EXHIBIT 10.1
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(LONG-TERM CREDIT FACILITY)
DATED AS OF MAY 31, 2000
BY AND AMONG
SOUTHERN UNION COMPANY
AS THE BORROWER
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AND
THE BANKS NAMED HEREIN
AS THE BANKS
------------
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
AS THE ADMINISTRATIVE AGENT
---------------------------
AND
BANK ONE, NA
AS THE SYNDICATION AGENT
------------------------
AND
FIRST UNION NATIONAL BANK
AS THE DOCUMENTATION AGENT
--------------------------
AND
CHASE SECURITIES INC.
AS THE SOLE BOOK MANAGER AND LEAD ARRANGER
------------------------------------------
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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(LONG-TERM CREDIT FACILITY)
Reference is hereby made to that certain Revolving Credit Agreement
(Long-Term Credit Facility) dated as of November 10, 1998, executed by and
between SOUTHERN UNION COMPANY, a corporation organized under the laws of
Delaware (the "Borrower"), the financial institutions listed on the signature
pages of said Revolving Credit Agreement (each of said financial institutions
now or hereafter a party to said Revolving Credit Agreement being hereinafter
referred to collectively as "Banks" and individually as a "Bank"), and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association ("Chase"),
in its capacity as agent (the "Agent") for the Banks.
The Borrower, the Banks and the Agent have previously amended said
Revolving Credit Agreement pursuant to the terms of a First Amendment to
Revolving Credit Agreement (Long-Term Facility) dated as of February 25, 1999
(the "First Amendment") and a Second Amendment to Revolving Credit Agreement
(Long-Term Facility) dated as of July 14, 1999 (the "Second Amendment"). Said
Revolving Credit Agreement, as previously amended by the First Amendment and
the Second Amendment, is referred to herein as the "Original Agreement."
As a result of certain discussions between the Borrower, the Agent
and the Banks, the parties to the Original Agreement now desire to amend and
restate the Original Agreement in its entirety. Accordingly, the Original
Agreement is hereby amended and restated in its entirety to hereafter be and
read as follows:
SOUTHERN UNION COMPANY, a corporation organized under the laws of
Delaware (hereinafter called the "Borrower"), the financial institutions
listed on the signature pages hereof (collectively, the "Banks" and
individually, a "Bank"), CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national
banking association ("Chase") in its capacity as administrative agent (the
"Agent") for the Banks hereunder, BANK ONE, NA, a national banking
association, in its capacity as syndication agent (the "Syndication Agent")
for the Banks hereunder, and FIRST UNION NATIONAL BANK, a national banking
association, in its capacity as documentation agent (the "Documentation
Agent") for the Banks hereunder, hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"ADDITIONAL COSTS" shall mean, with respect to any Rate Period in the
case of any Eurodollar Rate Loan, all costs, losses or payments, as determined
by any Bank in its sole and absolute discretion (which determination shall be
conclusive in the absence of manifest error) that such Bank or its Domestic
Lending Office or its Eurodollar Lending Office does, or would, if such
Eurodollar Rate Loan were funded during such Rate Period by the Domestic
Lending Office or the Eurodollar Lending Office of such Bank, incur, suffer or
make by reason of:
(a) any and all present or future taxes (including, without
limitation, any interest equalization tax or any similar tax on the
acquisition of debt obligations, or any stamp or registration tax or duty or
official or sealed papers tax), levies, imposts or any other charge of any
nature whatsoever imposed by any taxing authority on or with regard to any
aspect of the
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transactions contemplated by this Agreement, except such taxes as may be
measured by the overall net income of such Bank or its Domestic Lending Office
or its Eurodollar Lending Office and imposed by the jurisdiction, or any
political subdivision or taxing authority thereof, in which such Bank's
Domestic Lending Office or its Eurodollar Lending Office is located; and
(b) any increase in the cost to such Bank of agreeing to make or
making, funding or maintaining any Eurodollar Rate Loan because of or arising
from (i) the introduction of, or any change (other than any change by way of
imposition or increase of reserve requirements, in the case of any Eurodollar
Rate Loan, included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation or administration of, any law or regulation or (ii) the
compliance with any request from any central bank or other governmental
authority (whether or not having the force of law).
"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 Revolving Credit Agreement, as the same
may be amended, modified, supplemented or restated from time to time.
"ALTERNATE BASE RATE" shall mean, for any day, a rate, per annum
(rounds upward to the nearest 1/16 of 1%) equal to: (a) the greatest of (i)
the Prime Rate (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be) in effect on such day; or
(ii) the Federal Funds Rate in effect for such day PLUS one-half of one
percent (1/2%) (computed on the basis of the actual number of days elapsed
over a year of 360 days).
"ALTERNATE BASE RATE LOAN" shall mean any Loan which bears interest
at the Alternate Base Rate.
"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.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning set forth in
Section 13.13.
"AVAILABLE SENIOR FUNDED DEBT CAPACITY" for any period shall mean, as
of the first day of that period, the principal amount of additional Senior
Funded Debt that the Borrower would be permitted to issue under the then
existing indentures, note purchase agreements and credit agreements (other
than the Agreement and other revolving credit agreements).
"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.
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"BORROWING DATE" shall mean a date upon which the Borrower has
requested a Loan is to be made in a Notice of Borrowing delivered pursuant to
Section 2.1.
"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 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 the Borrower and its
Subsidiaries, any of their obligations that should, in accordance with GAAP,
be recorded as Capital Leases.
"CASH INTEREST EXPENSE" shall mean, for any period, total interest
expense to the extent paid in cash (including the interest component of
Capitalized Lease Obligations and capitalized interest and all dividends and
interest paid on or with respect to Borrower's Structured Securities) of the
Borrower and any Subsidiary for such period all as determined in conformity
with GAAP.
"CLOSING DATE" shall mean May 31, 2000.
"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" shall have the meaning set forth in Section 2.1(a) and
"Commitments" shall mean, collectively, the Commitments of all of the Banks.
"CONSOLIDATED NET INCOME" shall mean for any period the consolidated
net income of the Borrower and all Subsidiaries, determined in accordance with
GAAP, for such period.
"CONSOLIDATED NET WORTH" shall mean, for any period for the Borrower
and all Subsidiaries, (a) the consolidated stockholders' equity of the
Borrower and its Subsidiaries, and preferred securities of the Borrower's
Subsidiaries, all determined in accordance with GAAP, LESS (b) the sum of the
following consolidated items, without duplication: the book amount of any
deferred charges (including, but not limited to, unamortized debt discount and
expenses, organization expenses, experimental and development expenses, but
excluding prepaid expenses) that are not permitted to be recovered by the
Borrower under rates permitted under rate tariffs, PLUS (c) the sum of all
amounts contributed or paid by the Borrower to the Rabbi Trusts for purposes
of funding the same, but only to the extent such contributions and payments
are required to be deducted from the consolidated stockholders' equity of the
Borrower and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean at any time the
sum of: (a) Consolidated Net Worth at such time; PLUS (b) the principal amount
of outstanding Debt of the Borrower and its Subsidiaries.
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"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean all Debt of the Borrower
and all Subsidiaries including any current maturities thereof, PLUS, without
duplication, all amounts outstanding under Standby Letters of Credit and,
without duplication, all Facility Letter of Credit Obligations.
"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 and which is due within thirty (30) days after the
original invoice date; (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; (d) obligations under direct or indirect
Guaranties other than Guaranties issued by the Borrower covering obligations
of the Southern Union Trusts under the Structured Securities. Whenever the
definition of Debt is being used herein in order to compute a financial ratio
or covenant applicable to the consolidated business of the Borrower and its
Subsidiaries, Debt which is already included in such computation by virtue of
the fact that it is owed by a Subsidiary of the Borrower will not also be
added by virtue of the fact that the Borrower 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 the
Borrower or its Subsidiaries.
"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 11,
whether or not 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.
"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.
"EBDIT" shall mean for any period the sum of (a) consolidated net
earnings for the Borrower and its Subsidiaries (excluding for all purposes
hereof all extraordinary items), PLUS (b) each of the following to the extent
actually deducted in deriving such net earnings: (i) depreciation and
amortization expense; (ii) interest expense; (iii) federal and state income
taxes; and (iv) dividends charged against income on or with respect to
Structured Securities, in each case before adjustment for extraordinary items,
as shown in the financial statements of Borrower
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and its Subsidiaries referred to in Section 7.2 hereof (excluding for all
purposes hereof all extraordinary items), and determined in accordance with
GAAP, and (c) PLUS (or MINUS, if applicable) the net amount of non-cash
deductions from (or additions to, if applicable) such net earnings for such
period attributable to fluctuations in the market price(s) of securities which
the Borrower is obligated to purchase in future periods under any of the Rabbi
Trusts, but only to the extent that such deductions (or additions, if
applicable) are required to be taken in accordance with GAAP.
"ELIGIBLE ASSIGNEE" shall mean: (i) any Bank, or any Affiliate of any
Bank, 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
$1,000,000,000.00.
"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 ▇.▇.▇▇ 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 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.
"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" shall mean with respect to the applicable Rate
Period in effect for each Eurodollar Rate Loan, the sum of (a) the quotient
obtained by dividing (i) the annual rate of interest determined by the Agent,
at or before 11:00 a.m. Houston time (or as soon thereafter as
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practicable), on the second Business Day prior to the first day of such Rate
Period, to be the annual rate of interest at which deposits of Dollars are
offered to the Agent by prime banks in whatever Eurodollar interbank market
may be selected by the Agent in its sole discretion, acting in good faith, at
the time of determination and in accordance with then existing practice in
such market for delivery on the first day of such Rate Period in immediately
available funds and having a maturity equal to such Rate Period in an amount
substantially equal to the amount of such Eurodollar Rate Loan by (ii) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Rate Period, PLUS (b) an additional percentage per annum changing with the
rating of the Borrower's unsecured, non-credit enhanced Senior Funded Debt and
determined in accordance with the following grid:
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ADDITIONAL
RATING OF THE BORROWER'S UNSECURED, NON-CREDIT PERCENTAGE
ENHANCED SENIOR FUNDED DEBT PER ANNUM
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Equal to or greater than A3 by ▇▇▇▇▇'▇ Investor Service, Inc.
AND equal to or greater than A- by Standard and Poor's Ratings
Group 0.500%
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Baa1 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB+ by Standard and
Poor's Ratings Group 0.600%
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Baa2 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB by Standard and
Poor's Ratings Group 0.650%
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Baa3 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB- by Standard and
Poor's Ratings Group 0.700%
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Equal to or less than Ba1 by ▇▇▇▇▇'▇ Investor Service, Inc. AND
equal to or less than BB+ by Standard and Poor's Ratings Group 1.200%
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"EURODOLLAR RATE LOAN" shall mean any Loan that bears interest at the
Eurodollar Rate.
"EURODOLLAR RATE RESERVE PERCENTAGE" of the Agent for any Rate Period
for any Eurodollar Rate Loan shall mean the reserve percentage applicable
during such Rate Period (or if more than one such percentages shall be so
applicable, the daily average of such percentages for those days in such Rate
Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental, or
other marginal reserve requirement) for member banks of the Federal Reserve
System with deposits exceeding $1,000,000,000 with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Rate Period.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
11, 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.
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"EXPIRATION DATE" shall mean the last day of a Rate Period.
"FACILITY LETTER(S) OF CREDIT" shall mean, in the singular form, any
Standby Letter of Credit issued by an Issuing Bank for the account of the
Borrower pursuant to Section 3 and, in the plural form, all such Standby
Letters of Credit issued for the account of the Borrower.
"FACILITY LETTER OF CREDIT FEE PERCENTAGE" shall mean a fee expressed
as a percent per annum for all periods equal to a percentage per annum
changing with the rating of the Borrower's unsecured, non-credit enhanced
Senior Funded Debt and determined in accordance with the following grid:
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ADDITIONAL
RATING OF THE BORROWER'S UNSECURED, NON-CREDIT PERCENTAGE
ENHANCED SENIOR FUNDED DEBT PER ANNUM
-----------------------------------------------------------------------------------------
Equal to or greater than A3 by ▇▇▇▇▇'▇ Investor Service, Inc. AND
equal to or greater than A- by Standard and Poor's Ratings Group 0.500%
-----------------------------------------------------------------------------------------
Baa1 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB+ by Standard and
Poor's Rating 0.600%
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Baa2 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB by Standard and Poor's
Rating Group 0.650%
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Baa3 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB- by Standard and
Poor's Rating Group 0.700%
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Equal to or less than Ba1 by ▇▇▇▇▇'▇ Investor Service, Inc. AND
equal to or less than BB+ by Standard and Poor's Rating Group 1.200%
-----------------------------------------------------------------------------------------
"FACILITY LETTER OF CREDIT OBLIGATIONS" shall mean, at any particular
time, the sum of (a) the Reimbursement Obligations, PLUS (b) the aggregate
undrawn face amount of all outstanding Facility Letters of Credit, in each
case as determined by the Agent.
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates (rounded to the nearest 1/100 of 1%) on overnight federal
fund transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from ▇▇▇▇▇▇ Prebon and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ or two other
federal funds brokers of recognized standing selected by the Agent.
"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
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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.
"GAAP" shall mean generally accepted accounting principles,
applicable to the circumstances as of the date of determination, applied
consistently with such principles as applied in the preparation of the
Borrowers audited financial statements referred to in Section 7.2.
"GENERAL INTANGIBLES" shall mean all of the Borrower's contract
rights now existing or hereafter acquired, arising or created under contracts
or arrangements for the purchase, sale, storage or transportation of gas or
other Inventory.
"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.
"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 the Borrower's or any Subsidiary's properties is
prohibited by any Governmental Authority.
"HIGHEST LAWFUL RATE" shall mean, with respect to each Bank, the
maximum nonusurious 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
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effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section
13.16.
"INTEREST PAYMENT DATE" shall mean (a) as to any Eurodollar Rate Loan
in which the Rate Period with respect thereto is not greater than three (3)
months, the date on which such Rate Period ends; (b) as to any Eurodollar Rate
Loan in which the Rate Period with respect thereto is greater than three (3)
months, the date on which the third month of such Rate Period ends, and the
date on which each such Rate Period ends; (c) as to any Alternate Base Rate
Loan in which the Rate Period with respect thereto is not greater than ninety
(90) days, the date on which such Rate Period ends; (d) as to any Alternate
Base Rate Loan in which the Rate Period with respect thereto is greater than
ninety (90) days, the ninetieth (90th) day of such Rate Period, and the date
on which each such Rate Period ends; and (e) as to all Loans, such time as the
principal of and interest on the Notes shall have been paid in full.
"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; PROVIDED, HOWEVER, that for purposes
of determining Investments of Borrower hereunder, the existing Guaranty by
Borrower of certain tax increment financing extended by The Fidelity Deposit
and Discount Bank to The Redevelopment Authority of the County of Lackawanna
shall be deemed to not be an Investment; (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.
"ISSUING BANK" shall mean (a) Banks and/or Affiliates of Banks listed
on the signature pages of this Agreement attached hereto and made a part
hereof, or (b) any Bank or any Affiliate not listed on the signature pages of
this Agreement in the event that such Bank or such Affiliate agrees, in its
sole discretion at the request of the Borrower, and on the terms and
conditions mutually acceptable to such Bank or such Affiliate, as the case may
be, to become an Issuing Bank for the purpose of issuing one or more Facility
Letters of Credit pursuant to Section 3. When a Bank is referred to as an
Issuing Bank under this Agreement, such reference to such Bank shall be
interpreted to refer to such Bank solely in its capacity as an Issuing Bank.
"L/C SUBFACILITY" shall mean that portion of the Commitments equal to
$25,000,000.00.
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"LETTER(S) OF CREDIT" shall mean, in the singular form, any letter of
credit issued by any Person for the account of the Borrower and, in the plural
form, all such letters of credit issued by any Person for the account of the
Borrower.
"LETTER OF CREDIT COMMITMENT" shall mean, with respect to each
Issuing Bank, such Issuing Bank's commitment to issue Facility Letters of
Credit.
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" shall mean, with respect
to a Facility Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several documents,
taken together) as the Issuing Bank from which the Facility Letter of Credit
is requested may employ in the ordinary course of business for its own
account, whether or not providing for collateral security, with such
modifications thereto as may be agreed upon by such Issuing Bank and the
account party and as are not materially adverse to the interests of any Bank;
PROVIDED, HOWEVER, in the event of any conflict between the terms of any
Letter of Credit Reimbursement Agreement and this Agreement, the terms of this
Agreement shall control; and PROVIDED, FURTHER, that any grant or purported
grant of a security interest in favor of the Issuing Bank contained in any
Letter of Credit Reimbursement Agreement shall be void.
"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.
"LOAN" or "LOANS" shall mean a loan or loans, respectively, from the
Banks to the Borrower made under Section 2.1.
"LOAN DOCUMENT" shall mean this Agreement, any Note, or any other
document, agreement or instrument now or hereafter executed and delivered by
the Borrower or any other Person 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.
"MAJORITY BANK" 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 EFFECT" shall mean any material adverse effect on
(a) the financial condition, business, properties, assets, prospects or
operations of the Borrower and its Subsidiaries taken as a whole, or (b) the
ability of the Borrower to perform its obligations under this Agreement, any
Note or any other Loan Document on a timely basis.
"MATURITY DATE" shall mean May 31, 2003, as modified pursuant to the
provisions of Section 2.4 hereof.
"NON-FACILITY LETTER OF CREDIT" shall mean any Letter of Credit which
is not a Facility Letter of Credit.
11
"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
2.1(c).
"OBLIGATIONS" shall mean (a) all obligations of the Borrower to the
Bank under this Agreement, the Notes and all other Loan Documents to which it
is a party; (b) all Reimbursement Obligations; and (c) any other obligations
of the Borrower with respect to a Facility Letter of Credit.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name
of the Borrower or a Subsidiary, as the case may be, by either its President,
one of its Vice Presidents, its Treasurer, its Secretary, or one of its
Assistant Treasurers or Assistant Secretaries.
