THIRD AMENDMENT TO AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT
Exhibit
10.b
THIRD
AMENDMENT TO
AMENDED
AND RESTATED TERM LOAN CREDIT AGREEMENT
THIS
THIRD AMENDMENT TO AMENDED AND RESTATED TERM LOAN CREDIT AGREEMENT (the
“Amendment”) is made effective as of November 9, 2004, by and among SOUTHERN
UNION COMPANY, a Delaware corporation (the “Borrower”), the financial
institutions listed on the signature pages of the Credit Agreement (as
hereinafter defined) (individually the “Bank” and collectively the “Banks”) and
JPMORGAN CHASE BANK, a New York banking corporation (“JPMorgan”), in its
capacity as agent (the “Agent”) for the Banks.
RECITALS:
WHEREAS,
the Borrower, the Banks and the Agent have executed a certain Amended and
Restated Term Loan Credit Agreement dated effective July 15, 2002, as previously
amended by that certain First Amendment to Amended and Restated Term Loan Credit
Agreement dated effective April 3, 2003 and as further amended by that certain
Second Amendment to Amended and Restated Term Loan Credit Agreement dated
effective May 28, 2004, by and among the Borrower, the Banks and the Agent
(said
Amended and Restated Term Loan Credit Agreement, as previously amended, being
hereinafter referred to as the “Credit Agreement”); and
WHEREAS,
the Majority Banks, the Agent and the Borrower desire to amend the Credit
Agreement in certain respects.
NOW,
THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
AGREEMENTS:
1. Amendment
of Definitions.
The
definitions of “Panhandle Eastern”, “Revolving Credit Facilities”, “Southern
Union Panhandle” and “Subsidiary” contained in Section
1
of the
Credit Agreement are hereby amended and restated in their entirety to read
as
follows:
“Panhandle
Eastern”
shall
mean Panhandle Eastern Pipe Line Company, LP, a Delaware limited partnership.
“Revolving
Credit Facility”
shall
mean that $400,000,000 revolving credit facility provided to the Borrower under
the terms of that certain Third Amended and Restated Revolving Credit Agreement
dated effective May 28, 2004 by and among the Borrower, JPMorgan, as
administrative agent, and the banks or financial institutions now or hereafter
a
party thereto and any and all amendments, modifications, increases, supplements,
restatements and/or replacements of the said revolving credit facility now
or
hereafter existing from time to time.
“Southern
Union Panhandle”
shall
mean Southern Union Panhandle LLC, a Delaware limited liability
company.
“Subsidiary”
of a
Person shall mean a corporation, partnership, limited liability company or
other
business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned,
or
the management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person.
2. New
Definitions.
The
following additional definitions are hereby added to Section
1
of the
Credit Agreement:
“Additional
Offering”
shall
mean, collectively, the issuance, offering and sale in (a) any offering or
issuance of capital stock, Equity-Preferred Securities or any other equity
interests in the Borrower (to the extent permitted under Section 10.5), so
long
as all net cash proceeds thereof are applied in the following order: (i) first,
(x) if the Southern Union Panhandle Bridge Loan is outstanding, to paying in
full the Southern Union Panhandle Bridge Loan or (y) if the Southern Union
Panhandle Bridge Loan is not outstanding (including, for avoidance of doubt,
a
funding of the Southern Union Panhandle Bridge Loan substantially simultaneously
with the consummation of such a public offering), to financing a portion of
the
acquisition costs for the Cross Country Acquisition and (ii) second, to repaying
other Debt of the Borrower, or (b) if all amounts owing under the Southern
Union
Panhandle Bridge Loan shall not have been repaid within three months after
the
Cross Country Acquisition Closing Date, an offering made pursuant to Rule 144A
of the Securities Act of debt securities of the Borrower, Southern Union
Panhandle or Panhandle Eastern, so long as all net cash proceeds from any such
offering are applied to paying in full the Southern Union Panhandle Bridge
Loan.
“CCE
Acquisition”
shall
mean CCE Acquisition LLC, a
Delaware limited liability company formed by the Borrower for the purpose of
ultimately owning and holding 50% of all issued and outstanding equity interest
in CCE Holdings.
“CCE
Group”
means
CCE Holdings and its Subsidiaries.
“CCE
Holdings”
shall
mean CCE Holdings LLC, a Delaware limited liability company.
“CCE
Holdings LLC Agreement”
shall
mean the Limited Liability Company Agreement of CCE Holdings dated as June
18,
2004, as amended from time to time, among the members of CCE
Holdings.
