loans or Commitments (to the extent that such Bank has not
already been compensated or reimbursed for such amounts pursuant to any other
provision of this Agreement). If any Bank becomes entitled to claim any
additional amounts pursuant to this Section 4.1(a) from the Borrower, it shall
promptly notify the Borrower, through the Administrative Agent, of the event by
reason of which it has become so entitled in the manner set forth in Section
4.8(b).
(b) If any Bank determines in good faith that the introduction of or any
change in or in the interpretation or application by any Governmental Authority
of any law or regulation regarding capital adequacy after the date of this
Agreement or compliance by such Bank or any corporation controlling such Bank
with any law or regulation or any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law) made or
issued after the date of this Agreement does or shall have the effect, as a
result of such Bank's obligations under this Agreement or under any Letter of
Credit, of reducing the rate of return on such Bank's or such corporation's
capital to a level below that which such Bank or such corporation could have
achieved but for such change or compliance (taking into consideration such
Bank's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, the Borrower shall pay to the
Administrative Agent for the account of such Bank, from time to time as
specified by such Bank in the manner set forth in Section 4.8(b), additional
amounts, computed by such Bank in accordance with Section 4.8(a), sufficient to
compensate such Bank or such corporation in the light of such circumstances, to
the extent that such Bank reasonably determines such reduction in rate of return
is allocable to the existence of such Bank's obligations hereunder.
(c) The agreements contained in this Section 4.1 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that in no event shall the Borrower be obligated to reimburse
or compensate any Bank for amounts contemplated by this Section 4.1 for any
period prior to the date that is 90 days prior to the date upon which such Bank
requests in writing such reimbursement or compensation from the Borrower.
35
SECTION 4.2. Pro Rata Treatment and Payments and Computations. (a) Each
Borrowing of Loans by the Borrower from the Banks hereunder, each payment by the
Borrower on account of any commitment or other fee, any reduction of the
Commitments of the Banks and any prepayment on account of principal and interest
on the Loans shall be made pro rata according to the respective Revolving
Percentages of the Banks.
(b) The Borrower shall make each payment (including each prepayment)
hereunder, whether on account of principal, interest, fees or otherwise, without
setoff or counterclaim, not later than 12:00 Noon (New York City time) on the
day when due in Dollars to the Administrative Agent at the Funding Office in
immediately available funds. The Administrative Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal,
interest, Letter of Credit fees or commitment or other fees (to the extent
received by the Administrative Agent) ratably to the Banks according to the
amounts of their respective Loans, L/C Obligations and Commitments in respect of
which such payment is made, and like funds relating to the payment of any other
amount payable to any Bank (to the extent received by the Administrative Agent)
to such Bank, in each case to be applied in accordance with the terms of this
Agreement.
(c) Whenever any payment hereunder or under the Notes 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 fees, as the case may be;
provided, however, if such extension would cause payment of interest on or
principal of LIBOR Rate Loans 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
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent the Borrower shall
not have so made such payment in full to the Administrative Agent, each Bank
shall pay to the Administrative Agent on demand an amount equal to the product
of (i) the daily average Federal Funds Effective Rate during such period, times
(ii) the amount of such Bank's Revolving Percentage of such payment, times (iii)
a fraction, the numerator of which is the number of days that elapse from and
including the date such amount is distributed to such Bank to the date on which
such Bank's Revolving Percentage of such payment shall have become immediately
available to the Administrative Agent and the denominator of which is 360.
SECTION 4.3. Taxes. (a) Any and all payments by the Borrower hereunder or
under the Loan Documents shall be made free and clear of and without deduction
or withholding for or on account of any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Administrative Agent, net
income taxes, branch profits taxes and franchise taxes imposed on it as a result
of a present or former connection between the jurisdiction (or political
subdivision thereof) of the government or taxing authority imposing such tax and
the Administrative Agent or such Bank other than a connection arising solely
from the Administrative Agent or such Bank
36
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any Note (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Bank or the Administrative Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
4.3) such Bank or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made;
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law; provided, however, that the Borrower shall
not be required to increase any such sums payable to any Bank with respect to
any Taxes (i) that are attributable to such Bank's failure to comply with the
requirements of Section 4.3(d) or (ii) that are United States withholding taxes
imposed on sums payable to such Bank at the time such Bank becomes a party to
this Agreement (or maintains a lending office), except to the extent that any
such Bank's assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Borrower with respect to such Taxes pursuant
to this Section 4.3. Whenever any Taxes or Other Taxes (as defined in Section
4.3(b)) are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for the account of the relevant
Bank or Administrative Agent, as the case may be, either (A) official tax
receipts or notarized copies of such receipts to such Bank within thirty (30)
days after payment of any applicable tax or (B) a certificate executed by a
Responsible Officer of the Borrower confirming that such Taxes or Other Taxes
have been paid, together with evidence of such payment.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under any Note or from the
execution, delivery or registration of or otherwise with respect to, this
Agreement, any other Loan Document, or the Loans and for which such Bank or the
Administrative Agent (as the case may be) has not been otherwise reimbursed by
the Borrower under this Agreement (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank and the Administrative Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 4.3) paid by such Bank or the Administrative Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, including, without limitation or duplication, any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Bank as a result of any failure by the Borrower to
pay any Taxes or Other Taxes when due to the appropriate taxing authority or to
remit to any Bank the receipts or other evidence of payment of Taxes or Other
Taxes.
(d) Each Bank registered in the Register that is not a U.S. Person as
defined in Section 7701(a)(30) of the Code agrees that it will deliver to the
Borrower and the Administrative Agent on the date hereof, or on the date which
it becomes a party to this Agreement, two duly completed copies of United States
Internal Revenue Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ W-8EXP or W-8IMY (or other
appropriate corresponding form) or any successor applicable form, as the case
may be. Each such Bank also agrees to deliver to the Borrower and the
Administrative
37
Agent two further copies of the said Form W-8BEN, W-8ECI, W-8EXP, or W-8IMY or
successor applicable forms or other manner of certification, as the case may be,
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form or
certification previously delivered by it to the Borrower, and such extensions or
renewals thereof as may reasonably be requested by the Borrower or the
Administrative Agent, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required that renders all
such forms inapplicable or that would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank so advises the
Borrower and the Administrative Agent. Each such Bank shall certify in the case
of a Form W-8BEN, W-8ECI, W-8EXP, or W-8IMY that it is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, subject to notification to the Borrower otherwise
pursuant to this Section 4.3(d). In the event that any such Bank fails to
deliver any forms required under this Section 4.3(d), the Borrower's obligation
to pay additional amounts shall be reduced to the amount that it would have been
obligated to pay had such forms been provided.
(e) If any Taxes or Other Taxes are not correctly or legally asserted and
the Administrative Agent or any Bank determines, in its reasonable discretion,
that it has received a refund of those Taxes or Other Taxes as to which it has
been indemnified by the Borrower, the Administrative Agent or such Bank shall
within 20 days after such refund pay to the Borrower the amount of such refund
to the extent that the Borrower indemnified the Administrative Agent or such
Bank for such Taxes or Other Taxes pursuant to this Section 4.3, net of any
out-of-pocket costs of the Administrative Agent or such Bank and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Bank, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Bank in the
event the Administrative Agent or such Bank is required to repay such refund to
such Governmental Authority. This paragraph shall not be construed to require
the Administrative Agent or any Bank to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.
(f) The agreements in this Section 4.3 shall survive the termination of
this Agreement and the payment of all amounts payable hereunder; provided,
however, that (i) in no event shall the Borrower be obligated to reimburse or
compensate any Bank for amounts contemplated by this Section 4.3 for any period
before the date that is 120 days before the date upon which such Bank requests
in writing such reimbursement or compensation from the Borrower (other than any
amounts as to which the ultimate amount of the reimbursement due could not then
be determined) and (ii) nothing contained in this Section 4.3 shall require the
Borrower to pay any amount to any Bank or the Administrative Agent in addition
to that for which it has already reimbursed any Bank or the Administrative Agent
under any other provision of this Agreement.
SECTION 4.4. Sharing of Payments, Etc. If any Bank (a "Benefitted Bank")
shall at any time receive any payment (other than pursuant to Section 3.4, 3.7,
4.1 or 4.3) of all or part of its Loans, Reimbursement Obligations owing to it
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, pursuant to events or proceedings
38
of the nature referred to in Section 8.1(g) or 8.1(h), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Bank, if any, in respect of such other Bank's Loans, Reimbursement Obligations
owing to it, respectively, or interest thereon, such benefitted Bank shall
purchase for cash from the other Banks a participating interest in such portion
of each such other Bank's Loans or Reimbursement Obligations owing to it,
respectively, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Bank to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 4.4 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of setoff) with respect
to such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation.
SECTION 4.5. Optional Termination or Reduction of the Commitments. (a)
Unless previously terminated, the Commitments of the Banks to make Loans shall
terminate on the Maturity Date.
(b) The Borrower shall have the right, without penalty or premium, upon at
least three (3) Business Days' irrevocable written notice to the Administrative
Agent (which shall give prompt notice to each Bank), to terminate in whole the
Commitments or permanently, from time to time, to reduce ratably in part the
unused portion of the Commitments, provided that (i) each partial reduction
shall be in the aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and (ii) no such termination or reduction shall
be permitted if, after giving effect thereto and to any prepayments made under
Section 4.6 by the Borrower on the effective date thereof, the Total Outstanding
Extensions of Credit then outstanding would exceed the Total Commitments then in
effect.
Each reduction of Commitments pursuant to this Section 4.5 shall be
applied pro rata to the Commitments of each Bank. If at any time, including
after giving effect to any reduction of Commitments pursuant to this Section
4.5, the Total Outstanding Extensions of Credit exceed the Total Commitments,
the Borrower shall be obligated, first, to prepay the Loans in the amount of
such excess, second, to cash collateralize Letters of Credit to the extent that
the aggregate amount of the L/C Obligations exceeds such Total Commitments after
prepayment of all Loans.
SECTION 4.6. Voluntary Prepayments. The Borrower may, upon written notice
delivered to the Administrative Agent not later than 11:00 A.M. (New York City
time) one (1) Business Day (or in the case of LIBOR Rate Loans, three (3)
Business Days) prior to the date of prepayment stating the aggregate principal
amount of the prepayment and the Loans to be prepaid, prepay the outstanding
principal amounts of such Loans comprising part of the same Borrowing in whole
or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that losses
incurred by any Bank under Section 3.7 shall be payable with respect to each
such prepayment in the manner set forth in Section 3.7. Any such notice provided
pursuant to this Section 4.6 shall be irrevocable,
39
and the payment amount specified in such notice shall be due and payable on the
prepayment date described in such notice, together with accrued and unpaid
interest on the amount prepaid. Partial prepayments pursuant to this Section 4.6
with respect to any Tranche of LIBOR Rate Loans shall be in an aggregate
principal amount equal to the lesser of (a) $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and (b) the aggregate principal amount of such
Tranche of LIBOR Rate Loans then outstanding, as the case may be; provided that
no partial prepayment of any Tranche of LIBOR Rate Loans may be made if, after
giving effect thereto, Section 2.3 would be contravened. Partial prepayments
with respect to the ABR Loans shall be made in an aggregate principal amount
equal to the lesser of (i) $5,000,000 or an integral multiple of $1,000,000 in
excess thereof or (ii) the aggregate principal amount of ABR Loans then
outstanding, as the case may be.
