Execution Copy
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CREDIT AGREEMENT
DATED AS OF APRIL 26, 2005
BY AND AMONG
TRUNKLINE LNG HOLDINGS LLC
AS THE BORROWER
PANHANDLE EASTERN PIPE LINE COMPANY, LP
AS A GUARANTOR
TRUNKLINE LNG COMPANY, LLC
AS A GUARANTOR
AND
THE BANKS NAMED HEREIN
AS THE BANKS
AND
BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH
AS THE AGENT,
THE SOLE BOOK RUNNER AND THE SOLE LEAD ARRANGER
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TABLE OF CONTENTS
1. CERTAIN DEFINITIONS ................................................... 1
1.1 Defined Terms ................................................... 1
1.2 Computation of Time Periods; Other Definitional Provisions ...... 15
1.3 Accounting Terms ................................................ 15
2. AMOUNTS AND TERMS OF THE LOANS ........................................ 15
2.1 The Loans ....................................................... 15
2.2 Making of the Loans ............................................. 16
2.3 Repayment of Loans .............................................. 17
2.4 Termination of the Commitments .................................. 17
2.5 Prepayments ..................................................... 17
2.6 Interest ........................................................ 17
2.7 Fees ............................................................ 18
2.8 Conversion of Loans ............................................. 18
2.9 Increased Costs, Etc. ........................................... 19
2.10 Payments and Computations ....................................... 20
2.11 Taxes ........................................................... 22
2.12 Sharing of Payments, Etc. ....................................... 25
2.13 Use of Proceeds ................................................. 25
2.14 Evidence of Debt ................................................ 26
2.15 Replacement of Banks ............................................ 27
3. REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES .................... 27
3.1 Organization and Qualification. Such Loan Party: ................ 27
3.2 Authorization, Validity, Etc. ................................... 27
3.3 Conflicting or Adverse Agreements or Restrictions ............... 28
3.4 No Consents Required ............................................ 28
3.5 Financial Statements ............................................ 28
3.6 Litigation ...................................................... 29
3.7 Default ......................................................... 29
3.8 Compliance ...................................................... 29
3.9 Title to Assets ................................................. 29
3.10 Payment of Taxes ................................................ 29
3.11 Investment Company Act Not Applicable ........................... 29
3.12 Public Utility Holding Company Act Not Applicable ............... 29
3.13 Regulations G, T, U and X ....................................... 30
3.14 ERISA ........................................................... 30
3.15 No Financing of Certain Security Acquisitions ................... 30
3.16 Franchises, Co-Licenses, Etc. ................................... 30
3.17 Environmental Matters ........................................... 31
3.18 Borrower Liens .................................................. 31
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3.19 Disclosure ...................................................... 31
3.20 Insurance ....................................................... 31
3.21 Subsidiaries .................................................... 31
4. CONDITIONS TO FUNDING ................................................. 32
4.1 Representations True and No Defaults ............................ 32
4.2 Intentionally Omitted ........................................... 32
4.3 Compliance With Law ............................................. 32
4.4 Notice of Borrowing and Other Documents ......................... 32
4.5 Payment of Fees and Expenses .................................... 32
4.6 Repayment of Debt ............................................... 32
4.7 Loan Documents, Opinions and Other Instruments .................. 33
5. AFFIRMATIVE COVENANTS OF THE LOAN PARTIES ............................. 33
5.1 Financial Statements and Information. Deliver to the Banks ...... 33
5.2 Books and Records ............................................... 34
5.3 Insurance ....................................................... 34
5.4 Maintenance of Property ......................................... 34
5.5 Inspection of Property and Records .............................. 34
5.6 Existence, Laws, Obligations, Taxes ............................. 35
5.7 Notice of Certain Matters ....................................... 35
5.8 ERISA ........................................................... 35
5.9 Compliance with Environmental Laws .............................. 36
6. NEGATIVE COVENANTS OF PANHANDLE EASTERN ............................... 37
6.1 Financial Covenants ............................................. 37
6.2 Liens, Etc. ..................................................... 37
6.3 Debt ............................................................ 38
6.4 Change in Nature of Business .................................... 38
6.5 Mergers, Consolidation .......................................... 38
6.6 Sale of Assets .................................................. 38
6.7 Restricted Payments ............................................. 39
6.8 Sales and Leasebacks ............................................ 39
6.9 Transactions with Related Parties ............................... 39
6.10 Hazardous Materials ............................................. 39
7. NEGATIVE COVENANTS OF THE BORROWER .................................... 39
7.1 Liens, Etc. ..................................................... 40
7.2 Debt ............................................................ 40
7.3 Merger, Consolidation ........................................... 41
7.4 Sale of Assets .................................................. 41
7.5 Restricted Payment .............................................. 42
7.6 Securities Credit Regulations ................................... 42
7.7 Nature of Business .............................................. 42
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7.8 Transactions with Related Parties ............................... 42
7.9 Hazardous Materials ............................................. 42
7.10 Use of Proceeds ................................................. 42
7.11 Other Documents ................................................. 43
8. EVENTS OF DEFAULT; REMEDIES ........................................... 43
8.1 Failure to Pay Obligations When Due ............................. 43
8.2 Intentionally Omitted ........................................... 43
8.3 Failure to Pay Other Debt ....................................... 43
8.4 Misrepresentation or Breach of Warranty ......................... 43
8.5 Violation of Certain Covenants .................................. 43
8.6 Violation of Other Covenants, Etc. .............................. 44
8.7 Bankruptcy and Other Matters .................................... 44
8.8 Dissolution ..................................................... 44
8.9 Undischarged Judgment ........................................... 44
8.10 Loan Documents .................................................. 44
8.11 Change of Control. Any of the following events shall occur: ..... 45
8.12 Other Remedies .................................................. 45
8.13 Remedies Cumulative ............................................. 45
9. THE AGENT ............................................................. 45
9.1 Authorization and Action ........................................ 46
9.2 Agent's Reliance, Etc. .......................................... 46
9.3 Defaults ........................................................ 46
9.4 HVB and Affiliates .............................................. 47
9.5 Non-Reliance on Agent and Other Banks ........................... 47
9.6 Indemnification ................................................. 47
9.7 Successor Agent ................................................. 48
9.8 Agent's Reliance ................................................ 48
10. GUARANTY .............................................................. 48
10.1 Guaranty ........................................................ 48
10.2 Guaranty Absolute ............................................... 49
10.3 Waivers and Acknowledgments ..................................... 50
10.4 Subrogation ..................................................... 51
10.5 Subordination ................................................... 51
10.6 Continuing Guaranty ............................................. 52
11. MISCELLANEOUS ......................................................... 52
11.1 Amendments, Waivers, Etc. ....................................... 52
11.2 Reimbursement of Expenses ....................................... 53
11.3 Notices ......................................................... 54
11.4 Governing Law ................................................... 56
11.5 Waiver of Jury Trial ............................................ 56
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11.6 Consent to Jurisdiction ......................................... 56
11.7 Survival of Representations, Warranties and Covenants ........... 57
11.8 Counterparts .................................................... 57
11.9 Severability .................................................... 57
11.10 Descriptive Headings ............................................ 57
11.11 Accounting Terms ................................................ 57
11.12 Limitation of Liability ......................................... 57
11.13 Set-Off ......................................................... 58
11.14 Sale or Assignment .............................................. 58
11.15 Interest ........................................................ 63
11.16 Indemnification ................................................. 64
11.17 Payments Set Aside .............................................. 64
11.18 Loan Agreement Controls ......................................... 64
11.19 Obligations Several ............................................. 64
11.20 Final Agreement ................................................. 64
Exhibit A Note
Exhibit B Notice of Borrowing
Exhibit C Assignment and Acceptance
Disclosure Schedule 3.10 Tax Matters
Disclosure Schedule 3.14 ERISA Matters
Disclosure Schedule 3.17(b) Environmental Matters
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of April 26, 2005 among TRUNKLINE LNG HOLDINGS
LLC a limited liability company organized under the laws of Delaware (the
"BORROWER"), PANHANDLE EASTERN PIPE LINE COMPANY, LP, a limited partnership
organized under the laws of Delaware ("PANHANDLE EASTERN"), TRUNKLINE LNG
COMPANY, LLC, a limited liability company organized under the laws of Delaware
("TLNG"), the financial institutions listed on the signature pages hereof
(collectively, the "Banks" and individually, a "BANK"), and BAYERISCHE HYPO- UND
VEREINSBANK AG, NEW YORK BRANCH ("HVB"), in its capacity as administrative agent
(the "AGENT") for the Banks hereunder:
PRELIMINARY STATEMENTS:
1. The Borrower desires to obtain from the Banks a senior term loan
financing (the "FINANCING") in an aggregate principal amount of $255,626,300,
the proceeds of which will be used to repay in full the existing indebtedness of
the Borrower under the Existing Credit Agreement (as defined below).
2. The Banks have indicated their willingness to provide the Financing, but
only on and subject to the terms and conditions of this Agreement, including the
guaranty set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
1. CERTAIN DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings:
"AFFILIATE" shall mean any Person controlling, controlled by or under
common control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise. If any Person shall own, directly
or indirectly, beneficially or of record, twenty percent (20%) or more of the
voting equity (whether outstanding capital stock, partnership interests or
otherwise) of another Person, such Person shall be deemed to be an Affiliate.
"AGENT" shall have the meaning set forth in the preamble hereto.
"AGREEMENT" shall mean this Credit Agreement, as the same may be amended,
modified, supplemented or restated from time to time.
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"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greater of: (a) the Prime Rate in effect on such day and (b) 1/2 of 1% per annum
above the Federal Funds Rate in effect on such day. The Alternate Base Rate is
an index rate and is not necessarily intended to be the lowest or best rate of
interest charged to other customers in connection with extensions of credit or
to other banks. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Federal Funds Rate,
respectively.
"ALTERNATE BASE RATE LOAN" shall mean any Loan which bears interest as
described in Section 2.6(a)(i) (Interest).
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Bank, such
Bank's (a) Domestic Lending Office in the case of an Alternate Base Rate Loan;
and (b) Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"APPLICABLE MARGIN" shall mean with respect to (a) Alternate Base Rate
Loans, a percentage per annum set forth below under the caption "Alternate Base
Rate Loans" and (b) Eurodollar Rate Loans, subject to the proviso set forth
below, a percentage per annum set forth below under the caption "Eurodollar Rate
Loans," in each case determined by reference to the rating of Panhandle
Eastern's unsecured, non-credit enhanced Senior Funded Debt (effective from and
after the date the applicable change of such a debt rating is first announced by
the applicable rating agency):
RATING OF PANHANDLE EASTERN'S UNSECURED, NON-CREDIT ENHANCED SENIOR EURODOLLAR RATE ALTERNATE BASE
FUNDED DEBT LOAN RATE LOAN
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Equal or greater to Baa1 by Xxxxx'x Investor Service, Inc. and/or
equal or greater to BBB+ by Standard and Poor's Ratings Group 0.550% 0%
Baa2 by Xxxxx'x Investor Service, Inc. or BBB by Standard and Poor's
Ratings Group 0.625% 0%
Baa3 by Xxxxx'x Investor Service, Inc. or BBB- by Standard and Poor's
Ratings Group 0.750% 0%
Ba1 by Xxxxx'x Investor Service, Inc. or BB+ by Standard and Poor's
Ratings Group 1.125% 0.125%
Ba2 by Xxxxx'x Investor Service, Inc. or BB by Standard and Poor's
Ratings Group 1.375% 0.375%
Below Ba2 by Xxxxx'x Investor Service, Inc. or below BB by Standard
and Poor's Ratings Group 1.625% 0.750%
provided that, for the period beginning on the Funding Date and ending on the
six-month anniversary of the Funding Date, the Applicable Margin for Eurodollar
Rate Loans shall not be less than 0.625%.
Notwithstanding the foregoing provisions, in the event that ratings of
Panhandle Eastern's unsecured, non-credit enhanced Senior Funded Debt under
Standard & Poor's Ratings Group and under Xxxxx'x Investor Service, Inc. fall
within different rating categories which are
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not functional equivalents, the Eurodollar Rate shall be based on the higher of
such ratings if there is only one category differential between the functional
equivalents of such ratings, and if there is a two category differential between
the functional equivalents of such ratings, the component of pricing from the
grid set forth above shall be based on the rating category which is then in the
middle of or between the two category ratings which are then in effect, and if
there is greater than a two category differential between the functional
equivalents of such ratings, the component of pricing from the grid set forth
above shall be based on the rating category which is then one rating category
above the lowest of the two category ratings which are then in effect.
Additionally, in the event that Panhandle Eastern withdraws from having its
unsecured, non-credit enhanced Senior Funded Debt being rated by Xxxxx'x
Investor Service, Inc. or Standard and Poor's Ratings Group, so that one or both
of such ratings services fails to rate Panhandle Eastern's unsecured, non-credit
enhanced Senior Funded Debt, (a) the Applicable Margin for all Eurodollar Rate
Loans for all Interest Periods commencing thereafter shall be 1.625% and (b) the
Applicable Margin for all Alternate Base Rate Loans shall be 0.750% effective
immediately, in each case continuing until such time as Panhandle Eastern
subsequently causes its unsecured, non-credit enhanced Senior Funded Debt to be
rated by both of said ratings services.
"APPROVED FUND" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Bank, (b) an Affiliate of a Bank or (c) an
entity or an Affiliate of an entity that administers or manages a Bank.
"ASSIGNMENT AND ACCEPTANCE" shall mean and Assignment and Acceptance
substantially in the form of Exhibit C hereto.
"ATTRIBUTABLE INDEBTEDNESS" means, with respect to any Sale-Leaseback
Transaction, the present value (discounted at the rate set forth or implicit in
the terms of the lease included in such Sale-Leaseback Transaction) of the total
obligations of the lessee for rental payments (other than amounts required to be
paid on account of taxes, maintenance, repairs, insurance, assessments,
utilities, operating and labor costs and other items that do not constitute
payments for property rights) during the remaining term of the lease included in
such Sale-Leaseback Transaction (including any period for which such lease has
been extended). In the case of any lease that is terminable by the lessee upon
payment of a penalty, the Attributable Indebtedness shall be the lesser of the
(a) Attributable Indebtedness determined assuming termination on the first date
such lease may be terminated (in which case the Attributable Indebtedness shall
also include the amount of the penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date on which it
may be so terminated) and (b) the Attributable Indebtedness determined assuming
no such termination.
"BANK" shall have the meaning set forth in the preamble hereto and shall
include the Agent, in its individual capacity.
"BORROWER" shall have the meaning set forth in the preamble hereto.
"BUSINESS DAY" shall mean a day when the Agent is open for business,
provided that, if the applicable Business Day relates to any Eurodollar Rate
Loan, it shall mean a day when the
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Agent is open for business and banks are open for business in the London
interbank market and in New York City.
"CAPITAL LEASE" shall mean any lease of any Property (whether real,
personal, or mixed) which, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATIONS" shall mean, for any Person, any of their
obligations that should, in accordance with GAAP, be recorded as Capital Leases.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
such date or (c) compliance by any Bank with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after such date.
"CLOSING DATE" means the date hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder issued by the Internal Revenue Service.
"COMMITMENT" means, with respect to any Bank, the commitment of such Bank
to make a Loan on the Funding Date, in the amount set forth opposite such Bank's
name on the signature pages hereto, and the aggregate amount of all the
Commitments is $255,626,300.
"CONSOLIDATED" refers to the consolidation of accounts in accordance with
GAAP.
"CONSOLIDATED NET INCOME" of any Person means, for any period, the
aggregate net income (or loss) from continuing operations of such Person and its
Subsidiaries on a Consolidated basis.
"CONSOLIDATED NET TANGIBLE ASSETS" means, at any date of determination, the
total amount of assets of Panhandle Eastern and its Subsidiaries after deducting
therefrom:
(a) all current liabilities (excluding (i) any current liabilities
that by their terms are extendable or renewable at the option of the
obligor thereon to a time more than 12 months after the time as of which
the amount thereof is being computed, and (ii) current maturities of
Long-Term Debt); and
(b) the value (net of any applicable reserves) of all goodwill, trade
names, trademarks, patents and other like intangible assets,
all as set forth on the Consolidated balance sheet of Panhandle Eastern and its
Subsidiaries for Panhandle Eastern's most recently completed fiscal quarter,
prepared in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, an amount equal to
the sum of (a) Consolidated Debt for Borrowed Money of Panhandle Eastern and its
Subsidiaries at such
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time plus (b) an amount equal to the sum of all amounts which, in accordance
with GAAP, would be included under owner's equity on a Consolidated balance
sheet of Panhandle Eastern and its Subsidiaries; provided, however, that
consistent with past practice, any loans made to Southern Union by Panhandle
Eastern up to but not exceeding $50,000,000 in the aggregate at any time
outstanding shall not be deemed to reduce owner's equity for purposes of this
definition.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a conversion of Loans
of one Type into Loans of the other Type pursuant to Section 2.8 (Conversion of
Loans).
"DEBT" means (without duplication), for any Person, indebtedness for money
borrowed determined in accordance with GAAP but in any event including, (a)
indebtedness of such Person for borrowed money or arising out of any extension
of credit to or for the account of such Person (including, without limitation,
extensions of credit in the form of reimbursement or payment obligations of such
Person relating to letters of credit issued for the account of such Person) or
for the deferred purchase price of property or services, except indebtedness
which is owing to trade creditors in the ordinary course of business; (b)
indebtedness of the kind described in clause (a) of this definition which is
secured by (or for which the holder of such Debt has any existing right,
contingent or otherwise, to be secured by) any Lien upon or in Property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness or obligations; (c) Capitalized Lease Obligations of such
Person; and (d) obligations under direct or indirect Guaranties. Whenever the
definition of Debt is being used herein in order to compute a financial ratio or
covenant applicable to the consolidated business of Panhandle Eastern and its
Subsidiaries, Debt which is already included in such computation by virtue of
the fact that it is owed by a Subsidiary of Panhandle Eastern will not also be
added by virtue of the fact that Panhandle Eastern has executed a guaranty with
respect to such Debt that would otherwise require such guaranteed indebtedness
to be considered Debt hereunder. Nothing contained in the foregoing sentence is
intended to limit the other provisions of this Agreement which contain
limitations on the amount and types of Debt which may be incurred by any Loan
Party.
"DEBT FOR BORROWED MONEY" of any Person means, at any date of
determination, the sum without duplication of (i) all items that, in accordance
with GAAP, would be classified as indebtedness on a Consolidated balance sheet
of such Person, (ii) all Guarantees by such Person of Debt of another Person and
(iii) all letter of credit reimbursement obligations of such Person.
