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EXHIBIT 10.31
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of September 29, 1995, between Enron Oil & Gas
Company, a Delaware corporation ("Lender"), and Enron Corp., a Delaware
corporation ("Borrower"). The parties hereto hereby agree as follows:
1. Loans. Subject to the terms and conditions of this Agreement,
Lender may make loans (the "Loans") from its available funds to Borrower from
time to time during the period from the date of this Agreement up to but not
including the Termination Date, as defined in Section 10, in an aggregate
principal amount up to but not exceeding the sum of Two Hundred Million Dollars
($200,000,000) at any one time outstanding. Within the limits of this
Agreement, Borrower may borrow, prepay pursuant to Section 4, and reborrow
under this Section 1. While the Lender has, and shall have, no obligation to
make Loans to the Borrower pursuant to this Agreement, the parties hereto agree
that any Loans by the Lender will be made in reliance on the agreements of the
Lender and the Borrower contained herein and on the terms and conditions and in
the manner provided herein. Lender may make Loans to Borrower and Borrower may
borrow under this Agreement to the extent Lender has temporary surplus cash
available and Borrower and Lender may mutually benefit from the Loans.
2. Interest. Interest on the outstanding and unpaid principal
amount of Loans made pursuant to this Agreement shall be calculated as follows:
a. On and after September 29, 1995 but before January 1,
1996. Borrower shall pay interest to Lender on the outstanding and
unpaid principal amount of the Loans made on and after September 29,
1995 but before January 1, 1996 pursuant to this Agreement at a rate
per annum equal to:
(1) the one month LIBOR rate as indicated by the
British Bankers Association Interest Settlement Rate
(displayed on the LIBO page of Telerate 3750) as of 11:00
a.m., London time, or if not available,
(2) the arithmetic mean of the rates at which
deposits in dollars are offered at the principal London office
of Bankers Trust Company and Citibank N.A. rounded to the
nearest 1/16 of 1% (or, if there is no such nearest 1/16 of
1%, the next higher 1/16 of 1%) at approximately 11:00 a.m.,
London time, and in an amount that is representative for a
single transaction in the London interbank market at such
time.
b. On and after January 1, 1996. Borrower shall pay
interest to Lender on the outstanding and unpaid principal amount of
the Loans made on and after January 1, 1996 pursuant to this Agreement
at a rate per annum equal to the sum of the following, divided by two:
(i) the daily market borrowing all-in cost of Borrower, as determined
daily by Borrower's Treasury Department and (ii) the daily average
rate, as determined daily by Borrower's Treasury Department, at which
Lender is able in accordance with Lender's Investment Policy to invest
temporary surplus cash available to Lender.
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c. Volumetric Production Payment Loans. Notwithstanding
the provisions of Section 2.a. or b., for any period during the term
of this Agreement during which the outstanding and unpaid principal
amount of loans made by Lender to Borrower is equal to or less than
the VPP Deferred Revenue Balance, such principal amount shall bear
interest as provided in the Promissory Note made on January 1, 1993 by
Borrower to Lender. Only principal balances in excess of any VPP
Deferred Revenue Balance shall bear interest as provided in Section
2.a or b. For purposes of this Agreement, "VPP Deferred Revenue
Balance" shall mean the amounts associated with the unamortized
deferred revenues under the terms of volumetric production payment and
exchange agreements effective October 1, 1992, as amended, that are
reported in the financial statements of Lender from time to time and
are comparable to amounts included in audited and publicly reported
financial statements.
Interest shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Interest shall be paid at the offices of
Lender at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 in funds immediately
available to Lender on the fifth Business Day of each month. As used herein,
Business Day means any day other than a Saturday, a Sunday or a state or
federal bank holiday in Houston, Texas or New York, New York.
3. Note. All Loans made by Lender under this Agreement shall be
evidenced by, and repaid with interest in accordance with, a single promissory
note of Borrower in substantially the form annexed hereto as Exhibit A (the
"Note"), with appropriate insertions therein. The Note shall be used to
evidence each borrowing, repayment and reborrowing hereunder. The Note shall
(i) be dated the date of the first Loan evidenced thereby and (ii) be stated to
mature as to principal on the Termination Date. Lender is hereby authorized by
Borrower to endorse on the schedule attached to the Note the amount of each
Loan and of each payment of principal received by Lender on account of the
Loans, which endorsement shall, in the absence of manifest error, be conclusive
as to the outstanding balance of the Loans made by Lender, provided, however,
that the failure to make such notation with respect to any Loan or payment
shall not limit or otherwise affect the obligations of Borrower under this
Agreement or the Note.
4. Prepayments. Borrower may prepay the Note in whole or in
part.
5. Acceleration. Lender reserves the right to require prepayment
of the Note upon demand, whereupon this Agreement shall be immediately
terminated and the principal amount of the Note, together with accrued interest
thereon, shall become immediately due and payable.
6. Use of Proceeds. The proceeds of the Loans hereunder shall be
used by Borrower to supplement working capital and for other general corporate
purposes.
7. Notices, Etc. All notices and other communications provided
for under this Agreement shall be in writing (including telegraphic
communication) and mailed, telecopied, telegraphed, or delivered, if to Lender,
at its address at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Senior
Vice President and Chief Financial Officer, telecopy number (000) 000-0000, and
if to Borrower, at its address at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000,
Attention: Vice President, Finance and
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Treasurer, telecopy number (000) 000-0000; or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
party complying as to delivery with the terms of this Section 7.
