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Aquila Gas Pipeline Corporation
File Number 1-12426
Exhibit 10.1
Loan Agreement dated April 1, 1997 between
Aquila Gas Pipeline Corporation and
Aquila Energy Corporation
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LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made and entered into as of
this 1st day of April 1997, by and between AQUILA ENERGY CORPORATION, a
Missouri corporation (the "Lender"), and AQUILA GAS PIPELINE CORPORATION, a
Delaware corporation (the "Borrower");
W I T N E S S E T H:
WHEREAS, the Borrower desires to enter into a loan agreement with the
Lender and the Lender is willing to extend and make credit available to the
Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Loan Arrangement
1.1 Commitment. Subject to the terms and conditions hereof,
the Lender agrees that it will concurrently herewith loan to the Borrower the
principal amount of $16,250,000 (the "Loan").
1.2 Promissory Note. The loan hereunder shall be evidenced by
a promissory note of the Borrower in substantially the form of Exhibit A
attached hereto (the "Note"). Said Note shall be dated the date of the
borrowing and shall bear interest on the unpaid principal amount thereof at a
rate equal to 6.83 %. Interest shall be payable semi-annually on April 1 and
October 1 of each year, commencing October 1, 1997. Except as herein otherwise
provided, the principal amount of the Loan, together with accrued interest
thereon, shall be repaid by the Borrower to the Lender on or before October 15,
2006.
1.3 Prepayment. The Borrower may, at any time, prepay without
penalty all or, in multiples of $100,000, any part of, the unpaid principal of
the Loan under this Loan Agreement upon the payment of all interest accrued on
the Note to the date of prepayment. All payments to be made by the Borrower of
principal, interest, fees and other amounts due hereunder shall be made without
set off or counterclaim in lawful money of the United States of America, and in
immediately available funds, at the office designated by the Lender from time
to time.
2. Indemnification
The Borrower agrees to indemnify the Lender and to hold the
Lender harmless from any reasonable cost, loss or expenses which the Lender may
sustain or incur as a consequence of a default by the Borrower in payment of
the principal amount of or interest on the Loan.
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3. Conditions to Loan
The obligation of the Lender to make the Loan is subject to the
following conditions precedent:
(a) Note. The Lender shall have received the Note,
conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower.
(b) Required Approvals. The Lender shall have received
certified copies of any consent or approval of any public or
governmental authority, agency, or department which is required
in connection with the transactions contemplated by this
Agreement.
(c) Additional Matters. All proceedings and other
documents and legal matters in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and
substance to the Lender and its counsel.
4. Affirmative Covenants
The Borrower represents and warrants to Lender as follows:
(a) Books of Account. The Borrower will itself and will
cause its subsidiaries at all times to keep proper books of
account in conformity with generally accepted accounting
principles ("GAAP") consistently applied, and hereby authorizes
the Lender, its agents, officers, attorneys, accountants and
other authorized representatives, to make or cause to be made at
the Borrower's expense, in such manner and at such times as the
Lender may require, inspections and audits of any books, records
and papers of the Borrower or any of its subsidiaries under the
control of the Borrower or any of its subsidiaries or otherwise
relating to their financial or business conditions, including the
making of copies thereof or extracts therefrom and inspections
and valuations of any of their respective assets.
(b) Incorporation and Authorization. The Borrower is a
corporation duly organized and existing under the laws of the
state of Delaware and is duly authorized to transact business in
all places where the conduct of its business requires it to be
qualified. The execution, delivery and performance of this Loan
Agreement, and the Note to be issued hereunder are within the
Borrower's corporate powers, have been duly authorized and are
not in contravention of any law or the terms of the Borrower's
charter, articles, bylaws or other corporation papers, or of any
indenture, agreement, document or undertaking to which the
Borrower is a party or by which it is bound.
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(c) Taxes. The Borrower agrees that it will pay
promptly when due all taxes, assessments and governmental charges
upon or against the Borrower or its subsidiaries or the property
or operations of the Borrower, in each case before the same
become delinquent and before penalties accrue thereon.
(d) Contingent Liabilities. The Borrower and its
subsidiaries do not now have and will not during the term of this
Loan Agreement have any material contingent liabilities known to
the Borrower which are not provided for or disclosed by
appropriate notes in the Borrower's financial statements.
(e) Adequate Assets. The Borrower and its subsidiaries
possess adequate assets for the conduct of their respective
businesses.
