Exhibit No. 10(b)
REVOLVING CREDIT AGREEMENT
(SHORT-TERM CREDIT FACILITY)
DATED AS OF APRIL 3, 2003
BY AND AMONG
SOUTHERN UNION COMPANY
as the Borrower
AND
THE BANKS NAMED HEREIN
as the Banks
AND
JPMORGAN CHASE BANK
as the Administrative Agent
AND
BANK ONE, NA (Main Office-Chicago)
as the Syndication Agent
AND
FLEET NATIONAL BANK
as the Documentation Agent
AND
X.X. XXXXXX SECURITIES INC.
as the Sole Book Runner and Lead Arranger
REVOLVING CREDIT AGREEMENT
(SHORT-TERM CREDIT FACILITY)
SOUTHERN UNION COMPANY, a corporation organized under the laws of
Delaware (hereinafter called the "Borrower"), the financial institutions listed
on the signature pages hereof (collectively, the "Banks" and individually, a
"Bank"), and JPMORGAN CHASE BANK, a New York banking corporation formerly known
as The Chase Manhattan Bank ("JPMorgan") in its capacity as administrative agent
(the "Agent") for the Banks hereunder, hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
"Additional Costs" shall mean, with respect to any Rate Period in the
case of any Eurodollar Rate Loan, all costs, losses or payments, as determined
by any Bank in its sole and absolute discretion (which determination shall be
conclusive in the absence of manifest error) that such Bank or its Domestic
Lending Office or its Eurodollar Lending Office does, or would, if such
Eurodollar Rate Loan were funded during such Rate Period by the Domestic Lending
Office or the Eurodollar Lending Office of such Bank, incur, suffer or make by
reason of:
(a) any and all present or future taxes (including, without limitation,
any interest equalization tax or any similar tax on the acquisition of debt
obligations, or any stamp or registration tax or duty or official or sealed
papers tax), levies, imposts or any other charge of any nature whatsoever
imposed by any taxing authority on or with regard to any aspect of the
transactions contemplated by this Agreement, except such taxes as may be
measured by the overall net income of such Bank or its Domestic Lending Office
or its Eurodollar Lending Office and imposed by the jurisdiction, or any
political subdivision or taxing authority thereof, in which such Bank's Domestic
Lending Office or its Eurodollar Lending Office is located; and
(b) any increase in the cost to such Bank of agreeing to make or
making, funding or maintaining any Eurodollar Rate Loan because of or arising
from (i) the introduction of, or any change (other than any change by way of
imposition or increase of reserve requirements, in the case of any Eurodollar
Rate Loan, included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation or administration of, any law or regulation or (ii) the
compliance with any request from any central bank or other governmental
authority (whether or not having the force of law).
"Additional Equity Offering" shall mean (a) a public offering by the
Borrower of additional capital stock in the Borrower resulting in not less than
$100,000,000.00 of net cash equity proceeds being received by the Borrower and
(b) any additional offering or issuance of capital stock, Equity-Preferred
Securities or any other equity interests in Borrower or Southern Union Panhandle
(to the extent permitted under Section 9.5), so long as all net cash proceeds
from any such offering or issuance of equity described in clauses (a) or (b)
above are applied in the following order: (i) first, to payment of the Bridge
Loan until the same is fully paid; (ii) second, for other working capital needs
of the Borrower or any of its Subsidiaries, including without limitation, the
payment of the AIG Loan (but only to the extent not otherwise required to be
applied to the Term Loan Facility, the Obligations under this Agreement and/or
Debt outstanding under the Long-Term Credit Facility in accordance with the
following clauses); (iii) third, 50% of the net cash proceeds, if any, received
by the Borrower in excess of $125,000,000 in the aggregate from all Additional
Equity Offerings shall be applied to the Term Loan Facility; and (iv) fourth,
50% of the net cash proceeds, if any, received by the Borrower in excess of
$125,000,000 in the aggregate from all Additional Equity Offerings shall be
applied to Obligations under this Agreement and/or Debt outstanding under the
Long-Term Credit Facility.
"Affiliate" shall mean any Person controlling, controlled by or under
common control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise. If any Person shall own, directly
or indirectly, beneficially or of record, twenty percent (20%) or more of the
voting equity (whether outstanding capital stock, partnership interests or
otherwise) of another Person, such Person shall be deemed to be an Affiliate.
"Agent" shall have the meaning set forth in the preamble hereto.
"Agreement" shall mean this Revolving Credit Agreement, as the same may
be amended, modified, supplemented or restated from time to time.
"AIG Entities" shall mean AIG Highstar Capital, L.P., a Delaware
limited partnership, AIG Highstar Funding Corp., a Delaware corporation, and any
other permitted owner and holder of any shares of stock or other equity
interests in Southern Union Panhandle not owned and held by the Borrower or any
of the Borrower's Subsidiaries.
"AIG Loan" shall mean a credit facility to be provided to the Borrower
by one or more of the AIG Entities in an aggregate principal amount not to
exceed $150,000,000.00 for purposes of financing a portion of the acquisition
costs for the Panhandle Eastern Acquisition, said loan to be (a) non-recourse to
the Borrower and its Subsidiaries, (b) secured only by 28% of the issued and
outstanding stock and other equity interests in Southern Union Panhandle, and
(c) subject to other terms and conditions acceptable to the Agent in all
respects.
"Alternate Base Rate" shall mean, for any day, a rate, per annum
(rounds upward to the nearest 1/16 of 1%) equal to: (a) the greatest of (i) the
Prime Rate (computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as the case may be) in effect on such day; or (ii) the
Federal Funds Rate in effect for such day plus one-half of one percent (1/2%)
(computed on the basis of the actual number of days elapsed over a year of 360
days).
"Alternate Base Rate Loan" shall mean any Loan which bears interest at
the Alternate Base Rate.
"Applicable Lending Office" shall mean, with respect to each Bank, such
Bank's (a) Domestic Lending Office in the case of an Alternate Base Rate Loan;
and (b) Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Assignment and Acceptance" shall have the meaning set forth in Section
12.13.
"Available Senior Funded Debt Capacity" for any period shall mean, as
of the first day of that period, the principal amount of additional Senior
Funded Debt that the Borrower would be permitted to issue under the then
existing indentures, note purchase agreements and credit agreements (other than
the Agreement and other revolving credit agreements).
"Bank" shall have the meaning set forth in the preamble hereto and
shall include the Agent, in its individual capacity.
"Borrower" shall have the meaning set forth in the preamble hereto.
"Borrowing Date" shall mean a date upon which the Borrower has
requested a Loan is to be made in a Notice of Borrowing delivered pursuant to
Section 2.1.
"Bridge Loan" shall mean an unsecured short-term credit facility to be
obtained by the Borrower in an aggregate principal amount not to exceed
$115,000,000.00, and having a final stated maturity on or before September 1,
2003, for purposes of financing a portion of the acquisition costs for the
Panhandle Eastern Acquisition, so long as such short-term credit facility is
obtained upon terms and conditions substantially similar to the terms and
conditions set forth in the term sheet attached hereto as Exhibit D
"Business Day" shall mean a day when the Agent is open for business,
provided that, if the applicable Business Day relates to any Eurodollar Rate
Loan, it shall mean a day when the Agent is open for business and banks are open
for business in the London interbank market and in New York City.
"Capital Lease" shall mean any lease of any Property (whether real,
personal, or mixed) which, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of the lessee.
"Capitalized Lease Obligations" shall mean, for the Borrower and its
Subsidiaries, any of their obligations that should, in accordance with GAAP, be
recorded as Capital Leases.
"Cash Interest Expense" shall mean, for any period, total interest
expense to the extent paid in cash (including the interest component of
Capitalized Lease Obligations and capitalized interest and all dividends and
interest paid on or with respect to Borrower's Structured Securities) of the
Borrower and any Subsidiary for such period all as determined in conformity with
GAAP.
"Closing Date" shall mean April 3, 2003.
"Code" shall mean the Internal Revenue Code of 1986, as amended, as now
or hereafter in effect, together with all regulations, rulings and
interpretations thereof or thereunder issued by the Internal Revenue Service.
"Commitment" shall have the meaning set forth in Section 2.1(a) and
"Commitments" shall mean, collectively, the Commitments of all of the Banks.
"Consolidated Net Income" shall mean for any period the consolidated
net income of the Borrower and all Subsidiaries, determined in accordance with
GAAP, for such period.
"Consolidated Net Worth" shall mean, for any period for the Borrower
and all Subsidiaries, (a) the sum of the following consolidated items, all
determined in accordance with GAAP and without duplication: the consolidated
stockholders' equity of all classes of stock (whether common, preferred,
mandatorily convertible preferred or preference) of the Borrower and its
Subsidiaries; the Equity-Preferred Securities; the other preferred securities of
the Borrower's Subsidiaries not constituting Equity-Preferred Securities; and
the minority interests in the Borrower's Subsidiaries, less (b) the sum of the
following consolidated items, without duplication: the book amount of any
deferred charges (including, but not limited to, unamortized debt discount and
expenses, organization expenses, experimental and development expenses, but
excluding prepaid expenses) that are not permitted to be recovered by the
Borrower or its applicable Subsidiaries under rates permitted under rate
tariffs, plus (c) the sum of all amounts contributed or paid by the Borrower to
the Rabbi Trusts for purposes of funding the same, but only to the extent such
contributions and payments are required to be deducted from the consolidated
stockholders' equity of the Borrower and its Subsidiaries in accordance with
GAAP.
"Consolidated Total Capitalization" shall mean at any time the sum of:
(a) Consolidated Net Worth at such time; plus (b) the principal amount of
outstanding Debt (other than (i) the Debt outstanding under the AIG Loan and
(ii) to the extent included in Debt of the Borrower and its Subsidiaries,
Equity-Preferred Securities not to exceed 10% of Consolidated Total
Capitalization [calculated for purposes of this clause without reference to any
Equity-Preferred Securities]) of the Borrower and its Subsidiaries.
"Consolidated Total Indebtedness" shall mean all Debt of the Borrower
and all Subsidiaries including any current maturities thereof, plus, without
duplication, all amounts outstanding under Standby Letters of Credit and,
without duplication, all Facility Letter of Credit Obligations, less, without
duplication, (i) all Debt of the Borrower outstanding under the AIG Loan and
(ii) to the extent included in Debt of the Borrower and its Subsidiaries,
Equity-Preferred Securities not to exceed 10% of Consolidated Total
Capitalization (calculated for purposes of this clause without reference to any
Equity-Preferred Securities).
"Debt" means (without duplication), for any Person indebtedness for
money borrowed determined in accordance with GAAP but in any event including,
(a) indebtedness of such Person for borrowed money or arising out of any
extension of credit to or for the account of such Person (including, without
limitation, extensions of credit in the form of reimbursement or payment
obligations of such Person relating to letters of credit issued for the account
of such Person) or for the deferred purchase price of property or services,
except indebtedness which is owing to trade creditors in the ordinary course of
business and which is due within thirty (30) days after the original invoice
date; (b) indebtedness of the kind described in clause (a) of this definition
which is secured by (or for which the holder of such Debt has any existing
right, contingent or otherwise, to be secured by) any Lien upon or in Property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness or obligations; (c) Capitalized Lease Obligations of such
Person; (d) obligations under direct or indirect Guaranties other than
Guaranties issued by the Borrower covering obligations of the Southern Union
Trusts under the Structured Securities. Whenever the definition of Debt is being
used herein in order to compute a financial ratio or covenant applicable to the
consolidated business of the Borrower and its Subsidiaries, Debt which is
already included in such computation by virtue of the fact that it is owed by a
Subsidiary of the Borrower will not also be added by virtue of the fact that the
Borrower has executed a guaranty with respect to such Debt that would otherwise
require such guaranteed indebtedness to be considered Debt hereunder. Nothing
contained in the foregoing sentence is intended to limit the other provisions of
this Agreement which contain limitations on the amount and types of Debt which
may be incurred by the Borrower or its Subsidiaries.
"Debtor Laws" shall mean all applicable liquidation, conservatorship,
bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization,
or similar laws, or general equitable principles from time to time in effect
affecting the rights of creditors generally.
"Default" shall mean any of the events specified in Section 10, whether
or not there has been satisfied any requirement in connection with such event
for the giving of notice, or the lapse of time, or the happening of any further
condition, event or act.
"Dollars" and "$" shall mean lawful currency of the United States of
America.
"Domestic Lending Office" shall mean, with respect to each Bank, the
office of such Bank located at its "Address for Notices" set forth below the
name of such Bank on the signature pages hereof or such other office of such
Bank as such Bank may from time to time specify to the Borrower and the Agent.
"EBDIT" shall mean for any period the sum of (a) consolidated net
earnings for the Borrower and its Subsidiaries (excluding for all purposes
hereof all extraordinary items), plus (b) each of the following to the extent
actually deducted in deriving such net earnings: (i) depreciation and
amortization expense; (ii) interest expense; (iii) federal and state income
taxes; and (iv) dividends charged against income on or with respect to
Structured Securities, in each case before adjustment for extraordinary items,
as shown in the financial statements of Borrower and its Subsidiaries referred
to in Section 6.2 hereof (excluding for all purposes hereof all extraordinary
items), and determined in accordance with GAAP, and (c) plus (or minus, if
applicable) the net amount of non-cash deductions from (or additions to, if
applicable) such net earnings for such period attributable to fluctuations in
the market price(s) of securities which the Borrower is obligated to purchase in
future periods under any of the Rabbi Trusts, but only to the extent that such
deductions (or additions, if applicable) are required to be taken in accordance
with GAAP.
"Eligible Assignee" shall mean: (i) any Bank, or any Affiliate of any
Bank, or any institution 100% of the voting stock of which is directly, or
indirectly owned by such Bank or by the immediate or remote parent of such Bank;
or (ii) a commercial bank, a foreign branch of a United States commercial bank,
a domestic branch of a foreign commercial bank or other financial institution
having in each case assets in excess of $1,000,000,000.00.
"Environmental Law" shall mean (a) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C.A. ss. 9601 et seq.), as
amended from time to time, and any and all rules and regulations issued or
promulgated thereunder ("CERCLA"); (b) the Resource Conservation and Recovery
Act (as amended by the Hazardous and Solid Waste Amendment of 1984, 42 U.S.C.A.
ss. 6901 et seq.), as amended from time to time, and any and all rules and
regulations promulgated thereunder ("RCRA"); (c) the Clean Air Act, 42 U.S.C.A.
ss. 7401 et seq., as amended from time to time, and any and all rules and
regulations promulgated thereunder; (d) the Clean Water Act of 1977, 33 X.X.XX
ss. 1251 et seq., as amended from time to time, and any and all rules and
regulations promulgated thereunder; (e) the Toxic Substances Control Act, 15
U.S.C.A. ss. 2601 et seq., as amended from time to time, and any and all rules
and regulations promulgated thereunder; or (f) any other federal or state law,
statute, rule, or emulation enacted in connection with or relating to the
protection or regulation of the environment (including, without limitation,
those laws, statutes, rules, and regulations regulating the disposal, removal,
production, storing, refining, handling, transferring, processing, or
transporting of Hazardous Materials) and any rules and regulations issued or
promulgated in connection with any of the foregoing by any governmental
authority, and "Environmental Laws" shall mean each of the foregoing.
"EPA" shall mean the Environmental Protection Agency, or any successor
organization.
"Equity-Preferred Securities" means (i) Debt, preferred equity or any
other securities that are mandatorily convertible by the issuer thereof at a
date certain, without cash payment by the issuer, into common shares of stock of
the Borrower or (ii) any other securities (A) that are issued by the Borrower or
any Subsidiary, (B) that are not subject to mandatory redemption at any time,
directly or indirectly, (C) that are perpetual or mature not less than 30 years
from the date of issuance, (D) the Debt component, if any, issued in connection
therewith, including any guaranty, is subordinate in right of payment to all
other unsecured and unsubordinated Debt of the issuer of such Debt component
(including any such guaranty, if applicable), and (E) the terms of which permit
the issuer thereof to defer at any time, without any additional payment or
premium, the payment of any and all interest and/or distributions thereon, as
applicable, to a date occurring after the Maturity Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and all rules, regulations, rulings and
interpretations thereof issued by the Internal Revenue Service or the Department
of Labor thereunder.
"Eurocurrency Liabilities" shall have 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" shall mean, with respect to each Bank, the
office of such Bank located at its "Address for Notices" set forth below the
name of such Bank on the signature pages hereof, or such other office of such
Bank as such Bank may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" shall mean with respect to the applicable Rate Period
in effect for each Eurodollar Rate Loan, the sum of (a) the quotient obtained by
dividing (i) the annual rate of interest determined by the Agent, at or before
11:00 a.m. Houston time (or as soon thereafter as practicable), on the second
Business Day prior to the first day of such Rate Period, to be the annual rate
of interest at which deposits of Dollars are offered to the Agent by prime banks
in whatever Eurodollar interbank market may be selected by the Agent in its sole
discretion, acting in good faith, at the time of determination and in accordance
with then existing practice in such market for delivery on the first day of such
Rate Period in immediately available funds and having a maturity equal to such
Rate Period in an amount substantially equal to the amount of such Eurodollar
Rate Loan by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Rate Period, plus (b) an additional percentage per annum
changing with the rating of the Borrower's unsecured, non-credit enhanced Senior
Funded Debt and determined in accordance with the following grid:
================================================================== ===================
Additional
Rating of the Borrower's unsecured, non-credit enhanced Senior Percentage Per
Funded Debt Annum
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Equal to or greater than A3 by Xxxxx'x Investor Service, Inc.
and equal to or greater than A- by Standard and Poor's Ratings
Group 0.775%
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Baa1 by Xxxxx'x Investor Service, Inc. or BBB+ by Standard and
--
Poor's Ratings Group 0.875%
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Baa2 by Xxxxx'x Investor Service, Inc. or BBB by Standard and
--
Poor's Ratings Group 1.000%
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Baa3 by Xxxxx'x Investor Service, Inc. or BBB- by Standard and
--
Poor's Ratings Group 1.250%
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Equal to or less than Ba1 by Xxxxx'x Investor Service, Inc. and
---
equal to or less than BB+ by Standard and Poor's Ratings Group 1.750%
================================================================== ===================
In the event that Borrower withdraws from having its unsecured, non-credit
enhanced Senior Funded Debt being rated by Xxxxx'x Investor Service, Inc. or
Standard and Poor's Ratings Group, so that one or both of such ratings services
fails to rate the Borrower's unsecured, non-credit enhanced Senior Funded Debt,
the component of pricing from the grid set forth above for purposes of
determining the applicable Eurodollar Rate for all Rate Periods commencing
thereafter shall be 1.750% until such time as Borrower subsequently causes its
unsecured, non-credit enhanced Senior Funded Debt to be rated by both of said
ratings services.
"Eurodollar Rate Loan" shall mean any Loan that bears interest at the
Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" of the Agent for any Rate Period for
any Eurodollar Rate Loan shall mean the reserve percentage applicable during
such Rate Period (or if more than one such percentages shall be so applicable,
the daily average of such percentages for those days in such Rate Period during
which any such percentage shall be so applicable) under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental, or other marginal reserve requirement)
for member banks of the Federal Reserve System with deposits exceeding
$1,000,000,000 with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Rate Period.
"Event of Default" shall mean any of the events specified in Section 10,
provided that there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act.
"Exchange Company" shall mean Southern Union Exchange Company, a
Delaware corporation and/or any other entity created and owned by Chicago
Deferred Exchange Corporation that the Borrower hereafter enters into a
"qualified exchange accommodation agreement" with for purposes of facilitating
the Panhandle Eastern Acquisition.
"Expiration Date" shall mean the last day of a Rate Period.
"Facility Letter(s) of Credit" shall mean, in the singular form, any
Standby Letter of Credit issued for the account of the Borrower under the
Long-Term Credit Facility and, in the plural form, all such Standby Letters of
Credit issued for the account of the Borrower.
"Facility Letter of Credit Obligations" shall mean, at any particular
time, the sum of (a) the Reimbursement Obligations, plus (b) the aggregate
undrawn face amount of all outstanding Facility Letters of Credit, in each case
as determined by the Agent.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates (rounded to the nearest 1/100 of 1%) on overnight federal fund
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from Xxxxxx Prebon and Xxxxxx Xxx Xxxxxx or two other federal funds
brokers of recognized standing selected by the Agent.
"Funded Debt" means all Debt of a Person which matures more than one
year from the date of creation or matures within one year from such date but is
renewable or extendible, at the option of such Person, by its terms or by the
terms of any instrument or agreement relating thereto, to a date more than one
year from such date or arises under a revolving credit or similar agreement
which obligates Banks to extend credit during a period of more than one year
from such date, including, without limitation, all amounts of any Funded Debt
required to be paid or prepaid within one year from the date of determination of
the existence of any such Funded Debt.
"GAAP" shall mean generally accepted accounting principles, applicable
to the circumstances as of the date of determination, applied consistently with
such principles as applied in the preparation of the Borrowers audited financial
statements referred to in Section 6.2.
"General Intangibles" shall mean all of the Borrower's contract rights
now existing or hereafter acquired, arising or created under contracts or
arrangements for the purchase, sale, storage or transportation of gas or other
Inventory.
"Governmental Authority" shall mean any (domestic or foreign) federal,
state, county, municipal, parish, provincial, or other government, or any
department, commission, board, court, agency (including, without limitation, the
EPA), or any other instrumentality of any of them or any other political
subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory, or administrative functions of, or pertaining to, government,
including, without limitation, any arbitration panel, any court, or any
commission.
"Governmental Requirement" means any Order, Permit, law, statute
(including, without limitation, any Environmental Protection Statute), code,
ordinance, rule, regulation, certificate, or other direction or requirement of
any Governmental Authority.
"Guaranty" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Debt of another Person, including, without limitation, by means of an agreement
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or to maintain financial covenants, or to assure the payment of such
Debt by an agreement to make payments in respect of goods or services regardless
of whether delivered or to purchase or acquire the Debt of another, or
otherwise, provided that the term "Guaranty" shall not include endorsements for
deposit or collection in the ordinary course of business.
"Hazardous Materials" shall mean any substance which, pursuant to any
Environmental Laws, requires special handling in its collection, use, storage,
treatment or disposal, including but not limited to any of the following: (a)
any "hazardous waste" as defined by RCRA; (b) any "hazardous substance" as
defined by CERCLA; (c) asbestos; (d) polychlorinated biphenyls; (e) any
flammables, explosives or radioactive materials; and (f) any substance, the
presence of which on any of the Borrower's or any Subsidiary's properties is
prohibited by any Governmental Authority.
"Highest Lawful Rate" shall mean, 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 the
Notes or on other amounts, if any, due to such Bank pursuant to this Agreement,
under laws applicable to such Bank which are presently in effect, or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Indemnified Parties" shall have the meaning set forth in Section
12.16.
"Interest Payment Date" shall mean (a) as to any Eurodollar Rate Loan
in which the Rate Period with respect thereto is not greater than three (3)
months, the date on which such Rate Period ends; (b) as to any Eurodollar Rate
Loan in which the Rate Period with respect thereto is greater than three (3)
months, the date on which the third month of such Rate Period ends, and the date
on which each such Rate Period ends; (c) as to any Alternate Base Rate Loan in
which the Rate Period with respect thereto is not greater than ninety (90) days,
the date on which such Rate Period ends; (d) as to any Alternate Base Rate Loan
in which the Rate Period with respect thereto is greater than ninety (90) days,
the ninetieth (90th) day of such Rate Period, and the date on which each such
Rate Period ends; and (e) as to all Loans, such time as the principal of and
interest on the Notes shall have been paid in full.
"Inventory" means, with respect to Borrower or any Subsidiary, all of
such Person's now owned or hereafter acquired or created inventory in all of its
forms and of every nature, wherever located, whether acquired by purchase,
merger, or otherwise, and all raw materials, work in process therefor and
finished goods thereof, and all supplies, materials, and products of every
nature and description used, usable, or consumed in connection with the
manufacture, packing, shipping, advertising, selling, leasing, furnishing, or
production of such goods, and shall include, in any event, all "inventory"
(within the meaning of such term in the Uniform Commercial Code in effect in any
applicable jurisdiction), whether in mass or joint, or other interest or right
of any kind in goods which are returned to, repossessed by, or stopped in
transit by such Person, and all accessions to any of the foregoing and all
products of any of the foregoing.
