UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D. C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): December 1, 2006
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
(Exact
name of registrant as specified in its charter)
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Delaware
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1-2921
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44-0382470
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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5444
Westheimer Road
Houston,
Texas
(Address
of principal executive offices)
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77056-5306
(Zip
Code)
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Registrant's
telephone number, including area code: (713) 989-7000
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[
]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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[
]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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[Missing
Graphic Reference]
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
ITEM
2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On
December 1, 2006, Trunkline LNG Holdings, LLC (“TLNG Holdings”), as borrower,
and Panhandle Eastern Pipe Line Company, LP. (“Panhandle”) and CrossCountry
Citrus, LLC (“CCC”), as guarantors, entered into a $465 million unsecured term
loan facility (the “Credit Agreement”) with the financial institutions listed
therein and Bayerische Hypo- Und Vereinsbank AG, New York Branch (“HVB”), as
administrative agent.
The
proceeds of the Credit Agreement were used to repay approximately $455 million
of existing indebtedness under (1) that certain amended and restated credit
agreement dated as of December 21, 2005, by and between Transwestern Holding
Company, LLC (“TWH”), CCC, the lenders party thereto, Wachovia Bank, National
Association, as administrative agent, Bank of America, N.A., as syndication
agent, and JPMorgan Chase Bank, N.A., Sun Trust Bank and Calyon, New York
Branch, as co-documentation agents, and (2) that certain note purchase
agreement, dated as of November 17, 2004, between TWH and the holders listed
therein (collectively the “Existing TWH Debt”). The Credit Amendment is attached
hereto as Exhibit 10.1.
Pursuant
to the Credit Agreement, on December 1, 2006, TLNG Holdings loaned the proceeds
of the Credit Agreement to CCC in exchange for an interest-bearing promissory
note with a principal amount of $465 million, the amount of the proceeds
of the
Credit Agreement. Accrued interest under the promissory note is payable
quarterly. The interest rate under the promissory note is based on the interest
rate under the Credit Agreement. The promissory note is attached hereto as
Exhibit 10.2.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c)
Exhibits.
Exhibit No.
Description
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10.1
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Credit
Agreement between Trunkline LNG Holdings, LLC, as borrower, Panhandle
Eastern Pipe Line Company, LP and CrossCountry Citrus, LLC, as
guarantors,
the financial institutions listed therein and Bayerische Hypo-
Und
Vereinsbank AG, New York Branch, as administrative agent, dated
as of
December 1, 2006.
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10.2
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Promissory
Note made by CrossCountry Citrus, LLC, as borrower, in favor of
Trunkline
LNG Holdings LLC, as holder, dated as of December 1,
2006.
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This
8-K
includes forward-looking statements. Although Panhandle believes that its
expectations are based on reasonable assumptions, it can give no assurance
that
such assumptions will materialize. Important factors that could cause actual
results to differ materially from those in the forward-looking statements
herein
are enumerated in Panhandle's Forms 10-K and 10-Q as filed with the Securities
and Exchange Commission. Panhandle assumes no obligation to publicly update
or
revise any forward-looking statements made herein or any other forward-looking
statements made by the Panhandle, whether as a result of new information,
future
events, or otherwise.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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PANHANDLE
EASTERN PIPE LINE COMPANY, LP
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(Registrant)
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Date:
December 4, 2006
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By:
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/s/
Richard N. Marshall
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Richard
N. Marshall
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Senior
Vice President and Chief Financial
Officer
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EXHIBIT
INDEX
Exhibit No. Description
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10.1
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Credit
Agreement between Trunkline LNG Holdings, LLC, as borrower, Panhandle
Eastern Pipe Line Company, LP and CrossCountry Citrus, LLC, as
guarantors,
the financial institutions listed therein and Bayerische Hypo-
Und
Vereinsbank AG, New York Branch, as administrative agent, dated
as of
December 1, 2006.
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10.2
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Promissory
Note made by CrossCountry Citrus, LLC, as borrower, in favor of
Trunkline
LNG Holdings LLC, as holder, dated as of December 1,
2006.
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Execution
Copy
CREDIT
AGREEMENT
dated
as of December 1, 2006
by
and among
TRUNKLINE
LNG HOLDINGS LLC
as
the Borrower
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
as
a Guarantor
CROSSCOUNTRY
CITRUS, LLC
as
a Guarantor
and
THE
BANKS NAMED HEREIN
as
the Banks
and
BAYERISCHE
HYPO- UND VEREINSBANK AG, NEW YORK BRANCH
as
the Agent,
the
Sole Book Runner and the Sole Lead Arranger
TABLE
OF CONTENTS
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1.
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CERTAIN
DEFINITIONS
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1.1
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Defined
Terms
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1.2
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Computation
of Time Periods; Other Definitional Provisions
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1.3
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Accounting
Terms
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2.
