EXHIBIT NO. 10(v)
REVOLVING CREDIT AGREEMENT
BY AND AMONG
ENERGYSOUTH, INC.,
AS BORROWER,
AND
REGIONS BANK, AS AGENT,
AND
REGIONS BANK, AMSOUTH BANK
AND SOUTHTRUST BANK,
AS LENDERS
$20,000,000.00
MARCH 28, 2001
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement is entered into as of the 28th day of
March, 2001, by and among ENERGYSOUTH, INC., as Borrower (herein called
"Borrower"), REGIONS BANK, as agent for Lenders to the extent and in the manner
provided in Article VIII, below (herein called "Agent"), and REGIONS BANK,
AMSOUTH BANK, and SOUTHTRUST BANK, as Lenders (herein collectively called
"Lenders").
WITNESSETH:
WHEREAS, Borrower has requested that Lenders enter into this Revolving
Credit Agreement to provide for a revolving credit facility for lending to
Borrower; and
WHEREAS, Lenders have agreed to do so upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and for other valuable consideration, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS OF TERMS
For the purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings assigned to
them in this Article I or in the section or recital referred to below:
SECTION 1.1. "Advance" shall mean the disbursement by the Agent of a
sum or sums loaned to Borrower pursuant to this Agreement.
SECTION 1.2. "Affiliate" shall mean any Person (1) which directly or
indirectly controls, or is controlled by, or is under common control with,
another Person or its Subsidiary; (2) which directly or indirectly beneficially
owns or holds five percent (5%) or more of any class of voting stock of another
Person or its Subsidiary; or (3) five percent (5%) or more of the voting stock
of which is directly or indirectly beneficially owned or held by another Person
or its Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
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SECTION 1.3. "Agent" shall have the meaning assigned to such term in
the preamble hereof.
SECTION 1.4. "Agreement" or "this Agreement" shall mean this Revolving
Credit Agreement as the same may be amended or modified from time to time.
SECTION 1.5. "Applicable Rate of Interest" shall mean the rate of
interest designated in accordance with Section 3.2 hereof.
SECTION 1.6. "Base Rate" shall mean the Regions Financial Corporation
Commercial Base Rate. The Base Rate is not necessarily the lowest rate charged
by Regions Bank on its loans and is set by Regions Bank in its sole discretion.
SECTION 1.7. "Base Spread" shall mean eighty basis points (.80%) below
the applicable Base Rate.
SECTION 1.8. "Borrower" shall have the meaning assigned to such term in
the preamble hereof.
SECTION 1.9. "Borrowing Account" shall mean a demand deposit account in
Regions Bank in the name of, and under the control of, Borrower.
SECTION 1.10. "Borrowing Date" shall mean any date specified in a
Request for Advance delivered in accordance with the provisions of Section
2.2(a) as a date on which Borrower requests an Advance hereunder.
SECTION 1.11. "Business Day" shall mean a day on which banks are open
for business in Mobile, Alabama.
SECTION 1.12. "Commitment" shall mean the obligation of each Lender to
extend credit to Borrower under this Agreement in an aggregate principal amount
not to exceed such Lender's Committed Sum.
SECTION 1.13. "Commitment Period" shall mean the period beginning on
the date hereof and ending on the Commitment Termination Date.
SECTION 1.14. "Commitment Termination Date" shall mean the earlier of
(i) January 31, 2003 or, (ii) date on which the Commitment is terminated by
either Borrower or Lenders pursuant to the provisions hereof.
SECTION 1.15. "Committed Sum" shall mean, with respect to a Lender, the
amount set forth below opposite the name of such Lender:
Regions Bank - $9,000,000.00
AmSouth Bank - $7,000,000.00
SouthTrust Bank - $4,000,000.00
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SECTION 1.16. "Debtor Law" shall mean any of, and "Debtor Laws" means
all of the applicable liquidation, conservatorship, bankruptcy, moratorium,
arrangement, receivership, insolvency, reorganization or similar laws of any
jurisdiction from time to time in effect affecting the rights of creditors
generally.
SECTION 1.17. "Default" shall mean any of the events specified in
Article VII, regardless of whether there shall have occurred any passage of time
or giving of notice or both that would be necessary in order to constitute such
event an Event of Default.
SECTION 1.18. "Event of Default" shall have the meaning assigned to
such term in Section 7.1.
SECTION 1.19. "Governmental Authority" shall mean any government (or
any political subdivision or jurisdiction thereof), court, bureau, agency or
other governmental authority having jurisdiction over either Borrower or any of
its business, operations or properties.
SECTION 1.20. "Indebtedness" shall mean all long-term debt listed in
Borrower's Consolidated Financial Statements contained in Borrower's Annual
Report on Form 10K for the respective year ended September 30.
SECTION 1.21. "Lenders" shall have the meaning assigned to such term in
the preamble hereof.
SECTION 1.22. "LIBOR Rate" shall mean a fluctuating rate of interest
equal to the average offered rate in the London Interbank Market for deposits in
U. S. Dollars for a one-, three-, or six-month period, as published in the Money
Rates section of The Wall Street Journal on the last Business Day of each
calendar month.
SECTION 1.23. "LIBOR Spread" shall mean one hundred twenty-five basis
points (1.25%) above the applicable LIBOR Rate.
SECTION 1.24. "Loan Documents" shall mean this Agreement and the Note
and all other documents executed by Borrower in connection therewith.
SECTION 1.25. "Loans" shall mean the aggregate unpaid principal balance
of all Advances; each Advance, individually, shall mean a "Loan."