“Cross
Country”
shall
mean CrossCountry Energy, LLC, a Delaware limited liability
company.
“Cross
Country Acquisition”
shall
mean the acquisition by CCE Holdings of 100% of all issued and outstanding
equity interest in Cross Country in accordance with the Cross Country
Acquisition Agreement, so long as such acquisition is in substantial compliance
with the following specified terms:
(a) immediately
after the consummation of such acquisition, Cross Country is a wholly-owned
Subsidiary of CCE Holdings;
(b) the
aggregate consideration paid for all equity interest in Cross Country shall
be
approximately $2,450,000,000 (which amount includes the assumption of
approximately $461,000,000 of outstanding Debt of Transwestern Pipeline Company
and is subject to customary purchase price adjustment as set forth in the Cross
Country Acquisition Agreement);
(c) neither
the Borrower nor any of its Subsidiaries shall have, incur or assume any
liability with respect to any Debt of Cross Country and its Subsidiaries
immediately after the consummation of such acquisition; and
(d) all
material requisite approvals and consents from any Governmental Authority with
respect to such acquisition shall have been received by the Borrower and its
Subsidiaries in a form acceptable to the Agent.
“Cross
Country Acquisition Agreement”
shall
mean that certain Purchase Agreement dated as of June 24, 2004 and amended
by
Amendment No. 1 dated as of September 1, 2004, by and among Enron Operations
Services, LLC, Enron Transportation Services, LLC, EOC Preferred, L.L.C. and
Enron Corp., as sellers, and CCE Holdings, as purchaser, as the same may
hereafter be amended (the form of any such amendment to be approved by the
Agent, such approval not to be unreasonably withheld, conditioned or
delayed).
“Cross
Country Acquisition Closing Date”
means
the date on which the Cross Country Acquisition is consummated.
“Southern
Union Panhandle Bridge Loan”
shall
mean a short-term credit facility to be obtained by Southern Union Panhandle
for
purposes of financing a portion of the acquisition costs for the Cross Country
Acquisition, in an aggregate principal amount not to exceed (i) $590,500,000
less
(ii) the
net cash proceeds of the Additional Offering applied to finance the acquisition
costs for the Cross County 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
E
with such changes as the Agent reasonably determines are not material to the
Banks.
3. Pledge
of CCE Holdings Equity Representation and Warranty.
A new
Section
6.18
is
hereby added to the Credit Agreement to read as follows:
6.18 No
Agreements Prohibiting Pledge of CCE Holdings Equity. Except
for the
applicable negative covenants of this Agreement, the Revolving Credit Facility,
the Southern Union Panhandle Bridge Loan and the CCE Holdings LLC Agreement,
neither the Borrower nor Southern Union Panhandle nor CCE Acquisition is a
party
to any contract or other agreement with any Person that directly or indirectly
prohibits the Borrower or Southern Union Panhandle or CCE Acquisition from
granting any Lien against the equity interests in CCE Holdings (whether common,
preferred or another class of equity ownership) at any time owned and held
by
the Borrower or any of its Subsidiaries as security for any Debt of the Borrower
or any of its Subsidiaries.
4. Additional
Offering Affirmative Covenant.
A new
Section
8.12
is
hereby added to the Credit Agreement to read as follows:
8.12 Additional
Offering. Within
six months after the Cross Country Acquisition Closing Date, the Borrower agrees
to (a) cause the Additional Offering to be consummated in full, and (b) if
the
Southern Union Panhandle Bridge Loan is then outstanding, cause the proceeds
received by the Borrower from such Additional Offering to be utilized to fully
pay the Southern Union Panhandle Bridge Loan.
5. Amendment
of Capital Requirements Negative Covenant.
Sections
9.1(a)
and
9.1(b)
of the
Credit Agreement are hereby amended and restated in their entirety to hereafter
be and read as follows:
(a) permit
its Consolidated Net Worth at the end of any fiscal quarter to be less than
the
sum of (i) $1,267,663,000; (ii) 40% of Consolidated Net Income (if positive)
for
the period commencing on January 1, 2004 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 Offering,
received by the Borrower or such consolidated Subsidiary at any time after
January 1, 2004; 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 Cross Country Acquisition Closing Date; (ii) 0.70
to
1.00 at the end of any fiscal quarter ending on or after the Cross Country
Acquisition Closing Date, but before the consummation of the Additional
Offering; and (iii) 0.65 to 1.00 at the end of any fiscal quarter ending on
or
after the consummation of the Additional Offering.