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AMOUNTS
AND TERMS OF THE LOANS
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2.1
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The
Loans
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2.2
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Making
of the Loans
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2.3
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Repayment
of Loans
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2.4
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Termination
of the Commitments
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2.5
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Prepayments
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2.6
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Interest
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2.7
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Fees
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2.8
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Conversion
of Loans
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2.9
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Increased
Costs, Etc.
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2.10
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Payments
and Computations
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2.11
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Taxes
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2.12
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Sharing
of Payments, Etc
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2.13
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Use
of Proceeds
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2.14
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Evidence
of Debt
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2.15
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Replacement
of Banks
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3.
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REPRESENTATIONS
AND WARRANTIES OF THE LOAN PARTIES
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3.1
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Organization
and Qualification. Such Loan Party:
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3.2
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Authorization,
Validity, Etc.
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3.3
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Conflicting
or Adverse Agreements or Restrictions
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3.4
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No
Consents Required
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3.5
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Financial
Statements.
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3.6
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Litigation
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3.7
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Default
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3.8
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Compliance
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3.9
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Title
to Assets
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3.10
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Payment
of Taxes
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3.11
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Investment
Company Act Not Applicable
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3.12
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Public
Utility Holding Company Act Not Applicable
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3.13
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Regulations
G, T, U and X
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3.14
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ERISA
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3.15
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No
Financing of Certain Security Acquisitions
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3.16
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Franchises,
Co-Licenses, Etc
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3.17
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Environmental
Matters
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3.18
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Disclosure
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3.19
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Insurance
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3.20
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Subsidiaries.
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4.
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CONDITIONS
TO FUNDING
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4.1
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Representations
True and No Defaults
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4.2
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Intentionally
Omitted
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4.3
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Compliance
With Law
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4.4
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Notice
of Borrowing and Other Documents.
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4.5
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Payment
of Fees and Expenses
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4.6
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Repayment
of Debt
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4.7
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Loan
Documents Satisfactory
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4.8
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Inter-Company
Note Satisfactory
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4.9
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Loan
Documents, Opinions and Other Instruments
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5.
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AFFIRMATIVE
COVENANTS OF THE LOAN PARTIES
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5.1
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Financial
Statements and Information. Deliver to the Banks
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5.2
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Books
and Records
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5.3
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Insurance
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5.4
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Maintenance
of Property
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5.5
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Inspection
of Property and Records.
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5.6
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Existence,
Laws, Obligations, Taxes
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5.7
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Notice
of Certain Matters
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5.8
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ERISA
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5.9
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Compliance
with Environmental Laws
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6.
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NEGATIVE
COVENANTS OF PANHANDLE EASTERN
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6.1
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Financial
Covenants
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6.2
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Liens,
Etc.
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6.3
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Debt
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6.4
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Change
in Nature of Business
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6.5
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Mergers,
Consolidation
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6.6
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Sale
of Assets
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6.7
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Restricted
Payments
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6.8
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Sales
and Leasebacks
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6.9
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Transactions
with Related Parties
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6.10
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Hazardous
Materials
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7.
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NEGATIVE
COVENANTS OF THE BORROWER
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7.1
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Liens,
Etc
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7.2
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Debt
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7.3
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Merger,
Consolidation
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7.4
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Sale
of Assets
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7.5
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Restricted
Payment
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7.6
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Securities
Credit Regulations
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7.7
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Nature
of Business
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7.8
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Transactions
with Related Parties
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7.9
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Hazardous
Materials
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7.10
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Use
of Proceeds
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7.11
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Other
Documents
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8.
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NEGATIVE
COVENANTS OF CCC
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8.1
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Liens,
Etc
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8.2
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Debt
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8.3
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Merger,
Consolidation
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8.4
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Sale
of Assets
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8.5
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Restricted
Payment
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8.6
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Securities
Credit Regulations
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8.7
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Nature
of Business
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8.8
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Transactions
with Related Parties
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8.9
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Hazardous
Materials
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8.10
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Use
of Proceeds
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8.11
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Other
Documents
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9.
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EVENTS
OF DEFAULT; REMEDIES
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9.1
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Failure
to Pay Obligations When Due
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9.2
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Intentionally
Omitted.
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9.3
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Failure
to Pay Other Debt
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9.4
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Misrepresentation
or Breach of Warranty
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9.5
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Violation
of Certain Covenants
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9.6
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Violation
of Other Covenants, Etc
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9.7
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Bankruptcy
and Other Matters
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9.8
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Dissolution.
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9.9
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Undischarged
Judgment
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9.10
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Loan
Documents
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9.11
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Change
of Control. Any of the following events shall
occur:
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9.12
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Other
Remedies
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9.13
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Remedies
Cumulative.
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10.