"PENDING ACQUISITIONS" shall mean collectively the following
described mergers by the Borrower with such specified entities, so long as (i)
after the finalization and consummation of such mergers the Borrower is the
surviving entity and (ii) such mergers are finalized and consummated on or
before November 30, 2000 in substantial compliance with the following
specified terms:
(a) The contemplated merger of the Borrower and Fall River Gas
Company announced October 5, 1999, whereby the Borrower acquires Fall
River Gas Company for consideration of approximately $75,000,000.00,
including assumption of certain existing Debt of Fall River Gas
Company;
(b) The contemplated merger of the Borrower and Providence
Energy Corporation announced November 15, 1999, whereby the Borrower
acquires Providence Energy Corporation for consideration of
approximately $400,000,000.00, including assumption of certain existing
Debt of Providence Energy Corporation, with each shareholder of
Providence Energy Corporation receiving cash of $42.50 per each
outstanding share of Providence Energy Corporation; and
(c) The contemplated merger of the Borrower and Valley
Resources, Inc. announced December 1, 1999, whereby the Borrower
acquires Valley Resources, Inc. for consideration of approximately
$160,000,000.00, including assumption of certain existing Debt of
Valley Resources, Inc., with each shareholder of Valley Resources, Inc.
receiving cash of $25.00 per each outstanding share of Valley
Resources, Inc.
"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.
"PLAN" shall mean any plan subject to Title IV of ERISA and
maintained for employees of the Borrower or of any member of a "controlled
group of corporations," as such term is defined in the Code, of which the
Borrower or any Subsidiary is a member, or any such plan to which the Borrower
or any Subsidiary is required to contribute on behalf of its employees.
12
"PRIME RATE" shall mean, on any day, the rate determined by the Agent
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.
"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 Commitment and the denominator of which shall be the aggregate
amount of all the Commitments of the Banks, as adjusted from time to time in
accordance with Section 4.6.
"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.
"QUALIFYING ASSETS" shall mean (i) equity interests owned one hundred
percent (100%) by the Borrower in entities engaged primarily in one or more of
the Borrower's lines of business described in Section 7.15 (singly, a
"Qualified Entity," collectively, "Qualified Entities"), or productive assets
used in one or more of such lines of business; PROVIDED, HOWEVER, that as to
any related group of such Assets acquired for a purchase price of more than
Sixty Million Dollars ($60,000,000.00) (including the amount of any Debt
assumed or deemed incurred in connection with such acquisition), the Majority
Banks shall have delivered to the Borrower their prior written consent; and
(ii) equity interests of less than one hundred percent (100%) owned by the
Borrower in one or more Qualifying Entities, provided that at any one time the
amount of the Borrower's investment in Qualifying Assets described in clause
(ii) (measured by the aggregate purchase price paid therefor, including the
aggregate amount of Debt assumed or deemed incurred by Borrower in connection
with such acquisitions) does not exceed ten percent (10%) of the Consolidated
Net Worth of the Borrower and its Subsidiaries as of the applicable
determination date.
"RABBI TRUSTS" shall mean those four (4) certain non-qualified
deferred compensation irrevocable trusts existing as of the Closing Date,
previously established by the Borrower for the benefit of its executive
employees, so long as the assets in each of such trusts which have not yet
been distributed to one or more executive employees of the Borrower remain
subject to the claims of the Borrower's general creditors.
"RATE PERIOD" shall mean the period of time for which the Alternate
Base Rate or the Eurodollar Rate shall be in effect as to any Alternate Base
Rate Loan or Eurodollar Rate Loan, as the case may be, commencing with the
Borrowing Date or the Expiration Date of the immediately preceding Rate
Period, as the case may be, applicable to and ending on the effective date of
any reborrowing made as provided in Section 2.2(a) as the Borrower may specify
in the related Notice of Borrowing, subject, however, to the early termination
provisions of the second sentence of Section 2.3(b) relating to any Eurodollar
Rate Loan; PROVIDED, HOWEVER, that any Rate Period that would otherwise end on
a day which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in
which case such Rate Period shall end on the next preceding Business Day. For
any Alternate Base Rate Loan, the Rate Period shall be 90 days; and for any
Eurodollar Rate Loan the Rate
13
Period may be 15 days, 1, 2, 3, or 6 months, in each case as specified in the
applicable Notice of Borrowing, subject to the provisions of Sections 2.2 and
2.3.
"REIMBURSEMENT OBLIGATIONS" shall mean the reimbursement or repayment
obligations of the Borrower to Issuing Banks pursuant to this Agreement or the
applicable Letter of Credit Reimbursement Agreement with respect to Facility
Letters of Credit issued for the account of the Borrower.
"RELEASE" shall mean a "release", as such term is defined in CERCLA.
"RESTRICTED PAYMENT" shall mean the Borrower's declaration or payment
of any dividend on, or purchase or agreement to purchase any of, or making of
any other distribution with respect to, any of its capital stock, except any
such dividend, purchase or distribution consisting solely of capital stock of
the Borrower, and except any dividend or interest paid on or with respect to
the Borrower's Structured Securities to the extent that such amounts are
included in Cash Interest Expense.
"SECURITIES ACT" shall have the meaning set forth in Section 13.1.
"SENIOR FUNDED DEBT" shall mean Funded Debt of the Borrower excluding
Debt that is contractually subordinated in right of payment to any other Debt.
"SENIOR NOTES" means (a) the $475,000,000 of 7.6% Senior Notes of the
Borrower previously placed with investors on or about January 31, 1994, and
(b) the $300,000,000 of 8.25% Senior Notes of the Borrower previously placed
with investors on or about November 3, 1999, as such Senior Notes may be
amended, modified, or supplemented from time to time in accordance with the
terms of this Agreement; and "SENIOR NOTE" means each such note individually.
"SHORT-TERM CREDIT FACILITY" means that certain $90,000,000.00 credit
facility provided to the Borrower by the Banks, as evidenced and governed by
the Short-Term Credit Facility Agreement.
"SHORT-TERM CREDIT FACILITY AGREEMENT" means that certain Amended and
Restated Revolving Credit Agreement (Short-Term Credit Facility) of even
effective date herewith, executed by and among the Borrower, the Banks, and
the Agent in connection with the Short-Term Credit Facility, as the same may
be amended, modified, supplemented, or restated from time to time.
"SHORT-TERM CREDIT FACILITY NOTES" means the promissory notes of the
Borrower executed and delivered under the Short-Term Credit Facility Agreement.
"SIGNIFICANT PROPERTY" shall mean at any time property or assets of
the Borrower or any Subsidiary having a book value (net of accumulated
depreciation taken in accordance with GAAP) of at least $5,000,000.00 or that
contributed (or is an integrated physical portion of an assemblage of assets
that contributed) at least 5% of the gross income of the owner thereof for the
fiscal quarter most recently ended.
"SOUTHERN UNION TRUST" means any of those certain Delaware business
trusts organized for the sole purpose of purchasing Subordinated Debt
Securities constituting a portion of, and
14
described in the definition of, Structured Securities and issuing the
Preferred Securities and Common Securities also constituting a portion of, and
described in the definition of, Structured Securities, and having no assets
other than the Borrower's Subordinated Debt Securities, the Guaranties (as
described in the definition of Structured Securities) and the proceeds
thereof. Southern Union Trusts shall be considered to be Subsidiaries for
purposes hereof so long as their affairs are consolidated under GAAP and for
federal income tax purposes with the affairs of the Borrower.
"STANDBY LETTER OF CREDIT" shall mean any standby letter of credit
issued to support obligations (contingent or otherwise) of the Borrower.
"STRUCTURED SECURITIES" shall mean collectively (a) the Subordinated
Debt Securities, the Guaranties, the Common Securities and the Preferred
Securities of the Southern Union Trusts, all as described and defined in the
Registration Statement on Form S-3 filed by the Borrower with the Securities
and Exchange Commission on March 25, 1995, and (b) subordinated debt
securities, guaranties, common securities and/or preferred securities
hereafter issued in connection with the consummation of the Pending
Acquisitions in an aggregate face amount of not more than $150,000,000 upon
terms and conditions substantially similar in all material respects to the
terms and conditions described and defined in such Registration Statement on
Form S-3 filed by the Borrower with the Securities and Exchange Commission on
March 25, 1995. For all purposes of this Agreement, the amounts payable by
Southern Union Trusts under the Preferred Securities and Common Securities (or
similar securities provided for under subclause (b) above) and the amounts
payable by the Borrower under the Subordinated Debt Securities or the
Guaranties (or similar securities provided for under subclause (b) above)
shall be treated without duplication, it being recognized that the amounts
payable by Southern Union Trusts are funded with payments made or to be made
by the Borrower to Southern Union Trusts and are also guaranteed by the
Borrower under the Guaranties described in the S-3 mentioned above (or similar
guaranties provided for under subclause (b) above).
"SUBSIDIARY" or "SUBSIDIARIES" shall mean any corporation or
corporations organized under the laws of any state of the United States of
America, Canada, or any province of Canada, which conduct(s) the major portion
of business in the United States of America or Canada and of which not less
than 50% of the voting stock of every class (except for directors' qualifying
shares), at the time as of which any determination is being made, is owned by
the Borrower either directly or indirectly through other Subsidiaries.
"TYPE" shall mean, with respect to any Loan, any Alternate Base Rate
Loan or any Eurodollar Rate Loan.
"UNUSED L/C SUBFACILITY" shall mean, at any time, the amount, if any,
by which the L/C Subfacility then in effect exceeds the aggregate outstanding
amount of all Facility Letter of Credit Obligations.
2. THE LOANS
2.1 THE LOANS
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(a) Subject to the terms and conditions and relying upon the
representations and warranties of the Borrower herein set forth, each
Bank severally agrees to make Loans to the Borrower on any one or
more Business Days prior to the Maturity Date, up to an aggregate
principal amount of Loans not exceeding at any time outstanding: (i)
the amount set opposite such Banks name on the signature pages hereof
(such Bank's "Commitment"); MINUS (ii) such Bank's Pro Rata
Percentage of the Facility Letter of Credit Obligations. Within such
limits and during such period and subject to the terms and conditions
of this Agreement, the Borrower may borrow, repay and reborrow
hereunder.
(b) The Borrower shall execute and deliver to the Agent for
each Bank to evidence the Loans made by each Bank under such Bank's
Commitment, a Note, which shall be: (i) dated the date of the Closing
Date; (ii) in the principal amount of such Bank's maximum Commitment;
(iii) in substantially the form attached hereto as EXHIBIT A, with
blanks appropriately filled; (iv) payable to the order of such Bank
on the Maturity Date; and (v) subject to acceleration upon the
occurrence of an Event of Default. Each Note shall bear interest on
the unpaid principal amount thereof from time to time outstanding at
the rate per annum determined as specified in Sections 2.2(a),
2.2(b), 2.3(b) and 2.3(c), payable on each Interest Payment Date and
at maturity, commencing with the first Interest Payment Date
following the date of each Note.
(c) Each Loan shall be: (i) in the case of any Eurodollar
Rate Loan, in an amount of not less than $1,000,000.00 or an integral
multiple of $1,000,000.00 in excess thereof; or (ii) in the case of
any Alternate Base Rate Loan, in an amount of not less than
$500,000.00 or an integral multiple of $100,000.00 in excess thereof
and, at the option of the Borrower, any borrowing under this Section
2.1(c) may be comprised of two or more such Loans bearing different
rates of interest. Each such borrowing shall be made upon prior
notice from the Borrower to the Agent in the form attached hereto as
EXHIBIT B (the "Notice of Borrowing") delivered to the Agent not
later than 11:00 am (Houston time): (i) on the third Business Day
prior to the Borrowing Date, if such borrowing consists of Eurodollar
Rate Loans; and (ii) on the Borrowing Date, if such borrowing
consists of Alternate Base Rate Loans. Each Notice of Borrowing shall
be irrevocable and shall specify: (i) the amount of the proposed
borrowing and of each Loan comprising a part thereof; (ii) the
Borrowing Date; (iii) the rate of interest that each such Loan shall
bear; (iv) the Rate Period with respect to each such Loan and the
Expiration Date of each such Rate Period; and (v) the demand deposit
account of the Borrower at Chase Bank of Texas, National Association
into which the proceeds of the borrowing are to be deposited by the
Agent. The Borrower may give the Agent telephonic notice by the
required time of any proposed borrowing under this Section 2.1(c);
PROVIDED THAT such telephonic notice shall be confirmed in writing by
delivery to the Agent promptly (but in no event later than the
Borrowing Date relating to any such borrowing) of a Notice of
Borrowing. 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 believes in good faith to have been given by
the Borrower, or for otherwise acting in good faith under this
Section 2.1(c).
(d) In the case of a proposed borrowing comprised of
Eurodollar Rate Loans, the Agent shall promptly notify each Bank of
the applicable interest rate under
16
Section 2.2. Each Bank shall, before 11:00 am (Houston time) on the
Borrowing Date, make available for the account of its Applicable
Lending Office to the Agent at the Agent's address set forth in
Section 13.4, in same day funds, its Pro Rata Percentage of such
borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Section 8, on
the Borrowing Date, the Agent shall make the borrowing available to
the Borrower at its Applicable Lending Office in immediately
available funds. Each Bank shall post on a schedule attached to its
Note(s): (i) the date and principal amount of each Loan made under
such Note; (ii) the rate of interest each such Loan will bear; and
(iii) each payment of principal thereon; PROVIDED, HOWEVER, that any
failure of such Bank so to ▇▇▇▇ such Note shall not affect the
Borrower's obligations thereunder; and PROVIDED FURTHER that such
Bank's records as to such matters shall be controlling whether or not
such Bank has so marked such Note. Any deposit to the Borrower's
demand deposit account by the Agent or by Chase Bank of Texas,
National Association (of funds received from the Agent) pursuant to a
request (whether written or oral) believed by the Agent or by Chase
Bank of Texas, National Association to be an authorized request by
the Borrower for a Loan hereunder shall be deemed to be a Loan
hereunder for all purposes with the same effect as if the Borrower
had in fact requested the Agent to make such Loan.
(e) Unless the Agent shall have received notice from a Bank
prior to the date of any borrowing that such Bank will not make
available to the Agent such Bank's Pro Rata Percentage 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 this Section 2.1 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 Pro Rata Percentage available to the Agent, such
Bank and the Borrower severally agree to repay to the Agent forthwith
on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, (i) in
the case of the Borrower, at the interest rate applicable at the time
to the Loans comprising such borrowing, and (ii) in the case of such
Bank, at the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan as part of such borrowing for purposes of
this Agreement.
(f) The failure of any Bank to make the Loan to be made by it
as part of any 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 any borrowing.
2.2 INTEREST RATE DETERMINATION
(a) Except as specified in Sections 2.3(b) and 2.3(c), the
Loans shall bear interest on the unpaid principal amount thereof from
time to time outstanding, until maturity, at a rate per annum
(calculated based on a year of 360 days in the case of the Eurodollar
Rate or the Alternate Base Rate based on the Federal Funds Rate and a
year of 365 or 366 days, as the case may be, in the case of the
Alternate Base Rate based on the Prime Rate) equal to the lesser of (A)
the rate specified in the Notice of Borrowing with
17
respect thereto or (B) the Highest Lawful Rate from the first day to,
but not including, the Expiration Date of the Rate Period then in
effect with respect thereto.
(b) Any principal, interest, fees or other amount owing
hereunder, under any Note or under any other Loan Document that is not
paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest at a rate per annum equal to the lesser
of (i) two percent (2%) above the Alternate Base Rate in effect from
time to time or (ii) the Highest Lawful Rate.
2.3 ADDITIONAL INTEREST RATE PROVISIONS
(a) The Note may be held by each Bank for the account of its
respective Domestic Lending Office or its respective Eurodollar
Lending Office, and may be transferred from one to the other from time
to time as each Bank may determine.
(b) If the Borrower shall have chosen the Eurodollar Rate in
a Notice of Borrowing and prior to the Borrowing Date, any Bank in
good faith determines (which determination shall be conclusive) that
(i) deposits in Dollars in the principal amount of such Eurodollar
Rate Loan are not being offered to the Eurodollar Lending Office of
such Bank in the Eurodollar interbank market selected by such Bank in
its sole discretion in good faith or (ii) adequate and reasonable
means do not exist for ascertaining the chosen Eurodollar Rate in
respect of such Eurodollar Rate Loan or (iii) the Eurodollar Rate for
any Rate Period for such Eurodollar Rate Loan will not adequately
reflect the cost to such Bank of making such Eurodollar Rate Loan for
such Rate Period, then such Bank will so notify the Borrower and the
Agent and such Eurodollar Rate shall not become effective as to such
Eurodollar Rate Loan on such Borrowing Date or at any time thereafter
until such time thereafter as the Borrower receives notice from the
Agent that the circumstances giving rise to such determination no
longer apply.
(c) Anything in this Agreement to the contrary
notwithstanding, if at any time any Bank in good faith determines
(which determination shall be conclusive) that the introduction of or
any change in any applicable law, rule or regulation or any change in
the interpretation or administration thereof by any governmental or
other regulatory authority charged with the interpretation or
administration thereof shall make it unlawful for the Bank (or the
Eurodollar Lending Office of such Bank) to maintain or fund any
Eurodollar Rate Loan, such Bank shall give notice thereof to the
Borrower and the Agent. With respect to any Eurodollar Rate Loan which
is outstanding when such Bank so notifies the Borrower, upon such date
as shall be specified in such notice the Rate Period shall end and the
lesser of (i) the Alternate Base Rate or (ii) the Highest Lawful Rate
shall commence to apply in lieu of the Eurodollar Rate in respect of
such Eurodollar Rate Loan and shall continue to apply unless and until
the Borrower changes the rate as provided in Section 2.2(a). No more
than five (5) Business Days after such specified date, the Borrower
shall pay to such Bank (x) accrued and unpaid interest on such
Eurodollar Rate Loan at the Eurodollar Rate in effect at the time of
such notice to but not including such specified date PLUS (y) such
amount or amounts (to the extent that such amount or amounts would not
be usurious under applicable law) as may be necessary to
compensate such Bank for any direct or indirect costs and losses
incurred by it (to the extent that such amounts have not been included
in the Additional Costs in calculating such Eurodollar Rate), but
otherwise without penalty. If notice has been given by such
18
Bank pursuant to the foregoing provisions of this Section 2.3(c),
then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such notice no longer apply, such
Eurodollar Rate shall not again apply to such Loan or any other Loan
and the obligation of such Bank to continue any Eurodollar Rate Loan
as a Eurodollar Rate Loan shall be suspended. Any such claim by such
Bank for compensation under clause (y) above shall be accompanied by
a certificate setting forth the computation upon which such claim is
based, and such certificate shall be conclusive and binding for all
purposes, absent manifest error.