"Investment" of any Person means any investment so classified under
GAAP, and, whether or not so classified, includes (a) any direct or indirect
loan advance made by it to any other Person; (b) any direct or indirect Guaranty
for the benefit of such Person; provided, however, that for purposes of
determining Investments of Borrower hereunder, the existing Guaranty by Borrower
of certain tax increment financing extended by The Fidelity Deposit and Discount
Bank to The Redevelopment Authority of the County of Lackawanna shall be deemed
to not be an Investment; (c) any capital contribution to any other Person; and
(d) any ownership or similar interest in any other Person; and the amount of any
Investment shall be the original principal or capital amount thereof (plus any
subsequent principal or capital amount) minus all cash returns of principal or
capital thereof.
"Letter(s) of Credit" shall mean, in the singular form, any letter of
credit issued by any Person for the account of the Borrower and, in the plural
form, all such letters of credit issued by any Person for the account of the
Borrower.
"Lien" shall mean any mortgage, deed of trust, pledge, security
interest, encumbrance, lien (including without limitation, any such interest
arising under any Environmental Law), or similar charge of any kind (including
without limitation, any agreement to give any of the foregoing, any conditional
sale or other title retention agreement or any lease in the nature thereof), or
the interest of the lessor under any Capital Lease.
"Loan" or "Loans" shall mean a loan or loans, respectively, from the
Banks to the Borrower made under Section 2.1.
"Loan Document" shall mean this Agreement, any Note, or any other
document, agreement or instrument now or hereafter executed and delivered by the
Borrower or any other Person in connection with any of the transactions
contemplated by any of the foregoing, as any of the foregoing may hereafter be
amended, modified, or supplemented, and "Loan Documents" shall mean,
collectively, each of the foregoing.
"Long-Term Credit Facility" means that certain $225,000,000.00 credit
facility provided to the Borrower by the Banks, as evidenced and governed by the
Long-Term Credit Facility Agreement.
"Long-Term Credit Facility Agreement" means that certain Second Amended
and Restated Revolving Credit Agreement dated May 29, 2001, executed by and
among the Borrower, certain financial institutions that are parties thereto, and
the Agent in connection with the Long-Term Credit Facility, as amended pursuant
to the terms of that certain First Amendment of Second Amended and Restated
Revolving Credit Agreement dated effective June 10, 2002 and that certain Second
Amendment of Second Amended and Restated Revolving Credit Agreement of even
effective date herewith, and as the same may hereafter may be further amended,
modified, supplemented, or restated from time to time.
"Long-Term Credit Facility Notes" means the promissory notes of the
Borrower executed and delivered under the Long-Term Credit Facility Agreement.
"Majority Banks" shall mean at any time Banks holding more than 50% of
the unpaid principal amounts outstanding under the Notes, or, if no such amounts
are outstanding, more than 50% of the Pro Rata Percentages.
"Material Adverse Effect" shall mean any material adverse effect on (a)
the financial condition, business, properties, assets, prospects or operations
of the Borrower and its Subsidiaries taken as a whole, or (b) the ability of the
Borrower to perform its obligations under this Agreement, any Note or any other
Loan Document on a timely basis.
"Maturity Date" shall mean April 1, 2004.
"Non-Facility Letter of Credit" shall mean any Letter of Credit which
is not a Facility Letter of Credit.
"Note" or "Notes" shall mean a promissory note or notes, respectively,
of the Borrower, executed and delivered under this Agreement.
"Notice of Borrowing" shall have the meaning set forth in Section
2.1(c).
"Obligations" shall mean all obligations of the Borrower to the Bank
under this Agreement, the Notes and all other Loan Documents to which it is a
party.
"Officer's Certificate" shall mean a certificate signed in the name of
the Borrower or a Subsidiary, as the case may be, by either its President, one
of its Vice Presidents, its Treasurer, its Secretary, or one of its Assistant
Treasurers or Assistant Secretaries.
"Panhandle Eastern" shall mean Panhandle Eastern Pipe Line Company, a
Delaware corporation.
"Panhandle Eastern Acquisition" shall mean the acquisition by the
Exchange Company of 100% of all issued and outstanding stock and other equity
interests, if any, in Panhandle Eastern in accordance with the Panhandle Eastern
Acquisition Agreement, so long as such acquisition is in substantial compliance
with the following specified terms:
(a) immediately after the finalization and consummation of such
acquisition, Panhandle Eastern is a wholly-owned Subsidiary of the
Exchange Company;
(b) the aggregate consideration paid for all stock and other
equity interests in Panhandle Eastern shall not exceed $663,000,000.00
in cash, with the source of said cash purchase price to be a
combination of some or all of the following: (i) $406,000,000.00 of
"like-kind" exchange proceeds previously received from the prior sale
to ONEOK, Inc. of the "Southern Union Gas Company" Texas division and
certain other related assets; (ii) the proceeds of the AIG Loan; (iii)
the proceeds of the Additional Equity Offering, if any; (iv) the
proceeds of the Bridge Loan, if required; and (v) other cash, if any,
held by or available to the Borrower;
(c) the Exchange Company shall make a Section 338(h)(10)
election under the Code as part of the closing of such acquisition, and
as soon as reasonably possible after the finalization and consummation
of such acquisition, the Exchange Company shall cause Panhandle Eastern
and each of its applicable Subsidiaries to convert from "C
corporations" to limited liability companies after receipt of all
requisite approvals and consents from any Governmental Authority,
including without limitation, the Federal Energy Regulatory Commission;
(d) immediately after such conversion of Panhandle Eastern and
each of its applicable Subsidiaries from "C corporations" to limited
liability companies, the Exchange Company shall distribute to the
Borrower 100% of all membership and other equity interests in Panhandle
Eastern, thus causing Panhandle Eastern to be a wholly-owned Subsidiary
of the Borrower;
(e) immediately after such distribution to the Borrower of 100%
of all membership and other equity interests in Panhandle Eastern, the
existing Debt of Panhandle Eastern and its Subsidiaries may cause
Consolidated Total Indebtedness to increase by not more than
$1,170,000,000.00 in the aggregate, provided that neither the Borrower
nor any of its Subsidiaries existing prior to such distribution shall
have, incur or assume any liability with respect to such existing Debt
of Panhandle Eastern and its Subsidiaries;
(f) one (1) Business Day after such distribution by the Exchange
Company to the Borrower of all membership and other equity interests in
Panhandle Eastern, the Borrower shall distribute to Southern Union
Panhandle 100% of all membership and other equity interests in
Panhandle Eastern; and
(g) all requisite approvals and consents from any Governmental
Authority with respect to the above-described acquisitions and
distributions shall have been received by the Borrower in a form
acceptable to the Agent.
"Panhandle Eastern Acquisition Agreement" shall mean that certain Stock
Purchase Agreement dated December 21, 2002, by and between CMS Gas Transmission
Company, as seller, Southern Union Panhandle, as purchaser, and the Borrower and
the AIG Entities, as sponsors, as the same may hereafter be amended, modified,
supplemented, restated or replaced (the form of any such amendment,
modification, etc. to be approved by the Agent, such approval to not be
unreasonably withheld, conditioned or delayed), it being contemplated that such
Stock Purchase Agreement will be assigned by the Borrower to the Exchange
Company to facilitate the Panhandle Eastern Acquisition.
"Panhandle Eastern Refinancing Debt" shall mean any Debt of Panhandle
Eastern and/or any of its Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund, any Debt of Panhandle Eastern and/or any of its Subsidiaries existing
prior to the Exchange Company's acquisition of all stock and other equity
interests in Panhandle Eastern in connection with the Panhandle Eastern
Acquisition, provided, that:
(a) the principal amount of such Panhandle Eastern Refinancing
Debt does not exceed the then outstanding principal amount of the Debt
so extended, refinanced, renewed, replaced, defeased or refunded;
(b) the interest rate or rates to accrue under such Panhandle
Eastern Refinancing Indebtedness do not exceed the lesser of (i) the
interest rate or rates then accruing on the Debt so extended,
refinanced, renewed, replaced, defeased or refunded or (ii) the
prevailing market interest rate or rates which are then applicable to,
and generally available for, Debt which is similar in type, amount,
maturity and other terms to the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded;
(c) the maturities, amortization schedules, covenants,
defaults, remedies, collateral security provisions (or absence thereof)
and other terms of such Panhandle Eastern Refinancing Indebtedness,
including without limitation, any restrictions on the payment by
Panhandle Eastern and/or its applicable Subsidiaries of any dividends
or other shareholder distributions, are in each case the same or more
favorable to Panhandle Eastern and/or its applicable Subsidiaries as
those in the Debt so extended, refinanced, renewed, replaced, defeased
or refunded; and
(d) no Default or Event of Default has occurred and is
continuing or would result from the issuance or origination of such
Panhandle Eastern Refinancing Indebtedness.
"Person" shall mean an individual, partnership, joint venture,
corporation, joint stock company, bank, trust, unincorporated organization
and/or a government or any department or agency thereof.
"Plan" shall mean any plan subject to Title IV of ERISA and maintained
for employees of the Borrower or of any member of a "controlled group of
corporations," as such term is defined in the Code, of which the Borrower or any
Subsidiary is a member, or any such plan to which the Borrower or any Subsidiary
is required to contribute on behalf of its employees.
"Prime Rate" shall mean, on any day, the rate determined by the Agent
as being its prime rate for that day. Without notice to the Borrower or any
other Person, the Prime Rate shall change automatically from time to time as and
in the amount by which said Prime Rate shall fluctuate, with each such change to
be effective as of the date of each change in such Prime Rate. The Prime Rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Agent may make commercial or other loans
at rates of interest at, above or below the Prime Rate.
"Prior Acquisitions" shall mean collectively the Borrower's previous
acquisitions of and mergers with Fall River Gas Company, Providence Energy
Corporation and Valley Resources, Inc.
"Pro-Rata Percentage" shall mean with respect to any Bank, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Bank's Commitment and the denominator of which shall be the aggregate amount of
all the Commitments of the Banks, as adjusted from time to time in accordance
with Section 3.6.
"Property" shall mean 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.
"Qualifying Assets" shall mean (i) equity interests owned one hundred
percent (100%) by the Borrower in entities engaged primarily in one or more of
the Borrower's lines of business described in Section 6.15 (singly, a "Qualified
Entity," collectively, "Qualified Entities"), or productive assets used in one
or more of such lines of business; provided, however, that as to any related
group of such assets acquired for a purchase price of more than Sixty Million
Dollars ($60,000,000.00) (including the amount of any Debt assumed or deemed
incurred in connection with such acquisition), the Majority Banks shall have
delivered to the Borrower their prior written consent; and (ii) equity interests
of less than one hundred percent (100%) owned by the Borrower in one or more
Qualifying Entities, provided that at any one time the amount of the Borrower's
investment in Qualifying Assets described in clause (ii) (measured by the
aggregate purchase price paid therefor, including the aggregate amount of Debt
assumed or deemed incurred by Borrower in connection with such acquisitions)
does not exceed ten percent (10%) of the Consolidated Net Worth of the Borrower
and its Subsidiaries as of the applicable determination date.
"Rabbi Trusts" shall mean those four (4) certain non-qualified deferred
compensation irrevocable trusts existing as of the Closing Date, previously
established by the Borrower for the benefit of its executive employees, so long
as the assets in each of such trusts which have not yet been distributed to one
or more executive employees of the Borrower remain subject to the claims of the
Borrower's general creditors.
"Rate Period" shall mean the period of time for which the Alternate
Base Rate or the Eurodollar Rate shall be in effect as to any Alternate Base
Rate Loan or Eurodollar Rate Loan, as the case may be, commencing with the
Borrowing Date or the Expiration Date of the immediately preceding Rate Period,
as the case may be, applicable to and ending on the effective date of any
reborrowing made as provided in Section 2.2(a) as the Borrower may specify in
the related Notice of Borrowing, subject, however, to the early termination
provisions of the second sentence of Section 2.3(c) relating to any Eurodollar
Rate Loan; provided, however, that any Rate Period that would otherwise end on a
day which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Rate Period shall end on the next preceding Business Day. For any
Alternate Base Rate Loan, the Rate Period shall be 90 days; and for any
Eurodollar Rate Loan the Rate Period may be 15 days, 1, 2, 3, or 6 months, in
each case as specified in the applicable Notice of Borrowing, subject to the
provisions of Sections 2.2 and 2.3.
"Reimbursement Obligations" shall mean the reimbursement or repayment
obligations of the Borrower with respect to Facility Letters of Credit issued
for the account of the Borrower.
"Release" shall mean a "release", as such term is defined in CERCLA.
"Restricted Payment" shall mean the Borrower's declaration or payment
of any dividend on, or purchase or agreement to purchase any of, or making of
any other distribution with respect to, any of its capital stock, except any
such dividend, purchase or distribution consisting solely of capital stock of
the Borrower, and except any dividend or interest paid on or with respect to the
Borrower's Structured Securities to the extent that such amounts are included in
Cash Interest Expense.
"Securities Act" shall have the meaning set forth in Section 12.1.
"Senior Funded Debt" shall mean Funded Debt of the Borrower excluding
Debt that is contractually subordinated in right of payment to any other Debt.
"Senior Notes" means (a) the $475,000,000 of 7.6% Senior Notes of the
Borrower previously placed with investors on or about January 31, 1994, and (b)
the $300,000,000 of 8.25% Senior Notes of the Borrower previously placed with
investors on or about November 3, 1999, as such Senior Notes may be amended,
modified, or supplemented from time to time in accordance with the terms of this
Agreement; and "Senior Note" means each such note individually.
"Significant Property" shall mean at any time property or assets of the
Borrower or any Subsidiary having a book value (net of accumulated depreciation
taken in accordance with GAAP) of at least $5,000,000.00 or that contributed (or
is an integrated physical portion of an assemblage of assets that contributed)
at least 5% of the gross income of the owner thereof for the fiscal quarter most
recently ended.
"Southern Union Panhandle" shall mean Southern Union Panhandle Corp., a
Delaware corporation formed by the Borrower for the purpose of ultimately owning
and holding 100% of all issued and outstanding equity interests in Panhandle
Eastern.
"Southern Union Trust" means any of those certain Delaware business
trusts organized for the sole purpose of purchasing Subordinated Debt Securities
constituting a portion of, and described in the definition of, Structured
Securities and issuing the Preferred Securities and Common Securities also
constituting a portion of, and described in the definition of, Structured
Securities, and having no assets other than the Borrower's Subordinated Debt
Securities, the Guaranties (as described in the definition of Structured
Securities) and the proceeds thereof. Southern Union Trusts shall be considered
to be Subsidiaries for purposes hereof so long as their affairs are consolidated
under GAAP and for federal income tax purposes with the affairs of the Borrower.
"Standby Letter of Credit" shall mean any standby letter of credit
issued to support obligations (contingent or otherwise) of the Borrower.
"Structured Securities" shall mean collectively (a) the Subordinated
Debt Securities, the Guaranties, the Common Securities and the Preferred
Securities of the Southern Union Trusts, all as described and defined in the
Registration Statement on Form S-3 filed by the Borrower with the Securities and
Exchange Commission on March 25, 1995, and (b) subordinated debt securities,
guaranties, common securities and/or preferred securities issued in connection
with the consummation of the Prior Acquisitions in an aggregate face amount of
not more than $150,000,000 upon terms and conditions substantially similar in
all material respects to the terms and conditions described and defined in such
Registration Statement on Form S-3 filed by the Borrower with the Securities and
Exchange Commission on March 25, 1995. For all purposes of this Agreement, the
amounts payable by Southern Union Trusts under the Preferred Securities and
Common Securities (or similar securities provided for under subclause (b) above)
and the amounts payable by the Borrower under the Subordinated Debt Securities
or the Guaranties (or similar securities provided for under subclause (b) above)
shall be treated without duplication, it being recognized that the amounts
payable by Southern Union Trusts are funded with payments made or to be made by
the Borrower to Southern Union Trusts and are also guaranteed by the Borrower
under the Guaranties described in the S-3 mentioned above (or similar guaranties
provided for under subclause (b) above).
"Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations organized under the laws of any state of the United States of
America, Canada, or any province of Canada, which conduct(s) the major portion
of business in the United States of America or Canada and of which not less than
50% of the voting stock of every class (except for directors' qualifying
shares), at the time as of which any determination is being made, is owned by
the Borrower either directly or indirectly through other Subsidiaries.
"Term Loan Facility" shall mean that certain term loan facility
provided to the Borrower in an aggregate amount of $311,086,956.00 under the
terms of that certain Amended and Restated Term Loan Credit Agreement dated July
15, 2002 by and among the Borrower, certain financial institutions that are
parties thereto, and the Agent, as amended pursuant to the terms of that certain
First Amendment of Amended and Restated Revolving Credit Agreement of even
effective date herewith, and as the same may hereafter may be further amended,
modified, supplemented, or restated from time to time.
"Trunkline LNG Holdings" shall mean CMS Trunkline LNG Holdings, LLC, a
Delaware limited liability company.
"Trunkline LNG Holdings Sale" shall mean the sale by Panhandle Eastern
to a third-party that is not an Affiliate of the Borrower or any of the AIG
Entities of all or a portion of the issued and outstanding stock and other
equity interests, if any, in Trunkline LNG Holdings, so long as such sale is
finalized and consummated in substantial compliance with the following specified
terms:
(a) all cash proceeds received by Panhandle Eastern from such
sale, less customary and reasonable transaction fees and the amount of
all taxes payable by the Panhandle Eastern attributable to such sale,
shall by fully distributed by Panhandle Eastern to Southern Union
Panhandle, and in turn by Southern Union Panhandle to the Borrower and
the AIG Entities;
(b) all cash proceeds distributed to the Borrower from such sale
shall be immediately applied against the Borrower's Debt in the
following order: (i) first to the Bridge Loan until the same is fully
paid; (ii) second, 50% of the remaining cash proceeds shall be applied
to the Term Loan Facility; and (iii) the balance, if any, shall be
applied to Obligations under this Agreement and/or Debt outstanding
under the Long-Term Credit Facility; and
(c) all requisite approvals and consents from any Governmental
Authority with respect to such sale shall have been received by
Panhandle Eastern in a form acceptable to the Agent.
"Type" shall mean, with respect to any Loan, any Alternate Base Rate
Loan or any Eurodollar Rate Loan.
2. THE LOANS
2.1 The Loans
(a) Subject to the terms and conditions and relying upon the
representations and warranties of the Borrower herein set forth,
each Bank severally agrees to make Loans to the Borrower on any
one or more Business Days prior to the Maturity Date, up to an
aggregate principal amount of Loans not exceeding at any time
outstanding the amount set opposite such Banks name on the
signature pages hereof (such Bank's "Commitment"). Within such
limits and during such period and subject to the terms and
conditions of this Agreement, the Borrower may borrow, repay and
reborrow hereunder.
(b) The Borrower shall execute and deliver to the Agent for each Bank
to evidence the Loans made by each Bank under such Bank's
Commitment, a Note, which shall be: (i) dated the date of the
Closing Date; (ii) in the principal amount of such Bank's maximum
Commitment; (iii) in substantially the form attached hereto as
Exhibit A, with blanks appropriately filled; (iv) payable to the
order of such Bank on the Maturity Date; and (v) subject to
acceleration upon the occurrence of an Event of Default. Each
Note shall bear interest on the unpaid principal amount thereof
from time to time outstanding at the rate per annum determined as
specified in Sections 2.2(a), 2.2(b), 2.3(b) and 2.3(c), payable
on each Interest Payment Date and at maturity, commencing with
the first Interest Payment Date following the date of each Note.
(c) Each Loan shall be: (i) in the case of any Eurodollar Rate Loan,
in an amount of not less than $1,000,000.00 or an integral
multiple of $1,000,000.00 in excess thereof; or (ii) in the case
of any Alternate Base Rate Loan, in an amount of not less than
$500,000.00 or an integral multiple of $100,000.00 in excess
thereof and, at the option of the Borrower, any borrowing under
this Section 2.1(c) may be comprised of two or more such Loans
bearing different rates of interest. Each such borrowing shall be
made upon prior notice from the Borrower to the Agent in the form
attached hereto as Exhibit B (the "Notice of Borrowing")
delivered to the Agent not later than 11:00 am (Houston time):
(i) on the third Business Day prior to the Borrowing Date, if
such borrowing consists of Eurodollar Rate Loans; and (ii) on the
Borrowing Date, if such borrowing consists of Alternate Base Rate
Loans. Each Notice of Borrowing shall be irrevocable and shall
specify: (i) the amount of the proposed borrowing and of each
Loan comprising a part thereof; (ii) the Borrowing Date; (iii)
the rate of interest that each such Loan shall bear; (iv) the
Rate Period with respect to each such Loan and the Expiration
Date of each such Rate Period; and (v) the demand deposit account
of the Borrower at JPMorgan into which the proceeds of the
borrowing are to be deposited by the Agent. The Borrower may give
the Agent telephonic notice by the required time of any proposed
borrowing under this Section 2.1(c); provided that such
telephonic notice shall be confirmed in writing by delivery to
the Agent promptly (but in no event later than the Borrowing Date
relating to any such borrowing) of a Notice of Borrowing. Neither
the Agent nor any Bank shall incur any liability to the Borrower
in acting upon any telephonic notice referred to above which the
Agent believes in good faith to have been given by the Borrower,
or for otherwise acting in good faith under this Section 2.1(c).
(d) In the case of a proposed borrowing comprised of Eurodollar Rate
Loans, the Agent shall promptly notify each Bank of the
applicable interest rate under Section 2.2. Each Bank shall,
before 11:00 am (Houston time) on the Borrowing Date, make
available for the account of its Applicable Lending Office to the
Agent at the Agent's address set forth in Section 12.4, in same
day funds, its Pro Rata Percentage of such borrowing. After the
Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Section 7, on the Borrowing
Date, the Agent shall make the borrowing available to the
Borrower at its Applicable Lending Office in immediately
available funds. Each Bank shall post on a schedule attached to
its Note(s): (i) the date and principal amount of each Loan made
under such Note; (ii) the rate of interest each such Loan will
bear; and (iii) each payment of principal thereon; provided,
however, that any failure of such Bank so to xxxx such Note shall
not affect the Borrower's obligations thereunder; and provided
further that such Bank's records as to such matters shall be
controlling whether or not such Bank has so marked such Note. Any
deposit to the Borrower's demand deposit account by the Agent or
by JPMorgan (of funds received from the Agent) pursuant to a
request (whether written or oral) believed by the Agent or by
JPMorgan to be an authorized request by the Borrower for a Loan
hereunder shall be deemed to be a Loan hereunder for all purposes
with the same effect as if the Borrower had in fact requested the
Agent to make such Loan.
(e) Unless the Agent shall have received notice from a Bank prior to
the date of any borrowing that such Bank will not make available
to the Agent such Bank's Pro Rata Percentage of such borrowing,
the Agent may assume that such Bank has made such portion
available to the Agent on the date of such borrowing in
accordance with this Section 2.1 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 Bank shall
not have so made such Pro Rata Percentage available to the Agent,
such Bank 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, (i) in the case of the Borrower, at the interest rate
applicable at the time to the Loans comprising such borrowing,
and (ii) in the case of such Bank, at the Federal Funds Rate. If
such Bank shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Bank's Loan as part
of such borrowing for purposes of this Agreement.
(f) 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.
2.2 Interest Rate Determination
(a) Except as specified in Sections 2.3(b) and 2.3(c), the Loans
shall bear interest on the unpaid principal amount thereof from
time to time outstanding, until maturity, at a rate per annum
(calculated based on a year of 360 days in the case of the
Eurodollar Rate or the Alternate Base Rate based on the Federal
Funds Rate and a year of 365 or 366 days, as the case may be, in
the case of the Alternate Base Rate based on the Prime Rate)
equal to the lesser of (A) the rate specified in the Notice of
Borrowing with respect thereto or (B) the Highest Lawful Rate
from the first day to, but not including, the Expiration Date of
the Rate Period then in effect with respect thereto.
(b) Any principal, interest, fees or other amount owing hereunder,
under any Note or under any other Loan Document that is not paid
when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest at a rate per annum equal to the
lesser of (i) two percent (2%) above the Alternate Base Rate in
effect from time to time or (ii) the Highest Lawful Rate.
2.3 Additional Interest Rate Provisions
(a) The respective Note of each Bank may be held by the applicable
Bank for the account of its respective Domestic Lending Office or
its respective Eurodollar Lending Office, and may be transferred
from one to the other from time to time as each Bank may
determine.