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THE
AGENT
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10.1
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Authorization
and Action
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10.2
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Agent’s
Reliance, Etc
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10.3
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Defaults
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10.4
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HVB
and Affiliates
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10.5
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Non-Reliance
on Agent and Other Banks
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10.6
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Indemnification
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10.7
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Successor
Agent
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10.8
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Agent’s
Reliance
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11.
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GUARANTY
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11.1
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Guaranty
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11.2
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Guaranty
Absolute
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11.3
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Waivers
and Acknowledgments
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11.4
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Subrogation
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11.5
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Subordination
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11.6
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Continuing
Guaranty
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12.
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MISCELLANEOUS
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12.1
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Amendments,
Waivers, Etc
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12.2
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Reimbursement
of Expenses
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12.3
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Notices
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12.4
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Governing
Law
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12.5
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Waiver
of Jury Trial
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12.6
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Consent
to Jurisdiction
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12.7
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Survival
of Representations, Warranties and Covenants
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12.8
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Counterparts
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12.9
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Severability
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12.10
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Descriptive
Headings
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12.11
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Accounting
Terms
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12.12
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Limitation
of Liability
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12.13
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Set-Off
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12.14
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Sale
or Assignment
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12.15
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Interest
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12.16
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Indemnification
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12.17
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Payments
Set Aside
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12.18
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Loan
Agreement Controls
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12.19
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Obligations
Several
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12.20
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Final
Agreement
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Exhibit
A Note
Exhibit
B Assignment
and Acceptance
Schedule
3.1 Subsidiaries
Schedule
3.10 Tax
Matters
Schedule
3.14 ERISA
Matters
Schedule
3.17 Environmental
Matters
CREDIT
AGREEMENT
CREDIT
AGREEMENT dated as of December 1, 2006 among TRUNKLINE LNG HOLDINGS LLC a
limited liability company organized under the laws of Delaware (the
“Borrower”),
PANHANDLE EASTERN PIPE LINE COMPANY, LP, a limited partnership organized under
the laws of Delaware (“Panhandle
Eastern”),
CROSSCOUNTRY CITRUS, LLC, a limited liability company organized under the laws
of Delaware (“CCC”),
the
financial institutions listed on the signature pages hereof (collectively,
the
“Banks”
and,
individually, a “Bank”),
and
BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH (“HVB”),
in
its capacity as administrative agent (the “Agent”)
for
the Banks hereunder:
PRELIMINARY
STATEMENTS:
1. The
Borrower desires to obtain from the Banks a senior term loan financing (the
“Financing”)
in an
aggregate principal amount of $465,000,000,
the
proceeds of which will be used to make the Inter-Company Loan (as defined below)
to CCC.
2. The
Banks
have indicated their willingness to provide the Financing, but only on and
subject to the terms and conditions of this Agreement, including the guaranty
set forth herein.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as
follows:
1. CERTAIN
DEFINITIONS.
1.1 Defined
Terms.
As used
in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
shall
mean any Person controlling, controlled by or under common control with any
other Person. For purposes of this definition, “control” (including “controlled
by” and “under common control with”) shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and
policies of such Person, whether through the ownership of voting securities
or
otherwise. If any Person shall own, directly or indirectly, beneficially or
of
record, twenty percent (20%) or more of the voting equity (whether outstanding
capital stock, partnership interests or otherwise) of another Person, such
Person shall be deemed to be an Affiliate.
“Agent”
shall
have the meaning set forth in the preamble hereto.
“Agreement” shall
mean
this
Credit Agreement, as the same may be amended, modified, supplemented or restated
from time to time.
“Alternate
Base Rate”
shall
mean, for any day, a rate per annum equal to the greater of: (a) the Prime
Rate
in effect on such day and (b) 1/2 of 1% per annum above the Federal Funds Rate
in effect on such day. The Alternate Base Rate is an index rate and is not
necessarily intended to be the lowest or best rate of interest charged to other
customers in connection with extensions of credit or to other banks. Any change
in the Alternate Base Rate due to a change in the Prime Rate or the Federal
Funds Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
“Alternate
Base Rate Loan”
shall
mean any Loan which bears interest as described in Section 2.6(a)(i)
(Interest).
“Applicable
Lending Office”
shall
mean, with respect to each Bank, such Bank’s (a) Domestic Lending Office in the
case of an Alternate Base Rate Loan; and (b) Eurodollar Lending Office in the
case of a Eurodollar Rate Loan.
