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Exhibit 10.1
EXECUTION COPY
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
Dated as of December 16, 2005
Among
DTE ENERGY COMPANY,
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN,
as Initial Lenders
and
THE BANK OF NOVA SCOTIA,
as Administrative Agent
================================================================================
SCOTIA CAPITAL,
as Lead Arranger and Sole Book Runner
================================================================================
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TABLE OF CONTENTS
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ARTICLE I: DEFINITIONS AND ACCOUNTING
TERMS.............................. 1
SECTION 1.01. Certain Defined
Terms................................. 1
SECTION 1.02. Computation of Time
Periods........................... 13
SECTION 1.03. Accounting
Terms...................................... 13
ARTICLE II: AMOUNTS AND TERMS OF THE
REIMBURSEMENT
ADVANCES AND THE FACILITY
LCs......................................... 13
SECTION 2.01.
Commitment............................................ 13
SECTION 2.02. Making the Reimbursement
Advances..................... 14
SECTION 2.03.
Fees.................................................. 15
SECTION 2.04. Termination or Reduction of
the Commitments........... 15
SECTION 2.05. Repayment of Credit
Extensions........................ 16
SECTION 2.06. Interest on Reimbursement
Advances.................... 16
SECTION 2.07. Interest Rate
Determination........................... 17
SECTION 2.08. Optional Conversion of
Reimbursement Advances......... 18
SECTION 2.09. Prepayments of Reimbursement
Advances................. 18
SECTION 2.10. Increased
Costs....................................... 19
SECTION 2.11.
Illegality............................................ 20
SECTION 2.12. Payments and
Computations............................. 20
SECTION 2.13.
Taxes................................................. 21
SECTION 2.14. Sharing of Payments,
Etc.............................. 23
SECTION 2.15. Use of
Proceeds....................................... 24
SECTION 2.16. Facility
LCs.......................................... 24
SECTION 2.17. Noteless Agreement; Evidence
of Indebtedness.......... 27
SECTION 2.18. Extension of Commitment
Termination Date.............. 28
SECTION 2.19. Conversion to Term
Loan............................... 28
ARTICLE III: CONDITIONS TO EFFECTIVENESS
AND CREDIT EXTENSIONS........... 29
SECTION 3.01. Conditions Precedent to
Effectiveness of this Agreement.................... 29
SECTION 3.02. Conditions Precedent to Each
Credit Extension......... 30
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SECTION 3.03. Determinations Under Section
3.01..................... 31
ARTICLE IV: REPRESENTATIONS AND
WARRANTIES............................... 31
SECTION 4.01. Representations and
Warranties of the Borrower........ 31
ARTICLE V: COVENANTS OF THE
BORROWER..................................... 33
SECTION 5.01. Affirmative
Covenants................................. 33
SECTION 5.02. Negative
Covenants.................................... 35
ARTICLE VI: EVENTS OF
DEFAULT............................................ 36
SECTION 6.01. Events of
Default..................................... 36
ARTICLE VII: THE
AGENT...................................................
38
SECTION 7.01. Authorization and
Action.............................. 38
SECTION 7.02. Agent's Reliance,
Etc................................. 39
SECTION 7.03. Scotia Capital and
Affiliates......................... 39
SECTION 7.04. Lender Credit
Decision................................ 40
SECTION 7.05.
Indemnification....................................... 40
SECTION 7.06. Successor
Agent....................................... 40
ARTICLE VIII:
MISCELLANEOUS..............................................
41
SECTION 8.01. Amendments,
Etc...................................... 41
SECTION 8.02. Notices,
Etc.......................................... 41
SECTION 8.03. No Waiver;
Remedies................................... 43
SECTION 8.04. Costs and
Expenses.................................... 43
SECTION 8.05. Right of
Set-off...................................... 44
SECTION 8.06. Binding
Effect........................................ 45
SECTION 8.07. Assignments, Designations
and Participations.......... 45
SECTION 8.08.
Confidentiality....................................... 49
SECTION 8.09. Governing
Law......................................... 49
SECTION 8.10. Execution in Counterparts;
Integration................ 49
SECTION 8.11. Jurisdiction,
Etc..................................... 50
SECTION 8.12. Waiver of Jury
Trial.................................. 50
SECTION 8.13. USA Patriot Act
Notification.......................... 50
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SCHEDULES AND EXHIBITS
Schedules
Schedule I - List of Applicable Lending
Offices
Pricing Schedule
Exhibits
Exhibit A - Form of Note (If Requested)
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and
Acceptance
Exhibit D - Form of Certificate by
Borrower
Exhibit E - Form of Opinion of Associate
General Counsel to the Borrower
Exhibit F - Form of Compliance
Certificate
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This LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this
"Agreement")
dated as of December 16, 2005 is entered
into among DTE ENERGY COMPANY, a
Michigan corporation (the "Borrower"), the
banks, financial institutions and
other institutional lenders (the "Initial
Lenders") listed on the signature
pages hereof, and THE BANK OF NOVA SCOTIA
("Scotia Capital"), as Administrative
Agent (the "Agent") for the Lenders (as
hereinafter defined).
PRELIMINARY STATEMENTS.
The Borrower has requested that the Initial Lenders enter into
this
Agreement, and the Initial Lenders have
indicated their willingness to enter
into this Agreement upon the terms and
conditions stated herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein,
the parties hereto hereby agree,
subject to the satisfaction of the
conditions set forth in Article III, as
follows:
ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the
following meanings (such meanings to be
equally applicable to both the singular and
plural forms of the terms defined):
"Affiliate" means, as to any Person, any other Person that,
directly
or indirectly,
controls, is controlled by or is under common control with
such Person or
is a director or officer of such Person. For purposes of
this definition,
the term "control" (including the terms "controlling",
"controlled by"
and "under common control with") of a Person means the
possession,
direct or indirect, of the power to vote 25% or more of the
Voting Stock of
such Person or to direct or cause the direction of the
management and
policies of such Person, whether through the ownership of
Voting Stock, by
contract or otherwise.
"Agent's Account" means the account of the Agent maintained by
the
Agent at Scotia
Capital with its office at One Liberty Plaza, 26th Floor,
New York, NY
10006, Account No. 2308363Corbk77, ABA No. 0026002532,
Attention:
Tamara Mohan.
"Aggregate Outstanding Credit Exposures" means, at any time,
the
aggregate of the
Outstanding Credit Exposures of all the Lenders.
"Applicable Commitment Fee Rate" means, as of any date, the
percentage
rate per annum
which is applicable at such time with respect to the
Commitments as
set forth in the Pricing Schedule.
"Applicable LC Fee Rate" means, as of any date, the percentage
rate
per annum which
is applicable at such time with respect to Facility LCs as
set forth in the
Pricing Schedule.
"Applicable Lending Office" means, with respect to each Lender or
the
LC Issuer, such
Lender's or the LC Issuer's Domestic Lending Office in the
case of a Base Rate
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Advance or the
issuance of any Facility LC and such Lender's Eurodollar
Lending Office
in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, (i) with respect to
all
Base Rate
Advances, 0.0% per annum, and (ii) with respect to all
Eurodollar
Rate Advances,
the percentage rate per annum which is applicable at such
time with
respect to Eurodollar Rate Advances as set forth in the Pricing
Schedule.
"Assignment and Acceptance" means an assignment and acceptance
entered
into by a Lender
and an Eligible Assignee, and accepted by the Agent, in
substantially
the form of Exhibit C hereto.
"Audited Statements" means the Consolidated balance sheets of
the
Borrower, DECO
and MichCon as at December 31, 2004, and the related
Consolidated
statements of income and cash flows of the Borrower, DECO and
MichCon for the
fiscal year then ended, accompanied by the opinion thereon
of the Borrower's, DECO's and
MichCon's independent public accountants. For
the avoidance of
doubt, the Audited Statements of the Borrower and DECO
shall mean such
Audited Statements as are presented in the Borrower's and
DECO's Form 8-K,
as applicable, dated August 3, 2005 and filed August 4,
2005 for the
year ended December 31, 2004.
"Base Rate" means a fluctuating interest rate per annum in effect
from
time to time,
which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest then most recently established by
Scotia
Capital in New York, New York (and transmitted to the Borrower) as
its
base rate for dollars loaned in the United States (it being
understood
and agreed that this rate is not necessarily intended to be the
lowest
rate of interest determined by Scotia Capital in connection
with
extensions of credit); or
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means a Reimbursement Advance that bears
interest
as provided in
Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties to
this
Agreement.