"DEBT/CAPITALIZATION RATIO" means, as of any date of determination, the
ratio of (a) the aggregate amount of outstanding Consolidated Debt for Borrowed
Money of Panhandle Eastern and its Subsidiaries as of such date to (b)
Consolidated Total Capitalization of Panhandle Eastern and its Subsidiaries as
of such date.
"DEBTOR LAWS" shall mean all applicable liquidation, conservatorship,
bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization,
or similar laws, or general equitable principles from time to time in effect
affecting the rights of creditors generally.
"DEFAULT" shall mean any of the events specified in Section 8 (Events of
Default; Remedies), whether or not there has been satisfied any requirement in
connection with such
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event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act.
"DOLLARS" and "$" shall mean lawful currency of the United States of
America.
"DOMESTIC LENDING OFFICE" shall mean, with respect to each Bank, the office
of such Bank located at its "Address for Notices" set forth below the name of
such Bank on the signature pages hereof or such other office of such Bank as
such Bank may from time to time specify to the Borrower and the Agent.
"EBITDA" means, for any period for any Person, (a) Consolidated Net Income
for such period, plus (b) without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, the sum
of (i) income tax expense, (ii) interest expense, amortization or write-off of
debt discount and debt issuance costs and commissions, discounts and other fees
and charges associated with Debt (including the Loans), (iii) depreciation and
amortization expense, (iv) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (v) any extraordinary or
non-recurring charges, (vi) any non-cash expenses or losses, and (vii) losses on
sales of assets, minus (c) to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (i) any extraordinary,
unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, gains on the sales of assets outside of the ordinary course of
business), (ii) income tax credits (to the extent not netted from income tax
expense), and (iii) any other non-cash income, and minus (d) any cash payments
made during such period in respect of items described in sub-clause (a)(vi)
above subsequent to the fiscal quarter in which the relevant non-cash expenses
or losses were reflected as a charge in the statement of Consolidated Net
Income, all as determined on a consolidated basis.
"ELIGIBLE ASSIGNEE" shall mean: (i) any Bank, or any Affiliate of any Bank,
any Approved Fund, or any institution 100% of the voting stock of which is
directly, or indirectly owned by such Bank or by the immediate or remote parent
of such Bank; or (ii) a commercial bank, a foreign branch of a United States
commercial bank, a domestic branch of a foreign commercial bank or other
financial institution having in each case assets in excess of $1,000,000,000.
"ENVIRONMENTAL LAW" shall mean (a) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C.A. Section 9601 et seq.),
as amended from time to time, and any and all rules and regulations issued or
promulgated thereunder ("CERCLA"); (b) the Resource Conservation and Recovery
Act (as amended by the Hazardous and Solid Waste Amendment of 1984, 42 U.S.C.A.
Section 6901 et seq.), as amended from time to time, and any and all rules and
regulations promulgated thereunder ("RCRA"); (c) the Clean Air Act, 42 U.S.C.A.
Section 7401 et seq., as amended from time to time, and any and all rules and
regulations promulgated thereunder; (d) the Clean Water Act of 1977, 33 X.X.XX
Section 1251 et seq., as amended from time to time, and any and all rules and
regulations promulgated thereunder; (e) the Toxic Substances Control Act, 15
U.S.C.A. Section 2601 et seq., as amended from time to time, and any and all
rules and regulations promulgated thereunder; or (f) any other federal or state
law, statute, rule, or
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emulation enacted in connection with or relating to the protection or regulation
of the environment (including, without limitation, those laws, statutes, rules,
and regulations regulating the disposal, removal, production, storing, refining,
handling, transferring, processing, or transporting of Hazardous Materials) and
any rules and regulations issued or promulgated in connection with any of the
foregoing by any governmental authority, and "ENVIRONMENTAL LAWS" shall mean
each of the foregoing.
"EPA" shall mean the Environmental Protection Agency, or any successor
organization.
"EQUITY INTERESTS" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or non-voting, and whether or not such shares,
warrants, options, rights or other interests are authorized or otherwise
existing on any date of determination.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations thereof issued by the Internal Revenue Service or the Department
of Labor thereunder.
"EUROCURRENCY LIABILITIES" shall have the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR LENDING OFFICE" shall mean, with respect to each Bank, the
office of such Bank located at its "Address for Notices" set forth below the
name of such Bank on the signature pages hereof, or such other office of such
Bank as such Bank may from time to time specify to the Borrower and the Agent.
"EURODOLLAR RATE" means, for any Interest Period in effect for each
Eurodollar Rate Loan comprising part of the same Borrowing, an interest rate per
annum equal to the rate determined by the Agent to be the offered rate which
appears on the display designated as page "BBAM1" on the Bloomberg service (or
on any successor or substitute page of such display, or any successor to or
substitute for such display, providing rate quotations comparable to those
currently provided on such page of such screen, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "Eurodollar Rate" with respect to such Eurodollar Rate
Loans for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
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"EURODOLLAR RATE LOAN" means a Loan that bears interest as provided in
Section 2.6(a)(ii) (Interest).
"EVENT OF DEFAULT" shall mean any of the events specified in Section 8
(Events of Default; Remedies), provided that there has been satisfied any
requirement in connection with such event for the giving of notice, or the lapse
of time, or the happening of any further condition, event or act.
"EXISTING CREDIT AGREEMENT" shall have the meaning set forth in Section
2.13 (Use of Proceeds).
"FEDERAL FUNDS RATE" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER" shall mean that certain fee letter dated as of the date hereof
by and between the Borrower and HVB.
"FUNDED DEBT" means all Debt of a Person which matures more than one year
from the date of creation or matures within one year from such date but is
renewable or extendible, at the option of such Person, by its terms or by the
terms of any instrument or agreement relating thereto, to a date more than one
year from such date or arises under a revolving credit or similar agreement
which obligates Banks to extend credit during a period of more than one year
from such date, including, without limitation, all amounts of any Funded Debt
required to be paid or prepaid within one year from the date of determination of
the existence of any such Funded Debt.
"FUNDING DATE" shall mean the date on which each of the conditions
precedent set forth in Section 4 (Conditions to Funding) shall have been
satisfied or waived by the Banks.
"GAAP" has the meaning specified in Section 1.3 (Accounting Terms).
"GOVERNMENTAL AUTHORITY" shall mean any (domestic or foreign) federal,
state, county, municipal, parish, provincial, or other government, or any
department, commission, board, court, agency (including, without limitation, the
EPA), or any other instrumentality of any of them or any other political
subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory, or administrative functions of, or pertaining to, government,
including, without limitation, any arbitration panel, any court, or any
commission.
"GOVERNMENTAL REQUIREMENT" means any order, permit, law, statute
(including, without limitation, any Environmental Protection Statute), code,
ordinance, rule, regulation, certificate, or other direction or requirement of
any Governmental Authority.
"GUARANTEED OBLIGATIONS" shall have the meaning set forth in Section 10.1.
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"GUARANTOR" means each of Panhandle Eastern and TLNG.
"GUARANTY" means, with respect to any Person, any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
another Person, including, without limitation, by means of an agreement to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or to maintain financial covenants, or to assure the payment of such Debt
by an agreement to make payments in respect of goods or services regardless of
whether delivered or to purchase or acquire the Debt of another, or otherwise,
provided that the term "Guaranty" shall not include endorsements for deposit or
collection in the ordinary course of business.
"HAZARDOUS MATERIALS" shall mean any substance which, pursuant to any
Environmental Laws, requires special handling in its collection, use, storage,
treatment or disposal, including but not limited to any of the following: (a)
any "hazardous waste" as defined by RCRA; (b) any "hazardous substance" as
defined by CERCLA; (c) asbestos; (d) polychlorinated biphenyls; (e) any
flammables, explosives or radioactive materials; and (f) any substance, the
presence of which on any of Loan Parties' properties is prohibited by any
Governmental Authority.
"HEDGE AGREEMENTS" means interest rate, commodity or currency swap, cap or
collar agreements, future or option contracts and other hedging agreements
(including, without limitation, all "swap agreements" as defined in 11 U.S.C.
Section 101).
"HIGHEST LAWFUL RATE" shall mean, with respect to each Bank, the maximum
non-usurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged, or received with respect to the Notes
or on other amounts, if any, due to such Bank pursuant to this Agreement, under
laws applicable to such Bank which are presently in effect, or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than applicable laws now
allow.
"HVB" shall have the meaning set forth in the preamble
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 11.16
(Indemnification).
"INTEREST COVERAGE RATIO" means, as of any date of determination, the ratio
of (a) Consolidated EBITDA of Panhandle Eastern to (b) Consolidated Interest
Expense of Panhandle Eastern, in each case for the four fiscal quarters then
ended.
"INTEREST EXPENSE" of any Person means, for any period, total cash interest
expense (including that attributable to Capitalized Leases) of such Person for
such period with respect to all outstanding Debt of such Person (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs and benefits under
Hedge Agreements in respect of interest rates to the extent such net costs and
benefits are allocable to such period in accordance with GAAP).
"INTEREST PERIOD" means, for each Eurodollar Rate Loan comprising part of
the same borrowing, the period commencing on the date of such Eurodollar Rate
Loan or the date of the
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Conversion of any Alternate Base Rate Loan into such Eurodollar Rate Loan, and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six months
(or, if available to each Bank, nine or twelve months), as the Borrower may,
upon notice received by the Agent not later than 11:00 A.M. (New York City time)
on the third Business Day prior to the first day of such Interest Period,
select; provided, however, that:
(a) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, provided,
however, that, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(b) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such succeeding
calendar month.
"INVENTORY" means, with respect to Borrower or any Subsidiary, all of such
Person's now owned or hereafter acquired or created inventory in all of its
forms and of every nature, wherever located, whether acquired by purchase,
merger, or otherwise, and all raw materials, work in process therefor and
finished goods thereof, and all supplies, materials, and products of every
nature and description used, usable, or consumed in connection with the
manufacture, packing, shipping, advertising, selling, leasing, furnishing, or
production of such goods, and shall include, in any event, all "inventory"
(within the meaning of such term in the Uniform Commercial Code in effect in any
applicable jurisdiction), whether in mass or joint, or other interest or right
of any kind in goods which are returned to, repossessed by, or stopped in
transit by such Person, and all accessions to any of the foregoing and all
products of any of the foregoing.
"INVESTMENT" of any Person means any investment so classified under GAAP,
and, whether or not so classified, includes (a) any direct or indirect loan
advance made by it to any other Person; (b) any direct or indirect Guaranty for
the benefit of such Person; (c) any capital contribution to any other Person;
and (d) any ownership or similar interest in any other Person; and the amount of
any Investment shall be the original principal or capital amount thereof (plus
any subsequent principal or capital amount) minus all cash returns of principal
or capital thereof.
"LIEN" shall mean any mortgage, deed of trust, pledge, security interest,
encumbrance, lien (including without limitation, any such interest arising under
any Environmental Law), or similar charge of any kind (including without
limitation, any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof), or the
interest of the lessor under any Capital Lease.
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"LOAN" or "LOANS" shall mean a loan or loans, respectively, from the Banks
to the Borrower made under Section 2.1 (The Loans).
"LOAN DOCUMENT" shall mean this Agreement, any Note, the Fee Letter and any
other document, agreement or instrument now or hereafter executed and delivered
by any Loan Party in connection with any of the transactions contemplated by any
of the foregoing, as any of the foregoing may hereafter be amended, modified, or
supplemented, and "LOAN DOCUMENTS" shall mean, collectively, each of the
foregoing.
"LOAN PARTY" shall mean TLNG, Panhandle Eastern, the Borrower and its
Subsidiaries.
"LONG-TERM DEBT" means any Debt that, in accordance with GAAP, constitutes
(or, when incurred, constituted) a long-term liability.
"MAJORITY BANKS" shall mean at any time Banks holding more than 50% of the
unpaid principal amounts outstanding under the Notes, or, if no such amounts are
outstanding, more than 50% of the Pro Rata Percentages.
"MATERIAL ADVERSE CHANGE" means, for any Person, any material adverse
change in the business, operations, financial condition or assets of such Person
and its Subsidiaries, taken as a whole.
"MATERIAL ADVERSE EFFECT" shall mean any material adverse effect on (a) the
financial condition, business, properties, assets or operations of Panhandle
Eastern and its Subsidiaries, taken as a whole, or (b) the ability of Panhandle
Eastern, Borrower or TLNG to perform its obligations under this Agreement, any
Note or any other Loan Document on a timely basis.
"MATURITY DATE" shall mean March 15, 2007.
"NOTE" or "NOTES" shall mean a promissory note or notes, respectively, of
the Borrower, executed and delivered under this Agreement.
"NOTICE OF BORROWING" shall have the meaning set forth in Section 2.2(a)
(Making the Loans).
"OBLIGATIONS" shall mean all obligations of Panhandle Eastern, Borrower and
TLNG to the Banks under this Agreement, the Notes and all other Loan Documents
to which any of them is a party.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the
applicable Loan Party, by either its President, one of its Vice Presidents, its
Treasurer, its Secretary, or one of its Assistant Treasurers or Assistant
Secretaries.
"PANHANDLE EASTERN" shall have the meaning given in the preamble hereto.
"PERMITTED LIENS" means any of the following Liens:
(a) Any Lien:
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(i) arising by reason of deposits with or the giving of any form
of security to any Governmental Authority in connection with the
financing of the acquisition or construction of property to be used in
the business of a Loan Party;
(ii) for current taxes and assessments or taxes and assessments
not at the time delinquent and for which adequate reserves have been
established to the extent required by GAAP; or
(iii) for taxes and assessments which are delinquent but the
validity of which is being contested at the time by a Loan Party in
good faith and by appropriate proceedings and for which adequate
reserves have been established to the extent required by GAAP;
(b) Leases, whether now or hereafter existing, in the ordinary course
of business, of property and assets now and hereafter owned by a Loan Party
(excluding Capitalized Leases) and any renewals or extensions thereof;
(c) Liens reserved in leases, or arising by operation of law, for rent
and for compliance with the terms of the lease in the case of the leasehold
estates;
(d) Liens arising by reason of deposits with or the giving of any form
of security to any Governmental Authority or any other governmental body
created or approved by law or governmental regulation for any purpose at
any time as required by law or governmental regulation as a condition to
the transaction of any business or the exercise of any privilege or
license, or to enable a Loan Party to maintain self-insurance or to
participate in any fund for liability on any insurance risks or in
connection with workmen's compensation, unemployment insurance, old age
pensions or other social security or to share in the privileges or benefits
required for companies participating in such arrangements;
(e) (i) Mechanics', materialmen's, warehousemen's, landlord's or
similar Liens or any Lien arising by reason of pledges or deposits to
secure payment of workmen's compensation or other insurance or social
security legislation, (ii) good faith deposits or downpayments in
connection with tenders or leases of real estate, bids or contracts (other
than contracts for the payment of money), including contracts for the
acquisition of machinery and equipment, (iii) deposits to secure public or
statutory obligations, (iv) deposits to secure or in lieu of surety, stay
or appeal bonds, (v) margin deposits (provided that all such margin
deposits shall not exceed $2,000,000 in the aggregate at any time) and (vi)
deposits as security for the payment of taxes or assessments or other
similar charges;
(f) Liens of any judgments not constituting an Event of Default under
Section 8.9 (Undischarged Judgment);
(g) Any obligation or duties, affecting the property of a Loan Party,
to any Governmental Authority with respect to any franchise, grant, lease,
license, permit or similar arrangement with such Governmental Authority;
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(h) Rights reserved to or vested in any Governmental Authority by the
terms of any right, power, franchise, grant, license or permit or by any
provision of law, to terminate or to require annual or other periodic
payments as a condition to the continuance of such right, power, franchise,
grant, license or permit;
(i) Rights reserved to or vested in any Governmental Authority to
control or regulate any property of a Loan Party, or to use such property
in any manner which does not materially impair the use of such property for
the purpose for which it is held by a Loan Party;
(j) Zoning laws and ordinances;
(k) Restrictive covenants, easements on, exceptions to or reservations
in respect of any property of a Loan Party granted or reserved for the
purpose of electric lines, fiber optic lines, water and sewer lines,
pipelines, other utilities, roads, streets, alleys, highways, railroad
purposes, the removal of oil, gas, hydrocarbon, coal or other minerals, and
other like purposes, or for the use of real property or interests therein,
facilities and equipment, which do not materially impair the use thereof
for the purposes for which it is held by a Loan Party, and any and all
rents, royalties, reservations, Liens and rights or interests of third
parties, in each case not securing any Debt, arising in the ordinary course
of business of a Loan Party by virtue of any lease or exploration,
development, drilling, unitization, communitization or operating agreement
relating to or affecting any oil, gas, hydrocarbon, coal or other mineral
properties in which a Loan Party has an interest;
(l) Defects or irregularities of title, and inaccuracies of legal
descriptions, affecting any portion of the property of a Loan Party or any
of its Subsidiaries that individually or in the aggregate do not materially
interfere with the operation, value of use of the properties of such Loan
Party or such Subsidiaries taken as a whole;
(m) Liens securing Debt with respect to Debt of any Person that
becomes a Subsidiary of a Loan Party, provided that such Liens were in
existence prior to the date on which such Person becomes a Subsidiary of
such Loan Party and were not created in contemplation of such Person
becoming a Subsidiary of such Loan Party;
(n) Liens on any office equipment, data processing equipment
(including computer and computer peripheral equipment), or motor vehicles
purchased in the ordinary course of the applicable Loan Party's business;
and
(o) Liens created in the ordinary course of business in favor of banks
and other financial institutions over credit balances or any bank accounts
of a Loan Party held at such banks or financial institutions.
"PERSON" shall mean an individual, partnership, joint venture, corporation,
joint stock company, bank, trust, unincorporated organization and/or a
government or any department or agency thereof.
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"PLAN" shall mean any plan subject to Title IV of ERISA and maintained for
employees of any Loan Party or of any member of a "controlled group of
corporations," as such term is defined in the Code, of which a Loan Party is a
member, or any such plan to which a Loan Party thereof is required to contribute
on behalf of its employees.
"PRIME RATE" shall mean, on any day, the rate determined by the Agent and
announced to its customers as being its prime rate for that day. Without notice
to the Borrower or any other Person, the Prime Rate shall change automatically
from time to time as and in the amount by which said Prime Rate shall fluctuate,
with each such change to be effective as of the date of each change in such
Prime Rate. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The Agent
may make commercial or other loans at rates of interest at, above or below the
Prime Rate.
"PRIORITY OBLIGATIONS AMOUNT" means the sum (without duplication) of (i)
all Attributable Indebtedness with respect to any Sale-Leaseback Transaction
entered into by Panhandle Eastern or any of its Subsidiaries, (ii) all Debt of
Panhandle Eastern or any of its Subsidiaries secured by a Lien (other than Liens
permitted by clauses (a) through (c) of Section 6.2 (Liens, Etc.)) and (iii) all
Debt of Subsidiaries (other than Borrower or TLNG), other than such Debt owed to
Panhandle Eastern or another Subsidiary.