“Applicable
Margin”
shall
mean with respect to (a) Alternate Base Rate Loans, a percentage per annum
set
forth below under the caption “Alternate Base Rate Loans” and
(b) Eurodollar Rate Loans, subject to the provisos set forth below, a
percentage per annum set forth below under the caption “Eurodollar Rate Loans,”
in each case determined by reference to the rating of Panhandle Eastern’s
unsecured, non-credit enhanced Senior Funded Debt (effective from and after
the
date the applicable change of such a debt rating is first announced by the
applicable rating agency):
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Rating
of Panhandle Eastern’s unsecured, non-credit enhanced Senior Funded
Debt
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Eurodollar
Rate Loan
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Alternate
Base Rate Loan
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Equal
or greater to Baa1 by Moody’s Investor Service, Inc. and/or equal or
greater to BBB+ by Standard and Poor’s Ratings Group
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0.620%
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0%
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Baa2
by Moody’s Investor Service, Inc. or BBB by Standard and Poor’s Ratings
Group
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0.750%
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0%
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Baa3
by Moody’s Investor Service, Inc. or BBB- by Standard and Poor’s Ratings
Group
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0.875%
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0%
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Ba1
by Moody’s Investor Service, Inc. or BB+ by Standard and Poor’s Ratings
Group
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1.250%
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0.250%
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Ba2
by Moody’s Investor Service, Inc. or BB by Standard and Poor’s Ratings
Group
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1.500%
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0.500%
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Below
Ba2 by Moody’s Investor Service, Inc. or below BB by Standard and Poor’s
Ratings Group
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1.750%
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0.750%
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provided
that,
for the period beginning on the Funding Date and ending on the six-month
anniversary of the Funding Date, the Applicable Margin for Eurodollar Rate
Loans
shall not be less than 0.750% and provided,
further,
that
upon the occurrence of an SUG Change of Control, the Applicable Margin for
Eurodollar Rate Loans and for Base Rate Loans shall be increased by 1.0% above
the Applicable Margin otherwise in effect at such time, commencing 10 Business
Days after the occurrence of the SUG Change of Control, unless such increase
in
Applicable Margin shall have been waived in writing by Majority
Banks.
Notwithstanding
the foregoing provisions, in the event that ratings of Panhandle Eastern’s
unsecured, non-credit enhanced Senior Funded Debt under Standard & Poor’s
Ratings Group and under Moody’s Investor Service, Inc. fall within different
rating categories which are not functional equivalents, the Applicable Margin
shall be based on the higher of such ratings if there is only one category
differential between the functional equivalents of such ratings, and if there
is
a two category differential between the functional equivalents of such ratings,
the component of pricing from the grid set forth above shall be based on the
rating category which is then in the middle of or between the two category
ratings which are then in effect, and if there is greater than a two category
differential between the functional equivalents of such ratings, the component
of pricing from the grid set forth above shall be based on the rating category
which is then one rating category above the lowest of the two category ratings
which are then in effect. Additionally, in the event that Panhandle Eastern
withdraws from having its unsecured, non-credit enhanced Senior Funded Debt
being rated by Moody’s Investor Service, Inc. or Standard and Poor’s Ratings
Group, so that one or both of such ratings services fails to rate Panhandle
Eastern’s unsecured, non-credit enhanced Senior Funded Debt, (a) the Applicable
Margin for all Eurodollar Rate Loans for all Interest Periods commencing
thereafter shall be 1.750% and (b) the Applicable Margin for all Alternate
Base
Rate Loans shall be 0.750% effective immediately, in each case continuing until
such time as Panhandle Eastern subsequently causes its unsecured, non-credit
enhanced Senior Funded Debt to be rated by both of said ratings
services.
“Approved
Fund”
shall
mean any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course of its business and that is administered or managed
by
(a) a Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of
an
entity that administers or manages a Bank.
“April
2005 Credit Agreement”
shall
mean the Credit Agreement, dated as of April 26, 2005, by and among the
Borrower, as the borrower, Panhandle Eastern, as a guarantor, Trunkline LNG
Company, LLC, as a guarantor, the financial institutions party thereto, and
HVB,
as the administrative agent, the sole book runner and the sole lead arranger,
as
amended, restated, amended and restated or otherwise modified from time to
time;
“Assignment
and Acceptance”
shall
mean and Assignment and Acceptance substantially in the form of Exhibit B
hereto.
“Attributable
Indebtedness”
shall
mean, with respect to any Sale-Leaseback Transaction, the present value
(discounted at the rate set forth or implicit in the terms of the lease included
in such Sale-Leaseback Transaction) of the total obligations of the lessee
for
rental payments (other than amounts required to be paid on account of taxes,
maintenance, repairs, insurance, assessments, utilities, operating and labor
costs and other items that do not constitute payments for property rights)
during the remaining term of the lease included in such Sale-Leaseback
Transaction (including any period for which such lease has been extended).
In
the case of any lease that is terminable by the lessee upon payment of a
penalty, the Attributable Indebtedness shall be the lesser of the (a)
Attributable Indebtedness determined assuming termination on the first date
such
lease may be terminated (in which case the Attributable Indebtedness shall
also
include the amount of the penalty, but no rent shall be considered as required
to be paid under such lease subsequent to the first date on which it may be
so
terminated) and (b) the Attributable Indebtedness determined assuming no such
termination.