(d) THE BORROWER WILL INDEMNIFY EACH BANK AGAINST, AND
REIMBURSE EACH BANK ON DEMAND FOR, ANY LOSS (INCLUDING LOSS OF
REASONABLY ANTICIPATED PROFITS DETERMINED USING REASONABLE ATTRIBUTION
AND ALLOCATION METHODS), OR REASONABLE COST OR EXPENSE INCURRED OR
SUSTAINED BY SUCH BANK (INCLUDING WITHOUT LIMITATION, ANY LOSS OR
EXPENSE INCURRED BY REASON OF THE LIQUIDATION OR REEMPLOYMENT OF
DEPOSITS OR OTHER FUNDS ACQUIRED BY SUCH BANK TO FUND OR MAINTAIN ANY
EURODOLLAR RATE LOAN) AS A RESULT OF (I) ANY ADDITIONAL COSTS INCURRED
BY SUCH BANK; (II) ANY PAYMENT OR REPAYMENT (WHETHER AUTHORIZED OR
REQUIRED HEREUNDER OR OTHERWISE) OF ALL OR A PORTION OF ANY LOAN ON A
DAY OTHER THAN THE EXPIRATION DATE OF A RATE PERIOD FOR SUCH LOAN;
(III) ANY PAYMENT OR PREPAYMENT (WHETHER REQUIRED HEREUNDER OR
OTHERWISE) OF ANY LOAN MADE AFTER THE DELIVERY OF A NOTICE OF
BORROWING BUT BEFORE THE APPLICABLE BORROWING DATE IF SUCH PAYMENT OR
PREPAYMENT PREVENTS THE PROPOSED BORROWING FROM BECOMING FULLY
EFFECTIVE; OR (IV) AFTER RECEIPT BY THE AGENT OF A NOTICE OF
BORROWING, THE FAILURE OF ANY LOAN TO BE MADE OR EFFECTED BY SUCH
BANK DUE TO ANY CONDITION PRECEDENT TO A BORROWING NOT BEING
SATISFIED BY THE BORROWER OR DUE TO ANY OTHER ACTION OR INACTION OF
THE BORROWER. ANY BANK DEMANDING PAYMENT UNDER THIS SECTION 2.3(D)
SHALL DELIVER TO THE BORROWER AND THE AGENT A STATEMENT REASONABLY
SETTING FORTH THE AMOUNT AND MANNER OF DETERMINING SUCH LOSS, COST OR
EXPENSE. THE FACTS SET FORTH IN SUCH STATEMENT SHALL BE CONCLUSIVE
AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST ERROR.
(e) If, after the date of this Agreement, any Bank shall have
determined that the adoption of any applicable law, rule, guideline,
interpretation or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder and under similar lending
arrangements to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into
19
consideration such Bank's policies with respect to capital adequacy)
by an amount deemed by such Bank to be material then the Borrower
shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction.
(f) A certificate of such Bank setting forth such amount or
amounts as shall be necessary to compensate such Bank as specified in
subparagraph (e) above shall be delivered as soon as practicable to
the Borrower (with a copy thereof to the agent) and to the extent
determined in accordance with subparagraph (e) above shall be
conclusive and binding, absent manifest error. The Borrower shall pay
such Bank the amount shown as due on any such certificate within
fifteen (15) days after such Bank delivers such certificate. In
preparing such certificate, such Bank may employ such assumptions and
allocations (consistently applied with respect to advances made by
such Bank or commitments by such Bank to make advances) of costs and
expenses as it shall in good ▇▇▇▇▇ ▇▇▇▇ reasonable and may use any
reasonable averaging and attribution method (consistently applied
with respect to advances made by such Bank or commitments by such
Bank to make advances).
(g) In calculating the Eurodollar Rate, the Facility Letter
of Credit Fee Percentage and the commitment fee payable under SECTION
5.1 hereof, and notwithstanding the provisions set forth in the
definitions of Eurodollar Rate and Facility Letter of Credit Fee
Percentage or in the pricing grid established for the commitment fee
in SECTION 5.1 hereof, in the event that ratings of the Borrower's
unsecured, non-credit enhanced Senior Funded Debt under Standard &
Poor's Ratings Group and under ▇▇▇▇▇'▇ Investor Service, Inc. fall
within different rating categories which are not functional
equivalents, the Eurodollar Rate, the Facility Letter of Credit Fee
Percentage and the commitment fee payable under SECTION 5.1 hereof
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 in such definitions or in SECTION 5.1 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.
2.4 EXTENSION OF MATURITY DATE. On a Business Day no less than
sixty (60) and no more than ninety (90) days prior to May 31, 2001, and during
such period in each year thereafter during which this Agreement is in effect,
the Borrower may elect to notify the Agent, in writing, of its request for an
extension of the maturity date of each Banks Commitment (on the terms and
conditions set forth herein) for a period of up to one (1) year from the date
of the then current Maturity Date. Promptly after receipt of such request, the
Agent shall notify the Banks of such request. Each Bank shall notify the Agent
in writing of its consent to, or rejection of, such request on or prior to
April 30 of each such year. In the event that any Bank fails to so notify the
Agent, that request shall be deemed to have been rejected by such Bank. The
Commitments shall be extended hereunder only upon the consent of each Bank,
whereupon the Maturity Date of each Note shall be deemed to be extended to the
agreed date of extension, but in no event later than the date which is one (1)
year after the date of the Maturity Date in effect prior to such extension. In
the event of the renewal and extension of the Commitments and the maturity
date of the Notes pursuant to this Section 2.4, the terms and conditions of
this Agreement will apply during such renewal and extension period and, from
and after the date of such extension, the term "Maturity Date" shall mean such
date as so renewed and extended.
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2.5 INCREASE OF COMMITMENTS
(a) At any time after the Closing Date, provided that no
Default or Event of Default shall have occurred and be continuing,
the Borrower may request from time to time one or more increases of
the Commitments by notice to the Agent in writing of the amount of
each such proposed increase (each such notice, a "COMMITMENT INCREASE
NOTICE"). Any such Commitment Increase Notice must offer each Bank
the opportunity to subscribe for its pro rata share of the requested
increase in the Commitments, and the Agent shall promptly provide to
each Bank a copy of any Commitment Increase Notice received by the
Agent. Within 10 Business Days after receipt by the Agent of the
applicable Commitment Increase Notice, each Bank wishing to subscribe
for its pro rata share of the requested increase in the Commitments
must deliver written notice of such fact to the Agent. If any portion
of the requested increase in the Commitments is not subscribed for by
the Banks within such 10-day period, the Borrower may, in its sole
discretion, but with the consent of the Agent as to any Person that
is not at such time a Bank (which consent shall not be unreasonably
withheld or delayed so long as such Person is an Eligible Assignee),
offer to any existing Bank or to one or more additional banks or
financial institutions the opportunity to participate in all or a
portion of such unsubscribed portion of the requested increase in the
Commitments pursuant to Section 2.5 (b) or (c) below, as applicable;
(b) Any additional bank or financial institution that the
Borrower selects to offer a participation in the unsubscribed portion
of the increased Commitments, and that elects to become a party to
this Agreement and obtain a Commitment, shall execute an agreement (a
"NEW BANK AGREEMENT"), in the form required by the Agent, with the
Borrower and the Agent, whereupon such bank or financial institution
(a "NEW BANK") shall become a Bank for all purposes hereunder to the
same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Agreement, and the signature pages
hereof shall be deemed to add the name and Commitment of such New
Bank, provided that the Commitment of any such New Bank shall be in
an amount not less than $5,000,000;
(c) Any Bank that accepts an offer by the Borrower to
increase its Commitment pursuant to this Section 2.5 shall, in each
case, execute a commitment increase agreement (a "COMMITMENT INCREASE
AGREEMENT"), in the form required by the Agent, with the Borrower and
the Agent, whereupon such Bank shall be bound by and entitled to the
benefits of this Agreement with respect to the full amount of its
Commitment as so increased, and the signature pages hereof shall be
deemed to be amended to reflect such increase in the Commitment of
such Bank;
(d) The effectiveness of any New Bank Agreement or Commitment
Increase Agreement shall be contingent upon receipt by the Agent of
such corporate resolutions of the Borrower and legal opinions of
in-house counsel to the Borrower, if any, as the Agent shall
reasonably request with respect thereto;
(e) If any bank or financial institution becomes a New Bank
pursuant to Section 2.5(b) or if any Bank's Commitment is increased
pursuant to Section 2.5(c), additional Loans and additional liability
for Facility Letters of Credit made or issued on or after the
effectiveness thereof (the "RE-ALLOCATION DATE") shall
be made pro rata based
21
on each Bank's (including each New Bank's) respective Commitment in
effect on and after such Re-Allocation Date (except to the extent
that any such pro rata borrowings or incurring of liability would
result in any Bank making an aggregate principal amount of Loans and
incurring liability for the Facility Letters of Credit in excess of
its Commitment, in which case such excess amount will be allocated
to, and made or incurred by, such New Bank and/or Banks with such
increased Commitments to the extent of, and pro rata based on, their
respective Commitments), and continuations of Eurodollar Rate Loans
outstanding on such Re-Allocation Date shall be effected by repayment
of such Eurodollar Rate Loans on the last day of the Rate Period
applicable thereto and the extension of new Eurodollar Rate Loans pro
rata based on the Banks' respective Commitments in effect on and
after such Re-Allocation Date. In the event that on any such
Re-Allocation Date there are Alternate Base Rate Loans outstanding,
the Borrower shall make prepayments thereof and borrow new Alternate
Base Rate Loans so that, after giving effect thereto, the Alternate
Base Rate Loans outstanding are held pro rata based on the Banks'
respective Commitments in effect on and after such Re-Allocation
Date. In the event that on any such Re-Allocation Date there are
Eurodollar Rate Loans outstanding, such Eurodollar Rate Loans shall
remain outstanding with the respective holders thereof until the
expiration of their respective Rate Periods (unless the Borrower
elects to prepay any thereof in accordance with the applicable
provisions of this Agreement), and interest on and repayments of such
Eurodollar Rate Loans will be paid thereon to the respective Banks
holding such Eurodollar Rate Loans pro rata based on the respective
principal amounts thereof outstanding;
(f) Notwithstanding anything to the contrary in this Section
2.5, (i) no Bank shall have any obligation to increase its Commitment
under this Section 2.5 unless it agrees in writing to do so in its
sole discretion, (ii) no Bank shall have any right to decrease the
amount of its Commitment as a result of any requested increase of the
Commitments pursuant to this Section 2.5, (iii) the Agent shall have
no obligation to find or locate any New Bank to participate in any
unsubscribed portion of any increase in the Commitments requested by
the Borrower, (iv) each increase in the Commitments requested by the
Borrower shall not be less than $10,000,000, (v) after giving effect
to any increase in the Commitments pursuant to this Section 2.5, the
sum of the Commitments and the aggregate commitments of the lenders
under the Short-Term Credit Facility shall not exceed $250,000,000,
and (vi) in the event the Borrower reduces the Commitments pursuant
to Section 4.6 or any other provision of this Agreement more than one
time during the term of this Agreement, the ability of the Borrower
to request increases in the Commitments pursuant to this Section 2.5
shall automatically terminate; and
(g) The Borrower shall execute and deliver to the Agent (for
delivery by the Agent to each applicable Bank) a new Note payable to
each applicable Bank (including each New Bank) participating in any
increase of the Commitments in the original principal amount of such
Bank's Commitment after giving effect to any such increase of the
Commitments.
3. LETTERS OF CREDIT
3.1 OBLIGATION TO ISSUE. Subject to the terms and conditions of
this Agreement, and in reliance upon the representations and warranties of the
Borrower set forth herein or in any
22
other Loan Document, each Issuing Bank hereby severally agrees to issue, from
time to time during the period commencing on the Closing Date and ending on
the Business Day immediately prior to the Maturity Date, for the account of
the Borrower through such of the Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Facility Letters of Credit in
accordance with this Section 3. Notwithstanding the foregoing, no Issuing Bank
shall have any obligation to issue, and shall not issue, any Facility Letter
of Credit at any time if:
(a) the aggregate undrawn face amount of Facility Letters of
Credit theretofore issued by such Issuing Bank, after giving effect to
all requested but unissued Facility Letters of Credit, exceeds any
limit imposed by law or regulation upon such Issuing Bank;
(b) after taking into account the face amount of the
requested Facility Letter of Credit the aggregate principal amount of
Facility Letter of Credit Obligations with respect to Facility
Letters of Credit issued by such Issuing Bank for the account of the
Borrower (which amount shall be calculated without giving effect to
the participation of the Banks pursuant to Section 3.5) would exceed
such Issuing Bank's Letter of Credit Commitment;
(c) immediately after giving effect to the issuance of such
Facility Letter of Credit, the aggregate Facility Letter of Credit
Obligations would exceed the L/C Subfacility;
(d) immediately after giving effect to the issuance of such
Facility Letter of Credit, the aggregate of outstanding Loans, would
exceed the Banks' aggregate Commitments; or
(e) such Facility Letter of Credit has an expiry date (i)
more than one year after the date of issuance; or (ii) after the
Business Day immediately preceding the Maturity Date.
3.2 CONDITIONS. The obligation of an Issuing Bank to issue any
Facility Letter of Credit, and of each Bank to participate therein as provided
in Section 3.5 is subject to the satisfaction in full of the applicable
conditions precedent set forth in Section 8 and each of the following
conditions:
(a) the Borrower shall have delivered to the Issuing Bank, at
such times and in such manner as such Issuing Bank may prescribe, a
Letter of Credit application, a Letter of Credit Reimbursement
Agreement, and such other documents and materials as may be required
pursuant to the terms thereof;
(b) the terms of the proposed Facility Letter of Credit shall
not be inconsistent with any term or provision of this Agreement and
otherwise shall be satisfactory to such Issuing Bank; and
(c) as of the date of issuance of such Facility Letter of
Credit, no order, judgment, or decree of any court, arbitrator, or
governmental authority shall purport by its terms to enjoin or
restrain the Issuing Bank from issuing such Facility Letter of
Credit, and no law, rule, or regulation applicable to such Issuing
Bank, and no request or
23
directive (whether or not having the force of law) from any
governmental authority having jurisdiction over such Issuing Bank,
shall prohibit or request that such Issuing Bank refrain from the
issuance of Letters of Credit, generally or the issuance of such
Facility Letter of Credit.
3.3 ISSUANCE OF FACILITY LETTERS OF CREDIT
(a) The Borrower shall give the Agent written notice (or
telephonic notice confirmed in writing by the Borrower not later than
the requested issuance date of the Facility Letter of Credit) of its
request for the issuance of a Facility Letter of Credit no later than
11:00 a.m. four (4) Business Days prior to the date such Facility
Letter of Credit is requested to be issued. Such notice shall be
irrevocable and shall specify, with respect to such requested Facility
Letter of Credit, the face amount, beneficiary, effective date of
issuance, expiry date (which effective date and expiry date shall be a
Business Day and, with respect to the expiry date, shall be no later
than the Business Day immediately preceding the Maturity Date), the
identity of the Issuing Bank selected by the Borrower, and the
purpose for which such Facility Letter of Credit is to be issued. At
the time a request for the issuance of a Facility Letter of Credit is
made, the Borrower shall also provide the Agent with a copy of the
form of Letter of Credit that the proposed Issuing Bank has agreed to
issue. If the face amount of the requested Facility Letter of Credit
is less than or equal to the Unused L/C Subfacility, as determined by
the Agent as of the close of business on the date of its receipt of
written notice of the requested issuance, the Agent shall so notify
the proposed Issuing Bank in writing (or by telephonic notice
promptly confirmed thereafter in writing) not later than the close of
business on the second Business Day following the Agent's receipt of
the Borrower's written notice. The Issuing Bank shall issue such
Facility Letter of Credit on the date requested by the Borrower,
UNLESS (i) on or before the Business Day prior to such issuance date,
such Issuing Bank shall have received written notice from the Agent
or any Bank that the conditions precedent to the issuance of a
Facility Letter of Credit as set forth in Section 3.2 have not been
met; or (ii) on the requested issuance date, such Issuing Bank has
actual knowledge that such conditions precedent have not been met. If
an Issuing Bank receives written notice, or has actual knowledge,
that the conditions precedent to the issuance of a Facility Letter of
Credit have not been met, then such Issuing Bank shall have no
obligation to issue, and shall not issue, any Facility Letter of
Credit until (i) such notice is withdrawn; or (ii) such Issuing Bank
receives a notice from the Agent that the condition(s) described in
such notice have been waived in accordance with the provisions of
this Agreement. The Issuing Bank shall give the Agent prompt written
notice (or telephonic notice promptly confirmed in writing) of the
issuance of any Facility Letter of Credit. Any Letter of Credit
issued by an Issuing Bank in compliance with the provisions of this
Section 3.3 shall be a Facility Letter of Credit.
(b) An Issuing Bank shall not extend or amend any Facility
Letter of Credit unless the requirements of this Section 3.3 are met
as though a new Facility Letter of Credit was being requested and
issued.
(c) An Issuing Bank or any Bank may issue Non-Facility
Letters of Credit for its own account, and at its own risk. None of
the provisions of this Section 3 shall apply to any Non-Facility
Letter of Credit.
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3.4 REIMBURSEMENT OBLIGATIONS; DUTIES OF ISSUING BANK
(a) Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement:
(1) the Borrower shall reimburse the applicable
Issuing Bank for a drawing under a Facility Letter of Credit issued by
such Issuing Bank no later than the earlier of (A) the time specified
in the related Letter of Credit Reimbursement Agreement; or (B) one (1)
Business Day after the payment of such drawing by such Issuing Bank;
and
(2) the Borrower's Reimbursement Obligations with respect
to a drawing under a Facility Letter of Credit shall bear interest
from the date of such drawing to the date paid in full at the higher
of (A) the interest rate specified in the applicable Letter of Credit
Reimbursement Agreement; or (B) the interest rate for past due
Alternate Base Rate Loans; BUT NOT GREATER than the Highest Lawful
Rate.
(b) No action taken or omitted to be taken by an Issuing Bank
in connection with any Facility Letter of Credit shall (i) result in
any liability on the part of such Issuing Bank to any Bank, unless
such Issuing Bank's action or omission constitutes willful
misconduct or gross negligence; or (ii) relieve any Bank of any of
its obligations to such Issuing Bank hereunder, unless the Facility
Letter of Credit in question was issued in contravention of the
provisions of Section 3.3 or at a time during which a notice,
described in Section 3.3, from such Bank to such Issuing Bank
remained in effect. Each Bank agrees that, prior to making any
payment to a beneficiary with respect to a drawing under a Facility
Letter of Credit, the Issuing Bank shall be responsible only to
confirm that documents required by the terms of such Facility Letter
of Credit to be delivered as a condition precedent to such drawing
have been delivered and that the same appear on their face to
conform with the requirements thereof. Each Bank further agrees that
such Issuing Bank may assume that documents appearing on their face
to be the documents required to be delivered as a condition
precedent to a drawing do in fact comply.
