Exhibit 10.02
March 28, 2003
Duke Energy Field Services, LLC
000 00xx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Chief Financial Officer
Ladies/Gentlemen:
Bank One, NA, having its principal office in Chicago, Illinois (the
"Lender"), is pleased to make a term loan (the "Term Loan") in the amount of
$100,000,000 on the date hereof to Duke Energy Field Services, LLC (the
"Borrower") on the terms and conditions set forth below.
1. The principal amount of the Term Loan may be divided into
tranches (each a "Tranche") which will bear interest, at the Borrower's option:
(a) at a rate equal to the higher of (i) the prime rate of
interest announced by the Lender from time to time (the "Prime Rate"), changing
when and as the Prime Rate changes, and (ii) the sum of (x) the Federal Funds
Effective Rate (as defined below) most recently determined by the Lender plus
(y) 0.50% per annum, with interest payable on the first business day of each
calendar quarter, on the Maturity Date (as defined below), and on demand
thereafter (any Tranche bearing interest as described in this clause (a), an
"ABR Tranche"); or
(b) subject to availability and for interest periods of one, two
or three months (provided that no such interest period may extend beyond the
Maturity Date), at a fixed rate equal to the sum of 1.35% per annum plus the
Eurodollar Rate, where "Eurodollar Rate" means the applicable London interbank
offered rate for deposits in U.S. dollars appearing on the display designated as
page "3750" of the Telerate Service (or such other page as may replace the 3750
page of that service or, if the Telerate Service shall cease displaying such
rates, such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London Interbank Offered Rates for
U.S. Dollar deposits) as of 11:00 a.m. (London time) two business days prior to
the first day of the applicable interest period, and having a maturity equal to
such interest period, adjusted for maximum statutory reserve requirements, with
interest payable on the last day of such interest period (a Tranche bearing
interest as described in this clause (b), a "Eurodollar Tranche").
As used herein, "Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the rates on overnight
Federal Funds transaction with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day by the Federal Reserve Bank of
New York, or if such rate is not so published for such day, the average of the
quotations for such day on such transactions received by the Lender from three
Federal funds brokers of recognized standing selected by it.
Each Tranche shall be in the amount of $10,000,000 or a higher integral
multiple of $1,000,000. Initially, the entire Term Loan shall be a Eurodollar
Tranche having an interest period of one month.
The Borrower may elect to convert all or any portion (subject to the
last sentence of this paragraph) of any ABR Tranche to a Eurodollar Tranche or
vice versa, or to continue any Eurodollar Tranche for a new interest period, by
giving notice to the Lender not later than 10:00 a.m. (Chicago time) on the date
of any conversion to an ABR Tranche or three business days prior to any
conversion to or continuation of a Eurodollar Tranche. If at the end of any
interest period for a Eurodollar Tranche, the Borrower has not timely selected a
new interest period, such Tranche shall automatically convert to an ABR Tranche.
After giving effect to any conversion or continuation, the principal amount of
each Tranche shall be $10,000,000 or a higher integral multiple of $1,000,000.
Notwithstanding the foregoing provisions of this Section 1, if any
principal of the Term Loan is not paid when due (by acceleration or otherwise),
such principal shall bear interest from such due date until paid at a rate per
annum equal to the sum of 1% plus the rate otherwise applicable thereto pursuant
to the terms hereof.
2. All computations of interest on ABR Tranches when the
applicable interest rate is determined by the Prime Rate shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of interest shall be made on the basis of a 360-day year
and actual days elapsed.
3. The Term Loan shall be due and payable on September 30, 2003
(the "Maturity Date"). The Borrower may from time to time prepay the Term Loan
in whole or in part upon (a) three business days' prior notice, in the case of a
prepayment of a Eurodollar Tranche, or (b) same day notice, in the case of an
ABR Tranche; provided that each partial prepayment of a Tranche shall be in an
integral multiple of $1,000,000 and, after giving effect to any prepayment the
principal amount of each Tranche shall be $10,000,000 or a higher integral
multiple of $1,000,000.