SECTION 4.7. Mitigation of Losses and Costs. Any Bank claiming
reimbursement from the Borrower under any of Sections 3.4, 3.7, 4.1 and 4.3
hereof shall use reasonable efforts (including, without limitation, if requested
by the Borrower, reasonable efforts to designate a different lending office of
such Bank) to mitigate the amount of such losses, costs, expenses and
liabilities, if such efforts can be made and such mitigation can be accomplished
without such Bank suffering (i) any economic disadvantage for which such Bank
does not receive full indemnity from the Borrower under this Agreement or (ii)
any legal or regulatory disadvantage.
SECTION 4.8. Determination and Notice of Additional Costs and Other
Amounts. (a) In determining the amount of any claim for reimbursement or
compensation under Sections 3.4, 3.7 and 4.1, each Bank may use any reasonable
averaging, attribution and allocation methods consistent with such methods
customarily employed by such Bank in similar situations.
(b) Each Bank or, with respect to compensation claimed by it pursuant to
Section 4.3, the Administrative Agent, as the case may be, will (i) use its best
efforts to notify the Borrower through the Administrative Agent (in the case of
each Bank) of any event occurring after the date of this Agreement promptly
after the occurrence thereof and (ii) notify the Borrower through the
Administrative Agent (in the case of each Bank) promptly after such Bank or the
Administrative Agent, as the case may be, becomes aware of any event occurring
after the date of this Agreement, in either case if such event (for purposes of
this Section 4.8(b), a "Triggering Event") will entitle such Bank or the
Administrative Agent, as the case may be, to compensation pursuant to Section
3.4, 3.7, 4.1 or 4.3, as the case may be. Each such notification of a Triggering
Event shall be accompanied by a certificate of such Bank or the Administrative
Agent, as the case may be, setting forth the calculations and justification in
reasonable detail such amount or amounts as shall be necessary to compensate
such Bank or the Administrative Agent, as the case may be, as specified in
Section 3.4, 3.7, 4.1 or 4.3, as the case may be, and certifying that such costs
are generally being charged by such Bank to other similarly situated borrowers
under similar credit facilities, which certificate shall be conclusive absent
manifest error. The Borrower shall pay to the Administrative Agent for the
account of such Bank or to the Administrative Agent for its own account, as the
case may be, the amount shown as due on any such certificate within ten Business
Days after its receipt of the same.
40
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.1. Conditions Precedent to Loans and Letters of Credit. The
agreement of each Bank to make the initial extension of credit requested to be
made by it is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) The Administrative Agent (or its counsel) shall have received
this Agreement duly executed by the Borrower and each Bank.
(b) The Administrative Agent (or its counsel) shall have received
a certificate dated as of the Closing Date of the Secretary or an
Assistant Secretary of the Borrower certifying (i) the names and true
signatures of the Responsible Officers of the Borrower authorized to
sign each Loan Document to which the Borrower is a party and the
notices and other documents to be delivered by the Borrower pursuant
to any such Loan Document; (ii) the bylaws and articles of
incorporation of the Borrower as in effect on the date of such
certification; (iii) the resolutions of the Board of Directors of the
Borrower approving and authorizing the execution, delivery and
performance by the Borrower of each Loan Document to which it is a
party and any Notes from time to time issued hereunder and authorizing
the borrowings and other transactions contemplated hereunder and (iv)
that all material authorizations, approvals and consents by any
Governmental Authority or other Person necessary in connection with
the execution, delivery and performance of the Loan Documents and any
other regulatory approvals in respect thereof required to be obtained
prior to the Closing Date, have been obtained and are in full force
and effect.
(c) The Administrative Agent shall have received an executed
legal opinion, dated the Closing Date, of (i) ▇▇▇▇▇ ▇▇▇▇▇ LLP, special
counsel to the Borrower and (ii) ▇▇▇▇▇ ▇▇▇▇▇, Esq., deputy general
counsel of the Borrower. Each such legal opinion shall cover such
matters incident to the transactions contemplated by the Loan
Documents as the Administrative Agent may reasonably require and shall
otherwise be in form and substance reasonably satisfactory to the
Administrative Agent.
(d) The Administrative Agent (or its counsel) shall have received
a certificate dated on or about the Closing Date of the Secretary of
State of the State of Texas as to the existence and good standing of
the Borrower.
(e) The Administrative Agent shall have received satisfactory
evidence that (i) the Existing Credit Agreement shall concurrently be
terminated and all amounts owing thereunder shall concurrently be paid
or refinanced in full and (ii) satisfactory arrangements shall have
been made for the termination of all Liens granted in connection
therewith, and the Borrower shall have delivered such
41
documentation with respect to the foregoing as the Administrative
Agent shall reasonably request.
(f) The effectiveness, substantially concurrent with the
effectiveness of this Agreement, of (i) the $200,000,000 credit
facility arranged by ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Citigroup Global
Markets Inc., as global coordinators, for CenterPoint Electric and
(ii) the CEHE Backstop Agreement.
(g) All governmental and third-party approvals necessary in
connection with the execution, delivery and performance by the
Borrower of the Loan Documents shall have been obtained and be in full
force and effect, including without limitation receipt of a financing
order from the SEC.
(h) The Administrative Agent shall have received all financial
statements and other information as the Administrative Agent shall
reasonably request, including projections and pro forma balance sheets
adjusted to give effect to the financing contemplated hereby and the
other financings described in clause (f) above, and such financial
statements shall not, in the reasonable judgment of the Banks, reflect
any material adverse change in the consolidated financial condition of
the Borrower and its Subsidiaries, as reflected in the financial
statements or projections contained in the Confidential Information
Memorandum.
(i) Detailed consolidated projections through the 2007 fiscal
year of the Borrower (including a projected consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of each such fiscal
year, the related consolidated statements of projected cash flow,
projected changes in financial position and projected income and a
description of the underlying assumptions applicable thereto) in each
case to the extent provided in the Confidential Information
Memorandum.
(j) The Administrative Agent shall have received all fees
required to be paid on or before the Closing Date.
(k) All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the Facility
shall be in form and substance reasonably satisfactory to the
Administrative Agent.
The Administrative Agent shall notify the Borrower and the Banks of the
Closing Date, and such notice shall be conclusive and binding.
SECTION 5.2. Conditions Precedent to Each Borrowing. The obligation of each
Bank to make each extension of credit (including, to the extent relevant, the
initial extensions of credit hereunder) is subject to the satisfaction of the
following conditions precedent:
(a) On or prior to the date of the making of such extension of
credit, the Administrative Agent shall have received from the Borrower
a Notice of Borrowing or an Application, as the case may be, in
accordance with the terms of
42
this Agreement, or, in the case of the issuance, extension or increase
of any Letter of Credit, the instruments required under Section 2.4 in
respect thereof.
(b) The representations and warranties of the Borrower contained
in Section 6.1 of this Agreement and in the other Loan Documents shall
be true and correct in all material respects on and as of the date of
such extension of credit (except for those representations or
warranties or parts thereof that, by their terms, expressly relate
solely to a specific date, in which case such representations and
warranties shall be true and correct in all material respects as of
such specific date and, except at any time after the Closing Date (x)
in the case of any conversion, continuation or extension of any
outstanding Loan or Letter of Credit and (y) in the case of a
Borrowing the proceeds of which are used solely to refund commercial
paper maturing at the time of such Borrowing, the representations and
warranties contained in Sections 6.1(j) and (k)), before and after
giving effect to such extension of credit, and to the application of
the proceeds therefrom, as though made on and as of such date.
(c) No Default or Event of Default shall have occurred and be
continuing or would result from such extension of credit.
(d) Each of the giving of any applicable Notice of Borrowing or
Application, as the case may be, the acceptance by the Borrower of the
proceeds of each Borrowing, and each Letter of Credit issued on behalf
of the Borrower, shall constitute a representation and warranty by the
Borrower that on the date of such extension of credit that the
conditions contained in this Section 5.2 have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) Corporate Status of the Borrower. The Borrower (i) is validly organized
and existing as a corporation and in good standing under the laws of its
jurisdiction of incorporation; (ii) is duly authorized or qualified to do
business in and is in good standing in each other jurisdiction in which the
conduct of its business or the ownership or leasing of its Property requires it
to be so authorized or qualified to do business, except where the failure to be
so duly authorized or qualified or in good standing, individually or in the
aggregate, would not have a Material Adverse Effect, and (iii) has the corporate
power and authority to conduct its business, as presently conducted.
(b) Status of Significant Subsidiaries of the Borrower. Each Significant
Subsidiary of the Borrower (i) is validly organized and existing and in good
standing under the laws of the jurisdiction of its organization and is duly
authorized or qualified to do business in and is in good standing in each other
jurisdiction in which the conduct of its business or the ownership or
43
leasing of its Property requires it to be so authorized or qualified to do
business, except where the failure to be so validly organized and existing or
duly authorized or qualified or in good standing, individually or in the
aggregate, would not have a Material Adverse Effect and (ii) has the corporate,
partnership or other requisite power and authority to conduct its business, as
presently conducted, except where the failure to have such power and authority,
individually or in the aggregate, would not have a Material Adverse Effect.
(c) Corporate Powers. The Borrower has the corporate power to execute,
deliver and perform and comply with its obligations under this Agreement, any
Notes and the other Loan Documents to which it is a party. This Agreement has
been, and each other Loan Document to which the Borrower is a party will be,
duly executed and delivered on behalf of the Borrower.
(d) Authorization, No Conflict, Etc. The borrowings by the Borrower
contemplated by this Agreement, the execution and delivery by the Borrower of
this Agreement and the other Loan Documents to which it is a party and the
performance by the Borrower of its obligations hereunder and thereunder have
been duly authorized by all requisite corporate or other requisite action on the
part of the Borrower and do not and will not (i) violate any law, any order to
which the Borrower or any Restricted Subsidiary of the Borrower is subject of
any court or other Governmental Authority, or the articles of incorporation or
bylaws or other organizational documents (each as amended from time to time) of
the Borrower or any Restricted Subsidiary of the Borrower; (ii) violate,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both, or any other condition) a default under, any indenture, loan
agreement or other agreement to which the Borrower or any Restricted Subsidiary
of the Borrower is a party or by which the Borrower or any Restricted Subsidiary
of the Borrower, or any of their respective Property, is bound (except for such
violations, conflicts, breaches or defaults that, individually or in the
aggregate, do not have or would not have a Material Adverse Effect); or (iii)
result in, or require, the creation or imposition of any material Lien upon any
of the Properties of the Borrower or any Significant Subsidiary not permitted
under this Agreement.