SECTION 1.26. "Maximum Rate" shall mean, on any day, the highest
nonusurious rate of interest permitted by applicable law on such day that at any
time, or from time to time, may be contracted for, taken, reserved, charged or
received on the Loans evidenced by the Note under the laws which are presently
in effect of the
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United States of America and the State of
Alabama applicable to the holders of
the Note and such Loans or, to the extent permitted by law, under such
applicable laws of the United States of America and the State of
Alabama which
may hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
SECTION 1.27. "Note" shall mean the Revolving Credit Note executed by
Borrower and delivered pursuant to the terms of this Agreement, together with
any renewals, extensions or modifications thereof.
SECTION 1.28. "Obligations" shall mean:
(a) All present and future indebtedness, obligations and liabilities of
Borrower to Agent and Lenders arising pursuant to this Agreement, regardless of
whether such indebtedness, obligations and liabilities are direct, indirect,
fixed, contingent, joint, several, or joint and several;
(b) All present and future indebtedness, obligations and liabilities of
Borrower to Lenders arising pursuant to or represented by the Note and all
interest accruing thereon, and reasonable attorneys' fees incurred in the
enforcement or collection thereof;
(c) All present and future indebtedness, obligations and liabilities of
Borrower evidenced by or arising pursuant to any of the Loan Documents; and
(d) All renewals, extensions, modifications and refundings of the
indebtedness referred to in the foregoing clauses, or any part thereof.
SECTION 1.29. "Percentage" shall mean, with respect to each Lender, the
percentage set forth below opposite the name of such Lender but as it may be
changed from time pursuant to Section 2.3(b):
Regions Bank - 45% (.45)
AmSouth Bank - 35% (.35)
SouthTrust Bank - 20% (.20)
SECTION 1.30. "Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority, or other entity of whatever nature.
SECTION 1.31. "Regular Settlement" shall mean a Settlement held on a
Regular Settlement Date.
SECTION 1.32. "Regular Settlement Date" shall mean the first and
fifteenth day of each month (or if such day is not a Business Day, then on the
next Business Day).
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SECTION 1.33. "Request for Advance" shall have the meaning assigned to
such term in Section 2.2(a).
SECTION 1.34. "Required Deposit" shall mean the funds necessary to be
advanced by a Lender to Agent on a Settlement Date to restore Lender's
Percentage of the then outstanding balance of the Note to the Percentage set
forth in Section 1.28.
SECTION 1.35. "Required Remittance" shall mean the funds necessary to
be remitted by Agent to Lender on a Settlement Date to restore Lender's
Percentage of the then outstanding balance of the Note to the Percentage set
forth in Section 1.28.
SECTION 1.36. "Settlement" shall mean the process by which the then
outstanding balance of the Note is reallocated among the Lenders in accordance
with their respective Percentages. At such time, each Lender shall transmit or
receive funds to achieve such reallocation.
SECTION 1.37. "Settlement Date" shall mean a Regular Settlement Date or
a Special Settlement Date.
SECTION 1.38. "Special Settlement" shall mean a Settlement required
pursuant to Section 2.2(c) or Section 3.6.
SECTION 1.39. "Special Settlement Date" shall mean a date on which a
Special Settlement is required.
SECTION 1.40. "Subsidiary" shall mean a corporation, general
partnership, limited liability company, limited partnership or other business
entity of which the shares, partnership or membership interests having ordinary
voting power to elect a majority of the board of directors, general partners,
managing partners or managers of such business entity are at the time owned, or
the management of which is otherwise controlled, directly or indirectly, through
one or more intermediaries, or both, by Borrower.
SECTION 1.41. "Taxes" shall have the meaning assigned to such term in
Section 3.7.
SECTION 1.42. "Total Commitment" shall mean $20,000,000.00.
SECTION 1.43. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the above defined
meanings when used in the Note or any Loan Documents, certificate, report or
other document made or delivered pursuant to this Loan Agreement, unless the
context thereof shall otherwise require.
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(b) Defined terms used herein in the singular shall import the plural
and vice-versa.
(c) The words "hereof," "herein," "hereunder," and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
ARTICLE II
THE REVOLVING LOANS
SECTION 2.1. Revolving Commitments. Subject to the terms and conditions
of the Agreement, each Lender severally (and not jointly) agrees to lend to
Borrower on a revolving basis, in one or more Advances, from time to time during
the Commitment Period, an amount equal to such Lender's Percentage of amounts
requested by Borrower in each Request for Advance; provided, however, that (a)
total Loans outstanding at any one time shall not exceed $20,000,000.00, and (b)
except as provided in Section 2.2(c) with respect to Agent, no Lender shall be
obligated to make an advance if such advance would cause the Lender's Percentage
of the unpaid principal balance of the indebtedness evidenced by the Note to be
in excess of such Lender's Committed Sum. Within the limits of this Section 2.1,
during the Commitment Period Borrower may borrow, repay and reborrow in
accordance with the terms and conditions of this Agreement.
SECTION 2.2. Advances.
(a) Request for Advance. Borrower shall give Agent telephonic notice by
11:00 a.m., local time in Mobile,
Alabama, on the day of each requested
Borrowing hereunder, confirmed in writing by hand delivery or facsimile within
one (1) hour of such telephonic notice (a "Request for Advance"), specifying the
aggregate amount of such Borrowing.
(b) Notice Irrevocable. Each Request for Advance shall be irrevocable
and binding on Borrower, and Borrower shall indemnify each Lender against any
cost, loss or expense incurred by such Lender as a result of any failure to
fulfill, on or before the date specified for an Advance, the conditions to the
making of such Advance set forth herein, including without limitation, any cost,
loss or expense incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by any Lender to fund the Advance to be made by
such Lender as part of such Borrowing.