"PRO-RATA PERCENTAGE" shall mean with respect to any Bank, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Bank's outstanding Loans (or Commitment) and the denominator of which shall be
the aggregate amount of all the outstanding Loans (or Commitments) of the Banks,
as adjusted from time to time in accordance herewith.
"PROPERTY" shall mean any interest or right in any kind of property or
asset, whether real, personal, or mixed, owned or leased, tangible or
intangible, and whether now held or hereafter acquired.
"REGISTER" shall have the meaning set forth in Section 11.14(d).
"RELEASE" shall mean a "release", as such term is defined in CERCLA.
"RESTRICTED PAYMENT" shall mean a Person's declaration or payment of any
dividends, the purchase, redemption, retirement, defeasance or other acquisition
for value of any of its Equity Interests now or hereafter outstanding, return
any capital to its stockholders, partners or members (or the equivalent Persons
thereof) as such, making any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such or making of any interest payment on any
Debt owing to its direct or indirect parent (or any equity owner thereof).
"REQUIRED BANKS" means, at any time, Banks having more than 66-2/3% of the
aggregate amount of the Loans outstanding at such time.
"SALE-LEASEBACK TRANSACTION" has the meaning set forth in Section 6.8
(Sales and Leasebacks).
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"SENIOR FUNDED DEBT" shall mean Funded Debt of Panhandle Eastern excluding
Debt that is contractually subordinated in right of payment to any other Debt of
Panhandle Eastern.
"SOUTHERN UNION" shall mean Southern Union Company.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such Person (irrespective
of whether at the time capital stock of any other class or classes of such
Person shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such trust or estate
is at the time directly or indirectly owned or controlled by such Person, by
such Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"TLNG" shall have the meaning given in the preamble hereto.
"TYPE" shall mean, with respect to any Loan, any Alternate Base Rate Loan
or any Eurodollar Rate Loan.
1.2 COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL PROVISIONS. In this
Agreement and the other Loan Documents in the computation of periods of time
from a specified date to a later specified date, the word "FROM" means "from and
including" and the words "TO" and "UNTIL" each mean "to but excluding".
References in the Loan Documents to any agreement or contract "AS AMENDED" shall
mean and be a reference to such agreement or contract as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with its terms.
1.3 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
in effect from time to time in the United States of America ("GAAP"). If, at any
time after the date of this Agreement, any material change is made to GAAP or
Panhandle Eastern's or the Borrower's accounting practices that would affect in
any material respect the determination of compliance with the covenants set
forth in this Agreement, the Borrower and the Agent shall negotiate in good
faith to amend any such covenant to restore the Borrower and the Banks to the
position they occupied before the implementation of such material change in GAAP
or accounting practices if the Borrower notifies the Agent of such change (or if
the Agent notifies the Borrower that the Required Banks request an amendment to
any such covenant for such purpose); provided that, until so amended, such
covenant shall continue to be computed on the basis of GAAP as in effect and
applied immediately before such change shall have become effective.
2. AMOUNTS AND TERMS OF THE LOANS
2.1 THE LOANS. Each Bank severally agrees, on the terms and conditions
hereinafter set forth, to make a single Loan (a "LOAN") to the Borrower on the
Funding Date in an amount equal to such Bank's Commitment at such time. The
initial Borrowing shall consist of Loans made simultaneously by the Banks
ratably according to their Commitments. Amounts borrowed under this Section 2.1
and repaid or prepaid may not be reborrowed.
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2.2 MAKING OF THE LOANS.
(a) The initial Borrowing shall be made on notice, given not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the
date of such Borrowing in the case of a Borrowing consisting of Eurodollar
Rate Loans, or not later than 9:00 A.M. (New York City time) on the date of
such Borrowing in the case of a Borrowing consisting of Alternate Base Rate
Loans, by the Borrower to the Agent, which shall give to each Bank prompt
notice thereof. The notice of the initial Borrowing (the "NOTICE OF
BORROWING") shall be in writing, in substantially the form of Exhibit B
hereto, specifying therein the requested (i) date of such Borrowing, (ii)
Type of Loans comprising such Borrowing, (iii) aggregate amount of such
Borrowing, which shall not exceed the aggregate amount of the Commitments
and (iv) in the case of a Borrowing consisting of Eurodollar Rate Loans,
initial Interest Period for each such Loan. Each Bank shall, before 11:00
A.M. (New York City time) on the date of such Borrowing, make available for
the account of its Applicable Lending Office to the Agent at the Agent's
account, in same day funds, such Bank's portion of such Borrowing in
accordance with Section 2.1 (The Loans). After the Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in
Section 4 (Conditions to Funding), the Agent will make such funds available
to the Borrower by electronic transfer of same day funds to the Borrower's
account.
(b) The Notice of Borrowing shall be irrevocable and binding on the
Borrower. If the Notice of Borrowing specifies the initial Borrowing is to
be comprised of Eurodollar Rate Loans, the Borrower shall indemnify each
Bank against any loss, cost or expense incurred by such Bank as a result of
any failure to fulfill on or before the date specified in the Notice of
Borrowing the applicable conditions set forth in Section 4 (Conditions to
Funding), including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund the Loan to be made by such Bank as part of
such Borrowing when such Loan, as a result of such failure, is not made on
such date.
(c) Unless the Agent shall have received written notice from a Bank
prior to the date of the initial Borrowing that such Bank will not make
available to the Agent such Bank's ratable portion of such Borrowing, the
Agent may assume that such Bank has made such portion available to the
Agent on the date of such Borrowing in accordance with clause (a) of this
Section 2.2 and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to
the extent that such Bank shall not have so made such ratable portion
available to the Agent, such Bank and the Borrower severally agree to repay
or pay to the Agent forthwith on demand such corresponding amount and to
pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to
the Agent, at (i) in the case of the Borrower, the interest rate applicable
at such time under Section 2.6 (Interest) to Loans comprising such
Borrowing and (ii) in the case of such Bank, the Federal Funds Rate. If
such Bank shall pay to the Agent such corresponding amount, such amount so
paid shall constitute such Bank's Loan as part of such Borrowing for all
purposes.
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(d) The failure of any Bank to make the Loan to be made by it as part
of the initial Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Loan on the date of such
Borrowing, but no Bank shall be responsible for the failure of any other
Bank to make the Loan to be made by such other Bank on the date of such
Borrowing.
2.3 REPAYMENT OF LOANS. The Borrower shall repay to the Agent for the
ratable account of the Banks the aggregate outstanding principal amount of the
Loans on the Maturity Date.
2.4 TERMINATION OF THE COMMITMENTS. The Commitment of each Bank shall be
automatically and permanently reduced to $0 on the Funding Date.
2.5 PREPAYMENTS. The Borrower may, upon at least three Business Days'
notice in the case of Eurodollar Rate Loans and at least one Business Day's
notice in the case of Alternate Base Rate Loans, in each case to the Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Borrower shall, prepay the outstanding aggregate
principal amount of the Loans comprising part of the same Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the aggregate principal amount prepaid; provided, however, that (i) each
partial prepayment shall be in an aggregate principal amount of $1,000,000 in
the case of Eurodollar Rate Loans and $1,000,000 in the case of Alternate Base
Rate Loans, or in each case an integral multiple of $1,000,000 in excess thereof
and (ii) if any prepayment of a Eurodollar Rate Loan is made on a date other
than the last day of an Interest Period for such Loan, the Borrower shall also
pay any amounts owing pursuant to Section 11.2(b) (Expenses). Each such
prepayment of any Loans shall be applied to installments thereof as directed by
the Borrower. The Agent shall promptly notify each Bank of any notice received
from Borrower pursuant to this Section 2.5.
2.6 INTEREST.
(a) The Borrower shall pay interest on the unpaid principal amount of
each Loan owing to each Bank from the date of such Loan until such
principal amount shall be paid in full, at the following rates per annum:
(i) During such periods as such Loan is an Alternate Base Rate
Loan, a rate per annum equal at all times to the sum of (a) the
Alternate Base Rate in effect from time to time plus (b) the
Applicable Margin in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December
during such periods and on the date such Alternate Base Rate Loan
shall be Converted or paid in full.
(ii) During such periods as such Loan is a Eurodollar Rate Loan,
a rate per annum equal at all times during each Interest Period for
such Loan to the sum of (a) the Eurodollar Rate for such Interest
Period for such Loan 0 (b) the Applicable Margin in effect on the
first day of such Interest Period, payable in arrears on the last day
of such Interest Period and, if such Interest Period has a duration of
more than three months, on each day that occurs during such Interest
17
Period every three months from the first day of such Interest Period
and on the date such Eurodollar Rate Loan shall be Converted or paid
in full.
(b) To the fullest extent permitted by applicable law, the amount of
any principal, interest, fee or other amount payable under this Agreement
or any other Loan Document to any Agent or any Bank that is not paid when
due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full
and on demand, at a rate per annum equal at all times to 2% per annum above
the rate per annum required to be paid, in the case of principal or
interest, on the Type of Loan relating to such principal or interest
pursuant to clause (i) or (ii) of clause (a) above, as applicable, and, in
all other cases, on Alternate Base Rate Loans pursuant to clause (i) of
clause (a) above.
(c) Promptly after receipt of the Notice of Borrowing pursuant to
Section 2.2(a) (Making of the Loans), a notice of Conversion pursuant to
Section 2.8 (Conversion of Loans) or a notice of selection of an Interest
Period pursuant to the terms of the definition of "Interest Period", the
Agent shall give notice to the Borrower and each Bank of the applicable
Interest Period and the applicable interest rate determined by the Agent
for purposes of clause (a)(i) or (a)(ii) above. If the Borrower shall fail
to select the duration of any Interest Period for any Eurodollar Rate Loans
in accordance with the provisions contained in the definition of "Interest
Period", the Agent will forthwith so notify the Borrower and the Banks,
whereupon the Borrower shall be deemed to have selected a one-month
Interest Period for each such Eurodollar Rate Loan.
2.7 FEES.
(a) The Borrower shall pay to the Agent for its own account such fees
as may from time to time be agreed between the Borrower and the Agent,
including the fees specified in the Fee Letter.
(b) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent. Fees paid shall not be
refundable under any circumstances.
2.8 CONVERSION OF LOANS.
(a) The Borrower may on any Business Day, upon notice given to the
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Conversion and subject to the
provisions of Section 2.6 (Interest) and 2.9 (Increased Costs), Convert all
or any portion of the Loans of one Type comprising the same borrowing into
Loans of the other Type; provided, however, that any Conversion of
Eurodollar Rate Loans into Alternate Base Rate Loans shall be made only on
the last day of an Interest Period for such Eurodollar Rate Loans and each
Conversion of Loans shall be made ratably among the Banks in accordance
with their Pro Rata Percentages; and also provided that, upon giving effect
to such Conversions, no more than five Interest Periods shall be in effect.
Each such notice of Conversion shall, within the restrictions specified
above, specify (i) the date of such Conversion, (ii) the Loans to be
Converted and (iii) if such Conversion is into Eurodollar Rate Loans, the
18
duration of the initial Interest Period for such Loans. Each notice of
Conversion shall be in writing and shall be irrevocable and binding on the
Borrower. The Agent shall promptly notify each Bank of any notice received
from Borrower pursuant to this Section 2.8.
(b) Upon the occurrence and during the continuation of any Default and
if the Required Banks shall so direct, (i) each Eurodollar Rate Loan will
automatically, on the last day of the then existing Interest Period
therefor, Convert into an Alternate Base Rate Loan and (ii) the obligation
of the Banks to make, or to Convert Loans into, Eurodollar Rate Loans shall
be suspended.
2.9 INCREASED COSTS, ETC.
(a) If, due to a Change in Law, there shall be any increase in the
cost to any Bank of agreeing to make or of making, funding or maintaining
Eurodollar Rate Loans (excluding, for purposes of this Section 2.9, any
such increased costs resulting from (i) Taxes or Other Taxes (as to which
Section 2.11 (Taxes) shall govern), (ii) changes in the rate of taxation or
basis of taxation of overall net income or overall gross income by the
United States or by the foreign jurisdiction or state under the laws of
which such Bank is organized or has its principal office or Applicable
Lending Office or any political subdivision thereof and (iii) reserve
requirements contemplated by Section 2.9(b) (Taxes)), then the Borrower
shall from time to time, within 10 days of receipt of a certificate from
such Bank setting forth in reasonable detail a calculation of the amount
necessary to compensate such Bank (with a copy of such certificate to the
Agent), pay to the Agent for the account of such Bank additional amounts
sufficient to compensate such Bank for such increased cost; provided,
however, that a Bank claiming additional amounts under this Section 2.9(a)
agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need
for, or reduce the amount of, such increased cost that may thereafter
accrue and would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Bank, shall be conclusive
and binding for all purposes, absent manifest error.
(b) The Borrower shall pay to each Bank, as long as such Bank shall be
required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known
as "EUROCURRENCY LIABILITIES"), additional interest on the unpaid principal
amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Bank (as determined by such Bank in
good faith, which determination shall be conclusive), which shall be due
and payable on each date on which interest is payable on such Loan,
provided the Borrower shall have received at least 10 days' prior notice
(with a copy to the Agent) of such additional interest from such Bank
(which notice shall contain a calculation of such additional interest in
reasonable detail). If a Bank fails to give notice 10 days prior to the
relevant date on which interest is payable, such additional interest shall
be due and payable 10 days from receipt of such notice.
19
(c) If, with respect to any Eurodollar Rate Loans, the Majority Banks
notify the Agent that the Eurodollar Rate for any Interest Period for such
Loans will not adequately reflect the cost to the Banks of making, funding
or maintaining their Eurodollar Rate Loans for such Interest Period, the
Agent shall forthwith so notify the Borrower and the Banks, whereupon (i)
each such Eurodollar Rate Loan will automatically, on the last day of the
then existing Interest Period therefor, Convert into an Alternate Base Rate
Loan and (ii) the obligation of the Banks to make, or to Convert Loans
into, Eurodollar Rate Loans shall be suspended until the Agent shall notify
the Borrower that the Banks have determined that the circumstances causing
such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction or effectiveness of or any change in or in the interpretation
of any law or regulation shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for any Bank
or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar
Rate Loans hereunder, then, on notice thereof and demand therefor by such
Bank to the Borrower through the Agent, (i) each Eurodollar Rate Loan will
automatically, upon such demand, Convert into an Alternate Base Rate Loan
and (ii) the obligation of the Banks to make, or to Convert Loans into,
Eurodollar Rate Loans shall be suspended until the Agent shall notify the
Borrower that such Bank has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Bank agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation
would allow such Bank or its Eurodollar Lending Office to continue to
perform its obligations to make Eurodollar Rate Loans or to continue to
fund or maintain Eurodollar Rate Loans and would not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank.
(e) A Bank shall only be entitled to recover increased costs pursuant
to Section 2.9 (Increased Costs) to the extent such costs were incurred
during any time or period commencing not more than 120 days prior to the
date on which such Bank notifies the Agent and the Borrower that it
proposes to demand such compensation and identifies to the Agent and the
Borrower the statute, regulation or other basis upon which the claimed
compensation is or will be based; provided that, if the Change in Law
giving rise to such increased costs is retroactive, then the 120-day period
referred to above shall be extended to include the period of retroactive
effect thereof.
2.10 PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under the
Notes, irrespective of any right of counterclaim or set-off, not later than
12:00 P.M. (New York City time) on the day when due in U.S. dollars to the
Agent at the Agent's account in same day funds, with payments being
received by the Agent after such time being deemed to have been received on
the next succeeding Business Day. The Agent will promptly thereafter cause
like funds to be distributed (x) if such payment by the Borrower is in
respect of principal, interest or any other Obligation then payable
20
hereunder and under the Notes to more than one Bank, to such Banks for the
account of their respective Applicable Lending Offices ratably in
accordance with the amounts of such respective Obligations then payable to
such Banks and (y) if such payment by the Borrower is in respect of any
Obligation then payable hereunder to one Bank, to such Bank for the account
of its Applicable Lending Office, in each case to be applied in accordance
with the terms of this Agreement. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the
Register pursuant to Section 11.14(d) (Sale or Assignment), from and after
the effective date of such Assignment and Acceptance, the Agent shall make
all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Bank assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between
themselves.
(b) The Borrower hereby authorizes each Bank and each of its
Affiliates, if and to the extent payment owed to such Bank is not made when
due hereunder or, in the case of a Bank, under the Note held by such Bank,
to charge from time to time, to the fullest extent permitted by law,
against any or all of the Borrower's accounts with such Bank or such
Affiliate any amount so due.
(c) All computations of interest based on the Prime Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be,
and all computations of interest based on the Eurodollar Rate or the
Federal Funds Rate shall be made by the Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest
is payable. Each determination by the Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest; provided,
however, that if such extension would cause payment of interest on or
principal of Eurodollar Rate Loans to be made in the next following
calendar month, such payment shall be made on the next preceding Business
Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to any Bank hereunder that
the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be distributed to
each such Bank on such due date an amount equal to the amount then due such
Bank. If and to the extent the Borrower shall not have so made such payment
in full to the Agent, each such Bank shall repay to the Agent forthwith on
demand such amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such Bank until
the date such Bank repays such amount to the Agent, at the Federal Funds
Rate.
21
(f) If the Agent receives funds for application to the Obligations of
the Loan Parties under or in respect of the Loan Documents under
circumstances for which the Loan Documents do not specify the Loans to
which, or the manner in which, such funds are to be applied, the Agent may,
but shall not be obligated to, elect to distribute such funds to each of
the Banks in accordance with such Bank's pro rata share of the aggregate
principal amount of all Loans outstanding at such time, for application to
such principal repayment installments thereof, as the Agent shall direct.
2.11 TAXES.
(a) Any and all payments by any Loan Party to or for the account of
any Bank or any Agent hereunder or under the Notes or any other Loan
Document shall be made, in accordance with Section 2.10 (Payments and
Computations) or the applicable provisions of such other Loan Document, if
any, 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, excluding, in the case of each Bank and
each Agent, taxes that are imposed on its overall net income by the United
States (and franchise taxes imposed in lieu thereof) and taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Bank or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Bank, taxes that are imposed
on its overall net income (and franchise taxes imposed in lieu thereof) by
the state or foreign jurisdiction of such Bank's principal office or
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If any Loan Party shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or
under any Note or any other Loan Document to any Bank or any Agent, (i) the
sum payable by such Loan Party shall be increased as may be necessary so
that after such Loan Party and the Agent have made all required deductions
(including deductions applicable to additional sums payable under this
Section 2.11) such Bank or such Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Loan Party shall make all such deductions and (iii) such
Loan Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, a Loan Party shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that
arise from any payment made by such Loan Party hereunder or under any Notes
or any other Loan Documents or from the execution, delivery or registration
of, performance under, or otherwise with respect to, this Agreement, the
Notes or the other Loan Documents (hereinafter referred to as "OTHER
TAXES").