"Borrowing" means a borrowing consisting of simultaneous
Reimbursement
Advances of the
same Type and (in the case of Eurodollar Rate Advances)
having the same
Interest Period, made by each of the Lenders pursuant to
Section
2.01.
"Business Day" means a day of the year on which banks are not
required
or authorized by
law to close in New York City and, if the applicable
Business Day
relates to any Eurodollar Rate Advances, on which dealings are
carried on in
the London interbank market.
"Capitalization" means the sum of Consolidated Net Worth plus
Consolidated
Debt.
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"Collateral Shortfall Amount" means, as of any date of
determination,
an amount in
immediately available funds, which funds shall be held in the
Facility LC
Collateral Account, equal to the difference of (x) the amount
of LC
Obligations at such time, less (y) the amount on deposit in the
Facility LC
Collateral Account at such time which is free and clear of all
rights and
claims of third parties and has not been applied against the
Obligations.
"Commitment" means, for each Lender, the obligation of such Lender
to
make
Reimbursement Advances to, and participate in Facility LCs issued
upon
the application
of, the Borrower in an aggregate amount not exceeding the
amount set forth
opposite such Lender's name on Schedule I hereto or if
such Lender has
entered into any Assignment and Acceptance, set forth for
such Lender in
the Register maintained by the Agent pursuant to Section
8.07(d), as such
amount may be modified from time to time pursuant to the
terms
hereof.
"Commitment Termination Date" means the earlier of (a) December
15,
2006, as it may
be extended pursuant to Section 2.18, and (b) the date of
termination in
whole of the Commitments pursuant to Section 2.04 or 6.01.
"Confidential Information" means information that the Borrower
furnishes to the
Agent or any Lender designated as confidential, but does
not include any
such information that is or becomes generally available to
the public or
that is or becomes available to the Agent or such Lender from
a source other
than the Borrower.
"Consolidated" refers to the consolidation of accounts in
accordance
with GAAP.
"Consolidated Net Worth" means, as of any date of determination,
the
consolidated
total stockholders' equity (including capital stock,
additional
paid-in capital and retained earnings) of the Borrower and its
Subsidiaries
determined in accordance with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion
of
Reimbursement
Advances of one Type into Reimbursement Advances of the other
Type pursuant to
Section 2.07 or 2.08.
"Conversion Date" is defined in Section 2.19.
"Credit Extension" means the making of a Reimbursement Advance or
the
issuance,
renewal, extension or increase of a Facility LC hereunder.
"Debt" of any Person means, without duplication, (a) all
indebtedness
of such Person
for borrowed money, (b) all obligations of such Person for
the deferred
purchase price of property or services (other than trade
payables not
overdue by more than 60 days incurred in the ordinary course
of such Person's
business), (c) all obligations of such Person evidenced by
notes, bonds,
debentures or other similar instruments, (d) all obligations
of such Person
created or arising under any conditional sale or other title
retention
agreement with respect to property acquired by such Person
(even
though the
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rights and
remedies of the seller or lender under such agreement in the
event of default
are limited to repossession or sale of such property), (e)
all obligations
of such Person as lessee under leases that have been or
should be, in
accordance with GAAP, recorded as capital leases, (f) all
obligations,
contingent or otherwise, of such Person in respect of
acceptances,
letters of credit or similar extensions of credit, (g) all
obligations of
such Person in respect of Hedge Agreements, (h) all Debt of
others referred
to in clauses (a) through (g) above or clause (i) below
guaranteed
directly or indirectly in any manner by such Person, or in
effect
guaranteed directly or indirectly by such Person through an
agreement (1) to
pay or purchase such Debt or to advance or supply funds
for the payment
or purchase of such Debt, (2) to purchase, sell or lease
(as lessee or
lessor) property, or to purchase or sell services, primarily
for the purpose
of enabling the debtor to make payment of such Debt or to
assure the
holder of such Debt against loss, (3) to supply funds to or in
any other manner
invest in the debtor (including any agreement to pay for
property or
services irrespective of whether such property is received or
such services
are rendered) or (4) otherwise to assure a creditor against
loss, and (i)
all Debt referred to in clauses (a) through (h) above secured
by (or for which
the holder of such Debt has an existing right, contingent
or otherwise, to
be secured by) any Lien on property (including, without
limitation,
accounts and contract rights) owned by such Person, even though
such Person has
not assumed or become liable for the payment of such Debt.
See the
definition of "Nonrecourse Debt" below.
"DECO" means The Detroit Edison Company, a Michigan corporation
wholly
owned by the
Borrower.
"Default" means any Event of Default or any event that would
constitute an
Event of Default but for the requirement that notice be given
or time elapse
or both.
"Designating Lender" has the meaning specified in Section
8.07(h).
"Disclosed Litigation" has the meaning specified in Section
4.01(f).
"Domestic Lending Office" means, with respect to any Lender or the
LC
Issuer, the
office of such Lender or the LC Issuer specified as its
"Domestic
Lending Office" opposite its name on Schedule I hereto or, in
the
case of a
Lender, in the Assignment and Acceptance pursuant to which it
became a Lender,
or such other office of such Lender or the LC Issuer as
such Lender or
the LC Issuer may from time to time specify to the Borrower
and the
Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender;
(iii) a
commercial bank organized under the laws of the United States,
or
any State
thereof, and having a combined capital and surplus of at least
$500,000,000;
(iv) a savings and loan association or savings bank organized
under the laws
of the United States, or any State thereof, and having a
combined capital
and surplus of at least $500,000,000; (v) a commercial
bank organized
under the laws of any other country that is a member of the
Organization for
Economic Cooperation and Development or has concluded
special
4
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lending
arrangements with the International Monetary Fund associated
with
its General
Arrangements to Borrow, or a political subdivision of any such
country, and
having a combined capital and surplus of at least
$500,000,000, so
long as such bank is acting through a branch or agency
located in the
United States; (vi) the central bank of any country that is
a member of the
Organization for Economic Cooperation and Development;
(vii) a finance
company, insurance company or other financial institution
or fund (whether
a corporation, partnership, trust or other entity) that is
engaged in
making, purchasing or otherwise investing in commercial loans
in
the ordinary
course of its business and having a combined capital and
surplus of at
least $500,000,000; and (viii) any other Person approved by
the Agent and,
so long as no Event of Default shall be continuing, the
Borrower, such
approval not to be unreasonably withheld or delayed by
either party;
provided, however, that neither the Borrower nor an Affiliate
of the Borrower
shall qualify as an Eligible Assignee.
"Enterprises" means DTE Enterprises, Inc., a Michigan
corporation
wholly-owned by
the Borrower.
"Environmental Action" means any action, suit, demand, demand
letter,
claim, notice of
non-compliance or violation, notice of liability or
potential
liability, investigation, proceeding, consent order or consent
agreement
relating in any way to any Environmental Law, Environmental
Permit or
Hazardous Materials or arising from alleged injury or threat of
injury to the
environment, including, without limitation, (a) by any
governmental or
regulatory authority for enforcement, cleanup, removal,
response,
remedial or other actions or damages and (b) by any
governmental
or regulatory
authority or any third party for damages, contribution,
indemnification,
cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law,
ordinance, rule, regulation, code, order, judgment, decree or
judicial or
agency interpretation, policy or guidance relating to pollution
or protection of
the environment or natural resources, including, without
limitation,
those relating to the use, handling, transportation, treatment,
storage,
disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification
number, license
or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as
amended from
time to time, and the regulations promulgated and rulings
issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV
of
ERISA is a
member of the Borrower's controlled group, or under common
control with the
Borrower, within the meaning of Section 414 of the
Internal Revenue
Code.
