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EXHIBIT 10.16
CREDIT AGREEMENT
CREDIT AGREEMENT (this "Agreement") dated as of May 1, 1999 between
Enron Corp., an Oregon corporation ("Lender"), and Azurix Corp., a Delaware
corporation ("Borrower"). The parties hereby agree as follows:
1. Advances. Subject to the terms and conditions of this Agreement,
Lender will make advances ("Advances"), including Advances for the payment of
interest under this Agreement, from its available funds to Borrower from time to
time during the period from the date of this Agreement up to but not including
the Termination Date, as defined in Section 11, in an aggregate principal amount
up to but not exceeding the sum of One Hundred Eighty Million Dollars
(U.S.$180,000,000) at any one time outstanding. The aggregate principal amount
outstanding is further limited by the provisions in Section 2. Within the limits
of this Agreement, Borrower may borrow, prepay pursuant to Section 5, and
reborrow under this Section 1. The parties hereto agree that any Advances by the
Lender will be made in reliance on the agreements of the Lender and the Borrower
contained herein and on the terms and conditions and in the manner provided
herein.
2. Limits on the Principal Amount Outstanding. The principal amount
outstanding under this Agreement will be further limited to no more than:
a) U.S.$ 60,000,000 at any time during the calendar year 1999.
b) U.S.$120,000,000 at any time during the calendar year 2000.
c) U.S.$180,000,000 at any time during the calendar year 2001.
In addition, no additional amounts shall be advanced after, and all principal
and interest outstanding under the Note, all interest thereon and all other
amounts payable under this Agreement shall be due and payable 90 days after, the
first date on which both of the following occur:
i) Lender and affiliates of Lender do not individually or
collectively, directly or indirectly, own or have the power to
vote at least one-third of the capital stock of Borrower having
ordinary voting power for the election of directors, and
ii) Fewer than one-third of the directors of Borrower are persons who
are employees, officers or directors of Lender or of any
affiliate of Lender.
3. Interest. Interest shall accrue on a daily basis on the
outstanding and unpaid principal amount of the Advances at a rate per annum
equal to the Fed Funds Rate (as defined below) plus 1.50%. For the purposes of
this Agreement, the "Fed Funds Rate" shall be defined as the rate published in
Federal Reserve Statistical Release H.15 as the Federal funds (effective) rate
for that day. In the event that the Fed Funds Rate is not available for a
particular day, employees of Lender's Treasury group shall use the last
published Fed Funds Rate as the Fed Funds Rate for that day.
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Interest shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Interest shall be paid at the offices of
Lender at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, or each other addresses that
the Lender may specify by notice to the Borrower, in funds immediately available
to Lender on the first Business Day of each quarter.
4. Priority of Indebtedness/Note. The indebtedness of Borrower owing
to Lender resulting from Advances made under the provisions of this Credit
Agreement and the Note shall not be subordinate or subordinated to any other
borrowings made by Borrower. All Advances made by Lender under this Agreement
shall be evidenced by, and repaid with interest in accordance with, a single
promissory note of Borrower in substantially the form annexed hereto as Exhibit
A (the "Note"), with appropriate insertions therein. The Note shall be used to
evidence each borrowing, repayment and reborrowing hereunder. The Note shall (i)
be dated the date of the first Advance evidenced thereby and (ii) be stated to
mature as to principal on the Termination Date. Lender is hereby authorized by
Borrower to endorse on the schedule attached to the Note the amount of each
Advance and of each payment of principal received by Lender on account of the
Advances, which endorsement shall, in the absence of manifest error, be
conclusive as to the outstanding balance of the Advances made by Lender,
provided, however, that the failure to make such notation with respect to any
Advance or payment shall not limit or otherwise affect the obligations of
Borrower under this Agreement or the Note.
5. Prepayments. Borrower may prepay the Note in whole or in part on
any Business Day.
6. Use of Proceeds. The proceeds of the Advances hereunder shall be
used by Borrower to pay for general, administrative and operating expenses.
7. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) The Borrower shall breach any of the material provisions of
any written Agreement with Lender, including but not limited to this
Credit Agreement; or
(b) The Borrower shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Borrower seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), shall
remain undismissed or unstayed for a period of 60 days; or the Borrower
shall take any corporate action to authorize any of the actions set
forth above in this subsection (b); or
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(c) Any event or events having a material adverse effect on (i)
the ability of the Borrower to meet its obligations under this
Agreement or (ii) the business, operations, assets or financial
condition of the Borrower.
then, and in any such event, Lender may by notice to the Borrower, declare the
Note, all interest thereon and all other amounts payable under this Agreement to
be forthwith due and payable, whereupon the Note, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest, notice of intent to accelerate or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that in the event of an actual or deemed entry of an order for relief with
respect to Borrower under the Bankruptcy Code, the Note, all such interest and
all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
8. Notices, Etc. All notices and other communications provided for
under this Agreement shall be in writing (including telegraphic communication)
and telecopied, telegraphed, or delivered, if to Lender, at its address at 0000
Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Senior Vice President, Finance
and Treasurer, telecopy number (000) 000-0000 and if to Borrower, at its address
at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Vice Chairman and Chief
Financial Officer, telecopy number (000) 000-0000; or, as to each party, at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 8.