6. Amendment
of Liens Negative Covenant.
Section
9.2(d)
of the
Credit Agreement is hereby amended and restated in its entirety to hereafter
be
and read as follows:
(d) (i)
Liens
on property existing at the time of acquisition thereof by the Borrower or
any
Subsidiary, including without limitation, (A) any property acquired by the
Borrower in consummating and finalizing any of the Prior Acquisitions, (B)
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 as
of
the Closing Date and (C) 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), (ii) Liens against (A) the stock and other equity interests in
Panhandle Eastern, (B) the equity interests in CCE Holdings held by the Borrower
and its Subsidiaries and (C) Debt owed to Southern Union Panhandle by Panhandle
Eastern and CCE Acquisition, in each case to secure the Southern Union Panhandle
Bridge Loan, or (iii) 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; provided
that no
such Lien may encumber or cover any other property of the Borrower or any
Subsidiary.
7. Amendment
of Debt Negative Covenant.
Sections
9.3(a)
and
9.3(g)
of the
Credit Agreement are hereby amended and restated in their entirety to hereafter
be and read as follows:
(a) Debt
evidenced by the Notes or outstanding under the Revolving Credit Facility or
the
Southern Union Panhandle Bridge Loan, or issued pursuant to the Additional
Offering and any Equity-Preferred Securities (to the extent the same constitutes
Debt) not in default, as well as (i) Debt of Panhandle Eastern and/or any of
its
Subsidiaries outstanding as of the Closing Date, (ii) any Panhandle Eastern
Refinancing Debt, (iii) 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 (A) $50,000,000 in the aggregate at any time that the ratio
of
Consolidated Total Indebtedness to Consolidated Total Capitalization for
Panhandle Eastern and Panhandle Eastern’s Subsidiaries (excluding the Borrower
and all other Subsidiaries of the Borrower for purposes of such calculation)
is
greater than 0.65 to 1.00 and (B) $75,000,000 in the aggregate at any time
that
the ratio of Consolidated Total Indebtedness to Consolidated Total
Capitalization for Panhandle Eastern and Panhandle Eastern’s Subsidiaries
(excluding the Borrower and all other Subsidiaries of the Borrower for purposes
of such calculation) is less than or equal to 0.65 to 1.00, (iv) Guaranty by
Panhandle Eastern of the obligations of Southern Union Panhandle under the
Southern Union Panhandle Bridge Loan, (v) any loans or advances of proceeds
of
the Additional Offering by the Borrower (or Panhandle Eastern, if applicable)
to
CCE Acquisition for purposes of financing the Cross Country Acquisition and
(vi)
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).
(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 Cross Country Acquisition Closing Date, (B) 0.70 to
1.00
at all times on and after the Cross Country Acquisition Closing Date, but before
the consummation of the Additional Offering and (C) 0.65 to 1.00 at all times
on
or after the consummation of the Additional Offering; (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 Two Hundred Fifty Million Dollars ($250,000,000.00) in
the
aggregate plus Twenty Million Dollars ($20,000,000.00) of reimbursement
obligations incurred in connection with Non-Revolving Credit 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 Loans shall
not be included and 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, or the Revolving
Credit Facility or shall be borrowed from a financial institution that is not
a
Bank under this Agreement or the Revolving Credit Facility.
8. Amendment
of Investment Negative Covenant.
(a)
Sections
9.4(a)
and
9.4(b)
of the
Credit Agreement are hereby amended and restated in their entirety to hereafter
be and read as follows:
(a) stock
or
other equity interests of (i) the Subsidiaries named in Section 7.1; (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; (iv) CCE Holdings; and (v) the same
Qualifying Entities as the Qualifying Entities under subparagraph (ii) of the
definition of "Qualifying Assets,”provided
that at
any time the aggregate purchase price paid for such stock and other equity
interests in such Qualifying Entities then held by the Borrower as of the
applicable determination date, including the aggregate amount of Debt assumed
or
deemed incurred by the Borrower in connection with the purchase of such stock
and other equity interests, is not more than twenty percent (20%) of the
Consolidated Net Worth of the Borrower and its Subsidiaries as of the applicable
determination date.
(b) loans
or
advances to a Subsidiary, as well as advances of proceeds of the Additional
Offering by the Borrower or Panhandle Eastern to CCE Acquisition for purposes
of
facilitating the consummation of the Cross Country 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.