"ERISA Event" means (a) (i) the occurrence of a reportable
event,
within the
meaning of Section 4043 of ERISA, with respect to any Plan
unless the
30-day notice requirement with respect to such event has been
waived by the
PBGC, or (ii) the
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requirements of
subsection (1) of Section 4043(b) of ERISA (without regard
to subsection
(2) of such Section) are met with respect to a contributing
sponsor, as
defined in Section 4001(a)(13) of ERISA, of a Plan, and an
event described
in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA
is reasonably expected to occur with respect to such Plan
within the
following 30 days; (b) the application for a minimum funding
waiver with
respect to a Plan; (c) the provision by the administrator of
any Plan of a
notice of intent to terminate such Plan pursuant to Section
4041(a)(2) of
ERISA (including any such notice with respect to a plan
amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a
facility of the Borrower or any ERISA Affiliate in the
circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by
the Borrower or
any ERISA Affiliate from a Multiple Employer Plan during a
plan year for
which it was a substantial employer, as defined in Section
4001(a)(2) of
ERISA; (f) the conditions for the imposition of a lien under
Section 302(f)
of ERISA shall have been met with respect to any Plan; (g)
the adoption of
an amendment to a Plan requiring the provision of security
to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by
the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the
occurrence of any event or condition described in Section
4042 of ERISA
that constitutes grounds for the termination of, or the
appointment of a
trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term
in
Regulation D of
the Board of Governors of the Federal Reserve System, as in
effect from time
to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the
office of such
Lender specified as its "Eurodollar Lending Office" opposite
its name on
Schedule I hereto or in the Assignment and Acceptance pursuant
to which it
became a Lender (or, if no such office is specified, its
Domestic Lending
Office), or such other office of such Lender as such
Lender may from time
to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar
Rate Advance
comprising part of the same Borrowing, an interest rate per
annum equal to
the rate per annum obtained by dividing (a) the rate
appearing on
Page 3750 of Moneyline Telerate, Inc. ("Service") (or on any
successor or
substitute page of such Service, or any successor to or
substitute for
such Service, providing rate quotations comparable to those
currently
provided on such page of such Service, as determined by the
Agent
after
consultation with the Borrower from time to time for purposes
of
providing
quotations of interest rates applicable to U.S. dollar deposits
in the London
interbank market) at approximately 11:00 A.M. (London time)
two Business
Days prior to the commencement of such Interest Period, as the
rate for U.S.
dollar deposits with a maturity comparable to such Interest
Period, or in
the event that such rate is not available at such time for
any reason, the
rate per annum at which deposits in U.S. dollars are
offered by the
principal office of the Reference Bank in London, England to
prime banks in
the London interbank market at 11:00 A.M. (London time) two
Business Days
before the first day of such Interest Period in an amount
approximately
equal to the Reference Bank's Eurodollar Rate Advance
comprising part
of such Borrowing to be outstanding during such Interest
Period and for a
period equal to such Interest Period, by (b) a percentage
equal to
100%
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minus the
Eurodollar Rate Reserve Percentage for such Interest Period,
subject,
however, to the provisions of Section 2.07.
"Eurodollar Rate Advance" means a Reimbursement Advance that
bears
interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for
all
Eurodollar Rate Advances
comprising part of the same Borrowing means the
reserve
percentage applicable two Business Days before the first day of
such Interest
Period under regulations issued from time to time by the
Board of
Governors of the Federal Reserve System (or any successor) for
determining the
maximum reserve requirement (including, without limitation,
any emergency,
supplemental or other marginal reserve requirement) for a
member bank of
the Federal Reserve System in New York City with respect to
liabilities or
assets consisting of or including Eurocurrency Liabilities
(or with respect
to any other category of liabilities that includes
deposits by
reference to which the interest rate on Eurodollar Rate
Advances is
determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Hedging Debt" means all Debt arising under any Hedge
Agreement in
respect of fluctuations in commodity prices.
"Facility LC" has the meaning specified in Section 2.16(a).
"Facility LC Application" has the meaning specified in Section
2.16(c).
"Facility LC Collateral Account" has the meaning specified in
Section
2.16(i).
"Facility Termination Date" means the second anniversary of the
Commitment
Termination Date, or any earlier date on which the Obligations
shall become due
pursuant to the terms hereof.
"Federal Funds Rate" means for any day the rate per annum
(rounded
upward, if
necessary, to the nearest 1/100th of 1%) 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 on such
day, as
published by the Federal Reserve Bank of New York on the
Business
Day next
succeeding such day; provided that (i) if such day is not a
Business Day,
the Federal Funds Rate for such day shall be such rate on
such transaction
on the next preceding Business Day as so published on the
next succeeding
Business Day and (ii) if no such rate is so published on
the next
succeeding Business Day, the Federal Funds Rate for such day
shall
be the average
of quotations for such day on such transactions received by
the Agent from
three Federal funds brokers of recognized standing selected
by the
Agent.
"Fee Letter" means that certain fee letter, dated as of the
Effective
Date by and between the Borrower
and the Agent, as the same may be amended,
restated,
supplemented or otherwise modified from time to time.
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"Financial Officer" of any Person means the chief executive
officer,
president, chief
financial officer, any vice president, controller,
assistant
controller, treasurer or any assistant treasurer of such
Person.
"GAAP" means generally accepted accounting principles in the
United
States of America.
"Hazardous Materials" means (a) petroleum and petroleum
products,
by-products or
breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon
gas and
(b) any other
chemicals, materials or substances designated, classified or
regulated as
hazardous or toxic or as a pollutant or contaminant under any
Environmental
Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements,
interest rate
future or option contracts, currency swap agreements,
currency future
or option contracts and other similar agreements.
"Identified Reports on Form 8-K" means those certain reports of
the
Borrower, DECO
and MichCon on Form 8-K filed or furnished with the
Securities and
Exchange Commission on (a) February 1, February 3, February
10, February 11
(two filings), February 22, February 25, March 10, April 8,
April 27, April
28, May 2, May 3, May 10, June 14, June 16, June 28, July
28 (two
filings), July 29 (two filings), August 4 (two filings),
September
21, September
26, September 27, October 5, October 21 (three filings),
October 31,
November 3 (two filings), November 7, and November 23, 2005
with respect to
the Borrower, (b) February 10, February 11 (two filings),
March 10, April
8, April 27, April 28, May 2, June 14, July 12, July 28
(two filings),
July 29, August 4 (two filings) , September 21, September
27, October 5,
October 21, October 31, November 3 (two filings), and
November 7, 2005
with respect to DECO, and (c) February 11, March 10, April
27, April 28,
May 2, May 3, May 10, June 14, June 16, July 28, July 29,
September 27,
October 21, November 3 (two filings), and November 7, 2005
with respect to
MichCon.
"Interest Period" means, for each Eurodollar Rate Advance
comprising
part of the same
Borrowing, the period commencing on the date of such
Eurodollar Rate
Advance or the date of the Conversion of any Base Rate
Advance into
such Eurodollar Rate Advance and ending on the last day of the
period selected
by the Borrower pursuant to the provisions below and,
thereafter, with
respect to Eurodollar Rate Advances, 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 the
provisions below. The duration of each such Interest Period
shall be one,
two, three or six months, as the Borrower may, upon notice
received by the
Agent not later than 11:00 A.M. (New York City time) on the
third Business
Day prior to the first day of such Interest Period, select;
provided,
however, that:
(i) the Borrower may not select any Interest Period that ends
after the Commitment Termination Date then in effect (or, if
the
Aggregate Outstanding
8
<PAGE>
Credit Exposures have been converted to a term loan as set forth
in
Section 2.19, on the Facility Termination Date);
(ii) Interest Periods commencing on the same date for
Eurodollar
Rate Advances comprising part of the same Borrowing shall be of
the
same duration;
(iii) 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, however, 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
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no
numerically
corresponding day in the calendar month that succeeds such
initial
calendar month by the number of months equal to the number of
months
in such Interest Period, such Interest Period shall end on the
last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as
amended from
time to time, and the regulations promulgated and rulings
issued
thereunder.
"Junior Subordinated Debt" means (a) subordinated junior
deferrable
interest
debentures of the Borrower, DECO, Enterprises or MichCon, (b)
the
related
preferred securities, if applicable, of Subsidiaries of the
Borrower and (c)
the related subordinated guarantees, if applicable, of the
Borrower, DECO,
Enterprises or MichCon, in each case, from time to time
outstanding.
"LC Commitment" has the meaning specified in Section 2.16(a).
"LC Fee" has the meaning specified in Section 2.03(c).
"LC Issuer" means Scotia Capital (or any subsidiary or
Affiliate
thereof
designated thereby) in its capacity as issuer of Facility LCs
hereunder.
"LC Obligations" means, at any time, the sum, without duplication,
of
(i) the
aggregate undrawn stated amount under all Facility LCs
outstanding
at such time
plus (ii) the aggregate unpaid amount at such time of all
Reimbursement
Obligations.
"LC Payment Date" has the meaning specified in Section 2.16(d).
"Lenders" means the Initial Lenders and each Person that shall
become
a party hereto
pursuant to Section 8.07(a), (b) and (c).
"Lien" means any lien, security interest or other charge or
encumbrance of
any kind, or any other type of preferential arrangement,
including,
without limitation, the lien or retained security title of a
conditional
vendor and any easement, right of way or other encumbrance on
title to real
property.
9
<PAGE>
"Loan Documents" means this Agreement, the Facility LC
Applications,
the Fee Letter
and the Notes.