(e) Governmental Approvals and Consents. No authorization or approval or
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower of, or
for the Borrowings under, this Agreement and the other Loan Documents to which
it is a party, except those that have been obtained.
(f) Obligations Binding. This Agreement and the other Loan Documents to
which the Borrower is a party are the legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their
respective terms (assuming due and valid authorization, execution and delivery
of this Agreement by any party other than the Borrower), except as such
enforceability may be (i) limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) subject to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(g) Use of Proceeds, Margin Stock. The proceeds of the Loans will be used
by the Borrower (i) to refinance certain obligations under, or for which credit
support is provided by, the Existing Credit Facility, (ii) to support commercial
paper issued by the Borrower, and (iii) for
44
other general corporate purposes. Neither the Borrower nor any Restricted
Subsidiary of the Borrower is principally engaged in, or has as one of its
important activities, the business of extending credit for the purpose of
purchasing or carrying any Margin Stock, and no part of the proceeds of any Loan
made to the Borrower will be used for any purpose that would violate the
provisions of the margin regulations of the Board.
(h) Title to Properties. The issued and outstanding Capital Stock owned by
the Borrower of each of its Significant Subsidiaries whether such stock is owned
directly or indirectly through one or more of its Subsidiaries, is owned free
and clear of any Lien. In addition, each of the Borrower and each Significant
Subsidiary has good title to the Properties reflected in the financial
statements referred to in Section 6.1(m) and in any financial statements
delivered pursuant to Section 7.1(a), except for such Properties that have been
disposed of subsequent to the dates of the balance sheets included in such
financial statements and that are no longer used or useful in the conduct of the
business of the Borrower or any Significant Subsidiary or that have been
disposed of pursuant to Section 7.2(b) or (c) or that have been disposed of in
the ordinary course of their respective business, and all such Properties are
free and clear of any Lien except Liens permitted under this Agreement.
(i) Investment Company Act. Neither the Borrower nor any Restricted
Subsidiary of the Borrower is an "investment company" as defined in, or
otherwise subject to regulation under, the Investment Company Act of 1940, as
amended.
(j) Material Adverse Change. Since the later of (i) December 31, 2003 and
(ii) the date of the audited financial statements of the Borrower most recently
delivered pursuant to Section 7.1(a)(i), there has been no event, development or
circumstance that has or would reasonably be expected to have a Material Adverse
Effect; provided that the Borrower shall not be required to repeat the foregoing
representation and warranty hereunder at any time after the first time that the
Ratings issued by S&P and ▇▇▇▇▇'▇ are at least (i) BBB and Baa2, respectively,
(ii) BBB+ and Baa3, respectively, or (iii) BBB- and Baa1, respectively.
(k) Litigation. There is no litigation, action, suit, investigation or
other legal or governmental proceeding pending or, to the best knowledge of the
Borrower, threatened, at law or in equity, or before or by any arbitrator or
Governmental Authority (i) relating to the transactions under this Agreement or
under any other Loan Document or (ii) in which there is a reasonable possibility
of an adverse decision that would have a Material Adverse Effect; provided that
the Borrower shall not be required to repeat the representation and warranty
hereunder contained in the foregoing clause (ii) at any time after the first
time that the Ratings issued by S&P and ▇▇▇▇▇'▇ are at least (i) BBB and Baa2,
respectively, (ii) BBB+ and Baa3, respectively, or (iii) BBB- and Baa1,
respectively.
(l) ERISA. Neither the Borrower nor any Significant Subsidiary has incurred
any material liability or deficiency arising out of or in connection with (i)
any Reportable Event or "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) with respect to any Plan that
has occurred during the five-year period immediately preceding the date on which
this representation is made or deemed made, (ii) any failure of a Plan to comply
with the applicable provisions of ERISA and the Code, (iii) any termination of a
Single Employer Plan, (iv) any complete or partial withdrawal by the Borrower
45
or any Commonly Controlled Entity from any Multiemployer Plan or (v) any Lien in
favor of the PBGC or any Plan that has arisen during the five-year period
referred to in clause (i) above. In addition, no Multiemployer Plan is in
Reorganization or is Insolvent, where such Reorganization or Insolvency,
individually or when aggregated with the events described in the first sentence
of this Section 6.1(l), is likely to result in a material liability or
deficiency of the Borrower or any Significant Subsidiary. As used in this
Section 6.1(1), any liability or deficiency shall be deemed not to be "material"
so long as the sum of all liabilities and deficiencies referred to in this
Section 6.1(1) at any one time outstanding, individually and in the aggregate,
is less than $50,000,000.
(m) Financial Statements. The consolidated financial statements of the
Borrower as of and for the nine months ended September 30, 2004 filed with the
SEC with the Borrower's 10-Q for the period then ended, copies of which have
been delivered to the Banks, present fairly in all material respects the
consolidated financial condition and results of operations of the Borrower, its
Consolidated Subsidiaries and the Unrestricted Subsidiaries as of such date and
for the period then ended, in conformity with, as applicable, GAAP and, except
as otherwise stated therein, consistently applied (in the case of such unaudited
statements, subject to year-end adjustments and the exclusion of detailed
footnotes).
(n) Accuracy of Information. None of the documents or written information
(excluding estimates, financial projections and forecasts) provided by the
Borrower to the Banks in connection with or pursuant to this Agreement or the
other Loan Documents contains as of the date thereof or will contain as of the
date thereof any untrue statement of a material fact or omits or will omit to
state as of the date thereof a material fact (other than industry-wide risks
normally associated with the types of businesses conducted by the Borrower and
its Subsidiaries) necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading, as a whole.
The estimates, financial projections and forecasts furnished to the Banks by the
Borrower with respect to the transactions contemplated under this Agreement were
prepared in good faith and on the basis of information and assumptions that the
Borrower believed to be reasonable as of the date of such information; it being
recognized by the Banks that such estimates, financial projections and forecasts
as they relate to future events are not to be viewed as fact and that actual
results during the period or periods covered by such estimates, financial
projections and forecasts may differ from the projected results set forth
therein by a material amount.
(o) No Violation. The Borrower is not in violation of any order, writ,
injunction or decree of any court or any order, regulation or demand of any
Governmental Authority that, individually or in the aggregate, reasonably could
be expected to have a Material Adverse Effect.
(p) Subsidiaries. Schedule 6.1(p) attached hereto sets forth each
Significant Subsidiary as of the date hereof. Except as disclosed on Schedule
6.1(p), as of the date hereof the Borrower owns, directly or indirectly through
one or more of its Subsidiaries, all of the outstanding Capital Stock of each
Significant Subsidiary, in each case free and clear of any Liens not permitted
under this Agreement.
46
(q) Senior Indebtedness. The obligations under this Agreement and the other
Loan Documents constitute "Senior Debt" of the Borrower under and as defined in
the ▇▇▇▇ Indenture and under any indenture governing any Junior Subordinated
Debt.
(r) Taxes. The Borrower and each of its Subsidiaries has filed or caused to
be filed all Federal, state and other material tax returns that are required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its Property and all other taxes,
fees or other charges imposed on it or any of its Property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Subsidiaries), except where the failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such tax, fee or other charges (other than
any Liens or claims that could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect).
ARTICLE VII
AFFIRMATIVE AND NEGATIVE COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower covenants that, as long as
any amount is owing hereunder or under any other Loan Documents, any Letter of
Credit is outstanding or any Bank shall have any Commitment outstanding under
this Agreement:
(a) Delivery of Financial Statements, Notices and Certificates. The
Borrower shall deliver to the Administrative Agent for distribution to the Banks
sufficient copies for each of the Banks of the following:
(i) as soon as practicable and in any event within 90 days after the
end of each fiscal year of the Borrower (beginning with fiscal 2004), a
consolidated balance sheet of the Borrower, its Consolidated Subsidiaries
and the Unrestricted Subsidiaries as of the end of such fiscal year and the
related statements of consolidated income, retained earnings and cash flows
prepared in conformity with GAAP consistently applied, setting forth in
comparative form the figures for the previous fiscal year, together with a
report thereon by independent certified public accountants of nationally
recognized standing selected by the Borrower (which requirement may be
satisfied by delivering the Borrower's Annual Report on Form 10-K with
respect to such fiscal year as filed with the SEC);
(ii) as soon as practicable and in any event within 55 days after the
end of each of the first three quarters of each fiscal year of the Borrower
(beginning with the quarter ending March 31, 2005), unaudited consolidated
financial statements of the Borrower, its Consolidated Subsidiaries and the
Unrestricted Subsidiaries consisting of at least consolidated balance
sheets as at the close of such quarter and statements of consolidated
income, retained earnings and cash flows for such quarter and for the
period from the beginning of such fiscal year to the close of such quarter
(which requirement
47
may be satisfied by delivering the Borrower's Quarterly Report on Form 10-Q
with respect to such fiscal quarter as filed with the SEC); such financial
statements shall be accompanied by a certificate of a Responsible Officer
of the Borrower to the effect that such unaudited financial statements
present fairly in all material respects the consolidated financial
condition and results of operations of the Borrower, its Consolidated
Subsidiaries and the Unrestricted Subsidiaries as of such date for the
period then ending, and have been prepared in conformity with GAAP in a
manner consistent with the financial statements referred to in paragraph
(a)(i) above (subject to year-end adjustments and exclusion of detailed
footnotes);
(iii) with each set of statements to be delivered pursuant to Sections
7.1(a)(i) and (ii) above, a certificate in a form reasonably satisfactory
to the Administrative Agent, signed by a Responsible Officer of the
Borrower confirming compliance with Section 7.2(a) and setting out in
reasonable detail the calculations necessary to demonstrate such compliance
as at the date of the most recent balance sheet included in such financial
statements and stating that no Default or Event of Default has occurred and
is continuing or, if there is any Default or Event of Default, describing
it and the steps, if any, being taken to cure it; and
(iv) (A) within ten days of the filing thereof, copies of all periodic
reports (other than (x) reports on Form 11-K or any successor form, (y)
Current Reports on Form 8-K that contain no information other than exhibits
filed therewith and (z) reports on Form 10-Q or 10-K or any successor
forms) under the Exchange Act (in each case other than exhibits thereto and
documents incorporated by reference therein)) filed by the Borrower with
the SEC; (B) promptly, and in any event within seven (7) Business Days
after a Responsible Officer of the Borrower becomes aware of the occurrence
thereof, written notice of (x) any Event of Default or any Default, (y) the
institution of (I) any litigation, action, suit or other legal or
governmental proceeding involving the Borrower or any Restricted Subsidiary
of the Borrower as to which there is a reasonable possibility of an adverse
decision that would have a Material Adverse Effect on the Borrower or (II)
any other final adverse determination in any litigation, action, suit or
other legal or governmental proceeding involving the Borrower or any
Significant Subsidiary of the Borrower (1) in the True-Up Litigation or (2)
that would have a Material Adverse Effect or (z) the incurrence by the
Borrower or any Significant Subsidiary of a material liability or
deficiency not permitted under this Agreement, or the existence of an event
that could reasonably be expected to result in a material liability or
deficiency, arising out of or in connection with (1) any Reportable Event
with respect to any Plan, (2) the failure to make any required contribution
to a Plan, (3) the creation of any Lien in favor of the PBGC or a Plan, (4)
any withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (5) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the termination, Reorganization or Insolvency of, any Plan; provided that,
as used in this clause (z), any liability or deficiency shall be deemed not
to be "material" so long as the sum of all liabilities and deficiencies
referred to in this clause (z) at any one time outstanding, individually
and in the aggregate, is less than $50,000,000; (C) with each set of
statements delivered pursuant to Section 7.1(a)(i), a certificate signed by
a Responsible
48
Officer of the Borrower identifying those Subsidiaries which, determined as
of the date of such financial statements, are Significant Subsidiaries and
Unrestricted Subsidiaries; and (D) such other information relating to the
Borrower or its business, properties, condition and operations as the
Administrative Agent (or any Bank through the Administrative Agent) may
reasonably request.