(c) Funding. After receiving a Request for Advance in the manner
provided herein, Agent shall deposit such funds into the Borrowing Account. This
will, from time to time, result in Agent's Percentage being above that set out
in
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Section 1.28. However, the Percentage will be adjusted on the next Regular
Settlement Date. If an Advance causes the amount outstanding as Agent's
Percentage to exceed the Agent's Committed Sum, then there will be an immediate
Special Settlement.
SECTION 2.3. Settlements.
(a) On each Settlement Date, Agent shall notify each Lender by
telephone (confirmed immediately by telecopier, telex, or cable), telecopier,
telex, or cable of the then current balance under the Note. Thereafter, before
2:00 p.m., local time in Mobile,
Alabama, on said Settlement Date, either each
Lender will make the Required Deposit with Agent or Agent will make the Required
Remittance to each Lender.
(b) If and to the extent any Lender shall not have so made the Required
Deposit available to Agent, Borrower agrees to repay to Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to or on behalf of Borrower until
the date such amount is repaid to Agent, at the Applicable Rate of Interest. The
failure of any Lender to make any Required Deposit hereunder shall not relieve
any other Lender of its obligations to make its Required Deposit hereunder.
Neither Agent nor any Lender shall be responsible for the performance by any
other Lender of its obligations hereunder. In the event of any failure by a
Lender to make a Required Deposit hereunder, the other Lenders may (but shall
not be required to) purchase (on a pro rata basis, according to their respective
Percentages) such Lender's interest in the Note.
SECTION 2.4. Commitment Fees. Borrower agrees to pay to Agent, for the
account of each Lender, availability fees for the Commitment Period computed at
a rate per annum equal to one-eighth of one percent (1/8 of 1 %) on the average
daily unborrowed amount of such Lender's Committed Sum in effect during the
period for which payment is made. Such commitment fees shall be payable
quarterly in arrears on the fifth Business Day after each calendar quarter
following the date of the Note and again at the maturity date of the Note.
SECTION 2.5. Termination or Reduction of Commitment by Borrower.
Borrower may at any time, upon not less than thirty (30) Business Days' prior
written notice to Lenders, (a) reduce the Commitment, in multiples of
$1,000,000.00, at which time the Commitment Fees will be reduced accordingly, or
(b) terminate the Commitment; provided, however, that upon the termination of
the Commitment, all amounts due under the Note and other Loan Documents shall be
immediately due and payable.
SECTION 2.6. Use of Proceeds. The proceeds of each Borrowing shall be
used for the general corporate purposes of Borrower.
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ARTICLE III
NOTE AND NOTE PAYMENTS
SECTION 3.1. Note. The Advances shall be evidenced by a Revolving
Credit Note (the "Note") executed by Borrower, which Note shall (a) be dated the
date hereof, (b) be in the principal amount of $20,000,000.00, (c) be payable to
the order of Agent, as Agent for the Lenders, at the office of Agent, (d) bear
interest in accordance herewith, and (e) be in the form of EXHIBIT A, attached
hereto, with blanks appropriately completed in conformity herewith. The Agent is
authorized, but is not required, to endorse on the schedule attached to the Note
appropriate notations evidencing the date and amount of each Advance as well as
the amount of each payment made by Borrower thereunder.
SECTION 3.2. Interest Rate. The Borrower shall pay interest to the
Agent for the ratable benefit of the Lenders, on the outstanding and unpaid
principal amount of the Loans, as follows: Borrower may select a per annum rate
equal to: (i) a LIBOR Rate, based upon the applicable rate for the term selected
(i.e., one, three, or six months), plus the LIBOR Spread; or (ii) the Base Rate
minus the Base Spread, each computed on the basis of a 360-day year. Borrower
shall give Agent telephonic notice of its interest rate selection by 11:00 a.m.,
local time in Mobile,
Alabama, on the first day of each calendar month (or on
the first day of the calendar month in which a new rate must be chosen) of its
selection of the rate. Such notice shall be confirmed in writing (by hand
delivery or facsimile) within one (1) hour of such telephonic notice. The rate
selected will remain in effect for the entire calendar month or, if Borrower has
selected a three- or six-month LIBOR Rate, for that corresponding period of
time. In the event Borrower fails to give such notice, Agent will recalculate an
interest rate as though Borrower had reselected the same index previously
chosen. Such rate will remain in effect for the corresponding period of time
until Borrower has given proper notice.
SECTION 3.3. Principal Payments.
(a) Payment of the Note. The unpaid principal amount of the Note, and
all accrued but unpaid interest thereon, shall be due and payable on the earlier
of (i) the Commitment Termination Date, or (ii) the date on which the Note
becomes due and payable under the provisions of Section 7.2 hereof.
(b) Principal Payments on the Note. At any time and from time to time
Borrower may pay without premium or penalty the principal of the Note then
outstanding, in whole or in part, provided that Borrower shall give Agent
telephonic notice by 11:00 a.m. local time in Mobile,
Alabama, on the day of
each principal payment hereunder, confirmed in writing by hand delivery or
facsimile within one (1) hour of such telephonic notice.
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SECTION 3.4. Payment of Interest on the Note. Interest upon the Note
shall be calculated at the end of each calendar month and shall be due and
payable on the first business day of the next calendar month and at the
Commitment Termination Date.