"Material Adverse Change" means any material adverse change in
the
business,
condition (financial or otherwise), operations, performance or
properties of
the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the
business,
condition (financial or otherwise), operations, performance or
properties of
the Borrower and its Subsidiaries taken as a whole, or (b)
the ability of
the Borrower to perform its obligations under any Loan
Document to
which it is a party.
"MichCon" means Michigan Consolidated Gas Company, a Michigan
corporation,
wholly owned (indirectly) by the Borrower.
"Modify" and "Modification" have the respective meanings specified
in
Section
2.16(a).
"Moody's" means Moody's Investors Service, Inc.
"Moody's Rating" is defined in the Pricing Schedule.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section
4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate is making
or accruing an
obligation to make contributions, or has within any of the
preceding five
plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined
in
Section
4001(a)(15) of ERISA, that (a) is maintained for employees of
the
Borrower or any
ERISA Affiliate and at least one Person other than the
Borrower and the
ERISA Affiliates or (b) was so maintained and in respect
of which the
Borrower or any ERISA Affiliate could have liability under
Section 4064 or
4069 of ERISA in the event such plan has been or were to be
terminated.
"Nonrecourse Debt" means Debt of the Borrower or any of its
Subsidiaries in
respect of which no recourse may be had by the creditors
under such Debt
against the Borrower or such Subsidiary in its individual
capacity or
against the assets of the Borrower or such Subsidiary, other
than assets
which were purchased by the Borrower or such Subsidiary with
the proceeds of
such Debt to which a creditor has recourse; it being
understood that
Securitization Bonds shall constitute Nonrecourse Debt for
all purposes of
the Loan Documents, except to the extent (and only to the
extent) of any
claims made against DECO in respect of its indemnification
obligations
relating to such Securitization Bonds.
"Note" has the meaning specified in Section 2.17.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
10
<PAGE>
"Obligations" means all unpaid principal of and accrued and
unpaid
interest on
Reimbursement Advances, all Reimbursement Obligations, all
accrued and
unpaid fees and all expenses, reimbursements, indemnities and
other
obligations of the Borrower to the Lenders or to any Lender,
the
Agent, the LC
Issuer or any indemnified party arising under the Loan
Documents.
"Outstanding Credit Exposure" means, as to any Lender at any time,
the
sum of (i) the
aggregate principal amount of its Reimbursement Advances
outstanding at
such time, plus (ii) an amount equal to its Pro Rata Share
of the LC
Obligations at such time.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Person" means an individual, partnership, corporation (including
a
business trust),
joint stock company, trust, unincorporated association,
joint venture,
limited liability company or other entity, or a government
or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Pricing Schedule" means the Pricing Schedule identifying the
Applicable
Margin, the Applicable Commitment Fee Rate and the Applicable
LC
Fee Rate
attached hereto identified as such.
"Pro Rata Share" means, with respect to a Lender, a portion equal
to a
fraction the
numerator of which is such Lender's Commitment and the
denominator of
which is the aggregate of all the Lenders' Commitments.
"Reference Bank" means The Bank of Nova Scotia and its
successors.
"Register" has the meaning specified in Section 8.07(d).
"Reimbursement Advance" means an advance by a Lender to the
Borrower
as part of a
Borrowing, and refers to a Base Rate Advance or a Eurodollar
Rate Advance
(each of which shall be a "Type" of Reimbursement Advance).
"Reimbursement Obligations" means, at any time, the aggregate of
all
obligations of
the Borrower then outstanding under Section 2.16 to
reimburse the LC
Issuer for amounts paid by the LC Issuer in respect of any
one or more
drawings under Facility LCs issued by the LC Issuer.
"Required Lenders" means at any time Lenders owed more than
fifty
percent (50%) of
the Aggregate Outstanding Credit Exposures at such time,
or, if the
Aggregate Outstanding Credit Exposures is zero, Lenders having
more than fifty
percent (50%) of the Commitments.
"S&P" means Standard & Poor's Ratings Services, a division
of the
McGraw-Hill
Companies, Inc.
11
<PAGE>
"S&P Rating" is defined in the Pricing Schedule.
"SEC Reports" means the following reports and financial
statements:
(i) the Borrower's, DECO's and MichCon's Annual Reports on Form
10-K,
as amended by
Form 10-K/A, for the year ended December 31, 2004, as filed
with or sent to
the Securities and Exchange Commission, including the
Audited
Statements of the Borrower, DECO and MichCon, respectively; and
(ii) the Borrower's, DECO's and MichCon's Quarterly Reports on
Form
10-Q for the
quarters ended March 31, 2005, June 30, 2005 and September 30,
2005, including
therein the Unaudited Statements of the Borrower, DECO and
MichCon,
respectively, and the Identified Reports on Form 8-K.
"Service" has the meaning specified in the definition of
"Eurodollar
Rate".
"Securitization Bonds" means Debt of one or more Securitization
SPEs,
issued pursuant
to The Customer Choice and Electricity Reliability Act, Act
No. 142, Public
Acts of Michigan, 2000, as the same may be amended from
time to
time.
"Securitization SPE" means an entity established or to be
established
directly or
indirectly by the Borrower for the purpose of issuing
Securitization
Bonds and includes The Detroit Edison Securitization Funding
LLC, a limited
liability company organized under the laws of the State of
Michigan.
"Significant Subsidiary" means (i) DECO, Enterprises and MichCon,
and
(ii) any other
Subsidiary of the Borrower (A) the total assets (after
intercompany
eliminations) of which exceed 30% of the total assets of the
Borrower and its
Subsidiaries or (B) the net worth of which exceeds 30% of
the Consolidated
Net Worth, in each case as shown on the audited
Consolidated
financial statements of the Borrower as of the end of the
fiscal year
immediately preceding the date of determination.
"Single Employer Plan" means a single employer plan, as defined
in
Section
4001(a)(15) of ERISA, that (a) is maintained for employees of
the
Borrower or any
ERISA Affiliate and no Person other than the Borrower and
the ERISA Affiliates or (b) was so
maintained and in respect of which the
Borrower or any
ERISA Affiliate could have liability under Section 4069 of
ERISA in the
event such plan has been or were to be terminated.
"SPV" has the meaning specified in Section 8.07(h).
"Subsidiary" of any Person means any corporation, partnership,
joint
venture, limited
liability company, trust or estate of which (or in which)
more than 50% of
(a) the issued and outstanding capital stock having
ordinary voting
power to elect a majority of the Board of Directors of such
corporation
(irrespective of whether at the time capital stock of any other
class or classes
of such corporation shall or might have voting power upon
the occurrence
of any contingency), (b) the interest in the capital or
profits of such
limited liability company, partnership or joint venture or
(c) the
beneficial interest in such
12
<PAGE>
trust or estate
is at the time directly owned or controlled by such Person,
by such Person
and one or more of its other Subsidiaries or by one or more
of such Person's
other Subsidiaries.
"Unaudited Statements" means the unaudited condensed
Consolidated
balance sheets
of the Borrower, DECO and MichCon, as at September 30, 2005,
and the related
condensed Consolidated statements of income and cash flows
of the Borrower,
DECO and MichCon for the nine-month period then ended.
"Voting Stock" means capital stock issued by a corporation, or
equivalent
interests in any other Person, the holders of which are
ordinarily, in
the absence of contingencies, entitled to vote for the
election of
directors (or persons performing similar functions) of such
Person, even if
the right so to vote has been suspended by the happening of
such a
contingency.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle
E of Title IV of
ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in
the
computation of periods of time from a
specified date to a later specified date,
the word "from" means "from and including"
and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. Except as otherwise expressly
provided
herein, all terms of an accounting or
financial nature shall be construed in
accordance with GAAP, as in effect from
time to time; provided that, if the
Borrower notifies the Agent that the
Borrower requests an amendment to any
provision hereof to eliminate the effect of
any change occurring after the date
hereof in GAAP or in the application
thereof on the operation of such provision
(or if the Agent notifies the Borrower that
the Required Lenders request an
amendment to any provision hereof for such
purpose), regardless of whether any
such notice is given before or after such
change in GAAP or in the application
thereof, then such provision shall be
interpreted on the basis of GAAP as in
effect and applied immediately before such
change shall have become effective
until such notice shall have been withdrawn
or such provision amended in
accordance herewith.