9. No Waiver; Remedies. No failure on the part of Lender to
exercise, and no delay in exercising, any right, power, or remedy under this
Agreement or the Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement or the Note preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided in this Agreement or the Note are cumulative and not exclusive
of any remedies provided by law.
10. Governing Law. This instrument shall be construed under the laws
of the State of Texas, and the obligation of Borrower to make payments of
interest as provided for herein is expressly limited so that the aggregate
amount of all the interest paid by Borrower on the Note shall never exceed the
highest contract rate allowed by the laws of the State of Texas as construed by
the highest court or courts having jurisdiction thereof (the "Highest Lawful
Rate"); and if, at the time any such payment of interest is due or is paid, the
payment of such sum would make the total interest exceed interest calculated at
the Highest Lawful Rate, the amount so payable by Borrower shall be reduced to
an amount which does not exceed the Highest Lawful Rate; and, similarly, if the
maturity of the Note is accelerated for any reason before the due date stated,
earned interest may never include more than interest calculated at the Highest
Lawful Rate, it being the intention of the parties to conform strictly to the
laws of the State of Texas now in force, and in the event it should be held that
the interest payable under the Note or otherwise is in excess of interest
calculated at the Highest Lawful Rate, the interest payable hereunder (whether
included in the face amount or otherwise) shall be reduced to the Highest Lawful
Rate, and any amount in excess of interest
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calculated at the Highest Lawful Rate shall be cancelled automatically and shall
be either refunded (if theretofore paid) or credited to the principal amount due
on the Note.
11. Termination Date. The "Termination Date" means December 15, 2001.
This Agreement may be terminated early upon mutual consent of the Lender and
Borrower; provided, however, that the provisions of this Agreement shall survive
as to any Advances maturing after the effective termination date. Upon
cancellation of the last such Advance, this Agreement shall be of no further
force and effect.
12. Captions. The captions of the various sections of this Agreement
have been inserted only for the purposes of convenience, and shall not be deemed
in any manner to modify, explain, enlarge or restrict any provisions of this
Agreement.
13. Business Day. As used herein, Business Day means any day other
than a Saturday, a Sunday or a state or federal bank holiday in Houston, Texas
or New York, New York.
14. Entire Agreement. THIS AGREEMENT AND THE NOTE TOGETHER CONSTITUTE
A WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
AZURIX CORP.
By:
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Name:
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Title:
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ENRON CORP.
By:
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Xxxxxxx XxXxxxx
Senior Vice President, Finance and
Treasurer
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EXHIBIT A
PROMISSORY NOTE
Houston, Texas
$180,000,000 May 1, 1999
FOR VALUE RECEIVED, the undersigned, Azurix Corp., a Delaware
corporation ("Borrower"), DOES HEREBY PROMISE to pay to the order of Enron Corp.
("Lender") at its office at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, in lawful
money of the United States and in funds immediately available to Lender, the
principal amount of One Hundred Eighty Million and No/100 Dollars
(U.S.$180,000,000) or the aggregate unpaid principal amount of all Advances (the
"Advances") made to Borrower by Lender pursuant to Section 1 of the Agreement
hereinafter referred to, whichever is less, on or before December 15, 2001.
Borrower further promises to pay interest in like money, at said office, from
the date hereof on the unpaid principal amount hereof until such principal
amount shall become due and payable, at the rates per annum and on the dates
provided in Sections 2 and 3 of the Agreement, on or before December 15, 2001.
Each Advance made by the Lender to the Borrower pursuant to the
Agreement, and all payments made on account of principal thereof, shall be
recorded by the Lender and endorsed on the Schedule attached hereto which is
part of this Promissory Note or in such other records as the Lender may
designate.
This Promissory Note is the Note described in and issued pursuant to
the Agreement dated as of May 1, 1999, between Borrower and Lender (the
"Agreement"), and is entitled to the benefits thereof. The Agreement, among
other things, (i) provides for the making of Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed the U.S. dollar
amount first above mentioned, the indebtedness of the Borrower resulting from
each such Advance being evidenced by this Promissory Note, and (ii) contains
provisions for prepayments on account of the principal of this Promissory Note
upon the terms and conditions specified in the Agreement. The indebtedness of
Borrower owing to Lender resulting from Advances made under the provisions of
the Agreement and this Note shall be senior to and not subordinate to any other
borrowings made by Borrower. Terms used herein which are defined in the
Agreement shall have their defined meanings when used herein.
This Note shall be governed by and construed in accordance with the
laws of the State of Texas. If this Note shall be collected by any legal
proceedings or shall be placed in the hands of an attorney for collection after
maturity, the undersigned promises to pay to the owner and holder hereof all
reasonable attorney's fees and costs of collection.
THIS AGREEMENT AND THE CREDIT AGREEMENT TOGETHER CONSTITUTE A WRITTEN LOAN
AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF
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PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
AZURIX CORP.
By:
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Name:
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Title:
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SCHEDULE TO PROMISSORY NOTE
This Grid is attached to and made part of the Promissory Note dated May
1, 1999 executed by Azurix Corp. to Enron Corp., and records advances, payments
and other information required therein.
UNPAID NAME OF
AMOUNT OF PRINCIPAL PERSON
AMOUNT OF PRINCIPAL BALANCE OF MAKING
DATE ADVANCE REPAID NOTE NOTATION
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