SECTION 3.5. Manner and Application of Payments. All payments of
principal of, and interest on, the Note shall be made by Borrower to Agent
before 2:00 p.m., local time in Mobile,
Alabama, in federal or other immediately
available funds at Agent's principal banking office in Mobile,
Alabama, provided
that any payment of principal (i) made on a Regular Settlement Date, or (ii)
that results in the need for a Special Settlement, shall be made before 12:00
p.m. local time in Mobile,
Alabama. Any payment received by Agent after the
required time shall be deemed to have been received by Agent on the next
succeeding Business Day. Should the principal of or interest on the Note, or any
commitment fee, become due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day.
SECTION 3.6. Application of Payments. Each payment received by Agent
shall be applied to Agent's portion of the Note. This will, from time to time,
result in Agent's Percentage falling below that set out in Section 1.28.
However, the Percentage will be adjusted on the next Regular Settlement Date. If
a payment causes the amount outstanding as Agent's Percentage to fall below $0,
then there will be an immediate Special Settlement.
SECTION 3.7. Taxes.
(a) Any and all payments by Borrower hereunder or under the Note shall
be made in accordance with this Article III, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto.
(b) Borrower shall pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or under the Loan Documents or from the
execution, delivery or registration of, or otherwise with respect to, any of the
Loan Documents.
(c) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
Section 3.7 shall survive the payment in full of the Obligations.
SECTION 3.8. Indemnity. Borrower shall indemnify each Lender and hold
each Lender harmless from any loss or expense or loss of margin which such
Lender may sustain or incur as a consequence of Borrower's failure or refusal to
borrow after Borrower has given a Request for Advance pursuant to Section
2.2(a). This covenant shall survive termination of this Agreement and payment of
the Obligations for a period of one (1) year. A statement setting forth the
calculations of any amounts
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payable pursuant to this section submitted by a Lender to Borrower and Agent
shall be conclusive in the absence of manifest error.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Initial Advance. The obligation of each Lender to make the
initial Advance hereunder is subject to the condition precedent that, on or
before the date of such Advance, Agent shall have received for each Lender the
following, each dated as of the date of such Advance, in form and substance
satisfactory to Agent and such Lender:
(a) Note. The duly executed Note.
(b) Resolutions of Borrower. Resolutions of Borrower approving the
Loans contemplated hereby, duly adopted by Borrower's Board of Directors and
accompanied by a certificate of the Secretary or Assistant Secretary of Borrower
stating that such resolutions are true and correct, have not been altered or
repealed and are in full force and effect.
(c) Officer's Certificate of Borrower. A certificate of an authorized
officer of Borrower averring to the fact that the Borrower has not amended its
Articles of Incorporation or Bylaws in any material respect since September 30,
2000, and further averring to the accuracy of the representation and warranties
of the Borrower contained in Article V below.
SECTION 4.2. All Advances. The obligation of each Lender to make any
Advance under this Agreement (including the initial Advance) shall be subject to
the following conditions precedent:
(a) No Defaults. As of the date of the making of such Advance, there
shall exist no Default or Event of Default.
(b) Compliance with Agreement. Borrower shall have performed and
complied with all agreements and conditions contained herein and in each of the
Loan Documents which are required to be performed or complied with by Borrower
before or on the date of such Advance.
(c) Request for Advance. Agent shall have received from Borrower a
Request for Advance in the form attached hereto as EXHIBIT B, dated as of the
date of such Borrowing and signed by an authorized officer of Borrower.
(d) Representations and Warranties. The representations and warranties
contained in Article V hereof and in each of the Loan Documents shall be true in
all
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respects on the date of making of such Advance, with the same force and effect
as though made on and as of that date.
(e) Bankruptcy Proceedings. No proceeding or case under Debtor Law
shall have been commenced by or against Borrower or any direct or indirect
Subsidiary of Borrower.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans hereunder, Borrower represents and
warrants Agent and to Lenders that:
SECTION 5.1. Organization and Good Standing. Borrower is a corporation
duly organized and existing in good standing under the laws of the State of
Alabama, and has the corporate power and authority to own its properties and
assets and to transact the business in which it is engaged.
SECTION 5.2. Authorization and Power. Borrower has the corporate power
and requisite authority to execute, deliver and perform the Loan Documents to be
executed by Borrower. Borrower is duly authorized, and has taken all corporate
action necessary to authorize Borrower, to execute, deliver and perform the Loan
Documents executed by Borrower. Borrower is and will continue to be duly
authorized to perform the Loan Documents executed by Borrower and the
Obligations.
SECTION 5.3. No Conflicts or Consents. Neither the execution and
delivery of the Loan Documents, nor the consummation of any of the transactions
therein contemplated, nor compliance with the terms and provisions thereof, will
materially contravene or conflict with any provision of law, statute or
regulation to which Borrower is subject or any judgment, license, order or
permit applicable to Borrower, or any indenture, loan agreement, mortgage, deed
of trust, or other agreement or instrument to which Borrower is a party or to
which Borrower may be subject, or violate any provision of the charter or bylaws
of Borrower. No consent, approval, authorization or order of any court or
Governmental Authority or third party is required and has not been obtained in
connection with the execution and delivery by Borrower of the Loan Documents or
to consummate the transactions contemplated hereby or thereby.
SECTION 5.4. Enforceable Obligations. The Loan Documents have been duly
executed and delivered by Borrower and are the legal and binding obligations of
Borrower, enforceable in accordance with their respective terms, except as
limited by Debtor Laws.
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SECTION 5.5. No Default. No event known to Borrower has occurred and is
continuing which constitutes a Default or an Event of Default.