8. No Waiver; Remedies. No failure on the part of Lender to
exercise, and no delay in exercising, any right, power, or remedy under this
Agreement or the Note shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under this Agreement or the Note preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided in this Agreement or the Note are cumulative and not
exclusive of any remedies provided by law.
9. Governing Law. This instrument shall be construed under the
laws of the State of Texas, and the obligation of Borrower to make payments of
interest as provided for herein is expressly limited so that the aggregate
amount of all the interest paid by Borrower on the Note shall never exceed the
highest rate allowed by the laws of the State of Texas as construed by the
highest court or courts having jurisdiction thereof (the "Legal Interest
Rate"); and if, at the time any such payment of interest is due, the payment of
such sum would make the total interest exceed the Legal Interest Rate, the
amount so payable by Borrower shall be reduced to an amount which does not
exceed Legal Interest Rate; and, similarly, if the maturity of the Note is
accelerated for any reason before the due date stated, earned interest may
never include more than the Legal Interest Rate, it being the intention of the
parties to conform strictly to the laws of the State of Texas now in force, and
in the event it should be held that the interest payable under the Note or
otherwise is in excess of the Legal Interest Rate, the interest chargeable
hereunder (whether included in the face amount or otherwise) shall be reduced
to the Legal Interest Rate, and any amount in excess of the Legal Interest Rate
shall be cancelled automatically and shall be either refunded (if theretofore
paid) or credited to the principal amount due on the Note.
10. Termination Date. The "Termination Date" means December 31,
1998. Notwithstanding the above, this Credit Agreement may be terminated upon
at least thirty (30) days prior written notice given by one party to the other;
provided, however, that the provisions of this Agreement shall survive as to
any Loans maturing after the effective termination date. Upon cancellation of
the last such Loan, this Agreement shall be of no further force and effect.
11. Captions. The captions of the various sections of this
Agreement have been inserted only for the purposes of convenience, and shall
not be deemed in any manner to modify, explain, enlarge or restrict any
provisions of this Agreement.
12. Entire Agreement. THIS AGREEMENT AND THE NOTE TOGETHER
CONSTITUTE A WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
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ENRON OIL & GAS COMPANY
By:__________________________________
Xxxxxx X. Xxxxxx Senior Vice
President and Chief Financial
Officer
ENRON CORP.
By:__________________________________
xxxx X. Xxxxxx
Vice President, Finance and Treasurer
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EXHIBIT A
PROMISSORY NOTE
Houston, Texas
$200,000,000 September 29, 1995
FOR VALUE RECEIVED, the undersigned, Enron Corp., a Delaware corporation
("Borrower"), DOES HEREBY PROMISE to pay to the order of Enron Oil & Gas
Company ("Lender") at its office at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, in
lawful money of the United States and in funds immediately available to Lender,
the principal amount of Two Hundred Million and No/100 Dollars ($200,000,000)
or the aggregate unpaid principal amount of all loans (the "Loans") made to
Borrower by Lender pursuant to Section 1 of the Credit Agreement hereinafter
referred to, whichever is less, on demand or on December 31, 1998. Borrower
further promises to pay interest in like money, at said office, from the date
hereof on the unpaid principal amount hereof until such principal amount shall
become due and payable, at the rates per annum and on the dates provided in
Section 2 of the Credit Agreement.
Each Loan made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded by the Lender and endorsed on the Schedule attached hereto which is
part of this Promissory Note or in such other records as the Lender may
designate.
This Promissory Note is the Note described in and issued pursuant to
the Credit Agreement dated as of September 29, 1995, between Borrower and
Lender (the "Credit Agreement"), and is entitled to the benefits thereof. The
Credit Agreement, among other things, (i) provides for the making of Loans by
the Lender to the Borrower from time to time in an aggregate amount not to
exceed the U.S. dollar amount first above mentioned, the indebtedness of the
Borrower resulting from each such Loan being evidenced by this Promissory Note,
and (ii) contains provisions for prepayments on account of the principal of
this Promissory Note upon the terms and conditions specified in the Credit
Agreement. Terms used herein which are defined in the Credit Agreement shall
have their defined meanings when used herein.
This Note shall be governed by and construed in accordance with the
laws of the State of Texas. If this Note shall be collected by any legal
proceedings or shall be placed in the hands of an attorney for collection after
maturity, the undersigned promises to pay to the owner and holder hereof all
reasonable attorney's fees and costs of collection.
THIS AGREEMENT AND THE CREDIT AGREEMENT TOGETHER CONSTITUTE A WRITTEN
LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
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AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
ENRON CORP.
By:__________________________________
Xxxx X. Xxxxxx Vice
President, Finance and
Treasurer
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SCHEDULE TO PROMISSORY NOTE
This Grid is attached to and made part of the Promissory Note dated
September 29, 1995, executed by Enron Oil & Gas Company to Enron Corp., and
records advances, payments and other information required therein.
UNPAID NAME OF
AMOUNT OF PRINCIPAL PERSON
AMOUNT OF PRINCIPAL BALANCE OF MAKING
DATE LOAN REPAID NOTE NOTATION
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