(b) Section
9.4(h)
of the
Credit Agreement is hereby renamed as Section
9.4(i),
and a
new Section
9.4(h)
is
hereby added to the Credit Agreement to read as follows:
(h) loans
or
advances to any member of the CCE Group by the Borrower or any Subsidiary not
otherwise permitted under the other provisions of this Section 9.4, so long
as
the sum of such loans and advances does not exceed $25,000,000 in the aggregate
at any time.
9. No
Agreements Prohibiting Pledge of CCE Holdings Equity.
A new
Section
9.18
is
hereby added to the Credit Agreement to read as follows:
9.18 No
Agreements Prohibiting Pledge of CCE Holdings Equity. Neither
the Borrower nor Southern Union Panhandle nor CCE Acquisition will enter into
any contract or other agreement with any Person that directly or indirectly
prohibits the Borrower or Southern Union Panhandle or CCE Acquisition from
granting any Lien against the equity interests in CCE Holdings (whether common,
preferred or another class of equity ownership) at any time owned and held
by
the Borrower or any of its Subsidiaries as security for any Debt of the Borrower
or any of its Subsidiaries, other than the applicable negative covenants of
this
Agreement, the Revolving Credit Facility, the Southern Union Panhandle Bridge
Loan and the CCE Holdings LLC Agreement.
10. New
Exhibit.
A new
Exhibit
E
in the
form of Exhibit
E
attached
to this Amendment, is hereby added to the Credit Agreement.
11. Other
Sections.
Except
as expressly amended by this Amendment, the provisions of the Credit Agreement
and the Notes shall remain in full force and effect, and the Borrower
acknowledges and reaffirms its liability to the Banks thereunder. In the event
of any inconsistency between this Amendment and the terms of the Credit
Agreement or the Notes, this Amendment shall govern.
12. Representations
and Warranties.
The
Borrower represents and warrants to the Banks as of the Borrower’s execution of
this Amendment and as of the effective date hereof that:
a. -Representations
and Warranties.
The
representations and warranties contained in Section
6
of the
Credit Agreement, as amended hereby, are true and correct, and no Default or
Event of Default has occurred and is continuing.
b. -Corporate
Power and Authorization.
The
Borrower is duly authorized and empowered to execute, deliver and perform its
obligations under this Amendment and to make the borrowings provided for in
the
Credit Agreement, and all requisite corporate action on the Borrower’s part for
the due execution, delivery and performance of this Amendment has been duly
and
effectively taken.
c. -Binding
Obligations.
This
Amendment constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as limited
by Debtor Laws.
d. -No
Conflict or Resultant Lien.
The
execution, delivery and performance of this Amendment and the consummation
of
the transactions contemplated herein do not and will not violate any provision
of, or result in a default under, the certificate of incorporation or bylaws
of
the Borrower, or any contract, agreement or instrument or any governmental
requirement to which the Borrower is subject, or result in the creation or
imposition of any Lien upon any property of the Borrower (other than as
contemplated or permitted by the Credit Agreement).
e. -No
Consent.
The
Borrower’s execution, delivery and performance of this Amendment does not
require the consent or approval of any Person.
13. Miscellaneous.
a.
In
accordance with the terms of Section 12.2 of the Credit Agreement, this
Amendment shall become effective when executed and delivered by the Borrower,
the Agent and the Majority Banks.
b. No
Bank,
by its execution of this Amendment, waives any rights it may have against any
person not a party hereto.
c. This
Amendment may be executed in multiple counterparts, each of which shall
constitute an original instrument, but all of which shall constitute one and
the
same Amendment.
d. All
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Credit Agreement.
e. The
invalidity of any one or more covenants, phrases, clauses, sentences or
paragraphs of this Amendment shall not affect the remaining portion of this
Amendment, or any part thereof, and in case of any such invalidity, this
Amendment shall be construed as if such invalid covenants, phrases, clauses,
sentences or paragraphs had not been inserted. The section headings in this
Amendment are for convenience only and shall not limit or in any way affect
the
meaning of the terms and provisions of this Amendment.
f. THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF TEXAS AND THE UNITED STATES OF AMERICA.
THIS
WRITTEN AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT, THE NOTES AND THE LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT
OF THE PARTIES.
THERE
ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective
as of the date first above written.
SOUTHERN
UNION COMPANY
By:
Name:
___________________________________
Title:
___________________________________
JPMORGAN
CHASE BANK, for itself and as Agent for the Banks
By:
Name:
Title:
BAYERISCHE
HYPO-AND VEREINSBANK AG, NEW YORK BRANCH
By: By:
Name:
Title: ____________________________________
BANK
ONE,
NA
(Main
Office-Chicago)
By: By:
Name:
Title:
WACHOVIA
BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
FLEET
NATIONAL BANK
By:
Name:
Title:
THE
BANK
OF TOKYO-MITSUBISHI, LTD.