ARTICLE II: AMOUNTS AND TERMS OF THE
REIMBURSEMENT ADVANCES AND THE FACILITY LCs
SECTION 2.01. Commitment. Each Lender severally agrees, on the
terms
and conditions hereinafter set forth, to
(i) make Reimbursement Advances to the
Borrower solely to satisfy any
Reimbursement Obligations pursuant to Section
2.16(e) on any Business Day during the
period from the Effective Date until the
Commitment Termination Date and (ii)
participate in Facility LCs issued upon the
request of the Borrower from time to time;
provided that, after giving effect to
the making of each such Reimbursement
Advance and the issuance of each such
Facility LC, such Lender's Outstanding
Credit Exposure shall not exceed its
Commitment. Each Borrowing shall be in an
aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess
thereof (or, if less, in the aggregate
principal amount of any applicable
Reimbursement Obligation as provided in
Section 2.16(e)) and shall consist of
13
<PAGE>
Reimbursement Advances of the same Type
made on the same day by the Lenders
ratably according to their respective
Commitments. Within the limits of each
Lender's Commitment, the Borrower may
borrow under this Section 2.01 only to
satisfy any Reimbursement Obligation,
prepay pursuant to Section 2.09 and
reborrow under this Section 2.01 to satisfy
any other Reimbursement Obligation.
The LC Issuer will issue Facility LCs
hereunder on the terms and conditions set
forth in Section 2.16.
SECTION 2.02. Making the Reimbursement Advances. (a) Each
Borrowing
shall be made on notice, given 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 Borrowing consisting of Eurodollar
Rate Advances, or 10:00 A.M. (New York
City time) on the Business Day of the
proposed Borrowing in the case of a
Borrowing consisting of Base Rate Advances,
by the Borrower to the Agent, which
shall give to each Lender prompt notice
thereof by telecopier or telex. Each
such notice of a Borrowing (a "Notice of
Borrowing") shall be by telephone,
confirmed immediately in writing signed by
a Financial Officer in substantially
the form of Exhibit B hereto, specifying
therein the requested (i) date of such
Borrowing, (ii) Type of Reimbursement
Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, (iv) in
the case of a Borrowing consisting
of Eurodollar Rate Advances, initial
Interest Period for each such Reimbursement
Advance and (v) wire transfer instructions.
Each Lender shall, before 12:00 noon
(New York City time) on the date of such
Borrowing, make available for the
account of its Applicable Lending Office to
the Agent at the Agent's Account, in
same day funds, such Lender's ratable
portion of such Borrowing. After the
Agent's receipt of such funds and upon
fulfillment of the applicable conditions
set forth in Article III, the Agent will
make such funds available to the
Borrower as specified in the Notice of
Borrowing.
(b) Anything in
subsection (a) above to the contrary notwithstanding, (i)
the Borrower may not select Eurodollar Rate
Advances for any Borrowing if the
aggregate amount of such Borrowing is less
than $5,000,000 or if the obligation
of the Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant
to Section 2.07 or 2.11 and (ii) at no time
shall the number of Borrowings
comprising Eurodollar Rate Advances
outstanding hereunder be greater than ten.
(c) Each Notice
of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that
the related Notice of Borrowing
specifies is to be comprised of Eurodollar
Rate Advances, the Borrower shall
indemnify each Lender against any loss,
cost or expense incurred by such Lender
as a result of any failure to fulfill on or
before the date specified in such
Notice of Borrowing for such Borrowing the
applicable conditions set forth in
Article III, including, without limitation,
any loss (excluding loss of
anticipated profits), cost or expense
incurred by reason of the liquidation or
reemployment of deposits or other funds
acquired by such Lender to fund the
Reimbursement Advance to be made by such
Lender as part of such Borrowing when
such Reimbursement Advance, as a result of
such failure, is not made on such
date.
(d) Unless the
Agent shall have received notice from a Lender prior to the
time of any Borrowing that such Lender will
not make available to the Agent such
Lender's ratable portion of such Borrowing,
the Agent may assume that such
Lender has made such portion available to
the Agent on the date of such
Borrowing in accordance with subsection (a)
of this Section 2.02
14
<PAGE>
and the Agent may, in reliance upon such
assumption, make available to the
Borrower on such date a corresponding
amount. If and to the extent that such
Lender shall not have so made such ratable
portion available to the Agent, such
Lender and the Borrower severally agree to
repay to the Agent forthwith on
demand such corresponding amount together
with interest thereon, for each day
from the date such amount is made available
to the Borrower until the date such
amount is repaid to the Agent, at (i) in
the case of the Borrower, the interest
rate applicable at the time to
Reimbursement Advances comprising such Borrowing
and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender
shall repay to the Agent such corresponding
amount, such amount so repaid shall
constitute such Lender's Reimbursement
Advance as part of such Borrowing for
purposes of this Agreement.
(e) The failure
of any Lender to make the Reimbursement Advance to be made
by it as part of any Borrowing shall not
relieve any other Lender of its
obligation, if any, hereunder to make its
Reimbursement Advance on the date of
such Borrowing, but no Lender shall be
responsible for the failure of any other
Lender to make the Reimbursement Advance to
be made by such other Lender on the
date of any Borrowing.
SECTION 2.03. Fees. (a) Commitment Fee. The Borrower agrees to pay
to
the Agent for the account of each Lender
(based on its Pro Rata Share), for the
period (including any portion thereof when
any Commitment is suspended by reason
of the Borrower's inability to satisfy any
condition of Article III) commencing
on the Effective Date and continuing
through the Commitment Termination Date, a
commitment fee at a per annum rate equal to
the then effective Applicable
Commitment Fee Rate, multiplied by the sum
of the average daily unused portion
of the Commitment of such Lender. All
commitment fees payable pursuant to this
Section shall be payable by the Borrower in
arrears on the last day of each
March, June, September and December, and on
the Commitment Termination Date. For
purposes of computing commitment fees, the
Commitment of a Lender shall be
deemed to be used to the extent of the
Outstanding Credit Exposure of such
Lender.
(b) Agent's
Fees. The Borrower shall pay to the Agent for its own account
such fees as may from time to time be
agreed between the Borrower and the Agent.
(c) LC Fees. The
Borrower shall pay to the Agent, for the account of the
Lenders ratably in accordance with their
respective Pro Rata Shares, a per annum
letter of credit fee equal to the
Applicable LC Fee Rate multiplied by the
average daily undrawn stated amount under
such Facility LC, such fee to be
payable in arrears quarterly on the last
day of each March, June, September and
December, and on the Commitment Termination
Date (each such fee described in
this sentence an "LC Fee"). The Borrower
shall also pay to the LC Issuer for its
own account (x) a fronting fee in an amount
and payable at such times as is
agreed upon between the LC Issuer and the
Borrower, and (y) documentary and
processing charges in connection with the
issuance or Modification of and draws
under Facility LCs in accordance with the
LC Issuer's standard schedule for such
charges as in effect from time to time.
SECTION 2.04. Termination or Reduction of the Commitments. (a)
The
Commitments shall be automatically
terminated on the Commitment Termination
Date.
15
<PAGE>
(b) The Borrower
shall have the right, upon at least three Business Days'
notice to the Agent, to terminate in whole
or reduce ratably in part the unused
portions of the respective Commitments of
the Lenders, provided that each
partial reduction shall be in the aggregate
amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof.
Once terminated, a Commitment or
portion thereof may not be reinstated.
SECTION 2.05. Repayment of Credit Extensions. The Borrower shall
repay
to the Agent for the ratable account of the
Lenders on the Commitment
Termination Date (or, if the Aggregate
Outstanding Credit Exposures have been
converted to a term loan as set forth in
Section 2.19, on the Facility
Termination Date) any Aggregate Outstanding
Credit Exposures and all other
unpaid Obligations. In addition, the
Borrower shall make all payments required
to be made under Section 2.18 to each
Lender that does not consent to an
extension of the Commitment Termination
Date.
SECTION 2.06. Interest on Reimbursement Advances. (a) Scheduled
Interest. The Borrower shall pay interest
on the unpaid principal amount of each
Reimbursement Advance owing to each Lender
from the date of such Reimbursement
Advance until such principal amount shall
be paid in full, at the following
rates per annum:
(i) Base Rate Advances. During such periods as such
Reimbursement
Advance is a
Base Rate Advance, a rate per annum equal at all times to the
sum of (x) the
Base Rate in effect from time to time plus (y) the
Applicable
Margin in effect from time to time, payable in arrears
quarterly
on the last day
of each March, June, September and December during such
periods and on
the date such Base Rate Advance shall be Converted or paid
in full.