(f) Corporate Existence and Good Standing. The Borrower
and its subsidiaries will maintain their corporate existence and
their qualification and good standing in all states necessary to
conduct their businesses and own or lease their properties, and
maintain all licenses, permits, franchises, and governmental
authorizations necessary to conduct their businesses and own or
lease their property.
(g) Consolidated Net Worth. The Borrower and its
subsidiaries will maintain at all times Consolidated Net Worth of
not less than $140 million.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus, translation adjustment, and the balance of the current
profit and loss account not transferred to surplus) accounts of
the Borrower and its subsidiaries appearing on a consolidated
balance sheet of the Borrower and its subsidiaries prepared as of
the date of determination in accordance with GAAP.
(h) Insurance. The Borrower and its subsidiaries will
maintain insurance (including product and other liability
insurance) with responsible insurance companies against such
risks and in such amounts as is customarily maintained by
companies engaged in the same or similar businesses and similarly
situated (provided that the Borrower or any subsidiary may self-
insure to the extent that adequate reserves have been established
and maintained and exist with respect thereto in accordance with
GAAP).
(i) Maintenance of Property. The Borrower and its
subsidiaries will maintain all of its property necessary and
useful in its business in good operating condition and repair,
ordinary wear and tear excepted.
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(j) Environmental Laws. The Borrower and its
subsidiaries will obtain all applicable permits, licenses and
other authorizations which are required under all Environmental
Laws (as defined below) except to the extent failure to have any
such permit, license or authorization would not have a material
adverse effect on the business of Borrower or its financial
condition, operations or prospects. Borrower and its subsidiaries
shall also maintain compliance with the terms and conditions of
all such applicable permits, licenses and authorizations, and
shall also maintain compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued,
entered, promulgated, or approved thereunder, except to the
extent failure to comply would not have a material adverse effect
on its financial condition, operations, business or prospects.
"Environmental Laws" means any federal, state, county, regional
or local law, statute or regulation (including, without
limitation, CERCLA, RCRA and XXXX) enacted in connection with or
relating to the protection or regulation of the environment,
including, without limitation, those laws, statutes and
regulations regulating the disposal, removal, production,
storing, refining, handling, transferring, processing or
transporting of any hazardous substances, and any regulations
issued or promulgated in connection with such statutes by any
federal, state or local governmental authority and any orders,
decrees or judgments issued by any court of competent
jurisdiction in connection with any of the foregoing.
As used in this definition:
CERCLA -- means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to
time (by XXXX or otherwise), and all rules and regulations
promulgated in connection therewith;
RCRA -- means the Resource Conservation and Recovery Act
of 1976, as amended, and any rules and regulations issued in
connection therewith; and
XXXX -- means the Superfund Amendments and Reauthorization
Act of 1986, as amended from time to time, and all rules and
regulations promulgated in connection therewith.
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(k) Further Assurances. The Borrower and its
subsidiaries will execute and deliver to the Lender, upon
request, such documents and agreements as the Lender may, from
time to time, reasonably request to carry out the terms and
conditions of this Agreement.
5. Negative Covenants - Conduct of Business
The Borrower covenants that, so long as any amounts remain
outstanding under this Agreement and the Note, the Borrower and its
subsidiaries shall not, without the Lender's prior written consent engage,
directly or indirectly, in any line of business other than the business of
purchasing, gathering, transporting, processing and marketing of natural gas
and natural gas liquids.
6. Lender's Call Options
If, at any time, the Lender ceases to own 80% or more of the
outstanding voting securities of the Borrower (a "Control Event"), the Lender
shall have the right and option within 90 days after the occurrence of the
Control Event, but not the obligation, to call the Note for repayment provided,
however, that the Lender shall give the Borrower 90 days prior written notice
of its election to call the Note for repayment (the "Control Call Option"). In
the event that the Lender exercises its Control Call Option, all obligations,
amounts, indebtedness, and interest owing to the Lender by the Borrower shall
be immediately due and payable.
