EXHIBIT 10.2
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(SHORT-TERM CREDIT FACILITY)
DATED AS OF MAY 31, 2000
BY AND AMONG
SOUTHERN UNION COMPANY
AS THE BORROWER
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
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(SHORT-TERM CREDIT FACILITY)
Reference is hereby made to that certain Revolving Credit Agreement
(Short-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 (Short-Term Facility) dated as of February 25, 1999
(the "First Amendment") and a Second Amendment to Revolving Credit Agreement
(Short-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
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whatsoever imposed by any taxing authority on or with regard to any aspect of
the 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 12.13.
"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.
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"BORROWER" shall have the meaning set forth in the preamble hereto.
"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 10,
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
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adjustment for extraordinary items, as shown in the financial statements of
Borrower and its Subsidiaries referred to in Section 6.2 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
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determined by the Agent, at or before 11:00 a.m. Houston time (or as soon
thereafter as 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:
========================================================================================
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 Ratings Group 0.600%
----------------------------------------------------------------------------------------
Baa2 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB by Standard and
Poor's Ratings Group 0.650%
----------------------------------------------------------------------------------------
Baa3 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB- by Standard and
Poor's Ratings Group 0.700%
----------------------------------------------------------------------------------------
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%
----------------------------------------------------------------------------------------
"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.
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"EVENT OF DEFAULT" shall mean any of the events specified in Section
10, 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.
"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 for the account of the Borrower under the
Long-Term Credit Facility and, in the plural form, all such Standby Letters of
Credit issued for the account of the Borrower.
"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 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 6.2.
"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.
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"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 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
12.16.
"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
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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.
"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.
"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.
"LONG-TERM CREDIT FACILITY" means that certain $135,000,000.00 credit
facility provided to the Borrower by the Banks, as evidenced and governed by
the Long-Term Credit Facility Agreement.
"LONG-TERM CREDIT FACILITY AGREEMENT" means that certain Revolving
Credit Agreement of even effective date herewith, executed by and among the
Borrower, the Banks, and the Agent in connection with the Long-Term Credit
Facility, as the same may be amended, modified, supplemented, or restated from
time to time.
"LONG-TERM CREDIT FACILITY NOTES" means the promissory notes of the
Borrower executed and delivered under the Long-Term Credit Facility Agreement.
"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.
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"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 30, 2001, 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.
"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 all obligations of the Borrower to the Bank
under this Agreement, the Notes and all other Loan Documents to which it is a
party.
"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.
10
"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.
"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 3.6.
"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 6.15
(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
11
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 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 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 12.1.
"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.
"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 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
12
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.
2. THE LOANS
2.1 THE LOANS
(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 the amount set
opposite such Banks name on the signature pages hereof (such Bank's
"Commitment"). 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.
13
(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 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 12.4, 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
7, 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 ▇▇▇▇
14
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 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
15
(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 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.
16
(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 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
17
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 and the commitment fee
payable under SECTION 4.1 hereof, and notwithstanding the provisions
set forth in the definitions of Eurodollar Rate or in the pricing grid
established for the commitment fee in SECTION 4.1 hereof, in the event
that the ratings for 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 and the commitment
fee payable under SECTION 4.1 hereof shall be based on the higher of
such ratings if there is only one category difference between the
functional equivalents of such ratings, and if there is a two category
difference between the functional equivalents of such ratings, the
component of pricing from the grid set forth in such definitions or in
SECTION 4.1 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 30, 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 364 days
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 364 days 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.
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
18
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 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
19
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
Long-Term Credit Facility shall not exceed $250,000,000, and (vi) in
the event the Borrower reduces in 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. PAYMENTS AND PREPAYMENTS
3.1 REQUIRED PREPAYMENTS
(a) The Borrower agrees that if at any time it or the Agent
determines that the aggregate principal amount of Loans outstanding
exceeds the Commitments, then the Borrower shall make a prepayment of
principal of the Loans in an amount at least equal to such excess.
20
(b) Upon the Borrower's reduction or termination of the
Commitments under Section 3.6, the Borrower shall make such prepayments
as are required by the terms of Section 3.6.
(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 Long-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 Long-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).
3.2 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.
3.3 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 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.
3.4 NO PREPAYMENT PREMIUM OR PENALTY. Each prepayment pursuant
to Section 3.1 or 3.3 shall be without premium or penalty, subject in the
case of Eurodollar Rate Loans to the provisions of Section 2.3(d).
3.5 TAXES. All payments (whether of principal, interest,
reimbursements or otherwise) under this Agreement or on the Notes 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
21
other charge is 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.
3.6 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. 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.