By:
Name:
Title: ____________________________________
XXXXX
XXX
COMMERICAL BANK, LTD.,
LOS
ANGELES BRANCH
By:
Name:
Title: ____________________________________
KBC
BANK
N.V.
By:
Name:
Title:
By:
Name:
Title:
PNC
BANK,
NATIONAL ASSOCIATION
By:
Name:
Title:
MANUFACTURERS
AND TRADERS TRUST COMPANY
By:
Name:
Title:
CALYON
NEW YORK BRANCH
By:
Name:
Title: ____________________________________
By:
Name:
Title: ____________________________________
THE
NORINCHUKIN BANK, NEW YORK BRANCH
By:
Name:
Title: ____________________________________
CITIZENS
BANK OF RHODE ISLAND
By:
Name:
Title:
BANK
OF
COMMUNICATIONS, NEW YORK BRANCH
By:
Name:
Title: ____________________________________
MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY
By:
Name:
Title: ____________________________________
EXHIBIT
E
Summary
of Terms and Conditions
Southern
Union Panhandle Bridge Loan
|
Borrower:
|
Southern
Union Panhandle LLC (the “Borrower”).
|
|
Guarantor:
|
Panhandle
Eastern Pipe Line Company, LP or its successor (“Panhandle”),
referred to herein as the “Guarantor”,
and the Guarantor, together with the Borrower, are sometimes referred
to
herein as the “Obligors”.
If Southern Union Company (the "Parent")
holds any direct ownership interest in Panhandle, it shall also become
a
Guarantor and an Obligor hereunder, provided
that
the Parent's guarantee shall be limited to the pledge of its ownership
interest in Panhandle.
|
|
Facility
Description:
|
Up
to $590,500,000 term loan (the “Facility”)
with a maturity of six months from the date of closing of the Cross
Country Acquisition (the “Closing
Date”),
but in no event later than June 17, 2005 (the “Maturity
Date”).
The Facility will be available for drawdown until the Closing Date,
but in
no event later than December 17, 2004.
|
|
Security:
|
The
Facility will be secured by a perfected first priority security interest
in (i) all indebtedness owed to the Borrower by Panhandle and CCE
Acquisition LLC (“CCE
Acquisition”)
and (ii) (A) 100% of ownership interest in Panhandle and (B) all
capital
stock owned by the Borrower of CCE Acquisition.
|
|
Purpose:
|
The
Facility will be used (i) to finance a portion of the Cross Country
Acquisition (as defined in the accompanying Commitment Letter) and
(ii) to
pay fees and expenses incurred in connection with the Cross Country
Acquisition.
|
|
Joint
Lead Arrangers and Bookrunners:
|
X.X.
Xxxxxx Securities Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc.
(together, the “Lead
Arrangers”).
|
|
Administrative
Agent:
|
JPMorgan
Chase Bank (“JPMC”
or the “Administrative
Agent”).
|
|
Syndication
Agent:
|
Xxxxxxx
Xxxxx Capital Corp.
|
|
Borrowing
Options:
|
LIBOR
and ABR.
ABR
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 on the Closing Date.
|
|
Optional
Prepayments:
|
ABR
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 Reductions and Prepayments:
|
100%
of the net cash proceeds from the issuance or incurrence after the
Closing
Date of debt, equity or equity-like securities by the Parent or the
Borrower (other than from the issuance of the Parent’s common stock of up
to $87 million to the extent the proceeds are used for general corporate
purposes) shall be applied to reduce the commitments under the Facility
(if still in existence) or to prepay the Facility.
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|
Representations
and Warranties:
|
Customary
for credit agreements of this nature, with respect to the Obligors
and
their subsidiaries (including Cross Country 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.
Cross Country Acquisition matters.
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|
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 and solvency
certifications).
4. Payment
of fees.
5. Absence
of (a) material adverse condition or material adverse change in or
affecting the business, operations, property, condition (financial
or
otherwise) or prospects of the Parent and its subsidiaries, taken
as a
whole or (b) any event or condition that would result in a closing
condition under the Purchase Agreement not being satisfied and thereby
permitting the “Purchaser” thereunder to not consummate the transactions
contemplated by the Purchase Agreement.