“Bank”
shall
have the meaning set forth in the preamble hereto and shall include the Agent,
in its individual capacity.
“Borrower”
shall
have the meaning set forth in the preamble hereto.
“Business
Day”
shall
mean a day when the Agent is open for business, provided
that, if
the applicable Business Day relates to any Eurodollar Rate Loan, it shall mean
a
day when the Agent is open for business and banks are open for business in
the
London interbank market and in New York City.
“Capital
Lease”
shall
mean any lease of any Property (whether real, personal, or mixed) which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of the lessee.
“Capitalized
Lease Obligations”
shall
mean, for any Person, any of their obligations that should, in accordance with
GAAP, be recorded as Capital Leases.
“CCC”
shall
have the meaning set forth in the preamble hereto.
“Change
in Law”
shall
mean (a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after such
date or (c) compliance by any Bank with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made
or
issued after such date.
“Citrus
Corp.”
shall
mean Citrus Corp., a Delaware corporation.
“Closing
Date”
shall
mean the date hereof.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended, as now or hereafter in
effect, together with all regulations, rulings and interpretations thereof
or
thereunder issued by the Internal Revenue Service.
“Commitment”
shall
mean, with respect to any Bank, the commitment of such Bank to make a Loan
on
the Funding Date, in the amount set forth opposite such Bank’s name on the
signature pages hereto, and the aggregate amount of all the Commitments is
$465,000,000.
“Consolidated”
shall
refer to the consolidation of accounts in accordance with GAAP.
“Consolidated
Net Income”
of any
Person shall mean, for any period, the aggregate net income (or loss) from
continuing operations of such Person and its Subsidiaries on a Consolidated
basis.
“Consolidated
Net Tangible Assets”
shall
mean, at any date of determination, the total amount of assets of Panhandle
Eastern and its Subsidiaries after deducting therefrom:
(a) all
current liabilities (excluding (i) any current liabilities that by their terms
are extendable or renewable at the option of the obligor thereon to a time
more
than 12 months after the time as of which the amount thereof is being computed,
and (ii) current maturities of Long-Term Debt); and
(b) the
value
(net of any applicable reserves) of all goodwill, trade names, trademarks,
patents and other like intangible assets,
all
as
set forth on the Consolidated balance sheet of Panhandle Eastern and its
Subsidiaries for Panhandle Eastern’s most recently completed fiscal quarter,
prepared in accordance with GAAP.
“Consolidated
Total Capitalization”
shall
mean, at any time, an amount equal to the sum of (a) Consolidated Debt for
Borrowed Money of Panhandle Eastern and its Subsidiaries at such time
plus
(b) an
amount equal to the sum of all amounts which, in accordance with GAAP, would
be
included under owner’s equity on a Consolidated balance sheet of Panhandle
Eastern and its Subsidiaries; provided,
however,
that
consistent with past practice, any loans made to Southern Union by Panhandle
Eastern up to but not exceeding $50,000,000 in the aggregate at any time
outstanding shall not be deemed to reduce owner’s equity for purposes of this
definition.
“Conversion”,
“Convert”
and
“Converted”
each
shall refer to a conversion of Loans of one Type into Loans of the other Type
pursuant to Section 2.8 (Conversion of Loans).
“Debt”
shall
mean (without duplication), for any Person, indebtedness for money borrowed
determined in accordance with GAAP but in any event including (a) indebtedness
of such Person for borrowed money or arising out of any extension of credit
to
or for the account of such Person (including, without limitation, extensions
of
credit in the form of reimbursement or payment obligations of such Person
relating to letters of credit issued for the account of such Person) or for
the
deferred purchase price of property or services, except indebtedness which
is
owing to trade creditors in the ordinary course of business; (b) indebtedness
of
the kind described in clause (a) of this definition which is secured by (or
for
which the holder of such Debt has any existing right, contingent or otherwise,
to be secured by) any Lien upon or in Property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such indebtedness or
obligations; (c) Capitalized Lease Obligations of such Person; and (d)
obligations under direct or indirect Guaranties. Whenever the definition of
Debt
is being used herein in order to compute a financial ratio or covenant
applicable to the consolidated business of Panhandle Eastern and its
Subsidiaries, Debt which is already included in such computation by virtue
of
the fact that it is owed by a Subsidiary of Panhandle Eastern will not also
be
added by virtue of the fact that Panhandle Eastern has executed a guaranty
with
respect to such Debt that would otherwise require such guaranteed indebtedness
to be considered Debt hereunder. Nothing contained in the foregoing sentence
is
intended to limit the other provisions of this Agreement which contain
limitations on the amount and types of Debt which may be incurred by any Loan
Party.