(c) Panhandle Eastern, Borrower and TLNG shall indemnify each Bank and
each Agent for and hold them harmless against the full amount of Taxes and
Other Taxes, imposed on or paid by such Bank or such Agent (as the case may
be) with respect to any payment by or on account of any obligation of the
Loan Parties hereunder (including
22
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 2.11) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date
such Bank or such Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
appropriate Loan Party shall furnish to the Agent, at its address referred
to in Section 11.3 (Notices), the original or a certified copy of a receipt
evidencing such payment, to the extent such a receipt is issued therefor,
or other written proof of payment thereof that is reasonably satisfactory
to the Agent. In the case of any payment hereunder or under the Notes or
the other Loan Documents by or on behalf of a Loan Party through an account
or branch outside the United States or by or on behalf of a Loan Party by a
payor that is not a United States person, if such Loan Party determines
that no Taxes are payable in respect thereof, such Loan Party shall
furnish, or shall cause such payor to furnish, to the Agent, at such
address, an opinion of counsel reasonably acceptable to the Agent stating
that such payment is exempt from Taxes. For purposes of subsections (d) and
(e) of this Section 2.11, the terms "UNITED STATES" and "UNITED STATES
PERSON" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Bank organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery
of this Agreement or on the date of the Assignment and Acceptance pursuant
to which it becomes a Bank, as the case may be, and from time to time
thereafter as reasonably requested in writing by a Loan Party (but only so
long thereafter as such Bank remains lawfully able to do so), or upon the
obsolescence or invalidity of any form previously provided provide each of
the Agent and such Loan Party with two original Internal Revenue Service
Forms W-8BEN or W-8ECI, as appropriate, or any other form prescribed by the
Internal Revenue Service, certifying that such Bank is exempt from or
entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or the Notes or any other Loan Document, or (in
the case of a Bank that is claiming exemption from U.S. federal withholding
with respect to payments of "portfolio interest" and has certified in
writing to the Agent that it is not (i) a "bank" as defined in Section
881(c)(3)(A) of the Internal Revenue Code, (ii) a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code)
of such Loan Party or (iii) a controlled foreign corporation related to
such Loan Party (within the meaning of Section 864(d)(4) of the Internal
Revenue Code)) Internal Revenue Service Form W-8BEN, or any successor or
other form prescribed by the Internal Revenue Service, or, in the case of a
Bank that has certified that it is not a "bank" as described above,
certifying that such Bank is a foreign corporation, partnership, estate or
trust. If the forms provided by a Bank at the time such Bank first becomes
a party to this Agreement indicate a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Bank provides the appropriate
forms certifying that a lesser rate applies, whereupon withholding tax at
such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; provided, however, that if, at the effective date
of the Assignment and Acceptance pursuant to which a Bank becomes a party
to this Agreement, the Bank assignor was entitled to
23
payments under subsection (a) of this Section 2.11 in respect of United
States withholding tax with respect to interest paid at such date, then, to
such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to
the Bank assignee on such date. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required
on the date hereof by Internal Revenue Service Form W-8BEN or W-8ECI or the
related certificate described above, that the applicable Bank reasonably
considers to be confidential, such Bank shall give notice thereof to the
applicable Loan Party and shall not be obligated to include in such form or
document such confidential information.
(f) For any period with respect to which a Bank has failed to provide
a Loan Party with the appropriate form, certificate or other document
described in subsection (e) above (other than if such failure is due to a
change in law, or in the interpretation or application thereof, occurring
after the date on which a form, certificate or other document originally
was required to be provided or if such form, certificate or other document
otherwise is not required under subsection (e) above), such Bank shall not
be entitled to indemnification under subsection (a) or (c) of this Section
2.11 with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Bank become subject to Taxes
because of its failure to deliver a form, certificate or other document
required hereunder, the Loan Parties shall, at the sole expense of such
Bank, take such steps as such Bank shall reasonably request to assist such
Bank to recover such Taxes.
(g) Any Bank claiming any additional amounts payable pursuant to this
Section 2.11 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of
its Applicable Lending Office or assign its rights and obligations under
this Agreement to another of its offices, branches or Affiliates if the
making of such a change or assignment would avoid the need for, or reduce
the amount of, any such additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank.
(h) If a Bank or Agent actually receives a refund of any Taxes or
Other Taxes as to which it has been indemnified by a Loan Party or with
respect to which a Loan Party has paid additional amounts pursuant to this
Section 2.11, it shall pay over such refund to the Loan Party (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Loan Party under this Section 2.11 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Agent
or such Bank or Agent and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund); provided
that the Loan Party, upon the request of the Agent or such Bank or Agent,
agrees to repay the amount paid over to the Loan Party (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority)
to the Agent or such Bank or Agent in the event the Agent or such Bank or
Agent is required to repay such refund to such Governmental Authority. This
Section 2.11(h) shall not be construed to require the Agent or any Bank
24
or Agent to claim a refund or make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Loan
Parties or any other Person.
2.12 SHARING OF PAYMENTS, ETC. If any Bank shall obtain at any time any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise, other than as a result of an assignment pursuant to
Section 11.14 (Sale and Assignment)) (a) on account of Obligations due and
payable to such Bank hereunder and under the Notes and the other Loan Documents
at such time in excess of its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Bank at such time to (ii)
the aggregate amount of the Obligations due and payable to all Banks hereunder
and under the Notes and the other Loan Documents at such time) of payments on
account of the Obligations due and payable to all Banks hereunder and under the
Notes at such time obtained by all the Banks at such time or (b) on account of
Obligations owing (but not due and payable) to such Bank hereunder and under the
Notes and the other Loan Documents at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Bank at such time to (ii) the aggregate amount of the Obligations owing (but not
due and payable) to all Banks hereunder and under the Notes and the other Loan
Documents at such time) of payments on account of the Obligations owing (but not
due and payable) to all Banks hereunder and under the Notes at such time
obtained by all of the Banks at such time, such Bank shall forthwith purchase
from the other Banks such interests or participating interests in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each other Bank shall be rescinded and such other Bank shall repay to the
purchasing Bank the purchase price to the extent of such Bank's ratable share
(according to the proportion of (i) the purchase price paid to such Bank to (ii)
the aggregate purchase price paid to all Banks) of such recovery together with
an amount equal to such Bank's ratable share (according to the proportion of (i)
the amount of such other Bank's required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered;
provided, further that, so long as the Obligations under the Loan Documents
shall not have been accelerated, any excess payment received by any Bank shall
be shared on a pro rata basis only with other Banks. The Borrower agrees that
any Bank so purchasing an interest or participating interest from another Bank
pursuant to this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such interest or participating interest, as the case may be, as fully as if
such Bank were the direct creditor of the Borrower in the amount of such
interest or participating interest, as the case may be.
2.13 USE OF PROCEEDS. The Borrower agrees that the proceeds of the Loans
shall be used to repay in full the existing Debt of the Borrower under its
Credit Agreement dated as of December 21, 2001 by and among the Borrower, as the
borrower, TLNG, as the guarantor, the lenders party thereto, and Credit Suisse
First Boston, as the administrative agent, the collateral agent and the issuing
bank (the "EXISTING CREDIT AGREEMENT").
25
2.14 EVIDENCE OF DEBT.
(a) (i) Each Bank shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Bank resulting from each Loan owing to such Bank from time to time,
including the amounts of principal and interest payable and paid to such
Bank from time to time hereunder. The Borrower agrees that upon request by
any Bank to the Borrower (with a copy of such request to the Agent) to the
effect that a promissory note or other evidence of indebtedness is required
or appropriate in order for such Bank to evidence (whether for purposes of
pledge, enforcement or otherwise) the Loans owing to, or to be made by,
such Bank, the Borrower shall promptly execute and deliver to such Bank,
with a copy to the Agent, a Note payable to the order of such Bank in a
principal amount equal to the Loans of such Bank. All references to Notes
in the Loan Documents shall mean Notes, if any, to the extent issued
hereunder.
(b) The Register maintained by the Agent pursuant to Section 11.14(d)
(Sale and Assignment) shall include a control account, and a subsidiary
account for each Bank, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the Type of Loans
comprising such Borrowing and, if appropriate, the Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Bank hereunder, and (iv) the amount of any sum received by the Agent
from the Borrower hereunder and each Bank's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Bank in its account or accounts
pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Bank and,
in the case of such account or accounts, such Bank, under this Agreement,
absent manifest error; provided, however, that the failure of the Agent or
such Bank to make an entry, or any finding that an entry is incorrect, in
the Register or such account or accounts shall not limit or otherwise
affect the obligations of the Borrower under this Agreement.
2.15 REPLACEMENT OF BANKS. If (a) any Bank requests compensation under
Section 2.9 (Increased Costs) or asserts, pursuant to Section 2.9(d) that it is
unlawful for such Bank to make Eurodollar Rate Loans, (b) the Borrower is
required to pay any additional amount to any Bank or any Governmental Authority
for the account of any Bank pursuant to Section 2.11 (Taxes), (c) any Bank
defaults in its obligation to fund Loans hereunder, or (d) with respect of any
Bank that does not approve any amendment or waiver of any provision of any Loan
Document that requires the unanimous consent of all of the Banks pursuant to
Section 11.1 (Amendments; Waivers, Etc.), if such amendment or waiver is agreed
to by the Required Banks, then the Borrower may, at its sole expense, upon prior
notice to such Bank and the Agent, require such Bank to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 11.14 (Sale and Assignment)), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which
26
assignee may be another Bank, if a Bank accepts such assignment); provided that
(i) to the extent required under Section 11.14 (Sale and Assignment), the
Borrower shall have received the prior written consent of the Agent, which
consent shall not unreasonably be withheld, (ii) such Bank shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.9 (Increased Costs) or payments required to be made pursuant to
Section 2.11 (Taxes), such assignment will result in a reduction in such
compensation or payments. A Bank shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Bank or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
3. REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES
Each of Panhandle Eastern, Borrower and TLNG represents and warrants that:
3.1 ORGANIZATION AND QUALIFICATION. Such Loan Party:
(a) is duly organized, validly existing, and in good standing under
the laws of its state of organization;
(b) has the corporate or organizational power to own its properties
and to carry on its respective businesses as now conducted; and
(c) is duly qualified as a foreign limited partnership or limited
liability company, as applicable, to do business and is in good standing in
every jurisdiction where such qualification is necessary except when the
failure to so qualify would not or does not have a Material Adverse Effect.
The Borrower has the Subsidiaries as applicable listed on Schedule 3.1 attached
hereto and made a part hereof for all purposes, and no others, each of which is
a Delaware limited liability company unless otherwise noted on Schedule 3.1.
3.2 AUTHORIZATION, VALIDITY, ETC. Each such Loan Party has the limited
liability company or limited partnership power and authority to make, execute,
deliver and perform under this Agreement and the Loan Documents to which it is a
party and the transactions contemplated herein and therein, and all such action
has been duly authorized by all necessary limited partnership or limited
liability company proceedings on its part. Each Loan Document has been duly and
validly executed and delivered by such Loan Party and constitutes the valid and
legally binding agreement of such Loan Party enforceable against such Loan Party
in accordance with its terms, except as limited by Debtor Laws.
3.3 CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS. No Loan Party is a
party to any contract or agreement or subject to any restriction which would
materially adversely affect the ability of any Loan Party to perform its
obligations under the Loan Documents to which it is a party. Neither the
execution and delivery of this Agreement or any other Loan Document by any Loan
Party that is or is to become a party thereto, nor the consummation of the
transactions
27
contemplated hereby or thereby, nor the fulfillment of and compliance with the
respective terms, conditions and provisions hereof or thereof or of any
instruments required hereby will conflict with or result in a breach of any of
the terms, conditions or provisions of, or constitute a default under, or result
in any violation of, or result in the creation or imposition of any lien (other
than as contemplated or permitted by this Agreement) on any of the property of
such Loan Party pursuant to (a) the charter or bylaws or similar organizational
documents applicable to such Loan Party; (b) any law or any regulation of any
Government Authority; (c) any order, writ, injunction or decree of any court; or
(d) the terms, conditions or provisions of any agreement or instrument to which
such Loan Party is a party or by which it is bound or to which it is subject,
except in the case of clauses (b), (c) and (d) for conflicts, breaches,
defaults, violations or the creation or imposition of liens that could not be
reasonably expected to have a Material Adverse Effect.
3.4 NO CONSENTS REQUIRED. No action, approval, consent, waiver, exemption,
variance, franchise, order, permit, authorization, right or license of or from a
Governmental Authority, and no notice to or filing with, any Governmental
Authority (including without limitation the SEC under PUHCA) or any other third
party is required for (a) the due execution, delivery or performance by any Loan
Party of any Loan Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby, including without
limitation the incurrence of Debt under this Agreement and the borrowing and
repayment of Loans hereunder; or (b) the exercise by any Agent or any Bank of
its rights under the Loan Documents, except for those authorizations, approvals,
actions, notices and filings (A) which have been duly obtained or made or which
are not required under the terms of the Loan Documents to have been obtained or
made on or prior to such date or (B) with respect to the consummation of the
transactions contemplated hereby, the failure of which to be obtained or made
could not reasonably be expected to have a Material Adverse Effect.
3.5 FINANCIAL STATEMENTS.
(a) Panhandle Eastern has furnished the Banks with its audited
financial report as of the fiscal year ending December 31, 2004. These
statements are complete and correct and present fairly, in all material
respects, in accordance with GAAP, consistently applied throughout the
periods involved, the Consolidated financial position of Panhandle Eastern
and its Subsidiaries and the results of their operations as at the dates
and for the periods indicated.
(b) The Borrower has furnished the Banks with the Borrower's unaudited
financial report as of the fiscal year ending December 31, 2004. These
statements are complete and correct and present fairly, in all material
respects, in accordance with GAAP, consistently applied throughout the
periods involved, the Consolidated financial position of the Borrower and
its Subsidiary and the results of their operations as at the dates and for
the periods indicated.
(c) Since December 31, 2004, there has not occurred any event or
condition which, individually or in the aggregate, has resulted in, or
could reasonably be expected to result in, a Material Adverse Change
respecting Panhandle Eastern, Borrower or TLNG.
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3.6 LITIGATION. Except as disclosed on Schedule 3.6 or pursuant to Section
3.17 (Environmental Matters), there is no: (a) action or proceeding pending or,
to the knowledge of Panhandle Eastern, Borrower and TLNG, threatened against any
Loan Party before any court, administrative agency or arbitrator which is
reasonably expected to have a Material Adverse Effect; (b) unsatisfied judgment
outstanding against such Loan Party for the payment of money; or (c) other
outstanding judgment, order or decree affecting such Loan Party before or by any
administrative or governmental authority, compliance with or satisfaction of
which may reasonably be expected to have a Material Adverse Effect.
3.7 DEFAULT. No Loan Party is in default under or in violation of the
provisions of any instrument evidencing any Debt or of any agreement relating
thereto or any judgment, order, writ, injunction or decree of any court or any
order, regulation or demand of any administrative or governmental
instrumentality, which default or violation could reasonably be expected to have
a Material Adverse Effect.
3.8 COMPLIANCE. Each Loan Party is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
3.9 TITLE TO ASSETS. Each Loan Party has good title to its respective
assets, subject to no Liens except those permitted in Section 6.2 (Liens, Etc.)
and Section 7.1 (Liens, Etc.) and Permitted Encumbrances. For purposes of this
Section 3.9, "PERMITTED ENCUMBRANCES" shall mean easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of such Loan Party.
3.10 PAYMENT OF TAXES. Each Loan Party has filed all material tax returns
required to be filed and has paid all taxes shown on said returns and all
assessments which are due and payable (except such as are being contested in
good faith by appropriate proceedings for which adequate reserves for their
payment have been provided in a manner consistent with the accounting practices
followed by the applicable Loan Party as of December 31, 2004). No Loan Party is
aware of any pending investigation by any taxing authority or of any claims by
any Governmental Authority for any unpaid taxes. Except as disclosed on Schedule
3.10, no Loan Party is party to any tax sharing agreement or arrangement.
3.11 INVESTMENT COMPANY ACT NOT APPLICABLE. No Loan Party is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
3.12 PUBLIC UTILITY HOLDING COMPANY ACT NOT APPLICABLE. No Loan Party is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", or an "affiliate" of a "subsidiary company"
of a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
3.13 REGULATIONS G, T, U AND X. No Loan shall be a "purpose credit secured
directly or indirectly by margin stock" within the meaning of Regulation U of
the Board of
29
Governors of the Federal Reserve System ("margin stock"); none of the proceeds
of any Loan will be used by any Loan Party to extend credit to others for the
purpose of purchasing or carrying any margin stock, or for any other purpose
which would constitute this transaction a "purpose credit secured directly or
indirectly by margin stock" within the meaning of said Regulation U, as now in
effect or as the same may hereafter be in effect. No Loan Party will take or
permit any action which would involve the Banks in a violation of Regulation G,
Regulation T, Regulation U, Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System or a violation of the Securities
Exchange Act of 1934, in each case as now or hereafter in effect.
3.14 ERISA. No Reportable Event (as defined in Section 4043(c) of ERISA)
has occurred with respect to any Plan. Except as provided in Disclosure Schedule
3.14, each Plan complies in all material respects with applicable provisions of
ERISA, and each Loan Party has filed all reports required by ERISA and the Code
to be filed with respect to each Plan. Except as provided in Disclosure Schedule
3.14, no Loan Party has any knowledge of any event which could result in a
liability of a Loan Party to the Pension Benefit Guaranty Corporation. Each Loan
Party has met all requirements with respect to funding the Plans imposed by
ERISA or the Code. Since the effective date of Title IV of ERISA, there have not
been any, nor are there now existing any, events or conditions that would permit
any Plan to be terminated under circumstances which would cause the lien
provided under Section 4068 of ERISA to attach to any property of a Loan Party.
3.15 NO FINANCING OF CERTAIN SECURITY ACQUISITIONS. None of the proceeds of
any Loan will be used to acquire any security in any transaction that is subject
to Section 13 or Section 14 of the Securities Exchange Act of 1934, as amended.
3.16 FRANCHISES, CO-LICENSES, ETC. Each Loan Party owns or has obtained all
the material governmental permits, certificates of authority, leases, patents,
trademarks, service marks, trade names, copyrights, franchises and licenses, and
rights with respect thereto, required or necessary (or, in the sole and
independent judgment of the Borrower, prudent) in connection with the conduct of
their respective businesses as presently conducted or as proposed to be
conducted, except where the failure to have any of the foregoing could not be
reasonably expected to have a Material Adverse Effect.