SECTION 5.6. Use of Proceeds; Margin Stock. The proceeds of the Loans
will be used by Borrower solely for the purposes specified in this Agreement.
None of such proceeds will be used for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U, Regulation X, or Regulation G, or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a "margin stock" or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of such
Regulation U, Regulation X, or Regulation G. Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stocks. Borrower has neither taken nor will take, and no Person acting on behalf
of Borrower has taken or will take, any action which might cause the Note or any
of the other Loan Documents, including this Agreement, to violate Regulation U,
Regulation X, or Regulation G or any other regulations of the Board of Governors
of the Federal Reserve System or to violate Section 8 of the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect. Borrower neither owns, nor does any
Subsidiary of Borrower own, "margin stock" as herein defined.
SECTION 5.7. Taxes. All tax returns required to be filed by Borrower in
any jurisdiction have been filed and all taxes (including mortgage recording
taxes), assessments, fees and other governmental charges upon Borrower or upon
any of its properties, income or franchises have been paid prior to the time
that such taxes could give rise to a lien thereon. There is no known material
proposed tax assessment against Borrower and Borrower is not aware of any basis
for such assessment.
ARTICLE VI
COVENANTS
So long as Lenders have any commitment to make Advances hereunder, and
until payment in full of the Note, Borrower agrees that (unless Lenders shall
otherwise consent in writing):
SECTION 6.1. Financial Information. Borrower shall deliver to each
Lender, within three (3) days of its transmittal for filing with the Securities
and Exchange Commission, a true and correct copy of each Form 10-Q and Form 10-K
of Borrower and a copy of its annual report within three (3) days of its
availability.
SECTION 6.2. Additional Financial Information. Borrower shall deliver
to each Lender such additional financial information as Lenders may reasonably
request from time to time.
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SECTION 6.3. Payment of Taxes and Other Indebtedness. Borrower shall
pay and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it before delinquent, and (b) all other indebtedness of Borrower;
provided, however, that Borrower shall not be required to pay any such tax,
assessment, charge or levy if and so long as the amount, applicability or
validity thereof shall be contested in good faith by appropriate proceedings,
and appropriate accruals therefor shall have been established in accordance with
generally accepted accounting principles.
SECTION 6.4. Maintenance of Existence and Rights; Conduct of Business.
Borrower shall preserve and maintain its corporate existence and all of its
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, and conduct its business in an orderly and efficient manner
consistent with good business practices.
SECTION 6.5. Compliance with Material Agreements. Borrower shall comply
in all material respects with all material agreements, indentures, mortgages or
documents binding on it or affecting its properties or business.
SECTION 6.6. Minimum Stockholders' Equity Plus Minority Interest.
Borrower and its consolidated subsidiaries shall, at the end of each fiscal
quarter, have a total stockholders' equity, plus minority interest, on a
consolidated basis of not less than: (i) Sixty-Five Million and No/100 Dollars
($65,000,000.00) through September 30, 2001; and (ii) Seventy Million and No/100
Dollars ($70,000,000.00) for the period from October 1, 2001, through January
31, 2003.
SECTION 6.7. Leverage Ratio. Borrower and its consolidated subsidiaries
will have, at the end of each fiscal quarter, on a consolidated basis, a ratio
of total liabilities plus long-term debt, (excluding debt used to purchase cash
equivalents or temporary investments) to stockholders' equity plus minority
interest of not greater than 2.0 to 1.0.
SECTION 6.8. Debt/Earnings Ratio. Borrower and its consolidated
subsidiaries will have, at the end of each fiscal quarter, on a consolidated
basis, a ratio of funded debt (excluding debt used to purchase cash equivalents
or temporary investments) to EBITDA (after dividends) of not more than the
following: (i) 6.0 to 1 for the period ending September 30, 2001; (ii) 5.5 to 1
for the period from October 1, 2001, through September 30, 2002; and (iii) 5.0
to 1 for the period from October 1, 2002, through January 31, 2003. "EBITDA"
means earnings before interest, taxes, depreciation, and amortization. For the
purposes of this calculation, EBITDA is to be computed on a trailing
four-quarter basis and shall be the sum of EBITDA for the respective fiscal
quarter ended, plus EBITDA for the previous three fiscal quarters. Funded debt
is defined as the sum of long-term debt, current maturities of long-term debt,
and notes payable to Banks for the respective fiscal quarter ended.
14
SECTION 6.9. Reporting Requirements. Borrower shall compute the ratios
required under Sections 6.6, 6.7, and 6.8 for each fiscal quarter and shall
submit a written report of the same to Bank within forty-five (45) days
following the end of each fiscal quarter (within ninety (90) days following the
end of its fiscal fourth quarter), together with a certificate signed by
Borrower's chief financial officer noting compliance with the terms and
conditions of this Agreement.
SECTION 6.10. Mobile Gas Service Corporation. (a) Borrower shall not
convey, sell, assign, transfer or otherwise dispose of any interest in Mobile
Gas Service Corporation or its capital stock, and (b) Borrower shall not allow
the gross assets of Mobile Gas Service Corporation to be less than
$100,000,000.00 at any time during the term of the Loans.