6. The
fact that the Cross Country Acquisition shall close simultaneously
with
the closing of the Facility, on terms and conditions substantially
as set
forth in (i) the Purchase Agreement dated as of June 24, 2004, as
amended
by Amendment No.1 dated as of September 1, 2004 relating to the Cross
Country Acquisition (including without limitation, the closing conditions
of the entry of specified Bankruptcy Court orders and receipt of
all
material requisite governmental consents), modified to require pre-closing
conversion of corporate subsidiaries of Cross Country to Limited
Liability
Companies, and (ii) the September 1, 2004 execution drafts of the
letter
agreement and term sheet relating to the joint venture to be formed
by
affiliates of the Parent and General Electric Capital Corporation
in
connection with the Cross Country Acquisition (the “Joint
Venture”),
in each case with such changes thereto as the Lenders may approve
in their
sole discretion.
7. The
fact that the Parent shall have received all amendments or consents
under
its other existing financing arrangements that are necessary or reasonably
desirable to permit the consummation of (i) the Cross Country Acquisition
on the terms contemplated by the Purchase Agreement and the Joint
Venture
documents and (ii) the Facility on the terms contemplated hereby
(including without limitation, the security arrangements contemplated
hereby), all of which shall be in form and substance satisfactory
to the
Lenders.
8. Execution
of satisfactory management services agreements.
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|
Covenants
of each Obligor:
|
Customary
in credit agreements of this nature, and applicable to the Obligors
and
their subsidiaries (including Cross Country 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 Parent.
14. Prohibition
on dividends and other restricted payments (including intercompany
loans)
by the Parent while a default exists.
15. Financial
covenants TBD.
16. Satisfactory
SEC disclosure regarding the loan.
17. Restriction
on agreements that limit, directly or indirectly, the Obligors from
granting a lien on the stock or other equity interests in Cross Country
as
security for obligations under the Facility, with exceptions for
negative
pledges under existing credit agreements of the Obligors to be
specified.
18. Restriction
on agreements that limit, directly or indirectly, Cross Country and
its
subsidiaries (including Citrus Corp. and its subsidiaries) from paying
dividends on its capital stock, other than those existing at the
Closing
Date or contained in the documentations for the debt to be issued
by Cross
Country Holdings, LLC (“Holdings”)
and its subsidiaries for the purpose of financing the acquisition
costs
for the Cross Country Acquisition (and any refinancing
thereof).
19. Limitation
on restricted payments.
20. Limitation
on acquisitions.
21. Restriction
on any amendment of the Joint Venture documents that is materially
adverse
to the Lenders.
22. Collateral
matters.
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|
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 Parent or any of its subsidiaries,
including Cross Country and its subsidiaries (to be defined as debt
in a
principal amount of at least $10 million).
6. Change
of ownership or control of the Parent.
7. (a)
Failure of the Parent to own 100% of the capital stock of the Borrower,
(b) failure of an affiliate of the Parent to own at least 50% of
the
aggregate ownership interest in Holdings or (c) an affiliate of the
Parent
ceasing to be the managing member of Holdings.
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.
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|
Increased
Costs/Change of
Circumstances:
|
The
credit agreement will contain 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 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. In addition, all costs and expenses of the
Lenders
in connection with default and enforcement are to be paid by the
Borrower.
|
|
Governing
Law:
|
New
York.
|
Pricing
Schedule
Applicable
Margins:
The
“Eurodollar
Margin”
applicable to outstanding LIBOR Loans shall be determined in accordance with
the
following grid. The “ABR
Margin”
applicable to outstanding ABR Loans shall be the Eurodollar Margin reduced
by
1.00%.
|
Rating
of the Borrower’s unsecured,
non-credit enhanced Senior Funded Debt
|
Additional
Percentage
Per
Annum
|
|
Level
1: Equal to or greater than Baa2 by Moody’s and
equal to or greater than BBB by S&P
|
1.00%
|
|
Level
2: Equal to or greater than Baa3 by Moody’s and
equal to or greater than BBB- by S&P, but less than Xxxxx
0
|
1.25%
|
|
Level
3: Equal to or greater than Ba1 by Moody’s
and equal
to or greater than BB+ by S&P, but less than Xxxxx 0
|
1.75%
|
|
Level
4: Equal to or less than Ba2 by Moody’s or
equal to or less than BB by S&P
|
2.25%
|
In
the
event that the Borrower withdraws from having its unsecured, non-credit enhanced
Senior Funded Debt being rated by Xxxxx’x Investors Service, Inc. or Standard
& 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 2.25% until such time as the 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.