3.17 ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 3.17(b), (a)
all facilities and property owned or leased by a Loan Party have been and
continue to be, owned or leased and operated by such Loan Party in material
compliance with all Environmental Laws; (b) there has not been (during the
period of such Loan Party's ownership or lease) any Release of Hazardous
Materials at, on, under or from any property now (or, to such Loan Party's
knowledge, previously) owned or leased by such Loan Party (i) that required, or
may reasonably be expected to require, such Loan Party to expend funds on
remediation or cleanup activities pursuant to any Environmental Law except for
remediation or clean-up activities that would not be reasonably expected to have
a Material Adverse Effect, or (ii) that otherwise, singly or in the aggregate,
has, or may reasonably be expected to have, a Material Adverse Effect; (c) each
Loan Party has been issued and is in material compliance with all permits,
certificates, approvals, orders, licenses and other authorizations relating to
environmental matters necessary for the conduct of its businesses; (d) there are
no polychlorinated biphenyls (PCB's) or asbestos-
30
containing materials or surface impoundments in any of the facilities now (or,
to the knowledge of such Loan Party, previously) owned or leased by such Loan
Party, except for PCB's and asbestos-containing materials of the type and in
quantities that, to the knowledge of such Loan Party, do not currently require
remediation, and if remediation of such PCB's and asbestos-containing materials
is hereafter required for any reason, such remediation activities would not
reasonably be expected to have a Material Adverse Effect; (e) Hazardous
Materials have not been generated, used, treated, recycled, stored or disposed
of at, on, under or from any of the facilities or property now (or, to the
knowledge of such Loan Party, previously) owned or leased by such Loan Party
during the time of such Loan Party's ownership or lease of such property that
may require remediation or clean-up activities that would be reasonably expected
to have a Material Adverse Effect; and (f) all underground storage tanks located
on the property now (or, to the knowledge of such Loan Party, previously) owned
or leased by such Loan Party have been (and to the extent currently owned or
leased are) operated in material compliance with all applicable Environmental
Laws.
3.18 BORROWER LIENS. After application of the proceeds from the Loan to the
repayment of the Existing Debt, there shall not exist any Liens on any Property
of the Borrower or its Subsidiaries.
3.19 DISCLOSURE. No written information (other than any projections)
concerning any Loan Party and the transactions contemplated hereby furnished by
or on behalf of such Loan Party to the Agent or any Bank in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished), taken as a whole, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein not misleading in any material
respect in light of the circumstances under which such statements were or are
made. The projections were prepared by or on behalf of each Loan Party in good
faith based upon assumptions that such Loan Party believes to be reasonable as
of the Closing Date and the Funding Date (it being understood that such
projections are subject to significant uncertainties and contingencies, many of
which are beyond such Loan Party's control, and accordingly no assurance can be
given and no representations are made that the assumptions are correct or that
the projections will be realized).
3.20 INSURANCE. Each Loan Party has insurance with a responsible and
reputable insurer covering its assets against loss or damage of the kinds
customarily insured against by companies similarly situated in the industry in
which such Person conducts its business, in such amounts and with such
deductibles as are customary for similarly situated companies; and such Person
(a) has not received notice from any insurer or agent of such insurer that any
material capital improvements or other material expenditures are required or
necessary to be made in order to continue such insurance or (b) does not have
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage at
commercially available rates from similar insurers as may be necessary to
continue its business.
3.21 SUBSIDIARIES. TLNG is wholly owned by the Borrower. The Borrower is
wholly owned by Panhandle Eastern.
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4. CONDITIONS TO FUNDING
The obligation of the Banks to make any Loans is subject to the following
conditions:
4.1 REPRESENTATIONS TRUE AND NO DEFAULTS.
(a) The representations and warranties contained in Section 3
(Representations and Warranties of the Loan Parties) shall be true and
correct on and as of the Funding Date as though made on and as of each such
date;
(b) None of Panhandle Eastern, Borrower or TLNG shall be in default in
the due performance of any covenant on its part contained in this
Agreement;
(c) No Material Adverse Change shall have occurred with respect to (i)
Panhandle Eastern reflected in the Consolidated annual financial statements
of Panhandle Eastern dated December 31, 2004 (copies of such audited
financial statements having been supplied to the Agent and each Bank) or
(ii) the Borrower reflected in the Consolidated annual financial statements
of the Borrower dated December 31, 2004 (copies of such unaudited financial
statements having been supplied to the Agent and each Bank); and
(d) No Event of Default or Default shall have occurred and be
continuing.
4.2 INTENTIONALLY OMITTED.
4.3 COMPLIANCE WITH LAW. The business and operations of each Loan Party as
conducted at all times relevant to the transactions contemplated by this
Agreement to and including the close of business on the Funding Date shall have
been and shall be in compliance in all material respects with all applicable
State and Federal laws, regulations and orders affecting such Loan Party and the
business and operations of any of them.
4.4 NOTICE OF BORROWING AND OTHER DOCUMENTS. The Banks shall have received
(a) the Notice of Borrowing; and (b) such other documents and certificates
relating to the transactions herein contemplated as the Banks may reasonably
request.
4.5 PAYMENT OF FEES AND EXPENSES. The Borrower shall have paid (a) all
expenses of the type described in Section 11.2 (Reimbursement of Expenses)
through the date of such Loan and (b) all closing, structuring and other
invoiced fees owed as of the Funding Date to the Agent or any of the Banks by
the Borrower under this Agreement or any other written agreement between a Loan
Party and the Agent, the applicable Bank(s), or any of their Affiliates.
4.6 REPAYMENT OF DEBT. Simultaneously with the funding of the Loans, (i)
the Borrower shall repay all of the obligations under the Existing Credit
Agreement and the commitments of the lenders thereunder shall be terminated,
(ii) the Borrower shall terminate, or shall have terminated, all of its Hedge
Agreements, (iii) the Agent shall receive a "pay-off" letter reasonably
satisfactory to it with respect to the Existing Credit Agreement, and (iv) there
shall be in place arrangements for the release of any liens and security
interests in respect of the Existing Credit Agreement satisfactory to the Agent.
32
4.7 LOAN DOCUMENTS, OPINIONS AND OTHER INSTRUMENTS. As of the Funding Date,
the Loan Parties shall have delivered to the Agent the following:
(a) this Agreement, each of the Notes and all other Loan Documents
required by the Agent and the Banks to be executed and delivered by the
applicable Loan Parties in connection with this Agreement;
(b) a certificate from the Secretary of State of the State of Delaware
as to the continued existence and good standing of Panhandle Eastern,
Borrower and TLNG in the State of Delaware;
(c) a certificate from Secretary of State of the States of Louisiana
and Texas as to the good standing of TLNG as a foreign entity to do
business in each such State;
(d) a Secretary's Certificate executed by the duly elected Secretary
or a duly elected Assistant Secretary of Panhandle Eastern, Borrower and
TLNG, in a form acceptable to the Agent, whereby such Secretary or
Assistant Secretary certifies that one or more resolutions adopted by the
Board of Managers of such Loan Party (or, in the case of Panhandle Eastern,
the Board of Managers of its general partner) remain in full force and
effect authorizing such Loan Party to enter into the transactions
contemplated hereby and perform its obligations under the Loan Documents;
and
(e) a legal opinion from in-house counsel for the Borrower and each
Guarantor, dated as of the Funding Date, addressed to the Agent and the
Banks and otherwise acceptable in all respects to the Agent in its
discretion.
5. AFFIRMATIVE COVENANTS OF THE LOAN PARTIES
Each of Panhandle Eastern, Borrower and TLNG covenants and agrees that, so
long as the Borrower may borrow hereunder and until payment in full of the
Obligations, each of Panhandle Eastern, Borrower and/or TLNG, as applicable,
will:
5.1 FINANCIAL STATEMENTS AND INFORMATION. DELIVER TO THE BANKS:
(a) as soon as available, and in any event within 120 days after the
end of each fiscal year of Panhandle Eastern, a copy of the annual audit
report of Panhandle Eastern and its Subsidiaries for such fiscal year
containing a balance sheet, statement of income and stockholders equity and
a cash flow statement, all in reasonable detail and certified by
PriceWaterhouseCoopers or another independent certified public accountant
of recognized standing reasonably satisfactory to the Banks; and
(b) as soon as available, and in any event within 120 days after the
end of each fiscal year of the Borrower, an unaudited financial report of
the Borrower and its Subsidiary for such fiscal year containing a balance
sheet, statement of income and stockholders equity and cash flow statement,
all in reasonable detail and certified by a financial officer of such Loan
Party to have been prepared in accordance with GAAP, except as may be
explained in such certificate; and
33
(c) as soon as available, and in any event within 60 days after the
end of each quarterly accounting period in each fiscal year of Panhandle
Eastern and the Borrower (excluding the fourth quarter), an unaudited
financial report of Panhandle Eastern and its Subsidiaries and the Borrower
and its Subsidiaries as at the end of such quarter and for the period then
ended, containing a balance sheet, statements of income and stockholders
equity and a cash flow statement, all in reasonable detail and certified by
a financial officer of such Loan Party to have been prepared in accordance
with GAAP, except as may be explained in such certificate; and
(d) such additional financial or other information as the Banks may
reasonably request.
All financial statements specified in clauses (a), (b) and (c) above shall be
furnished in Consolidated form for Panhandle Eastern and its Subsidiaries and
the Borrower and its Subsidiaries with comparative Consolidated figures for the
corresponding period in the preceding year. Together with each delivery of
financial statements required by clauses (a), (b) and (c) above, each of
Panhandle Eastern and the Borrower, as applicable, will deliver to the Banks an
Officer's Certificate stating that there exists no Event of Default or Default,
or, if any such Event of Default or Default exists, stating the nature thereof,
the period of existence thereof and what action the Borrower has taken or
proposes to take with respect thereto. The Banks are authorized to deliver a
copy of any financial statement delivered to it to any regulatory body having
jurisdiction over them, and to disclose same to any prospective assignees or
participant Banks.
5.2 BOOKS AND RECORDS. Maintain, and cause each of its Subsidiaries to
maintain, proper books of record and account in accordance with sound accounting
practices in which true, full and correct entries will be made of all their
respective dealings and business affairs.
5.3 INSURANCE. Maintain, and cause each of its Subsidiaries to maintain,
insurance with financially sound, responsible and reputable companies in such
types and amounts and against such casualties, risks and contingencies as is
customarily carried by owners of similar businesses and properties.
5.4 MAINTENANCE OF PROPERTY. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in accordance with such Loan Party's
established maintenance plan as in effect from time to time consistent with past
practices.
5.5 INSPECTION OF PROPERTY AND RECORDS. Permit any officer, director or
agent of the Agent or any Bank, on written notice and at such Bank's expense, to
visit and inspect during normal business hours any of the properties, corporate
books and financial records of each Loan Party and discuss their respective
affairs and finances with their principal officers, all at such times as the
Agent or any Bank may reasonably request.
5.6 EXISTENCE, LAWS, OBLIGATIONS, TAXES. Maintain, and cause each of its
Subsidiaries to maintain, its corporate existence and franchises, and any
license agreements and tariffs that permit the recovery of a return that such
Loan Party considers to be fair (and as to
34
licenses, franchises, and tariffs that are subject to regulatory determinations
of recovery of returns, such Loan Party has presented or is presenting favorable
defense thereof); and to comply, and cause each of its Subsidiaries to comply,
with all statutes and governmental regulations noncompliance with which might
have a Material Adverse Effect, and pay, and cause each of its Subsidiaries to
pay, all taxes, assessments, governmental charges, claims for labor, supplies,
rent and other obligations which if unpaid might become a lien against the
property of such Loan Party and its Subsidiaries except liabilities being
contested in good faith.
5.7 NOTICE OF CERTAIN MATTERS. Notify the Agent immediately upon acquiring
knowledge of the occurrence of any of the following events:
(a) the institution or threatened institution of any lawsuit or
administrative proceeding affecting a Loan Party that is not covered by
insurance (less applicable deductible amounts) and which, if determined
adversely to such Loan Party, could reasonably be expected to have a
Material Adverse Effect;
(b) the occurrence of any Material Adverse Change, or of any event
that in the good faith opinion of such Loan Party is likely to result in a
Material Adverse Change, affecting such Loan Party;
(c) the occurrence of any Event of Default or any Default;
(d) a change by Xxxxx'x Investors Service, Inc. or by Standard and
Poor's Ratings Group in the rating of the Funded Debt of Panhandle Eastern;
(e) copies of all regular, periodic and special reports, and all
registration statements, that such Loan Party files with the SEC or any
governmental authority that may be substituted therefor, or with any
national securities exchange;
(f) such other information respecting the business, financial
condition, operations or assets of the Loan Parties as any Agent, or any
Bank through the Agent, may from time to time reasonably request.
5.8 ERISA. At all times:
(a) to the extent required of a Loan Party under applicable law,
maintain and keep in full force and effect each Plan, subject to Southern
Union's right, in accordance with applicable legal requirements, (i) to
amend any such Plans, (ii) to merge any such Plans, and to (iii) cease
benefit accruals under any such Plans;
(b) to the extent required of a Loan Party under applicable law, make
contributions to each Plan in a timely manner and in an amount sufficient
to comply with the minimum funding standards requirements of ERISA;
(c) immediately upon acquiring knowledge of any "reportable event" or
of any "prohibited transaction" (as such terms are defined in Section 4043
and Section 406 of ERISA) in connection with any Plan, furnish the Banks
with a statement executed by the president or chief financial officer of a
Loan Party setting forth the details thereof and the action
35
which the Borrower proposes to take with respect thereto and, when known,
any action taken by the Internal Revenue Service with respect thereto;
(d) notify the Banks promptly upon receipt by a Loan Party or its
Subsidiary of any notice of the institution of any proceeding or other
action which may result in the termination of any Plan and furnish to the
Banks copies of such notice;
(e) to the extent required of a Loan Party under applicable law,
acquire and maintain Pension Benefit Guaranty Corporation employer
liability coverage insurance required under ERISA;
(f) furnish the Banks with copies of the summary annual report for
each Plan filed with the Internal Revenue Service as the Agent or the Banks
may request; and
(g) furnish the Banks with copies of any request for waiver of the
funding standards or extension of the amortization periods required by
Section 303 and Section 304 of ERISA or Section 412 of the Code promptly
after the request is submitted to the Secretary of the Treasury, the
Department of Labor or the Internal Revenue Service, as the case may be.
5.9 COMPLIANCE WITH ENVIRONMENTAL LAWS. At all times:
(a) (i) use and operate, and cause each of its Subsidiaries to use and
operate, all of their respective facilities and properties in material
compliance with all Environmental Laws; (ii) keep, and cause each of its
Subsidiaries to keep, all necessary permits, approvals, orders,
certificates, licenses and other authorizations relating to environmental
matters in effect and remain in material compliance therewith; (iii)
handle, and cause each of its Subsidiaries to handle, all Hazardous
Materials in material compliance with all applicable Environmental Laws;
and (iv) dispose, and cause each of its Subsidiaries to dispose, of all
Hazardous Materials with carriers that maintain valid permits, approvals,
certificates, licenses or other authorizations for such disposal in
material compliance with applicable Environmental Laws;
(b) promptly notify the Agent and provide copies upon receipt of all
written claims, complaints, notices or inquiries relating to the condition
of the facilities and properties of such Loan Party under, or their
respective compliance with, applicable Environmental Laws wherein the
condition or the noncompliance that is the subject of such claim,
complaint, notice, or inquiry involves, or could reasonably be expected to
involve, liability of or expenditures of (1) in the case of Borrower, TLNG
or any of their respective Subsidiaries, $10,000,000 or more, and (2) in
the case of Panhandle Eastern and its Subsidiaries taken as a whole,
$30,000,000 or more, to the extent in each case that such matters are not
reflected in the financial statements provided pursuant to Sections 3.5 (a)
and (b) hereof for the period ended December 31, 2004; and
(c) provide such information and certifications which the Banks may
reasonably request from time to time to evidence compliance with this
Section 5.9.
36
6. NEGATIVE COVENANTS OF PANHANDLE EASTERN
So long as the Borrower may borrow hereunder and until payment in full of
the Obligations, except with the written consent of the Banks:
6.1 FINANCIAL COVENANTS. Panhandle Eastern will not
(a) Permit the Interest Coverage Ratio as of the end of any fiscal
quarter to be less than 2.00 to 1.00.
(b) Permit the Debt/Capitalization Ratio as of the last day of any
fiscal quarter to be greater than 65.0%.
6.2 LIENS, ETC. Panhandle Eastern will not, and will not permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien on or with
respect to any of its Property, or sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement that names
Panhandle Eastern or any of its Subsidiaries as debtor, or sign or suffer to
exist any security agreement authorizing any secured party thereunder to file
such financing statement, or assign any accounts or other right to receive
income, except:
(a) Permitted Liens for Panhandle Eastern and its Subsidiaries;
(b) Liens existing on the date hereof and any replacement, extension
or renewal of the indebtedness secured by such Lien, provided that the
amount of Debt or other obligations secured thereby is not increased and is
not secured by any additional assets; and
(c) Liens arising in connection with Capitalized Leases; provided that
no such Lien shall extend to or cover any assets other than the assets
subject to such Capitalized Leases) and purchase money Liens upon or in
real property, equipment or other fixed or capital assets acquired or held
by Panhandle Eastern or any of its Subsidiaries to secure the purchase
price of such property, equipment or other fixed or capital assets or to
secure Debt incurred for the purpose of financing the acquisition,
construction or improvement of any such property, equipment or other fixed
or capital assets, or Liens existing on any such property, equipment or
other fixed or capital assets at the time of acquisition, or extensions,
renewals or replacements of any of the foregoing for the same or a lesser
amount (provided that no such Lien shall extend to or cover any property
other than the property, equipment or other fixed or capital assets being
acquired, constructed or improved, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore subject
to the Lien being extended, renewed or replaced); provided that the
aggregate principal amount of the Debt secured by Liens permitted by this
clause (c) shall not exceed $50,000,000 at any time outstanding;
provided, however, that Panhandle Eastern or any of its Subsidiaries may create
or assume any other Lien securing Debt if, after giving effect to such Debt, the
Priority Obligations Amount does not exceed 10% of the Consolidated Net Tangible
Assets.
37
6.3 DEBT. Panhandle Eastern will not, and will not permit any Subsidiary
(other than the Borrower or TLNG) to, create, incur, assume or suffer to exist
any Debt, unless if after giving effect to such Debt, the Priority Obligations
Amount does not exceed 10% of the Consolidated Net Tangible Assets.
6.4 CHANGE IN NATURE OF BUSINESS. Panhandle Eastern will not make any
material change in the nature of Panhandle Eastern's business as carried on at
the date hereof.