SECTION 6.11. Due on Sale Provision. Upon any sale, lease, transfer or
disposition of either a controlling interest in Borrower, or a majority of its
assets, whether now owned or hereafter acquired, or consolidation or merger into
another entity, the Loans and the Note shall immediately become due and payable
in full.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1. Events of Default. An "Event of Default" shall exist if
any one or more of the following events (herein collectively called "Events of
Default") shall occur and be continuing:
(a) Borrower shall fail to pay within five (5) days of when due any
principal of, or interest on, any Note or any fee, expense or other payment
required hereunder;
(b) Any representation or warranty made under this Agreement, or in any
certificate or financial statement furnished or made to Lenders pursuant hereto
or in connection herewith or with the Loans hereunder, shall prove to be untrue
or inaccurate in any material respect as of the date on which such
representation or warranty is made;
(c) Default shall occur in the performance of any of the covenants or
agreements of Borrower contained herein, and such default remains uncured ten
(10) days after notice of such default is given to Borrower;
(d) Default shall occur in the payment of any material Indebtedness of
Borrower (other than the Obligations) or default on the part of Borrower shall
occur in respect of any note, loan agreement or credit agreement relating to any
such indebtedness and such default shall continue for more than the period of
grace, if any, specified therein; or any such Indebtedness shall become due
before its stated
15
maturity by acceleration of the maturity and shall not be promptly paid or
extended, thereof or shall become due by its terms and shall not be promptly
paid or extended;
(e) Borrower shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervenor or liquidator of itself or of all or a
substantial part of Borrower's assets, (ii) file a voluntary petition in
bankruptcy, admit in a writing delivered or furnished to a third party
(including the Agent or Lenders) that such Borrower is unable to pay its debts
as they become due or generally not pay its debts as they become due, (iii) make
a general assignment for the benefit of creditors, (iv) file a petition or
answer seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy or insolvency laws or other Debtor Law, (v) file an
answer admitting the material allegations of, or consent to, or default in
answering, a petition filed against Borrower in any bankruptcy, reorganization
or insolvency proceeding, or (vi) take corporate action for the purpose of
effecting any of the foregoing;
(f) An involuntary petition or complaint shall be filed against
Borrower seeking bankruptcy or reorganization of Borrower or the appointment of
a receiver, custodian, trustee, intervenor or liquidator of Borrower, or all or
substantially all of the assets of Borrower, and such petition or complaint
shall not have been dismissed within ninety (90) days of the filing thereof; or
an order, order for relief, judgment or decree shall be entered by any court of
competent jurisdiction or other competent authority approving a petition or
complaint seeking reorganization of Borrower or appointing a receiver,
custodian, trustee, intervenor or liquidator of Borrower, or of all or
substantially all of the assets of Borrower.
SECTION 7.2. Remedies Upon Event of Default. If an Event of Default
shall have occurred and be continuing, then Agent shall, at the request of
Lenders, and may, with the consent of Lenders, exercise any one or more of the
following rights and remedies, and any other remedies provided in any of the
Loan Documents, as Lenders in their sole discretion may deem necessary or
appropriate: (a) terminate Lenders' commitment to lend hereunder, (b) declare
the principal of, and all interest then accrued on, the Note and any other
liabilities hereunder to be forthwith due and payable, whereupon the same shall
forthwith become due and payable without presentment, demand, protest, notice of
default, notice of acceleration or of intention to accelerate or other notice of
any kind, all of which Borrower hereby expressly waives, anything contained
herein or in the Note to the contrary notwithstanding, (c) reduce any claim to
judgment, and/or (d) without notice of Event of Default or demand, pursue and
enforce any of Agent's or Lenders' rights and remedies under the Loan Documents,
or otherwise provided under or pursuant to any applicable law; provided,
however, that if any Event of Default specified in Section 7.1(f) shall occur
with respect to Borrower, the principal of, and all interest on, the Note and
other liabilities hereunder shall thereupon become due and payable concurrently
therewith, and Lenders' obligations to lend shall immediately terminate
hereunder, without any further action by Agent or any Lender and without
presentment, demand, protest,
16
notice of default, notice of acceleration or of intention to accelerate or other
notice of any kind, all of which Borrower hereby expressly waives.
ARTICLE VIII
THE AGENT: PARTICIPATIONS
SECTION 8.1. Appointment and Authorization. Each Lender hereby
irrevocably appoints and authorizes Agent to take such action on its behalf and
to exercise such powers under the Loan Documents as are delegated to Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. With respect to its Commitment and the Advances made by it,
Regions Bank shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Regions Bank in its capacity as a Lender. Agent may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, Borrower , any of Borrower's Affiliates and any Person which
may do business with Borrower or any of Borrower's Affiliates, all as if Agent
were not Agent hereunder and without any duty to account therefor to Lenders.
SECTION 8.2. Agent's Fees. Borrower shall pay to Agent for its own
account fees, if any, in the amounts and at the times agreed between them.
SECTION 8.3. Documents. Agent shall not be under a duty to examine or
pass upon the validity, effectiveness, enforceability, genuineness or value of
any of the Loan Documents or any other instrument or document furnished pursuant
thereto or in connection therewith, and Agent shall be entitled to assume that
the same are valid, effective, enforceable and genuine and what they purport to
be.
SECTION 8.4. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving fifteen (15) Business Days' written notice thereof
to Lenders and Borrower. Upon any such resignation, Borrower shall have the
right to appoint a successor Agent from among the remaining Lenders. If no
successor Agent shall have been so appointed by Borrower and shall have accepted
such appointment within fifteen (15) Business Days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Borrower, appoint a successor Agent. 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 hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article VIII shall continue in effect
for its benefit in respect to any actions taken or omitted to be taken by it
while it was acting as Agent.