3.5 PARTICIPATIONS
(a) Immediately upon the issuance by an Issuing Bank of any
Facility Letter of Credit in compliance with the provisions of Section
3.3, and immediately upon conversion of a Letter of Credit of an
Issuing Bank to a Facility Letter of Credit pursuant to Section 3.10,
each Bank shall be deemed to have irrevocably and unconditionally
purchased and received from such Issuing Bank, without recourse or
warranty, an undivided interest and participation to the extent of such
Bank's Pro Rata Percentage in such Facility Letter of Credit, including
without limitation, all obligations of the Borrower with respect
thereto and any security therefor or guaranty pertaining thereto.
(b) An Issuing Bank shall promptly notify the Agent, and the
Agent shall promptly notify the other Banks, if the Borrower fails to
reimburse such Issuing Bank for payments made by such Issuing Bank in
respect of drawings by a beneficiary under a Facility Letter of Credit.
Upon each such other Banks receipt of such notice, such Bank shall
unconditionally pay to the Agent, for the account of such Issuing Bank,
an amount equal to such Bank's Pro Rata Percentage of the unreimbursed
payment made by such
25
Issuing Bank under the Facility Letter of Credit. Such payment shall
be made by such Bank in Dollars and in same day funds on the day
such Bank receives notice from the Agent that such payment is owing,
if such notice is received by such Bank prior to 11:00 a.m. (Houston
time) on a Business Day; if such notice is not received by such
time, then such Bank shall remit its payment on the next Business
Day following the day such notice is received. Any amount payable by
a Bank under this Section 3.5(b) which is not paid when due pursuant
to the terms hereof shall be payable on demand, together with
interest thereon at the Federal Funds Rate from the date such
payment was due until paid in full. The failure of any Bank to make
any payment owing by it under this Section 3.5(b) shall neither
relieve nor increase the obligation of any other Bank to make any
payment owing by it under this Section 3.5(b). The Agent shall
promptly remit to the applicable Issuing Bank all amounts received
by the Agent, for the account of such Issuing Bank, from each Bank
pursuant to this Section 3.5(b). No payment made by a Bank pursuant
to this Section 3.5(b) shall prejudice the ability of such Bank to
claim that the Issuing Bank to which such payment is made is subject
to liability under Section 3.4(b).
(c) Whenever an Issuing Bank receives a payment with respect
to a Reimbursement Obligation (including any interest thereon) for
which such Issuing Bank has received payments from a Bank pursuant to
Section 3.5(b), such Issuing Bank shall promptly remit to the Agent and
the Agent shall promptly remit to each Bank which has funded its
participating interest therein, in Dollars and in the kind of funds so
received, an amount equal to each Bank's Pro Rata Percentage thereof.
Each such payment shall be made by the Issuing Bank or the Agent, as
the case may be, on the Business Day on which such Person receives the
funds paid to such Person pursuant to the preceding sentence, if
received prior to 11:00 a.m. (Houston time) on such Business Day, and
otherwise on the next succeeding Business Day.
(d) Upon the request of the Agent or any Bank, an Issuing Bank
shall furnish to the Agent or each Bank copies of any Facility Letter
of Credit, Letter of Credit Reimbursement Agreement, or Letter of
Credit application to which Issuing Bank is party, and such other
documentation as may reasonably be requested by the Agent or such Bank
with respect to a Facility Letter of Credit issued by such Issuing
Bank.
(e) The obligations of a Bank under Section 3.5(b) to make
payments to the Agent for the account of an Issuing Bank with respect
to a Facility Letter of Credit shall be irrevocable, not subject to any
qualification or exception whatsoever, and shall be made in accordance
with, but not subject to, the terms and conditions of this Agreement
under all circumstances (assuming that such Issuing Bank has issued
such Facility Letter of Credit in compliance with the provisions of
Section 3.3), including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any other Loan Document;
(ii) the existence of any claim, set off, defense, or
other right which the Borrower may have at any time against a
beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, any Bank,
the Issuing Bank, or any
26
Person, whether in connection with this Agreement, any Facility
Letter of Credit, the transactions contemplated herein, or any
unrelated transactions (including any underlying transactions
between the Borrower and the beneficiary named in any Facility
Letter of Credit);
(iii) any draft, certificate, of any other document
presented under the Facility Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any Loan
Document;
(v) any failure by the Agent or an Issuing Bank to make
any reports required pursuant to Section 3.8; or
(vi) the occurrence of any Default or Event of Default.
3.6 PAYMENT OF REIMBURSEMENT OBLIGATIONS
(a) The Borrower agrees to pay to each Issuing Bank the amount
of all Reimbursement Obligations, interest, and other amounts payable
to such Issuing Bank under or in connection with any Facility Letter of
Credit immediately when due, irrespective of any claim, set off,
defense, or other right which the Borrower may have at any time against
any Issuing Bank or any other Person.
(b) In the event any payment by the Borrower received by an
Issuing Bank with respect to a Facility Letter of Credit and
distributed to Banks on account of their respective participation is
thereafter set aside, avoided, or recovered from such Issuing Bank in
connection with any Debtor Laws, each Bank which received such
distribution shall, upon demand by such Issuing Bank, contribute each
Bank's Pro Rata Percentage of the amount set aside, avoided, or
recovered together with interest at the rate required to be paid by the
Issuing Bank upon the amount required to be repaid by it.
3.7 EXONERATION. As between the Borrower, each Bank, and each Issuing
Bank, the Borrower assumes all risks of the acts and omissions of, or misuse of
the Facility Letter of Credit issued by such Issuing Bank by, the respective
beneficiaries of such Facility Letter of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the Letter of Credit
applications, the Issuing Bank and the Banks shall not be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any party in connection with
the application for and issuance of a Facility Letter of Credit, even
if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;
(b) the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign a Facility Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for
any reason;
27
(c) failure of the beneficiary of a Facility Letter of Credit
to comply duly with conditions required in order to draw upon such
Facility Letter of Credit, PROVIDED THAT the Issuing Bank complies with
the provisions of Section 3.4(b);
(d) errors, omissions, interruptions, or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex, or
otherwise, whether or not they be in cipher;
(e) errors in interpretation of technical terms;
(f) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Facility Letter
of Credit or of the proceeds thereof;
(g) the misapplication by the beneficiary of a Facility Letter
of Credit; or
(h) any consequences arising from causes beyond the control of
the Agent, any Bank, or any Issuing Bank, including, without
limitation, any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental
Authority. In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by an Issuing Bank under or in connection with the Facility Letters of
Credit or any related certificates, if taken or omitted in good faith
and not constituting gross negligence or willful misconduct, shall not
put the Issuing Bank, the Agent, or any Bank under any resulting
liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.
3.8 ISSUING BANK'S REPORTING REQUIREMENTS. In addition to the reports
required by Section 3.5, each Issuing Bank shall, no later than the tenth (10th)
Business Day following the last day of each quarter of such Issuing Bank's
fiscal year, provide to the Agent and the Borrower a schedule for Standby
Letters of Credit issued as Facility Letters of Credit, in form and substance
reasonably satisfactory to the Agent, showing the date of issue, beneficiary,
face amount, expiration date, and the reference number of each Facility Letter
of Credit issued by such Issuing Bank which was outstanding at any time during
such quarter and the aggregate amount payable by the Borrower during the quarter
pursuant to Section 3.9.
3.9 COMPENSATION FOR FACILITY LETTERS OF CREDIT
(a) FACILITY LETTER OF CREDIT FEE. The Borrower agrees to pay
to the Agent, for the account of each Bank, in the case of each
Letter of Credit issued as, or converted to (for transactions which
convert Letters of Credit in existence on the Closing Date to
Facility Letters of Credit pursuant to Section 3.10), a Facility
Letter of Credit, a facility letter of credit fee (the "Facility
Letter of Credit Fee") payable quarterly in arrears equal to the
applicable Facility Letter of Credit Fee Percentage of the average
amount available to be drawn under such Letter of Credit during the
quarter then ending multiplied by the actual number of days during
such quarter on which such Letter of Credit was outstanding, divided
by 360 but no less than $500.00 per Facility Letter of Credit per
year. The Borrower shall also pay to the Agent in the event of any
extension or modification of a Facility Letter of Credit which
extends the expiration date or increases
28
the maximum amount available for drawing thereunder an additional
fee calculated and payable on the same basis as that set forth in
the first sentence of this Section 3.9(a) with respect to any such
extension or additional amount. Whenever an Issuing Bank receives a
payment from the Borrower with respect to any fees incurred in
connection with any Facility Letter of Credit issued by such Issuing
Bank, such Issuing Bank shall promptly remit to the Agent, and the
Agent shall promptly remit to each Bank which has funded its
participation in such Facility Letter of Credit, in Dollars and in
same day funds, an amount equal to such Bank's Pro Rata Percentage
of such fees.
(b) ISSUING BANK'S CHARGES. Each Issuing Bank shall have the
right to receive, solely for its own account, such amounts as it and
the Borrower may agree, in writing, to compensate such Issuing Bank
with respect to issuance fees and such Issuing Bank's out-of-pocket
costs of issuing and servicing Facility Letters of Credit.
(c) INCREASED CAPITAL. If either (i) the introduction of or
any change in or in the interpretation of any law or regulation, or
(ii) compliance by any Issuing Bank or any Bank with any guideline
or request from any central bank or other Governmental Authority
(whether or not having the force of law) affects or would affect (by
an amount deemed by such Issuing Bank to be material) the capital
required or expected to be maintained by it or any corporation
controlling it, and such Bank or such Issuing Bank determines, on
the basis of reasonable allocations, that the amount of such capital
is increased by (an amount deemed by such Issuing Bank to be
material) or is based (to a degree deemed by such Issuing Bank to be
material) upon its issuance or maintenance of or participation in,
or commitment to issue or to participate in, the Facility Letters of
Credit then, upon demand by such Bank or such Issuing Bank, the
Borrower shall immediately pay to the Agent (for the account of each
Bank) or such Issuing Bank, from time to time as specified by such
Bank or such Issuing Bank, additional amounts sufficient to compensate
such Bank or such Issuing Bank therefor. A certificate as to such
amounts submitted to the Borrower by such Bank or such Issuing Bank
shall, in the absence of manifest error, be conclusive and binding
for all purposes.
3.10 TRANSITIONAL PROVISIONS. SCHEDULE 3.10 contains a schedule of
certain Letters of Credit issued for the account of the Borrower prior to the
Closing Date by one or more of the Issuing Banks. Subject to the satisfaction of
the conditions precedent contained in Section 8, on the Closing Date (a) such
Letters of Credit shall be deemed to be converted into Facility Letters of
Credit issued pursuant to Section 3.3; and (b) the face amount of such Letters
of Credit shall be included in the calculation of the Facility Letter of Credit
Obligations.
4. PAYMENTS AND PREPAYMENTS
4.1 REQUIRED PREPAYMENTS
(a) The Borrower agrees that if at any time it or the Agent
determines that the sum of (i) the aggregate principal amount of Loans
outstanding and (ii) the face amount of Facility Letters of Credit
issued hereunder exceeds the Commitments, then the Borrower shall make
a prepayment of principal of the Loans in an amount at least equal to
such excess.
29
(b) Upon the Borrower's reduction or termination of the
Commitments under Section 4.6, the Borrower shall make such prepayments
as are required by the terms of Section 4.6.
(c) Immediately upon the termination of any period of 180
consecutive calendar days in which the aggregate principal amount
outstanding under the Notes and the Short-Term Credit Facility Notes
has exceeded the Borrower's Available Senior Funded Debt Capacity
outstanding under the Senior Notes, the Borrower will prepay the Notes
and/or the Short-Term Credit Facility Notes by the amount of such
excess, together with all interest accrued on such prepaid amount and
such other amounts that may be required to be paid in consequence of
such prepayment under Section 2.3(d).
4.2 REPAYMENT OF THE LOANS. Borrower shall repay the principal
amount of each Loan, on the last day of the Interest Period for such Loan,
together with all accrued and unpaid interest thereon as of such date,
irrespective of any claim, set off, defense, or other right which the
Borrower may have at any time against any Bank, the Agent or any other Person.
4.3 PLACE OF PAYMENT OR PREPAYMENT. All payments and prepayments made
in accordance with the provisions of this Agreement or of the Notes or of any
other Loan Document or of the Letter of Credit Reimbursement Agreements in
respect of commitment fees or of principal or interest on the Notes shall be
made to the Agent for the account of the Banks at its Domestic Lending Office,
no later than noon, Houston time, in immediately available funds. Unless the
Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Banks hereunder that the Borrower will not make any
payment due hereunder 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 Bank on such due date an
amount equal to the amount then due to such Bank. If and to the extent the
Borrower shall not have so made such payment in full to the Agent, each 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. If and to the extent that the Agent receives
any payment or prepayment from the Borrower and fails to distribute such payment
or prepayment to the Banks ratably on the basis of their respective Pro Rata
Percentage on the day the Agent receives such payment or prepayment, and such
distribution shall not be so made by the Agent in full on the required day, the
Agent shall pay to each Bank such Bank's Pro Rata Percentage thereof together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is paid to the Agent by the Borrower until the date the Agent pays such
amount to such Bank.
4.4 NO PREPAYMENT PREMIUM OR PENALTY. Each prepayment pursuant to
Section 4.1 or 4.3 shall be without premium or penalty, subject in the case of
Eurodollar Rate Loans to the provisions of Section 2.3(d).
4.5 TAXES. All payments (whether of principal, interest,
reimbursements or otherwise) under this Agreement or on the Notes or in
respect of Facility Letter of Credit Obligations shall be made by the
Borrower without set off or counterclaim and shall be made free and clear of
and without deduction for any present or future tax, levy, impost or any
other charge, if any, of any nature whatsoever now or hereafter imposed by
any taxing authority. If the making of such payments is prohibited by law,
unless such a tax, levy, impost or other charge is
30
deducted or withheld therefrom, the Borrower shall pay to the Banks, on the
date of each such payment, such additional amounts as may be necessary in
order that the net amounts received by the Banks after such deduction or
withholding shall equal the amounts which would have been received if such
deduction or withholding were not required.
4.6 REDUCTION OR TERMINATION OF COMMITMENTS. The Borrower may at any
time or from time to time reduce or terminate the Commitment of each Bank by
giving not less than ten (10) full Business Days' prior written notice to such
effect to the Agent, provided that any partial reduction shall be in the amount
of $1,000,000.00 or an integral multiple thereof. Concurrently with each such
reduction or termination, all amounts in excess of the reduced Commitments shall
be automatically due and payable and it is a condition to the effectiveness of
such reduction that the Borrower shall immediately prepay the entire amount of
such excess together with all accrued interest thereon and such other amounts
that may be required to be paid in consequence of such prepayment under Section
2.3(d). Promptly after the Agent's receipt of such notice of reduction, the
Agent shall notify each Bank of the proposed reduction and such reduction shall
be effective on the date specified in the Borrower's notice with respect to such
reduction and shall reduce the Commitment of each Bank proportionately in
accordance with its Pro Rata Percentage (and such reduction shall also ratably
reduce the Commitments related to Facility Letters of Credit). After each such
reduction, the commitment fee shall be calculated upon the Commitments as so
reduced. The Commitment of each Bank shall automatically terminate on the
Maturity Date or in the event of acceleration of the maturity date of the Notes.
Each reduction of the Commitment hereunder shall be irrevocable.
5. COMMITMENT FEE AND OTHER FEES
5.1 COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
account of each Bank a commitment fee based on a year of 360 days, from the
Closing Date to, but not including, the Maturity Date (or such earlier date as
of which all Commitments shall have terminated), on the daily average unused
amount of each Bank's Commitment, such commitment fee to be payable quarterly in
arrears on (a) the last day of each March, June, September, and December,
commencing on June 30, 2000 and (b) the Maturity Date, at a rate per annum
changing with the rating of the Borrower's unsecured, non-credit enhanced Senior
Funded Debt, and determined in accordance with the following grid:
===============================================================================
RATING OF THE BORROWER'S UNSECURED, NON-CREDIT PERCENTAGE
ENHANCED SENIOR FUNDED DEBT PER ANNUM
-------------------------------------------------------------------------------
Equal to or greater than A3 by ▇▇▇▇▇'▇ Investor
Service, Inc. AND equal to or greater than A- by
Standard and Poor's Ratings Group 0.125%
-------------------------------------------------------------------------------
Baa1 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB+ by
Standard and Poor's Ratings Group 0.150%
-------------------------------------------------------------------------------
Baa2 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB by
Standard and Poor's Ratings Group 0.150%
-------------------------------------------------------------------------------
Baa3 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB-
===============================================================================
31
===============================================================================
by Standard and Poor's Ratings Group 0.150%
-------------------------------------------------------------------------------
Equal to or less than Ba1 by ▇▇▇▇▇'▇ Investor
Service, Inc. AND equal to or less than BB+ by
Standard and Poor's Ratings Group 0.250%
===============================================================================
5.2 FACILITY LETTER OF CREDIT FEE. The Borrower shall pay to the
Agent, for the account of each Issuing Bank, the Facility Letter of Credit
Fees as set forth in Section 3.9.
5.3 FEES NOT INTEREST; NONPAYMENT. The fees described in this
Agreement represent compensation for services rendered and to be rendered
separate and apart from the lending of money or the provision of credit and
do not constitute compensation for the use, detention, or forbearance of
money, and the obligation of the Borrower to pay each fee described herein
shall be in addition to, and not in lieu of, the obligation of the Borrower
to pay interest, other fees described in this Agreement, and expenses
otherwise described in this Agreement. Fees shall be payable when due in
Dollars and in immediately available funds. The commitment fee referred to in
Section 5.1 shall be non-refundable, and shall, to the fullest extent
permitted by law, bear interest, if not paid when due, at a rate per annum
equal to the lesser of (a) five percent (5%) above the Alternate Base Rate as
in effect from time to time or (b) the Highest Lawful Rate.
5.4 UTILIZATION FEE. The Borrower agrees to pay to Agent, for the
account of each Bank, an utilization fee at a rate per annum equal to 0.125%,
based on a year of 360 days, from the Closing Date to, but not including, the
Maturity Date (or such earlier date as of which the Commitments have been
terminated), on the daily average amount by which the sum of the aggregate
principal amount of the Loans and the Facility Letter of Credit Obligations
exceeds thirty-three percent (33%) of the aggregate amount of the Commitments,
such utilization fee to be payable quarterly in arrears on (a) the last day of
each March, June, September, and December, commencing on June 30, 2000, and (b)
the Maturity Date.