7. Default
7.1 Events of Default. The Lender shall have the right to
terminate this Agreement at any time without notice upon the occurrence of any
one or more of the following events (an "Event of Default") for any reason
whatsoever (whether voluntary or involuntary, or by operation of law or
pursuant to or in compliance with any judgment, decree or order of any court or
any order, rule or regulation of any public authority):
(a) The Borrower fails to pay the principal of or
interest or other amounts due under the Loan and such failure
shall continue for more than ten (10) days after the Lender gives
notice thereof to Borrower;
(b) Default shall occur in the observance or
performance of any of the representations, covenants and
agreements contained in this Agreement, the Note or any other
agreement entered into at any time to which the Borrower or any
subsidiary and the Lender are party and shall continue for more
than thirty (30) days after the Lender gives written notice
thereof to the Borrower; or if any such agreement, instrument or
document shall terminate (other than in accordance with its terms
or the terms hereof or with the written consent of the Lender) or
become void or unenforceable without the written consent of the
Lender;
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(c) Default shall occur in the payment of any
principal, interest or premium with respect to any indebtedness
for borrowed money of the Borrower or any subsidiary in an
outstanding principal amount in excess of $5,000,000 or under any
agreement or instrument under or pursuant to which any such
indebtedness may have been issued, created, assumed secured, or
guaranteed, and such default shall continue for more than the
period of grace, if any, therein specified, or if any such
indebtedness shall become or be declared due and payable prior to
the stated maturity thereof;
(d) The Borrower or any subsidiary shall: (i) file a
voluntary petition in bankruptcy or file a voluntary petition or
an answer or otherwise commence any action or proceeding seeking
reorganization, arrangement or readjustment of its debts or for
any other relief under the federal bankruptcy code, as amended,
or under any other bankruptcy or insolvency act or law, state or
federal now or hereafter existing, or consent to, approve of, or
acquiesce in, any such petition, action or proceeding; (ii) apply
for or acquiesce in the appointment of a receiver, assignee,
liquidator, sequestrator, custodian, trustee or similar officer
for it or for all or a substantial part of its property; (iii)
make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(e) An involuntary petition shall be filed or an action
or proceeding otherwise commenced seeking reorganization,
arrangement or readjustment of the Borrower's debts or for any
other relief under the federal bankruptcy code, as amended, or
under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing and shall not be dismissed
ninety (90) days after such filing, action or proceeding;
(f) A receiver, assignee, liquidator, sequestrator,
custodian, trustee or similar officer for the Borrower or any
subsidiary or for all or a substantial part of its property shall
be appointed involuntarily and shall remain for more than ninety
(90) days; or a warrant of attachment, execution or similar
process shall be issued against any substantial part of the
property of the Borrower or any subsidiary and such remains in
effect for more than ninety (90) days;
(g) The Borrower shall file a certificate of
dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against
it any action or proceeding for dissolution, winding-up or
liquidation, or shall take any corporate action in furtherance
thereof; or
(h) One or more final judgments for the payment of
money aggregating in excess of $5,000,000 shall be rendered
against the Borrower and the Borrower shall fail to discharge the
same within sixty days from the date of notice of entry
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thereof or to appeal therefrom or from the order, decree or
process upon which or pursuant to which said judgment was
granted, based or entered and secure a state of execution pending
such appeal.
7.2 Upon the occurrence of any Event of Default, all
obligations and amounts due under this Agreement and Note shall, at the
Lender's election, become immediately due and payable; provided, however, that
upon the occurrence of any Event of Default described in subsections (d), (e),
(f), (g), or (h) of Section 7.1, all obligations and amounts due under this
Agreement and Note shall automatically become immediately due and payable.
8. General
8.1 Waiver. No act, delay or failure of the Lender in
exercising any right, power, privilege or remedy under this Agreement or the
Note shall affect such right, power, privilege or remedy or be deemed to be a
waiver of the same or any part thereof; nor shall any single or partial
exercise thereof or any failure to exercise the same in any instance preclude
any further or future exercise thereof, or the exercise of any other right,
power, privilege or remedy.
8.2 Cumulative Rights and Remedies. All rights and remedies of
the Lender whether or not granted hereunder shall be cumulative and may be
exercised singularly or concurrently. The enumeration of the Lender's rights
and remedies is not intended to be exclusive, and such rights and remedies are
in addition to and not by way of limitation of any other rights or remedies
that the Lender may have under applicable law.
8.3 Right of Set-Off. Whenever an Event of Default exists, the
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lender or any affiliate of the Lender to
or for the credit or the account of the Borrower against any and all of the
amounts owing under this Agreement, whether or not then due and payable. The
Lender shall be deemed to have exercised its right of set off immediately at
the time of its election even though any charge therefor is made or entered on
the Lender's records subsequent to that time. All costs and expenses,
including, without limitation, attorneys' fees, paid or incurred by the Lender
in connection with any such set off shall be paid by the Borrower on demand.