4. COMMITMENT FEE AND OTHER FEES
4.1 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 0.105%
----------------------------------------------------------------------------------------
Baa1 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB+ by Standard and
Poor's Ratings Group 0.130%
----------------------------------------------------------------------------------------
Baa2 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB by Standard and
Poor's Ratings Group 0.130%
----------------------------------------------------------------------------------------
Baa3 by ▇▇▇▇▇'▇ Investor Service, Inc. OR BBB- by Standard and
Poor's Ratings Group 0.130%
========================================================================================
22
----------------------------------------------------------------------------------------
Equal to or less than Ba1 by ▇▇▇▇▇'▇ Investor Service, Inc. AND
equal to or less than BB+ by Standard and Poor's Ratings Group 0.230%
========================================================================================
4.2 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.
4.3 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.
5. APPLICATION OF PROCEEDS
5.1 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
Long-Term Credit Facility, if any, to finance the Pending Acquisitions
in excess of $100,000,000 in the aggregate and PROVIDED, FURTHER, that
the use
23
of any Loan proceeds, together with the use of proceeds of the
Long-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 Long-Term Credit Facility for
such purpose, if any, shall be limited to an aggregate amount advanced
to $40,000,000; 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 Long-Term Credit Facility
for such purpose, if any, shall be limited to an aggregate amount
advanced to $50,000,000.
6. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
6.1 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 6.1 attached hereto and hereby made a part hereof for all
purposes, and no others, each of which is a Delaware corporation unless
otherwise noted. None of the Subsidiaries listed on SCHEDULE 6.1 as "Inactive
Subsidiaries," conducts or will conduct any business, and none of such
Subsidiaries has any assets other than minimum legal capitalization.
6.2 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.
6.3 LITIGATION. Except as disclosed on SCHEDULE 6.3 or pursuant
to Section 6.16, 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
24
expected to have a Material Adverse Effect; (b) judgment outstanding 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.
6.4 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.
6.5 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.
6.6 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 6.6.
6.7 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.
6.8 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.
25
6.9 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.
6.10 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.
6.11 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 Long-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 9.2
of the Credit Agreement and the restrictions on disposition of assets set
forth in Section 9.8 of the Credit Agreement is represented by margin stock.
6.12 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.
6.13 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 Section 13 or Section 14 of the Securities Exchange Act of
1934, as amended, except the equity interests described in subparagraph (ii)
of the definition of "Qualifying Assets".
6.14 FRANCHISES, CO-LICENSES, ETC. The Borrower and each Subsidiary
own or have obtained all the material governmental permits, certificates of
authority, leases, patents, trademarks,
26
service marks, trade names, copyrights, franchises and licenses, and rights
with respect thereto, required or necessary (or, in the sole and independent
judgment of the Borrower, prudent) in connection with the conduct of their
respective businesses as presently conducted or as proposed to be conducted.
6.15 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.
6.16 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 6.16, 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.
7. CONDITIONS
The obligation of the Banks to make any Loans is subject to the
following conditions:
27
7.1 REPRESENTATIONS TRUE AND NO DEFAULTS
(a) The representations and warranties contained in Section 6
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.
7.2 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.
7.3 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.
7.4 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.
7.5 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.
7.6 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
28
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 authorizing the Borrower to secure Loans and Facility
Letters of Credit in accordance with the terms of this Agreement and the
Long-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.
8. 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:
8.1 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.
29
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 9.1 or reflecting any 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.
8.2 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 8.2) 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 8.1(a) a current complete schedule (in the form of SCHEDULE
8.2) 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.
8.3 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.
8.4 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 8.1(a), an Officer's Certificate containing full
information as to the insurance carried.
8.5 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.
30
8.6 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 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.
8.7 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
6.1.
8.8 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.
8.9 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;
31
(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;
(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.
8.10 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 8.10.
8.11 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).
9. 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:
9.1 CAPITAL REQUIREMENTS. The Borrower will not:
32
(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 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 9.4, 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 Long-Term Credit Facility Notes to exceed for a period
of 180 consecutive days the Borrower's Available Senior Funded Debt
Capacity.
9.2 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
33
(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 no such Lien may encumber or cover any
other property of the Borrower or any Subsidiary.
9.3 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 Long-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 6.2(b) and refinancings
thereof other than Debt that has been refinanced by the proceeds of
Loans or the proceeds of the Long-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 9.2(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
34
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, (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 Long-Term Credit Facility Agreement or shall be borrowed from a
financial institution that is not a Bank under this Agreement or the
Long-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 9.3.
9.4 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 6.1 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
35
(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
(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 8.2 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
9.1(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 9.4, 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.
36
9.5 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), 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.
9.6 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 9.14, 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 9.1(c);
(e) the Borrower or any Subsidiary may sell, lease, assign or
otherwise dispose of assets as otherwise permitted under Section 9.8;
and
(f) the Borrower may merge with the entities described in and
as contemplated under the definition of "Pending Acquisitions."