6.5 MERGERS, CONSOLIDATION. Panhandle Eastern will not merge into or
consolidate with any Person or permit any Person to merge into it, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or permit
any of its Subsidiaries to do so, except that:
(a) any Subsidiary of Panhandle Eastern may merge into or consolidate
with Panhandle Eastern, provided that Panhandle Eastern is the continuing
or surviving Person;
(b) any Subsidiary of Panhandle Eastern may merge into or consolidate
with any other Subsidiary of Panhandle Eastern; provided that if such
Subsidiary is the Borrower, such transaction shall comply with Section
7.3(c);
(c) any Subsidiary of Panhandle Eastern may be liquidated or dissolved
if Panhandle Eastern determines in good faith that such liquidation or
dissolution is in the best interest of Panhandle Eastern and is not
materially disadvantageous to the Banks;
(d) any Subsidiary of Panhandle Eastern may merge into or consolidate
with any other Person or permit any other Person to merge into or
consolidate with it; provided that either (i) the Person surviving such
merger shall be a Subsidiary of Panhandle Eastern or (ii) such transaction
complies with Sections 6.6 (b), 7.3 and 7.4; and
(e) Panhandle Eastern may merge with any Person; provided that if
Panhandle Eastern is not the surviving entity, the surviving entity agrees
to assume and be bound by the terms and conditions of this Agreement
pursuant to documentation satisfactory to the Agent to such effect;
provided, however, that in each case, immediately before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing
and such transaction shall not cause or have caused a Material Adverse Effect.
6.6 SALE OF ASSETS. Panhandle Eastern will not, and will not permit any of
its Subsidiaries to, sell, lease, transfer or otherwise dispose of, in one
transaction or in a series of transactions, assets representing all or
substantially all of the Consolidated assets of Panhandle Eastern, except:
(a) in a transaction authorized by Section 6.5 (Mergers); and
38
(b) sales, transfers or other dispositions of assets among Panhandle
Eastern and its Subsidiaries.
6.7 RESTRICTED PAYMENTS. Panhandle Eastern will not, and will not permit
any of its Subsidiaries to, pay or declare any Restricted Payment, except that,
(a) any of its Subsidiaries may make Restricted Payments to Panhandle Eastern or
another Subsidiary of Panhandle Eastern (except that the Borrower may not make
any such payment to any Person other than Panhandle Eastern and Subsidiaries of
the Borrower may not make any such payment to any Person other than Borrower or
Panhandle Eastern) and (b) so long as no Event of Default has occurred and is
continuing and Panhandle Eastern is in pro forma compliance with Section 6.1(b)
(Financial Covenants) after giving effect to such Restricted Payments, Panhandle
Eastern may make distributions to Southern Union and Southern Union Panhandle,
LLC.
6.8 SALES AND LEASEBACKS. Panhandle Eastern will not enter into any
arrangement with any Person (other than Subsidiaries of Panhandle Eastern)
providing for the leasing by Panhandle Eastern or any Subsidiary of real or
personal property that has been or is to be sold or transferred by Panhandle
Eastern or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of Panhandle Eastern or such Subsidiary (each a
"SALE-LEASEBACK TRANSACTION"), unless if after giving effect to such
Sale-Leaseback Transaction, the Priority Obligations Amount does not exceed 10%
of the Consolidated Net Tangible Assets.
6.9 TRANSACTIONS WITH RELATED PARTIES. Panhandle Eastern will not, and will
not permit any Subsidiary to, enter into any transaction or agreement with any
officer, director or holder (other than Southern Union and its Subsidiaries) of
ten percent (10%) or more of any class of the outstanding capital stock of
Panhandle Eastern or any Subsidiary (or any Affiliate of any such Person) unless
the same is upon terms substantially similar to those obtainable from wholly
unrelated sources.
6.10 HAZARDOUS MATERIALS. Panhandle Eastern will not, and will not permit
any Subsidiary to, (a) cause or permit any Hazardous Materials to be placed,
held, used, located, or disposed of on, under or at any of such Person's
property or any part thereof by any Person in a manner which could reasonably be
expected to have a Material Adverse Effect; (b) cause or permit any part of any
of such Person's property to be used as a manufacturing, storage, treatment or
disposal site for Hazardous Materials, where such action could reasonably be
expected to have a Material Adverse Effect; or (c) cause or suffer any liens to
be recorded against any of such Person's property as a consequence of, or in any
way related to, the presence, remediation, or disposal of Hazardous Materials in
or about any of such Person's property, including any so-called state, federal
or local "superfund" lien relating to such matters, where such recordation could
reasonably be expected to have a Material Adverse Effect.
7. NEGATIVE COVENANTS OF THE BORROWER
So long as the Borrower may borrow hereunder and until payment in full of
the Notes, except with the written consent of the Banks:
39
7.1 LIENS, ETC. The Borrower will not, and will not permit any Subsidiary
to create, incur, assume or suffer to exist any Lien on or with respect to any
of its Property, or sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign any accounts or other right to receive income,
except:
(a) Permitted Liens for the Borrower and its Subsidiaries;
(b) Liens existing on the date hereof and any replacement, extension
or renewal of the indebtedness secured by such Lien, provided that the
amount of Debt or other obligations secured thereby is not increased and is
not secured by any additional assets; and
(c) Liens arising in connection with Capitalized Leases; provided that
no such Lien shall extend to or cover any assets other than the assets
subject to such Capitalized Leases) and purchase money Liens upon or in
real property, equipment or other fixed or capital assets acquired or held
by the Borrower or any of its Subsidiaries to secure the purchase price of
such property, equipment or other fixed or capital assets or to secure Debt
incurred for the purpose of financing the acquisition, construction or
improvement of any such property, equipment or other fixed or capital
assets, or Liens existing on any such property, equipment or other fixed or
capital assets at the time of acquisition, or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount
(provided that no such Lien shall extend to or cover any property other
than the property, equipment or other fixed or capital assets being
acquired, constructed or improved, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore subject
to the Lien being extended, renewed or replaced); provided that the
aggregate principal amount of the Debt secured by Liens permitted by this
clause (c) shall not exceed $10,000,000 at any time outstanding.
7.2 DEBT. The Borrower will not, and will not permit any Subsidiary to,
incur or permit to exist any Debt, except:
(a) Debt under this Agreement;
(b) Debt of TLNG to the Borrower and unsecured Debt of the Borrower to
any Subsidiary;
(c) Debt existing as of December 31, 2004 as reflected on the
Borrower's financial statements delivered under Section 3.2 (Financial
Statements) and refinancings thereof, other than Debt under the Existing
Credit Agreement;
(d) endorsements in the ordinary course of business of negotiable
instruments in the course of collection;
(e) Debt of TLNG or other Subsidiaries of the Borrower subordinated to
the Loans on terms and pursuant to documentation satisfactory to the Agent;
40
(f) Unsecured Debt of the Borrower; and
(g) Capitalized Leases of the Borrower with Subsidiaries as permitted
pursuant to 7.1(c).
7.3 MERGER, CONSOLIDATION. The Borrower will not, and will not permit any
Subsidiary to, merge or consolidate with any other Person or sell, lease,
transfer or otherwise dispose of (whether in one transaction or a series of
transactions) all or a substantial part of its assets or acquire (whether in one
transaction or a series of transactions) all or a substantial part of the assets
of any Person, except that:
(a) any Subsidiary of the Borrower may merge or consolidate with the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with any one or more Subsidiaries of the Borrower;
(b) any Subsidiary of the Borrower may sell, lease, transfer or
otherwise dispose of any of its assets to the Borrower or another
Subsidiary of the Borrower;
(c) the Borrower may acquire the assets of or merge with any Person,
provided that if Borrower is not the surviving entity, the surviving entity
agrees to assume and be bound by the terms and conditions of this Agreement
pursuant to documentation satisfactory to the Agent.
(d) the Borrower or any Subsidiary of the Borrower may sell, lease,
assign or otherwise dispose of assets as otherwise permitted under Section
7.4 (Sale of Assets), which shall include without limitation the transfer
of assets to a Subsidiary and the subsequent sale of the equity interests
in such Subsidiary;
provided that, after giving effect to any transaction, no Default or Event
of Default shall have occurred and be continuing and such transaction shall
not cause or have caused a Material Adverse Effect.
7.4 SALE OF ASSETS. The Borrower will not, and will not permit any
Subsidiary to, except as permitted under this Section 7.4, sell, assign, lease,
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or any part of its Property (whether now owned or hereafter
acquired); provided, however, that
(a) the Borrower or any Subsidiary may in the ordinary course of
business dispose of (i) Property consisting of Inventory; and (ii) Property
consisting of goods or equipment that are, in the opinion of the Borrower
or any Subsidiary of the Borrower, obsolete or unproductive, but if in the
good faith judgment of the Borrower or any Subsidiary of the Borrower such
disposition without replacement thereof would have a Material Adverse
Effect, such goods and equipment shall be replaced, or their utility and
function substituted, by new or existing goods or equipment; and
(b) the Borrower or any Subsidiary may dispose of Property other than
Inventory (in consideration of such amount as in the good faith judgment of
the Borrower or such Subsidiary represents a fair consideration therefor),
provided that the aggregate
41
value of such property disposed of (determined after depreciation and in
accordance with GAAP) after the Funding Date does not exceed ten percent
(10%) of the aggregate value of all of the Borrower's and its Subsidiaries'
real property and tangible personal property other than Inventory
considered on a Consolidated basis and determined after depreciation and in
accordance with GAAP, as of December 31, 2004.
7.5 RESTRICTED PAYMENT. The Borrower will not pay or declare any Restricted
Payment to any Person other than to Panhandle Eastern. The Borrower will not
permit any Subsidiary to pay or declare any Restricted Payment to any Person
other than the Borrower.
7.6 SECURITIES CREDIT REGULATIONS. Neither the Borrower nor any Subsidiary
will take or permit any action which might cause the Loans or this Agreement to
violate Regulation G, Regulation T, Regulation U, Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or a
violation of the Securities Exchange Act of 1934, in each case as now or
hereafter in effect.
7.7 NATURE OF BUSINESS. The Borrower will not, and will not permit any
Subsidiary, to make any material change in the nature of the Borrower's business
as carried on at the date hereof.
7.8 TRANSACTIONS WITH RELATED PARTIES. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or agreement with any
officer director or holder (other than Southern Union and its Subsidiaries) of
ten percent (10%) or more of any class of the outstanding capital stock of the
Borrower or any Subsidiary (or any Affiliate of any such Person) unless the same
is upon terms substantially similar to those obtainable from wholly unrelated
sources.
7.9 HAZARDOUS MATERIALS. The Borrower will not, and will not permit any
Subsidiary to, (a) cause or permit any Hazardous Materials to be placed, held,
used, located, or disposed of on, under or at any of such Person's property or
any part thereof by any Person in a manner which could reasonably be expected to
have a Material Adverse Effect; (b) cause or permit any part of any of such
Person's property to be used as a manufacturing, storage, treatment or disposal
site for Hazardous Materials, where such action could reasonably be expected to
have a Material Adverse Effect; or (c) cause or suffer any liens to be recorded
against any of such Person's property as a consequence of, or in any way related
to, the presence, remediation, or disposal of Hazardous Materials in or about
any of such Person's property, including any so-called state, federal or local
"superfund" lien relating to such matters, where such recordation could
reasonably be expected to have a Material Adverse Effect.
7.10 USE OF PROCEEDS. The Borrower will not, and will not permit any
Subsidiary to, use the proceeds of any Loan for any purpose other than for
purposes set forth in Section 2.13 (Use of Proceeds); or use any such proceeds
in a manner which violates or results in a violation of any law or regulation.
7.11 OTHER DOCUMENTS. The Borrower will not, and will not permit any
Subsidiary to, amend, restate or otherwise modify or waive any provision or
condition of any instrument or agreement relating to any secured Debt of such
Person if the effect of such modification or
42
waiver is to increase the obligations of such Person in a manner that is
adverse to the Banks without the consent of the Majority Banks.
8. EVENTS OF DEFAULT; REMEDIES
If any of the following events shall occur, then the Agent shall at the
request, or may with the consent, of the Majority Banks, declare the Notes and
all interest accrued and unpaid thereon, and all other amounts payable under the
Notes, this Agreement and the other Loan Documents, to be forthwith due and
payable, whereupon the Notes, all such interest and all such other amounts,
shall become and be forthwith due and payable without presentment, demand,
protest, or further notice of any kind (including, without limitation, notice of
default, notice of intent to accelerate and notice of acceleration), all of
which are hereby expressly waived by the Borrower; provided, however, that with
respect to any Event of Default described in Sections 8.7 (Bankruptcy) or 8.8
(Dissolution) hereof, the entire unpaid principal amount of the Notes, all
interest accrued and unpaid thereon, and all such other amounts payable under
the Notes, this Agreement and the other Loan Documents, shall automatically
become immediately due and payable, without presentment, demand, protest, or any
notice of any kind (including, without limitation, notice of default, notice of
intent to accelerate and notice of acceleration), all of which are hereby
expressly waived by the Borrower:
8.1 FAILURE TO PAY OBLIGATIONS WHEN DUE. The Borrower fails to pay, repay
or prepay any principal on the date when due, or any other Obligation within
five Business Days after the date when due.
8.2 INTENTIONALLY OMITTED.
8.3 FAILURE TO PAY OTHER DEBT. (a) The Borrower or any Subsidiary of the
Borrower fails to pay principal or interest on any unsecured Debt aggregating
more than $10,000,000 or any secured Debt when due and any related grace period
has expired, or the holder of any of such other Debt declares such Debt due
prior to its stated maturity because of the Borrower's or any Subsidiary's
default thereunder and the expiration of any related grace period or (b)
Panhandle Eastern or any of its Subsidiaries fails to pay principal or interest
on any other Debt aggregating more than $50,000,000 when due and any related
grace period has expired, or the holder of any of such other Debt declares such
Debt due prior to its stated maturity because of Panhandle Eastern's or any such
Subsidiary's default thereunder and the expiration of any related grace period.
8.4 MISREPRESENTATION OR BREACH OF WARRANTY. Any representation or warranty
made by any Loan Party herein or otherwise furnished to the Bank in connection
with this Agreement or any other Loan Document shall be incorrect, false or
misleading in any material respect when made.
8.5 VIOLATION OF CERTAIN COVENANTS. Any Loan Party violates any covenant,
agreement or condition contained in Sections 5.6 (Existence), 5.7(c) (Notice of
Defaults), 6.1 (Financial Covenants), 6.2 (Liens), 6.3 (Debt), 6.5 (Merger), 6.6
(Sale of Assets), 6.7 (Restricted Payments), 7.1 (Liens), 7.2 (Debt), 7.3
(Merger, Consolidation), 7.4 (Sale of Assets) or 7.5 (Restricted Payments).
43
8.6 VIOLATION OF OTHER COVENANTS, ETC. Any Loan Party violates any other
covenant, agreement or condition contained herein (other than the covenants,
agreements and conditions set forth or described in Sections 8.1 (Failure to Pay
Obligations When Due), 8.3 (Cross Default), 8.4 (Representations), and 8.5
(Certain Covenants) above) or in any other Loan Document and such violation
shall not have been remedied within (30) days after the earlier of (i) actual
discovery by a Loan Party of such violation or (ii) written notice has been
received by the Borrower from the Bank or the holder of the Note.
8.7 BANKRUPTCY AND OTHER MATTERS. Any Loan Party or Southern Union (a)
makes an assignment for the benefit of creditors; or (b) admits in writing its
inability to pay its debts generally as they become due; or (c) generally fails
to pay its debts as they become due; or (d) files a petition or answer seeking
for itself, or consenting to or acquiescing in, any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
applicable Debtor Law (including, without limitation, the Federal Bankruptcy
Code); or (e) there is appointed a receiver, custodian, liquidator, fiscal
agent, or trustee of any Loan Party or Southern Union or of the whole or any
substantial part of their respective assets; or (f) any court enters an order,
judgment or decree approving a petition filed against any Loan Party or Southern
Union seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any Debtor Law and either such
order, decree or judgment so filed against it is not dismissed or stayed (unless
and until such stay is no longer in effect) within thirty (30) days of entry
thereof or an order for relief is entered pursuant to any such law.
8.8 DISSOLUTION. Any order is entered in any proceeding against any Loan
Party or Southern Union decreeing the dissolution, liquidation, winding-up or
split-up of any Loan Party or Southern Union, and such order remains in effect
for thirty (30) days.
8.9 UNDISCHARGED JUDGMENT. (a) A final judgment or judgments in the
aggregate, that might be or give rise to Liens on any property of the Borrower
or any of its Subsidiaries, for the payment of money in excess of $10,000,000
shall be rendered against the Borrower or any of its Subsidiaries and the same
shall remain undischarged for a period of sixty (60) days during which execution
shall not be effectively stayed or (b) a final judgment or judgments in the
aggregate, that might be or give rise to Liens on any property of Panhandle
Eastern or any of its Subsidiaries, for the payment of money in excess of
$50,000,000shall be rendered against Panhandle Eastern or any of its
Subsidiaries and the same shall remain undischarged for a period of sixty (60)
days during which execution shall not be effectively stayed.
8.10 LOAN DOCUMENTS. Any material provision in any Loan Document shall for
any reason cease to be valid and binding on any party thereto except upon
fulfillment of such party's obligations thereunder (or any such party shall so
state in writing), or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any party thereto (other than the
Agent and the Banks) or any Governmental Authority, or any such party shall deny
in writing that it has any liability or obligation thereunder, except upon
fulfillment of its obligations thereunder.
44
8.11 CHANGE OF CONTROL. ANY OF THE FOLLOWING EVENTS SHALL OCCUR:
(a) Panhandle Eastern shall cease to own or control, directly or
indirectly, 100% of the Equity Interests and voting power of the Borrower
and TLNG;
(b) Southern Union shall cease to own or control, directly or
indirectly, more than 50% of the Equity Interests and voting power of
Panhandle Eastern;
(c) (i) any entity, person or group shall acquire or control 25% or
more of the common stock of Southern Union, (ii) the election or
appointment, within a twelve-month period, of persons to Southern Union's
board of directors who were not directors of Southern Union at the
beginning of such twelve-month period, and whose election or appointment
was not approved by a majority of those persons who were directors at the
beginning of such period, where such newly elected or appointed directors
constitute 30% or more of the directors of the board of directors of
Southern Union.
8.12 OTHER REMEDIES. In addition to and cumulative of any rights or
remedies expressly provided for in this Section 8, if any one or more Events of
Default shall have occurred, the Agent shall at the request, and may with the
consent, of the Majority Banks proceed to protect and enforce the rights of the
Banks hereunder by any appropriate proceedings. The Agent shall at the request,
and may with the consent, of the Majority Banks also proceed either by the
specific performance of any covenant or agreement contained in this Agreement or
by enforcing the payment of the Notes or by enforcing any other legal or
equitable right provided under this Agreement or the Notes or otherwise existing
under any law in favor of the holder of the Notes.