8.4 Fees and Expenses. The Borrower shall reimburse the Lender
on demand for all reasonable costs, fees and expenses incurred by the Lender in
connection with the negotiation, preparation, enforcement, and termination of
this Agreement, any amendment hereof, and any agreements and documents relating
hereto, including, but not limited to, attorneys' fees, costs and expenses
payable in connection with the transactions contemplated by this Agreement and
all out-of-pocket costs, fees and expenses the Lender incurs or becomes
obligated for in connection with: (a) any proceeding relating to this
Agreement; and (b) enforcement of any of the Lender's rights and remedies with
respect to this Agreement.
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8.5 Notices. Any notice required hereunder shall be in
writing, shall be delivered against receipt, or mailed by registered or
certified mail, return receipt requested, postage prepaid, or sent by
recognized overnight courier service, and addressed to the party to be notified
as follows:
If to the Lender: Aquila Energy Corporation
0000 Xxxxx 000 Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000-0000
Attention: Chief Financial Officer
with a copy to: UtiliCorp United Inc.
00 Xxxx Xxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
If to the Borrower: Aquila Gas Pipeline Corporation
000 X.X. Xxxx 000, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
or to such other address as each party may designate for itself by like notice.
8.6 Governing Law. This Loan Agreement and all rights and
obligations hereunder, including matters of construction, validity and
performance, shall be governed by and construed and interpreted in accordance
with the laws of the state of Missouri.
8.7 Validity. Any provision of this Loan Agreement which shall
be held to be inoperative for any reason shall be ineffective and inapplicable;
but shall not invalidate the remaining provisions hereof or the liens herein
created.
8.8 Successors. This Loan Agreement shall inure to the benefit
of and be binding upon the parties hereto, their respective successors and
assigns; provided, however, that this Loan Agreement may not be assigned by the
Borrower without the prior written consent of the Lender.
8.9 Modification. This agreement is intended by the Borrower
and the Lender to be the final, complete and exclusive expression of the
agreement between the Lender and the Borrower. This Agreement supersedes any
and all prior oral or written agreements relating to the subject matter hereof.
No modification, rescission, waiver, release or amendment of any provision of
this Agreement shall be made, except by a written agreement signed by the
Borrower and a duly authorized officer of the Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed by their duly authorized officers the day and year first above
written.
AQUILA ENERGY CORPORATION
By: /s/ XXXXXXXX XXXXXXX
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Name: Xxxxxxxx Xxxxxxx
Title: Sr. Vice President
AQUILA GAS PIPELINE CORPORATION
By: /s/ D. BUTTON
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Name: D. Button
Title: Vice President
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EXHIBIT "A"
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TERM NOTE
U.S. $16,250,000 Dated: April 1, 1997
FOR VALUE RECEIVED, the undersigned, AQUILA GAS PIPELINE CORPORATION
(the "Borrower") hereby promises to pay to the order of AQUILA ENERGY
CORPORATION (the "Lender") (capitalized terms used herein but not otherwise
defined herein shall have the meanings assigned to such terms in the Loan
Agreement referred to below), the principal amount of SIXTEEN MILLION TWO
HUNDRED FIFTY THOUSAND U.S. DOLLARS (US $16,250,000). This Note shall bear
interest on the unpaid principal amount hereof at a rate equal to 6.83 %.
Interest shall be payable semi-annually on April 1 and October 1 of each year,
commencing October 1, 1997. Except as otherwise provided in the Loan Agreement,
the principal amount of the Loan, together with accrued interest thereon, shall
be repaid by the Borrower to the Lender on or before October 15, 2006.
Both principal and interest are payable in lawful money of the United
States of America to the office or financial institution designated by the
Lender from time to time, in immediately available funds.
This Note is the Note referred to in, and is entitled to the benefits of
the Loan Agreement, dated as of April 1, 1997 between the Borrower and the
Lender (the "Loan Agreement"). The Loan Agreement, among other things, provides
(i) for payments and prepayments on account of the principal hereof prior to
the maturity hereof upon certain terms and conditions specified, (ii) for the
right and option on behalf of the Lender to call the Note for repayment upon
certain terms and conditions, and (iii) for acceleration of the maturity based
upon the happening of certain Events of Default.
DEMAND, PRESENTMENT, PROTEST, AND NOTICE OF NON-PAYMENT AND PROTEST ARE
HEREBY WAIVED BY THE BORROWER.
THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MISSOURI.
AQUILA GAS PIPELINE CORPORATION
By: /s/ D. BUTTON
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Name: D. Button
Title: Vice President