4. The obligation of the Lender to make the Term Loan is subject
to conditions precedent that (a) the Lender shall have received appropriate
resolutions, an incumbency certificate, an opinion of counsel and such other
documents as the Lender may reasonably request; (b) the representations and
warranties of the Borrower in Section 5 shall be true and correct in all
material respects as of the date of the making of the Term Loan; and (c) no
Event of Default (as defined below) or event which, with the giving of notice,
the passage of time or both, would become an Event of Default shall exist or
would result therefrom.
5. The Borrower represents and warrants to the Lender that:
(a) None of the execution and delivery of this letter agreement,
the consummation of the transactions contemplated herein, nor the performance of
and compliance with the terms and provisions hereof by the Borrower will (i)
violate or conflict with any provision of its organizational documents or
bylaws, (ii) materially violate, contravene or conflict with any applicable law
(including, without limitation, the Public Utility Holding Company Act of 1935,
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as amended), regulation (including, without limitation, Regulation U or X of the
Board of Governors of the Federal Reserve System (the "FRB")), order, writ,
judgment, injunction, decree or permit applicable to it, (iii) materially
violate, contravene or conflict with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract, agreement or instrument to which it is a party or by which it may be
bound or (iv) result in or require the creation of any Lien (as defined in the
Syndicated Agreement) upon or with respect to its properties;
(b) this letter agreement is the Borrower's legal, valid and
binding obligation, enforceable against the Borrower in accordance with its
terms, except as enforceability may be limited by bankruptcy or insolvency laws
or similar laws affecting creditors' rights generally or by general equitable
principles;
(c) the proceeds of the Term Loan will be used for the Borrower's
general company purposes, and none of such proceeds will be used for the purpose
of (i) purchasing or carrying any "margin stock" as defined in Regulation U or X
of the FRB, (ii) for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry "margin stock", (iii) for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of Regulation U or X of the FRB or (iv) for the acquisition of another
entity unless the board of directors (or other comparable governing body) or
stockholders, as appropriate, of such entity have approved such acquisition; and
(d) each of the representations and warranties set forth in
Section 6 of the Credit Agreement (the "Syndicated Agreement") dated as of March
28, 2003 among the Borrower, Duke Energy Field Services Corporation, various
lenders and JPMorgan Chase Bank, as agent, is true and correct as if each of
such representations and warranties (and all related definitions) were set forth
in full herein (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they were true and correct as
of such earlier date).
6. The Borrower will perform, comply with and observe for the
Lender's benefit the covenants set forth in Sections 7 and 8 of the Syndicated
Agreement and, for purposes of the foregoing, the provisions of such Sections,
together with all related definitions, are incorporated herein by reference,
mutatis mutandis, and shall be deemed to continue in effect for the Lender's
benefit as in effect on the date hereof, whether or not the Syndicated Agreement
remains in effect or is amended, waived or otherwise modified by the parties
thereto.
7. Each of the following shall constitute an "Event of Default"
hereunder: (a) the Borrower fails to pay any principal of the Term Loan when due
or any interest, fee or other amount payable hereunder within five days of the
due date therefor; (b) the Borrower fails to comply with or to perform any
provision of this letter agreement and, in the case of any provision hereof
which is incorporated by reference from the Syndicated Agreement, other than
Sections 7.1(e), 7.8, 7.10, 8.1, 8.2, 8.3, 8.4, 8.5 and 8.6 thereof, such
failure shall continue unremedied for a period of at least 30 days after the
earlier of (x) a Responsible Officer (as defined in the Syndicated Agreement) of
the Borrower becomes aware of such failure or (y) notice of such failure is
given by the Lender to the Borrower; (c) any representation or warranty made by
the Borrower herein or any in any writing furnished in connection herewith or
pursuant hereto shall prove to have been untrue in any material respect on the
date as of when made; or
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(d) an "Event of Default" as defined in the Syndicated Agreement (as now or
hereafter in effect) shall occur and be continuing.