6. APPLICATION OF PROCEEDS
6.1 APPLICATION OF PROCEEDS. The Borrower agrees that the proceeds of
the Loans shall be used:
(a) to provide working capital and for general corporate
purposes;
(b) to finance the acquisition of Qualifying Assets, which
Qualifying Assets may be acquired on a revolving basis as long as at
any one time the amount of the Borrower's investment in Qualifying
Assets does not exceed the amounts set forth in clause (i) and clause
(ii) of the definition of Qualifying Assets as applicable; PROVIDED,
HOWEVER, that the prior written consent of the Majority Banks shall be
required for the use of Loan proceeds to finance any portion of any
such acquisition described in clause (i) of the definition of
Qualifying Assets requiring the payment of more than $60,000,000;
(c) to finance the Pending Acquisitions; PROVIDED, HOWEVER,
that the prior written consent of the Majority Banks shall be required
for the use of Loan proceeds, together with the use of proceeds of the
Short-Term Credit Facility, if any, to finance the Pending Acquisitions
in excess of $100,000,000 in the aggregate and PROVIDED, FURTHER,
32
that the use of any Loan proceeds, together with the use of proceeds
of the Short-Term Credit Facility, if any, in excess of $60,000,000
in the aggregate to finance the Pending Acquisitions shall be repaid
in full not more than 180 days after the consummation of the Pending
Acquisitions or May 30, 2001, whichever occurs first;
(d) to finance the Borrower's open market acquisition of its
own 7.60% Senior Notes due 2024; PROVIDED, HOWEVER, that such use,
together with the use of proceeds of the Short-Term Credit Facility for
such purpose, if any, shall be limited to an aggregate amount advanced
to $60,000,000; and
(e) to finance the Borrower's repurchase of its own common
stock and preferred equity securities; PROVIDED, HOWEVER, that such
use, together with the use of proceeds of the Short-Term Credit
Facility for such purpose, if any, shall be limited to an aggregate
amount advanced to $50,000,000.
7. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
7.1 ORGANIZATION AND QUALIFICATION. The Borrower and each Subsidiary:
(a) are corporations duly organized, validly existing, and in good standing
under the laws of their respective states of incorporation; (b) have the
corporate or organizational power to own their respective properties and to
carry on their respective businesses as now conducted; and (c) are duly
qualified as foreign corporations (or, in the case of any Southern Union Trust,
trusts) to do business and are 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 is a corporation organized
under the laws of Delaware and has the Subsidiaries listed on SCHEDULE 7.1
attached hereto and made a part hereof for all purposes, and no others, each of
which is a Delaware corporation unless otherwise noted on SCHEDULE 7.1. None of
the Subsidiaries listed on SCHEDULE 7.1 as "Inactive Subsidiaries" conducts or
will conduct any business, and none of such Subsidiaries has any assets other
than minimum legal capitalization.
7.2 FINANCIAL STATEMENTS. The Borrower has furnished the Banks
with (a) the Borrower's annual audit report containing the Borrower's
consolidated balance sheet, statements of income and stockholder's equity and
a cash flow statement as at and for the twelve month period ending June 30,
1999, accompanied by the certificate of Price Waterhouse Coopers and (b) the
Borrower's unaudited financial report as of the fiscal quarter ending March
31, 2000. These statements are complete and correct and present fairly in
accordance with GAAP, consistently applied throughout the periods involved,
the consolidated financial position of the Borrower and the Subsidiaries and
the results of its and their operations as at the dates and for the periods
indicated subject, as to interim statements only, to changes resulting from
customary end-of-year credit adjustments which in the aggregate will not be
material. There has been no material adverse change in the condition, financial
or otherwise, of the Borrower or any Subsidiary since March 31, 2000.
7.3 LITIGATION. Except as disclosed on SCHEDULE 7.3 or pursuant to
Section 7.16, there is no: (a) action or proceeding pending or, to the knowledge
of the Borrower, threatened against the Borrower or any Subsidiary before any
court, administrative agency or arbitrator which is reasonably expected to have
a Material Adverse Effect; (b) judgment outstanding
33
against the Borrower for the payment of money; or (c) other outstanding
judgment, order or decree affecting the Borrower or any Subsidiary before or
by any administrative or governmental authority, compliance with or satisfaction
of which may reasonably be expected to have a Material Adverse Effect.
7.4 DEFAULT. Neither the Borrower nor any Subsidiary 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 might have a Material
Adverse Effect.
7.5 TITLE TO ASSETS. The Borrower and each Subsidiary have good and
marketable title to their respective assets, subject to no Liens except those
permitted in Section 10.2.
7.6 PAYMENT OF TAXES. The Borrower and each Subsidiary have filed all
tax returns required to be filed and have 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 Borrower as of March 31, 2000). The Borrower is not
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
7.6.
7.7 CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS. Neither the
Borrower nor any Subsidiary is a party to any contract or agreement or subject
to any restriction which would have a Material Adverse Effect. Neither the
execution and delivery of this Agreement or the Notes or any other Loan Document
nor the consummation of the transactions contemplated hereby nor fulfillment of
and compliance with the respective terms, conditions and provisions hereof or of
the Notes 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 the Borrower or any Subsidiary pursuant to
(a) the charter or bylaws applicable to the Borrower or any Subsidiary; (b) any
law or any regulation of any administrative or governmental instrumentality; (c)
any order, writ, injunction or decree of any court; or (d) the terms, conditions
or provisions of any agreement or instrument to which the Borrower or any
Subsidiary is a party or by which it is bound or to which it is subject.
7.8 AUTHORIZATION, VALIDITY, ETC. The Borrower has the corporate
power and authority to make, execute, deliver and carry out this Agreement
and the transactions contemplated herein, to make the borrowings provided for
herein, to execute and deliver the Notes and to perform its obligations
hereunder and under the Notes and the other Loan Documents to which it is a
party and all such action has been duly authorized by all necessary corporate
proceedings on its part. This Agreement has been duly and validly executed
and delivered by the Borrower and constitutes the valid and legally binding
agreement of the Borrower enforceable in accordance with its terms, except as
limited by Debtor Laws; and the Notes and the other Loan Documents, when duly
executed and delivered by the Borrower pursuant to the provisions hereof,
will constitute the valid and legally binding obligation of the Borrower
enforceable in accordance with the terms thereof and of this Agreement,
except as limited by Debtor Laws.
34
7.9 INVESTMENT COMPANY ACT NOT APPLICABLE. Neither the Borrower
nor any Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
7.10 PUBLIC UTILITY HOLDING COMPANY ACT NOT APPLICABLE. Neither the
Borrower nor any Subsidiary 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.
7.11 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 Governors of the Federal Reserve System ("margin stock"); none
of the proceeds of any Loan will be used 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. Neither the Borrower nor any
Subsidiary 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. After applying proceeds of the Loans and the Short-Term
Credit Facility used to acquire the equity interests described in the definition
of "Qualifying Assets", not more than twenty-five percent (25%) of the value (as
determined by any reasonable method) of the assets subject to the negative
pledge set forth in Section 10.2 of the Credit Agreement and the restrictions on
disposition of assets set forth in Section 10.8 of the Credit Agreement is
represented by margin stock.
7.12 ERISA. No Reportable Event (as defined in Section 4043(b) of
ERISA) has occurred with respect to any Plan. Each Plan complies in all material
respects with a applicable provisions of ERISA, and the Borrower and each
Subsidiary have filed all reports required by ERISA and the Code to be filed
with respect to each Plan. The Borrower has no knowledge of any event which
could result in a liability of the Borrower or any Subsidiary to the Pension
Benefit Guaranty Corporation. The Borrower and each Subsidiary have 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 the Borrower or any Subsidiary. The
value of the Plans' benefits guaranteed under Title IV of ERISA on the date
hereof does not exceed the value of such Plans' assets allocable to such
benefits as of the date of this Agreement and shall not be permitted to do so
hereafter.
7.13 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 Section13 or Section14 of the Securities Exchange Act of
1934, as amended, except the equity interests described in subparagraph (ii) of
the definition of "Qualifying Assets".
7.14 FRANCHISES, CO-LICENSES, ETC. The Borrower and each Subsidiary
own or have obtained all the material governmental permits, certificates of
authority, leases, patents, trademarks, service marks, trade names,
copyrights, franchises and licenses, and rights with
35
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.
7.15 LINES OF BUSINESS. The nature of the Borrower's lines of business
are predominately the following: (a) the operation of energy distribution and
transportation services, including without limitation, natural gas sales and
transportation and distribution, propane sales and distribution and promotion,
marketing and sale of compressed natural gas and liquified natural gas; (b) the
development and marketing of fuel cell and distributive energy options; (c)
electric marketing/generation; (d) the operation of fuel oil distribution and
transportation networks; and (e) sales and rentals of appliances utilizing one
or more of the fuel or energy options specified in this Section 7.15.
7.16 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 7.16, all
facilities and property owned or leased by the Borrower or any Subsidiary have
been and continue to be, owned or leased and operated by the Borrower and each
Subsidiary in material compliance with all Environmental Laws; (i) there has not
been (during the period of the Borrower's, or a Subsidiary's ownership or lease)
any Release of Hazardous Materials at, on or under any property now (or, to the
Borrower's knowledge, previously) owned or leased by the Borrower or any
Subsidiary (A) in quantities that would be required to be reported under any
Environmental Law, (B) that required, or may reasonably be expected to require,
the Borrower 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 (C) that
otherwise, singly or in the aggregate, has, or may reasonably be expected to
have, a Material Adverse Effect; (ii) the Borrower and each Subsidiary have been
issued and are in material compliance with all permits, certificates, approvals,
orders, licenses and other authorizations relating to environmental matters
necessary for their respective businesses; and (iii) there are no
polychlorinated biphenyls (PCB's) or asbestos-containing materials or surface
impoundments in any of the facilities now (or, to the knowledge of the Borrower,
previously) owned or leased by the Borrower or any Subsidiary, except for
asbestos-containing materials of the type and in quantities that, to the
knowledge of the borrower, do not currently require remediation, and if
remediation of such asbestos-containing materials is hereafter required for any
reason, such remediation activities would not reasonably be expected to have a
Material Adverse Effect; (iv) Hazardous Materials have not been generated, used,
treated, recycled, stored or disposed of in any of the facilities or on any of
the property now (or, to the knowledge of the Borrower, previously) owned or
leased by the Borrower or any Subsidiary during the time of the Borrower's or
such Subsidiary's ownership or leased by the Borrower or any Subsidiary during
the time of the Borrower's or such Subsidiary's ownership except in material
compliance with all applicable Environmental Laws; and (v) all underground
storage tanks located on the property now (or, to the knowledge of the Borrower,
previously) owned or leased by the Borrower or any Subsidiary have been (and to
the extent currently owned or leased are) operated in material compliance with
all applicable Environmental Laws.
8. CONDITIONS
The obligation of the Banks to make any Loans or issue any Facility
Letters of Credit is subject to the following conditions:
8.1 REPRESENTATIONS TRUE AND NO DEFAULTS
36
(a) The representations and warranties contained in Section 7
shall be true and correct on and as of the particular Borrowing Date as
though made on and as of such date;
(b) The Borrower shall not 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 the business, assets, properties or condition (financial or
otherwise) of the Borrower reflected in the quarterly financial
statements of the Borrower dated March 31, 2000 (copies of such audited
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.
8.2 GOVERNMENTAL APPROVALS. The Borrower shall have obtained all
orders, approvals or consents of all public regulatory bodies required for the
making and carrying out of this Agreement, the making of the borrowings pursuant
hereto, the issuance of the Notes to evidence such borrowings, and the execution
and delivery of the Security Documents.
8.3 COMPLIANCE WITH LAW. The business and operations of the Borrower
and each Subsidiary as conducted at all times relevant to the transactions
contemplated by this Agreement to and including the close of business on the
particular Borrowing Date shall have been and shall be in compliance in all
material respects with all applicable State and Federal laws, regulations and
orders affecting the Borrower and each Subsidiary and the business and
operations of any of them.
8.4 NOTICE OF BORROWING AND OTHER DOCUMENTS. On each Borrowing Date,
the Banks shall have received (a) a Notice of Borrowing; and (b) such other
documents and certificates relating to the transactions herein contemplated as
the Banks may reasonably request.
8.5 PAYMENT OF FEES AND EXPENSES. The Borrower shall have paid (a)
all expenses of the type described in Section 13.3 through the date of such
Loan or the issuance of such Facility Letter of Credit and (b) all closing,
structuring and other invoiced fees owed as of the Closing Date to the Agent,
any of the Banks and/or Chase Securities Inc. by the Borrower under this
Agreement or any other written agreement between the Borrower and the Agent,
the applicable Bank(s) or Chase Securities Inc.
8.6 LOAN DOCUMENTS, OPINIONS AND OTHER INSTRUMENTS. As of the Closing
Date, the Borrower 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 Borrower 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 the Borrower in the
State of Delaware; (c) a certificate from Secretary of State of the State of
Texas as to the continued qualification of the Borrower to do business in the
State of Texas; (d) a current certificate from the Office of the Comptroller of
the State of Texas as to the good standing of the Borrower in the State of
Texas; (e) a Secretary's Certificate executed by the duly elected Secretary or a
duly elected Assistant Secretary of the Borrower, in a form acceptable to the
Agent, whereby such Secretary or Assistant Secretary certifies that one or more
corporate resolutions adopted by the Board of Directors of the Borrower remain
in full force and effect
37
authorizing the Borrower to secure Loans and Facility Letters of Credit in
accordance with the terms of this Agreement and the Short-Term Credit
Facility; and (f) a legal opinion from in-house counsel for the Borrower,
dated as of the Closing Date, addressed to the Agent and the Lenders and
otherwise acceptable in all respects to the Agent in its discretion.
9. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Borrower may
borrow hereunder and until payment in full of the Notes, and its other
obligations under this Agreement and the other Loan Documents the Borrower will:
9.1 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 the Borrower, a copy of the annual
audit report of the Borrower and the Subsidiaries for such fiscal year
containing a balance sheet, statements of income and stockholders
equity and a cash flow statement, all in reasonable detail and
certified by Price Waterhouse Coopers or another independent certified
public accountant of recognized standing satisfactory to the Banks. The
Borrower will obtain from such accountants and deliver to the Banks at
the time said financial statements are delivered the written statement
of the accountants that in making the examination necessary to said
certification they have obtained no knowledge of any Event of Default
or Default, or if such accountants shall have obtained knowledge of any
such Event of Default or Default, they shall state the nature and
period of existence thereof in such statement; PROVIDED THAT such
accountants shall not be liable directly or indirectly to the Banks
for failure to obtain knowledge of any such Event of Default or
Default; and
(b) as soon as available, and in any event within sixty (60)
days after the end of each quarterly accounting period in each fiscal
year of the Borrower (excluding the fourth quarter), an unaudited
financial report of the Borrower and the 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 the
Borrower to have been prepared in accordance with GAAP, except as may
be explained in such certificate; and
(c) copies of all statements and reports sent to stockholders
of the Borrower or filed with the Securities and Exchange Commission;
and
(d) such additional financial or other information as the
Banks may reasonably request including, without limitation, copies of
such monthly, quarterly, and annual reports of gas purchases and sales
that the Borrower is required to deliver to or file with governmental
bodies pursuant to tariffs and/or franchise agreements.
All financial statements specified in clauses (a) and (b) above shall be
furnished in consolidated and consolidating form for the Borrower and all
Subsidiaries with comparative consolidated figures for the corresponding period
in the preceding year. Together with each delivery of financial statements
required by clauses (a) and (b) above, the Borrower will deliver to the Banks
(i) such schedules, computations and other information as may be required to
demonstrate that the Borrower is in compliance with its covenants in Section
10.1 or reflecting any
38
noncompliance therewith as at the applicable date and (ii) 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 Lenders.
9.2 LEASE AND INVESTMENT SCHEDULES. Deliver to the Banks:
(a) from time to time and, in any event, with each delivery of
annual financial statements under Section 9.1(a), a current, complete
schedule (in the form of SCHEDULE 9.2) of all agreements to rent or
lease any property (personal, real or mixed, but not including oil and
gas leases) to which the Borrower or any Subsidiary is a party lessee
and which, considered independently or collectively with other leases
with the same lessor, involve an obligation by the Borrower or a
Subsidiary to make payments of at least $250,000.00 in any year,
showing the total amounts payable under each such agreement, the
amounts and due dates of payments thereunder and containing a
description of the rented or leased property, and all other information
the Majority Banks may request; and
(b) with each delivery of annual financial statements under
Section 9.1(a) a current complete schedule (in the form of SCHEDULE
9.2) listing all debt exceeding $200,000.00 in principal amount
outstanding and equity owned or held by the Borrower or any Subsidiary
containing all information required by, and in a form satisfactory to,
the Banks, except for such debt or equity of Subsidiaries.
9.3 BOOKS AND RECORDS. Maintain, and cause each Subsidiary 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.
9.4 INSURANCE. Maintain, and cause each Subsidiary 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, and furnish
to the Banks, together with each delivery of annual financial statements under
Section 9.1(a), an Officer's Certificate containing full information as to the
insurance carried.
9.5 MAINTENANCE OF PROPERTY. Cause its Significant Property and the
Significant Property of each Subsidiary to be maintained, preserved, protected
and kept in good repair, working order and condition so that the business
carried on in connection therewith may be conducted properly and efficiently,
except for normal wear and tear; PROVIDED, HOWEVER, that the improved properties
of Lavaca Realty Company should be maintained, preserved and protected in a
manner consistent with the maintenance, preservation and protection of improved
real property held for sale.
9.6 INSPECTION OF PROPERTY AND RECORDS. Permit any officer,
director or agent of the Agent or any Bank, on written notice and at such
Banks expense, to visit and inspect during normal business hours any of the
properties, corporate books and financial records of the
39
Borrower and each Subsidiary and discuss their respective affairs and
finances with their principal officers, all at such times as the Agent or any
Bank may reasonably request.
9.7 EXISTENCE, LAWS, OBLIGATIONS. Maintain, and cause each Subsidiary
to maintain, its corporate existence and franchises, and any license agreements
and tariffs that permit the recovery of a return that the Borrower considers to
be fair (and as to licenses, franchises, and tariffs that are subject to
regulatory determinations of recovery of returns, the Borrower has presented or
is presenting favorable defense thereof); and to comply, and cause each
Subsidiary to comply, with all statutes and governmental regulations
noncompliance with which might have a Material Adverse Effect, and pay, and
cause each Subsidiary 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 the Borrower or any Subsidiary except
liabilities being contested in good faith. Notwithstanding the foregoing, the
Borrower may dissolve those certain inactive and minimally capitalized
Subsidiaries designated as such on SCHEDULE 7.1.