Information required to be delivered pursuant to the foregoing Sections
7.1(a)(i), (ii), and (iv)(A) shall be deemed to have been delivered on the date
on which the Borrower provides notice (including notice by e-mail) to the
Administrative Agent (which notice the Administrative Agent will convey promptly
to the Banks) that such information has been posted on the SEC website on the
Internet at ▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇ or at another website identified in such
notice and accessible by the Banks without charge; provided that (i) such notice
may be included in a certificate delivered pursuant to Section 7.1(a)(iii) and
(ii) the Borrower shall deliver paper copies of such information to the
Administrative Agent, and the Administrative Agent shall deliver paper copies of
such information to any Bank that requests such delivery.
(b) Use of Proceeds. The Borrower will use the proceeds of any Loan or
Letter of Credit made or issued by the Banks or any Issuing Bank to it for the
purposes set forth in Section 6.1(g), and it will not use the proceeds of any
Loan or Letter of Credit made or issued by the Banks or any Issuing Bank for any
purpose that would violate the provisions of the margin regulations of the
Board. The Borrower will not, and will not permit any of its Subsidiaries to
engage principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying, within the meaning
of Regulation U, any Margin Stock.
(c) Existence; Laws. The Borrower will and will cause each of its
Significant Subsidiaries to, do or cause to be done all things necessary (i) to
preserve, renew and keep in full force and effect its legal existence and all
rights, licenses, permits and franchises (except to the extent otherwise
permitted by Sections 7.2(c) or 7.2(d)) and (ii) to comply with all laws and
regulations applicable to it, except in each case, where the failure to do so,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(d) Maintenance of Properties. The Borrower will, and will cause each
Significant Subsidiary to, preserve and maintain all of its Property that is
material to the conduct of its business, provided, however, that nothing in this
Section 7.1(d) shall prevent (a) the Borrower or any of its Significant
Subsidiaries from selling, abandoning or otherwise disposing of any Properties
(including the Capital Stock of any Subsidiary of the Borrower that is not a
Significant Subsidiary), the retention of which in the good faith judgment of
the Borrower or such Significant Subsidiary is inadvisable or unnecessary to the
business of the Borrower and its Subsidiaries, taken as a whole, or the failure
to maintain would not reasonably be expected to have a Material Adverse Effect
or (b) any other transaction that is expressly permitted by the terms of any
other provision of this Agreement.
(e) Maintenance of Business Line. The Borrower will maintain its
fundamental business of providing services and products in the energy market.
(f) Books and Records; Access. The Borrower will, and will cause each
Significant Subsidiary to, keep proper books of record and account in which
full, true and correct entries are
49
made of all dealings and transactions in relation to its business and activities
as required by GAAP. The Borrower will, and will cause each of its Significant
Subsidiaries to, at any reasonable time and from time to time, permit up to six
representatives of the Banks designated by the Majority Banks, or
representatives of the Administrative Agent, on not less than five Business
Days' notice, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and each
Significant Subsidiary and to discuss the general business affairs of the
Borrower and each of its Significant Subsidiaries with their respective officers
and independent certified public accountants; subject, however, in all cases to
the imposition of such conditions as the Borrower and each of its Significant
Subsidiaries shall deem necessary based on reasonable considerations of safety
and security; provided, however, that neither the Borrower nor any of its
Significant Subsidiaries shall be required to disclose to any Agent, any Bank or
any agents or representatives thereof any information which is the subject of
attorney-client privilege or attorney work-product privilege properly asserted
by the applicable Person to prevent the loss of such privilege in connection
with such information or which is prevented from disclosure pursuant to a
confidentiality agreement with third parties. Notwithstanding the foregoing,
none of the conditions precedent to the exercise of the right of access
described in the preceding sentence that relate to notice requirements or
limitations on the Persons permitted to exercise such right shall apply at any
time when a Default or an Event of Default shall have occurred and be
continuing.
(g) Insurance. The Borrower will and will cause each of its Significant
Subsidiaries to, maintain insurance with responsible and reputable insurance
companies or associations, or to the extent that the Borrower or such
Significant Subsidiary deems it prudent to do so, through its own program of
self-insurance, in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses, of comparable size and financial
strength and with comparable risks.
(h) Corporate Rating. The Borrower will deliver to the Administrative Agent
notice of any change by a Rating Agency in its credit or corporate rating
promptly upon the effectiveness of such change.
SECTION 7.2. Negative Covenants. The Borrower covenants that, so long as
any amount is owing to the Banks hereunder or under any other Loan Documents to
which it is a party or any Letter of Credit is outstanding under this Agreement,
the Borrower will not:
(a) Financial Ratios.
(i) Permit at any time the ratio of Consolidated Indebtedness at such
time to Consolidated EBITDA for the most recently ended twelve-month period
ending during any period set forth below to exceed the ratio set forth
below opposite such period:
PERIOD RATIO
------ ---------
Closing Date through December 31, 2006 4.50:1.00
January 1, 2007 through December 31, 2007 4.25:1.00
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PERIOD RATIO
------ ---------
2007
January 1, 2008 through the Maturity Date 4.00:1.00
(ii) Permit at any time the ratio of Consolidated EBITDA for the most
recently ended twelve-month period ending during any period set forth below
to Adjusted Interest Expense for such period to be less than the ratio set
forth below opposite such period:
PERIOD RATIO
------ ---------
Closing Date through December 31, 2006 1.75:1.0
January 1, 2007 through Maturity Date 2.00:1.00
(b) Certain Liens. And will not permit any of its Restricted Subsidiaries
to, pledge, mortgage, hypothecate or ▇▇▇▇▇ ▇ ▇▇▇▇ upon, or permit any mortgage,
pledge, security interest or other Lien upon, any Property of the Borrower or
any Restricted Subsidiary of the Borrower now or hereafter owned directly or
indirectly by the Borrower; provided, however, that this restriction shall
neither apply to nor prevent the creation or existence of:
(i) Permitted Liens;
(ii) any Lien in existence on the date hereof securing Indebtedness of
the Borrower or any of its Subsidiaries; provided that no such Lien
described in this clause (ii) encumbers any additional Property after the
date hereof and that the principal amount of Indebtedness secured thereby
is not increased;
(iii) Liens securing bonds issued after the Closing Date pursuant to
the Original Mortgage (to the extent the proceeds thereof are used to
replace, refund or refinance first mortgage bonds outstanding on the date
hereof) or the General Mortgage Indenture (or second or subordinated, as
the case may be, Liens in lieu thereof);
(iv) Liens required to be granted pursuant to "equal and ratable"
clauses existing on the date hereof under Contractual Obligations of the
Borrower and its Restricted Subsidiaries (and extensions and renewals
thereof);
(v) Liens arising in connection with the securitization of accounts
receivable of Resources and its Subsidiaries or any Securitization
Subsidiary, in the case of Resources and its Subsidiaries, to the extent
affecting only the accounts receivable of Resources and its Subsidiaries
and assets customarily related thereto;
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(vi) Liens securing Indebtedness of (x) Texas Genco and/or its
Subsidiaries; provided that such Liens shall be limited to the Property of
Texas Genco and/or its Subsidiaries and (y) Resources and/or its
Subsidiaries; provided that such Liens shall be limited to the Property of
Resources and/or its Subsidiaries;
(vii) Liens on office buildings, parking and related real estate owned
by CenterPoint Energy Properties, Inc. to secure new financing based
thereon;
(viii) Liens on fixed or capital assets and related inventory and
intangible assets acquired, constructed, improved, altered or repaired by
the Borrower or any Restricted Subsidiary; provided that (i) such Liens
secure Indebtedness otherwise permitted by this Agreement, (ii) such Liens
and the Indebtedness secured thereby are incurred prior to or within 365
days after such acquisition or the later of the completion of such
construction, improvement, alteration or repair or the date of commercial
operation of the assets constructed, improved, altered or repaired, (iii)
the Indebtedness secured thereby does not exceed the cost of acquiring,
constructing, improving, altering or repairing such fixed or capital
assets, as the case may be, and (iv) such Lien shall not apply to any other
property or assets of the Borrower or of its Restricted Subsidiaries (other
than repairs, renewals, replacements, additions, accessions, improvements
and betterments thereto);
(ix) Liens on Property and repairs, renewals, replacements, additions,
accessions, improvements and betterments thereto existing at the time such
Property is acquired by the Borrower or any Restricted Subsidiary and not
created in contemplation of such acquisition (or on repairs, renewals,
replacements, additions, accessions and betterments thereto), and Liens on
the Property of any Person at the time such Person becomes a Restricted
Subsidiary of the Borrower and not created in contemplation of such Person
becoming a Restricted Subsidiary of the Borrower (or on repairs, renewals,
replacements, additions, accessions and betterments thereto);
(x) rights reserved to or vested in any Governmental Authority by the
terms of any right, power, franchise, grant, license or permit, or by any
Requirements of Law, to terminate such right, power, franchise, grant,
license or permit or to purchase, condemn, expropriate or recapture or to
designate a purchaser of any of the Property of the Borrower or any of its
Restricted Subsidiaries;
(xi) rights reserved to or vested in (or exercised by) any
Governmental Authority to control, regulate or use any Property of a Person
or its activities, including zoning, planning and environmental laws and
ordinances and municipal regulations;
(xii) Liens on Property of the Borrower or any of its Restricted
Subsidiaries securing non-recourse Indebtedness of the Borrower or any such
Restricted Subsidiary;
(xiii) Liens on the stock or assets of Securitization Subsidiaries;
(xiv) any extension, renewal or refunding of any Lien permitted by
clauses (i) through (xiii) above on the same Property previously subject
thereto; provided that no extension, renewal or refunding of any such Lien
shall increase the principal amount of
52
any Indebtedness secured thereby immediately prior to such extension,
renewal or refunding, unless such Indebtedness is permitted under Section
7.2(a);
(xv) Liens on cash collateral to secure obligations of the Borrower
and its Restricted Subsidiaries in respect of cash management arrangements
with any Bank or Affiliate thereof; and
(xvi) Liens not otherwise permitted by this Section 7.2(b) securing
Indebtedness of the Borrower and its Restricted Subsidiaries so long as the
aggregate outstanding principal amount of the obligations secured thereby
does not at any time exceed at the time of incurrence of such obligations
(including any such incurrence resulting from any extension, renewal or
refunding of such obligations), as to the Borrower and all of its
Restricted Subsidiaries, 10% of Net Tangible Assets.