“Debt
for Borrowed Money”
of any
Person shall mean, at any date of determination, the sum without duplication
of
(i) all items that, in accordance with GAAP, would be classified as indebtedness
on a Consolidated balance sheet of such Person, (ii) all Guarantees by such
Person of Debt of another Person and (iii) all letter of credit reimbursement
obligations of such Person.
“Debt/Capitalization
Ratio”
shall
mean, as of any date of determination, the ratio of (a) the aggregate amount
of
outstanding Consolidated Debt for Borrowed Money of Panhandle Eastern and its
Subsidiaries as of such date to (b) Consolidated Total Capitalization of
Panhandle Eastern and its Subsidiaries as of such date.
“Debtor
Laws”
shall
mean all applicable liquidation, conservatorship, bankruptcy, moratorium,
arrangement, receivership, insolvency, reorganization, or similar laws, or
general equitable principles from time to time in effect affecting the rights
of
creditors generally.
“Default”
shall
mean any of the events specified in Section 9 (Events of Default; Remedies),
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.
“EBITDA”
shall
mean, for any period for any Person, (a) Consolidated Net Income for such
period, plus
(b)
without duplication and to the extent reflected as a charge in the statement
of
such Consolidated Net Income for such period, the sum of (i) income tax expense,
(ii) interest expense, amortization or write-off of debt discount and debt
issuance costs and commissions, discounts and other fees and charges associated
with Debt (including the Loans), (iii) depreciation and amortization expense,
(iv) amortization of intangibles (including, but not limited to, goodwill)
and
organization costs, (v) any extraordinary or non-recurring charges, (vi) any
non-cash expenses or losses, and (vii) losses on sales of assets, minus
(c) to
the extent included in the statement of such Consolidated Net Income for such
period, the sum of (i) any extraordinary, unusual or non-recurring income or
gains (including, whether or not otherwise includable as a separate item in
the
statement of such Consolidated Net Income for such period, gains on the sales
of
assets outside of the ordinary course of business), (ii) income tax credits
(to
the extent not netted from income tax expense), and (iii) any other non-cash
income, and minus
(d) any
cash payments made during such period in respect of items described in
sub-clause (a)(vi) above subsequent to the fiscal quarter in which the relevant
non-cash expenses or losses were reflected as a charge in the statement of
Consolidated Net Income, all as determined on a consolidated basis.
“Eligible
Assignee”
shall
mean: (i) any Bank, or any Affiliate of any Bank, any Approved Fund, or any
institution 100% of the voting stock of which is directly, or indirectly owned
by such Bank or by the immediate or remote parent of such Bank; or (ii) a
commercial bank, a foreign branch of a United States commercial bank, a domestic
branch of a foreign commercial bank or other financial institution having in
each case assets in excess of $1,000,000,000.
“Environmental
Law”
shall
mean (a) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (as amended by the Superfund Amendments and Reauthorization Act
of
1986, 42 U.S.C.A. § 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.
§ 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. § 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 U.S.CA § 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. § 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.
“Equity
Interests”
shall
mean, with respect to any Person, shares of capital stock of (or other ownership
or profit interests in) such Person, warrants, options or other rights for
the
purchase or other acquisition from such Person of shares of capital stock of
(or
other ownership or profit interests in) such Person, securities convertible
into
or exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
other acquisition from such Person of such shares (or such other interests),
and
other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting
or
non-voting, and whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of
determination.
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and all rules, regulations, rulings and interpretations thereof issued
by the Internal Revenue Service or the Department of Labor
thereunder.
“Eurocurrency
Liabilities”
shall
have the meaning assigned to that term in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
“Eurodollar
Lending Office”
shall
mean, with respect to each Bank, the office of such Bank located at its “Address
for Notices” set forth below the name of such Bank on the signature pages
hereof, or such other office of such Bank as such Bank may from time to time
specify to the Borrower and the Agent.
“Eurodollar
Rate”
shall
mean, for any Interest Period in effect for each Eurodollar Rate Loan comprising
part of the same Borrowing, an interest rate per annum equal to the rate
determined by the Agent to be the offered rate which appears on the display
designated as page “BBAM1” on the Bloomberg service (or on any successor or
substitute page of such display, or any successor to or substitute for such
display, providing rate quotations comparable to those currently provided on
such page of such screen, as determined by the Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for
dollar deposits with a maturity comparable to such Interest Period. In the
event
that such rate is not available at such time for any reason, then the
“Eurodollar Rate” with respect to such Eurodollar Rate Loans for such Interest
Period shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London
office of the Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to
the
commencement of such Interest Period.
“Eurodollar
Rate Loan”
shall
mean a Loan that bears interest as provided in Section 2.6(a)(ii)
(Interest).
“Event
of Default”
shall
mean any of the events specified in Section 9 (Events of Default; Remedies),
provided
that
there has been satisfied any requirement in connection with such event for
the
giving of notice, or the lapse of time, or the happening of any further
condition, event or act.