Upon the occurrence of an Event of Default resulting from an "Event of
Default" under Section 9.1(e) of the Syndicated Agreement all obligations
hereunder shall become immediately due and payable in full; and upon the
occurrence of any other Event of Default, the Lender may declare the principal
of and accrued interest on the Term Loan, and all other amounts payable
hereunder, to be forthwith due and payable in full.
8. Subject to the terms of the commitment letter dated March 25,
2003, the Lender may (a) make assignments of the Term Loan (with the consent of
the Borrower, such consent not to be unreasonably withheld), provided that any
partial assignment shall be in an amount equal to $10,000,000 (or, if less, the
remaining amount of the Term Loan) or a higher integral multiple of $1,000,000,
(b) sell participations in the Term Loan and (c) disclose information pertaining
to the Borrower to prospective assignees and participants, provided that such
prospective assignees and participants execute and deliver an agreement with
confidentiality provisions substantially similar to the provisions set forth in
Section 11.
9. In consideration of the execution and delivery of this letter
agreement by the Lender and the extension of credit hereunder, the Borrower
hereby agrees to indemnify the Lender and each of its officers, directors,
employees and agents (collectively the "Indemnified Parties") for, and agrees to
hold each Indemnified Party harmless against, any and all losses, liabilities,
claims, damages and expenses incurred by any Indemnified Party in connection
with this letter agreement, the transaction contemplated hereby or the use of
the proceeds of the Term Loan, all to the same extent and on the same basis as
is set forth in Section 11.5(iii) of the Syndicated Agreement.
10. The Borrower agrees to reimburse the Lender for any increase
in the cost to the Lender of, or any reduction in the amount of any sum
receivable by the Lender in respect of, maintaining any Eurodollar Tranche in
accordance with the terms of Section 4.1(c) of the Syndicated Agreement as if
such Section were set forth in full herein mutatis mutandis.
If the Lender makes any determination of the type described in Section
4.1(a) or (b) of the Syndicated Agreement with respect to any Eurodollar
Tranche, such Tranche shall automatically convert to an ABR Tranche on the date
required and, if applicable, the availability of Eurodollar Tranches shall be
suspended.
The Borrower agrees to reimburse the Lender for all increased capital
costs of the type described in Section 4.2 of the Syndicated Agreement as if
such Section were set forth in full herein mutatis mutandis.
The Borrower will indemnify the Lender upon demand against any loss or
expense which the Lender may sustain or incur (including, without limitation,
any loss or expense sustained or incurred in obtaining, liquidating or employing
deposits or other funds acquired to fund or maintain any portion of the Term
Loan) as a consequence of (i) any failure of the Borrower to borrow, continue or
convert a Tranche into a Eurodollar Tranche on a date specified therefor in a
notice thereof or (ii) any payment (including any payment upon the Lender's
acceleration of the
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Term Loan), prepayment or conversion of a Eurodollar Tranche on a day other than
the last day of the interest period therefor.
11. The Lender will keep any information delivered or made
available by the Borrower pursuant to this letter agreement confidential from
anyone other than persons employed or retained by the Lender and its affiliates
who are engaged in evaluating, approving, structuring or administering this
letter agreement; provided that the Lender shall be entitled to disclose such
information (a) upon the order of any court or administrative agency, (b) upon
the request or demand of any regulatory agency or authority, (c) which had been
publicly disclosed other than as a result of a disclosure by the Lender
prohibited by this letter agreement, (d) in connection with any litigation to
which the Lender or its subsidiaries or parent may be a party, (e) to the extent
necessary in connection with the exercise of any remedy under this letter
agreement, (f) to the Lender's legal counsel and independent auditors and (g)
subject to provisions substantially similar to this Section 11, to any actual or
proposed participant or assignee.