8.13 REMEDIES CUMULATIVE. No remedy, right or power conferred upon the
Banks is intended to be exclusive of any other remedy, right or power given
hereunder or now or hereafter existing at law, in equity, or otherwise, and all
such remedies, rights and powers shall be cumulative.
9. THE AGENT
9.1 AUTHORIZATION AND ACTION. Each Bank hereby appoints HVB as its Agent
under and irrevocably authorizes the Agent (subject to this Section 9.1 and
Section 9.7 (Successor Agent)) to take such action as the Agent on its behalf
and to exercise such powers under this Agreement, the Loan Documents and the
Notes as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto. Without limitation of the
foregoing, each Bank expressly authorizes the Agent to execute, deliver, and
perform its obligations under this Agreement and the Loan Documents, and to
exercise all rights, powers, and remedies that the Agent may have hereunder and
thereunder. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes), the
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 the
Majority Banks, and such instructions shall be binding upon all the Banks and
all holders of any Note; provided, however, that the Agent shall not be required
to take any action which exposes the Agent to personal
45
liability or which is contrary to this Agreement or applicable law. The Agent
agrees to give to each Bank prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
9.2 AGENT'S RELIANCE, ETC. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to any Bank for any action taken
or omitted to be taken by it or them under or in connection with this Agreement,
the Notes and the other Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (a) may treat the original or any successor holder of any
Note as the holder thereof until the Agent receives notice from the Bank which
is the payee of such Note concerning the assignment of such Note; (b) may employ
and consult with legal counsel (including counsel for the Borrower), independent
public accountants, and other experts selected by it and shall not be liable to
any Bank for any action taken, or omitted to be taken, in good faith by it or
them in accordance with the advice of such counsel, accountants, or experts
received in such consultations and shall not be liable for any negligence or
misconduct of any such counsel, accountants, or other experts; (c) makes no
warranty or representation to any Bank and shall not be responsible to any Bank
for any opinions, certifications, statements, warranties, or representations
made in or in connection with this Agreement; (d) shall not have any duty to any
Bank to ascertain or to inquire as to the performance or observance of any of
the terms, covenants, or conditions of this Agreement or any other instrument or
document furnished pursuant thereto or to satisfy itself that all conditions to
and requirements for any Loan have been met or that the Borrower is entitled to
any Loan or to inspect the property (including the books and records) of the
Borrower or any Subsidiary; (e) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this Agreement or any other instrument or document furnished pursuant
thereto; and (f) shall incur no liability under or in respect of this Agreement
by acing upon any notice, consent, certificate, or other instrument or writing
believed by it to be genuine and signed or sent by the proper party or parties.
9.3 DEFAULTS. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the nonpayment of principal of or interest
hereunder or of any fees) unless the Agent has received notice from a Bank or
the Borrower specifying such Default and stating that such notice is a Notice of
Default. In the event that the Agent receives such a notice of the occurrence of
a Default, the Agent shall give prompt notice thereof to the Banks (and shall
give each Bank prompt notice of each such nonpayment). The Agent shall (subject
to Section 9.7 (Successor Agent)) take such action with respect to such Default;
provided that, unless and until the Agent shall have received the directions
referred to in Sections 9.1 (Authorization and Action) or 9.7 (Successor Agent),
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable and
in the best interest of the Banks.
9.4 HVB AND AFFILIATES. With respect to its Commitment, any Loan made by
it, and the Note issued to it, HVB shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though it were not
the Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include HVB in its individual capacity. HVB and its respective
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower,
any of its
46
respective Affiliates and any Person who may do business with or own securities
of the Borrower or any such Affiliate, all as if HVB were not the Agent and
without any duty to account therefor to the Banks.
9.5 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank agrees that it has,
independently and without reliance on the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and each Subsidiary and its decision to enter into the
transactions contemplated by this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement.
The Agent shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Agreement or to inspect the properties or
books of Panhandle Eastern, the Borrower or any Subsidiary. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Banks by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition, or business of Southern Union,
Panhandle Eastern, the Borrower or any Subsidiary (or any of their Affiliates)
which may come into the possession of the Agent or any of its Affiliates.
9.6 INDEMNIFICATION. Notwithstanding anything to the contrary herein
contained, the Agent shall be fully justified in failing or refusing to take any
action hereunder unless it shall first be indemnified to its satisfaction by the
Banks against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, and disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of its taking or continuing to take
any action. Each Bank agrees to indemnify the Agent (to the extent not
reimbursed by the Borrower), according to such Bank's Pro Rata Percentage, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, and disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or the Notes or
any action taken or omitted by the Agent under this Agreement or the Notes;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the gross negligence or willful
misconduct of the person being indemnified; and provided, further, that it is
the intention of each Bank to indemnify the Agent against the consequences of
the Agent's own negligence, whether such negligence be sole, joint, concurrent,
active or passive. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its Pro Rata Percentage of any
out-of-pocket expenses (including attorneys' fees) incurred by the Agent in
connection with the preparation, administration, or enforcement of, or legal
advice in respect of rights or responsibilities under, this Agreement and the
Notes, to the extent that the Agent is not reimbursed for such expenses by the
Borrower.
9.7 SUCCESSOR AGENT. The Agent may resign at any time as Agent under this
Agreement by giving written notice thereof to the Banks and the Borrower and may
be removed at any time with or without cause by the Majority Banks. Upon any
such resignation or removal, the Majority Banks shall have the right to appoint
a successor Agent. If no successor Agent shall
47
have been so appointed by the Majority Banks or shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000. 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 under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
9.8 AGENT'S RELIANCE. The Borrower shall notify the Agent in writing of the
names of its officers and employees authorized to request a Loan on behalf of
the Borrower and shall provide the Agent with a specimen signature of each such
officer or employee. The Agent shall be entitled to rely conclusively on such
officer's or employee's authority to request a Loan on behalf of the Borrower
until the Agent receives written notice from the Borrower to the contrary. The
Agent shall have no duty to verify the authenticity of the signature appearing
on any Notice of Borrowing, and, with respect to any oral request for a Loan,
the Agent shall have no duty to verify the identity of any Person representing
himself as one of the officers or employees authorized to make such request on
behalf of the Borrower. Neither the Agent nor any Bank shall incur any liability
to the Borrower in acting upon any telephonic notice referred to above which the
Agent or such Bank believes in good faith to have been given by a duly
authorized officer or other Person authorized to borrow on behalf of the
Borrower or for otherwise acting in good faith.
10. GUARANTY
10.1 GUARANTY. Each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees the punctual payment when due, whether at scheduled
maturity or by acceleration, demand or otherwise, of all Obligations of the
Borrower now or hereafter existing under or in respect of the Loan Documents
(including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing Obligations), whether
direct or indirect, absolute or contingent, and whether for principal, interest,
premiums, fees, indemnities, contract causes of action, costs, expenses or
otherwise (such Obligations being the "GUARANTEED OBLIGATIONS").
10.2 GUARANTY ABSOLUTE. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Bank with
respect thereto. The Obligations of each Guarantor under or in respect of this
Guaranty are independent of any Obligations of the Borrower under or in respect
of the Loan Documents, and a separate action or actions may be brought and
prosecuted against each Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of each Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional
48
irrespective of, and each Guarantor hereby irrevocably waives any defenses it
may now have or hereafter acquire in any way relating to, any or all of the
following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of the Borrower under or in respect of the Loan Documents, or
any other amendment or waiver of or any consent to departure from any Loan
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to any Loan
Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any collateral,
or any taking, release or amendment or waiver of, or consent to departure
from, any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of any collateral, or proceeds thereof,
to all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Guaranteed Obligations
or any other Obligations of any Loan Party under the Loan Documents or any
other assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Bank to disclose to any Loan Party any
information relating to the business, operations, financial condition,
assets or prospects of any other Loan Party now or hereafter known to such
Bank (each Guarantor waiving any duty on the part of the Banks to disclose
such information);
(g) the failure of any other Person to execute or deliver any other
guaranty or agreement or the release or reduction of liability of any other
guarantor or surety with respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
any Bank that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Bank or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though such payment had not been made.
49
10.3 WAIVERS AND ACKNOWLEDGMENTS.
(a) Each Guarantor hereby unconditionally and irrevocably waives
promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that any Bank protect,
secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against any Loan Party or any other
Person or any collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guaranty and acknowledges that this Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an
election of remedies by any Bank that in any manner impairs, reduces,
releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of each Guarantor or
other rights of such Guarantor to proceed against the Borrower, any other
guarantor or any other Person and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of such
Guarantor hereunder.
(d) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Bank to disclose to any Guarantor any matter, fact
or thing relating to the business, operations, financial condition, assets
or prospects of the Borrower or any of its Subsidiaries now or hereafter
known by such Bank.
(e) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated
by the Loan Documents and that the waivers set forth in Section 10.2
(Guaranty Absolute) and this Section 10.3 are knowingly made in
contemplation of such benefits.
10.4 SUBROGATION. Each Guarantor hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against the Borrower that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under or in respect of this Guaranty
or any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of any Bank against the Borrower or
any other insider guarantor, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash and the Commitments shall have
expired or been terminated. If any amount shall be paid to any Guarantor in
violation of the immediately preceding sentence at any time prior to the later
of (a) the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Guaranty and (b) the Maturity Date, such amount shall
be received and held in trust
50
for the benefit of the Banks, shall be segregated from other property and funds
of such Guarantor and shall forthwith be paid or delivered to the Agent in the
same form as so received (with any necessary endorsement or assignment) to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Loan Documents or other amounts payable under this Guaranty thereafter
arising. If (i) any Guarantor shall make payment to any Bank of all or any part
of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all
other amounts payable under this Guaranty shall have been paid in full in cash
and (iii) the Maturity Date shall have occurred, the Banks will, at such
Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.
10.5 SUBORDINATION. Each Guarantor hereby subordinates any and all debts,
liabilities and other Obligations owed to such Guarantor by the Borrower (the
"SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations to the extent and in
the manner hereinafter set forth in this Section 10.5:
(a) Except during the continuance of a Default (including the
commencement and continuation of any proceeding under any Debtor Law
relating to the Borrower), a Guarantor may receive regularly scheduled
payments from the Borrower on account of the Subordinated Obligations.
After the occurrence and during the continuance of any Default (including
the commencement and continuation of any proceeding under any Debtor Law
relating to the Borrower), however, unless the Agent otherwise agrees, no
Guarantor shall demand, accept or take any action to collect any payment on
account of the Subordinated Obligations.
(b) In any proceeding under any Debtor Law relating to the Borrower,
each Guarantor agrees that the Banks shall be entitled to receive payment
in full in cash of all Guaranteed Obligations (including all interest and
expenses accruing after the commencement of a proceeding under any Debtor
Law, whether or not constituting an allowed claim in such proceeding ("POST
PETITION INTEREST")) before any Guarantor receives payment of any
Subordinated Obligations.
(c) After the occurrence and during the continuance of any Default
(including the commencement and continuation of any proceeding under any
Debtor Law relating to the Borrower), each Guarantor shall, if the Agent so
requests, collect, enforce and receive payments on account of the
Subordinated Obligations as trustee for the Banks and deliver such payments
to the Agent on account of the Guaranteed Obligations (including all Post
Petition Interest), together with any necessary endorsements or other
instruments of transfer, but without reducing or affecting in any manner
the liability of such Guarantor under the other provisions of this
Guaranty.
(d) After the occurrence and during the continuance of any Default
(including the commencement and continuation of any proceeding under any
Debtor Law relating to the Borrower), the Agent is authorized and empowered
(but without any obligation to so
51
do), in its discretion, (i) in the name of a Guarantor, to collect and
enforce, and to submit claims in respect of, Subordinated Obligations and
to apply any amounts received thereon to the Guaranteed Obligations
(including any and all Post Petition Interest), and (ii) to require each
Guarantor (A) to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Agent for application to the Guaranteed Obligations
(including any and all Post Petition Interest).
10.6 CONTINUING GUARANTY. This Guaranty is a continuing guaranty and shall
remain in full force and effect until the later of (a) the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty and (b) the Maturity Date.
11. MISCELLANEOUS
11.1 AMENDMENTS, WAIVERS, ETC. No amendment or waiver of any provision of
any Loan Document, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Borrower and the Majority Banks, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by each Bank, do any of the following:
(a) waive any of the conditions specified in Section 4 (Conditions to
Funding);
(b) increase the Commitment of any Bank or alter the term thereof, or
subject any Bank to any additional or extended obligations;
(c) change the principal of, or rate of interest on, the Loans or any
Note, or any fees or other amounts payable hereunder;
(d) postpone any date fixed for any payment of principal of, or
interest on, the Loans or any Note, or any fees (including, without
limitation, any fee) or other amounts payable hereunder;
(e) change the definition of "Majority Banks" or the number of Banks
which shall be required for Banks, or any of them, to take any action
hereunder;
(f) amend this Section 11.1; or
(g) reduce or limit the obligations of any Guarantor under the Loan
Documents or release any Guarantor from its obligations under the Loan
Documents;
and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to each Bank, affect the rights or
duties of the Agent under any Loan Document. No failure or delay on the part of
any Bank or the Agent in exercising any power or right hereunder shall operate
as a waiver thereof nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power.
52
No course of dealing between the Borrower and any Bank or the Agent shall
operate as a waiver of any right of any Bank or the Agent. No modification or
waiver of any provision of this Agreement or the Note nor consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be in writing, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
11.2 REIMBURSEMENT OF EXPENSES.
(a) The Borrower agrees to pay on demand (and whether or not the
Funding Date occurs) (1) all reasonable and documented out-of-pocket costs
and expenses of the Agent, including reasonable and documented fees and
expenses of a single counsel for the Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any amendments, modifications or
waivers of the provisions hereof, and (2) all costs and expenses of the
Agent and each Bank in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights
generally (including, without limitation, the reasonable fees and expenses
of counsel for the Agent and each Bank with respect thereto). The Borrower
further agrees to pay any stamp or other taxes that may be payable in
connection with the execution or delivery of any Loan Document.
(b) If any payment of principal of, or Conversion of, any Eurodollar
Rate Loan is made by the Borrower to or for the account of a Bank other
than on the last day of the Interest Period for such Loan, as a result of a
payment or Conversion pursuant to Section 2.5 (Prepayments), 2.8
(Conversion of Loans) or 2.9(d) (Increased Costs, Etc.), acceleration of
the maturity of the Notes pursuant to Section 8 (Events of Default;
Remedies) or for any other reason, or by an Eligible Assignee to a Bank
other than on the last day of the Interest Period for such Loan upon an
assignment of rights and obligations under this Agreement pursuant to
Section 11.14 (Sale or Assignment) as a result of a demand by the Borrower
pursuant to Section 11.14(a), or if the Borrower fails to make any payment
or prepayment of a Loan for which a notice of prepayment has been given,
whether pursuant to Section 2.3 (Repayment of Loans), 2.5 (Prepayments) or
Section 8 (Events of Default; Remedies) or otherwise, the Borrower shall,
upon demand by such Bank (with a copy of such demand to the Agent), pay to
the Agent for the account of such Bank any amounts required to compensate
such Bank for any additional losses, costs or expenses reasonably incurred
by such Bank as a result of such payment or Conversion or such failure to
pay or prepay, as the case may be, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Bank to fund or maintain such Loan.
(c) The obligations of the Borrower under this Section 11.2 shall
survive the termination of this Agreement and/or the payment of the Notes.
53
11.3 NOTICES. Any communications between the parties hereto or notices
provided herein to be given shall be given to the following addresses:
(a) If to Panhandle Eastern, to: Panhandle Eastern Pipe Line Company, LP
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with copies to: Southern Union Company
Xxx XXX Xxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
and
Panhandle Eastern Pipe Line Company, LP
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Borrower, to: Trunkline LNG Holdings LLC
c/o Panhandle Eastern Pipe Line Company,
LP
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with copies to: Southern Union Company
Xxx XXX Xxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
and
54
Panhandle Eastern Pipe Line Company, LP
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
(c) If to TLNG, to: Trunkline LNG Holdings LLC
c/o Panhandle Eastern Pipe Line Company,
LP
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with copies to: Southern Union Company
Xxx XXX Xxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
and
Panhandle Eastern Pipe Line Company, LP
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Agent, to: Bayerische Hypo- und Vereinsbank AG,
New York Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Agency Services, Xxxxxxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
and if to any Bank, at the address specified below its name on the signature
pages hereof, or as to the Borrower or the Agent, to such other address as shall
be designated by such party in a written notice to the other party and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent. All notices or other
communications required or permitted to be given hereunder shall be in writing
and shall be
55
considered as properly given (a) if delivered in person, (b) if sent by
overnight delivery service (including Federal Express, UPS, ETA, Xxxxx, DHL,
AirBorne and other similar overnight delivery services), (c) if mailed by first
class United States Mail, postage prepaid, registered or certified with return
receipt requested or (d) if sent by facsimile or other electronic transmission.
Notice so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by direct written electronic means shall
be deemed to have been validly and effectively given on the day (if a Business
Day and, if not, on the next following Business Day) on which it is transmitted
if transmitted before 4:00 p.m. (New York time), recipient's time, and if
transmitted after that time, on the next following Business Day; provided,
however, that if any notice is tendered to an addressee and the delivery thereof
is refused by such addressee, such notice shall be effective upon such tender.
Any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by giving of 30 days' notice
to the other parties in the manner set forth above.
11.4 GOVERNING LAW. This Agreement, and any instrument or agreement
required hereunder (to the extent not otherwise expressly provided for therein),
shall be governed by, and construed under, the laws of the State of New York,
without reference to conflicts of laws (other than Section 5-1401 and Section
5-1402 of the New York General Obligations Law).
11.5 WAIVER OF JURY TRIAL. THE AGENT, THE BANKS AND EACH LOAN PARTY HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS, OF THE AGENT, THE BANKS OR THE LOAN PARTIES. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE BANKS TO ENTER INTO THIS AGREEMENT.
11.6 CONSENT TO JURISDICTION. The Agent, the Banks and each Loan Party
agree that any legal action or proceeding by or against any Loan Party or with
respect to or arising out of this Agreement or any other Loan Document may be
brought in or removed to the Supreme Court of the State of New York, in and for
the County of New York, or the United States District Court for the Southern
District of New York, and any court of appeals from either therefrom as the
Agent may elect. By execution and delivery of the Agreement, each of the Banks,
the Agent and each Loan Party accepts, for themselves and in respect of their
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Agent, the Banks and each Loan Party irrevocably consent to the
service of process out of any of the aforementioned courts in any manner
permitted by law. Nothing herein shall affect the right of the Agent and the
Banks to bring legal action or proceedings in any other competent jurisdiction.