“Existing
TWH Indebtedness”
shall
have the meaning set forth in Section 2.13 (Use of Proceeds).
“Federal
Funds Rate”
shall
mean, for any day, the weighted average (rounded upwards, if necessary, to
the
next 1/100 of 1%) of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New
York, or, if such rate is not so published for any day that is a Business Day,
the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it.
“Fee
Letter”
shall
mean that certain fee letter dated as of the date hereof by and between the
Borrower and HVB.
“Funded
Debt”
shall
mean all Debt of a Person which matures more than one year from the date of
creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, by its terms or by the terms of any
instrument or agreement relating thereto, to a date more than one year from
such
date or arises under a revolving credit or similar agreement which obligates
Banks to extend credit during a period of more than one year from such date,
including, without limitation, all amounts of any Funded Debt required to be
paid or prepaid within one year from the date of determination of the existence
of any such Funded Debt.
“Funding
Date”
shall
mean the date on which each of the conditions precedent set forth in Section
4
(Conditions to Funding) shall have been satisfied or waived by the
Banks.
“GAAP”
has the
meaning specified in Section 1.3 (Accounting Terms).
“Governmental
Authority”
shall
mean any (domestic or foreign) federal, state, county, municipal, parish,
provincial, or other government, or any department, commission, board, court,
agency (including, without limitation, the EPA), or any other instrumentality
of
any of them or any other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory, or administrative
functions of, or pertaining to, government, including, without limitation,
any
arbitration panel, any court, or any commission.
“Governmental
Requirement”
shall
mean any order, permit, law, statute (including, without limitation, any
Environmental Protection Statute), code, ordinance, rule, regulation,
certificate, or other direction or requirement of any Governmental
Authority.
“Guaranteed
Obligations” shall
have the meaning set forth in Section 11.1.
“Guarantor”
shall
mean each of Panhandle Eastern and CCC.
“Guaranty”
shall
mean, with respect to any Person, any obligation, contingent or otherwise,
of
such Person directly or indirectly guaranteeing any Debt of another Person,
including, without limitation, by means of an agreement to purchase or pay
(or
advance or supply funds for the purchase or payment of) such Debt or to maintain
financial covenants, or to assure the payment of such Debt by an agreement
to
make payments in respect of goods or services regardless of whether delivered
or
to purchase or acquire the Debt of another, or otherwise, provided
that the
term “Guaranty” shall not include endorsements for deposit or collection in the
ordinary course of business.
“Hazardous
Materials”
shall
mean any substance which, pursuant to any Environmental Laws, requires special
handling in its collection, use, storage, treatment or disposal, including
but
not limited to any of the following: (a) any “hazardous waste” as defined by
RCRA; (b) any “hazardous substance” as defined by CERCLA; (c) asbestos; (d)
polychlorinated biphenyls; (e) any flammables, explosives or radioactive
materials; and (f) any substance, the presence of which on any of Loan Parties’
properties is prohibited by any Governmental Authority.
“Hedge
Agreements”
shall
mean interest rate, commodity or currency swap, cap or collar agreements, future
or option contracts and other hedging agreements (including, without limitation,
all “swap agreements” as defined in 11 U.S.C. § 101).
“Highest
Lawful Rate”
shall
mean, with respect to each Bank, the maximum non-usurious interest rate, if
any,
that at any time or from time to time may be contracted for, taken, reserved,
charged, or received with respect to the Notes or on other amounts, if any,
due
to such Bank pursuant to this Agreement, under laws applicable to such Bank
which are presently in effect, or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now allow.
“HVB”
shall
have the meaning set forth in the preamble.
“Indemnified
Parties”
shall
have the meaning set forth in Section 12.16 (Indemnification).
“Inter-Company
Loan”
shall
mean the loan made by the Borrower to CCC pursuant to the Inter-Company
Note.
“Inter-Company
Note”
shall
mean the note dated as of the date hereof by CCC in favor of
Borrower.
“Interest
Coverage Ratio”
shall
mean, as of any date of determination, the ratio of (a) Consolidated EBITDA
of
Panhandle Eastern to (b) Consolidated Interest Expense of Panhandle Eastern,
in
each case for the four fiscal quarters then ended.
“Interest
Expense”
of any
Person shall mean, for any period, total cash interest expense (including that
attributable to Capitalized Leases) of such Person for such period with respect
to all outstanding Debt of such Person (including all commissions, discounts
and
other fees and charges owed with respect to letters of credit and bankers’
acceptance financing and net costs and benefits under Hedge Agreements in
respect of interest rates to the extent such net costs and benefits are
allocable to such period in accordance with GAAP).