9.8 NOTICE OF CERTAIN MATTERS. Notify the Agent Bank 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 the Borrower or any Subsidiary that is not covered by
insurance (less applicable deductible amounts) and which, if determined
adversely to the Borrower or such Subsidiary, 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 the Borrower is
likely, to result in a material adverse change, in the assets, liabilities,
financial condition, business or affairs of the Borrower or any Subsidiary; (c)
the occurrence of any Event of Default or any Default; or (d) a change by
▇▇▇▇▇'▇ Investors Service, Inc. or by Standard and Poor's Ratings Group in the
rating of the Borrower's Funded Debt.
9.9 ERISA. At all times:
(a) maintain and keep in full force and effect each Plan;
(b) 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
the Code Section 4043) in connection with any Plan, furnish the Banks
with a statement executed by the president or chief financial officer
of the Borrower setting forth the details thereof and the action 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 the Borrower or
any 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) acquire and maintain in amounts satisfactory to the Banks
from either the Pension Benefit Guaranty Corporation or authorized
private insurers, when available, the contingent employer liability
coverage insurance required under ERISA;
40
(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.
9.10 COMPLIANCE WITH ENVIRONMENTAL LAWS. At all times:
(a) use and operate, and cause each Subsidiary to use and
operate, all of their respective facilities and properties in material
compliance with all Environmental Laws; keep, and cause each Subsidiary
to keep, all necessary permits, approvals, orders, certificates,
licenses and other authorizations relating to environmental matters in
effect and remain in material compliance therewith; handle, and cause
each Subsidiary to handle, all Hazardous Materials in material
compliance with all applicable Environmental Laws; and dispose, and
cause each Subsidiary to dispose, of all Hazardous Materials generated
by the Borrower or any Subsidiary or at any property owned or leased by
them at facilities or with carriers that maintain valid permits,
approvals, certificates, licenses or other authorizations for such
disposal under 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 the Borrower and each
Subsidiary 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
by the Borrower and its Subsidiaries of $10,000,000.00 or more; and
(c) provide such information and certifications which the
Banks may reasonably request from time to time to evidence compliance
with this Section 9.10.
9.11 PGA CLAUSES. The Borrower will use its best efforts to maintain
in force provisions in all of its tariffs and franchise agreements that
permit the Borrower to recover from customers substantially all of the amount
by which the cost of gas purchases exceeds the amount currently billed to
customers for the delivery of such gas (sometimes referred to as PGA clauses).
10. NEGATIVE COVENANTS
So long as the Borrower may borrow hereunder and until payment in full
of the Notes, except with the written consent of the Banks:
10.1 CAPITAL REQUIREMENTS. The Borrower will not:
(a) permit its Consolidated Net Worth at the end of any fiscal
quarter to be less than the sum of (i) $698,603,000; (ii) 40% of
Consolidated Net Income (if positive) for the period commencing on
January 1, 2000 and ending on the date of determination, and treated as
a single accounting period; (iii) the difference between (A) 100% of
the net proceeds of any issuance of capital or preferred stock by the
Borrower or any
41
consolidated Subsidiary received by the Borrower or such
consolidated Subsidiary at any time after December 31, 1999; and (B)
the aggregate amount of all redemption or repurchase payments
hereafter made, if any, by the Borrower and any such consolidated
Subsidiary in connection with the repurchase by the Borrower or any
such consolidated Subsidiary of any of their respective capital or
preferred stock; and (iv) without duplication, the difference
between (A) 100% of the net proceeds heretofore and hereafter
received by the Borrower and any consolidated Subsidiary in respect
of the issuance by the Borrower or such consolidated Subsidiary of
the Structured Securities, and (B) the aggregate amount of all
redemption payments hereafter made, if any, by the Borrower and any
such consolidated Subsidiary in connection with the redemption of
any of the Structured Securities; or
(b) permit the ratio of its Consolidated Total Indebtedness to
its Consolidated Total Capitalization to be greater than 0.65 to 1.00
at the end of any fiscal quarter; or
(c) acquire, or permit any Subsidiary to acquire, any assets
other than (i) investments permitted under Section 10.4, or (ii)
Qualifying Assets; or
(d) permit the ratio of EBDIT to Cash Interest Expense for the
four fiscal quarters most recently ended (considered as a single
accounting period) at any time to be less than (i) 2.00 to 1.0 at all
times during the period ending June 30, 2002, and (ii) 2.25 to 1.0 at
all times thereafter; or
(e) permit the aggregate outstanding principal amount of the
Notes and the Short-Term Credit Facility Notes to exceed for a period
of 180 consecutive days the Borrower's Available Senior Funded Debt
Capacity.
10.2 MORTGAGES, LIENS, ETC. The Borrower will not, and will not permit
any Subsidiary to, create or permit to exist any Lien (including the charge upon
assets purchased under a conditional sales agreement, purchase money mortgage,
security agreement or other title retention agreement) upon any of its
respective assets, whether now owned or hereafter acquired, or assign or
otherwise convey any right to receive income, except:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings;
(b) other Liens incidental to the conduct of its business or
the ownership of its assets that were not incurred in connection with
the borrowing of money or the obtaining of advances or credit, and that
do not in the aggregate materially detract from the value of such
assets or materially impair the use thereof in the operation of such
business;
(c) Liens on assets of a Subsidiary to secure obligations of
such Subsidiary to the Borrower or another Subsidiary; and
(d) Liens on property existing at the time of acquisition
thereof by the Borrower or any Subsidiary, including without
limitation, any property acquired by the Borrower in consummating and
finalizing any of the Pending Acquisitions, or purchase money Liens
placed on an item of real or personal property purchased by the
Borrower or any Subsidiary to secure a portion of the purchase price of
such property, PROVIDED THAT
42
no such Lien may encumber or cover any other property of the Borrower
or any Subsidiary.
10.3 DEBT. The Borrower will not, and will not permit any Subsidiary
to, incur or permit to exist any Debt, except:
(a) Debt evidenced by the Notes, the Short-Term Credit Facility
Notes and Facility Letter of Credit Obligations not in default;
(b) Debt of any Subsidiary to the Borrower or any other
Subsidiary;
(c) Debt existing as of March 31, 2000 as reflected on financial
statements delivered under Section 7.2(b) and refinancings thereof
other than Debt that has been refinanced by the proceeds of Loans or
the proceeds of the Short-Term Credit Facility;
(d) endorsements in the ordinary course of business of
negotiable instruments in the course of collection;
(e) Debt of the Borrower or any Subsidiary representing the
portion of the purchase price of property acquired by the Borrower or
such Subsidiary that is secured by Liens permitted by the provisions of
Section 10.2(d); PROVIDED, HOWEVER, that at no time may the aggregate
principal amount of such Debt outstanding exceed thirty percent (30%)
of the Consolidated Net Worth of the Borrower and its Subsidiaries as
of the applicable determination date;
(f) Debt evidenced by Senior Notes; and
(g) additional Debt of the Borrower and Structured Securities
of the Borrower and the Southern Union Trusts provided that after
giving effect to the issuance thereof, there shall exist no Default or
Event of Default; and: (i) the ratio of Consolidated Total Indebtedness
to Consolidated Total Capitalization shall be no greater than 0.65 to
1.00; (ii) the ratio of EBDIT for the four fiscal quarters most
recently ended to pro forma Cash Interest Expense for the following
four fiscal quarters shall be no less than (A) 2.00 to 1.0 at all times
during the period ending June 30, 2002, and (B) 2.25 to 1.0 at all
times thereafter; PROVIDED, HOWEVER, that if the additional Debt for
which the determinations required to be made by this subparagraph (g)
will be used to finance in whole or in part the consideration to be
paid by the Borrower for the acquisition of any entity otherwise
permitted under the terms of this Agreement, the determination of
EBDIT for purposes of this ratio shall include not only the EBDIT of
the Borrower and its Subsidiaries for the four fiscal quarters most
recently ended, but shall also include the EBDIT of such entity to be
acquired for such four fiscal quarters most recently ended; and (iii)
(A) such Debt and Structured Securities shall have a final maturity
or mandatory redemption date, as the case may be, no earlier than the
Maturity Date (as the same may be extended pursuant to Section 2.4)
and shall mature or be subject to mandatory redemption or mandatory
defeasance no earlier than the Maturity Date (as so extended) and
shall be subject to no mandatory redemption or "put" to the Borrower
or any Southern Union Trust exercisable, or sinking fund or other
similar mandatory principal payment provisions that require payments
to be made toward principal, prior to such Maturity Date (as so
extended); or (B) (x) such additional Debt shall have a final
maturity date prior to the Maturity Date,
43
(y) such additional Debt shall not exceed Eighty Million Dollars
($80,000,000.00) in the aggregate plus Twenty Million Dollars
($20,000,000.00) of reimbursement obligations incurred in connection
with Non-Facility Letters of Credit issued by a Bank or Banks or by
any other financial institution; PROVIDED, HOWEVER, that for
purposes of determining the aggregate amount of such additional Debt
for purposes of this subclause (y), the $30,000,000 of 8.375%
mortgage notes of PG Energy maturing December 1, 2002 shall not be
included, and (z) such additional Debt shall be borrowed from a Bank
or Banks as a loan or loans arising independent of this Agreement or
the Short-Term Credit Facility Agreement or shall be borrowed from a
financial institution that is not a Bank under this Agreement or the
Short-Term Credit Facility Agreement.
(h) existing short-term Debt of any entity specified in the
definition of "Pending Acquisitions" that is assumed by the Borrower in
connection with the consummation of any of the Pending Acquisitions, so
long as (i) the aggregate principal amount of such Debt assumed for all
of the Pending Acquisitions does not exceed $100,000,000.00 and (ii)
none of such Debt remains outstanding for more than 180 days after the
consummation of the applicable merger, unless all or a portion of such
Debt is refinanced with Debt otherwise permitted by other provisions of
this Section 10.3.
10.4 LOANS, ADVANCES AND INVESTMENTS. The Borrower will not, and will
not permit any Subsidiary to, make or have outstanding any loan or advance to,
or own or acquire any stock or securities of or equity interest or other
Investment in, any Person, except (without duplication):
(a) stock of (i) the Subsidiaries named in Section 7.1 and any
other Subsidiary to be acquired in accordance with the terms of any of
the Pending Acquisitions; (ii) other entities that are acquired by the
Borrower or any Subsidiary but that are promptly merged with and into
the Borrower, including without limitation, the stock of each entity
merging with the Borrower under any of the Pending Acquisitions; and
(iii) the same Qualifying Entities as the Qualifying Entities under
subparagraph (ii) of the definition of "Qualifying Assets," provided
that at any one time the aggregate purchase price paid for such stock
in such Qualifying Entities, including the aggregate amount of Debt
assumed or deemed incurred by Borrower in connection with the purchase
of such stock, is not more than ten percent (10%) of the Consolidated
Net Worth of the Borrower and its Subsidiaries as of the applicable
determination date;
(b) loans or advances to a Subsidiary;
(c) Securities maturing no more than 180 days after Borrower's
purchase that are either:
(i) readily marketable securities issued by the United
States or its agencies or instrumentalities; or
(ii) commercial paper rated "Prime 2" by ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's") or A-2 by Standard and Poor's Ratings
Group ("S&P"); or
44
(iii) certificates of deposit or repurchase contracts on
customary terms with financial institutions in which deposits
are insured by any agency or instrumentality of the United
States; or
(iv) readily marketable securities received in settlement
of liabilities created in the ordinary course of business; or
(v) obligations of states, agencies, counties, cities
and other political subdivisions of any state rated at lest MIG2,
VMIG2 or Aa by Moody's or AA by S&P; or
(vi) loan participations in credits in which the
borrower's debt is rated at least Aa or Prime 2 by Moody's or
AA or A-2 by S&P; or
(vii) money market mutual funds that are regulated by
the Securities and Exchange Commission, have a dollar-weighted
average stated maturity of 90 days or fewer on their investments
and include in their investment objectives the maintenance of a
stable net asset value of $1 for each share.
(d) other equity interests owned by a Subsidiary on the date
of this Agreement and such additional equity interests to the extent
(but only to the extent) that such Subsidiary is legally obligated to
acquire those interests on the date of this Agreement, in each case as
disclosed to the Banks in writing;
(e) loans or advances by the Borrower to customers in connection
with and pursuant to marketing and merchandising products that the
Borrower reasonably expects to increase sales of the Borrower or
Subsidiaries, PROVIDED that: (i) such loans must be either less than
$2,000,000.00 to any one customer (or group of affiliated customers,
shown on the Borrower's records to be Affiliates) or must be disclosed
on SCHEDULE 9.2 hereof; and (ii) all such loans must not exceed
$24,000,000.00 in the aggregate outstanding at any time;
(f) travel and expense advances in the ordinary course of
business to officers and employees;
(g) stock or securities of or equity interests in, any Person
provided that, after giving effect to the acquisition and ownership
thereof, the Borrower is in compliance with the provisions of Section
10.1(c) of this Agreement; and
(h) loans, advances or other Investments by the Borrower or
any Subsidiary not otherwise permitted under the other provisions of
this Section 10.4, so long as the sum of the outstanding balance of all
of such loans and advances and the purchase price paid for all of such
other Investments does not exceed in the aggregate seven percent (7%)
of the Consolidated Net Worth of the Borrower and its Subsidiaries as
of the applicable determination date.
10.5 STOCK AND DEBT OF SUBSIDIARIES. The Borrower will not, and will
not permit any Subsidiary to, sell or otherwise dispose of any shares of stock
or Debt of any Subsidiary, or permit any Subsidiary to issue or dispose of its
stock (other than directors' qualifying shares),
45
except to the Borrower or another Subsidiary, and except that Southern Union
Trusts may issue preferred beneficial interests in public offerings of
Borrower's Structured Securities.
10.6 MERGER, CONSOLIDATION, ETC. 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 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;
(b) any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Borrower or another Subsidiary;
(c) subject to Section 10.14, Lavaca Realty Company may
dispose of all or a substantial part of its assets to any Person,
whether in one transaction or a series of transactions, for a price or
prices that do not result in a Material Adverse Effect;
(d) the Borrower may acquire the assets of any Person, PROVIDED
that, after giving effect to such acquisition, the Borrower is in
compliance with the provisions of Sections 10.1(c);
(e) the Borrower or any Subsidiary may sell, lease, assign or
otherwise dispose of assets as otherwise permitted under Section 10.8;
and
(f) the Borrower may merge with the entities described in and
as contemplated under the definition of "Pending Acquisitions."
10.7 SUPPLY AND PURCHASE CONTRACTS. The Borrower will not, and will
not permit any Subsidiary to, enter into or be a party to any contract for the
purchase of materials, supplies or other property if such contract requires that
payment for such materials, supplies or other property shall be made regardless
of whether or not delivery is ever made or tendered of such materials, supplies
and other property, except in those circumstances and involving those supply or
purchase contracts that the Borrower reasonably considers to be necessary or
helpful in its operations in the ordinary course of business and that the
Borrower reasonably considers not to be unnecessarily burdensome on the Borrower
or its Subsidiaries.
10.8 SALE OR OTHER DISPOSITION OF ASSETS. The Borrower will not, and
will not permit any Subsidiary to, except as permitted under this Section 10.8,
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 (i) the Borrower or any Subsidiary
may in the ordinary course of business dispose of (a) Property consisting of
Inventory; and (b) Property consisting of goods or equipment that are, in the
opinion of the Borrower or any Subsidiary, obsolete or unproductive, but if in
the good faith judgment of the Borrower or any Subsidiary 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; (ii) Lavaca Realty Company may dispose of
46
its Property on the terms set forth in Section 10.6(c); (iii) the Borrower
may transfer or dispose of any of its Significant Property (in any
transaction or series of transactions) to any Subsidiary or Subsidiaries only
if such Property so transferred or disposed of after the Closing Date has an
aggregate value (determined after depreciation and in accordance with GAAP)
of not more than 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 March 31, 2000; (iv) the
Borrower and Lavaca Realty Company may dispose of their real property in one
or more sale/leaseback transactions, provided that any Debt incurred in
connection with such transaction does not create a Default as defined herein;
(v) a Southern Union Trust may distribute the Borrower's subordinated debt
securities constituting a portion of the Structured Securities, on the terms
and under the conditions set out in the registration statement therefor filed
with the Securities and Exchange Commission on March 25, 1995 or any similar
registration statement hereafter filed with the Securities and Exchange
Commission in connection with any other Structured Securities issued in
connection with the Pending Acquisitions; (vi) the Borrower or any Subsidiary
may dispose of real property or tangible personal 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 value of such property disposed of (determined
after depreciation and in accordance with GAAP) after the Closing 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 March 31, 2000; (vii) the Borrower may
dispose of Qualifying Assets of the type described in clause (ii) of the
definition of Qualifying Assets, provided that the Borrower make a payment on
the Loan in an amount equal to the lesser of (a) the net sales proceeds from
such disposition, and (b) the amount of Loan proceeds used to acquire such
clause (ii) Qualifying Assets; and (viii) the Borrower may dispose of other
Investments of the type acquired under the terms of Section 10.4(h), provided
that the Borrower make a payment on the Loan in an amount equal to the lesser
of (a) the net sales proceeds from such disposition, and (b) the amount of
Loan proceeds used to acquire such other Investments.
10.9 DISCOUNT OR SALE OF RECEIVABLES. The Borrower will not, and will
not permit any Subsidiary, other than Southern Union Total Energy Services,
Inc., to discount or sell with recourse, or sell for less than the face value
thereof (including any accrued interest) any of its notes receivable,
receivables under leases or other accounts receivable.
10.10 CHANGE IN ACCOUNTING METHOD. The Borrower will not, and will not
permit any Subsidiary to, make any change in the method of computing
depreciation for either tax or book purposes or any other material change in
accounting method representing any departure from GAAP without the Majority
Banks' prior written approval.
10.11 RESTRICTED PAYMENT. The Borrower will not pay or declare any
Restricted Payment unless immediately prior to such payment AND after giving
effect to such payment, the Borrower could incur at least $1 of additional Debt
without violating the provisions of Section 10.3(g) AND after giving effect
thereto no Default or Event of Default exists hereunder.
10.12 SECURITIES CREDIT REGULATIONS. Neither the Borrower nor any
Subsidiary will take or permit any action which might cause the Loans or the
Facility Letter of Credit Obligations or this Agreement to violate Regulation G,
Regulation T, Regulation U, Regulation
47
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.