(b) If the Borrower shall have chosen the Eurodollar Rate in a Notice
of Borrowing and prior to the Borrowing Date, any Bank in good
faith determines (which determination shall be conclusive) that
(i) deposits in Dollars in the principal amount of such
Eurodollar Rate Loan are not being offered to the Eurodollar
Lending Office of such Bank in the Eurodollar interbank market
selected by such Bank in its sole discretion in good faith or
(ii) adequate and reasonable means do not exist for ascertaining
the chosen Eurodollar Rate in respect of such Eurodollar Rate
Loan or (iii) the Eurodollar Rate for any Rate Period for such
Eurodollar Rate Loan will not adequately reflect the cost to such
Bank of making or maintaining such Eurodollar Rate Loan for such
Rate Period, then such Bank will so notify the Borrower and the
Agent and such Eurodollar Rate shall not become effective as to
such Eurodollar Rate Loan on such Borrowing Date or at any time
thereafter until such time thereafter as the Borrower receives
notice from the Agent that the circumstances giving rise to such
determination no longer apply.
(c) Anything in this Agreement to the contrary notwithstanding, if at
any time any Bank in good faith determines (which determination
shall be conclusive) that the introduction of or any change in
any applicable law, rule or regulation or any change in the
interpretation or administration thereof by any governmental or
other regulatory authority charged with the interpretation or
administration thereof shall make it unlawful for the Bank (or
the Eurodollar Lending Office of such Bank) to maintain or fund
any Eurodollar Rate Loan, such Bank shall give notice thereof to
the Borrower and the Agent. With respect to any Eurodollar Rate
Loan which is outstanding when such Bank so notifies the
Borrower, upon such date as shall be specified in such notice the
Rate Period shall end and the lesser of (i) the Alternate Base
Rate or (ii) the Highest Lawful Rate shall commence to apply in
lieu of the Eurodollar Rate in respect of such Eurodollar Rate
Loan and shall continue to apply unless and until the Borrower
changes the rate as provided in Section 2.2(a). No more than five
(5) Business Days after such specified date, the Borrower shall
pay to such Bank (x) accrued and unpaid interest on such
Eurodollar Rate Loan at the Eurodollar Rate in effect at the time
of such notice to but not including such specified date plus (y)
such amount or amounts (to the extent that such amount or amounts
would not be usurious under applicable law) as may be
necessary to compensate such Bank for any direct or indirect
costs and losses incurred by it (to the extent that such amounts
have not been included in the Additional Costs in calculating
such Eurodollar Rate), but otherwise without penalty. If notice
has been given by such Bank pursuant to the foregoing provisions
of this Section 2.3(c), then, unless and until such Bank notifies
the Borrower that the circumstances giving rise to such notice no
longer apply, such Eurodollar Rate shall not again apply to such
Loan or any other Loan and the obligation of such Bank to
continue any Eurodollar Rate Loan as a Eurodollar Rate Loan shall
be suspended. Any such claim by such Bank for compensation under
clause (y) above shall be accompanied by a certificate setting
forth the computation upon which such claim is based, and such
certificate shall be conclusive and binding for all purposes,
absent manifest error.
(d) THE BORROWER WILL INDEMNIFY EACH BANK AGAINST, AND REIMBURSE EACH
BANK ON DEMAND FOR, ANY LOSS (INCLUDING LOSS OF REASONABLY
ANTICIPATED PROFITS DETERMINED USING REASONABLE ATTRIBUTION AND
ALLOCATION METHODS), OR REASONABLE COST OR EXPENSE INCURRED OR
SUSTAINED BY SUCH BANK (INCLUDING WITHOUT LIMITATION, ANY LOSS OR
EXPENSE INCURRED BY REASON OF THE LIQUIDATION OR REEMPLOYMENT OF
DEPOSITS OR OTHER FUNDS ACQUIRED BY SUCH BANK TO FUND OR MAINTAIN
ANY EURODOLLAR RATE LOAN) AS A RESULT OF (i) ANY ADDITIONAL COSTS
INCURRED BY SUCH BANK; (ii) ANY PAYMENT OR REPAYMENT (WHETHER
AUTHORIZED OR REQUIRED HEREUNDER OR OTHERWISE) OF ALL OR A
PORTION OF ANY LOAN ON A DAY OTHER THAN THE EXPIRATION DATE OF A
RATE PERIOD FOR SUCH LOAN; (iii) ANY PAYMENT OR PREPAYMENT
(WHETHER REQUIRED HEREUNDER OR OTHERWISE) OF ANY LOAN MADE AFTER
THE DELIVERY OF A NOTICE OF BORROWING BUT BEFORE THE APPLICABLE
BORROWING DATE IF SUCH PAYMENT OR PREPAYMENT PREVENTS THE
PROPOSED BORROWING FROM BECOMING FULLY EFFECTIVE; OR (iv) AFTER
RECEIPT BY THE AGENT OF A NOTICE OF BORROWING, THE FAILURE OF ANY
LOAN TO BE MADE OR EFFECTED BY SUCH BANK DUE TO ANY CONDITION
PRECEDENT TO A BORROWING NOT BEING SATISFIED BY THE BORROWER OR
DUE TO ANY OTHER ACTION OR INACTION OF THE BORROWER. ANY BANK
DEMANDING PAYMENT UNDER THIS SECTION 2.3(d) SHALL DELIVER TO THE
BORROWER AND THE AGENT A STATEMENT REASONABLY SETTING FORTH THE
AMOUNT AND MANNER OF DETERMINING SUCH LOSS, COST OR EXPENSE. THE
FACTS SET FORTH IN SUCH STATEMENT SHALL BE CONCLUSIVE AND BINDING
FOR ALL PURPOSES, ABSENT MANIFEST ERROR.
(e) If, after the date of this Agreement, any Bank shall have
determined that the adoption of any applicable law, rule,
guideline, interpretation or regulation regarding capital
adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such
Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder and under similar
lending arrangements to a level below that which such Bank could
have achieved but for such adoption, change or compliance (taking
into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material then
the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction.
(f) A certificate of such Bank setting forth such amount or amounts
as shall be necessary to compensate such Bank as specified in
subparagraph (e) above shall be delivered as soon as practicable
to the Borrower (with a copy thereof to the agent) and to the
extent determined in accordance with subparagraph (e) above shall
be conclusive and binding, absent manifest error. The Borrower
shall pay such Bank the amount shown as due on any such
certificate within fifteen (15) days after such Bank delivers
such certificate. In preparing such certificate, such Bank may
employ such assumptions and allocations (consistently applied
with respect to advances made by such Bank or commitments by such
Bank to make advances) of costs and expenses as it shall in good
xxxxx xxxx reasonable and may use any reasonable averaging and
attribution method (consistently applied with respect to advances
made by such Bank or commitments by such Bank to make advances).
(g) In calculating the Eurodollar Rate and the commitment fee payable
under Section 4.1 hereof, and notwithstanding the provisions set
forth in the definitions of Eurodollar Rate or in the pricing
grid established for the commitment fee in Section 4.1 hereof, in
the event that the ratings for Borrower's unsecured, non-credit
enhanced Senior Funded Debt under Standard & Poor's Ratings Group
and under Xxxxx'x Investor Service, Inc. fall within different
rating categories which are not functional equivalents, the
Eurodollar Rate and the commitment fee payable under Section 4.1
hereof shall be based on the higher of such ratings if there is
only one category difference between the functional equivalents
of such ratings, and if there is a two category difference
between the functional equivalents of such ratings, the component
of pricing from the grid set forth in such definitions or in
Section 4.1 shall be based on the rating category which is then
in the middle of or between the two category ratings which are
then in effect.
2.4 Increase of Commitments
(a) At any time after the Closing Date, the Agent may arrange for an
existing Bank or another bank or financial institution, with the
consent of the Borrower as to any such bank or financial
institution that is not at such time a Bank (which consent shall
not be unreasonably withheld or delayed so long as such bank or
financial institution is an Eligible Assignee) to participate in
a possible increase in the Commitments pursuant to the other
terms and conditions of this Section 2.4;
(b) Any such bank or financial institution that so elects to become a
party to this Agreement and obtain a Commitment shall execute an
agreement (a "New Bank Agreement"), in the form required by the
Agent, with the Borrower and the Agent, whereupon such bank or
financial institution (a "New Bank") shall become a Bank for all
purposes hereunder to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this
Agreement, and the signature pages hereof shall be deemed to add
the name and Commitment of such New Bank, provided that the
Commitment of any such New Bank shall be in an amount not less
than $2,500,000;
(c) If an existing Bank accepts an offer to increase its Commitment
pursuant to this Section 2.4, such Bank shall execute a
commitment increase agreement (a "Commitment Increase
Agreement"), in the form required by the Agent, with the Borrower
and the Agent, whereupon such Bank shall be bound by and entitled
to the benefits of this Agreement with respect to the full amount
of its Commitment as so increased, and the signature pages hereof
shall be deemed to be amended to reflect such increase in the
Commitment of such Bank;
(d) The effectiveness of any New Bank Agreement or Commitment
Increase Agreement shall be contingent upon receipt by the Agent
of such corporate resolutions of the Borrower and legal opinions
of in-house counsel to the Borrower, if any, as the Agent shall
reasonably request with respect thereto;
(e) If any bank or financial institution becomes a New Bank pursuant
to Section 2.4(b) or if any Bank's Commitment is increased
pursuant to Section 2.4(c), additional Loans made or issued on or
after the effectiveness thereof (the "Re-Allocation Date") shall
be made pro rata based on each Bank's (including each New Bank's)
respective Commitment in effect on and after such Re-Allocation
Date (except to the extent that any such pro rata borrowings or
incurring of liability would result in any Bank making an
aggregate principal amount of Loans in excess of its Commitment,
in which case such excess amount will be allocated to, and made
or incurred by, such New Bank and/or Banks with such increased
Commitments to the extent of, and pro rata based on, their
respective Commitments), and continuations of Eurodollar Rate
Loans outstanding on such Re-Allocation Date shall be effected by
repayment of such Eurodollar Rate Loans on the last day of the
Rate Period applicable thereto and the extension of new
Eurodollar Rate Loans pro rata based on the Banks' respective
Commitments in effect on and after such Re-Allocation Date. In
the event that on any such Re-Allocation Date there are Alternate
Base Rate Loans outstanding, the Borrower shall make prepayments
thereof and borrow new Alternate Base Rate Loans so that, after
giving effect thereto, the Alternate Base Rate Loans outstanding
are held pro rata based on the Banks' respective Commitments in
effect on and after such Re-Allocation Date. In the event that on
any such Re-Allocation Date there are Eurodollar Rate Loans
outstanding, such Eurodollar Rate Loans shall remain outstanding
with the respective holders thereof until the expiration of their
respective Rate Periods (unless the Borrower elects to prepay any
thereof in accordance with the applicable provisions of this
Agreement), and interest on and repayments of such Eurodollar
Rate Loans will be paid thereon to the respective Banks holding
such Eurodollar Rate Loans pro rata based on the respective
principal amounts thereof outstanding;
(f) Notwithstanding anything to the contrary in this Section 2.4, (i)
no Bank shall have any obligation to increase its Commitment
under this Section 2.4 unless it agrees in writing to do so in
its sole discretion, (ii) no Bank shall have any right to
decrease the amount of its Commitment as a result of any
requested increase of the Commitments pursuant to this Section
2.4, (iii) the Agent shall have no obligation to arrange, find or
locate any New Bank to participate in any unsubscribed portion of
any increase in the Commitments requested by the Borrower, (iv)
each increase in the Commitments requested by the Borrower shall
not be less than $2,500,000, and (v) after giving effect to any
increase in the Commitments pursuant to this Section 2.4, the sum
of the Commitments shall not exceed $150,000,000; and
(g) The Borrower shall execute and deliver to the Agent (for delivery
by the Agent to each applicable Bank) a new Note payable to each
applicable Bank (including each New Bank) participating in any
increase of the Commitments in the original principal amount of
such Bank's Commitment after giving effect to any such increase
of the Commitments.
3. PAYMENTS AND PREPAYMENTS
3.1 Required Prepayments. The Borrower agrees to make prepayments of the
Loans as follows:
(a) The Borrower agrees that if at any time it or the Agent
determines that the aggregate principal amount of Loans
outstanding exceeds the Commitments, then the Borrower shall make
a prepayment of principal of the Loans in an amount at least
equal to such excess.
(b) Upon the Borrower's reduction or termination of the Commitments
under Section 3.6, the Borrower shall make such prepayments as
are required by the terms of Section 3.6.
(c) Immediately upon the termination of any period of 180 consecutive
calendar days in which the aggregate principal amount outstanding
under the Notes, the Long-Term Credit Facility Notes and the Term
Loan Facility has exceeded the Borrower's Available Senior Funded
Debt Capacity outstanding under the Senior Notes, the Borrower
will prepay the Notes, the Long-Term Credit Facility Notes and/or
the Term Loan Facility by the amount of such excess, together
with all interest accrued on such prepaid amount and such other
amounts that may be required to be paid in consequence of such
prepayment under Section 2.3(d).
(d) All cash proceeds distributed to the Borrower from the Trunkline
LNG Holdings Sale shall be immediately applied against the
Borrower's Debt in the following order: (i) first to the Bridge
Loan until the same is fully paid; (ii) second, 50% of the
remaining cash proceeds shall be applied to the Term Loan
Facility; and (iii) the balance, if any, shall be applied to
Obligations under this Agreement and/or Debt outstanding under
the Long-Term Credit Facility.
(e) All net cash proceeds received by the Borrower from any
Additional Equity Offerings shall be applied in the following
order: (i) first, to payment of the Bridge Loan until the same is
fully paid; (ii) second, for other working capital needs of the
Borrower or any of its Subsidiaries, including without
limitation, the payment of the AIG Loan (but only to the extent
not otherwise required to be applied to the Term Loan Facility,
the Obligations under this Agreement and/or Debt outstanding
under the Long-Term Credit Facility in accordance with the
following clauses); (iii) third, 50% of the net cash proceeds, if
any, received by the Borrower in excess of $125,000,000 in the
aggregate from all Additional Equity Offerings shall be applied
to the Term Loan Facility; and (iv) fourth, 50% of the net cash
proceeds, if any, received by the Borrower in excess of
$125,000,000 in the aggregate from all Additional Equity
Offerings shall be applied to Obligations under this Agreement
and/or Debt outstanding under the Long-Term Credit Facility.
3.2 Repayment of the Loans. Borrower shall repay the principal amount of
each Loan, on the last day of the Rate Period for such Loan, together with all
accrued and unpaid interest thereon as of such date, irrespective of any claim,
set off, defense, or other right which the Borrower may have at any time against
any Bank, the Agent or any other Person.
3.3 Place of Payment or Prepayment. All payments and prepayments made in
accordance with the provisions of this Agreement or of the Notes or of any other
Loan Document in respect of commitment fees or of principal or interest on the
Notes shall be made to the Agent for the account of the Banks at its Domestic
Lending Office, no later than noon, Houston time, in immediately available
funds. Unless the 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 any payment due hereunder 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 Bank on
such due date an amount equal to the amount then due to such Bank. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Bank shall repay to the Agent forthwith on demand such amount distributed
to such Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at the Federal Funds Rate. If and to the extent that the Agent
receives any payment or prepayment from the Borrower and fails to distribute
such payment or prepayment to the Banks ratably on the basis of their respective
Pro Rata Percentage on the day the Agent receives such payment or prepayment,
and such distribution shall not be so made by the Agent in full on the required
day, the Agent shall pay to each Bank such Bank's Pro Rata Percentage thereof
together with interest thereon at the Federal Funds Rate for each day from the
date such amount is paid to the Agent by the Borrower until the date the Agent
pays such amount to such Bank.
3.4 No Prepayment Premium or Penalty. Each prepayment pursuant to Section
3.1 or 3.3 shall be without premium or penalty, subject in the case of
Eurodollar Rate Loans to the provisions of Section 2.3(d).
3.5 Taxes. All payments (whether of principal, interest, reimbursements or
otherwise) under this Agreement or on the Notes shall be made by the Borrower
without set off or counterclaim and shall be made free and clear of and without
deduction for any present or future tax, levy, impost or any other charge, if
any, of any nature whatsoever now or hereafter imposed by any taxing authority.
If the making of such payments is prohibited by law, unless such a tax, levy,
impost or other charge is deducted or withheld therefrom, the Borrower shall pay
to the Banks, on the date of each such payment, such additional amounts as may
be necessary in order that the net amounts received by the Banks after such
deduction or withholding shall equal the amounts which would have been received
if such deduction or withholding were not required.
3.6 Reduction or Termination of Commitments. The Borrower may at any time
or from time to time reduce or terminate the Commitment of each Bank by giving
not less than ten (10) full Business Days' prior written notice to such effect
to the Agent, provided that any partial reduction shall be in the amount of
$1,000,000.00 or an integral multiple thereof. Concurrently with each such
reduction or termination, all amounts in excess of the reduced Commitments shall
be automatically due and payable and it is a condition to the effectiveness of
such reduction that the Borrower shall immediately prepay the entire amount of
such excess together with all accrued interest thereon and such other amounts
that may be required to be paid in consequence of such prepayment under Section
2.3(d). Promptly after the Agent's receipt of such notice of reduction, the
Agent shall notify each Bank of the proposed reduction and such reduction shall
be effective on the date specified in the Borrower's notice with respect to such
reduction and shall reduce the Commitment of each Bank proportionately in
accordance with its Pro Rata Percentage. After each such reduction, the
commitment fee shall be calculated upon the Commitments as so reduced. The
Commitment of each Bank shall automatically terminate on the Maturity Date or in
the event of acceleration of the maturity date of the Notes. Each reduction of
the Commitment hereunder shall be irrevocable.
4. COMMITMENT FEE AND OTHER FEES
4.1 Commitment Fee. The Borrower agrees to pay to the Agent for the account
of each Bank a commitment fee based on a year of 360 days, from the Closing Date
to, but not including, the Maturity Date (or such earlier date as of which all
Commitments shall have terminated), on the daily average unused amount of each
Bank's Commitment, such commitment fee to be payable quarterly in arrears on (a)
the last day of each March, June, September, and December, commencing on June
30, 2003 and (b) the Maturity Date, at a rate per annum changing with the rating
of the Borrower's unsecured, non-credit enhanced Senior Funded Debt, and
determined in accordance with the following grid:
================================================================== ===================
Rating of the Borrower's unsecured, non-credit enhanced Senior Percentage Per
Funded Debt Annum
------------------------------------------------------------------ -------------------
------------------------------------------------------------------ -------------------
Equal to or greater than A3 by Xxxxx'x Investor Service, Inc.
and equal to or greater than A- by Standard and Poor's Ratings
Group 0.105%
------------------------------------------------------------------ -------------------
------------------------------------------------------------------ -------------------
Baa1 by Xxxxx'x Investor Service, Inc. or BBB+ by Standard and
--
Poor's Ratings Group 0.130%
------------------------------------------------------------------ -------------------
------------------------------------------------------------------ -------------------
Baa2 by Xxxxx'x Investor Service, Inc. or BBB by Standard and
--
Poor's Ratings Group 0.150%
------------------------------------------------------------------ -------------------
------------------------------------------------------------------ -------------------
Baa3 by Xxxxx'x Investor Service, Inc. or BBB- by Standard and
--
Poor's Ratings Group 0.175%
------------------------------------------------------------------ -------------------
------------------------------------------------------------------ -------------------
Equal to or less than Ba1 by Xxxxx'x Investor Service, Inc. and
---
equal to or less than BB+ by Standard and Poor's Ratings Group 0.250%
================================================================== ===================
In the event that Borrower withdraws from having its unsecured, non-credit
enhanced Senior Funded Debt being rated by Xxxxx'x Investor Service, Inc. or
Standard and Poor's Ratings Group, so that one or both of such ratings services
fails to rate the Borrower's unsecured, non-credit enhanced Senior Funded Debt,
the component of pricing from the grid set forth above for purposes of
determining the applicable commitment fee for all applicable periods commencing
thereafter shall be 0.250% until such time as Borrower subsequently causes its
unsecured, non-credit enhanced Senior Funded Debt to be rated by both of said
ratings services.
4.2 Fees Not Interest; Nonpayment. The fees described in this Agreement
represent compensation for services rendered and to be rendered separate and
apart from the lending of money or the provision of credit and do not constitute
compensation for the use, detention, or forbearance of money, and the obligation
of the Borrower to pay each fee described herein shall be in addition to, and
not in lieu of, the obligation of the Borrower to pay interest, other fees
described in this Agreement, and expenses otherwise described in this Agreement.
Fees shall be payable when due in Dollars and in immediately available funds.
The commitment fee referred to in Section 4.1 shall be non-refundable, and
shall, to the fullest extent permitted by law, bear interest, if not paid when
due, at a rate per annum equal to the lesser of (a) five percent (5%) above the
Alternate Base Rate as in effect from time to time or (b) the Highest Lawful
Rate.
4.3 Utilization Fee. The Borrower agrees to pay to Agent, for the account
of each Bank, a utilization fee at a rate per annum equal to 0.25%, based on a
year of 360 days, from the Closing Date to, but not including, the Maturity Date
(or such earlier date as of which the Commitments have been terminated), on the
daily average of the aggregate principal amount of the Loans outstanding on
those days when such aggregate principal amount of the Loans outstanding exceeds
thirty-three percent (33%) of the aggregate amount of the Commitments, such
utilization fee to be payable quarterly in arrears on (a) the last day of each
March, June, September, and December, commencing on June 30, 2003, and (b) the
Maturity Date.
5. APPLICATION OF PROCEEDS
5.1 Application of Proceeds. The Borrower agrees that the proceeds of the
Loans shall be used:
(a) to provide working capital and for general corporate
purposes;
(b) to finance the acquisition of Qualifying Assets, which
Qualifying Assets may be acquired on a revolving basis as
long as at any one time the amount of the Borrower's
investment in Qualifying Assets does not exceed the amounts
set forth in clause (i) and clause (ii) of the definition of
Qualifying Assets as applicable; provided, however, that the
prior written consent of the Majority Banks shall be
required for the use of Loan proceeds to finance any portion
of any such acquisition described in clause (i) of the
definition of Qualifying Assets requiring the payment of
more than $60,000,000;
(c) to finance the Borrower's open market acquisition of its own
7.60% Senior Notes due 2024; provided, however, that such
use, together with the use of proceeds of the Long-Term
Credit Facility for such purpose, if any, shall be limited
to an aggregate amount advanced to $40,000,000; and
(d) to finance the Borrower's repurchase of its own common stock
and preferred equity securities; provided, however, that
such use, together with the use of proceeds of the Long-Term
Credit Facility for such purpose, if any, shall be limited
to an aggregate amount advanced to $50,000,000.
6. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
6.1 Organization and Qualification. The Borrower and each Subsidiary: (a)
are corporations duly organized, validly existing, and in good standing under
the laws of their respective states of incorporation; (b) have the corporate or
organizational power to own their respective properties and to carry on their
respective businesses as now conducted; and (c) are duly qualified as foreign
corporations (or, in the case of any Southern Union Trust, trusts) to do
business and are in good standing in every jurisdiction where such qualification
is necessary except when the failure to so qualify would not or does not have a
Material Adverse Effect. The Borrower is a corporation organized under the laws
of Delaware and has the Subsidiaries listed on Schedule 6.1 attached hereto and
hereby made a part hereof for all purposes, and no others, each of which is a
Delaware corporation unless otherwise noted. None of the Subsidiaries listed on
Schedule 6.1 as "Inactive Subsidiaries," conducts or will conduct any business,
and none of such Subsidiaries has any assets other than minimum legal
capitalization.
6.2 Financial Statements. The Borrower has furnished the Banks with (a) the
Borrower's annual audit reports containing the Borrower's consolidated balance
sheets, statements of income and stockholder's equity and a cash flow statements
as at and for the twelve month period ending June 30, 2001, accompanied by the
certificate of Price Waterhouse Coopers and (b) the Borrower's unaudited
financial report as of the fiscal quarter ending December 31, 2001. These
statements are complete and correct and present fairly in accordance with GAAP,
consistently applied throughout the periods involved, the consolidated financial
position of the Borrower and the Subsidiaries and the results of its and their
operations as at the dates and for the periods indicated subject, as to interim
statements only, to changes resulting from customary end-of-year credit
adjustments which in the aggregate will not be material. There has been no
material adverse change in the condition, financial or otherwise, of the
Borrower or any Subsidiary since December 31, 2001.
6.3 Litigation. Except as disclosed on Schedule 6.3 or pursuant to Section
6.16, there is no: (a) action or proceeding pending or, to the knowledge of the
Borrower, threatened against the Borrower or any Subsidiary before any court,
administrative agency or arbitrator which is reasonably expected to have a
Material Adverse Effect; (b) judgment outstanding against the Borrower for the
payment of money; or (c) other outstanding judgment, order or decree affecting
the Borrower or any Subsidiary before or by any administrative or governmental
authority, compliance with or satisfaction of which may reasonably be expected
to have a Material Adverse Effect.