Notwithstanding the foregoing provisions of this Section 11, the
Borrower and the Lender agree that, from the commencement of discussions with
respect to the credit facility established by this letter agreement (the
"Facility"), the Borrower and the Lender (and each of their respective, and
their respective affiliates', employees, officers, directors, representatives,
advisors and agents) are permitted to disclose to any and all Persons, without
limitation of any kind, the structure and tax aspects (as such terms are used in
Sections 6011, 6111 and 6112 of the Code (as defined in the Syndicated
Agreement) and the regulations promulgated thereunder) of the Facility and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower or the Lender relating to the structure and tax aspects
of the Facility, other than any information for which nondisclosure is
reasonably necessary in order to comply with applicable securities laws. In this
regard, the Borrower and the Lender acknowledge and agree that the disclosure of
the structure and tax aspects of the Facility is not limited in any way by an
express or implied understanding or agreement, oral or written (whether or not
such understanding or agreement is legally binding). Furthermore, each of the
Borrower and the Lender acknowledges and agrees that it does not know or have
reason to know that its use or disclosure of information relating to the
structure or tax aspects of the Facility is limited in any other manner (such as
where the Facility is claimed to be proprietary or exclusive) for the benefit of
any other person or entity. The provisions of this paragraph supersede any
confidentiality obligation of the Lender relating to the Facility under any
other agreement between the Borrower and the Lender. The Borrower and the Lender
agree that any such confidentiality obligation of the Lender shall be deemed
void ab initio to the extent the same relates to the Facility; provided that
each of the Borrower and the Lender acknowledges that the privilege each has to
maintain, in its sole discretion, the confidentiality of a communication
relating to the Facility, including a confidential communication with its
attorney or a confidential communication with a federally authorized tax
practitioner under Section 7525 of the Internal Revenue Code, is not intended to
be affected by the foregoing.
12. THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this letter agreement may be brought in the courts
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of the State of New York or of the United States for the Southern District of
New York, and by execution and delivery of this letter agreement, the Borrower
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. The Borrower further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 13 hereof, such service to become effective 30 days after
such mailing. Nothing herein shall affect the right of the Lender to serve
process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against the Borrower in any other jurisdiction.
The Borrower hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this letter agreement brought
in the courts referred to in this Section 12 and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS LETTER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
13. Except as otherwise expressly provided herein, all notices and
other communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via facsimile (or other facsimile device), (c)
on the Business Day (as defined in the Syndicated Agreement) following the day
on which the same has been delivered prepaid (or pursuant to an invoice
arrangement) to a reputable national overnight air courier service, or (d) on
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the applicable party at the
address or facsimile number set forth below, or at such other address as such
party may specify by written notice to the other party hereto:
If to the Borrower, to:
Duke Energy Field Services, LLC
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Duke Energy Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Sherwood Love
Telephone: 000-000-0000
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Facsimile: 000-000-0000
If to the Lender, to:
Bank One, NA
0 Xxxx Xxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxx, Xxxxx, Xxxx & Maw
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
Telephone: 000-000-0000
Facsimile: 000-000-0000.
14. Neither this letter agreement nor any of the terms hereof may
be amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing and signed by the Lender
and the Borrower.
15. This letter agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of an executed counterpart hereof by facsimile shall be as effective as
an original and shall constitute a representation that an original will be
delivered.
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16. This letter agreement represents the entire agreement of the
parties hereto, and supersedes all prior agreements and understandings between
such parties, oral or written, if any, including any commitment letter or
correspondence relating to this letter agreement or the transactions
contemplated herein, except to the extent that the terms of the commitment
letter referred to in Section 8 relate to the matters set forth in such Section.
Very truly yours,
BANK ONE, NA
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Title: Managing Directory
Accepted and agreed:
DUKE ENERGY FIELD SERVICES, LLC
By: /s/ Xxxxxx X. Xxxx
--------------------------------
Title: Vice President and Treasurer
Date: March 28, 2003
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