10.13 NATURE OF BUSINESS; MANAGEMENT. The Borrower will not, and will
not permit any Subsidiary to: (a) change its principal line of business; or (b)
enter into any business not within the scope of Section 7.15 and the definition
of Qualifying Assets; or (c) permit any material overall change in the
management of the Borrower.
10.14 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 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.
10.15 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.
10.16 LIMITATIONS ON PAYMENTS ON SUBORDINATED DEBT. The Borrower will
not, and will not permit any Subsidiary to, make any payment in respect of
interest on, principal of, or otherwise relating to, the borrower's subordinated
debt securities issued in connection with the Structured Securities if, after
giving effect to such payment, a Default or Event of Default would exist.
11. 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 holders of more than fifty percent
(50%) in principal amount of the Notes then outstanding or, if no Note is then
outstanding, Banks having more than fifty percent (50%) of the Commitments, (a)
by notice to the Borrower, declare the Commitment of each Bank and the several
obligation of each Bank to make Loans hereunder to be terminated, whereupon the
same shall forthwith terminate, and (b) 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 11.7 or 11.8 hereof, (i) the
Commitment of each Bank and the obligation of the Banks to make Loans shall
automatically be terminated and (ii) 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
48
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:
11.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower does not pay,
repay or prepay any principal of or interest on any Note or any Short-Term
Credit Facility Note when due; or
11.2 FAILURE TO PAY COMMITMENT FEE OR OTHER AMOUNTS. The Borrower does
not pay any commitment fee or any other obligation or amount payable under this
Agreement, the Short-Term Credit Facility Agreement, the Notes, the Short-Term
Credit Facility Notes, or any Letter of Credit Reimbursement Agreement within
two (2) calendar days after the same shall have become due; or
11.3 FAILURE TO PAY OTHER DEBT. The Borrower or any Subsidiary
fails to pay principal or interest aggregating more than $2,000,000.00 on any
other 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
11.4 MISREPRESENTATION OR BREACH OF WARRANTY. Any representation or
warranty made by the Borrower 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; or
11.5 VIOLATION OF NEGATIVE COVENANTS. The Borrower violates any
covenant, agreement or condition contained in Sections 10.2, 10.3, 10.5, 10.6,
10.9, 10.10, 10.11, or 10.15; or
11.6 VIOLATION OF OTHER COVENANTS, ETC. The Borrower violates any
other covenant, agreement or condition contained herein (other than the
covenants, agreements and conditions set forth or described in Sections 11.1,
11.2, 11.3, 11.4, and 11.5 above) or in any other Loan Document and such
violation shall not have been remedied within (30) days after written notice
has been received by the Borrower from the Bank or the holder of the Note; or
11.7 BANKRUPTCY AND OTHER MATTERS. The Borrower or any Subsidiary (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 (i) there is appointed a receiver, custodian, liquidator, fiscal
agent, or trustee of the Borrower or any Subsidiary or of the whole or any
substantial part of their respective assets; or (ii) any court enters an order,
judgment or decree approving a petition filed against the Borrower or any
Subsidiary 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; or
49
11.8 DISSOLUTION. Any order is entered in any proceeding against the
Borrower or any Subsidiary decreeing the dissolution, liquidation, winding-up
or split-up of the Borrower or such Subsidiary, and such order remains in
effect for thirty (30) days; or
11.9 UNDISCHARGED JUDGMENT. Final Judgment or judgments in the
aggregate, that might be or give rise to Liens on any property of the Borrower
or any Subsidiary, for the payment of money in excess of $1,000,000.00 shall
be rendered against the Borrower or any Subsidiary and the same shall remain
undischarged for a period of thirty (30) days during which execution shall not
be effectively stayed; or
11.10 ENVIRONMENTAL MATTERS. The occurrence of any of the following
events that could result in liability to the Borrower or any Subsidiary under
any Environmental Law or the creation of a Lien on any property of the
Borrower or any Subsidiary in favor of any governmental authority or any other
Person for any liability under any Environmental Law or for damages arising
from costs incurred by such Person in response to a Release or threatened
Release of Hazardous Materials into the environment if any such asserted
liability or Lien exceeds $10,000,000.00 and if any such lien would cover any
property of the Borrower or any Subsidiary which property is or would
reasonably be considered to be integral to the operations of the Borrower or
any Subsidiary in the ordinary course of business:
(a) the Release of Hazardous Materials at, upon, under or
within the property owned or leased by the Borrower or any Subsidiary
or any contiguous property;
(b) the receipt by the Borrower or any Subsidiary of any
summons, claim, complaint, judgment, order or similar notice that it
is not in compliance with or that any governmental authority is
investigating its compliance with any Environmental Law;
(c) the receipt by the Borrower or any Subsidiary of any
notice or claim to the effect that it is or may be liable for the
Release or threatened Release of Hazardous Materials into the
environment; or
(d) any governmental authority incurs costs or expenses in
response to the Release of any Hazardous Material which affects in any
way the properties of the Borrower or any Subsidiary.
11.11 OTHER REMEDIES. In addition to and cumulative of any rights or
remedies expressly provided for in this Section 11, 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.
11.12 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.
50
12. THE AGENT
12.1 AUTHORIZATION AND ACTION. Each Bank hereby appoints Chase as its
Agent under and irrevocably authorizes the Agent (subject to Sections 12.1 and
12.7) to take such action as the Agent on its behalf and to exercise such
powers under this Agreement 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 to
exercise all rights, powers, and remedies that the Agent may have hereunder.
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 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.
12.2 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 (which
may be by telegram, cable, telex, or otherwise) believed by it to be genuine
and signed or sent by the PROPER PARTY or parties.
12.3 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
51
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 12.7) take such action with respect to such
Default; PROVIDED THAT, unless and until the Agent shall have received the
directions referred to in Sections 12.1 or 12.7, 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.
12.4 CHASE AND AFFILIATES. With respect to its Commitment, any Loan
made by it, and the Note issued to it, Chase 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 Chase in its individual capacity. Chase
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 respective Affiliates and any Person who may do
business with or own securities of the Borrower or any such Affiliate, all as
if Chase were not the Agent and without any duty to account therefor to the
Banks.
12.5 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 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 the
Borrower or any Subsidiary (or any of their Affiliates) which may come into
the possession of the Agent or any of its Affiliates.
12.6 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 COMMITMENT,
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
52
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.
12.7 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 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
$500,000,000.00. 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 12 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
12.8 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.
13. MISCELLANEOUS
13.1 REPRESENTATION BY THE BANKS. Each Bank represents that it is the
intention of such Bank, as of the date of its acquisition of its Note, to
acquire the Note for its account or for the account of its Affiliates, and not
with a view to the distribution or sale thereof, and, subject to any
applicable laws, the disposition of such Bank's property shall at all times be
within its control. The Notes have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), and may not be transferred,
sold or otherwise disposed of EXCEPT (a) in a registered Offering under the
Securities Act; (b) pursuant to an exemption from the registration
53
provisions of the Securities Act; or (c) if the Securities Act shall not apply
to the Notes or the transactions contemplated hereunder as commercial lending
transactions.
13.2 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 8; (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, any Note, or any fees or other amounts payable
hereunder; (d) postpone any date fixed for any payment of principal of, or
interest on, any Note, or any fees (including, without limitation, any fee) or
other amounts payable hereunder; (e) change the percentage of the Commitments
or of the aggregate unpaid principal amount of any Note, or the number of
Banks which shall be required for Banks, or any of them, to take any action
hereunder; or (f) amend this Section 13.2; 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. 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.
13.3 REIMBURSEMENT OF EXPENSES. Other than expenses provided in
Section 9.7, any provision hereof to the contrary notwithstanding, and whether
or not the transactions contemplated by this Agreement shall be consummated,
the Borrower agrees to reimburse the Bank for its reasonable out-of-pocket
expenses, including the reasonable fees and expenses of counsel to the Bank,
in connection with such transactions, or any of them, or otherwise in
connection with this Agreement, including its negotiation, preparation,
execution, administration, modification and enforcement, and all reasonable
fees, including the reasonable fees and expenses of counsel to the Agent and
each Bank, costs and expenses of the Agent for environmental consultants and
costs and expenses of the Agent and each Bank in connection with due
diligence, transportation, computer time and research and duplication. The
Borrower agrees to pay any and all stamp and other taxes which may be payable
or determined to be payable in connection with the execution and delivery of
this Agreement or the Notes, and to save any holder of any Note harmless from
any and all liabilities with respect to or resulting from any delay or
omission to pay any such taxes. The obligations of the Borrower under this
Section 13.3 shall survive the termination of this Agreement and/or the
payment of the Notes.
54
13.4 NOTICES. All notices and other communications provided for
herein shall be in writing (including telex, facsimile, or cable
communication) and shall be mailed, telecopied, telexed, cabled or delivered
addressed as follows:
(a) If to the Borrower, to it at: Southern Union Company
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Southern Union Company
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Agent, to it at: Chase Bank of Texas, National Association
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager/Commercial Lending
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Chase Securities Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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 such notices and
communications shall, when mailed, telecopied, telexed, transmitted, or
cabled, become effective when deposited in the mail, confirmed by telex answer
back, transmitted to the telecopier, or delivered to the cable company, except
that notices and communications to the Agent under Sections 2.1(c) or 2.2
shall not be effective until actually received by the Agent.
13.5 GOVERNING LAW; VENUE. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
AND THE UNITED STATES OF AMERICA; PROVIDED, HOWEVER, that Chapter 346 of the
Texas Finance Code, as amended, shall not apply to this Agreement and the
Notes issued hereunder. ▇▇▇▇▇▇ County, Texas shall be a proper place of venue
to enforce payment or performance of this Agreement and the other Loan
Documents by the Borrower, unless the Agent shall give its prior written
consent to a different venue. The Borrower hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of
or relating to any of the Loan Documents in the District Courts of ▇▇▇▇▇▇
County, Texas, or in the United
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ for the Western District of Texas, Austin Division, and
hereby further irrevocably waives any claims that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient
forum. The Borrower hereby irrevocably agrees that, provided that the Borrower
can obtain personal jurisdiction over and service of process upon the Agent or
the applicable Bank, any legal proceeding against the Agent or any Bank
arising out of or in connection with this Agreement or the other Loan
Documents shall be brought in the district courts of ▇▇▇▇▇▇ County, Texas, or
in the United States District Court for the Western District of Texas, Austin
Division. Nothing contained in this Section or in any other provision of any
Loan Document (unless expressly provided otherwise) shall be deemed or
construed as an agreement by any Bank to be subject to the jurisdiction of
such courts.
13.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants contained herein or made in writing
by the Borrower in connection herewith shall survive the execution and
delivery of this Agreement 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 the Borrower 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 the Borrower.
13.7 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.
13.8 SEPARABILITY. 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.
13.9 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.
13.10 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.
56
13.11 LIMITATION OF LIABILITY. No claim may be made by the Borrower
or any other Person against the Agent or any Bank or the Affiliates,
directors, officers, employees, attorneys, or agents of the Agent or any Bank
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 Borrower hereby waives, releases, and agrees not
to ▇▇▇ upon any claim for any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
13.12 SET-OFF. The Borrower hereby gives and confirms to each Bank a
right of set-off of all moneys, securities and other property of the Borrower
(whether special, general or limited) and the proceeds thereof, now or
hereafter delivered to remain with or in transit in any manner to such Bank,
its Affiliates, correspondents or agents from or for the Borrower, 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 the Borrower
with, and any and all claims of security for the payment of the Notes and of
all other liabilities and obligations now or hereafter owed by the Borrower 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 the Borrower 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 the Borrower.
13.13 SALE OR ASSIGNMENT
(a) Subject to the prior written consent of the Agent and the
Borrower, such consent not to be unreasonably withheld, each Bank may
assign to an Eligible Assignee all or a portion of its rights and
obligations under this Agreement (including, without limitation, all
or a portion of its Commitments and the Note held by it); PROVIDED,
HOWEVER, that: (i) each such assignment shall be of a constant, and
not a varying, percentage of all of the assigning Banks rights and
obligations under this Agreement; (ii) the amount of the Commitments
so assigned shall equal or exceed $5,000,000.00; (iii) the Commitment
of each Bank shall be not less than $5,000,000.00 (subject only to
reductions pursuant to Sections 4.6 and 11 hereof); (iv) the parties
to each such assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register (as hereinafter
defined), an Assignment and Acceptance in the form of EXHIBIT C
attached hereto and made a part hereof (the "Assignment and
Acceptance"), together with any Note subject to such assignment and a
processing and recordation fee of $2,000.00; (v) any such assignment
from one Bank to another Bank shall not require the consent of the
Agent or the Borrower if such assignment does not result in any Bank
holding more than 60% of the aggregate outstanding Commitments; and
(vi) any such assignment shall not require the consent of the
Borrower if a Default or Event of Default shall have occurred and is
then continuing. Upon such execution, delivery, acceptance, and
recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be the date on
which such Assignment and
57
Acceptance is accepted by the Agent, (A) the Eligible 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
under the Loan Documents, and (B) 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 and be released from its obligations under the Loan
Documents (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Bank's rights and
obligations under the Loan Documents, such Bank shall cease to be a
party thereto).
(b) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the Eligible Assignee thereunder
confirm to and agree with each other and the other parties 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 in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness,
sufficiency, or value of 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 the Borrower or any Subsidiary or the
performance or observance by the Borrower of any of its obligations
under any Loan Document or any other instrument or document furnished
pursuant thereto; (iii) such Eligible Assignee confirms that it has
received a copy of the Loan Documents, together with copies of the
financial statements referred to in Section 7.2 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 Eligible Assignee, independently and without
reliance upon the Agent, such assigning Bank, or any Bank and based on
such documents and information as it shall deem appropriate at the
time, will continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such Eligible Assignee
appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under any Loan Document as are
delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vi) such Eligible
Assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of any Loan Document are
required to be performed by it as a Bank.
(c) The Agent shall maintain at its address referred to in
Section 13.4 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 Banks and the Commitment of, and 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
Banks may treat each Person whose name is recorded in the Register as
Bank hereunder for all purposes of the Loan Documents. The Register
shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank, together with any Note subject to such
assignment, the Agent, if such
58
Assignment and Acceptance has been completed and is in substantially
the form of EXHIBIT C, shall (i) accept such Assignment and
Acceptance; (ii) record the information contained therein in the
Register; and (iii) give prompt notice thereof to the Borrower.
Within three (3) Business Days after its receipt of such notice, the
Borrower at its own expense, shall execute and deliver to the Agent
in exchange for each surrendered Note a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained a Commitment hereunder, a new Note to the order of the
assigning Bank in an amount equal to the Commitment retained by it
hereunder. The new Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of the surrendered Notes,
shall be dated the effective date of such Assignment and Acceptance
and shall otherwise be in substantially the form of EXHIBIT C
attached hereto and made a part hereof. Upon receipt by the Agent of
each such new Note conforming to the requirements set forth in the
preceding sentences, the Agent shall return to the Borrower each such
surrendered Note marked to show that each such surrendered Note has
been replaced, renewed, and extended by such new Note.
(e) Each Bank may sell participations to one or more banks or
other entities in or to all or a portion of its rights and/or
obligations under this Agreement (including, without limitation, all
or a portion of its Commitment and the Note held by it); PROVIDED,
HOWEVER, that (i) each Bank's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged; (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations; (iii) except as provided below, such Bank shall remain
the holder of any such Note for all purposes of this Agreement; and
(iv) the participating banks or other entities shall be entitled to
the benefits of Sections 2.3 and 4.6 to recover costs, losses and
expenses in the circumstances, and to the extent provided in Section
2.3, as though such participant were a Bank; PROVIDED, HOWEVER, the
amounts to which a participant shall be entitled to obtain pursuant
to Sections 2.3 and 4.6 shall be determined by reference to such
participant's selling Bank and shall be recoverable solely from such
selling Bank and (v) the Borrower, the Agent and the other Banks
shall continue to deal solely and directly with the selling Bank in
connection with such Bank's rights and obligations under this
Agreement and the other Loan Documents; PROVIDED, HOWEVER, the
selling Bank may grant a participant rights with respect to
amendments, modification or waivers with respect to any fees payable
hereunder to such Bank (including the amount and the dates fixed for
the payment of any such fees) or the amount of principal or the rate
of interest payable on, the dates fixed for any payment of principal
or interest on, the Loans, or the release of any obligations of the
Borrower hereunder and under the other Loan Documents, or the release
of any security for any of the Obligations. Except with respect to
cost protections contained in Sections 2.3 and 4.6, no participant
shall be a third party beneficiary of this Agreement and shall not be
entitled to enforce any rights provided to its selling Bank against
the Company under this Agreement.
13.14 NON U.S. BANKS. Prior to the date of the initial Borrowings
hereunder, and from time to time thereafter if requested by the Borrower or
the Agent, each Bank organized under the laws of a jurisdiction outside the
United States of America shall provide the Agent and the Borrower with the
forms prescribed by the Internal Revenue Service of the United States of
America certifying such Banks exemption from United States withholding taxes
with respect to
59
all payments to be made to such Bank hereunder or under such Bank's Note.
Unless the Borrower and the Agent have received forms or other documents
satisfactory to them indicating that payments hereunder or under such Bank's
Note are not subject to United States withholding tax or are subject to such
tax at a rate reduced by an applicable tax treaty, the Borrower or the Agent
shall withhold taxes from such payments at the applicable statutory rate in
the case of payments to or for any Bank organized under the laws of a
jurisdiction outside the United States.
13.15 INTEREST. All agreements between the Borrower, 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 shall not exceed the
Highest Lawful Rate. The terms and provisions of this Section 13.15 shall
control and supersede every other provision of all agreements between the
Borrower and the Banks.
13.16 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 THEREBY AND THE EXERCISE OF ANY
OF THE BANKS' RIGHTS UNDER THIS AGREEMENT AND THE NOTES OR
60
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 13.16 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 BY THE BORROWER. FOR
PURPOSES OF THE FOREGOING SECTION 13.16, THE PHRASE "CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED THEREBY" SET FORTH IN SUBPARAGRAPH (a) ABOVE SHALL
INCLUDE, BUT NOT BE LIMITED TO, THE FINANCING OF ANY CORPORATE TAKEOVER
PERMITTED HEREUNDER AND THE BORROWER'S USE OF THE LOAN PROCEEDS FOR THE
PURPOSE OF ACQUIRING ANY EQUITY INTERESTS DESCRIBED IN SUBPARAGRAPH (ii) OF
THE DEFINITION OF "QUALIFYING ASSETS" SET FORTH IN THIS AGREEMENT (AS
AMENDED). THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 13.16 SHALL
SURVIVE ANY TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE NOTES.
13.17 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
61
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.