6.4 Default. Neither the Borrower nor any Subsidiary is in default under or
in violation of the provisions of any instrument evidencing any Debt or of any
agreement relating thereto or any judgment, order, law, writ, injunction or
decree of any court or any order, regulation or demand of any administrative or
governmental instrumentality which default or violation might have a Material
Adverse Effect.
6.5 Title to Assets. The Borrower and each Subsidiary have good and
marketable title to their respective assets, subject to no Liens except those
permitted in Section 9.2.
6.6 Payment of Taxes. The Borrower and each Subsidiary have filed all tax
returns required to be filed and have paid all taxes shown on said returns and
all assessments which are due and payable (except such as are being contested in
good faith by appropriate proceedings for which adequate reserves for their
payment have been provided in a manner consistent with the accounting practices
followed by the Borrower as of December 31, 2001). The Borrower is not aware of
any pending investigation by any taxing authority or of any claims by any
governmental authority for any unpaid taxes, except as disclosed on Schedule
6.6.
6.7 Conflicting or Adverse Agreements or Restrictions. Neither the Borrower
nor any Subsidiary is a party to any contract or agreement or subject to any
restriction which would have a Material Adverse Effect. Neither the execution
and delivery of this Agreement or the Notes or any other Loan Document nor the
consummation of the transactions contemplated hereby nor fulfillment of and
compliance with the respective terms, conditions and provisions hereof or of the
Notes or of any instruments required hereby will conflict with or result in a
breach of any of the terms, conditions or provisions of, or constitute a default
under, or result in any violation of, or result in the creation or imposition of
any lien (other than as contemplated or permitted by this Agreement) on any of
the property of the Borrower or any Subsidiary pursuant to (a) the charter or
bylaws applicable to the Borrower or any Subsidiary; (b) any law or any
regulation of any administrative or governmental instrumentality; (c) any order,
writ, injunction or decree of any court; or (d) the terms, conditions or
provisions of any agreement or instrument to which the Borrower or any
Subsidiary is a party or by which it is bound or to which it is subject.
6.8 Authorization, Validity, Etc. The Borrower has the corporate power and
authority to make, execute, deliver and carry out this Agreement and the
transactions contemplated herein, to make the borrowings provided for herein, to
execute and deliver the Notes and to perform its obligations hereunder and under
the Notes and the other Loan Documents to which it is a party and all such
action has been duly authorized by all necessary corporate proceedings on its
part. This Agreement has been duly and validly executed and delivered by the
Borrower and constitutes the valid and legally binding agreement of the Borrower
enforceable in accordance with its terms, except as limited by Debtor Laws; and
the Notes and the other Loan Documents, when duly executed and delivered by the
Borrower pursuant to the provisions hereof, will constitute the valid and
legally binding obligation of the Borrower enforceable in accordance with the
terms thereof and of this Agreement, except as limited by Debtor Laws.
6.9 Investment Company Act Not Applicable. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
6.10 Public Utility Holding Company Act Not Applicable. Neither the
Borrower nor any Subsidiary is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", or an affiliate
of a "subsidiary company" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended.
6.11 Regulations G, T, U and X. No Loan shall be a "purpose credit secured
directly or indirectly by margin stock" within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System ("margin stock"); none of
the proceeds of any Loan will be used to extend credit to others for the purpose
of purchasing or carrying any margin stock, or for any other purpose which would
constitute this transaction a "purpose credit secured directly or indirectly by
margin stock" within the meaning of said Regulation U, as now in effect or as
the same may hereafter be in effect. Neither the Borrower nor any Subsidiary
will take or permit any action which would involve the Banks in a violation of
Regulation G, Regulation T, Regulation U, Regulation X or any other regulation
of the Board of Governors of the Federal Reserve System or a violation of the
Securities Exchange Act of 1934, in each case as now or hereafter in effect.
After applying proceeds of the Loans and the Long-Term Credit Facility used to
acquire the equity interests described in the definition of "Qualifying Assets",
not more than twenty-five percent (25%) of the value (as determined by any
reasonable method) of the assets subject to the negative pledge set forth in
Section 9.2 of the Credit Agreement and the restrictions on disposition of
assets set forth in Section 9.8 of the Credit Agreement is represented by margin
stock.
6.12 ERISA. No Reportable Event (as defined in ss. 4043(b) of ERISA) has
occurred with respect to any Plan. Each Plan complies in all material respects
with a applicable provisions of ERISA, and the Borrower and each Subsidiary have
filed all reports required by ERISA and the Code to be filed with respect to
each Plan. The Borrower has no knowledge of any event which could result in a
liability of the Borrower or any Subsidiary to the Pension Benefit Guaranty
Corporation. The Borrower and each Subsidiary have met all requirements with
respect to funding the Plans imposed by ERISA or the Code. Since the effective
date of Title IV of ERISA, there have not been any, nor are there now existing
any, events or conditions that would permit any Plan to be terminated under
circumstances which would cause the lien provided under ss. 4068 of ERISA to
attach to any property of the Borrower or any Subsidiary. The value of the
Plans' benefits guaranteed under Title IV of ERISA on the date hereof does not
exceed the value of such Plans' assets allocable to such benefits as of the date
of this Agreement and shall not be permitted to do so hereafter.
6.13 No Financing of Certain Security Acquisitions. None of the proceeds of
any Loan will be used to acquire any security in any transaction that is subject
to ss.13 or ss.14 of the Securities Exchange Act of 1934, as amended, except the
equity interests described in subparagraph (ii) of the definition of "Qualifying
Assets".
6.14 Franchises, Co-Licenses, Etc. The Borrower and each Subsidiary own or
have obtained all the material governmental permits, certificates of authority,
leases, patents, trademarks, service marks, trade names, copyrights, franchises
and licenses, and rights with respect thereto, required or necessary (or, in the
sole and independent judgment of the Borrower, prudent) in connection with the
conduct of their respective businesses as presently conducted or as proposed to
be conducted.
6.15 Lines of Business. The nature of the Borrower's lines of business are
predominately the following: (a) the operation of energy distribution and
transportation services, including without limitation, natural gas sales and
transportation and distribution, propane sales and distribution and promotion,
marketing and sale of compressed natural gas and liquified natural gas; (b) the
development and marketing of fuel cell and distributive energy options; (c)
electric marketing/generation; and (d) sales and rentals of appliances utilizing
one or more of the fuel or energy options specified in this Section 6.15.
6.16 Environmental Matters. Except as disclosed in Schedule 6.16, all
facilities and property owned or leased by the Borrower or any Subsidiary have
been and continue to be, owned or leased and operated by the Borrower and each
Subsidiary in material compliance with all Environmental Laws; (i) there has not
been (during the period of the Borrower's, or a Subsidiary's ownership or lease)
any Release of Hazardous Materials at, on or under any property now (or, to the
Borrower's knowledge, previously) owned or leased by the Borrower or any
Subsidiary (A) in quantities that would be required to be reported under any
Environmental Law, (B) that required, or may reasonably be expected to require,
the Borrower to expend funds on remediation or cleanup activities pursuant to
any Environmental Law except for remediation or clean-up activities that would
not be reasonably expected to have a Material Adverse Effect, or (C) that
otherwise, singly or in the aggregate, has, or may reasonably be expected to
have, a Material Adverse Effect; (ii) the Borrower and each Subsidiary have been
issued and are in material compliance with all permits, certificates, approvals,
orders, licenses and other authorizations relating to environmental matters
necessary for their respective businesses; and (iii) there are no
polychlorinated biphenyls (PCB's) or asbestos-containing materials or surface
impoundments in any of the facilities now (or, to the knowledge of the Borrower,
previously) owned or leased by the Borrower or any Subsidiary, except for
asbestos-containing materials of the type and in quantities that, to the
knowledge of the borrower, do not currently require remediation, and if
remediation of such asbestos-containing materials is hereafter required for any
reason, such remediation activities would not reasonably be expected to have a
Material Adverse Effect; (iv) Hazardous Materials have not been generated, used,
treated, recycled, stored or disposed of in any of the facilities or on any of
the property now (or, to the knowledge of the Borrower, previously) owned or
leased by the Borrower or any Subsidiary during the time of the Borrower's or
such Subsidiary's ownership or leased by the Borrower or any Subsidiary during
the time of the Borrower's or such Subsidiary's ownership except in material
compliance with all applicable Environmental Laws; and (v) all underground
storage tanks located on the property now (or, to the knowledge of the Borrower,
previously) owned or leased by the Borrower or any Subsidiary have been (and to
the extent currently owned or leased are) operated in material compliance with
all applicable Environmental Laws.
6.17 No Agreements Prohibiting Pledge of Southern Union Panhandle Stock.
Except for the applicable negative covenants of this Agreement, the Long-Term
Credit Facility Agreement, the Term Loan Facility and the Bridge Loan, the
Borrower is not a party to any contract or other agreement with any Person that
directly or indirectly prohibits the Borrower from granting any Lien against the
stock or other equity interests in Southern Union Panhandle (whether common,
preferred or another class of equity ownership) at any time owned and held by
the Borrower as security for any Debt of the Borrower or any of its
Subsidiaries.
7. CONDITIONS
The obligation of the Banks to make any Loans is subject to the
following conditions:
7.1 Representations True and No Defaults
(a) The representations and warranties contained in Section 6 shall be true
and correct on and as of the particular Borrowing Date as though made on and as
of such date;
(b) The Borrower shall not be in default in the due performance of any
covenant on its part contained in this Agreement;
(c) No material adverse change shall have occurred with respect to the
business, assets, properties or condition (financial or otherwise) of the
Borrower reflected in the quarterly financial statements of the Borrower dated
December 31, 2001 (copies of such unaudited financial statements having been
supplied to the Agent and each Bank); and
(d) No Event of Default or Default shall have occurred and be continuing.
7.2 Governmental Approvals. The Borrower shall have obtained all orders,
approvals or consents of all public regulatory bodies required for the making
and carrying out of this Agreement, the making of the borrowings pursuant
hereto, the issuance of the Notes to evidence such borrowings.
7.3 Compliance With Law. The business and operations of the Borrower and
each Subsidiary as conducted at all times relevant to the transactions
contemplated by this Agreement to and including the close of business on the
particular Borrowing Date shall have been and shall be in compliance in all
material respects with all applicable State and Federal laws, regulations and
orders affecting the Borrower and each Subsidiary and the business and
operations of any of them.
7.4 Notice of Borrowing and Other Documents. On each Borrowing Date, the
Banks shall have received (a) a Notice of Borrowing; and (b) such other
documents and certificates relating to the transactions herein contemplated as
the Banks may reasonably request.
7.5 Payment of Fees and Expenses. The Borrower shall have paid (a) all
expenses of the type described in Section 12.3 through the date of such Loan and
(b) all closing, structuring and other invoiced fees owed as of the Closing Date
to the Agent, any of the Banks and/or X.X. Xxxxxx Securities Inc. by the
Borrower under this Agreement or any other written agreement between the
Borrower and the Agent, the applicable Bank(s) or X.X. Xxxxxx Securities Inc.
The Borrower hereby agrees to fully pay on the Closing Date all of such
expenses, closing, structuring and other fees described in the preceding
sentence that are then owing on the Closing Date, to the extent that Borrower
has been presented an invoice for the same on or before the Closing Date.
7.6 Loan Documents, Opinions and Other Instruments. As of the Closing Date,
the Borrower shall have delivered to the Agent the following: (a) this
Agreement, each of the Notes and all other Loan Documents required by the Agent
and the Banks to be executed and delivered by the Borrower in connection with
this Agreement; (b) a certificate from the Secretary of State of the State of
Delaware as to the continued existence and good standing of the Borrower in the
State of Delaware; (c) a certificate from Secretary of State of the State of
Texas as to the continued qualification of the Borrower to do business in the
State of Texas; (d) a current certificate from the Office of the Comptroller of
the State of Texas as to the good standing of the Borrower in the State of
Texas; (e) a Secretary's Certificate executed by the duly elected Secretary or a
duly elected Assistant Secretary of the Borrower, in a form acceptable to the
Agent, whereby such Secretary or Assistant Secretary certifies that one or more
corporate resolutions adopted by the Board of Directors of the Borrower remain
in full force and effect authorizing the Borrower to secure Loans in accordance
with the terms of this Agreement; and (f) a legal opinion from in-house counsel
for the Borrower, dated as of the Closing Date, addressed to the Agent and the
Lenders and otherwise acceptable in all respects to the Agent in its discretion.
8. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Borrower may
borrow hereunder and until payment in full of the Notes, and its other
obligations under this Agreement and the other Loan Documents the Borrower will:
8.1 Financial Statements and Information. Deliver to the Banks:
(a) as soon as available, and in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the annual audit report
of the Borrower and the Subsidiaries for such fiscal year containing a
balance sheet, statements of income and stockholders equity and a cash flow
statement, all in reasonable detail and certified by Price Waterhouse
Coopers or another independent certified public accountant of recognized
standing satisfactory to the Banks. The Borrower will obtain from such
accountants and deliver to the Banks at the time said financial statements
are delivered the written statement of the accountants that in making the
examination necessary to said certification they have obtained no knowledge
of any Event of Default or Default, or if such accountants shall have
obtained knowledge of any such Event of Default or Default, they shall
state the nature and period of existence thereof in such statement;
provided that such accountants shall not be liable directly or indirectly
to ------------- the Banks for failure to obtain knowledge of any such
Event of Default or Default; and
(b) as soon as available, and in any event within sixty (60) days
after the end of each quarterly accounting period in each fiscal year of
the Borrower (excluding the fourth quarter), an unaudited financial report
of the Borrower and the Subsidiaries as at the end of such quarter and for
the period then ended, containing a balance sheet, statements of income and
stockholders equity and a cash flow statement, all in reasonable detail and
certified by a financial officer of the Borrower to have been prepared in
accordance with GAAP, except as may be explained in such certificate; and
(c) copies of all statements and reports sent to stockholders of the
Borrower or filed with the Securities and Exchange Commission; and
(d) such additional financial or other information as the Banks may
reasonably request including, without limitation, copies of such monthly,
quarterly, and annual reports of gas purchases and sales that the Borrower
is required to deliver to or file with governmental bodies pursuant to
tariffs and/or franchise agreements.
All financial statements specified in clauses (a) and (b) above shall be
furnished in consolidated and consolidating form for the Borrower and all
Subsidiaries with comparative consolidated figures for the corresponding period
in the preceding year. Together with each delivery of financial statements
required by clauses (a) and (b) above, the Borrower will deliver to the Banks
(i) such schedules, computations and other information as may be required to
demonstrate that the Borrower is in compliance with its covenants in Section 9.1
or reflecting any noncompliance therewith as at the applicable date and (ii) an
Officer's Certificate stating that there exists no Event of Default or Default,
or, if any such Event of Default or Default exists, stating the nature thereof,
the period of existence thereof and what action the Borrower has taken or
proposes to take with respect thereto. The Banks are authorized to deliver a
copy of any financial statement delivered to it to any regulatory body having
jurisdiction over them, and to disclose same to any prospective assignees or
participant Lenders.
8.2 Lease and Investment Schedules. Deliver to the Banks:
(a) from time to time and, in any event, with each delivery of annual
financial statements under Section 8.1(a), a current, complete schedule of
all agreements to rent or lease any property (personal, real or mixed, but
not including oil and gas leases) to which the Borrower or any Subsidiary
is a party lessee and which, considered independently or collectively with
other leases with the same lessor, involve an obligation by the Borrower or
a Subsidiary to make payments of at least $250,000.00 in any year, showing
the total amounts payable under each such agreement, the amounts and due
dates of payments thereunder and containing a description of the rented or
leased property, and all other information the Majority Banks may request;
and
(b) with each delivery of annual financial statements under Section
8.1(a) a current complete schedule listing all debt exceeding $200,000.00
in principal amount outstanding and equity owned or held by the Borrower or
any Subsidiary containing all information required by, and in a form
satisfactory to, the Banks, except for such debt or equity of Subsidiaries.
8.3 Books and Records. Maintain, and cause each Subsidiary to maintain,
proper books of record and account in accordance with sound accounting practices
in which true, full and correct entries will be made of all their respective
dealings and business affairs.
8.4 Insurance. Maintain, and cause each Subsidiary to maintain, insurance
with financially sound, responsible and reputable companies in such types and
amounts and against such casualties, risks and contingencies as is customarily
carried by owners of similar businesses and properties, and furnish to the
Banks, together with each delivery of annual financial statements under Section
8.1(a), an Officer's Certificate containing full information as to the insurance
carried.
8.5 Maintenance of Property. Cause its Significant Property and the
Significant Property of each Subsidiary to be maintained, preserved, protected
and kept in good repair, working order and condition so that the business
carried on in connection therewith may be conducted properly and efficiently,
except for normal wear and tear.
8.6 Inspection of Property and Records. Permit any officer, director or
agent of the Agent or any Bank, on written notice and at such Banks expense, to
visit and inspect during normal business hours any of the properties, corporate
books and financial records of the Borrower and each Subsidiary and discuss
their respective affairs and finances with their principal officers, all at such
times as the Agent or any Bank may reasonably request.
8.7 Existence, Laws, Obligations. Maintain, and cause each Subsidiary to
maintain, its corporate existence and franchises, and any license agreements and
tariffs that permit the recovery of a return that the Borrower considers to be
fair (and as to licenses, franchises, and tariffs that are subject to regulatory
determinations of recovery of returns, the Borrower has presented or is
presenting favorable defense thereof); and to comply, and cause each Subsidiary
to comply, with all statutes and governmental regulations noncompliance with
which might have a Material Adverse Effect, and pay, and cause each Subsidiary
to pay, all taxes, assessments, governmental charges, claims for labor,
supplies, rent and other obligations which if unpaid might become a lien against
the property of the Borrower or any Subsidiary except liabilities being
contested in good faith. Notwithstanding the foregoing, the Borrower may
dissolve those certain inactive and minimally capitalized Subsidiaries
designated as such on Schedule 6.1.
8.8 Notice of Certain Matters. Notify the Agent Bank immediately upon
acquiring knowledge of the occurrence of any of the following events: (a) the
institution or threatened institution of any lawsuit or administrative
proceeding affecting the Borrower or any Subsidiary that is not covered by
insurance (less applicable deductible amounts) and which, if determined
adversely to the Borrower or such Subsidiary, could reasonably be expected to
have a Material Adverse Effect; (b) the occurrence of any material adverse
change, or of any event that in the good faith opinion of the Borrower is
likely, to result in a material adverse change, in the assets, liabilities,
financial condition, business or affairs of the Borrower or any Subsidiary; (c)
the occurrence of any Event of Default or any Default; or (d) a change by
Xxxxx'x Investors Service, Inc. or by Standard and Poor's Ratings Group in the
rating of the Borrower's Funded Debt.
8.9 ERISA. At all times:
(a) maintain and keep in full force and effect each Plan;
(b) make contributions to each Plan in a timely manner and in an
amount sufficient to comply with the minimum funding standards requirements
of ERISA;
(c) immediately upon acquiring knowledge of any "reportable event" or
of any "prohibited transaction" (as such terms are defined in the Code ss.
4043) in connection with any Plan, furnish the Banks with a statement
executed by the president or chief financial officer of the Borrower
setting forth the details thereof and the action which the Borrower
proposes to take with respect thereto and, when known, any action taken by
the Internal Revenue Service with respect thereto;
(d) notify the Banks promptly upon receipt by the Borrower or any
Subsidiary of any notice of the institution of any proceeding or other
action which may result in the termination of any Plan and furnish to the
Banks copies of such notice;
(e) acquire and maintain in amounts satisfactory to the Banks from
either the Pension Benefit Guaranty Corporation or authorized private
insurers, when available, the contingent employer liability coverage
insurance required under ERISA;
(f) furnish the Banks with copies of the summary annual report for
each Plan filed with the Internal Revenue Service as the Agent or the Banks
may request; and
(g) furnish the Banks with copies of any request for waiver of the
funding standards or extension of the amortization periods required by ss.
303 and ss. 304 of ERISA or ss. 412 of the Code promptly after the request
is submitted to the Secretary of the Treasury, the Department of Labor or
the Internal Revenue Service, as the case may be.
8.10 Compliance with Environmental Laws. At all times:
(a) use and operate, and cause each Subsidiary to use and operate, all
of their respective facilities and properties in material compliance with
all Environmental Laws; keep, and cause each Subsidiary to keep, all
necessary permits, approvals, orders, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
material compliance therewith; handle, and cause each Subsidiary to handle,
all Hazardous Materials in material compliance with all applicable
Environmental Laws; and dispose, and cause each Subsidiary to dispose, of
all Hazardous Materials generated by the Borrower or any Subsidiary or at
any property owned or leased by them at facilities or with carriers that
maintain valid permits, approvals, certificates, licenses or other
authorizations for such disposal under applicable Environmental Laws;
(b) promptly notify the Agent and provide copies upon receipt of all
written claims, complaints, notices or inquiries relating to the condition
of the facilities and properties of the Borrower and each Subsidiary under,
or their respective compliance with, applicable Environmental Laws wherein
the condition or the noncompliance that is the subject of such claim,
complaint, notice, or inquiry involves, or could reasonably be expected to
involve, liability of or expenditures by the Borrower and its Subsidiaries
of $10,000,000.00 or more; and
(c) provide such information and certifications which the Banks may
reasonably request from time to time to evidence compliance with this
Section 8.10.
8.11 PGA Clauses. The Borrower will use its best efforts to maintain in
force provisions in all of its tariffs and franchise agreements that permit the
Borrower to recover from customers substantially all of the amount by which the
cost of gas purchases exceeds the amount currently billed to customers for the
delivery of such gas (sometimes referred to as PGA clauses).
8.12 Additional Equity Offering. On or before September 1, 2003, the
Borrower agrees to (a) cause the Additional Equity Offering to be consummated
and finalized, and (b) if the Bridge Loan is then outstanding, cause the
proceeds received by the Borrower from such Additional Equity Offering to be
utilized to fully pay the Bridge Loan.
8.13 Bridge Loan Commitments. On or before April 4, 2003, the Borrower
agrees to cause to be delivered to the Agent valid and binding written loan
commitments for the Bridge Loan, accepted by the Borrower, from one or more
lenders in an aggregate amount of not less than $100,000,000.00.
9. NEGATIVE COVENANTS
So long as the Borrower may borrow hereunder and until payment in full
of the Notes, except with the written consent of the Banks:
9.1 Capital Requirements. The Borrower will not:
(a) permit its Consolidated Net Worth at the end of any fiscal quarter
to be less than the sum of (i) $741,887,000, (ii) 40% of Consolidated Net
Income (if positive) for the period commencing on January 1, 2002 and
ending on the date of determination, and treated as a single accounting
period; (iii) the difference between (A) 100% of the net proceeds of any
issuance of capital or preferred stock or any other Equity-Preferred
Securities by the Borrower or any consolidated Subsidiary, including
without limitation, the Additional Equity Offering, received by the
Borrower or such consolidated Subsidiary at any time after January 1, 2002;
and (B) the aggregate amount of all redemption or repurchase payments
hereafter made, if any, by the Borrower and any such consolidated
Subsidiary in connection with the repurchase by the Borrower or any such
consolidated Subsidiary of any of their respective capital or preferred
stock; (iv) without duplication, the difference between (A) 100% of the net
proceeds heretofore and hereafter received by the Borrower and any
consolidated Subsidiary in respect of the issuance by the Borrower or such
consolidated Subsidiary of the Structured Securities, and (B) the aggregate
amount of all redemption payments hereafter made, if any, by the Borrower
and any such consolidated Subsidiary in connection with the redemption of
any of the Structured Securities; and (v) the minority interests in the
Borrower's Subsidiaries; or
(b) permit the ratio of its Consolidated Total Indebtedness to its
Consolidated Total Capitalization to be greater than (i) 0.65 to 1.00 at
the end of any fiscal quarter ending prior to the Exchange Company's
acquisition of all stock and other equity interests in Panhandle Eastern in
connection with the Panhandle Eastern Acquisition; (ii) 0.75 to 1.00 at the
end of any fiscal quarter ending on or after the Exchange Company's
acquisition of all stock and other equity interests in Panhandle Eastern in
connection with the Panhandle Eastern Acquisition, but before the
consummation of either the Additional Equity Offering or the Trunkline LNG
Holdings Sale, (iii) 0.70 to 1.00 at the end of any fiscal quarter ending
on or after the consummation of either the Additional Equity Offering or
the Trunkline LNG Holdings Sale, and (iv) 0.65 to 1.00 at the end of any
fiscal quarter ending on or after the earlier to occur of (A) the
consummation of both the Additional Equity Offering and the Trunkline LNG
Holdings Sale or (B) December 31, 2003; or
(c) acquire, or permit any Subsidiary to acquire, any assets other
than (i) investments permitted under Section 9.4, or (ii) Qualifying
Assets; or
(d) permit the ratio of EBDIT to Cash Interest Expense for the four
fiscal quarters most recently ended (considered as a single accounting
period) at any time to be less than 2.00 to 1.00 at all times; or
(e) permit the aggregate outstanding principal amount of the Notes,
the Long-Term Credit Facility Notes and the Term Loan Facility to exceed
for a period of 180 consecutive days the Borrower's Available Senior Funded
Debt Capacity.