The Agent, the Banks and each Loan Party further agree that the aforesaid courts
of the State of New York and of the United States of America shall have
exclusive jurisdiction with respect to any claim or counterclaim of any Loan
Party based upon the assertion that the rate of interest charged by the Banks on
or under this Agreement, the Loans and/or the other Loan Documents is usurious.
The Agent, the Banks and each Loan Party hereby waive any right to stay or
dismiss any action or proceeding under or in connection with this Agreement or
any other Loan Document brought before the foregoing courts on the basis of an
inconvenient forum.
56
11.7 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants contained herein or made in writing by
any Loan Party in connection herewith shall survive the execution and delivery
of the Loan Documents and the Notes, and will bind and inure to the benefit of
the respective successors and assigns of the parties hereto, whether so
expressed or not, provided that the undertaking of the Banks to make the Loans
to the Borrower shall not inure to the benefit of any successor or assign of the
Borrower. No investigation at any time made by or on behalf of the Banks shall
diminish the Banks' rights to rely on any representations made herein or in
connection herewith. All statements contained in any certificate or other
written instrument delivered by any Loan Party or by any Person authorized by
the Borrower under or pursuant to this Agreement or in connection with the
transactions contemplated hereby shall constitute representations and warranties
hereunder as of the time made by such Loan Party.
11.8 COUNTERPARTS. This Agreement may be executed in several counterparts,
and by the parties hereto on separate counterparts, and each counterpart, when
so executed and delivered, shall constitute an original instrument and all such
separate counterparts shall constitute but one and the same instrument.
11.9 SEVERABILITY. Should any clause, sentence, paragraph or section of
this Agreement be judicially declared to be invalid, unenforceable or void, such
decision shall not have the effect of invalidating or voiding the remainder of
this Agreement, and the parties hereto agree that the part or parts of this
Agreement so held to be invalid, unenforceable or void will be deemed to have
been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein. Each
covenant contained in this Agreement shall be construed (absent an express
contrary provision herein) as being independent of each other covenant contained
herein, and compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with one or more other
covenants.
11.10 DESCRIPTIVE HEADINGS. The section headings in this Agreement have
been inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.
11.11 ACCOUNTING TERMS. All accounting terms used herein which are not
expressly defined in the Agreement, or the respective meanings of which are not
otherwise qualified, shall have the respective meanings given to them in
accordance with GAAP.
11.12 LIMITATION OF LIABILITY. No claim may be made by any Person for any
special, indirect, consequential, or punitive damages in respect to any claim
for breach of contract arising out of or related to the transactions
contemplated by this Agreement, or any act, omission, or event occurring in
connection herewith and the parties hereto hereby waive, release, and agree not
to xxx upon any claim for any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
11.13 SET-OFF. Each Loan Party hereby gives and confirms to each Bank a
right of set-off of all moneys, securities and other property of such Loan Party
(whether special, general or limited) and the proceeds thereof, now or hereafter
delivered to remain with or in transit in any
57
manner to such Bank, its Affiliates, correspondents or agents from or for such
Loan Party, whether for safekeeping, custody, pledge, transmission, collection
or otherwise or coming into possession of such Bank, its Affiliates,
correspondents or agents in any way, and also, any balance of any deposit
accounts and credits of such Loan Party with, and any and all claims of security
for the payment of the Loans and of all other liabilities and obligations now or
hereafter owed by any Loan Party to such Bank, contracted with or acquired by
such Bank, whether such liabilities and obligations be joint, several, absolute,
contingent, secured, unsecured, matured or unmatured, and each Loan Party hereby
authorizes each Bank, its Affiliates, correspondents or agents at any time or
times, without prior notice, to apply such money, securities, other property,
proceeds, balances, credits of claims, or any part of the foregoing, to such
liabilities in such amounts as it may select, whether such liabilities be
contingent, unmatured or otherwise, and whether any collateral security therefor
is deemed adequate or not. The rights described herein shall be in addition to
any collateral security, if any, described in any separate agreement executed by
any Loan Party.
11.14 SALE OR ASSIGNMENT.
(a) Each Bank may assign and, so long as no Default shall have
occurred and be continuing pursuant to Section 8.1 (Failure to Pay
Obligations When Due) or 8.7 (Bankruptcy and Other Matters), if demanded by
the Borrower (pursuant to Section 2.15 (Replacement of Banks)) upon at
least five Business Days' notice to such Bank and the Agent, a Bank will
assign, to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of the Loans owing to it
and the Note or Notes held by it) ; provided, however, that
(i) each such assignment shall be of a uniform, and not a
varying, percentage of all rights and obligations under and in respect
of the Loan Agreement;
(ii) except in the case of an assignment of all of a Bank's
rights and obligations under this Agreement or any assignment to any
Bank, an Affiliate of any Bank or an Approved Fund, the aggregate
amount of the Loans being assigned to such assignee pursuant to such
assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than
$1,000,000;
(iii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Bank, an Affiliate of any
Bank or an Approved Fund, such assignment shall be approved by the
Agent, and so long as no Default shall have occurred and be continuing
pursuant to Section 8.1 (Failure to Pay Obligations When Due) or 8.7
(Bankruptcy and Other Matters) at the time of effectiveness of such
assignment, the Borrower (in each case such approvals not to be
unreasonably withheld or delayed); provided that no Borrower approval
shall be required for any assignment made by HVB to any Eligible
Assignee from the Closing Date through and including the two-month
anniversary of the Funding Date;
58
(iv) each such assignment made as a result of a demand by the
Borrower pursuant to this Section 11.14 shall be made in accordance
with Section 2.15 (Replacement of Banks);
(v) no Bank shall be obligated to make any such assignment as a
result of a demand by the Borrower pursuant to this Section 11.14
unless and until such Bank shall have received one or more payments
from either the Borrower or one or more assignees in an aggregate
amount at least equal to the aggregate outstanding principal amount of
the Loans owing to such Bank, together with accrued interest thereon
to the date of payment of such principal amount and all other amounts
payable to such Bank under this Agreement;
(vi) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or
Notes subject to such assignment and a processing and recordation fee
of $3,500 (provided, however, that for each such assignment made as a
result of a demand by the Borrower pursuant to this Section 11.14, the
Borrower shall pay to the Agent the applicable processing and
recordation fee); and
(vii) the assignee, if it shall not be a Bank, shall deliver to
the Agent an administrative questionnaire in the form prepared by the
Agent.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and
(ii) the Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights (other than its
rights under Sections 2.9 (Increased Costs), 2.11 (Taxes) and 11.2
(Reimbursement of Expenses)) to the extent any claim thereunder
relates to an event arising prior to such assignment) and be released
from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the remaining portion of an
assigning Bank's rights and obligations under this Agreement, such
Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Bank assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows:
(i) other than as provided in such Assignment and Acceptance,
such assigning Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made
59
in or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document
or any other instrument or document furnished pursuant thereto;
(ii) such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
any Loan Party or the performance or observance by any Loan Party of
any of its obligations under any Loan Document or any other instrument
or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements most
recently delivered hereunder and such other documents and information
as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon
any Agent, such assigning Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by
the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Bank.
(d) The Agent shall maintain at its address a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the principal
amount of the Loans owing to, each Bank from time to time (the "REGISTER").
The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Banks
may treat each Person whose name is recorded in the Register as a Bank
hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Agent or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit C hereto, (1)
accept such Assignment and
60
Acceptance, (2) record the information contained therein in the Register
and (3) give prompt notice thereof to the Borrower. In the case of any
assignment by a Bank, within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note to the order
of such Eligible Assignee in an amount equal to the Loans assumed by it
pursuant to such Assignment and Acceptance and, if any assigning Bank has
retained any Loans hereunder, a new Note to the order of such assigning
Bank in an amount equal to the Loans retained by it hereunder. Such new
Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes and shall be
dated the effective date of such Assignment and Acceptance. No assignment
shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this Section 11.14.
(f) Each Bank may sell participations to one or more Persons (other
than any Loan Party or any of its Affiliates) in or to all or a portion of
its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Loans owing to it and
the Note or Notes (if any) held by it); provided, however, that (1) such
Bank's obligations under this Agreement shall remain unchanged, (2) such
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (3) such Bank shall remain the holder of
any such Note for all purposes of this Agreement, (4) the Borrower, the
Agent and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement and (5) no participant under any such participation shall have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom,
except to the extent that such amendment, waiver or consent would reduce
the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or release any
Guarantor. Subject to the last two sentences of this clause (f), the
Borrower agrees that each participant shall be entitled to the benefits of
Section 2.9 (Increased Costs), 2.11 (Taxes) and 11.2(b) (Costs and
Expenses) to the same extent as if it were a Bank and had acquired its
interest by assignment. To the extent permitted by law, each participant
also shall be entitled to the benefits of Section 11.13 (Set-Off) as though
it were a Bank, provided such participant agrees to be subject to Section
2.12 (Sharing of Payments, Etc.) as though it were a Bank. A participant
shall not be entitled to receive any greater payment under Section 2.9
(Increased Costs) or 2.11 (Taxes) than the applicable Bank would have been
entitled to receive with respect to the participation sold to such
participant, unless the sale of the participation to such participant is
made with the Borrower's prior written consent. A participant that is
organized under the laws of a jurisdiction outside the United States shall
not be entitled to the benefits of Section 2.11 (Taxes) unless the Borrower
is notified of the participation sold to such participant and such
participant agrees, for the benefit of the Borrower, to comply with Section
2.11(e) as though it were a Bank.
(g) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 11.14,
disclose to the
61
assignee or participant or proposed assignee or participant any information
relating to the Borrower furnished to such Bank by or on behalf of the
Borrower; provided, however, that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information received by it
from such Bank.
(h) Notwithstanding any other provision to the contrary set forth in
this Agreement, any Bank may at any time create a security interest in all
or any portion of its rights under this Agreement and the other Loan
Documents (including, without limitation, the Loans owing to it and the
Note or Notes held by it) in favor of any Federal Reserve Bank.
(i) Notwithstanding anything to the contrary contained herein, any
Bank that is a fund that invests in bank loans may create a security
interest in all or any portion of the Loans owing to it and the Note or
Notes held by it to the trustee for holders of obligations owed, or
securities issued, by such fund as security for such obligations or
securities, provided, that unless and until such trustee actually becomes a
Bank in compliance with the other provisions of this Section 11.14, (1) no
such pledge shall release the pledging Bank from any of its obligations
under the Loan Documents and (2) such trustee shall not be entitled to
exercise any of the rights of a Bank under the Loan Documents even though
such trustee may have acquired ownership rights with respect to the pledged
interest through foreclosure or otherwise.
11.15 INTEREST. All agreements between a Loan Party, the Agent or any Bank,
whether now existing or hereafter arising and whether written or oral, are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of demand being made on any Note or otherwise, shall the amount paid,
or agreed to be paid, to the Agent or any Bank for the use, forbearance, or
detention of the money to be loaned under this Agreement or otherwise or for the
payment or performance of any covenant or obligation contained herein or in any
document related hereto exceed the amount permissible at the Highest Lawful
Rate. If, as a result of any circumstances whatsoever, fulfillment of any
provision hereof or of any of such documents, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by applicable usury law, then, ipso facto, the obligation to be
filled shall be reduced to the limit of such validity, and if, from any such
circumstance, the Agent or any Bank shall ever receive interest or anything
which might be deemed interest under applicable law which would exceed the
amount permissible at the Highest Lawful Rate, such amount which would be
excessive interest shall be applied to the reduction of the principal amount
owing on account of the Notes or the amounts owing on other obligations of the
Borrower to the Agent or any Bank under this Agreement or any document related
hereto and not to the payment of interest, or if such excessive interest exceeds
the unpaid principal balance of the Notes and the amounts owing on other
obligations of the Borrower to the Agent or any Bank under this Agreement or any
document related hereto, as the case may be, such excess shall be refunded to
the Borrower. All sums paid or agreed to be paid to the Agent or any Bank for
the use, forbearance, or detention of the indebtedness of the Borrower to the
Agent or any Bank shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full term of such
indebtedness until payment in full of the principal thereof (Including the
period of any renewal or extension thereof) so that the interest on account of
such indebtedness
62
shall not exceed the Highest Lawful Rate. The terms and provisions of this
Section 11.15 shall control and supersede every other provision of all
agreements between the Borrower and the Banks.
11.16 INDEMNIFICATION. THE BORROWER AGREES TO INDEMNIFY, DEFEND, AND SAVE
HARMLESS THE AGENT, EACH BANK AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, AND ATTORNEYS, AND EACH OF THEM (THE "INDEMNIFIED PARTIES"),
FROM AND AGAINST ALL CLAIMS, ACTIONS, SUITS, AND OTHER LEGAL PROCEEDINGS,
DAMAGES, COSTS, INTEREST, CHARGES, TAXES, COUNSEL FEES, AND OTHER EXPENSES AND
PENALTIES (INCLUDING WITHOUT LIMITATION ALL ATTORNEY FEES AND COSTS OR EXPENSES
OF SETTLEMENT) WHICH ANY OF THE INDEMNIFIED PARTIES MAY SUSTAIN OR INCUR BY
REASON OF OR ARISING OUT OF (a) THE MAKING OF ANY LOAN HEREUNDER, THE EXECUTION
AND DELIVERY OF THIS AGREEMENT AND THE NOTES AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THE EXERCISE OF ANY OF THE BANKS' RIGHTS
UNDER THIS AGREEMENT AND THE NOTES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,
DAMAGES, COSTS, AND EXPENSES INCURRED BY ANY OF THE INDEMNIFIED PARTIES IN
INVESTIGATING, PREPARING FOR, DEFENDING AGAINST, OR PROVIDING EVIDENCE,
PRODUCING DOCUMENTS, OR TAKING ANY OTHER ACTION IN RESPECT OF ANY COMMENCED OR
THREATENED LITIGATION UNDER ANY FEDERAL SECURITIES LAW OR ANY SIMILAR LAW OF ANY
JURISDICTION OR AT COMMON LAW OR (b) ANY AND ALL CLAIMS OR PROCEEDINGS (WHETHER
BROUGHT BY A PRIVATE PARTY, GOVERNMENTAL AUTHORITY OR OTHERWISE) FOR BODILY
INJURY, PROPERTY DAMAGE, ABATEMENT, REMEDIATION, ENVIRONMENTAL DAMAGE, OR
IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING FROM OR RELATING TO THE
RELEASE OF ANY HAZARDOUS MATERIALS LOCATED UPON, MIGRATING INTO, FROM, OR
THROUGH OR OTHERWISE RELATING TO ANY PROPERTY OWNED OR LEASED BY THE BORROWER OR
ANY SUBSIDIARY (WHETHER OR NOT THE RELEASE OF SUCH HAZARDOUS MATERIALS WAS
CAUSED BY THE BORROWER, ANY SUBSIDIARY, A TENANT, OR SUBTENANT OF THE BORROWER
OR ANY SUBSIDIARY, A PRIOR OWNER, A TENANT, OR SUBTENANT OF ANY PRIOR OWNER OR
ANY OTHER PARTY AND WHETHER OR NOT THE ALLEGED LIABILITY IS ATTRIBUTABLE TO THE
HANDLING, STORAGE, GENERATION, TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS
MATERIALS OR THE MERE PRESENCE OF ANY HAZARDOUS MATERIALS ON SUCH PROPERTY;
PROVIDED THAT THE BORROWER SHALL NOT BE LIABLE TO THE INDEMNIFIED PARTIES WHERE
THE RELEASE OF SUCH HAZARDOUS MATERIALS OCCURS AT ANY TIME AT WHICH THE BORROWER
OR ANY SUBSIDIARY CEASES TO OWN OR LEASE SUCH PROPERTY); AND PROVIDED FURTHER
THAT NO INDEMNIFIED PARTY SHALL BE ENTITLED TO THE BENEFITS OF THIS SECTION
11.16 TO THE EXTENT ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT CONTRIBUTED
TO ITS LOSS; AND PROVIDED FURTHER THAT IT IS THE INTENTION OF THE BORROWER TO
INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE CONSEQUENCES OF THEIR OWN
NEGLIGENCE. THIS AGREEMENT IS INTENDED TO PROTECT AND INDEMNIFY THE INDEMNIFIED
PARTIES AGAINST ALL RISKS HEREBY ASSUMED
63
BY THE BORROWER. THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 10.16 SHALL
SURVIVE ANY TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE NOTES.
11.17 PAYMENTS SET ASIDE. To the extent that the Borrower makes a payment
or payments to the Agent or any Bank or the Agent or any Bank exercises its
right of set off, and such payment or payments or the proceeds of such set off
or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other Person under any Debtor Law or equitable cause, then, to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied, and all rights and remedies therefor, shall be revived and shall
continue in full force and effect as if such payment had not been made or set
off had not occurred.
11.18 LOAN AGREEMENT CONTROLS. If there are any conflicts or
inconsistencies among this Agreement and any other document executed in
connection with the transactions connected herewith, the provisions of this
Agreement shall prevail and control.
11.19 OBLIGATIONS SEVERAL. The obligations of each Bank under this
Agreement and the Note to which it is a party are several, and no Bank shall be
responsible for any obligation or Commitment of any other Bank under this
Agreement and the Note to which it is a party. Nothing contained in this
Agreement or the Note to which it is a party, and no action taken by any Bank
pursuant thereto, shall be deemed to constitute the Banks to be a partnership,
an association, a joint venture, or any other kind of entity.
11.20 FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT'S OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
64
IN WITNESS WHEREOF, the parties hereto, by their respective officers
thereunto duly authorized, have executed this Agreement on the dates set forth
below to be effective as of April 26, 2005.
TRUNKLINE LNG HOLDINGS LLC
As Borrower
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: Vice President and Treasurer
---------------------------------
PANHANDLE EASTERN PIPE LINE COMPANY, LP
As a Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: Vice President and Treasurer
---------------------------------
TRUNKLINE LNG COMPANY, LLC
As a Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: Vice President and Treasurer
---------------------------------
Commitment: $255,626,300 BAYERISCHE HYPO UND- VEREINSBANK AG,
NEW YORK BRANCH
For itself and as Agent for the Banks
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------
Title: Director
---------------------------------
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
----------------------------------
Title: Director
---------------------------------
ADDRESS FOR NOTICES IN ITS CAPACITY AS
A BANK:
00
Xxxxxxxxxx Xxxx- xxx Xxxxxxxxxxx XX,
Xxx Xxxx Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx and Xxxxxxx Xxxxxx
Tel: 000-000-0000 and 000-000-0000
Fax: 000-000-0000
66