13.18 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.
13.19 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.
13.20 PRO RATA TREATMENT. All Loans under, and all payments and other
amounts received in connection with this Agreement (including, without
limitation, amounts received as a result of the exercise by any Bank of any
right of set off) shall be effectively shared by the Banks ratably in
accordance with the respective Pro Rata Percentages of the Banks. If any Bank
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set off, or otherwise) on account of the principal of, or
interest on, or fees in respect of, any Note held by it (other than pursuant
to Section 2.3(d)) in excess of its Pro Rata Percentage of payments on account
of similar Notes obtained by all the Banks, such Bank shall forthwith purchase
from the other Banks such participations in the Notes or Loans made by them 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 Bank shall be rescinded and such Bank shall repay to the
purchasing Bank the purchase price to the extent of such recovery together
with an amount equal to such Bank's ratable share (according to the proportion
of (a) the amount of such Bank's required repayment to (b) 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.
Disproportionate payments of interest shall be shared by the purchase of
separate participations in unpaid interest obligations, disproportionate
payments of fees shall be shared by the purchase of separate participations in
unpaid fee obligations, and disproportionate payments of principal shall be
shared by the purchase of separate participations in unpaid principal
obligations. The Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 13.20 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation.
Notwithstanding the foregoing, a Bank may receive and retain an amount in
excess of its Pro Rata Percentage to the extent but only to the extent, that
such excess results from such Bank's Highest Lawful Rate exceeding another
Bank's Highest Lawful Rate.
13.21 NO RIGHTS, DUTIES OR OBLIGATIONS OF SYNDICATION AGENT OR
DOCUMENTATION AGENT. The Borrower, the Agent and each Bank acknowledge and
agree that except for the rights, powers, obligations and liabilities under
this Agreement and the other Loan Documents as a Bank, Bank One, NA, as
Syndication Agent, and First Union National Bank, as Documentation Agent,
shall have no additional rights, powers, obligations or liabilities under this
agreement or
62
any other Loan Documents in their capacities as Syndication Agent or
Documentation Agent, respectively.
13.22 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.
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 May 31, 2000.
SOUTHERN UNION COMPANY
By. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Treasurer
Commitment: CHASE BANK OF TEXAS, NATIONAL
$15,000,000 ASSOCIATION, for itself and as Agent for the
Banks
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
63
Commitment: BANK ONE, NA
$15,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
Bank One, NA
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: FIRST UNION NATIONAL BANK
$15,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
64
Commitment: SUNTRUST BANK
$9,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
SunTrust Bank
303 Peachtree Street NE, 3rd Floor, M.C. 1929
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: FLEET NATIONAL BANK
$9,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
65
Commitment: CREDIT LYONNAIS NEW YORK BRANCH
$9,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
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Address for Notices:
Credit Lyonnais New York Branch
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: BANK OF AMERICA, N.A.
$9,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
Bank of America, N.A.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code: NC1-007-16-13
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
66
Commitment: UMB BANK, N.A.
$9,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
UMB Bank, N.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: THE FUJI BANK, LIMITED
$9,000,000
By:
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Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
The Fuji Bank, Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Separate Domestic and Eurodollar Lending Office:
The Fuji Bank, Limited
Two World ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
67
Commitment: THE BANK OF TOKYO-MITSUBISHI, LTD.
$9,000,000
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
The Bank of Tokyo-Mitsubishi, Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: CITIZENS BANK OF RHODE ISLAND
$6,000,000
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
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Address for Notices:
Citizens Bank of Rhode Island
One Citizens Plaza, Mail Stop 0480
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
68
Commitment: ▇▇▇▇▇ FARGO BANK (TEXAS), N.A.
$6,000,000
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
▇▇▇▇▇ Fargo Bank (Texas), N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ - Energy Department
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: FIRSTAR BANK, N.A.
$6,000,000
By:
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Name:
---------------------------------------------
Title:
---------------------------------------------
Address for Notices:
Firstar Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
69
Commitment: WESTDEUTSCHE LANDESBANK
$6,000,000 GIROZENTRALE, NEW YORK BRANCH
By:
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Name:
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Title:
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Address for Notices:
Westdeutsche Landesbank Girozentrale, New York Branch
1211 Avenues of the Americas
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Commitment: GULF INTERNATIONAL BANK B.S.C.
$3,000,000
By:
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Name:
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Title:
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Address for Notices:
Gulf International Bank B.S.C.
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Separate Eurodollar Lending Office:
Gulf International Bank B.S.C., Grand Cayman
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EXHIBIT A
REVOLVING NOTE
(Long-Term Credit Facility)
$___________ ____________, 200__
FOR VALUE RECEIVED, the undersigned, SOUTHERN UNION COMPANY, a
corporation organized under the laws of Delaware (the "Borrower"), HEREBY
PROMISES TO PAY to the order of ___________________________________ (the
"Bank"), on or before _______________________ (the "Maturity Date"), the
principal sum of ________________ Million and No/ 100ths Dollars
($_,000,000.00) in accordance with the terms and provisions of that certain
Amended and Restated Revolving Credit Agreement (Long-Term Credit Facility)
dated May ___, 2000, by and among the Borrower, the Bank, the other banks
named on the signature pages thereof, and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Agent (the "Credit Agreement"). Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to such terms in
the Credit Agreement.
The outstanding principal balance of this Revolving Note shall be
payable at the Maturity Date. The Borrower promises to pay interest on the
unpaid principal balance of this Revolving Note from the date of any Loan
evidenced by this Revolving Note until the principal balance thereof is paid
in full. Interest shall accrue on the outstanding principal balance of this
Revolving Note from and including the date of any Loan evidenced by this
Revolving Note to but not including the Maturity Date at the rate or rates,
and shall be due and payable on the dates, set forth in the Credit Agreement.
Any amount not paid when due with respect to principal (whether at stated
maturity, by acceleration or otherwise), costs or expenses, or, to the extent
permitted by applicable law, interest, shall bear interest from the date when
due to and excluding the date the same is paid in full, payable on demand, at
the rate provided for in Section 2.2(b) of the Credit Agreement.
Payments of principal and interest, and all amounts due with respect
to costs and expenses, shall be made in lawful money of the United States of
America in immediately available funds, without deduction, set off or
counterclaim to the account of the Agent at the principal office of Chase Bank
of Texas, National Association in Houston, Texas (or such other address as the
Agent under the Credit Agreement may specify) not later than noon (Houston
time) on the dates on which such payments shall become due pursuant to the
terms and provisions set forth in the Credit Agreement.
If any payment of interest or principal herein provided for is not
paid when due, then the owner or holder of this Revolving Note may at its
option, by notice to the Borrower, declare the unpaid, principal balance of
this Revolving Note, all accrued and unpaid interest thereon and all other
amounts payable under this Revolving Note to be forthwith due and payable,
whereupon this Revolving Note, all such interest and all such amounts shall
become and be forthwith due and payable in full, without presentment, demand,
protest, notice of intent to accelerate, notice of actual acceleration or
further notice of any kind, all of which are hereby expressly waived by the
Borrower.
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If any payment of principal or interest on this Revolving Note shall
become due on a Saturday, Sunday, or public holiday on which the Agent is not
open for business, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in computing
interest in connection with such payment.
In addition to all principal and accrued interest on this Revolving
Note, the Borrower agrees to pay (a) all reasonable costs and expenses
incurred by the Agent and all owners and holders of this Revolving Note in
collecting this Revolving Note through any probate, reorganization bankruptcy
or any other proceeding and (b) reasonable attorneys' fees when and if this
Revolving Note is placed in the hands of an attorney for collection after
default.
All agreements between the Borrower and the 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 this Revolving Note or otherwise, shall the
amount paid, or agreed to be paid, to the Bank for the use, forbearance, or
detention of the money to be loaned under the Credit Agreement and evidenced
by this Revolving Note or otherwise or for the payment or performance of any
covenant or obligation contained in the Credit Agreement or this Revolving
Note exceed the amount permissible at Highest Lawful Rate. If as a result of
any circumstances whatsoever, fulfillment of any provision hereof or of the
Credit Agreement 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 fulfilled shall be reduced to the limit
of such validity, and if from any such circumstance, the 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 this Revolving Note or the amounts
owing on other obligations of the Borrower to the Bank under the Credit
Agreement and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance of this Revolving Note and the amounts
owing on other obligations of the Borrower to the Bank under the Credit
Agreement, as the case may be, such excess shall be refunded to the Borrower.
In determining whether or not the interest paid or payable under any specific
contingencies exceeds the Highest Lawful Rate, the Borrower and the Bank
shall, to the maximum extent permitted under applicable law, (a) characterize
any nonprincipal payment as an expense, fee or premium rather than as
interest; (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate and spread in equal parts during the period of the
full stated term of this Revolving Note, all interest at any time contracted
for, charged, received or reserved in connection with the indebtedness
evidenced by this Revolving Note.
This Revolving Note is one of the Notes provided for in, and is
entitled to the benefits of, the Credit Agreement, which Credit Agreement,
among other things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events, for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
and with the effect therein specified, and provisions to the effect that no
provision of the Credit Agreement or this Revolving Note shall require the
payment or permit the collection of interest in excess of the Highest Lawful
Rate. It is contemplated that by reason of prepayments or repayments hereon
prior to the Maturity Date, there may be times when no indebtedness is owing
hereunder prior to such date; but notwithstanding such occurrence this
Revolving Note shall
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remain valid and shall be in full force and effect as to Loans made pursuant
to the Credit Agreement subsequent to each such occurrence.
Except as otherwise specifically provided for in the Credit
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, protest, notice of protest, notice of intent to accelerate, notice of
acceleration and diligence in collecting and bringing of suit against any
party hereto, and agree to all renewals, extensions or partial payments hereon
and to any release or substitution of security hereof, in whole or in part,
with or without notice, before or after maturity.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
executed and delivered by its officer thereunto duly authorized effective as
of the date first above written.
SOUTHERN UNION COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
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EXHIBIT B
NOTICE OF BORROWING
(Long-Term Credit Facility)
The undersigned hereby certifies that s/he is an officer of SOUTHERN
UNION COMPANY, a corporation organized under the laws of Delaware (the
"Borrower"), authorized to execute this Notice of Borrowing on behalf of the
Borrower. With reference to that certain Amended and Restated Revolving
Credit Agreement (Long-Term Credit Facility) dated May ___, 2000 (as same may
be amended, modified, increased, supplemented and/or restated from time to
time, the "Credit Agreement") entered into by and between the Borrower, CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, as Agent, and the Banks identified
therein, the undersigned further certifies, represents and warrants to Banks
on behalf of the Borrower that to his best knowledge and belief after
reasonable and due investigation and review, all of the following statements
are true and correct (each capitalized term used herein having the same
meaning given to it in the Credit Agreement unless otherwise specified):
(a) Borrower requests that the Banks advance to the Borrower the
aggregate sum of $__________by no later than ____________, 200__ (the
"Borrowing Date"). Immediately following such Loan, the aggregate outstanding
balance of Loans shall equal $__________. Borrower requests that the Loans
bear interest as follows:
(i) The principal amount of the Loans, if any, which shall
bear interest at the Alternate Base Rate requested to be made by the
Banks is $________. The initial Rate Period for such Loans shall be 90
DAYS.
(ii) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
FIFTEEN DAYS requested to be made by the Banks is $___________.
(iii) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
ONE MONTH requested to be made by the Banks is $__________.
(iv) The principal amount of the Loans, if any, which shall
bear interest at the Eurodollar Rate for which the Rate Period shall be
TWO MONTHS requested to be made by the Banks is $_________.
(v) The principal amount of the Revolving Loans, if any,
which shall bear interest at the Eurodollar Rate for which the Rate
Period shall be THREE MONTHS requested to be made by the Banks is
$___________.
(vi) The principal amount of the Revolving Loans, if any,
which shall bear interest at the Eurodollar Rate for which the Rate
Period shall be SIX MONTHS requested to be made by the Banks is
$___________.
(b) The proceeds of the borrowing shall be deposited into Borrower's
demand deposit account at Chase Bank of Texas, National Association more fully
described as follows:
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Account No. 09916100522, styled Southern Union Company.
(c) Of the aggregate sum to be advanced, $_____________ will be
advanced to provide working capital pursuant to Section 6.1(a) of the Credit
Agreement and $__________will be advanced for the purposes set forth in
Section 6.1(b) of the Credit Agreement; and $__________ will be advanced for
the purposes set forth in Section 6.1(c) of the Credit Agreement; and
$___________ will be advanced for the purposes of replacing Loans currently
outstanding under the Credit Agreement.
(d) The Expiration Date of each Rate Period specified in (a) above
shall be the last day of such Rate Period.
(e) As of the date hereof, and as a result of the making of the
requested Loans, there does not and will not exist any Default or Event of
Default.
(f) The representations and warranties contained in Section 7 of the
Credit Agreement are true and correct in all material respects as of the date
hereof and shall be true and correct upon the making of the requested Loan,
with the same force and effect as though made on and as of the date hereof
and thereof.
(g) No change that would cause a material adverse effect on the
business, operations or condition (financial or otherwise) of the Borrower
has occurred since the date of the most recent financial statements provided
to the Banks dated as of __________, 200__.
EXECUTED AND DELIVERED this _____ day of _______________, 200__.
SOUTHERN UNION COMPANY
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By:
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Name:
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Title:
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EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
[NAME AND ADDRESS OF
ASSIGNING BANK]
_______________, 200__
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Re: Southern Union Company Amended and Restated Revolving Credit
Agreement (Long-Term Credit Facility)
Ladies and Gentlemen:
We have entered into an Amended and Restated Revolving Credit
Agreement (Long-Term Credit Facility) dated as of May ____, 2000 (the "Credit
Agreement"), among certain banks (including us), Chase Bank of Texas,
National Association (the "Agent") and Southern Union Company (the
"Company"). Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Credit Agreement.
Each reference to the Credit Agreement, the Notes, or any other
document evidencing or governing the Loans (all such documents collectively,
the "Financing Documents") includes each such document as amended, modified,
extended or replaced from time to time. All times are Houston times.
1. ASSIGNMENT. WE HEREBY SELL YOU AND ASSIGN TO YOU WITHOUT RECOURSE,
AND YOU HEREBY UNCONDITIONALLY AND IRREVOCABLY ACQUIRE FOR YOUR OWN ACCOUNT
AND RISK, A PERCENT ( %) UNDIVIDED INTEREST ("YOUR ASSIGNED SHARE") IN EACH
OF THE FOLLOWING (THE "ASSIGNED OBLIGATIONS"):
a. our Note;
b. all Loans and interest thereon as provided in Section 2 of the
Credit Agreement [,except that interest shall accrue on your assigned share in
the principal of Alternate Base Rate Loans and Eurodollar Rate Loans at an
annual rate equal to the rate provided in the Credit Agreement minus _____%];
and
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c. commitment fees payable pursuant to Section 5 of the Credit
Agreement[, except that your assigned share in such fees shall be at an annual
rate equal to the rate provided in the Credit Agreement minus ____%].
2. MATERIALS PROVIDED ASSIGNEE
a. We will promptly request that the Company issue new Notes
to us and to you in substitution for our Note to reflect the assignment set
forth herein. Upon issuance of such substitute Notes, (i) you will become a
Bank under the Credit Agreement, (ii) you will assume our obligations under
the Credit Agreement to the extent of your assigned share, and (iii) the
Company will release us from our obligations under the Credit Agreement to
the extent, but only to the extent, of your assigned share. The Company
consents to such release by signing this Agreement where indicated below. As
a Bank, you will be entitled to the benefits and subject to the obligations
of a "Bank", as set forth in the Credit Agreement, and your rights and
liabilities with respect to the other Banks and the Agent will be governed by
the Credit Agreement, including without limitation Section 12 thereof.
b. We have furnished you copies of the Credit Agreement, our
Note and each other Financing Document you have requested. We do not
represent or warrant (i) the priority, legality, validity, binding effect or
enforceability of any Financing Document or any security interest created
thereunder, (ii) the truthfulness and accuracy of any representation
contained in any Financing Document, (iii) the filing or recording of any
Financing Document necessary to perfect any security interest created
thereunder, (iv) the financial condition of the Company or any other Person
obligated under any Financing Document, any financial or other information,
certificate, receipt or other document furnished or to be furnished under any
Financing Document or (v) any other matter not specifically set forth herein
having any relation to any Financing Document, your interest in one Note, the
Company or any other Person. You represent to us that you are able to make,
and have made, your own independent investigation and determination of the
foregoing matters, including, without limitation, the credit worthiness of
the Company and the structure of the transaction.
3. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Texas. You
irrevocably submit to the jurisdiction of any State or Federal court sitting
in Austin, Texas in any suit, action or proceeding arising out of or relating
to this Agreement and irrevocably waive any objection you may have to this
laying of venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding has been brought
in an inconvenient forum. We may serve process in any manner permitted by law
and may bring proceedings against you in any other jurisdiction.
4. NOTICES. All notices and other communications given hereunder to a
party shall be given in writing (including bank wire, telecopy, telex or
similar writing) at such party's address set forth on the signature pages
hereof or such other address as such party may hereafter specify by notice to
the other party. Notice may also be given by telephone to the Person, or any
other officer in the office, listed on the signature pages hereof if
confirmed promptly by telex or telecopy. Notices shall be effective
immediately, if given by telephone; upon transmission, if given by bank wire,
telecopy or telex; five days after deposit in the mails, if mailed; and when
delivered, if given by other means.
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5. AUTHORITY. Each of us represents and warrants that the execution and
delivery of this Agreement have been validly authorized by all necessary
corporate action and that this Agreement constitutes a valid and legally
binding obligation enforceable against it in accordance with its terms.
6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by each party on separate counterparts, each of which shall
be an original but all of which taken together shall be but one instrument.
7. AMENDMENTS. No amendment modification or waiver of any provision of
this Agreement shall be effective unless in writing and signed by the party
against whom enforcement is sought.
If the foregoing correctly sets forth our agreement, please so
indicate by signing the enclosed copy of this Agreement and returning it to
us.
Very truly yours,
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By:
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Name:
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Title:
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[▇▇▇▇, ▇▇▇▇▇, Zip Code]
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Telephone:
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Telecopy:
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AGREED AND ACCEPTED:
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By:
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Attention:
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Telephone:
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Telecopy:
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Account for Payments:
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ASSIGNMENT APPROVED PURSUANT TO SECTION 13.13 OF THE CREDIT
AGREEMENT AND RELEASE APPROVED IN SECTION 2 OF THIS AGREEMENT:
SOUTHERN UNION COMPANY
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By:
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Name:
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Title:
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