(ii) Eurodollar Rate Advances. During such periods as such
Reimbursement
Advance is a Eurodollar Rate Advance, a rate per annum equal
at all times during
each Interest Period for such Reimbursement Advance to
the sum of (x)
the Eurodollar Rate for such Interest Period for such
Reimbursement
Advance plus (y) the Applicable Margin in effect from time to
time, payable in
arrears on the last day of such Interest Period and, if
such Interest
Period has a duration of more than three months, on each day
that occurs
during such Interest Period every three months from the first
day of such
Interest Period and on the date such Eurodollar Rate Advance
shall be
Converted or paid in full.
(b) Default
Interest. (i) Upon the occurrence and during the continuance of
an Event of Default, (x) the Borrower shall
pay interest on the unpaid principal
amount of each Reimbursement Advance owing
to each Lender, payable in arrears on
the dates referred to in clause (a)(i) or
(a)(ii) above, at a rate per annum
equal at all times to 2% per annum above
the rate per annum required to be paid
on such Reimbursement Advance pursuant to
clause (a)(i) or (a)(ii) above and (y)
the LC Fee shall be increased by 2% per
annum, and (ii) the Borrower shall pay,
to the fullest extent permitted by law, the
amount of any interest, fee or other
amount payable hereunder that is not paid
when due, from the date such amount
shall be due until such amount shall be
paid in full, payable in arrears on the
date such amount shall be paid in full and
on demand, at a rate per annum equal
at all times to 2% per annum above the rate
per annum required to be paid on
Base Rate Advances pursuant to clause
(a)(i) above.
16
<PAGE>
SECTION 2.07. Interest Rate Determination. (a) The Reference
Bank
agrees to furnish to the Agent timely
information for the purpose of determining
each Eurodollar Rate. The Agent shall give
prompt notice to the Borrower and the
Lenders of the applicable interest rate
determined by the Agent for purposes of
Section 2.06(a)(i) or (ii), and the rate,
if any, furnished by the Reference
Bank for the purpose of determining the
interest rate under Section 2.06(a)(ii).
(b) If, with
respect to any Eurodollar Rate Advances, the Required Lenders
notify the Agent that the Eurodollar Rate
for any Interest Period for such
Eurodollar Rate Advances will not
adequately reflect the cost to such Required
Lenders of making, funding or maintaining
their respective Eurodollar Rate
Advances for such Interest Period, the
Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i)
each Eurodollar Rate Advance will
automatically, on the last day of the then
existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii)
the obligation of the Lenders to
make, or to Convert Reimbursement Advances
into, Eurodollar Rate Advances shall
be suspended until the Agent shall notify
the Borrower and the Lenders that the
circumstances causing such suspension no
longer exist.
(c) If the
Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in
accordance with the provisions
contained in the definition of "Interest
Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the
Lenders and such Eurodollar Rate
Advances will automatically, on the last
day of the then existing Interest
Period therefor, Convert into Base Rate
Advances.
(d) On the date
on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any
Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than
$5,000,000, such Eurodollar Rate
Advances shall automatically Convert into
Base Rate Advances.
(e) Upon the
occurrence and during the continuance of any Event of Default,
(i) each Eurodollar Rate Advance will
automatically, on the last day of the then
existing Interest Period therefor, Convert
into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to
Convert Reimbursement Advances into,
Eurodollar Rate Advances shall be
suspended.
(f) If the
Service is not available or a rate does not timely appear on
the
Service and the Reference Bank does not
furnish timely information to the Agent
for determining the Eurodollar Rate for any
Eurodollar Rate Advances:
(i) the Agent shall forthwith notify the Borrower and the Lenders
that
the interest
rate cannot be determined for such Eurodollar Rate Advances,
(ii) with respect to Eurodollar Rate Advances, each such
Eurodollar
Rate Advance
will automatically, on the last day of the then existing
Interest Period
therefor, Convert into a Base Rate Advance (or if such
Advance is then
a Base Rate Advance, will continue as a Base Rate Advance),
and
(iii) the obligation of the Lenders to make Eurodollar Rate
Advances
or to Convert
Reimbursement Advances into Eurodollar Rate Advances shall be
suspended
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until the Agent
shall notify the Borrower and the Lenders that the
circumstances
causing such suspension no longer exist.
SECTION
2.08. Optional Conversion of Reimbursement Advances. The
Borrower may on any Business Day, upon
notice given to the Agent not later than
11:00 A.M. (New York City time) on the
third Business Day prior to the date of
the proposed Conversion and subject to the
provisions of Sections 2.07 and 2.11,
Convert all Reimbursement Advances of one
Type comprising the same Borrowing
into Reimbursement Advances of the other
Type (it being understood that such
Conversion of a Reimbursement Advance or of
its Interest Period does not
constitute a repayment or prepayment of
such Reimbursement Advance); provided,
however, that any Conversion of Eurodollar
Rate Advances into Base Rate Advances
shall be made only on the last day of an
Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate
Advances into Eurodollar Rate
Advances shall be in an amount not less
than the minimum amount specified in
Section 2.02(b) and no Conversion of any
Reimbursement Advances shall result in
more separate Borrowings than permitted
under Section 2.02(b). Each such notice
of a Conversion shall, within the
restrictions specified above, specify (i) the
date of such Conversion, (ii) the
Reimbursement Advances to be Converted, and
(iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the
initial Interest Period for each such
Eurodollar Rate Advance. Each notice of
Conversion shall be irrevocable and binding
on the Borrower.
SECTION 2.09. Prepayments of Reimbursement Advances. (a)
Optional
Prepayment. The Borrower may on any
Business Day, upon notice given to the Agent
not later than 11:00 A.M. (New York City
time), (i) on the same day for Base
Rate Advances and (ii) on the second
Business Day prior to the prepayment in the
case of Eurodollar Rate Advances stating
the proposed date and aggregate
principal amount of the prepayment (and if
such notice is given the Borrower
shall) prepay the outstanding principal
amount of the Reimbursement Advances
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 (x) each partial
prepayment shall be in an aggregate
principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess
thereof and (y) in the event of any such
prepayment of a Eurodollar Rate
Advance, the Borrower shall be obligated to
reimburse the Lenders in respect
thereof pursuant to Section 8.04(c).
(b) Mandatory
Prepayment. The Borrower shall, upon five Business Days'
notice from the Agent given at the request
or with the consent of the Required
Lenders, (i) pay to the Agent the
Collateral Shortfall Amount at such time,
which funds shall be held in the Facility
LC Collateral Account, and (ii) prepay
the Aggregate Outstanding Credit Exposures
(other than the undrawn stated amount
under all Facility LCs outstanding at such
time) plus all interest thereon and
all other amounts payable hereunder or
under the Notes, in the event that any
Person or two or more Persons acting in
concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3
of the Securities and Exchange
Commission under the Securities Exchange
Act of 1934), directly or indirectly,
of Voting Stock of the Borrower (or other
securities convertible into such
Voting Stock) representing 30% or more of
the combined voting power of all
Voting Stock of the Borrower. If at any
time subsequent to the foregoing payment
of the Collateral Shortfall Amount, the
Agent determines that the Collateral
Shortfall Amount at such time is greater
than zero, the Agent may make demand on
the Borrower to pay, and the Borrower will,
forthwith upon such demand and
without any further notice or act, pay to
the Agent the Collateral Shortfall
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<PAGE>
Amount at such time, which funds shall be
deposited in the Facility LC
Collateral Account. The Agent may at any
time or from time to time after funds
are deposited in the Facility LC Collateral
Account, apply such funds to the
payment of the Obligations and any other
amounts as shall from time to time have
become due and payable by the Borrower to
the Lenders or the LC Issuer under the
Loan Documents. Neither the Borrower nor
any Person claiming on behalf of or
through the Borrower shall have any right
to withdraw any of the funds held in
the Facility LC Collateral Account pursuant
to this Section 2.09(b); provided,
however, that after all of the Obligations
have been indefeasibly paid in full
and the aggregate Commitments have been
terminated, any funds remaining in the
Facility LC Collateral Account shall be
returned by the Agent to the Borrower or
paid to whomever may be legally entitled
thereto at such time.