(c) Consolidation, Merger or Disposal of Assets. And will not permit any
Significant Subsidiary to, (i) consolidate with, or merge into or amalgamate
with or into, any other Person; (ii) liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution); or (iii) convey, sell, transfer, lease
or otherwise dispose of all or substantially all of its Properties to any
Person; provided, however, that nothing contained in this Section 7.2(c) shall
prohibit (A) a merger involving a Subsidiary of the Borrower (including mergers
to reincorporate or change the domicile of such Subsidiary) if any Wholly-Owned
Significant Subsidiary of the Borrower is the surviving entity thereof; (B) the
liquidation, winding up or dissolution of a Significant Subsidiary of the
Borrower if all of the Properties of such Significant Subsidiary are conveyed,
transferred or distributed to the Borrower or a Person that after giving effect
to such transaction is a Wholly-Owned Significant Subsidiary of the Borrower;
(C) the conveyance, sale, transfer or other disposal of all or substantially all
(or any lesser portion) of the Properties of any Significant Subsidiary of the
Borrower to the Borrower or a Person that after giving effect to such
transaction is a Wholly-Owned Significant Subsidiary of the Borrower; or (D) the
transfer of assets in connection with the issuance of Securitization Securities;
provided that, in each case, immediately before and after giving effect to any
such merger, dissolution or liquidation, or conveyance, sale, transfer, lease or
other disposition, no Default or Event of Default shall have occurred and be
continuing.
(d) Takeover Bids. Use the proceeds of any Loan made to it to participate
in any unsolicited control bid for any other Person.
(e) Sale of Significant Subsidiary Stock. And will not permit the sale,
assignment, transfer or other disposal of any of the Capital Stock of any
Significant Subsidiary. Notwithstanding the foregoing provisions of Section
7.2(c) or this Section 7.2(e), (x) the Borrower or any Significant Subsidiary
may sell, assign, transfer or otherwise dispose of (i) any of the Capital Stock
of any Significant Subsidiary to the Borrower or to a Wholly-Owned Subsidiary of
the Borrower that constitutes a Significant Subsidiary after giving effect to
such transaction; (ii) the Texas Genco Stock; and (iii) any of the Capital Stock
of any Subsidiary that is not a Significant Subsidiary and (y) any Significant
Subsidiary shall have the right to issue, sell, assign, transfer or otherwise
dispose of for value its preference or preferred stock in one or more bona fide
transactions to any Person; provided that immediately before and after giving
53
effect to any such Disposition described in the foregoing clauses (x) and (y),
no Event of Default or Default shall have occurred and be continuing.
(f) Agreements Restricting Dividends. And will not permit any Significant
Subsidiary to enter into, incur or permit to exist any agreement or other
consensual arrangement that explicitly prohibits or restricts the payment by any
Significant Subsidiary of dividends or other distributions with respect to any
shares of its Capital Stock; provided that the foregoing shall not prohibit
financial incurrence, maintenance and similar covenants that indirectly have the
practical effect of prohibiting or restricting the ability of a Significant
Subsidiary to make such payments or provisions that require that a certain
amount of capital be maintained, or prohibit the return of capital to
shareholders above certain dollar limits; provided further, that the foregoing
shall not apply to (i) restrictions and conditions imposed by law or by this
Agreement, (ii) restrictions and conditions existing on the date hereof, any
amendment or modification thereof (other than an amendment or modification
expanding the scope of any such restriction or condition and any restrictions or
conditions) that (x) replace restrictions or conditions existing on the date
hereof and (y) are substantially similar to such existing restriction or
condition, (iii) restrictions (including any extension of such restrictions that
does not expand the scope of any such restrictions) existing at the time at
which any such Subsidiary first becomes a Significant Subsidiary, so long as
such restriction was in existence prior to such time in accordance with the
other provisions of this Agreement and was not agreed to or incurred in
contemplation of such change of status and (iv) any restrictions with respect to
a Significant Subsidiary imposed pursuant to an agreement that has been entered
into in connection with a disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary.
(g) Certain Investments, Loans, Advances, Guarantees and Acquisitions. And
will not permit any of its Significant Subsidiaries to purchase or acquire
(including pursuant to any merger) any Capital Stock, evidence of indebtedness
or other securities of or other interest in (including any option, warrant or
other right to acquire any of the foregoing), make any loans or advances to,
Guarantee any obligations of, or make any investment or other interest in or
capital contribution to any Unrestricted Subsidiary or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
Unrestricted Subsidiary constituting a business unit, (any of the foregoing, an
"Investment") at any time if the aggregate amount of net tangible assets of all
Unrestricted Subsidiaries at such time exceeds, or would exceed as a result of
any such Investment, 10% of the Net Tangible Assets.
(h) Indebtedness of Holding Companies. Permit Utility Holding LLC and any
other of its Subsidiaries that directly or indirectly own CenterPoint Electric
or Resources and which do not conduct, transact or otherwise engage in any
business or operations other than those incidental to their ownership of the
Capital Stock of CenterPoint Electric or Resources to incur, create, assume or
suffer to exist any Indebtedness for Borrowed Money, except (i) Indebtedness for
Borrowed Money owed to the Borrower or any Significant Subsidiary of the
Borrower, (ii) Guarantees of Indebtedness for Borrowed Money owed by the
Borrower or any Significant Subsidiary of the Borrower and (iii) Indebtedness
for Borrowed Money owed by such Subsidiary on the date hereof and any
refinancings, refundings, renewals or extensions thereof (without any increase
in the principal amount thereof).
SECTION 7.3. Borrower's Accounting Reorganization.
54
(a) The Borrower has advised the Banks that it is considering an accounting
reorganization of its operations and corporate structure that would involve the
extinguishment of a negative retained earnings balance and the restatement of
its assets and its liabilities to their fair values (the "Accounting
Reorganization").
(b) In the event that the Accounting Reorganization occurs, the Borrower
shall notify the Administrative Agent thereof and notwithstanding any of the
terms, conditions or provisions of this Agreement or the other Loan Documents to
the contrary, compliance with the financial covenants, standards, terms and
conditions in this Agreement and the Loan Documents shall be based on the
performance by the Borrower and its Subsidiaries therewith as though the
Accounting Reorganization had not occurred and the Borrower shall deliver,
together with the certificates required under Section 7.1(a)(iii), pro forma
financial statements prepared on the basis that the Accounting Reorganization
had not occurred.
(c) In addition, the Borrower may request various amendments to the
covenants, representations, Events of Defaults and the other standards, terms
and conditions of this Agreement and the Loan Documents. If so requested, the
Borrower and the Banks agree to enter into negotiations in order to amend such
provisions (with the agreement of the Majority Banks or, if required by Section
10.1, all of the Banks) so as to equitably reflect such changes with the desired
result that the criteria for evaluating any of the Borrower's and its Restricted
Subsidiaries' financial condition shall be the same after the Accounting
Reorganization as if such Accounting Reorganization had not occurred. Each of
the Banks agrees to consider these requests and proposed amendments in good
faith and agrees not to unreasonably withhold or delay its consent to such
amendments. Unless and until such provisions have been so amended, Section
7.3(b) shall govern the Borrower's compliance with this Agreement and the Loan
Documents.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default":
(a) Non-Payment of Principal, Interest and Commitment Fee. The Borrower
fails to pay, in the manner provided in this Agreement, (i) any principal or
Reimbursement Obligations payable by it hereunder when due or (ii) any interest
payment, any Commitment Fee, any Utilization Fee or any Letter of Credit fee
payable by it hereunder within five (5) Business Days after its due date; or
(b) Non-Payment of Other Amounts. The Borrower fails to pay, in the manner
provided in this Agreement, any other amount (other than the amounts set forth
in Section 8.1(a) above) payable by it hereunder within ten (10) Business Days
after notice of such payment is received by the Borrower from the Administrative
Agent; or
55
(c) Breach of Representation or Warranty. Any representation or warranty by
the Borrower in Section 6.1, in any other Loan Document or in any certificate,
document or instrument delivered by the Borrower under this Agreement shall have
been incorrect in any material respect when made or when deemed hereunder to
have been made; or
(d) Breach of Certain Covenants. Borrower fails to perform or comply with
any one or more of its obligations under Section 7.1(a)(iv)(B)(x) or 7.2; or
(e) Breach of Other Obligations. Borrower does not perform or comply with
any one or more of its other obligations under this Agreement (other than those
set forth in Section 8.1(a), (b) or (d) above) or under any other Loan Document
and such failure to perform or comply shall not have been remedied within 30
days after the earlier of notice thereof to it by the Administrative Agent or
the Majority Banks or discovery thereof by a Responsible Officer of the
Borrower; or
(f) Other Indebtedness. (i) The Borrower or any Significant Subsidiary
fails to pay when due (either at stated maturity or by acceleration or otherwise
but subject to applicable grace periods) any principal or interest in respect of
any Indebtedness for Borrowed Money, Secured Indebtedness or Junior Subordinated
Debt (other than Indebtedness of the Borrower under this Agreement) if the
aggregate principal amount of all such Indebtedness for which such failure to
pay shall have occurred and be continuing exceeds $50,000,000 or (ii) any
default, event or condition shall have occurred and be continuing with respect
to any Indebtedness for Borrowed Money, Secured Indebtedness or Junior
Subordinated Debt of the Borrower or any Significant Subsidiary (other than
Indebtedness of the Borrower under this Agreement), the effect of which default,
event or condition is to cause, or to permit the holder thereof to cause, (A)
such Indebtedness to become due prior to its stated maturity (other than in
respect of mandatory prepayments required thereby) or (B) in the case of any
Guarantee of Indebtedness for Borrowed Money of any Person or Junior
Subordinated Debt by the Borrower or any of its Significant Subsidiaries the
primary obligation (as such term is defined in the definition of "Guarantee" in
Section 1.1) to which such Guarantee relates to become due prior to its stated
maturity, if the aggregate amount of all such Indebtedness or primary
obligations (as the case may be) that is or could be caused to be due prior to
its stated maturity exceeds $50,000,000; or
(g) Involuntary Bankruptcy, Etc. (i) There shall be commenced against the
Borrower or any Significant Subsidiary any case, proceeding or other action (A)
seeking a decree or order for relief in respect of the Borrower or any
Significant Subsidiary under any applicable domestic or foreign bankruptcy,
insolvency, reorganization or other similar law, (B) seeking a decree or order
adjudging the Borrower or any Significant Subsidiary a bankrupt or insolvent,
(C) except as permitted by Section 7.2(c)(ii), seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other similar relief of or in respect of the Borrower or any Significant
Subsidiary or their respective debts under any applicable domestic or foreign
law or (D) seeking the appointment of a custodian, receiver, conservator,
liquidator, assignee, trustee, sequestrator or other similar official of the
Borrower or any Significant Subsidiary or of any substantial part of their
respective Properties, or the liquidation of their respective affairs, and such
petition is not dismissed within 90 days or (ii) a decree, order or other
judgment is entered in respect of any of the remedies, reliefs or other matters
for which any petition referred to in (i) above is presented or (iii) there
shall be commenced against the Borrower or any Significant
56
Subsidiary any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged or stayed or bonded
pending appeal within 90 days from the entry thereof; or
(h) Voluntary Bankruptcy, Etc. (i) The commencement by the Borrower or any
Significant Subsidiary of a voluntary case, proceeding or other action under any
applicable domestic or foreign bankruptcy, insolvency, reorganization or other
similar law (A) seeking to have an order of relief entered with respect to it,
(B) seeking to be adjudicated a bankrupt or insolvent, (C) seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other similar relief with respect to it or its debts under any
applicable domestic or foreign law or (D) seeking the appointment of or the
taking possession by a custodian, receiver, conservator, liquidator, assignee,