9.2 Mortgages, Liens, Etc. The Borrower will not, and will not permit any
Subsidiary to, create or permit to exist any Lien (including the charge upon
assets purchased under a conditional sales agreement, purchase money mortgage,
security agreement or other title retention agreement) upon any of its
respective assets, whether now owned or hereafter acquired, or assign or
otherwise convey any right to receive income, except:
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings;
(b) other Liens incidental to the conduct of its business or the
ownership of its assets that were not incurred in connection with the
borrowing of money or the obtaining of advances or credit, and that do not
in the aggregate materially detract from the value of such assets or
materially impair the use thereof in the operation of such business;
(c) Liens on assets of a Subsidiary to secure obligations of such
Subsidiary to the Borrower or another Subsidiary; and
(d) Liens on property existing at the time of acquisition thereof by
the Borrower or any Subsidiary, including without limitation, (i) any
property acquired by the Borrower in consummating and finalizing any of the
Prior Acquisitions, (ii) any Liens existing on any property of Panhandle
Eastern or any of its Subsidiaries to secure existing Debt of Panhandle
Eastern or any of its Subsidiaries on the date the Exchange Company
acquires all stock and other equity interests in Panhandle Eastern in
connection with the Panhandle Eastern Acquisition, and (iii) any Liens
against any property of Panhandle Eastern or any of its Subsidiaries to
secure Panhandle Eastern Refinancing Debt (provided such Liens are limited
to property of Panhandle Eastern or any of its Subsidiaries securing the
Debt so extended, refinanced, renewed, replaced, defeased or refunded), or
purchase money Liens placed on an item of real or personal property
purchased by the Borrower or any Subsidiary to secure a portion of the
purchase price of such property, including without limitation, any Liens
against up to 28% of the stock and other equity interests in Southern Union
Panhandle granted by the Borrower as security for the AIG Loan; provided
that no such Lien may encumber or cover any other property of the
Borrower or any Subsidiary.
9.3 Debt. The Borrower will not, and will not permit any Subsidiary to,
incur or permit to exist any Debt, except:
(a) Debt evidenced by the Notes, the Long-Term Credit Facility Notes,
the Facility Letter of Credit Obligations or outstanding under the Term
Loan Facility, the AIG Loan, the Bridge Loan and any Equity-Preferred
Securities (to the extent the same constitutes Debt) not in default, as
well as (i) existing Debt of Panhandle Eastern and/or any of its
Subsidiaries otherwise permitted in the definition of "Panhandle Eastern
Acquisition," (ii) any Panhandle Eastern Refinancing Debt, (iii) any loans
or advances of proceeds of the AIG Loan, the Bridge Loan and/or the
Additional Equity Offering by the Borrower to Southern Union Panhandle for
purposes of financing the Panhandle Eastern Acquisition, (iv) any loans or
advances by the Borrower to Panhandle Eastern and/or any of the Borrower's
other Subsidiaries permitted under Section 9.4(b) and (v) any working
capital credit facility or facilities provided directly to Panhandle
Eastern and/or any of Panhandle Eastern's Subsidiaries by any party other
than the Borrower, so long as the principal amount of all such outstanding
working capital facilities, together with the outstanding principal amount
of any working capital loans or advances by the Borrower to Panhandle
Eastern and/or any of Panhandle Eastern's Subsidiaries, does not exceed
$25,000,000 in the aggregate at any time;
(b) Debt of any Subsidiary to the Borrower or any other Subsidiary;
(c) Debt existing as of December 31, 2002 as reflected on financial
statements delivered under Section 6.2(b) and refinancings thereof other
than Debt that has been refinanced by the proceeds of Loans or the proceeds
of the Long-Term Credit Facility;
(d) endorsements in the ordinary course of business of negotiable
instruments in the course of collection;
(e) Debt of the Borrower or any Subsidiary representing the portion of
the purchase price of property acquired by the Borrower or such Subsidiary
that is secured by Liens permitted by the provisions of Section 9.2(d);
provided, however, that at no time may the aggregate principal amount of
such Debt outstanding exceed thirty percent (30%) of the Consolidated Net
Worth of the Borrower and its Subsidiaries as of the applicable
determination date;
(f) Debt evidenced by Senior Notes; and
(g) additional Debt of the Borrower and Structured Securities of the
Borrower and the Southern Union Trusts provided that after giving effect to
the issuance thereof, there shall exist no Default or Event of Default;
and: (i) the ratio of Consolidated Total Indebtedness to Consolidated Total
Capitalization shall be no greater than (A) 0.65 to 1.00 at all times prior
to the date the Exchange Company acquires all stock and other equity
interests in Panhandle Eastern in connection with the Panhandle Eastern
Acquisition, (B) 0.75 to 1.00 at all times on and after the date the
Exchange Company acquires all stock and other equity interests in Panhandle
Eastern in connection with the Panhandle Eastern Acquisition, but before
the consummation of either the Additional Equity Offering or the Trunkline
LNG Holdings Sale, (C) 0.70 to 1.00 at all times on or after the
consummation of either the Additional Equity Offering or the Trunkline LNG
Holdings Sale, and (D) 0.65 to 1.00 at all times on and after the earlier
to occur of (x) the consummation of both the Additional Equity Offering and
the Trunkline LNG Holdings Sale or (y) December 31, 2003; (ii) the ratio of
EBDIT for the four fiscal quarters most recently ended to pro forma Cash
Interest Expense for the following four fiscal quarters shall be no less
than 2.00 to 1.0 at all times; provided, however, that if the additional
Debt for which the determinations required to be made by
this subparagraph (g) will be used to finance in whole or in part the
consideration to be paid by the Borrower for the acquisition of any entity
otherwise permitted under the terms of this Agreement, the determination of
EBDIT for purposes of this ratio shall include not only the EBDIT of the
Borrower and its Subsidiaries for the four fiscal quarters most recently
ended, but shall also include the EBDIT of such entity to be acquired for
such four fiscal quarters most recently ended; and (iii) (A) such Debt and
Structured Securities shall have a final maturity or mandatory redemption
date, as the case may be, no earlier than the Maturity Date and shall
mature or be subject to mandatory redemption or mandatory defeasance no
earlier than the Maturity Date (as so extended) and shall be subject to no
mandatory redemption or "put" to the Borrower or any Southern Union Trust
exercisable, or sinking fund or other similar mandatory principal payment
provisions that require payments to be made toward principal, prior to such
Maturity Date (as so extended); or (B) (x) such additional Debt shall have
a final maturity date prior to the Maturity Date, (y) such additional Debt
shall not exceed One Hundred Million Dollars ($100,000,000.00) in the
aggregate plus Twenty Million Dollars ($20,000,000.00) of reimbursement
obligations incurred in connection with Non-Facility Letters of Credit
issued by a Bank or Banks or by any other financial institution; provided,
however, that for purposes of determining the aggregate
amount of such additional Debt for purposes of this subclause (y), the Debt
of the Borrower under the Term Loan Facility shall not be included and such
Debt under the Term Loan Facility shall be deemed to be permitted Debt for
purposes of this subclause (y), and (z) such additional Debt shall be
borrowed from a Bank or Banks as a loan or loans arising independent of
this Agreement, the Long-Term Credit Facility Agreement or the Term Loan
Facility or shall be borrowed from a financial institution that is not a
Bank under this Agreement, the Long-Term Credit Facility Agreement or the
Term Loan Facility.
9.4 Loans, Advances and Investments. The Borrower will not, and will not
permit any Subsidiary to, make or have outstanding any loan or advance to, or
own or acquire any stock or securities of or equity interest or other Investment
in, any Person, except (without duplication):
(a) stock or other equity interests of (i) the Subsidiaries named in
Section 6.1; (ii) other entities that are acquired by the Borrower or any
Subsidiary but that are promptly merged with and into the Borrower; (iii)
Southern Union Panhandle, Panhandle Eastern and any Subsidiaries of
Panhandle Eastern acquired as a result of the Panhandle Eastern
Acquisition; and (iv) the same Qualifying Entities as the Qualifying
Entities under subparagraph (ii) of the definition of "Qualifying Assets,"
provided that at any one time the aggregate purchase price paid for such
stock in such Qualifying Entities, including the aggregate amount of Debt
assumed or deemed incurred by Borrower in connection with the purchase of
such stock, is not more than ten percent (10%) of the Consolidated Net
Worth of the Borrower and its Subsidiaries as of the applicable
determination date, and further provided that Investments of the type
described in clauses (ii) and (iv) of this Section 9.4(a) shall be
permitted only after the consummation and finalization of both the
Additional Equity Offering and the Trunkline LNG Holdings Sale and the
payment in full of the AIG Loan;
(b) loans or advances to a Subsidiary, as well as advances of proceeds
of the AIG Loan, the Bridge Loan and/or the Additional Equity Offering by
the Borrower to the Exchange Company for purposes of facilitating the
consummation of the Panhandle Eastern Acquisition; provided, however, that
the principal amount of such loans and advances for working capital
purposes at any time outstanding to Panhandle Eastern and/or any of
Panhandle Eastern's Subsidiaries, together with the principal amount of any
outstanding working capital credit facility or facilities provided directly
to Panhandle Eastern and/or any of Panhandle Eastern's Subsidiaries by any
party other than the Borrower, does not exceed $25,000,000 in the aggregate
at any time;
(c) Securities maturing no more than 180 days after Borrower's
purchase that are either:
(i) readily marketable securities issued by the United States or
its agencies or instrumentalities; or
(ii) commercial paper rated "Prime 2" by Xxxxx'x Investors
Service, Inc. ("Moody's") or A-2 by Standard and Poor's Ratings Group
("S&P"); or
(iii) certificates of deposit or repurchase contracts on
customary terms with financial institutions in which deposits are
insured by any agency or instrumentality of the United States; or
(iv) readily marketable securities received in settlement of
liabilities created in the ordinary course of business; or
(v) obligations of states, agencies, counties, cities and other
political subdivisions of any state rated at lest MIG2, VMIG2 or Aa by
Moody's or AA by S&P; or
(vi) loan participations in credits in which the borrower's debt
is rated at least Aa or Prime 2 by Moody's or AA or A-2 by S&P; or
(vii) money market mutual funds that are regulated by the
Securities and Exchange Commission, have a dollar-weighted average
stated maturity of 90 days or fewer on their investments and include
in their investment objectives the maintenance of a stable net asset
value of $1 for each share.
(d) other equity interests owned by a Subsidiary on the date of this
Agreement and such additional equity interests to the extent (but only to
the extent) that such Subsidiary is legally obligated to acquire those
interests on the date of this Agreement, in each case as disclosed to the
Banks in writing;
(e) loans or advances by the Borrower to customers in connection with
and pursuant to marketing and merchandising products that the Borrower
reasonably expects to increase sales of the Borrower or Subsidiaries,
provided that: (i) such loans must be either less than $2,000,000.00 to any
one customer (or group of affiliated customers, shown on the Borrower's
records to be Affiliates); and (ii) all such loans must not exceed
$24,000,000.00 in the aggregate outstanding at any time;
(f) travel and expense advances in the ordinary course of business to
officers and employees;
(g) stock or securities of or equity interests in, any Person provided
that, after giving effect to the acquisition and ownership thereof, the
Borrower is in compliance with the provisions of Section 9.1(c) of this
Agreement; and
(h) loans, advances or other Investments by the Borrower or any
Subsidiary not otherwise permitted under the other provisions of this
Section 9.4, so long as the sum of the outstanding balance of all of such
loans and advances and the purchase price paid for all of such other
Investments does not exceed in the aggregate seven percent (7%) of the
Consolidated Net Worth of the Borrower and its Subsidiaries as of the
applicable determination date.
9.5 Stock and Debt of Subsidiaries. The Borrower will not, and will not
permit any Subsidiary to, sell or otherwise dispose of any shares of stock,
other equity interests or Debt of any Subsidiary, or permit any Subsidiary to
issue or dispose of its stock (other than directors' qualifying shares), except
for the following: (i) the sale, transfer or issuance of stock, other equity
interests or Debt of any Subsidiary to the Borrower or another Subsidiary of the
Borrower; (ii) the sale of up to 28% of all stock and other equity interests
owned by the Borrower in Southern Union Panhandle upon terms reasonably
acceptable to the Agent, so long as the proceeds of such equity sale are
utilized to fully pay the AIG Loan; (iii) the sale of stock in Trunkline LNG
Holdings and Debt of Trunkline LNG Holdings as a result of the Trunkline LNG
Holdings Sale; (iv) the issuance by Southern Union Trusts of preferred
beneficial interests in public offerings of Borrower's Structured Securities,
and (v) the issuance by other Subsidiaries of the Borrower formed for the
purpose of issuing Equity-Preferred Securities.
9.6 Merger, Consolidation, Etc. The Borrower will not, and will not permit
any Subsidiary to, merge or consolidate with any other Person or sell, lease,
transfer or otherwise dispose of (whether in one transaction or a series of
transactions) all or a substantial part of its assets or acquire (whether in one
transaction or a series of transactions) all or a substantial part of the assets
of any Person, except that:
(a) any Subsidiary may merge or consolidate with the Borrower
(provided that the Borrower shall be the continuing or surviving
corporation) or with any one or more Subsidiaries;
(b) any Subsidiary may sell, lease, transfer or otherwise dispose of
any of its assets to the Borrower or another Subsidiary;
(c) the Borrower may acquire the assets of any Person, provided that,
after giving effect to such acquisition, the Borrower is in compliance with
the provisions of Sections 9.1(c); and
(d) the Borrower or any Subsidiary may sell, lease, assign or
otherwise dispose of assets as otherwise permitted under Section 9.8.
9.7 Supply and Purchase Contracts. The Borrower will not, and will not
permit any Subsidiary to, enter into or be a party to any contract for the
purchase of materials, supplies or other property if such contract requires that
payment for such materials, supplies or other property shall be made regardless
of whether or not delivery is ever made or tendered of such materials, supplies
and other property, except in those circumstances and involving those supply or
purchase contracts that the Borrower reasonably considers to be necessary or
helpful in its operations in the ordinary course of business and that the
Borrower reasonably considers not to be unnecessarily burdensome on the Borrower
or its Subsidiaries.
9.8 Sale or Other Disposition of Assets. The Borrower will not, and will
not permit any Subsidiary to, except as permitted under this Section 9.8, sell,
assign, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or any part of its Property (whether now owned or
hereafter acquired); provided, however, that (i) the Borrower or any Subsidiary
may in the ordinary course of business dispose of (a) Property consisting of
Inventory; and (b) Property consisting of goods or equipment that are, in the
opinion of the Borrower or any Subsidiary, obsolete or unproductive, but if in
the good faith judgment of the Borrower or any Subsidiary such disposition
without replacement thereof would have a Material Adverse Effect, such goods and
equipment shall be replaced, or their utility and function substituted, by new
or existing goods or equipment; (ii) the Borrower may transfer or dispose of any
of its Significant Property (in any transaction or series of transactions) to
any Subsidiary or Subsidiaries only if such Property so transferred or disposed
of after the Closing Date has an aggregate value as of the date of such transfer
or disposition (determined after depreciation and in accordance with GAAP) of
not more than ten percent (10%) of the aggregate value of all of the Borrower's
and its Subsidiaries' real property and tangible personal property other than
Inventory considered on a consolidated basis and determined after depreciation
and in accordance with GAAP, as of December 31, 2001; (iii) the Borrower may
dispose of its real property in one or more sale/leaseback transactions,
provided that any Debt incurred in connection with such transaction does not
create a Default as defined herein; (iv) a Southern Union Trust may distribute
the Borrower's subordinated debt securities constituting a portion of the
Structured Securities, on the terms and under the conditions set out in the
registration statement therefor filed with the Securities and Exchange
Commission on March 25, 1995 or any similar registration statement hereafter
filed with the Securities and Exchange Commission in connection with any other
Structured Securities issued in connection with the Prior Acquisitions; (v) the
Borrower or any Subsidiary may dispose of real property or tangible personal
property other than Inventory (in consideration of such amount as in the good
faith judgment of the Borrower or such Subsidiary represents a fair
consideration therefor), provided that the aggregate value as of the date of
disposition of such property disposed of (determined after depreciation and in
accordance with GAAP) after the Closing Date does not exceed ten percent (10%)
of the aggregate value of all of the Borrower's and its Subsidiaries' real
property and tangible personal property other than Inventory considered on a
consolidated basis and determined after depreciation and in accordance with
GAAP, as of December 31, 2001; (vi) the Borrower may dispose of Qualifying
Assets of the type described in clause (ii) of the definition of Qualifying
Assets, provided that the Borrower make a payment on the Loan in an amount equal
to the lesser of (a) the net sales proceeds from such disposition, and (b) the
amount of Loan proceeds used to acquire such clause (ii) Qualifying Assets;
(vii) the Borrower may dispose of other Investments of the type acquired under
the terms of Section 9.4(h), provided that the Borrower make a payment on the
Loan in an amount equal to the lesser of (a) the net sales proceeds from such
disposition, and (b) the amount of Loan proceeds used to acquire such other
Investments; and (viii) Panhandle Eastern may sell all stock in Trunkline LNG
Holdings pursuant to the Trunkline LNG Holdings Sale..
9.9 Discount or Sale of Receivables. The Borrower will not, and will not
permit any Subsidiary, other than Southern Union Total Energy Services, Inc., to
discount or sell with recourse, or sell for less than the face value thereof
(including any accrued interest) any of its notes receivable, receivables under
leases or other accounts receivable.
9.10 Change in Accounting Method. The Borrower will not, and will not
permit any Subsidiary to, make any change in the method of computing
depreciation for either tax or book purposes or any other material change in
accounting method representing any departure from GAAP without the Majority
Banks' prior written approval.
9.11 Restricted Payment. The Borrower will not pay or declare any
Restricted Payment unless immediately prior to such payment and after giving
effect to such payment, the Borrower could incur at least $1 of additional Debt
without violating the provisions of Section 9.3(g) and after giving effect
thereto no Default or Event of Default exists hereunder.
9.12 Securities Credit Regulations. Neither the Borrower nor any Subsidiary
will take or permit any action which might cause the Loans or the Facility
Letter of Credit Obligations or this Agreement to violate Regulation G,
Regulation T, Regulation U, Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System or a violation of the Securities
Exchange Act of 1934, in each case as now or hereafter in effect.
9.13 Nature of Business; Management. The Borrower will not, and will not
permit any Subsidiary to: (a) change its principal line of business; or (b)
enter into any business not within the scope of Section 6.15 and the definition
of Qualifying Assets; or (c) permit any material overall change in the
management of the Borrower.
9.14 Transactions with Related Parties. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or agreement with any
officer, director or holder of ten percent (10%) or more of any class of the
outstanding capital stock of the Borrower or any Subsidiary (or any Affiliate of
any such Person) unless the same is upon terms substantially similar to those
obtainable from wholly unrelated sources.
9.15 Hazardous Materials. The Borrower will not, and will not permit any
Subsidiary to (a) cause or permit any Hazardous Materials to be placed, held,
used, located, or disposed of on, under or at any of such Person's property or
any part thereof by any Person in a manner which could reasonably be expected to
have a Material Adverse Effect; (b) cause or permit any part of any of such
Person's property to be used as a manufacturing, storage, treatment or disposal
site for Hazardous Materials, where such action could reasonably be expected to
have a Material Adverse Effect; or (c) cause or suffer any liens to be recorded
against any of such Person's property as a consequence of, or in any way related
to, the presence, remediation, or disposal of Hazardous Materials in or about
any of such Person's property, including any so-called state, federal or local
"superfund" lien relating to such matters, where such recordation could
reasonably be expected to have a Material Adverse Effect.
9.16 Limitations on Payments on Subordinated Debt. The Borrower will not,
and will not permit any Subsidiary to, make any payment in respect of interest
on, principal of, or otherwise relating to, the Borrower's subordinated debt
securities issued in connection with the Structured Securities if, after giving
effect to such payment, a Default or Event of Default would exist.
9.17 Dividends and Other Distributions by Southern Union Panhandle. The
Borrower will not permit Southern Union Panhandle to make any dividends,
payments or other distributions of any kind to holders of stock or other equity
interests in Southern Union Panhandle (whether common, preferred or another
class of equity ownership) unless such dividends, payments or other
distributions are made pro-rata to the Borrower and each other equity owner
based on their respective percentage ownership interests held in Southern Union
Panhandle.
9.18 No Agreements Prohibiting Pledge of Southern Union Panhandle Stock.
The Borrower will not enter into any contract or other agreement with any Person
that directly or indirectly prohibits the Borrower from granting any Lien
against the stock or other equity interests in Southern Union Panhandle (whether
common, preferred or another class of equity ownership) at any time owned and
held by the Borrower as security for any Debt of the Borrower or any of its
Subsidiaries, other than the applicable negative covenants of this Agreement,
the Long-Term Credit Facility Agreement, the Term Loan Facility and the Bridge
Loan.
10. EVENTS OF DEFAULT; REMEDIES
If any of the following events shall occur, then the Agent shall at the
request, or may with the consent, of the Majority Banks, (a) by notice to the
Borrower, declare the Commitment of each Bank and the several obligation of each
Bank to make Loans hereunder to be terminated, whereupon the same shall
forthwith terminate, and (b) declare the Notes and all interest accrued and
unpaid thereon, and all other amounts payable under the Notes, this Agreement
and the other Loan Documents, to be forthwith due and payable, whereupon the
Notes, all such interest and all such other amounts, shall become and be
forthwith due and payable without presentment, demand, protest, or further
notice of any kind (including, without limitation, notice of default, notice of
intent to accelerate and notice of acceleration), all of which are hereby
expressly waived by the Borrower; provided, however, that with respect to any
Event of Default described in Sections 10.7 or 10.8 hereof, (i) the Commitment
of each Bank and the obligation of the Banks to make Loans shall automatically
be terminated and (ii) the entire unpaid principal amount of the Notes, all
interest accrued and unpaid thereon, and all such other amounts payable under
the Notes, this Agreement and the other Loan Documents, shall automatically
become immediately due and payable, without presentment demand, protest, or any
notice of any kind (including, without limitation, notice of default, notice of
intent to accelerate and notice of acceleration), all of which are hereby
expressly waived by the Borrower:
10.1 Failure to Pay Principal or Interest. The Borrower does not pay, repay
or prepay any principal of or interest on any Note or any Long-Term Credit
Facility Note when due; or
10.2 Failure to Pay Commitment Fee or Other Amounts. The Borrower does not
pay any commitment fee or any other obligation or amount payable under this
Agreement, the Long-Term Credit Facility Agreement, the Notes, the Long-Term
Credit Facility Notes, or any Reimbursement Obligation within two (2) calendar
days after the same shall have become due; or
10.3 Failure to Pay Other Debt. The Borrower or any Subsidiary fails to pay
principal or interest aggregating more than $3,000,000.00 on any other Debt when
due and any related grace period has expired, or the holder of any of such other
Debt declares such Debt due prior to its stated maturity because of the
Borrower's or any Subsidiary's default thereunder and the expiration of any
related grace period; or
10.4 Misrepresentation or Breach of Warranty. Any representation or
warranty made by the Borrower herein or otherwise furnished to the Agent or any
Bank in connection with this Agreement or any other Loan Document shall be
incorrect, false or misleading in any material respect when made; or
10.5 Violation of Negative Covenants. The Borrower violates any covenant,
agreement or condition contained in Sections 9.2, 9.3, 9.5, 9.6, 9.9, 9.10,
9.11, or 9.15; or
10.6 Violation of Other Covenants, Etc. The Borrower violates any other
covenant, agreement or condition contained herein (other than the covenants,
agreements and conditions set forth or described in Sections 10.1, 10.2, 10.3,
10.4, and 10.5 above) or in any other Loan Document and such violation shall not
have been remedied within (30) days after written notice has been received by
the Borrower from the Agent or the holder of any Note; or
10.7 Bankruptcy and Other Matters. The Borrower or any Subsidiary (a) makes
an assignment for the benefit of creditors; or (b) admits in writing its
inability to pay its debts generally as they become due; or (c) generally fails
to pay its debts as they become due; or (d) files a petition or answer seeking
for itself, or consenting to or acquiescing in, any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
applicable Debtor Law (including, without limitation, the Federal Bankruptcy
Code); or (i) there is appointed a receiver, custodian, liquidator, fiscal
agent, or trustee of the Borrower or any Subsidiary or of the whole or any
substantial part of their respective assets; or (ii) any court enters an order,
judgment or decree approving a petition filed against the Borrower or any
Subsidiary seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any Debtor Law and either such
order, decree or judgment so filed against it is not dismissed or stayed (unless
and until such stay is no longer in effect) within thirty (30) days of entry
thereof or an order for relief is entered pursuant to any such law; or
10.8 Dissolution. Any order is entered in any proceeding against the
Borrower or any Subsidiary decreeing the dissolution, liquidation, winding-up or
split-up of the Borrower or such Subsidiary, and such order remains in effect
for thirty (30) days; or
10.9 Undischarged Judgment. Final Judgment or final judgments in the
aggregate, that might be or give rise to Liens on any property of the Borrower
or any Subsidiary, for the payment of money in excess of $5,000,000.00 shall be
rendered against the Borrower or any Subsidiary and the same shall remain
undischarged for a period of thirty (30) days during which execution shall not
be effectively stayed; or
10.10 Environmental Matters. The occurrence of any of the following events
that could result in liability to the Borrower or any Subsidiary under any
Environmental Law or the creation of a Lien on any property of the Borrower or
any Subsidiary in favor of any governmental authority or any other Person for
any liability under any Environmental Law or for damages arising from costs
incurred by such Person in response to a Release or threatened Release of
Hazardous Materials into the environment if any such asserted liability or Lien
exceeds $10,000,000.00 and if any such lien would cover any property of the
Borrower or any Subsidiary which property is or would reasonably be considered
to be integral to the operations of the Borrower or any Subsidiary in the
ordinary course of business:
(a) the Release of Hazardous Materials at, upon, under or within the
property owned or leased by the Borrower or any Subsidiary or any
contiguous property;
(b) the receipt by the Borrower or any Subsidiary of any summons,
claim, complaint, judgment, order or similar notice that it is not in
compliance with or that any governmental authority is investigating its
compliance with any Environmental Law;
(c) the receipt by the Borrower or any Subsidiary of any notice or
claim to the effect that it is or may be liable for the Release or
threatened Release of Hazardous Materials into the environment; or
(d) any governmental authority incurs costs or expenses in response to
the Release of any Hazardous Material which affects in any way the
properties of the Borrower or any Subsidiary.