9.7 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.
9.8 SALE OR OTHER DISPOSITION OF ASSETS. The Borrower will not, and
will not permit any Subsidiary to, except as permitted under this Section 9.8,
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 consist-
37
ing 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 its Property on the
terms set forth in Section 9.6(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 9.4(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.
9.9 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.
9.10 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.
9.11 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
38
could incur at least $1 of additional Debt without violating the provisions
of Section 9.3(g) AND after giving effect thereto no Default or Event of
Default exists hereunder.
9.12 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 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.
9.13 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 6.15 and the definition
of Qualifying Assets; or (c) permit any material overall change in the
management of the Borrower.
9.14 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.
9.15 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.
9.16 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.
10. 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
39
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 10.7 or 10.8
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 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:
10.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower does not pay,
repay or prepay any principal of or interest on any Note or any Long-Term Credit
Facility Note when due; or
10.2 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 Long-Term Credit Facility Agreement, the Notes, the Long-Term
Credit Facility Notes, or any Reimbursement Obligation within two (2) calendar
days after the same shall have become due; or
10.3 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
10.4 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
10.5 VIOLATION OF NEGATIVE COVENANTS. The Borrower violates any
covenant, agreement or condition contained in Sections 9.2, 9.3, 9.5, 9.6, 9.9,
9.10, 9.11, or 9.15; or
10.6 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 10.1,
10.2, 10.3, 10.4, and 10.5 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
10.7 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,
40
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
10.8 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
10.9 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
10.10 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.
10.11 OTHER REMEDIES. In addition to and cumulative of any rights or
remedies expressly provided for in this Section 10, 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
41
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.
10.12 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.
11. THE AGENT
11.1 AUTHORIZATION AND ACTION. Each Bank hereby appoints Chase as its
Agent under and irrevocably authorizes the Agent (subject to Sections 11.1 and
11.7) 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.
11.2 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
42
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.
11.3 DEFAULTS. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the nonpayment of principal of or interest
hereunder or of any fees) unless the Agent has received notice from a Bank or
the Borrower specifying such Default and stating that such notice is a Notice of
Default. In the event that the Agent receives such a notice of the occurrence of
a Default, the Agent shall give prompt notice thereof to the Banks (and shall
give each Bank prompt notice of each such nonpayment). The Agent shall (subject
to Section 11.7) take such action with respect to such Default; PROVIDED THAT,
unless and until the Agent shall have received the directions referred to in
Sections 11.1 or 11.7, 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.
11.4 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.
11.5 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.
11.6 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,
43
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES, AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO
OR ARISING OUT OF THIS AGREEMENT OR THE NOTES OR ANY ACTION TAKEN OR OMITTED
BY THE AGENT UNDER THIS AGREEMENT OR THE NOTES; PROVIDED THAT NO BANK SHALL
BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS
RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON BEING
INDEMNIFIED; AND PROVIDED FURTHER THAT IT IS THE INTENTION OF EACH BANK TO
INDEMNIFY THE AGENT AGAINST THE CONSEQUENCES OF THE AGENT'S OWN NEGLIGENCE,
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, CONCURRENT, ACTIVE OR PASSIVE.
WITHOUT LIMITATION OF THE FOREGOING, EACH BANK AGREES TO REIMBURSE THE AGENT
PROMPTLY UPON DEMAND FOR ITS PRO RATA PERCENTAGE OF ANY OUT-OF-POCKET
EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE AGENT IN CONNECTION WITH
THE PREPARATION, ADMINISTRATION, OR ENFORCEMENT OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT AND THE NOTES, TO
THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
11.7 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 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
11.8 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.
12. MISCELLANEOUS
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12.1 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 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.
12.2 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 7; (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 12.2; 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.
12.3 REIMBURSEMENT OF EXPENSES. Other than expenses provided in
Section 8.7, 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
45
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 12.3 shall survive the termination of this
Agreement and/or the payment of the Notes.
12.4 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.
46
12.5 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
States District Court 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.
12.6 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.
12.7 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.
12.8 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.
47
12.9 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.
12.10 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.
12.11 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.
12.12 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.
12.13 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 3.6 and 10 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
48
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 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 6.2 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 12.4 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
49
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 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 3.6 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 3.6 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 3.6, no
50
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.
12.14 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 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.
12.15 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 12.15 shall control and supersede every other
provision of all agreements between the Borrower and the Banks.
12.16 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,
51
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 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 12.16 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 12.16, 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
52
DEFINITION OF "QUALIFYING ASSETS" SET FORTH IN THIS AGREEMENT (AS AMENDED).
THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 12.16 SHALL SURVIVE ANY
TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE NOTES.