17
SECTION 8.5. Responsibility of Agent. It is expressly understood and
agreed that the obligations of Agent under the Loan Documents are only those
expressly set forth in the Loan Documents and that Agent shall be entitled to
assume that no Default or Event of Default has occurred and is continuing,
unless Agent has actual knowledge of such fact or has received notice from a
Lender that such Lender considers that a Default or an Event of Default has
occurred and is continuing and specifying the nature thereof. Lenders recognize
and agree that Agent shall not be required to determine independently whether
the conditions described in Article IV have been satisfied and, in disbursing
funds to Borrower, may rely fully upon statements contained in the relevant
Request for Advance . Neither Agent nor any of its directors, officers or
employees shall be liable for any action taken or omitted to be taken by it
under or in connection with Loan Documents, except for its own gross negligence
or willful misconduct. Agent shall incur no liability under or in respect of any
of the Loan Documents by acting upon any notice, consent, certificate, warranty
or other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties, or with respect to anything which it may
do or refrain from doing in the reasonable exercise of its judgment, or which
may seem to it to be necessary or desirable in the circumstances.
Agent shall not be responsible to Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by any Lender
under, this Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any document referred to or
provided for herein or for any failure by Borrower to perform any of its
obligations hereunder. Agent may, after consultation with Lenders, employ agents
and attorneys-in-fact and shall not be answerable, except as to money or
securities received by it or its authorized agents, for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
The relationship between Agent and each of the Lenders is only that of
agent and principal and has no fiduciary aspects, and Agent's duties hereunder
are acknowledged to be only ministerial and not involving the exercise of
discretion on its part. Nothing in this Agreement or elsewhere contained shall
be construed to impose on Agent any duties or responsibilities other than those
for which express provision is herein made. In performing its duties and
functions hereunder, Agent does not assume and shall not be deemed to have
assumed, and hereby expressly disclaims, any obligation or responsibility toward
or any relationship of agency or trust with or for Borrower. As to any matters
not expressly provided for by this Agreement (including, without limitation,
enforcement or collection of the Note), 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 Lenders and such instructions shall be binding
upon all Lenders; provided, however, that Agent shall not be required to take
18
any action which exposes Agent to personal liability or which is contrary to
this Agreement or applicable law.
SECTION 8.6. Notices of Event of Default. In the event that Agent shall
have acquired actual knowledge of any Event of Default or of an event which,
with the giving of notice or the lapse of time, or both, would constitute an
Event of Default, Agent shall promptly give notice thereof to the other Lenders.
In the event that any Lender shall have acquired actual knowledge of any Event
of Default or of any event which, with the giving of notice or the lapse of
time, or both, would constitute an Event of Default, such Lender shall promptly
give notice thereof to the Agent and other Lenders.
SECTION 8.7. Sale or Assignment. Each participation shall constitute an
assignment, without recourse to Regions Bank, of any undivided interest in the
Loans, the Loan Documents, and any and all property of Borrower or proceeds
thereof that may be received in payment from the Borrower or applied to the
Loans. Nothing in this Agreement nor in any other agreement among Lenders and
Agent shall be construed to create a loan by any Lender to Agent or any other
Lender unless expressly set forth therein.
SECTION 8.8. Catch-All. Except for Loan repayments and Commitment Fees
described herein, no Lender shall have any interest in other payments received
by the Agent from Borrower.
SECTION 8.9. Corporate Power. Each Lender and the Agent represents and
warrants to all other Lenders and Agent that the making and performance of this
Agreement is within its power and has been duly authorized by all necessary
corporate and other action by it, that this Agreement is in compliance with all
applicable laws and regulations promulgated thereunder, and does not conflict
with any agreements by which it is bound, and that this Agreement has been duly
executed by it, and constitutes the legal, valid and binding obligation of it,
enforceable in accordance with its respective terms.
SECTION 8.10. Credit Analysis. Each Lender has conducted and will
conduct its own credit analysis, without reliance on Agent, and based upon such
documents and information as it has deemed appropriate, made and will make its
decisions called for hereunder, and will continue to be responsible for making
its own independent appraisal of the credit, financial condition, and all ,other
matters concerning Borrower. Each Lender represents and warrants that its
participation in the Loan and Loan Documents is an ordinary commercial lending
transaction and not a "sale" of a "security" under any federal or state
securities law, rule or regulation.
SECTION 8.11. Administration of Loan. Only upon the unanimous consent
of each Lender may the Agent (i) agree to any modification of any of the terms
of the Credit Documents or any other agreement or instrument evidencing or
securing this
19
Loan; (ii) waive any of such terms or give or withhold consents or approvals to
any actions or failure to act by the Borrower; (iii) reduce the principal of or
the interest rate or extend the stated maturity of the Loan (other than pursuant
to the exercise of Borrower's rights under Section 2.5); (iv) agree upon any
extension, modification, refinancing, refunding, assumption or other
restructuring of the Loan.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Accounting Terms. All accounting terms not specifically
defined in this Agreement shall be construed in accordance with generally
accepted accounting principles.
SECTION 9.2. Waiver. No failure to exercise, and no delay in
exercising, on the part of any Lender, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right. The rights
of Lenders hereunder and under the Loan Documents shall be in addition to all
other rights provided by law. No modification or waiver of any provision of this
Agreement, the Note or any Loan Documents, nor consent to departure therefrom,
shall be effective unless in writing and no such consent or waiver shall extend
beyond the particular case and purpose involved. No notice or demand given in
any case shall constitute a waiver of the right to take other action in the
same, similar or other instances without such notice or demand.
SECTION 9.3. Payment of Expenses. Borrower agrees, in the event that
Lenders prevail, to pay all reasonable costs and expenses of Lenders (including,
without limitation, the reasonable attorneys' fees of Lenders' legal counsel)
incurred by Lenders in connection with the preservation and enforcement of
Agent's and Lenders' rights under this Agreement and/or the Note.