trustee, sequestrator or similar official of the Borrower or any Significant
Subsidiary of any substantial part of its Properties; or (ii) the making by the
Borrower or any Significant Subsidiary of a general assignment for the benefit
of creditors; or (iii) the Borrower or any Significant Subsidiary shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts described in clause (i) or (ii) above or in
Section 8.1(g); or (iv) the admission by the Borrower or any Significant
Subsidiary in writing of its inability to pay its debts generally as they become
due or the failure by the Borrower or any Significant Subsidiary generally to
pay its debts as such debts become due; or
(i) Enforcement Proceedings. A final judgment or decree for the payment of
money (not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) which, together with all other such judgments
or decrees against the Borrower or any Significant Subsidiary then outstanding
and unsatisfied, exceeds $50,000,000 in aggregate amount shall be rendered
against the Borrower or any Significant Subsidiary and the same shall remain
undischarged for a period of 60 days, during which the execution thereon shall
not effectively be stayed, released, bonded or vacated; or
(j) ERISA Events. The Borrower or any Significant Subsidiary shall incur
any liability arising out of (A) any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (B) the
occurrence of any "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) by a Plan, whether or not
waived, or any Lien in favor of the PBGC or a Plan on the assets of the Borrower
or any Commonly Controlled Entity, (C) the occurrence of a Reportable Event with
respect to, or the commencement of proceedings under Section 4042 of ERISA to
have a trustee appointed, or the appointment of a trustee under Section 4042 of
ERISA, to administer or to terminate any Single Employer Plan, which Reportable
Event, commencement of proceedings or appointment of a trustee which would
reasonably be expected to result in the termination of such Plan for purposes of
Title IV of ERISA, (D) the termination of any Single Employer Plan for purposes
of Title IV of ERISA, (E) withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan or (F) the occurrence of any other event or condition
with respect to a Plan, and any of such items (A) through (F) above results in
or would reasonably be expected to result in a material liability or deficiency
of the Borrower or any Significant Subsidiary; provided, however, that for
purposes of this Section 8.1(j), any liability or deficiency of the Borrower or
any Significant Subsidiary shall be deemed not to be material so long as the sum
of all liabilities
57
or deficiencies referred to in this Section 8.1(j) at any one time outstanding,
individually and in the aggregate, is less than $50,000,000; or
(k) Change in Control. A Change in Control shall have occurred.
SECTION 8.2. Cancellation/Acceleration. If at any time and for any reason
(whether within or beyond the control of any party to this Agreement):
(a) either of the Events of Default specified in Section 8.1(g) or 8.1(h)
occurs with respect to the Borrower, then automatically:
(i) the Commitments shall immediately be cancelled; and
(ii) all Loans made hereunder, all amounts of L/C Obligations (whether
or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required for draws thereunder), all unpaid
accrued interest or fees and any other sum payable under this Agreement or
any other Loan Document shall become immediately due and payable; or
(b) any other Event of Default specified in Section 8.1 occurs and, while
such Event of Default is continuing, the Administrative Agent, having been so
instructed by the Majority Banks, by notice to the Borrower shall so declare
that:
(i) the Commitments shall immediately be cancelled; and/or
(ii) either (A) all Loans made hereunder, all amounts of L/C
Obligations (whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required for draws
thereunder), all unpaid accrued interest or fees and any other sum payable
under this Agreement or any other Loan Document shall become immediately
due and payable or (B) all Loans made hereunder, all amounts of L/C
Obligations (whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required for draws
thereunder), all unpaid accrued interest or fees and any other sum payable
under this Agreement or any other Loan Document shall become due and
payable at any time thereafter immediately on demand by the Administrative
Agent (acting on the instructions of the Majority Banks).
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph or on the Termination Date, the Borrower shall at such time
deposit in a cash collateral account opened by the Administrative Agent cash or
cash equivalents in an amount equal to the aggregate then undrawn and unexpired
face amount of such Letters of Credit. The Borrower hereby grants to the
Administrative Agent, for the benefit of the Issuing Bank and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of the Borrower under this Agreement and the other Loan Documents.
Interest shall accrue on such account for the benefit of the Borrower at a rate
equal to the Federal Funds Effective Rate. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other obligations of the
58
Borrower hereunder and under the Notes. After all such Letters of Credit shall
have expired or been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Borrower hereunder and under the
Notes shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrower. The Borrower shall execute and
deliver to the Administrative Agent, for the account of each Issuing Bank and
the L/C Participants, such further documents and instruments as the
Administrative Agent may reasonably request to evidence the creation and
perfection of the within security interest in such cash collateral account.
Except as expressly provided above in this Section 8.2, presentment, demand,
protest, notice of intent to accelerate, notice of acceleration and all other
notices of any kind whatsoever are hereby expressly waived by the Borrower.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Appointment. Each Bank hereby irrevocably designates and
appoints JPMorgan Chase Bank, N.A. as the Administrative Agent of such Bank
under this Agreement and the other Loan Documents, and each such Bank
irrevocably authorizes JPMorgan Chase Bank, N.A., as the Administrative Agent
for such Bank, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, (a) the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent and (b) the other Agents and the Lead Arrangers shall not
have any duties or responsibilities hereunder, or any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the other Agents or the Lead Arrangers.
SECTION 9.2. Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 9.3. Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other
59
document referred to or provided for in, or received by the Administrative Agent
or any other Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any Note or any other Loan Document or for
any failure of the Borrower to perform its obligations hereunder or thereunder.
The Agents shall not be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Borrower.
SECTION 9.4. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
facsimile, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note or any loan
account in the Register as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed with
the Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Banks (or, if so specified by this Agreement, all Banks) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Majority Banks (or, if so specified by this Agreement, all Banks), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Banks and all future holders of the amounts owing hereunder.
SECTION 9.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Bank or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Banks. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Banks; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Banks.
SECTION 9.6. Non-Reliance on Administrative Agent and Other Banks. Each
Bank expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by any Agent to any Bank.
Each Bank represents to the Agents that it has, independently and without
reliance upon
60
any Agent or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it will,
independently and without reliance upon any 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 analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, Administrative Agent,
attorneys-in-fact or Affiliates.
SECTION 9.7. Indemnification. The Banks agree to indemnify the Agents and
the Lead Arrangers in their respective capacities as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective applicable Revolving
Percentages in effect on the date on which indemnification is sought under this
Section 9.7, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of all amounts owing hereunder and the
termination of the Commitments) be imposed on, incurred by or asserted against
the Agents or the Lead Arrangers, as the case may be, in any way relating to or
arising out of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agents or
the Lead Arrangers, as the case may be, under or in connection with any of the
foregoing; provided that no Bank shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agents' or
the Lead Arrangers', as the case may be, gross negligence or willful misconduct.
The agreements in this Section 9.7 shall survive the payment of all amounts
payable hereunder.
SECTION 9.8. Agent in Its Individual Capacity. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though such Agent were not an Agent
hereunder and under the other Loan Documents. With respect to its Loans made or
renewed by it, any Letter of Credit issued or participated in by it and its
Commitment hereunder, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Bank and may exercise the
same as though it were not an Agent, and the terms "Bank" and "Banks" shall
include the each Agent in its individual capacity.
SECTION 9.9. Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Banks and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Majority Banks shall
appoint from among the Banks a successor
61
agent for the Banks, which successor agent shall be approved by the Borrower,
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement or any holders of any
amounts payable hereunder; provided that if an Event of Default has occurred and
is continuing, no consent of the Borrower shall be required. If a successor
Administrative Agent shall not have been so appointed within said 30-day period,
the Administrative Agent may then appoint a successor Administrative Agent who
shall be a financial institution engaged or licensed to conduct banking business
under the laws of the United States with an office in New York City and that has
total assets in excess of $500,000,000 and who shall serve as Administrative
Agent until such time, if any, as an Administrative Agent shall have been
appointed as provided above. After any retiring Administrative Agent's
resignation or removal as Administrative Agent, the provisions of this Article X
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
Notwithstanding anything to the contrary contained herein, no Bank
identified as an "Agent", "Arranger" or "Global Coordinator" other than the
Administrative Agent, shall have the right, power, obligation, liability,
responsibility or duty under this Agreement or any Loan Document other than
those applicable to all Banks as such. Without limiting the foregoing, none of
the Banks so identified shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on any of the Banks so identified in deciding to enter into this
Agreement or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Amendments and Waivers. Neither this Agreement, any Note, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except pursuant to an instrument or instruments in
writing executed in accordance with the provisions of this Section 10.1. The
Majority Banks may, or, with the written consent of the Majority Banks, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to any Notes and the
other Loan Documents for the purpose of adding any provisions to this Agreement
or any Notes or the other Loan Documents or changing in any manner the rights of
the Banks or of the Borrower hereunder or thereunder or (b) waive, on such terms
and conditions as the Majority Banks or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or any Notes or the other Loan Documents or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall:
(i) reduce the amount or extend the scheduled date of maturity of any
Note or Loan, or reduce the stated rate of any interest or fee (including
the prepayment premium provided for in Section 4.6) payable hereunder or
extend the scheduled date of any
62
payment thereof, or increase the amount or extend the expiration date of any
Bank's Commitments, in each case without the consent of each Bank directly
affected thereby;
(ii) amend, modify or waive any provision of this Section or of
Section 4.2 in a manner that would alter the pro rata sharing of payments
required thereby, or reduce the percentage specified in the definition of
Majority Banks, or consent to the assignment or transfer by the Borrower of
any of its respective rights and obligations under this Agreement and the
other Loan Documents, in each case without the written consent of all the
Banks;
(iii) amend, modify or waive any provision of Article IX without the
written consent of the then Administrative Agent; or
(iv) amend, modify or waive any provision of Section 2.4 in a manner
that adversely affects any Issuing Bank without the written consent of the
then Issuing Bank or Issuing Banks.
Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Banks and shall be binding upon the Borrower,
the Banks, the Issuing Bank or Issuing Banks, the Administrative Agent and all
future holders of the amounts payable hereunder. In the case of any waiver (to
the extent specified therein), the Borrower, the Banks, the Issuing Bank or
Issuing Banks, and the Administrative Agent shall be restored to their former
position and rights hereunder and under any outstanding Notes and any other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing, but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
SECTION 10.2. Notices. Unless otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile followed by any original
sent by mail or delivery), and, shall be deemed to have been duly given or made
when delivered by hand, or three days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed as follows
in the case of the Borrower and the Administrative Agent, and as set forth in
Schedule 1.1(A) in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the amounts payable hereunder:
Borrower: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Assistant Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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The JPMorgan Chase Bank, N.A. Loan and
Agency Services Group
Administrative ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Agent: ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, N.A.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Banks shall not be effective until received.
SECTION 10.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 10.4. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.
SECTION 10.5. Payment of Expenses and Taxes; Indemnity. The Borrower agrees
(a) to pay all reasonable out-of-pocket expenses of the Global Coordinators
associated with the syndication of the Facility, (b) to pay or reimburse the
Administrative Agent and its Affiliates for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation,
negotiation and execution and delivery of, and any amendment, supplement or
modification to, this Agreement and any Notes and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special counsel to the Administrative Agent (but
excluding the fees or expenses of any other counsel), (c) to pay or reimburse
the Administrative Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, any
Notes, the other Loan Documents and any such other documents, including, without
limitation, the reasonable fees and disbursements of the special counsel to the
Administrative Agent, (d) to pay or reimburse each Bank for all its costs and
expenses incurred in connection with the enforcement, or at any time after the
occurrence and during the continuance of a Default or an Event of Default the
preservation, of any rights under this Agreement, any Notes, the other Loan
Documents and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to such Bank, (e) without
duplication of any other provision contained
64
in this Agreement or any Notes, to pay, indemnify, and hold each Bank and the
Administrative Agent harmless from, any and all recording and filing fees, if
any, and any and all liabilities (for which each Bank has not been otherwise
reimbursed under this Agreement) with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, that may be payable or determined
to be payable in connection with the execution and delivery of, or consummation
or administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, any Notes, the other Loan Documents and any such other
documents, and (f) without duplication of any other provision contained in this
Agreement or any Notes, to pay, indemnify, and hold each Global Coordinator,
each Lead Arranger, each Bank and each Agent together with their respective
directors, officers, employees, agents, trustees, advisors and affiliates
(collectively, "Indemnified Persons") harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including without limitation, all fees and expenses of counsel to any
indemnified person) with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, any Notes or the other Loan
Documents, the transactions contemplated by this Agreement, any Notes or the
other Loan Documents, or the use, or proposed use, of proceeds of the Loans (all
the foregoing in this clause (f), collectively, the "Indemnified Liabilities");
provided that the Borrower shall have no obligation hereunder to an Indemnified
Person with respect to Indemnified Liabilities arising from the gross negligence
or willful misconduct of such Indemnified Person, AND PROVIDED FURTHER THAT IT
IS THE INTENTION OF THE BORROWER TO INDEMNIFY THE INDEMNIFIED PERSONS AGAINST
THE CONSEQUENCES OF THEIR OWN NEGLIGENCE. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.
SECTION 10.6. Effectiveness, Successors and Assigns, Participations;
Assignments. (a) This Agreement shall become effective on the date hereof and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Banks, each Issuing Bank, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks or other financial
institutions or Bank Affiliates (a "Participant") participating interests in any
Loan owing to such Bank, any Note held by such Bank, any Commitment of such Bank
or any other interest of such Bank hereunder and under the other Loan Documents.
In the event of any such sale by a Bank of a participating interest to a
Participant, such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Loan and Commitment or other interest for all purposes under this
Agreement and the other Loan Documents, the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement and the other Loan
Documents and except with respect to the matters set forth in Section 10.1, the
amendment of which requires the consent of all of the Banks, the participation
agreement between the selling Bank and the Participant may not restrict such
Bank's voting rights hereunder. The Borrower agrees that each Participant, to
the extent provided in its participation, shall be entitled to the
65
benefits of Sections 3.4, 3.7, 4.1 and 4.3 with respect to its participation in
the Commitments and the Loans outstanding from time to time; provided that (i)
no Participant shall be entitled to receive any greater amount pursuant to such
Sections than the selling Bank would have been entitled to receive in respect of
the amount of the participation sold by such selling Bank to such Participant
had no such sale occurred and (ii) each such sale of participating interests
shall be to a "qualified purchaser", as such term is defined under the
Investment Company Act of 1940. Except as expressly provided in this Section
10.6(b), no Participant shall be a third-party beneficiary of or have any rights
under this Agreement or under any of the other Loan Documents.
(c) Except as set forth below, the Banks shall be permitted to assign all
or a portion of their Loans and Commitments to one or more financial
institutions ("Purchasing Banks") with the consent, not to be unreasonably
withheld, of (a) the Borrower, unless (i) the Purchasing Bank is a Bank or a
Bank Affiliate or (ii) an Event of Default has occurred and is continuing, (b)
the Administrative Agent, unless the assignment is from a Bank to its Bank
Affiliate, and (c) each Issuing Bank, unless the assignment is from a Bank to
its Bank Affiliate pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit C (an "Assignment and Acceptance"), executed by such
Purchasing Bank and such transferor Bank (and by the Borrower, the
Administrative Agent and each Issuing Bank, as applicable) and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided
that (i) such Purchasing Bank is a "qualified purchaser" as defined under the
Investment Company Act of 1940, (ii) each such sale shall be of a uniform, and
not a varying, percentage of all rights and obligations under and in respect of
the Commitment of such Bank, (iii) each such sale shall be in an aggregate
amount of not less than $5,000,000 (or such lesser amount representing the
entire Commitment of such transferor Bank) if such sale is not to an existing
Bank and (iv) after giving effect to such sale, the transferor Bank shall (to
the extent that it continues to have any Commitment hereunder) have a Commitment
of not less than $5,000,000, provided that such amounts shall be aggregated in
respect of each Bank and its Bank Affiliates, if any. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance (the "Transfer Effective Date"), (i)
the Purchasing Bank thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder with the Commitments as set forth therein and (ii) the transferor
Bank thereunder shall, to the extent provided in such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a transferor
Bank's rights and obligations under this Agreement, such transferor Bank shall
cease to be a party hereto). Such Assignment and Acceptance shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect
the addition of such Purchasing Bank and the resulting adjustment of Revolving
Percentages arising from the purchase by such Purchasing Bank of all or a
portion of the rights and obligations of such transferor Bank under this
Agreement. On or prior to the Transfer Effective Date determined pursuant to
such Assignment and Acceptance, (i) appropriate entries shall be made in the
accounts of the transferor Bank and the Register evidencing such assignment and
releasing the Borrower from any and all obligations to the transferor Bank in
respect of the assigned Loan or Loans and (ii) appropriate entries evidencing
the assigned Loan or Loans shall be made in the accounts of the Purchasing Bank
and the Register as required by Section 3.1 hereof. In the event that any Notes
have been issued in
66
respect of the assigned Loan or Loans, such Notes shall be marked "cancelled"
and surrendered by the transferor Bank to the Administrative Agent for return to
the Borrower.
(d) The Administrative Agent shall maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Banks and the Commitments of, and principal amount of the Loans owing to, each
Bank from time to time. To the extent permitted by applicable law, the entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Banks may (and, in the case of any
Loan or other obligations hereunder not evidenced by a Note, shall) treat, each
Person whose name is recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes of this Agreement and
the other Loan Documents, notwithstanding any notice to the contrary. Any
assignment of any Loan or other obligation hereunder not evidenced by a Note
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by a
transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank that
is not then a Bank Affiliate, by the Borrower and the Administrative Agent)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall promptly accept such
Assignment and Acceptance on the Transfer Effective Date determined pursuant
thereto, record the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and the Borrower.
(f) Each of the Banks and the Administrative Agent agrees to exercise its
best efforts to keep, and to cause any third party recipient of the information
described in this Section 10.6(f) to keep, any information delivered or made
available by the Borrower to it (including any information obtained pursuant to
Section 7.1), confidential from anyone other than Persons employed or retained
by such party who are or are expected to become engaged in evaluating,
approving, structuring or administering the transactions contemplated hereunder;
provided that nothing shall prevent any Bank or the Administrative Agent from
disclosing such information (i) to any other Bank or any Affiliate of any Bank,
(ii) pursuant to subpoena or upon the order of any court or administrative
agency, (iii) upon the request or demand of any Governmental Authority having
jurisdiction over such Bank, (iv) if such information has been publicly
disclosed, (v) to the extent reasonably required in connection with any
litigation to which either the Administrative Agent, any Bank, the Borrower or
their respective Affiliates may be a party, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vii) to the
Administrative Agent's or such Bank's, as the case may be, legal counsel,
independent auditors and other professional advisors, or (viii) to any actual or
proposed Participant, Purchasing Bank or pledgee (each, a "Transferee") that has
agreed in writing to be bound by the provisions of this Section 10.6(f). To the
extent permitted by applicable law, in the event that any Bank or the
Administrative Agent is legally requested or required to disclose any
confidential information pursuant to clause (ii), (iii), or (v) of this Section
10.6(f), such party shall promptly notify the Borrower of such request or
requirement prior to disclosure so that Borrower may seek an appropriate
protective order and/or waive compliance with the terms of this Agreement. If,
however, in the opinion of counsel for such party, such party is nonetheless,
67
in the absence of such order or waiver, compelled to disclose such confidential
information or otherwise stand liable for contempt or suffer possible censure or
other penalty or liability, then such party may disclose such confidential
information without liability to the Borrower; provided, however, that such
party will use its best efforts to minimize the disclosure of such information.
Subject to the exceptions above to disclosure of information, each of the Banks
and the Administrative Agent agrees that it shall not publish, publicize, or
otherwise make public any information regarding this Agreement or the
transactions contemplated hereby without the written consent of the Borrower, in
its sole discretion.
(g) If, pursuant to this Section 10.6, any interest in this Agreement or
any Loan or L/C Obligation is transferred to any Transferee that is organized
under the laws of any jurisdiction other than the United States or any state
thereof, the transferor Bank shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to deliver to the transferor Bank (and, in
the case of any Purchasing Bank registered in the Register, the Administrative
Agent and the Borrower) either U.S. Internal Revenue Service Form W-8BEN or U.S.