10.11 Other Remedies. In addition to and cumulative of any rights or
remedies expressly provided for in this Section 10, if any one or more Events of
Default shall have occurred, the Agent shall at the request, and may with the
consent, of the Majority Banks proceed to protect and enforce the rights of the
Banks hereunder by any appropriate proceedings. The Agent shall at the request,
and may with the consent, of the Majority Banks also proceed either by the
specific performance of any covenant or agreement contained in this Agreement or
by enforcing the payment of the Notes or by enforcing any other legal or
equitable right provided under this Agreement or the Notes or otherwise existing
under any law in favor of the holder of the Notes.
10.12 Remedies Cumulative. No remedy, right or power conferred upon the
Banks is intended to be exclusive of any other remedy, right or power given
hereunder or now or hereafter existing at law, in equity, or otherwise, and all
such remedies, rights and powers shall be cumulative.
10.13 Default under Term Loan Facility. The occurrence of an Event of
Default (as defined under the credit agreement evidencing the Term Loan
Facility) shall also constitute an Event of Default under this Agreement.
11. THE AGENT
11.1 Authorization and Action. Each Bank hereby appoints JPMorgan as its
Agent under and irrevocably authorizes the Agent (subject to Sections 11.1 and
11.7) to take such action as the Agent on its behalf and to exercise such powers
under this Agreement and the Notes as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto. Without
limitation of the foregoing, each Bank expressly authorizes the Agent to
execute, deliver, and perform its obligations under this Agreement, and to
exercise all rights, powers, and remedies that the Agent may have hereunder. As
to any matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act, or to refrain from acting (and shall be fully protected in so acting or
refraining from acting), upon the instructions of the Majority Banks, and such
instructions shall be binding upon all the Banks and all holders of any Note;
provided, however, that the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary to this Agreement
or applicable law. The Agent agrees to give to each Bank prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement.
11.2 Agent's Reliance, Etc. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to any Bank for any action taken
or omitted to be taken by it or them under or in connection with this Agreement,
the Notes and the other Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (a) may treat the original or any successor holder of any
Note as the holder thereof until the Agent receives notice from the Bank which
is the payee of such Note concerning the assignment of such Note; (b) may employ
and consult with legal counsel (including counsel for the Borrower), independent
public accountants, and other experts selected by it and shall not be liable to
any Bank for any action taken, or omitted to be taken, in good faith by it or
them in accordance with the advice of such counsel, accountants, or experts
received in such consultations and shall not be liable for any negligence or
misconduct of any such counsel, accountants, or other experts; (c) makes no
warranty or representation to any Bank and shall not be responsible to any Bank
for any opinions, certifications, statements, warranties, or representations
made in or in connection with this Agreement; (d) shall not have any duty to any
Bank to ascertain or to inquire as to the performance or observance of any of
the terms, covenants, or conditions of this Agreement or any other instrument or
document furnished pursuant thereto or to satisfy itself that all conditions to
and requirements for any Loan have been met or that the Borrower is entitled to
any Loan or to inspect the property (including the books and records) of the
Borrower or any Subsidiary; (e) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this Agreement or any other instrument or document furnished pursuant
thereto; and (f) shall incur no liability under or in respect of this Agreement
by acing upon any notice, consent, certificate, or other instrument or writing
(which may be by telegram, cable, telex, or otherwise) believed by it to be
genuine and signed or sent by the proper party or parties.
11.3 Defaults. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the nonpayment of principal of or interest
hereunder or of any fees) unless the Agent has received notice from a Bank or
the Borrower specifying such Default and stating that such notice is a Notice of
Default. In the event that the Agent receives such a notice of the occurrence of
a Default, the Agent shall give prompt notice thereof to the Banks (and shall
give each Bank prompt notice of each such nonpayment). The Agent shall (subject
to Section 11.7) take such action with respect to such Default; provided that,
unless and until the Agent shall have received the directions referred to in
Sections 11.1 or 11.7, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default as it
shall deem advisable and in the best interest of the Banks.
11.4 JPMorgan and Affiliates. With respect to its Commitment, any Loan made
by it, and the Note issued to it, JPMorgan shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as though it
were not the Agent; and the term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include JPMorgan in its individual capacity. JPMorgan and
its respective Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Borrower, any of its respective Affiliates and any Person who may do
business with or own securities of the Borrower or any such Affiliate, all as if
JPMorgan were not the Agent and without any duty to account therefor to the
Banks.
11.5 Non-Reliance on Agent and Other Banks. Each Bank agrees that it has,
independently and without reliance on the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and each Subsidiary and its decision to enter into the
transactions contemplated by this Agreement and that it will, independently and
without reliance upon the 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 analysis and decisions in taking or not taking action under this Agreement.
The Agent shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Agreement or to inspect the properties or
books of the Borrower or any Subsidiary. Except for notices, reports, and other
documents and information expressly required to be furnished to the Banks by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the affairs, financial
condition, or business of the Borrower or any Subsidiary (or any of their
Affiliates) which may come into the possession of the Agent or any of its
Affiliates.
11.6 Indemnification. Notwithstanding anything to the contrary herein
contained, the Agent shall be fully justified in failing or refusing to take any
action hereunder unless it shall first be indemnified to its satisfaction by the
Banks against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, and disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of its taking or continuing to take
any action. Each Bank agrees to indemnify the Agent (to the extent not
reimbursed by the Borrower), according to such Bank's Commitment, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, and disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or the Notes or
any action taken or omitted by the Agent under this Agreement or the Notes;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the gross negligence or willful
misconduct of the person being indemnified; and provided further that it is the
intention of each Bank to indemnify the Agent against the consequences of the
Agent's own negligence, whether such negligence be sole, joint, concurrent,
active or passive. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its Pro Rata Percentage of any
out-of-pocket expenses (including attorneys' fees) incurred by the Agent in
connection with the preparation, administration, or enforcement of, or legal
advice in respect of rights or responsibilities under, this Agreement and the
Notes, to the extent that the Agent is not reimbursed for such expenses by the
Borrower.
11.7 Successor Agent. The Agent may resign at any time as Agent under this
Agreement by giving written notice thereof to the Banks and the Borrower and may
be removed at any time with or without cause by the Majority Banks. Upon any
such resignation or removal, the Majority Banks shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks or shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation or the Majority
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000.00. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
11.8 Agent's Reliance. The Borrower shall notify the Agent in writing of
the names of its officers and employees authorized to request a Loan on behalf
of the Borrower and shall provide the Agent with a specimen signature of each
such officer or employee. The Agent shall be entitled to rely conclusively on
such officer's or employee's authority to request a Loan on behalf of the
Borrower until the Agent receives written notice from the Borrower to the
contrary. The Agent shall have no duty to verify the authenticity of the
signature appearing on any Notice of Borrowing, and, with respect to any oral
request for a Loan, the Agent shall have no duty to verify the identity of any
Person representing himself as one of the officers or employees authorized to
make such request on behalf of the Borrower. Neither the Agent nor any Bank
shall incur any liability to the Borrower in acting upon any telephonic notice
referred to above which the Agent or such Bank believes in good faith to have
been given by a duly authorized officer or other Person authorized to borrow on
behalf of the Borrower or for otherwise acting in good faith.
12. MISCELLANEOUS
12.1 Representation by the Banks. Each Bank represents that it is the
intention of such Bank, as of the date of its acquisition of its Note, to
acquire the Note for its account or for the account of its Affiliates, and not
with a view to the distribution or sale thereof, and, subject to any applicable
laws, the disposition of such Bank's property shall at all times be within its
control. The Notes have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be transferred, sold or otherwise
disposed of except (a) in a registered Offering under the Securities Act; (b)
pursuant to an exemption from the registration provisions of the Securities Act;
or (c) if the Securities Act shall not apply to the Notes or the transactions
contemplated hereunder as commercial lending transactions.
12.2 Amendments, Waivers, Etc. No amendment or waiver of any provision of
any Loan Document, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Borrower and the Majority Banks, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver, or consent shall, unless in
writing and signed by each Bank, do any of the following: (a) waive any of the
conditions specified in Section 7; (b) increase the Commitment of any Bank or
alter the term thereof, or subject any Bank to any additional or extended
obligations; (c) change the principal of, or rate of interest on, any Note, or
any fees or other amounts payable hereunder; (d) postpone any date fixed for any
payment of principal of, or interest on, any Note, or any fees (including,
without limitation, any fee) or other amounts payable hereunder; (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of any
Note, or the number of Banks which shall be required for Banks, or any of them,
to take any action hereunder; or (f) amend this Section 12.2; and provided,
further, that no amendment, waiver, or consent shall, unless in writing and
signed by the Agent in addition to each Bank, affect the rights or duties of the
Agent under any Loan Document. No failure or delay on the part of any Bank or
the Agent in exercising any power or right hereunder shall operate as a waiver
thereof nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No course of dealing between the Borrower and any Bank or the
Agent shall operate as a waiver of any right of any Bank or the Agent. No
modification or waiver of any provision of this Agreement or the Note nor
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be in writing, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.
12.3 Reimbursement of Expenses. The Borrower agrees to reimburse (a) the
Agent for its reasonable out-of-pocket expenses (including (i) due diligence
expenses, syndication expenses and travel expenses incurred prior to the Closing
date not to exceed $15,000 in the aggregate and (ii) the reasonable fees and
expenses of counsel to the Agent) in connection with the transactions
contemplated by this Agreement, whether or not such contemplated transactions
shall be consummated, or any of them, or otherwise in connection with this
Agreement, including its negotiation, preparation, execution, administration and
modification and (b) the Agent and each Bank for all reasonable fees incurred by
the Agent or any Bank in connection with the enforcement of this Agreement after
the occurrence of any Event of Default which is then continuing, including the
reasonable fees and expenses of counsel to the Agent and each Bank related
thereto, (c) the Agent for costs and expenses of the Agent for environmental
consultants related to the transactions contemplated and governed by this
Agreement, and (d) the Agent and each Bank for costs and expenses of the Agent
and each Bank in connection with due diligence, transportation, computer time
and research and duplication. The Borrower agrees to pay any and all stamp and
other taxes which may be payable or determined to be payable in connection with
the execution and delivery of this Agreement or the Notes, and to save any
holder of any Note harmless from any and all liabilities with respect to or
resulting from any delay or omission to pay any such taxes. The obligations of
the Borrower under this Section 12.3 shall survive the termination of this
Agreement and/or the payment of the Notes.
12.4 Notices. All notices and other communications provided for herein
shall be in writing (including telex, facsimile, or cable communication) and
shall be mailed, telecopied, telexed, cabled or delivered addressed as follows:
(a) If to the Borrower, to it at: Southern Union Company
Xxx XXX Xxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with copies to: Southern Union Company
Xxx XXX Xxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(b) If to the Agent, to it at: JPMorgan Chase Bank
000 Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Manager/Commercial Lending
Fax: (000) 000-0000
with a copy to: JPMorgan Chase Bank
Loan and Agency Services
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
and if to any Bank, at the address specified below its name on the signature
pages hereof, or as to the Borrower or the Agent, to such other address as shall
be designated by such party in a written notice to the other party and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed, telecopied, telexed, transmitted, or cabled,
become effective when deposited in the mail, confirmed by telex answer back,
transmitted to the telecopier, or delivered to the cable company, except that
notices and communications to the Agent under Sections 2.1(c) or 2.2 shall not
be effective until actually received by the Agent.
12.5 Governing Law; Venue. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES OF AMERICA; provided, however, that Chapter 346 of the Texas
Finance Code, as amended, shall not apply to this Agreement and the Notes issued
hereunder. Xxxxxx County, Texas shall be a proper place of venue to enforce
payment or performance of this Agreement and the other Loan Documents by the
Borrower, unless the Agent shall give its prior written consent to a different
venue. The Borrower hereby irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to any of the Loan
Documents in the District Courts of Xxxxxx County, Texas, or in the United
States District Court for the Western District of Texas, Austin Division, and
hereby further irrevocably waives any claims that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
The Borrower hereby irrevocably agrees that, provided that the Borrower can
obtain personal jurisdiction over and service of process upon the Agent or the
applicable Bank, any legal proceeding against the Agent or any Bank arising out
of or in connection with this Agreement or the other Loan Documents shall be
brought in the district courts of Xxxxxx County, Texas, or in the United States
District Court for the Western District of Texas, Austin Division. Nothing
contained in this Section or in any other provision of any Loan Document (unless
expressly provided otherwise) shall be deemed or construed as an agreement by
any Bank to be subject to the jurisdiction of such courts.
12.6 Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants contained herein or made in writing by
the Borrower in connection herewith shall survive the execution and delivery of
this Agreement and the Notes, and will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not, provided that the undertaking of the Banks to make the Loans to the
Borrower shall not inure to the benefit of any successor or assign of the
Borrower. No investigation at any time made by or on behalf of the Banks shall
diminish the Banks' rights to rely on any representations made herein or in
connection herewith. All statements contained in any certificate or other
written instrument delivered by the Borrower or by any Person authorized by the
Borrower under or pursuant to this Agreement or in connection with the
transactions contemplated hereby shall constitute representations and warranties
hereunder as of the time made by the Borrower.
12.7 Counterparts. This Agreement may be executed in several counterparts,
and by the parties hereto on separate counterparts, and each counterpart, when
so executed and delivered, shall constitute an original instrument and all such
separate counterparts shall constitute but one and the same instrument.
12.8 Separability. Should any clause, sentence, paragraph or section of
this Agreement be judicially declared to be invalid, unenforceable or void, such
decision shall not have the effect of invalidating or voiding the remainder of
this Agreement, and the parties hereto agree that the part or parts of this
Agreement so held to be invalid, unenforceable or void will be deemed to have
been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein. Each
covenant contained in this Agreement shall be construed (absent an express
contrary provision herein) as being independent of each other covenant contained
herein, and compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with one or more other
covenants.
12.9 Descriptive Headings. The section headings in this Agreement have been
inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.
12.10 Accounting Terms. All accounting terms used herein which are not
expressly defined in the Agreement, or the respective meanings of which are not
otherwise qualified, shall have the respective meanings given to them in
accordance with GAAP.
12.11 Limitation of Liability. No claim may be made by the Borrower or any
other Person against the Agent or any Bank or the Affiliates, directors,
officers, employees, attorneys, or agents of the Agent or any Bank for any
special, indirect, consequential, or punitive damages in respect to any claim
for breach of contract arising out of or related to the transactions
contemplated by this Agreement, or any act, omission, or event occurring in
connection herewith and the Borrower hereby waives, releases, and agrees not to
xxx upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
12.12 Set-Off. The Borrower hereby gives and confirms to each Bank a right
of set-off of all moneys, securities and other property of the Borrower (whether
special, general or limited) and the proceeds thereof, now or hereafter
delivered to remain with or in transit in any manner to such Bank, its
Affiliates, correspondents or agents from or for the Borrower, whether for
safekeeping, custody, pledge, transmission, collection or otherwise or coming
into possession of such Bank, its Affiliates, correspondents or agents in any
way, and also, any balance of any deposit accounts and credits of the Borrower
with, and any and all claims of security for the payment of the Notes and of all
other liabilities and obligations now or hereafter owed by the Borrower to such
Bank, contracted with or acquired by such Bank, whether such liabilities and
obligations be joint, several, absolute, contingent, secured, unsecured, matured
or unmatured, and the Borrower hereby authorizes each Bank, its Affiliates,
correspondents or agents at any time or times, without prior notice, to apply
such money, securities, other property, proceeds, balances, credits of claims,
or any part of the foregoing, to such liabilities in such amounts as it may
select, whether such liabilities be contingent, unmatured or otherwise, and
whether any collateral security therefor is deemed adequate or not. The rights
described herein shall be in addition to any collateral security, if any,
described in any separate agreement executed by the Borrower.
12.13 Sale or Assignment
(a) Each Bank may assign to one or more Banks, Bank Affiliates or
other Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments and the Note held by it); provided, however,
that (i) with respect to any assignment to any Eligible Assignee (other
than another Bank or a Bank Affiliate), the Agent and Borrower must give
their respective prior written consent, such consent not to be unreasonably
withheld; (ii) each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Banks rights and obligations
under this Agreement; (iii) the amount of the Commitments so assigned shall
equal or exceed $5,000,000.00; (iv) the Commitment of each Bank shall be
not less than $5,000,000.00 (subject only to reductions pursuant to
Sections 3.6 and 10 hereof); (v) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register (as hereinafter defined), an Assignment and Acceptance in the form
of Exhibit C attached hereto and made a part hereof (the "Assignment and
Acceptance"), together with any Note subject to such assignment and a
processing and recordation fee of $3,500.00; (vi) any such assignment from
one Bank to another Bank shall not require the consent of the Agent or the
Borrower if such assignment does not result in any Bank holding more than
60% of the aggregate outstanding Commitments; and (vii) any such assignment
shall not require the consent of the Borrower if a Default or Event of
Default shall have occurred and is then continuing. Upon such execution,
delivery, acceptance, and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
the date on which such Assignment and Acceptance is accepted by the Agent,
(A) the Eligible Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations
of a Bank under the Loan Documents, and (B) the Bank assignor thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents (and,
in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under the Loan
Documents, such Bank shall cease to be a party thereto).
(b) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the Eligible Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Bank
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in
connection with any Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of any Loan Document or
any other instrument or document furnished pursuant thereto; (ii) such
assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
any Subsidiary or the performance or observance by the Borrower of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such Eligible Assignee confirms that it
has received a copy of the Loan Documents, together with copies of the
financial statements referred to in Section 6.2 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv)
such Eligible Assignee, independently and without reliance upon the Agent,
such assigning Bank, or any Bank and based on such documents and
information as it shall deem appropriate at the time, will continue to make
its own credit decisions in taking or not taking action under this
Agreement; (v) such Eligible Assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under
any Loan Document as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (vi)
such Eligible Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of any Loan Document are
required to be performed by it as a Bank.
(c) The Agent shall maintain at its address referred to in Section
12.4 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of Banks
and the Commitment of, and principal amount of the Loans owing to, each
Bank from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent, and Banks may treat each Person whose name is recorded
in the Register as Bank hereunder for all purposes of the Loan Documents.
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.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank, together with any Note subject to such assignment, the
Agent, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C, shall (i) accept such Assignment and
Acceptance; (ii) record the information contained therein in the Register;
and (iii) give prompt notice thereof to the Borrower. Within three (3)
Business Days after its receipt of such notice, the Borrower at its own
expense, shall execute and deliver to the Agent in exchange for each
surrendered Note a new Note to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Bank has retained a Commitment
hereunder, a new Note to the order of the assigning Bank in an amount equal
to the Commitment retained by it hereunder. The new Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit C
attached hereto and made a part hereof. Upon receipt by the Agent of each
such new Note conforming to the requirements set forth in the preceding
sentences, the Agent shall return to the Borrower each such surrendered
Note marked to show that each such surrendered Note has been replaced,
renewed, and extended by such new Note.
(e) Each Bank may sell participations to one or more banks or other
entities in or to all or a portion of its rights and/or obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the Note held by it); provided, however, that (i) each
Bank's obligations under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged; (ii) such
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations; (iii) except as provided below, such Bank
shall remain the holder of any such Note for all purposes of this
Agreement; and (iv) the participating banks or other entities shall be
entitled to the benefits of Sections 2.3 and 3.6 to recover costs, losses
and expenses in the circumstances, and to the extent provided in Section
2.3, as though such participant were a Bank; provided, however, the amounts
to which a participant shall be entitled to obtain pursuant to Sections 2.3
and 3.6 shall be determined by reference to such participant's selling Bank
and shall be recoverable solely from such selling Bank and (v) the
Borrower, the Agent and the other Banks shall continue to deal solely and
directly with the selling Bank in connection with such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided,
however, the selling Bank may grant a participant rights with respect to
amendments, modification or waivers with respect to any fees payable
hereunder to such Bank (including the amount and the dates fixed for the
payment of any such fees) or the amount of principal or the rate of
interest payable on, the dates fixed for any payment of principal or
interest on, the Loans, or the release of any obligations of the Borrower
hereunder and under the other Loan Documents, or the release of any
security for any of the Obligations. Except with respect to cost
protections contained in Sections 2.3 and 3.6, no participant shall be a
third party beneficiary of this Agreement and shall not be entitled to
enforce any rights provided to its selling Bank against the Company under
this Agreement.
(f) Notwithstanding anything herein to the contrary, each Bank may
pledge and assign all or any portion of its rights and interests under the
Loan Documents to any Federal Reserve Bank.
(g) For purposes of this Section 12.13, "Bank Affiliate" shall mean
(a) with respect to any Bank, (i) an Affiliate of such 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 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 the same investment advisor
as such Bank or by an Affiliate of such investment advisor. Each Bank
Affiliate shall be deemed for purposes hereof to be an "Eligible Assignee."
12.14 Non U.S. Banks. Prior to the date of the initial Borrowings
hereunder, and from time to time thereafter if requested by the Borrower or the
Agent, each Bank organized under the laws of a jurisdiction outside the United
States of America shall provide the Agent and the Borrower with the forms
prescribed by the Internal Revenue Service of the United States of America
certifying such Banks exemption from United States withholding taxes with
respect to all payments to be made to such Bank hereunder or under such Bank's
Note. Unless the Borrower and the Agent have received forms or other documents
satisfactory to them indicating that payments hereunder or under such Bank's
Note are not subject to United States withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, the Borrower or the Agent shall
withhold taxes from such payments at the applicable statutory rate in the case
of payments to or for any Bank organized under the laws of a jurisdiction
outside the United States.