SECTION 9.4. Notices. Except for telephonic notices permitted herein,
any notices or other communications required or permitted to be given by this
Agreement or any other documents and instruments referred to herein must be (a)
given in writing and personally delivered or mailed by prepaid United States
mail, or (b) made by courier, overnight delivery service or telecopier or telex
delivered or transmitted, to the party to whom such notice of communication is
directed, to the address of such party as follows:
(a) Borrower: EnergySouth, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000
20
(b) Agent: Regions Bank
Xxxx Xxxxxx Xxxxxx 0000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000
(c) Lenders: Regions Xxxx
Xxxx Xxxxxx Xxxxxx 0000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000
AmSouth Bank
Xxxx Xxxxxx Xxxxxx 0000
Xxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
Telecopier No.: (000) 000-0000
SouthTrust Bank
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Any such notice or other communication shall be deemed to have been given on the
day it is received; provided, however, that any telephonic or other notice
received by Agent after 11:00 a.m. local time in Mobile, Alabama, on any day
from Borrower pursuant to Section 2.2(a) (with respect to a Request for Advance)
shall be deemed for the purposes of such section to have been given by Borrower
on the next succeeding Business Day. Any party may change its address for
purposes of this Agreement by giving notice of such change to the other parties
pursuant to this Section 9.4.
SECTION 9.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the United States of America and the
State of Alabama.
SECTION 9.6. Confidentiality. Agent and each Lender agree to hold any
confidential or non-public information which they may receive from Borrower
pursuant to this Agreement in confidence, except for disclosure (a) to other
Lenders, (b) to legal counsel, accountants, and other professional advisors, (c)
to regulatory officials as required by law, rule or regulation, (d) as required
by law or legal process or in connection with any legal proceeding, or (e) as
otherwise permitted by the Loan Documents.
21
SECTION 9.7. Non-Liability of Lenders. The relationship between
Borrower and Lenders is, and shall at all times remain, solely that of borrower
and lenders, and Lenders and Agent neither undertake nor assume any
responsibility or duty to Borrower to review, inspect, supervise, pass judgment
upon, or inform Borrower of any matter in connection with any phase of
Borrower's businesses, operations, or condition, financial or otherwise. There
is not and shall not be deemed to be a fiduciary relationship between Lenders
and Borrower. Borrower shall rely entirely upon its own judgment with respect to
such matters, and any review, inspection, supervision, exercise of judgment, or
information supplied to Borrower by any Lender or Agent in connection with any
such matter is for the protection of Lenders and Agent, and neither Borrower nor
any third party is entitled to rely thereon.
SECTION 9.8. No Joint Venture. Nothing herein contained or contained in
the other Loan Documents shall be deemed to create a partnership or joint
venture between Lenders and/or Agent on the one hand, and Borrower on the other
hand.
SECTION 9.9. Binding Effect. The Loan Documents shall be binding upon
and inure to the benefit of Borrower, Agent and Lenders and their respective
successors, assigns and legal representatives; provided, however, that (a)
Borrower may not, without the prior written consent of Lenders, assign any
rights, powers, duties or obligations thereunder, and (b) no Lender may, without
the prior written consent of the other Lenders and Borrower, assign any rights,
powers, duties or obligations thereunder.
SECTION 9.10. Entirety. The Loan Documents embody the entire agreement
between the parties and supersede all prior or contemporaneous agreements and
understandings, if any, relating to the subject matter hereof and thereof.
SECTION 9.11. Headings. Section headings are for convenience of
reference only and shall in no way affect the interpretation of this Agreement.
SECTION 9.12. No Third Party Beneficiary. The parties do not intend the
benefits of this Agreement to inure to any third party, nor shall this Agreement
be construed to make or render Agent or Lenders liable to any materialman,
supplier, contractor, subcontractor, purchaser or lessee of any property owned
by Borrower, or for debts or claims accruing to any such persons against
Borrower. Notwithstanding anything contained herein or in the Note, or in any
other Loan Document, or any conduct or course of conduct by any or all of the
parties hereto, before or after signing, neither this Agreement nor any other
Loan Document shall be construed as creating any right, claim or cause of action
against Agent or Lenders, or any of their officers, directors, agents or
employees, in favor of any materialman, supplier, contractor, subcontractor,
purchaser or lessee of any property owned by Borrower, nor to any other person
or entity other than Borrower.
22
SECTION 9.13. Multiple Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same agreement, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
BORROWER: ENERGYSOUTH, INC.
By: /s/ Xxxx X. Xxxxx
-----------------
XXXX X. XXXXX
President and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
XXXXXXX XXXXXXX
Senior Vice President and Chief
Financial Officer
By: /s/ Xxxxxx Xxxxxxxx
-------------------
XXXXXX XXXXXXXX
Its Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
23
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
AGENT: REGIONS BANK, as Agent for Lenders
pursuant to the terms hereof
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
XXXXXX X. XXXXXXXX
Its Assistant Vice President
LENDERS: REGIONS BANK
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
XXXXXX X. XXXXXXXX
Its Assistant Vice President
AMSOUTH BANK
By: /s/ Xxxxxx X. Xxxxx, Xx.
------------------------
Its Vice President
SOUTHTRUST BANK
By: /s/ Xxxxxxx X. Xxxxxxxxx
Its Senior Vice President
Attachments:
Exhibit A - Revolving Credit Note
Exhibit B - Request for Advance
24