Internal Revenue Service Form W-8ECI, or successor applicable forms (wherein
such Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (ii) to agree (for the
benefit of the transferor Bank, the Administrative Agent and the Borrower) to
deliver to the transferor Bank (and, in the case of any Purchasing Bank
registered in the Register, the Administrative Agent and Borrower) a new Form
duly executed and completed W-8BEN or W-8ECI, or successor applicable forms or
other manner of certification, as the case may be, upon the expiration or
obsolescence of any previously delivered form in accordance with applicable U.S.
laws and regulations and amendments, unless in any such case any change in
treaty, law or regulation has occurred prior to the date on which any such
delivery would otherwise be required that renders all such forms inapplicable or
that would prevent such Transferee from duly completing and delivering any such
form with respect to it and such Transferee so advises the transferor Bank (and,
in the case of any Purchasing Bank registered in the Register, the
Administrative Agent and the Borrower).
(h) Any Bank may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Bank, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Bank from any of its obligations hereunder or
substitute any such pledgee or Purchasing Bank for such Bank as a party hereto.
The Borrower hereby agrees that, upon request of any Bank at any time and from
time to time after the Borrower has made its initial Borrowing hereunder, the
Borrower shall provide to such Bank, at the Borrower's own expense, a promissory
note, substantially in the form of Exhibit D evidencing the Loans or L/C
Obligations, as the case may be, owing to such Bank.
SECTION 10.7. Setoff. In addition to any rights and remedies of the Banks
provided by law, each Bank shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under the Loans to which it is a party (whether at the
stated maturity, by acceleration or otherwise) to setoff and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each
68
case whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Bank or any branch or agency thereof to or for
the credit or the account of the Borrower. Each Bank agrees promptly to notify
the Borrower and the Administrative Agent after any such setoff and application
made by such Bank, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
SECTION 10.8. Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the parties
shall be maintained with Borrower and the Administrative Agent.
SECTION 10.9. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.10. Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the Banks
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Bank relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
SECTION 10.11. GOVERNING LAW. (a) THIS AGREEMENT AND ANY NOTES OR OTHER
LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT AND ANY NOTES AND ANY OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) Notwithstanding anything in Section 10.11(a) to the contrary,
nothing in this Agreement or in any Note or any other Loan Documents shall be
deemed to constitute a waiver of any rights which any Bank may have under
applicable federal law relating to the amount of interest which any Bank may
contract for, take, receive or charge in respect of any Loans, including any
right to take, receive, reserve and charge interest at the rate allowed by the
laws of the state where such Bank is located. To the extent that Texas law is
applicable to the determination of the Highest Lawful Rate, the Banks and the
Borrower agree that (i) if Chapter 303 of the Texas Finance Code, as amended, is
applicable to such determination, the weekly rate ceiling (formerly known as the
indicated (weekly) rate ceiling in Article 1.04, Subtitle 1, Title 79, of the
Revised Civil Statutes of Texas, as amended) as computed from time to time shall
apply, provided that, to the extent permitted by such Article, the
Administrative Agent may from time to time by notice to the Borrower revise the
election of such interest rate ceiling as such ceiling affects the then current
or future balances of the Loans; and (ii) the provisions of Chapter 346 of the
Texas Finance Code, as amended (formerly found in Chapter 15 of Subtitle 3,
Title 79, of the Revised Civil Statutes of Texas, 1925, as amended) shall not
apply to this Agreement or any Note issued hereunder.
69
SECTION 10.12. Submission to Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid to the Borrower at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to ▇▇▇ in
any other jurisdiction; and
(e) waives, to the maximum extent permitted by applicable law, any right it
may have to claim or recover in any legal action or proceeding any special,
exemplary, punitive or consequential damages.
SECTION 10.13. Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, any Notes and the other Loan Documents;
(b) neither the Administrative Agent nor any Bank has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Administrative Agent and the Banks, on one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture exists among the Banks or among the Borrower and the
Banks.
SECTION 10.14. Limitation on Agreements. All agreements between the
Borrower, the Administrative Agent or any Bank, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of demand being
made in respect of an amount due under any Loan Document or otherwise, shall the
amount paid, or agreed to be paid, to the Administrative Agent or any Bank for
the use, forbearance, or detention of the money to be loaned under this
Agreement, any Notes or any other Loan Document or otherwise or for the payment
or performance of any covenant or obligation contained herein or in any other
Loan Document exceed the Highest Lawful Rate. If, as a result of any
circumstances whatsoever, fulfillment of any provision hereof
70
or of any of such documents, at the time performance of such provision shall be
due, shall involve transcending the limit of validity prescribed by applicable
usury law, then, ipso facto, the obligation to be fulfilled shall be reduced to
the limit of such validity, and if, from any such circumstance, the
Administrative Agent or any Bank shall ever receive interest or anything that
might be deemed interest under applicable law that would exceed the Highest
Lawful Rate, such amount that would be excessive interest shall be applied to
the reduction of the principal amount owing on account of such Bank's Loans or
the amounts owing on other obligations of the Borrower to the Administrative
Agent or any Bank under any Loan Document and not to the payment of interest, or
if such excessive interest exceeds the unpaid principal balance of such Bank's
Loans and the amounts owing on other obligations of the Borrower to the
Administrative Agent or any Bank under any Loan Document, as the case may be,
such excess shall be refunded to the Borrower. All sums paid or agreed to be
paid to the Administrative Agent or any Bank for the use, forbearance or
detention of the indebtedness of the Borrower to the Administrative Agent or any
Bank shall, to the fullest extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full of the principal (including the period of any renewal or
extension thereof) so that the interest on account of such indebtedness shall
not exceed the Highest Lawful Rate. Notwithstanding anything to the contrary
contained in any Loan Document, it is understood and agreed that if at any time
the rate of interest that accrues on the outstanding principal balance of any
Loan shall exceed the Highest Lawful Rate, the rate of interest that accrues on
the outstanding principal balance of any Loan shall be limited to the Highest
Lawful Rate, but any subsequent reductions in the rate of interest that accrues
on the outstanding principal balance of any Loan shall not reduce the rate of
interest that accrues on the outstanding principal balance of any Loan below the
Highest Lawful Rate until the total amount of interest accrued on the
outstanding principal balance of any Loan equals the amount of interest that
would have accrued if such interest rate had at all times been in effect. The
terms and provisions of this Section 10.14 shall control and supersede every
other provision of all Loan Documents.
SECTION 10.15. Removal of Bank. Notwithstanding anything herein to the
contrary, the Borrower may, at any time in its sole discretion, remove any Bank
upon 15 Business Days' written notice to such Bank and the Administrative Agent
(the contents of which notice shall be promptly communicated by the
Administrative Agent to each other Bank), such removal to be effective at the
expiration of such 15-day notice period; provided, however, that no Bank may be
removed hereunder at a time when an Event of Default shall have occurred and be
continuing. Each notice by the Borrower under this Section 10.15 shall
constitute a representation by the Borrower that the removal described in such
notice is permitted under this Section 10.15. Concurrently with such removal,
the Borrower shall pay to such removed Bank all amounts owing to such Bank
hereunder and under any other Loan Document in immediately available funds. Upon
full and final payment hereunder of all amounts owing to such removed Bank, such
Bank shall make appropriate entries in its accounts evidencing payment of all
Loans hereunder and releasing the Borrower from all obligations owing to the
removed Bank in respect of the Loans hereunder and surrender to the
Administrative Agent for return to the Borrower any Notes of the Borrower then
held by it. Effective immediately upon such full and final payment, such removed
Bank will not be considered to be a "Bank" for purposes of this Agreement except
for the purposes of any provision hereof that by its terms survives the
termination of this Agreement and the payment of the amounts payable hereunder.
Effective immediately upon such removal, the Commitments of such removed Bank
shall immediately terminate and such Bank's
71
participation share in any outstanding Letters of Credit shall immediately
terminate and such participation share shall be divided among the remaining
Banks according to their Revolving Percentages. Such removal will not, however,
affect the Commitments of any other Bank hereunder.
SECTION 10.16. Officer's Certificates. It is not intended that any
certificate of any officer of the Borrower delivered to the Administrative Agent
or any Bank pursuant to this Agreement shall give rise to any personal liability
on the part of such officer.
SECTION 10.17. USA Patriot Act. Each Bank and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Patriot Act"), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Bank or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Patriot Act. The Borrower shall,
and shall cause each of its Subsidiaries to, provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested
by each Bank and the Administrative Agent to maintain compliance with the
Patriot Act.
72
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CENTERPOINT ENERGY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
and Treasurer
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.,
as Syndication Agent and as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
73
Signature Page
CenterPoint Credit Agreement
BARCLAYS BANK PLC, as
Co-Documentation Agent
By: /s/ Sydney ▇. ▇▇▇▇▇▇
------------------------------------
Name: Sydney ▇. ▇▇▇▇▇▇
Title: Director
Signature Page
CenterPoint Credit Agreement
BANK OF AMERICA, N.A., as
Co-Documentation Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Signature Page
CenterPoint Credit Agreement
CREDIT SUISSE FIRST BOSTON, as
Co-Documentation Agent
By: /s/ S. ▇▇▇▇▇▇▇ ▇▇▇
------------------------------------
Name: S. ▇▇▇▇▇▇▇ ▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Signature Page
CenterPoint Credit Agreement
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Signature Page
CenterPoint Credit Agreement
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch
By: /s/ S.▇▇▇▇▇▇▇ ▇▇▇
------------------------------------
Name: S. ▇▇▇▇▇▇▇ ▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Signature Page
CenterPoint Credit Agreement
Southwest Bank of Texas
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
Signature Page
CenterPoint Credit Agreement
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
Signature Page
CenterPoint Credit Agreement
▇▇▇▇▇ Fargo Bank, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Signature Page
CenterPoint Credit Agreement
Wachovia Bank N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
Signature Page
CenterPoint Credit Agreement
KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Signature Page
CenterPoint Credit Agreement
The Bank of Tokyo-Mitsubishi, Ltd.
Houston Agency, Dallas CBO
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: V.P. & Manager
Signature Page
CenterPoint Credit Agreement
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Signature Page
CenterPoint Credit Agreement
ROYAL BANK OF CANADA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Signature Page
CenterPoint Credit Agreement
SUNTRUST BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Signature Page
CenterPoint Credit Agreement
Deutsche Bank AG New York Branch
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
Signature Page
CenterPoint Credit Agreement
Commerzbank, AG
New York and Grand Cayman Branches
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Signature Page
CenterPoint Credit Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Signature Page
CenterPoint Credit Agreement
The Bank of Nova Scotia
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: Thane Ratttew
Title: Managing Director
Signature Page
CenterPoint Credit Agreement
THE ROYAL BANK OF SCOTLAND plc
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Signature Page
CenterPoint Credit Agreement
BARCLAYS BANK PLC
By: /s/ Sydney ▇. ▇▇▇▇▇▇
------------------------------------
Name: Sydney ▇. ▇▇▇▇▇▇
Title: Director
Signature Page
CenterPoint Credit Agreement
ABN AMRO Bank N.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Director
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Signature Page
CenterPoint Credit Agreement
UBS LOAN FINANCE LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
Banking Products
Services, US
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Associate Director
Banking Products
Services, US