SECTION 2.10. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the
interpretation of any law or
regulation or (ii) the compliance with any
guideline or request from any central
bank or other governmental authority
(whether or not having the force of law),
there shall be any increase in the cost to
any Lender of agreeing to make or
making, funding or maintaining Eurodollar
Rate Advances or participating in any
Facility LC or to the LC Issuer of agreeing
to issue any Facility LC hereunder
(excluding for purposes of this Section
2.10 any such increased costs resulting
from taxes (as to which Section 2.13 shall
govern), then the Borrower shall from
time to time, upon demand by such Lender or
the LC Issuer (with a copy of such
demand to the Agent), pay to the Agent for
the account of such Lender or the LC
Issuer, as applicable, additional amounts
sufficient to compensate such Lender
or the LC Issuer, as applicable, for such
increased cost. A certificate as to
the amount of such increased cost,
submitted to the Borrower and the Agent by
such Lender or the LC Issuer, as
applicable, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any
Lender or the LC Issuer determines that compliance with any law
or regulation or any guideline or request
from any central bank or other
governmental authority (whether or not
having the force of law) affects or would
affect the amount of capital required or
expected to be maintained by such
Lender or the LC Issuer or any corporation
controlling such Lender or the LC
Issuer, as applicable, and that the amount
of such capital is increased by or
based upon the existence of such Lender's
commitment to lend hereunder or to
participate in Facility LCs hereunder and
other commitments of this type or the
LC Issuer's issuance of Facility LCs
hereunder, then, upon demand by such Lender
or the LC Issuer, as applicable, (with a
copy of such demand to the Agent), the
Borrower shall pay to the Agent for the
account of such Lender or the LC Issuer,
as applicable, from time to time as
specified by such Lender or the LC Issuer,
as applicable, additional amounts
sufficient to compensate such Lender or the LC
Issuer, as applicable, or such corporation
in the light of such circumstances,
to the extent that such Lender or the LC
Issuer, as applicable, reasonably
determines such increase in capital to be
allocable to the existence of such
Lender's commitment to lend hereunder or to
participate in Facility LCs
hereunder or the LC Issuer's agreement to
issue Facility LCs hereunder. A
certificate as to such amounts submitted to
the Borrower and the Agent by such
Lender or the LC Issuer, as applicable,
shall be conclusive and binding for all
purposes, absent manifest error.
(c) In the event
that a Lender demands payment from the Borrower for
amounts owing pursuant to subsection (a) or
(b) of this Section 2.10, the
Borrower may, upon payment of such amounts
and subject to the requirements of
Sections 8.04 and 8.07, substitute for such
Lender another financial
institution, which financial institution
shall be an Eligible Assignee and
19
<PAGE>
shall assume the Commitments of such Lender
and purchase the Outstanding Credit
Exposures held by such Lender in accordance
with Section 8.07, provided,
however, that (i) no Default shall have
occurred and be continuing, (ii) the
Borrower shall have satisfied all of its
obligations in connection with the Loan
Documents with respect to such Lender, and
(iii) if such assignee is not a
Lender, (A) such assignee is acceptable to
the Agent and (B) the Borrower shall
have paid the Agent a $3,000 administrative
fee.
SECTION 2.11. Illegality. Notwithstanding any other provision of
this
Agreement, if any Lender shall notify the
Agent that the introduction of or any
change in or in the interpretation of any
law or regulation makes it unlawful,
or any central bank or other governmental
authority asserts that it is unlawful,
for any Lender or its Eurodollar Lending
Office to perform its obligations
hereunder to make Eurodollar Rate Advances
or to fund or maintain Eurodollar
Rate Advances hereunder, (i) each
Eurodollar Rate Advance will automatically,
upon such demand, Convert into a Base Rate
Advance or a Reimbursement Advance
that bears interest at the rate set forth
in Section 2.06(a)(i), as the case may
be, and (ii) the obligation of the Lenders
to make Eurodollar Rate Advances or
to Convert Reimbursement Advances into
Eurodollar Rate Advances shall be
suspended until the Agent shall notify the
Borrower and the Lenders that the
circumstances causing such suspension no
longer exist.
SECTION 2.12. Payments and Computations. (a) The Borrower shall
make
each payment hereunder and under the Notes
not later than 11:00 A.M. (New York
City time) on the day when due in U.S.
dollars to the Agent at the Agent's
Account in same day funds and without set
off, deduction or counterclaim other
than deductions on account of taxes. The
Agent will promptly thereafter cause to
be distributed like funds relating to the
payment of principal or interest,
commitment fees or LC Fees ratably (other
than amounts payable pursuant to
Section 2.10, 2.13 or 8.04(c)) to the
Lenders and the LC Issuer, as applicable,
for the account of their respective
Applicable Lending Offices, and like funds
relating to the payment of any other amount
payable to any Lender or the LC
Issuer to such Lender or the LC Issuer for
the account of its Applicable Lending
Office, in each case to be applied in
accordance with the terms of this
Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of
the information contained therein in the
Register pursuant to Section 8.07(c),
from and after the effective date specified
in such Assignment and Acceptance,
the Agent shall make all payments hereunder
and under the Notes in respect of
the interest assigned thereby to the Lender
assignee thereunder, and the parties
to such Assignment and Acceptance shall
make all appropriate adjustments in such
payments for periods prior to such
effective date directly between themselves.
(b) The Borrower
hereby authorizes each Lender and the LC Issuer, if and to
the extent payment owed to such Lender or
the LC Issuer is not made when due
hereunder or under the Note held by such
Lender or the LC Issuer, to charge from
time to time against any or all of the
Borrower's accounts with such Lender or
the LC Issuer any amount so due.
(c) All
computations of interest based on the Base Rate (other than
such
computations of the Base Rate that are
based on the Federal Funds Rate) shall be
made by the Agent on the basis of a year of
365 or 366 days, as the case may be,
and all computations of interest based on
the Eurodollar Rate or the Federal
Funds Rate and of the commitment fees
and
20
<PAGE>
the LC Fee shall be made by the Agent on
the basis of a year of 360 days, in
each case for the actual number of days
(including the first day but excluding
the last day) occurring in the period for
which such interest, commitment fees
or the LC Fee are payable. Each
determination by the Agent of an interest rate
hereunder shall be conclusive and binding
for all purposes, absent manifest
error.
(d) 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, commitment fee or the LC
Fee, as the case may be; provided, however,
that, if such extension would cause
payment of interest on or principal of
Eurodollar Rate Advances to be made in
the next following calendar month, such
payment shall be made on the next
preceding Business Day.
(e) Unless the
Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the
Lenders or the LC Issuer hereunder
that the Borrower will not make such
payment in full, the Agent may assume that
the Borrower has made such payment in full
to the Agent on such date and the
Agent may, in reliance upon such
assumption, cause to be distributed to each
Lender or the LC Issuer, as applicable, on
such due date an amount equal to the
amount then due such Lender or the LC
Issuer. If and to the extent the Borrower
shall not have so made such payment in full
to the Agent, each Lender or the LC
Issuer, as applicable, shall repay to the
Agent forthwith on demand such amount
distributed to such Lender or the LC Issuer
together with interest thereon, for
each day from the date such amount is
distributed to such Lender or the LC
Issuer until the date such Lender or the LC
Issuer repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes. (a) Subject to the exclusions set forth below
in
this Section 2.13(a) and, if applicable,
compliance with Section 2.13(e), any
and all payments by the Borrower hereunder
or under the Notes shall be made, in
accordance with Section 2.12, free and
clear of and without deduction for 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 Lender, the LC Issuer and the
Agent, any and all present or future
taxes, levies, imposts, deductions, charges
or withholdings imposed on its
income, and franchise taxes imposed on it
in lieu of income taxes, (i) by the
jurisdiction under the laws of which such
Lender, the LC Issuer or the Agent (as
the case may be) is organized or any
political subdivision thereof and (ii), in
the case of each Lender and the LC Issuer,
by the jurisdiction of such Lender's
or the LC Issuer's Applicable Lending
Office or any political subdivision
thereof (all such non-excluded taxes,
levies, imposts, deductions, charges,
withholdings and liabilities in respect of
payments hereunder or under the Notes
being hereinafter referred to as "Taxes").
Notwithstanding the above, 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 Lender, the LC Issuer or the
Agent, the Borrower will so deduct and (i)
the sum payable shall be increased as
may be necessary so that after making all
such deductions on account of Taxes
(including deductions on account of Taxes
applicable to additional sums payable
under this Section 2.13) such Lender, the
LC Issuer or the 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
21
<PAGE>
shall pay the full amount deducted to the
relevant taxation authority or other
authority in accordance with applicable
law.
(b) 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 the Notes or from the execution,
delivery or registration of this Agreement
or the Notes (hereinafter referred to
as "Other Taxes").
(c) Without
duplication of the Borrower's payment obligations on account of
Taxes or Other Taxes pursuant to Sections
2.13(a) and (b), the Borrower shall
indemnify each Lender, the LC Issuer and
the Agent for the full amount of Taxes
or Other Taxes (including, without
limitation, any Taxes imposed by any
jurisdiction on amounts payable under this
Section 2.13) imposed on or paid by
such Lender or the Agent (as the case may
be) and any liability (including
penalties, interest and expenses) arising
therefrom or with respect thereto.