12.15 Interest. All agreements between the Borrower, the 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 on any Note or otherwise, shall the amount paid,
or agreed to be paid, to the Agent or any Bank for the use, forbearance, or
detention of the money to be loaned under this Agreement or otherwise or for the
payment or performance of any covenant or obligation contained herein or in any
document related hereto exceed the amount permissible at the Highest Lawful
Rate. If, as a result of any circumstances whatsoever, fulfillment of any
provision hereof 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
filled shall be reduced to the limit of such validity, and if, from any such
circumstance, the Agent or any Bank shall ever receive interest or anything
which might be deemed interest under applicable law which would exceed the
amount permissible at the Highest Lawful Rate, such amount which would be
excessive interest shall be applied to the reduction of the principal amount
owing on account of the Notes or the amounts owing on other obligations of the
Borrower to the Agent or any Bank under this Agreement or any document related
hereto and not to the payment of interest, or if such excessive interest exceeds
the unpaid principal balance of the Notes and the amounts owing on other
obligations of the Borrower to the Agent or any Bank under this Agreement or any
document related hereto, as the case may be, such excess shall be refunded to
the Borrower. All sums paid or agreed to be paid to the Agent or any Bank for
the use, forbearance, or detention of the indebtedness of the Borrower to the
Agent or any Bank shall, to the 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 thereof (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. The terms and
provisions of this Section 12.15 shall control and supersede every other
provision of all agreements between the Borrower and the Banks.
12.16 Indemnification. THE BORROWER AGREES TO INDEMNIFY, DEFEND, AND SAVE
HARMLESS THE AGENT, EACH BANK AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, AND ATTORNEYS, AND EACH OF THEM (THE "INDEMNIFIED PARTIES"),
FROM AND AGAINST ALL CLAIMS, ACTIONS, SUITS, AND OTHER LEGAL PROCEEDINGS,
DAMAGES, COSTS, INTEREST, CHARGES, TAXES, COUNSEL FEES, AND OTHER EXPENSES AND
PENALTIES (INCLUDING WITHOUT LIMITATION ALL ATTORNEY FEES AND COSTS OR EXPENSES
OF SETTLEMENT) WHICH ANY OF THE INDEMNIFIED PARTIES MAY SUSTAIN OR INCUR BY
REASON OF OR ARISING OUT OF (a) THE MAKING OF ANY LOAN HEREUNDER, THE EXECUTION
AND DELIVERY OF THIS AGREEMENT AND THE NOTES AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED THEREBY AND THE EXERCISE OF ANY OF THE BANKS' RIGHTS
UNDER THIS AGREEMENT AND THE NOTES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,
DAMAGES, COSTS, AND EXPENSES INCURRED BY ANY OF THE INDEMNIFIED PARTIES IN
INVESTIGATING, PREPARING FOR, DEFENDING AGAINST, OR PROVIDING EVIDENCE,
PRODUCING DOCUMENTS, OR TAKING ANY OTHER ACTION IN RESPECT OF ANY COMMENCED OR
THREATENED LITIGATION UNDER ANY FEDERAL SECURITIES LAW OR ANY SIMILAR LAW OF ANY
JURISDICTION OR AT COMMON LAW OR (b) ANY AND ALL CLAIMS OR PROCEEDINGS (WHETHER
BROUGHT BY A PRIVATE PARTY, GOVERNMENTAL AUTHORITY OR OTHERWISE) FOR BODILY
INJURY, PROPERTY DAMAGE, ABATEMENT, REMEDIATION, ENVIRONMENTAL DAMAGE, OR
IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING FROM OR RELATING TO THE
RELEASE OF ANY HAZARDOUS MATERIALS LOCATED UPON, MIGRATING INTO, FROM, OR
THROUGH OR OTHERWISE RELATING TO ANY PROPERTY OWNED OR LEASED BY THE BORROWER OR
ANY SUBSIDIARY (WHETHER OR NOT THE RELEASE OF SUCH HAZARDOUS MATERIALS WAS
CAUSED BY THE BORROWER, ANY SUBSIDIARY, A TENANT, OR SUBTENANT OF THE BORROWER
OR ANY SUBSIDIARY, A PRIOR OWNER, A TENANT, OR SUBTENANT OF ANY PRIOR OWNER OR
ANY OTHER PARTY AND WHETHER OR NOT THE ALLEGED LIABILITY IS ATTRIBUTABLE TO THE
HANDLING, STORAGE, GENERATION, TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS
MATERIALS OR THE MERE PRESENCE OF ANY HAZARDOUS MATERIALS ON SUCH PROPERTY;
PROVIDED THAT THE BORROWER SHALL NOT BE LIABLE TO THE INDEMNIFIED PARTIES WHERE
THE RELEASE OF SUCH HAZARDOUS MATERIALS OCCURS AT ANY TIME AT WHICH THE BORROWER
OR ANY SUBSIDIARY CEASES TO OWN OR LEASE SUCH PROPERTY); AND PROVIDED FURTHER
THAT NO INDEMNIFIED PARTY SHALL BE ENTITLED TO THE BENEFITS OF THIS SECTION
12.16 TO THE EXTENT ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT CONTRIBUTED
TO ITS LOSS; AND PROVIDED FURTHER THAT IT IS THE INTENTION OF THE BORROWER TO
INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE CONSEQUENCES OF THEIR OWN
NEGLIGENCE. THIS AGREEMENT IS INTENDED TO PROTECT AND INDEMNIFY THE INDEMNIFIED
PARTIES AGAINST ALL RISKS HEREBY ASSUMED BY THE BORROWER. FOR PURPOSES OF THE
FOREGOING SECTION 12.16, THE PHRASE "CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED THEREBY" SET FORTH IN SUBPARAGRAPH (a) ABOVE SHALL INCLUDE, BUT NOT
BE LIMITED TO, THE FINANCING OF ANY CORPORATE TAKEOVER PERMITTED HEREUNDER AND
THE BORROWER'S USE OF THE LOAN PROCEEDS FOR THE PURPOSE OF ACQUIRING ANY EQUITY
INTERESTS DESCRIBED IN SUBPARAGRAPH (ii) OF THE DEFINITION OF "QUALIFYING
ASSETS" SET FORTH IN THIS AGREEMENT (AS AMENDED). THE OBLIGATIONS OF THE
BORROWER UNDER THIS SECTION 12.16 SHALL SURVIVE ANY TERMINATION OF THIS
AGREEMENT AND THE REPAYMENT OF THE NOTES.
12.17 Payments Set Aside. To the extent that the Borrower makes a payment
or payments to the Agent or any Bank or the Agent or any Bank exercises its
right of set off, and such payment or payments or the proceeds of such set off
or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other Person under any Debtor Law or equitable cause, then, to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied, and all rights and remedies therefor, shall be revived and shall
continue in full force and effect as if such payment had not been made or set
off had not occurred.
12.18 Loan Agreement Controls. If there are any conflicts or
inconsistencies among this Agreement and any other document executed in
connection with the transactions connected herewith, the provisions of this
Agreement shall prevail and control.
12.19 Obligations Several. The obligations of each Bank under this
Agreement and the Note to which it is a party are several, and no Bank shall be
responsible for any obligation or Commitment of any other Bank under this
Agreement and the Note to which it is a party. Nothing contained in this
Agreement or the Note to which it is a party, and no action taken by any Bank
pursuant thereto, shall be deemed to constitute the Banks to be a partnership,
an association, a joint venture, or any other kind of entity.
12.20 Pro Rata Treatment. All Loans under, and all payments and other
amounts received in connection with this Agreement (including, without
limitation, amounts received as a result of the exercise by any Bank of any
right of set off) shall be effectively shared by the Banks ratably in accordance
with the respective Pro Rata Percentages of the Banks. If any Bank shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set off, or otherwise) on account of the principal of, or interest on, or
fees in respect of, any Note held by it (other than pursuant to Section 2.3(d))
in excess of its Pro Rata Percentage of payments on account of similar Notes
obtained by all the Banks, such Bank shall forthwith purchase from the other
Banks such participations in the Notes or Loans made by them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such recovery together with an amount equal
to such Bank's ratable share (according to the proportion of (a) the amount of
such Bank's required repayment to (b) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. Disproportionate
payments of interest shall be shared by the purchase of separate participations
in unpaid interest obligations, disproportionate payments of fees shall be
shared by the purchase of separate participations in unpaid fee obligations, and
disproportionate payments of principal shall be shared by the purchase of
separate participations in unpaid principal obligations. The Borrower agrees
that any Bank so purchasing a participation from another Bank pursuant to this
Section 12.20 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation. Notwithstanding the foregoing, a Bank may
receive and retain an amount in excess of its Pro Rata Percentage to the extent
but only to the extent, that such excess results from such Bank's Highest Lawful
Rate exceeding another Bank's Highest Lawful Rate.
12.21 Replacement of Existing Credit Agreement. Reference is hereby made to
that certain Revolving Credit Agreement dated effective June 10, 2002, by and
among the Borrower, the Agent and the Banks. The indebtedness and obligations of
the Borrower governed by said existing Revolving Credit Agreement have been
refinanced and replaced by the Loans. Accordingly, said existing Revolving
Credit Agreement is hereby replaced in its entirety by this Agreement and said
existing Revolving Credit Agreement shall no longer have any force or effect
12.22 No Rights, Duties or Obligations of Syndication Agent or
Documentation Agent. The Borrower, the Agent and each Bank acknowledge and agree
that except for the rights, powers, obligations and liabilities under this
Agreement and the other Loan Documents as a Bank, Bank One, NA (Main
Office-Chicago), as Syndication Agent, and Fleet National Bank, as Documentation
Agent, shall have no additional rights, powers, obligations or liabilities under
this agreement or any other Loan Documents in their capacities as Syndication
Agent or Documentation Agent, respectively.
12.23 Final Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT'S OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12.24 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
IN WITNESS WHEREOF, the parties hereto, by their respective officers
thereunto duly authorized, have executed this Agreement on the dates set forth
below to be effective as of April 3, 2003.
SOUTHERN UNION COMPANY
By: s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Title: Treasurer
--------------------------------------------
Commitment: JPMORGAN Chase Bank,
$20,000,000 for itself and as Agent for the Banks
By: s/ Xxx X. Sample
-------------------------------------------
Name: Xxx X. Sample
-------------------------------------------
Title: Vice President
-------------------------------------------
Commitment: BANK ONE, NA
$15,000,000 (Main Office-Chicago)
By: s/ Xxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxx X. Xxxx
-------------------------------------------
Title: Associate Director
-------------------------------------------
Address for Notices:
Bank One, NA
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxx
Fax No.: (000) 000-0000
Separate Domestic and Eurodollar Lending Office:
Bank One, NA
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Commitment: CREDIT LYONNAIS NEW YORK BANK
$15,000,000
By: s/ Xxxxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxxxx
-------------------------------------------
Title: Senior Vice President
-------------------------------------------
Address for Notices:
Credit Lyonnais New York Branch
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxx
Fax No.: (000) 000-0000
Commitment: FLEET NATIONAL BANK
$15,000,000
By: s/ Xxxxx Xxxx
-------------------------------------------
Name: Xxxxx Xxxx
-------------------------------------------
Title: Vice President
-------------------------------------------
Address for Notices:
Fleet National Bank
Global Energy
000 Xxxxxxx Xxxxxx, XX DE 10008A
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Mr. Xxxxxxx Xxxxxxx
Fax No.: (000) 000-0000
Commitment: XXXXX FARGO BANK TEXAS, NA
$15,000,000
By: s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------------
Title: Vice President
-------------------------------------------
Address for Notices:
Xxxxx Fargo Bank Texas, NA
0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
Separate Domestic and Eurodollar Lending Office:
Xxxxx Fargo Bank Texas, NA
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Commitment: XXXXXXX XXXXX BUSINESS FINANCIAL
$11,950,000 SERVICES INC.
By: s/ Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxx
-------------------------------------------
Title: Assistant Vice President
-------------------------------------------
Address for Notices:
Xxxxxxx Xxxxx Business Financial Services Inc.
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: Mr. Xxxx Xxxxxxxx
Fax No.: (000) 000-0000
Separate Domestic and Eurodollar Lending Office:
Xxxxxxx Xxxxx Business Financial Services Inc.
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Commitment: UMB BANK, N.A.
$8,000,000
By: s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------------
Title: Senior Vice President
-------------------------------------------
Address for Notices:
UMB Bank, N.A.
0000 Xxxxx Xxxx.
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Commitment: CITIZENS BANK OF RHODE ISLAND
$7,600,000
By: s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President
-------------------------------------------
Address for Notices:
Citizens Bank of Rhode Island
One Citizens Xxxxx
Xxxx Xxxx XX0000
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Commitment: MANUFACTURERS AND TRADERS TRUST
$6,450,000 COMPANY
By: s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------------------------
Title: Vice President
-------------------------------------------
Address for Notices:
Manufacturers & Traders Trust Co.
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Fax No.: (000) 000-0000
Commitment: KBC BANK, N.V.
$6,000,000
By: s/ Xxxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------------------
Title: First Vice President
-------------------------------------------
Address for Notices:
KBC Bank N.V.
New York Branch
Atlanta Representative Xxxxxx
000 Xxxxxxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Fefrante
Fax No.: (000) 000-0000
Separate Domestic and Eurodollar Lending Office:
KBC Bank N.V.
New York Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment: WACHOVIA BANK, NATIONAL ASSOCIATION
$20,000,000
By: s/ Xxxx Xxxxx
------------------------------------------
Name: Xxxx Xxxxx
------------------------------------------
Title: Vice President
------------------------------------------
Address for Notices:
Wachovia Bank, National Association
000 Xxxxxxxxx Xx. XX, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx Xxxxxx
Fax No.: (000) 000-0000
Separate Domestic and Eurodollar Lending Office:
Wachovia Bank, National Association
000 Xxxxx Xxxxxxx Xx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
EXHIBIT A
REVOLVING NOTE
(Short-Term Credit Facility)
$___________ ____________, 200__
FOR VALUE RECEIVED, the undersigned, SOUTHERN UNION COMPANY, a corporation
organized under the laws of Delaware (the "Borrower"), HEREBY PROMISES TO PAY to
the order of ___________________________________ (the "Bank"), on or before the
Maturity Date (as defined in the Credit Agreement), the principal sum of
________________ Million and No/ 100ths Dollars ($_,000,000.00) in accordance
with the terms and provisions of that certain Revolving Credit Agreement
(Short-Term Credit Facility) dated April 3, 2003, by and among the Borrower, the
Bank, the other banks named on the signature pages thereof, and JPMORGAN Chase
Bank, as Agent (the "Credit Agreement"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the Credit
Agreement.
The outstanding principal balance of this Revolving Note shall be payable
at the Maturity Date. The Borrower promises to pay interest on the unpaid
principal balance of this Revolving Note from the date of any Loan evidenced by
this Revolving Note until the principal balance thereof is paid in full.
Interest shall accrue on the outstanding principal balance of this Revolving
Note from and including the date of any Loan evidenced by this Revolving Note to
but not including the Maturity Date at the rate or rates, and shall be due and
payable on the dates, set forth in the Credit Agreement. Any amount not paid
when due with respect to principal (whether at stated maturity, by acceleration
or otherwise), costs or expenses, or, to the extent permitted by applicable law,
interest, shall bear interest from the date when due to and excluding the date
the same is paid in full, payable on demand, at the rate provided for in Section
2.2(b) of the Credit Agreement.
Payments of principal and interest, and all amounts due with respect to
costs and expenses, shall be made in lawful money of the United States of
America in immediately available funds, without deduction, set off or
counterclaim to the account of the Agent at the principal office of JPMorgan
Chase Bank in Houston, Texas (or such other address as the Agent under the
Credit Agreement may specify) not later than noon (Houston time) on the dates on
which such payments shall become due pursuant to the terms and provisions set
forth in the Credit Agreement.
If any payment of interest or principal herein provided for is not paid
when due, then the owner or holder of this Revolving Note may at its option, by
notice to the Borrower, declare the unpaid, principal balance of this Revolving
Note, all accrued and unpaid interest thereon and all other amounts payable
under this Revolving Note to be forthwith due and payable, whereupon this
Revolving Note, all such interest and all such amounts shall become and be
forthwith due and payable in full, without presentment, demand, protest, notice
of intent to accelerate, notice of actual acceleration or further notice of any
kind, all of which are hereby expressly waived by the Borrower.
If any payment of principal or interest on this Revolving Note shall become
due on a Saturday, Sunday, or public holiday on which the Agent is not
open for business, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in computing
interest in connection with such payment.
In addition to all principal and accrued interest on this Revolving Note,
the Borrower agrees to pay (a) all reasonable costs and expenses incurred by the
Agent and all owners and holders of this Revolving Note in collecting this
Revolving Note through any probate, reorganization bankruptcy or any other
proceeding and (b) reasonable attorneys' fees when and if this Revolving Note is
placed in the hands of an attorney for collection after default.
All agreements between the Borrower and the 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 on this Revolving Note or otherwise, shall the amount paid, or agreed to be
paid, to the Bank for the use, forbearance, or detention of the money to be
loaned under the Credit Agreement and evidenced by this Revolving Note or
otherwise or for the payment or performance of any covenant or obligation
contained in the Credit Agreement or this Revolving Note exceed the amount
permissible at Highest Lawful Rate. If as a result of any circumstances
whatsoever, fulfillment of any provision hereof or of the Credit Agreement 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 Bank shall ever receive interest or anything
which might be deemed interest under applicable law which would exceed the
amount permissible at the Highest Lawful Rate, such amount which would be
excessive interest shall be applied to the reduction of the principal amount
owing on account of this Revolving Note or the amounts owing on other
obligations of the Borrower to the Bank under the Credit Agreement and not to
the payment of interest, or if such excessive interest exceeds the unpaid
principal balance of this Revolving Note and the amounts owing on other
obligations of the Borrower to the Bank under the Credit Agreement, as the case
may be, such excess shall be refunded to the Borrower. In determining whether or
not the interest paid or payable under any specific contingencies exceeds the
Highest Lawful Rate, the Borrower and the Bank shall, to the maximum extent
permitted under applicable law, (a) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest; (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate and
spread in equal parts during the period of the full stated term of this
Revolving Note, all interest at any time contracted for, charged, received or
reserved in connection with the indebtedness evidenced by this Revolving Note.
This Revolving Note is one of the Notes provided for in, and is entitled to
the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions and with the
effect therein specified, and provisions to the effect that no provision of the
Credit Agreement or this Revolving Note shall require the payment or permit the
collection of interest in excess of the Highest Lawful Rate. It is contemplated
that by reason of prepayments or repayments hereon prior to the Maturity Date,
there may be times when no indebtedness is owing hereunder prior to such date;
but notwithstanding such occurrence this Revolving Note shall remain valid and
shall be in full force and effect as to Loans made pursuant to the Credit
Agreement subsequent to each such occurrence.
Except as otherwise specifically provided for in the Credit Agreement, the
Borrower and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor or default, protest,
notice of protest, notice of intent to accelerate, notice of acceleration and
diligence in collecting and bringing of suit against any party hereto, and agree
to all renewals, extensions or partial payments hereon and to any release or
substitution of security hereof, in whole or in part, with or without notice,
before or after maturity.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
executed and delivered by its officer thereunto duly authorized effective as of
the date first above written.
SOUTHERN UNION COMPANY
By:_________________________________
Name:_______________________________
Title:________________________________
EXHIBIT B
NOTICE OF BORROWING
(Short-Term Credit Facility)
The undersigned hereby certifies that s/he is an officer of SOUTHERN UNION
COMPANY, a corporation organized under the laws of Delaware (the "Borrower"),
authorized to execute this Notice of Borrowing on behalf of the Borrower. With
reference to that certain Revolving Credit Agreement (Short-Term Credit
Facility) dated April 3, 2003 (as same may be amended, modified, increased,
supplemented and/or restated from time to time, the "Credit Agreement") entered
into by and between the Borrower, JPMORGAN Chase Bank, as Agent, and the Banks
identified therein, the undersigned further certifies, represents and warrants
to Banks on behalf of the Borrower that to his best knowledge and belief after
reasonable and due investigation and review, all of the following statements are
true and correct (each capitalized term used herein having the same meaning
given to it in the Credit Agreement unless otherwise specified):
(a) Borrower requests that the Banks advance to the Borrower the
aggregate sum of $__________by no later than ____________, 200__ (the "Borrowing
Date"). Immediately following such Loan, the aggregate outstanding balance of
Loans shall equal $__________. Borrower requests that the Loans bear interest as
follows:
(i) The principal amount of the Loans, if any, which shall
bear interest at the Alternate Base Rate requested to be made by the
Banks is $________. The initial Rate Period for such Loans shall be 90
days.
(ii) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
fifteen days requested to be made by the Banks is
$___________.
(iii) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
one month requested to be made by the Banks is $__________.
(iv) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
two months requested to be made by the Banks is $_________.
(v) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
three months requested to be made by the Banks is $_________.
(vi) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
six months requested to be made by the Banks is $__________.
(b) The proceeds of the borrowing shall be deposited into Borrower's
demand deposit account at JPMorgan Chase Bank more fully described as follows:
Account No. 09916100522, styled Southern Union Company.
(c) Of the aggregate sum to be advanced, $_____________ will be
advanced to provide working capital pursuant to Section 5.1(a) of the Credit
Agreement and $__________will be advanced for the purposes set forth in Section
5.1(b) of the Credit Agreement; and $__________ will be advanced for the
purposes set forth in Section 5.1(c) of the Credit Agreement; and $___________
will be advanced for the purposes of replacing Loans currently outstanding under
the Credit Agreement.
(d) The Expiration Date of each Rate Period specified in (a) above
shall be the last day of such Rate Period.
(e) As of the date hereof, and as a result of the making of the
requested Loans, there does not and will not exist any Default or Event of
Default.
(f) The representations and warranties contained in Section 6 of the
Credit Agreement are true and correct in all material respects as of the date
hereof and shall be true and correct upon the making of the requested Loan, with
the same force and effect as though made on and as of the date hereof and
thereof.
(g) No change that would cause a material adverse effect on the
business, operations or condition (financial or otherwise) of the Borrower has
occurred since the date of the most recent financial statements provided to the
Banks dated as of __________, 200__.
EXECUTED AND DELIVERED this _____ day of _______________, 200__.
SOUTHERN UNION COMPANY
By:_________________________
Name:_______________________
Title:________________________
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
[NAME AND ADDRESS OF
ASSIGNING BANK]
_______________, 200__
________________
________________
________________
________________
Re: Southern Union Company Revolving Credit Agreement (Short-Term Credit
Facility)
Ladies and Gentlemen:
We have entered into a Revolving Credit Agreement (Short-Term Credit
Facility) dated as of April 3, 2003 (the "Credit Agreement"), among certain
banks (including us), JPMorgan Chase Bank, which has been succeeded through
merger by The Chase Manhattan Bank (the "Agent") and Southern Union Company (the
"Company"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in the Credit Agreement.
Each reference to the Credit Agreement, the Notes, or any other document
evidencing or governing the Loans (all such documents collectively, the
"Financing Documents") includes each such document as amended, modified,
extended or replaced from time to time. All times are Houston times.
1. ASSIGNMENT. We hereby sell you and assign to you without recourse, and you
hereby unconditionally and irrevocably acquire for your own account and risk, a
percent ( %) undivided interest ("your assigned share") in each of the following
(the "Assigned Obligations"):
a. our Note;
b. all Loans and interest thereon as provided in Section 2 of the Credit
Agreement [,except that interest shall accrue on your assigned share in the
principal of Alternate Base Rate Loans and Eurodollar Rate Loans at an annual
rate equal to the rate provided in the Credit Agreement minus _____%]; and
c. commitment fees payable pursuant to Section 4 of the Credit Agreement[,
except that your assigned share in such fees shall be at an annual rate equal to
the rate provided in the Credit Agreement minus ____%].
2. MATERIALS PROVIDED ASSIGNEE
a. We will promptly request that the Company issue new Notes to us and to
you in substitution for our Note to reflect the assignment set forth herein.
Upon issuance of such substitute Notes, (i) you will become a Bank under the
Credit Agreement, (ii) you will assume our obligations under the Credit
Agreement to the extent of your assigned share, and (iii) the Company will
release us from our obligations under the Credit Agreement to the extent, but
only to the extent, of your assigned share. The Company consents to such release
by signing this Agreement where indicated below. As a Bank, you will be entitled
to the benefits and subject to the obligations of a "Bank", as set forth in the
Credit Agreement, and your rights and liabilities with respect to the other
Banks and the Agent will be governed by the Credit Agreement, including without
limitation Section 11 thereof.
b. We have furnished you copies of the Credit Agreement, our Note and each
other Financing Document you have requested. We do not represent or warrant (i)
the priority, legality, validity, binding effect or enforceability of any
Financing Document or any security interest created thereunder, (ii) the
truthfulness and accuracy of any representation contained in any Financing
Document, (iii) the filing or recording of any Financing Document necessary to
perfect any security interest created thereunder, (iv) the financial condition
of the Company or any other Person obligated under any Financing Document, any
financial or other information, certificate, receipt or other document furnished
or to be furnished under any Financing Document or (v) any other matter not
specifically set forth herein having any relation to any Financing Document,
your interest in one Note, the Company or any other Person. You represent to us
that you are able to make, and have made, your own independent investigation and
determination of the foregoing matters, including, without limitation, the
credit worthiness of the Company and the structure of the transaction.
3. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas. You irrevocably
submit to the jurisdiction of any State or Federal court sitting in Austin,
Texas in any suit, action or proceeding arising out of or relating to this
Agreement and irrevocably waive any objection you may have to this laying of
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding has been brought in an
inconvenient forum. We may serve process in any manner permitted by law and may
bring proceedings against you in any other jurisdiction.
4. NOTICES. All notices and other communications given hereunder to a party
shall be given in writing (including bank wire, telecopy, telex or similar
writing) at such party's address set forth on the signature pages hereof or such
other address as such party may hereafter specify by notice to the other party.
Notice may also be given by telephone to the Person, or any other officer in the
office, listed on the signature pages hereof if confirmed promptly by telex or
telecopy. Notices shall be effective immediately, if given by telephone; upon
transmission, if given by bank wire, telecopy or telex; five days after deposit
in the mails, if mailed; and when delivered, if given by other means.
5. AUTHORITY. Each of us represents and warrants that the execution and delivery
of this Agreement have been validly authorized by all necessary corporate action
and that this Agreement constitutes a valid and legally binding obligation
enforceable against it in accordance with its terms.
6. COUNTERPARTS. This Agreement may be executed in one or more counterparts, and
by each party on separate counterparts, each of which shall be an original but
all of which taken together shall be but one instrument.
7. AMENDMENTS. No amendment modification or waiver of any provision of this
Agreement shall be effective unless in writing and signed by the party against
whom enforcement is sought.
If the foregoing correctly sets forth our agreement, please so indicate by
signing the enclosed copy of this Agreement and returning it to us.
Very truly yours,
----------------------------------------
By: ____________________________________
Name: __________________________________
Title: _________________________________
[Street Address] ______________________
[City, State, Zip Code]_________________
Telephone: _____________________________
Telecopy:_______________________________
AGREED AND ACCEPTED:
__________________________________
By: _________________________
Name: _________________________
Title: _________________________
_________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ___________________
Account for Payments: ____________
ASSIGNMENT APPROVED PURSUANT TO SECTION 12.13 OF THE CREDIT AGREEMENT AND
RELEASE APPROVED IN SECTION 2 OF THIS AGREEMENT:
SOUTHERN UNION COMPANY JPMORGAN CHASE BANK, AGENT
By: _______________________ By: _______________________
Name: _______________________ Name: _______________________
Title: _______________________ Title: _______________________
EXHIBIT D
SUMMARY OF TERMS AND CONDITIONS
BRIDGE FACILITY
Borrower: Southern Union Company (the "Borrower").
Guarantors: Southern Union Panhandle and other direct
subsidiaries of the Borrower [other than
Panhandle Eastern (as defined below) and
its subsidiaries], referred to herein as
the "Guarantors", and the Guarantors,
together with the Borrower, are sometimes
referred to herein as the "Obligors".
Facility Description: Up to $115,000,000 (but not
less than $100,000,000) term loan (the
"Facility") with a maturity of six months
from the date of closing of the Panhandle
Eastern Acquisition (the "Closing Date"),
but in no event later than September 1,
2003 (the "Maturity Date"). The Facility
will be available for drawdown until the
Closing Date, but in no event later than
May 1, 2003.
Security: The Facility will be unsecured.
Purpose: The Facility will be used (i) to finance a
portion of the Panhandle Eastern
Acquisition of Panhandle Eastern (each as
defined on Schedule 1 hereto) and (ii) to
pay fees and expenses incurred in
connection with the Panhandle Eastern
Acquisition.
Joint Lead Arrangers and X.X. Xxxxxx Securities Inc. and [Merrill
Bookrunners: Xxxxx Capital Markets] (together,
the "Lead Arrangers").
Administrative Agent: JPMorgan Chase Bank ("JPMC" or the
"Administrative Agent").
Syndication Agent: Xxxxxxx Xxxxx Capital Markets.
Borrowing Options: LIBOR and Base Rate.
Base Rate means the higher of the
Administrative Agent's prime rate and the
federal funds rate + 0.50%.
LIBOR adjustments for Regulation D will be
charged by Lenders individually.
Pricing: Pricing on the commitments and loans will
be at the rates per annum set forth
in the attached Pricing Schedule,
expressed in basis points per annum.
Interest Payments: At the end of each applicable Interest
Period.
Interest Periods: 1, 2 or 3 months.
Drawdown: A single drawdown with same day notice if
Base Rate Loans and three business
days' notice if LIBOR Loans.
Optional Prepayments: Base Rate Loans may be prepaid at any time
on one business day's notice. LIBOR Loans
may be prepaid upon at least three
business days' notice subject to funding
losses. Amounts prepaid may not be
reborrowed.
Mandatory Commitment 100% of the net cash proceeds from the
Reductions and issuance or incurrence after the Closing
Prepayments: Date of equity or debt by
the Borrower shall be applied to reduce
the commitments under the Facility (if
still in existence) or to prepay the
Facility. 100% of the amount of proceeds
received by the Borrower or SUPH from
distributions or loans from Panhandle
Eastern, including distributions received
from Panhandle Eastern upon the Trunkline
LNG Holdings Sale (as defined below).
The Borrower will cause Panhandle Eastern
and SUPH to distribute to the Borrower its
share of any and all net cash proceeds
received by Panhandle Eastern upon such
sale or any other asset sale. Amounts
prepaid may not be reborrowed.
Representations Customary for credit agreements of this
and Warranties: nature, with respect to the Obligors and
their subsidiaries (including Panhandle
Eastern and its subsidiaries), including
but not limited to:
1. Existence and qualification; power;
compliance with laws.
2. Authority; no conflict.
3. No governmental approvals required.
4. Enforceability.
5. Litigation.
6. No default.
7. ERISA compliance.
8. Use of proceeds; margin regulations.
9. Tax liability.
10. Financial statements; no material
adverse change.
11. Environmental compliance.
12. Public Utility Holding Company Act;
Investment Company Act.
13. Disclosure.
14. Collateral matters.
15. Panhandle Eastern Acquisition matters.
Conditions: Customary in credit agreements of this
nature, including but not limited to:
1. Absence of default.
2. Accuracy of representations and
warranties.
3. Negotiation and execution of
satisfactory credit agreement and
customary closing documentation
(including legal opinions).
4. Payment of fees.
5. Consummation of the Panhandle Eastern
Acquisition on terms satisfactory to
the Lenders.
6. Completion of and satisfaction
with the results of due diligence
with respect to the Borrower and
its subsidiaries and Panhandle
Eastern and its subsidiaries.
7. Absence of material adverse
condition or material adverse
change in or affecting the
business, operations, property,
condition (financial or
otherwise) or prospects of the
Borrower and its subsidiaries, or
Panhandle Eastern and its
subsidiaries, in each case taken
as a whole.
8. The fact that the Panhandle
Eastern Acquisition and all other
elements of the Transactions
shall close simultaneously with
the closing of the Facility, on
terms and conditions
substantially as described to
Lenders prior to the date of the
Commitment Letter, with such
changes thereto as the Lenders
may approve in their sole
discretion. .
9. The fact that the Borrower shall
have received all amendments or
consents under its other existing
financing arrangements that are
necessary or reasonably desirable
to permit the consummation of the
Panhandle Eastern Acquisition on
the terms contemplated thereby,
all of which shall be in form and
substance satisfactory to the
Lenders.
10. The fact that the AIG Loan (as
defined in Schedule 1) shall be
funded prior to or simultaneously
with the closing of the Facility,
all on terms and conditions
satisfactory to the Lenders in
their sole discretion
11. Absence of any disruption of or
adverse change (or development that
could reasonably be expected to result
in a material adverse change) in or
affecting U.S. or international loan
syndication, banking, financial or
capital market conditions from those
in effect on the date hereof that,
individually or in the aggregate, in
our good faith judgment has or could
have a material adverse affect on our
ability to fund or syndicate the
Facility, or on the Borrower's
ability to consummate a refinancing
transaction to refinance the
Facility in whole promptly after the
Closing Date.
Covenants of each Obligor: Customary in credit agreements of this
nature, and applicable to the Obligors and
their subsidiaries (including Panhandle
Eastern and its subsidiaries) including
but not limited to:
1. Financial statements.
2. Certificates, notice and other
information.
3. Preservation of existence; maintenance
of corporate separateness.
4. Merger, consolidation, etc.
5. Sale of assets.
6. Maintenance of insurance.
7. Payment of taxes and other potential
liens.
8. Compliance with laws.
9. Environmental laws.
10. Compliance with ERISA.
11. Negative pledge
12. Accounting changes.
13. Limitation on debt of the Borrower.
14. Prohibition on dividends and other
restricted payments (including
intercompany loans) by the Borrower
while a default exists.
15. Financial covenants consistent with
the amended revolving and term loan
credit facilities including, but not
limited to, the following (with
covenants as defined in the
Amended and Restated Term Loan
Credit Agreement dated as of July
15, 2002, as amended to the
Closing Date, among the Borrower,
the Lenders party thereto, and
JPMC, as agent): (a) Consolidated
Total Indebtedness to
Consolidated Total Capitalization
of the Borrower (each determined
without inclusion of [either (x)]
the AIG Loan [or (y) to the
extent included in Debt of the
Borrower and its subsidiaries,
Equity-Preferred Securities (as
defined in Schedule 1) not to
exceed 10% of Consolidated Total
Capitalization (calculated for
purposes of this clause (y)
without reference to any
Equity-Preferred Securities))]
not to exceed (i) 75% at the end
of any fiscal quarter ending on
or after the Exchange Company's
acquisition of all stock and
other equity interests in
Panhandle Eastern in connection
with the Panhandle Eastern
Acquisition, but before the
consummation of either the
Additional Equity Offering or the
Trunkline LNG Holdings Sale (as
defined in Schedule 1 hereto),
(ii) 0.70 to 1.00 at the end of
any fiscal quarter ending on or
after the consummation of either
the Additional Equity Offering or
the Trunkline LNG Holdings Sale,
and (iv) 0.65 to 1.00 at the end
of any fiscal quarter ending on
or after the consummation of both
the Additional Equity Offering
and the Trunkline LNG Holdings
Sale; (b) minimum EBDIT to
interest expense of 2.00 to 1.00,
and (c) minimum Consolidated Net
Worth of not less than the sum of
(i) $751,887,000, (ii) 40% of
Consolidated Net Income (if
positive) for the fiscal quarters
after the Closing Date, treated
as a single period and (iii)
certain adjustments made with
respect to equity additions and
payments with respect to equity.
16. Satisfactory SEC disclosure regarding
the loan.
17. Restriction on agreements that limit,
directly or indirectly, the Borrower
from granting a lien on the stock or
other equity interests in Southern
Union Panhandle as security for
obligations under the Facility,
with exceptions for negative
pledges under existing credit
agreements of the Borrower to be
specified.
Events of Default: Customary in credit agreements of this nature,
including but not limited to the following:
1. Failure to pay any principal when due.
2. Failure to pay interest and fees
within five business days of the due
date.
3. Failure to meet covenants (with grace
periods, where appropriate).
4. Representations or warranties false in
any material respect when made.
5. Cross default to Material Debt of the
Borrower or any of its subsidiaries
(to be defined as debt in a principal
amount of at least $10 million).
6. Change of ownership or control of the
Borrower.
7. Failure of (i) the Borrower to own at
least 78% of the capital stock of
Southern Union Panhandle (as defined
in Schedule 1) or (ii) Southern Union
Panhandle to own 100% of the capital
stock of Panhandle Eastern.
8. Credit Agreement or any guarantee
shall be unenforceable or invalid.
9. Other usual defaults with respect to
the Obligors, including but not
limited to insolvency, bankruptcy,
ERISA and judgment defaults.
Increased Costs/Change of The credit agreement will contain
Circumstances: customary provisions protecting the
Lenders in the event of unavailability of
funding, illegality, increased costs and
funding losses.
Indemnification: The Obligors will indemnify the Lenders
against all losses, liabilities, claims,
damages, or expenses relating to their
loans, the Borrower's use of loan proceeds
or the commitments, including but not
limited to reasonable attorneys' fees and
settlement costs (except such as result
from the indemnitee's gross negligence or
willful misconduct).
Transfers and Participations: Lenders will have the right to transfer or
sell participations in their loans or
commitments with the transferability of
voting rights in the case of
participations limited to changes in
principal, rate, fees and term.
Assignments, which must be in amounts of
at least $5 million, will be allowed with
the consent of the Administrative Agent
and (so long as no Event of Default as to
it has occurred and is continuing) the
Borrower (such consent not to be
unreasonably withheld); provided that
assignments will be allowed within the
Lender group and to a Lender's affiliates
without any consent requirement. In
connection with each assignment, the
assignor Lender will pay the
Administrative Agent a $3,500 processing
fee.
Required Lenders: Majority of the aggregate amount of the
commitments.
Expenses: The Obligors will pay all legal and other
reasonable out-of-pocket expenses of the
Initial Lenders, Lead Arrangers and the
Administrative Agent to this transaction
and any subsequent amendments or waivers,
including the expenses and reasonable fees
of Xxxxx Xxxx & Xxxxxxxx, special counsel
to the Administrative Agent.
Governing Law: New York.
PRICING SCHEDULE TO BRIDGE LOAN TERM SHEET
Commitment Fee and Applicable Margins: A commitment fee, at a rate determined in
accordance with the following table, per annum will be charged on the unused
commitments. The "Eurodollar Margin" applicable to outstanding LIBOR Loans shall
be determined in accordance with the following grid, provided, however that for
all periods subsequent to the date 90 days following the Closing Date, the
Eurodollar Margin shall be the Additional Percentage Per Annum determined in
accordance with the following grid plus 1.00%. The "Base Rate Margin" applicable
to outstanding Base Rate Loans shall be the Eurodollar Margin reduced by 1.00%.
======================================================== ===================== =========================
Additional Commitment Fee
Rating of the Borrower's unsecured, non-credit Percentage Per Percentage Per Annum
enhanced Senior Funded Debt Annum
-------------------------------------------------------- --------------------- -------------------------
-------------------------------------------------------- --------------------- -------------------------
Equal to or greater than Baa2 by Moody's or equal to
or greater than BBB by S&P 1.25% 0.150%
-------------------------------------------------------- --------------------- -------------------------
-------------------------------------------------------- --------------------- -------------------------
Baa3 by Moody's or BBB- by S&P 1.50% 0.175%
-------------------------------------------------------- --------------------- -------------------------
-------------------------------------------------------- --------------------- -------------------------
Equal to or less than Ba1 by Moody's and equal to or
less than BB+ by S&P 2.00% 0.250%
======================================================== ===================== =========================
In the event that the ratings for Borrower's unsecured, non-credit enhanced
Senior Funded Debt specified by Standard & Poor's Ratings Group and Xxxxx'x
Investor Service, Inc. fall within different rating categories which are not
functional equivalents, the Eurodollar Margin shall be based on the higher of
such ratings if there is only one category difference between the functional
equivalents of such ratings, and if there is a two category difference between
the functional equivalents of such ratings, the Eurodollar Margin shall be based
on the rating category which is equivalent to one rating higher than the lower
of the two ratings then in effect.
In the event that Borrower withdraws from having its unsecured, non-credit
enhanced Senior Funded Debt being rated by Xxxxx'x Investor Service, Inc. or
Standard and Poor's Ratings Group, so that one or both of such ratings services
fails to rate the Borrower's unsecured, non-credit enhanced Senior Funded Debt,
the component of pricing from the grid set forth above for purposes of
determining the applicable Eurodollar Rate for all Rate Periods commencing
thereafter shall be 2.00% until such time as Borrower subsequently causes its
unsecured, non-credit enhanced Senior Funded Debt to be rated by both of said
ratings services.
The Applicable Margin shall be payable monthly in arrears on each determination
date based on outstanding loans during the period then ended.
Funding Fee: The Borrower shall pay to the Administrative Agent on the Closing
Date, for the account of the Lenders pro rata in accordance with each Lender's
funded Loan amount, a fee equal to [0.25]% of the amount of Loans borrowed on
the Closing Date.
Duration Fee: On the 30th day after the Closing Date, the Borrower shall pay to
the Administrative Agent, for the account of the Lenders pro rata in accordance
with each Lender's outstanding Loan on such day, a fee equal to [0.25]% of the
aggregate principal amount of all Loans outstanding on such day.
SCHEDULE 1 TO BRIDGE LOAN TERM SHEET
THE PANHANDLE EASTERN ACQUISITION AND CERTAIN RELATED DEFINITIONS
Additional Equity Offering: Shall mean (a) a public offering by the Borrower
of additional capital stock in the Borrower
resulting in not less than $100,000,000.00 of
net equity proceeds being received by the
Borrower and (b) any additional offering or
issuance of capital stock, Equity-Preferred
Securities or any other equity interests in
Borrower or Southern Union Panhandle (to
the extent permitted under the applicable
negative covenants restricting issuance of
stock in any Subsidiary of Borrower), so long
as all net cash proceeds from any such offering
or issuance of equity described in clauses
(a) or (b) above are applied in the following
order: (i) first, to payment of the Bridge Loan;
and (ii) the balance, if any, for other working
capital needs of the Borrower or any of its
subsidiaries, including without limitation,
the payment of the AIG Loan
AIG Entities: Shall mean AIG Highstar Capital, L.P., a
Delaware limited partnership, AIG Highstar
Funding Corp., a Delaware corporation, and any
other permitted owner and holder of any shares
of stock or other equity interests in Southern
Union Panhandle not owned and held by the
Borrower or any of the Borrower's subsidiaries
AIG Loan: Shall mean a credit facility to be provided to
the Borrower by one or more of the AIG Entities
in an aggregate principal amount not to exceed
$150,000,000.00 for purposes of financing a
portion of the acquisition costs for the
Panhandle Eastern Acquisition, said loan to be
(a) non-recourse to the Borrower, (b) secured
only by 28% of the issued and outstanding
stock and other equity interests in Southern
Union Panhandle and (c) subject to other terms
and conditions acceptable to the Administrative
Agent in all respects
Equity-Preferred Securities: Shall mean (i) Debt, preferred equity or any
other securities that are mandatorily
convertible by the issuer thereof a date
certain, without cash payment by the issuer,
into common shares of stock of the Borrower or
(ii) any other securities (A) that are issued by
the Borrower or any Subsidiary, (B) that are
not subject to mandatory redemption at any
time, directly or indirectly, (C) that are
perpetual or mature not less than 30 years
from any date of issuance, (D) the Debt
component, if any, issued in connection
therewith, including any guaranty, is
subordinate in right of payment to all other
unsecured and unsubordinated Debt of the issuer
of such Debt component (including any such
guaranty, if applicable), and (E) the terms of
which permit the issuer thereof to defer at any
time, without any additional payment or
premium, the payment of any and all interest
and/or distributions thereon, as applicable, to
a date occurring after [the date that is 364
days after effectiveness of the First Amendment
to the existing Revolving Credit Agreement]
Exchange Company: Shall mean Southern Union
Exchange Company, a Delaware corporation
and/or any other entity created and owned
by Chicago Deferred Exchange Corporation
that the Borrower hereafter enters into a
"qualified exchange accommodation
agreement" with for purposes of
facilitating the Panhandle Eastern
Acquisition
Panhandle Eastern: Shall mean Panhandle Eastern Pipeline Company,
a Delaware corporation
Panhandle Eastern Acquisition: Shall mean the
acquisition by the Exchange Company of
100% of all issued and outstanding stock
and other equity interests, if any, in
Panhandle Eastern in accordance with the
Panhandle Eastern Acquisition Agreement,
so long as such acquisition is in
substantial compliance with the following
specified terms:
(a) immediately after the finalization and consummation of
such acquisition, Panhandle Eastern is a wholly-owned
Subsidiary of the Exchange Company;
(b) the aggregate consideration paid for all stock and
other equity interests in Panhandle Eastern shall not
exceed $663,000,000.00 in cash, with the source of said
cash purchase price to be a combination of some or all
of the following: (i) $406,000,000.00 of "like-kind"
exchange proceeds previously received from the prior
sale to ONEOK, Inc. of the "Southern Union Gas Company"
Texas division and certain other related assets; (ii)
the proceeds of the AIG Loan; (iii) the proceeds of the
Additional Equity Offering, if any; (iv) the proceeds
of the Bridge Loan, if required; and (v) other cash, if
any, held by or available to the Borrower;
(c) the Exchange Company shall make a Section 338(h)(10)
election under the Internal Revenue Code as part of the
closing of such acquisition, and as soon as reasonably
possible after the finalization and consummation of
such acquisition, the Exchange Company shall cause
Panhandle Eastern and each of its applicable
subsidiaries to convert from "C corporations" to
limited liability companies after receipt of all
requisite approvals and consents from any Governmental
Authority, including without limitation, the Federal
Energy Regulatory Commission;
(d) immediately after such conversion of Panhandle Eastern
and each of its applicable subsidiaries from "C
corporations" to limited liability companies, the
Exchange Company shall distribute to the Borrower 100%
of all membership and other equity interests in
Panhandle Eastern, thus causing Panhandle Eastern to be
a wholly-owned Subsidiary of the Borrower;
(e) immediately after such distribution to the Borrower of
100% of all membership and other equity interests in
Panhandle Eastern, the existing Debt of Panhandle
Eastern and its subsidiaries may cause Consolidated
Total Indebtedness to increase by not more than
$1,170,000,000.00 in the aggregate, provided that
neither the Borrower nor any of its subsidiaries
existing prior to such distribution shall have, incur
or assume any liability with respect to such existing
Debt of Panhandle Eastern and its subsidiaries;
(f) one (1) Business Day after such distribution by the
Exchange Company to the Borrower of all membership and
other equity interests in Panhandle Eastern, the
Borrower shall distribute to Southern Union Panhandle
100% of all membership and other equity interests in
Panhandle Eastern; and
(g) all requisite approvals and consents from any
Governmental Authority with respect to the
above-described acquisitions and distributions shall
have been received by the Borrower in a form acceptable
to the Administrative Agent
Panhandle Eastern Shall mean that certain Stock Purchase Agreement
Acquisition Agreement: dated December 21, 2002, by and between CMS Gas
Transmission Company, as seller, Southern Union
Panhandle, as purchaser, and the Borrower and the
AIG Entities, as sponsors, as the same
may hereafter be amended, modified, supplemented,
restated or replaced (the form of any such amendment,
modification, etc. to be approved by the Administrative
Agent, such approval to not be unreasonably withheld,
conditioned or delayed), it being contemplated that
such Stock Purchase Agreement will be assigned by the
Borrower to the Exchange Company to facilitate the
Panhandle Eastern Acquisition
Southern Union Shall mean Southern Union Panhandle Corp.,
Panhandle: a Delaware corporation formed by the Borrower for the
purpose of ultimately owning and holding 100% of all
issued and outstanding equity interests in Panhandle
Eastern
Trunkline LNG Holdings: Shall mean CMS Trunkline LNG Holdings, LLC, a Delaware
limited liability company
Trunkline LNG Holdings Sale: Shall mean the sale by
Panhandle Eastern to a third-party that is
not an Affiliate of the Borrower or any of
the AIG Entities of all or a portion of
the issued and outstanding stock and other
equity interests, if any, in Trunkline LNG
Holdings, so long as such sale is
finalized and consummated in substantial
compliance with the following specified
terms:
(a) all cash proceeds received by
Panhandle Eastern from such sale,
less customary and reasonable
transaction fees and the amount
of all taxes payable by the
Panhandle Eastern attributable to
such sale, shall by fully
distributed by Panhandle Eastern
to Southern Union Panhandle, and
in turn by Southern Union
Panhandle to the Borrower and the
AIG Entities;
(b) all cash proceeds distributed to
the Borrower from such sale shall
be immediately applied against
the Borrower's Debt in the
following order: (i) first to the
Bridge Loan until the same is
fully paid; (ii) second, 50% of
the remaining cash proceeds shall
be applied to the Term Loan
Facility; and (iii) the balance,
if any, shall be applied to Debt
under the Short-Term Revolving
Credit Facility and/or Debt
outstanding under the Long-Term
Revolving Credit Facility; and
(c) all requisite approvals and
consents from any Governmental
Authority with respect to such
sale shall have been received by
Panhandle Eastern in a form
acceptable to the Administrative
Agent.