12.17 PAYMENTS SET ASIDE. To the extent that the Borrower makes a
payment or payments to the Agent or any Bank or the Agent or any Bank exercises
its right of set off, and such payment or payments or the proceeds of such set
off or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to a trustee, receiver
or any other Person under any Debtor Law or equitable cause, then, to the extent
of such recovery, the obligation or part thereof originally intended to be
satisfied, and all rights and remedies therefor, shall be revived and shall
continue in full force and effect as if such payment had not been made or set
off had not occurred.
12.18 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.
12.19 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.
12.20 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 12.20 may, to the fullest extent
53
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.
12.21 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
any other Loan Documents in their capacities as Syndication Agent or
Documentation Agent, respectively.
12.22 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
54
Commitment: CHASE BANK OF TEXAS, NATIONAL
$10,000,000 ASSOCIATION, for itself and as Agent for the Banks
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
55
Commitment: BANK ONE, NA
$10,000,000
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
Address for Notices:
Bank One, NA
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: FIRST UNION NATIONAL BANK
$10,000,000
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
Address for Notices:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
56
Commitment: SUNTRUST BANK
$6,000,000
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
Address for Notices:
SunTrust Bank
303 Peachtree Street NE, 3rd Floor, M.C. 1929
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: FLEET NATIONAL BANK
$6,000,000
By:
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Name:
---------------------------------------------
Title:
--------------------------------------------
Address for Notices:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
57
Commitment: CREDIT LYONNAIS NEW YORK BRANCH
$6,000,000
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
Address for Notices:
Credit Lyonnais New York Branch
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: BANK OF AMERICA, N.A.
$6,000,000
By:
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Name:
---------------------------------------------
Title:
--------------------------------------------
Address for Notices:
Bank of America, N.A.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code: NC1-007-16-13
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
58
Commitment: UMB BANK, N.A.
$6,000,000
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
Address for Notices:
UMB Bank, N.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: THE FUJI BANK, LIMITED
$6,000,000
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
The Fuji Bank, Limited
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Separate Domestic and Eurodollar Lending Office:
The Fuji Bank, Limited
Two World ▇▇▇▇▇ ▇▇▇▇▇▇
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Commitment: THE BANK OF TOKYO-MITSUBISHI, LTD.
$6,000,000
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
The Bank of Tokyo-Mitsubishi, Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Attention: ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: CITIZENS BANK OF RHODE ISLAND
$4,000,000
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
Citizens Bank of Rhode Island
One Citizens Plaza, Mail Stop 0480
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Commitment: ▇▇▇▇▇ FARGO BANK (TEXAS), N.A.
$4,000,000
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.
$4,000,000
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
Firstar Bank, N.A.
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Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Commitment: WESTDEUTSCHE LANDESBANK
$4,000,000 GIROZENTRALE, NEW YORK BRANCH
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
Westdeutsche Landesbank Girozentrale, New York
Branch
1211 Avenues of the Americas
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: GULF INTERNATIONAL BANK B.S.C.
$2,000,000
By:
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Name:
---------------------------------------------
Title:
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Address for Notices:
Gulf International Bank B.S.C.
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Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Separate Eurodollar Lending Office:
Gulf International Bank B.S.C., Grand Cayman
c/o ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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62
EXHIBIT A
REVOLVING NOTE
(Short-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 (Short-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.
1
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
2
notwithstanding such occurrence this Revolving Note shall 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:_____________________________
EXHIBIT B
NOTICE OF BORROWING
(Short-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 (Short-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
$_______________.
1
(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:
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 5.1(a) of the Credit
Agreement and $__________will be advanced for the purposes set forth in Section
5.1(b) of the Credit Agreement; and $__________ will be advanced for the
purposes set forth in Section 5.1(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 6 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
_____________________________________
By:______________________________
Name:____________________________
Title:___________________________
2
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
[NAME AND ADDRESS OF
ASSIGNING BANK]
_______________, 200__
________________
________________
________________
________________
Re: Southern Union Company Amended and Restated Revolving Credit
Agreement (Short-Term Credit Facility)
Ladies and Gentlemen:
We have entered into an Amended and Restated Revolving Credit
Agreement (Short-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
1
c. commitment fees payable pursuant to Section 4 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 11 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.
2
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,
-----------------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇]
------------------
[▇▇▇▇, ▇▇▇▇▇, Zip Code]
------------
Telephone:
------------------------
Telecopy:
------------------------
AGREED AND ACCEPTED:
---------------------------------------
By:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Attention:
-------------------------
Telephone:
-------------------------
Telecopy:
-------------------------
Account for Payments:
-----------------
3
ASSIGNMENT APPROVED PURSUANT TO SECTION 12.13 OF THE CREDIT AGREEMENT
AND RELEASE APPROVED IN SECTION 2 OF THIS AGREEMENT:
SOUTHERN UNION COMPANY
By:
----------------
Name:
----------------
Title:
----------------
4