This indemnification shall be made within
30 days from the date such Lender, the
LC Issuer or the Agent (as the case may be)
makes written demand therefor.
(d) Within 30
days after the date of any payment of Taxes, the Borrower
shall furnish to the Agent, at its address
referred to in Section 8.02, the
original or a certified copy of a receipt
evidencing payment thereof. In the
case of any payment hereunder or under the
Notes by or on behalf of the Borrower
through an account or branch outside the
United States or by or on behalf of the
Borrower by a payor that is not a United
States person, if the Borrower
determines that no Taxes are payable in
respect thereof, the Borrower shall
furnish, or shall cause such payor to
furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent
stating that such payment is exempt
from Taxes. For purposes of this subsection
(d) and subsection (e), the terms
"United States" and "United States person"
shall have the meanings specified in
Section 7701 of the Internal Revenue
Code.
(e) Each Lender
organized under the laws of a jurisdiction outside the
United States, on or prior to the date of
its execution and delivery of this
Agreement in the case of each Initial
Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes
a Lender in the case of each other
Lender, and from time to time thereafter as
requested in writing by the Borrower
(but only so long as such Lender remains
lawfully able to do so), shall provide
each of the Agent and the Borrower with two
original Internal Revenue Service
Form W-8BEN or W-8ECI, as appropriate, or
any successor or other form prescribed
by the Internal Revenue Service, certifying
that such Lender is exempt from
United States withholding tax on payments
pursuant to this Agreement or the
Notes. If any form or document referred to
in this subsection (e) requires the
disclosure of information, other than
information necessary to compute the tax
payable and information required on the
date hereof by Internal Revenue Service
Form W-8BEN or W-8ECI, that the Lender
reasonably considers to be confidential,
the Lender shall give notice thereof to the
Borrower and shall not be obligated
to include in such form or document such
confidential information; however, such
a Lender will not be entitled to any
payment or indemnification on account of
any Taxes imposed by the United States.
(f)
Notwithstanding any provision to the contrary in this Agreement,
the
Borrower will not be obligated to make
payments on account of or indemnify the
Lenders, the LC Issuer or the Agent for any
present or future taxes, levies,
imposts, deductions, charges or
withholdings,
22
<PAGE>
and all liabilities with respect thereto,
or any present or future stamp or
other documentary taxes or property taxes,
charges or similar levies that are
neither Taxes nor Other Taxes.
(g) For any
period with respect to which a Lender has failed to provide the
Borrower with the appropriate form
described in Section 2.13(e) (other than if
such failure is due to a change in law
occurring subsequent to the date on which
a form originally was required to be
provided, or if such form otherwise is not
required under the first sentence of
subsection (e) above), such Lender shall
not be entitled to indemnification under
Section 2.13(a) or (c) with respect to
Taxes imposed by the United States by
reason of such failure; provided, however,
that should a Lender become subject to
Taxes because of its failure to deliver a
form required hereunder, the Borrower shall
take such steps as the Lender shall
reasonably request to assist the Lender to
recover such Taxes.
(h) In the event
that a Lender demands payment from the Borrower for
amounts owing pursuant to subsection (a) or
(b) of this Section 2.13, the
Borrower may, upon payment of such amounts
and subject to the requirements of
Sections 8.04 and 8.07, substitute for such
Lender another financial
institution, which financial institution
shall be an Eligible Assignee and shall
assume the Commitments of such Lender and
purchase the Outstanding Credit
Exposures held by such Lender in accordance
with Section 8.07, provided,
however, that (i) no Default shall have
occurred and be continuing, (ii) the
Borrower shall have satisfied all of its
obligations in connection with the Loan
Documents with respect to such Lender, and
(iii) if such assignee is not a
Lender, (A) such assignee is acceptable to
the Agent and (B) the Borrower shall
have paid the Agent a $3,000 administrative
fee.
(i)
Notwithstanding any provision to the contrary in this Agreement, in
the
event that a Lender that is not an Initial
Lender and who purchased its interest
in this Agreement without the consent of
the Borrower pursuant to Section
8.07(a), seeks (i) payment of additional
amounts pursuant to Section 2.13(a),
(ii) payment of Other Taxes pursuant to
Section 2.13(b), or (iii)
indemnification for Taxes or Other Taxes
pursuant to Section 2.13(c), the amount
of any such payment or indemnification will
be no greater than what it would
have been had the Initial Lender not
transferred, assigned or sold its interest
in this Agreement.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain
any
payment (whether voluntary, involuntary,
through the exercise of any right of
set-off, or otherwise) on account of the
Outstanding Credit Exposures owing to
it (other than pursuant to Section 2.10,
2.13 or 8.04(c)) in excess of its
ratable share of payments on account of the
Aggregate Outstanding Credit
Exposures obtained by all of the Lenders,
such Lender shall forthwith purchase
from the other Lenders such participations
in the Aggregate Outstanding Credit
Exposures owing to them as shall be
necessary to cause such purchasing Lender to
share the excess payment ratably with each
of them; provided, however, that if
all or any portion of such excess payment
is thereafter recovered from such
purchasing Lender, such purchase from each
Lender shall be rescinded and such
Lender shall repay to the purchasing Lender
the purchase price to the extent of
such recovery together with an amount equal
to such Lender's ratable share
(according to the proportion of (i) the
amount of such Lender's required
repayment to (ii) the total amount so
recovered from the purchasing Lender) of
any interest or other amount paid or
payable by the purchasing Lender in respect
of the total amount so recovered. The
23
<PAGE>
Borrower agrees that any Lender so
purchasing a participation from another
Lender pursuant to this Section 2.14 may,
to the fullest extent permitted by
law, exercise all its rights of payment
(including the right of set-off) with
respect to such participation as fully as
if such Lender were the direct
creditor of the Borrower in the amount of
such participation.
SECTION 2.15. Use of Proceeds. The proceeds of the
Reimbursement
Advances shall be available (and the
Borrower agrees that it shall use such
proceeds) solely to satisfy only
Reimbursement Obligations as contemplated in
Section 2.01; and Facility LCs shall be
issued hereunder (and the Borrower
agrees that it shall use such Facility LCs)
solely for general corporate
purposes of the Borrower and its
Subsidiaries.
SECTION 2.16. Facility LCs. (a) Issuance. The LC Issuer hereby
agrees,
on the terms and conditions set forth in
this Agreement, to issue standby
letters of credit for the account of the
Borrower and for the benefit of the
Borrower or any Subsidiary of the Borrower
(each, a "Facility LC") and to renew,
extend, increase, decrease or otherwise
modify each Facility LC ("Modify", and
each such action a "Modification"), from
time to time from and including the
date of this Agreement and prior to the
Commitment Termination Date upon the
request of the Borrower; provided that
immediately after each such Facility LC
is issued or Modified, the Aggregate
Outstanding Credit Exposures shall not
exceed the aggregate of all the
Commitments. No Facility LC shall have an expiry
date later than the earlier of (x) the
Commitment Termination Date and (y) one
year after its issuance; provided that any
Facility LC with a one-year term may
provide for the renewal thereof for
additional one-year periods (which shall in
no event extend beyond the date referenced
in clause (x) above). In addition, no
Facility LC shall provide that the stated
amount of such Facility LC may, by its
terms or by the terms of any Facility LC
Application, be automatically increased
by an amount in excess of the stated amount
of such Facility LC as of the
original issuance date thereof.
(b)
Participations. Upon the issuance or Modification by the LC Issuer
of a
Facility LC in accordance with this Section
2.16, the LC Issuer shall be deemed,
without further action by any party hereto,
to have unconditionally and
irrevocably sold to each Lender, and each
Lender shall be deemed, without
further action by any party hereto, to have
unconditionally and irrevocably
purchased from the LC Issuer, a
participation in such Facility LC (and each
Modification thereof) and the related LC
Obligations in proportion to its Pro
Rata Share.
(c) Notice.
Subject to Section 2.16(a), the Borrower shall give the LC
Issuer and the Agent notice prior to 11:00
a.m. (New York City time) at least
five Business Days prior to the proposed
date of issuance or Modification of
each Facility LC, specifying the
beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such
Facility LC, and describing the
proposed terms of such Facility LC and the
nature of the transactions proposed
to be supported thereby. Upon receipt of
such notice, the Agent shall promptly
notify each Lender of the contents thereof
and of the amount of such Le