“Interest
Period”
shall
mean, for each Eurodollar Rate Loan comprising part of the same borrowing,
the
period commencing on the date of such Eurodollar Rate Loan or the date of the
Conversion of any Alternate Base Rate Loan into such Eurodollar Rate Loan,
and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the
last
day of the immediately preceding Interest Period and ending on the last day
of
the period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six months
(or, if available to each Bank, nine or twelve months), as the Borrower may,
upon notice received by the Agent not later than 11:00 A.M. (New York City
time)
on the third Business Day prior to the first day of such Interest Period,
select;
provided,
however,
that:
(a) whenever
the last day of any Interest Period would otherwise occur on a day other than
a
Business Day, the last day of such Interest Period shall be extended to occur
on
the next succeeding Business Day, provided,
however,
that,
if such extension would cause the last day of such Interest Period to occur
in
the next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and
(b) whenever
the first day of any Interest Period occurs on a day of an initial calendar
month for which there is no numerically corresponding day in the calendar month
that succeeds such initial calendar month by the number of months equal to
the
number of months in such Interest Period, such Interest Period shall end on
the
last Business Day of such succeeding calendar month.
“Inventory”
shall
mean, with respect to Borrower or any Subsidiary, all of such Person’s now owned
or hereafter acquired or created inventory in all of its forms and of every
nature, wherever located, whether acquired by purchase, merger, or otherwise,
and all raw materials, work in process therefor and finished goods thereof,
and
all supplies, materials, and products of every nature and description used,
usable, or consumed in connection with the manufacture, packing, shipping,
advertising, selling, leasing, furnishing, or production of such goods, and
shall include, in any event, all “inventory” (within the meaning of such term in
the Uniform Commercial Code in effect in any applicable jurisdiction), whether
in mass or joint, or other interest or right of any kind in goods which are
returned to, repossessed by, or stopped in transit by such Person, and all
accessions to any of the foregoing and all products of any of the
foregoing.
“Investment”
of any
Person shall mean any investment so classified under GAAP, and, whether or
not
so classified, includes (a) any direct or indirect loan advance made by it
to
any other Person; (b) any direct or indirect Guaranty for the benefit of such
Person; (c) any capital contribution to any other Person; and (d) any ownership
or similar interest in any other Person; and the amount of any Investment shall
be the original principal or capital amount thereof (plus
any
subsequent principal or capital amount) minus
all cash
returns of principal or capital thereof.
“Lien”
shall
mean any mortgage, deed of trust, pledge, security interest, encumbrance, lien
(including without limitation, any such interest arising under any Environmental
Law), or similar charge of any kind (including without limitation, any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement or any lease in the nature thereof), or the interest of the lessor
under any Capital Lease.
“Loan”
or
“Loans”
shall
mean a loan or loans, respectively, from the Banks to the Borrower made under
Section 2.1 (The Loans).
“Loan
Document” shall
mean this Agreement, any Note, the Fee Letter and any other document, agreement
or instrument now or hereafter executed and delivered by any Loan Party in
connection with any of the transactions contemplated by any of the foregoing,
as
any of the foregoing may hereafter be amended, modified, or supplemented, and
“Loan
Documents”
shall
mean, collectively, each of the foregoing.
“Loan
Party”
shall
mean CCC, Panhandle Eastern, the Borrower and its Subsidiaries.
“Long-Term
Debt”
shall
mean any Debt that, in accordance with GAAP, constitutes (or, when incurred,
constituted) a long-term liability.
“Majority
Banks”
shall
mean at any time Banks holding more than 50% of the unpaid principal amounts
outstanding under the Loans, or, if no such amounts are outstanding, more than
50% of the Pro Rata Percentages.
“Material
Adverse Change”
shall
mean, for any Person, any material adverse change in the business, operations,
financial condition or assets of such Person and its Subsidiaries, taken as
a
whole.
“Material
Adverse Effect”
shall
mean any material adverse effect on (a) the financial condition, business,
properties, assets or operations of Panhandle Eastern and its Subsidiaries,
taken as a whole, or (b) the ability of Panhandle Eastern, Borrower or CCC
to
perform its obligations under this Agreement, any Note, any other Loan Document
or the Inter-Company Note on a timely basis.
“Maturity
Date”
shall
mean April 4, 2008.
“Note”
or
“Notes”
shall
mean a promissory note or notes, respectively, of the Borrower, executed and
delivered under this Agreement.
“Notice
of Borrowing”
shall
have the meaning set forth in Section 2.2(a) (Making the Loans).
“Obligations”
shall
mean all obligations of Panhandle Eastern, Borrower and CCC to the Banks under
this Agreement, the Notes and all other Loan Documents to which any of them
is a
party.
“Officer’s
Certificate”
shall
mean a certificate signed in the name of the applicable Loan Party, by either
its President, one of its Vice Presidents, its Treasurer, its Secretary, or
one
of its Assistant Treasurers or Assistant Secretaries.
“Panhandle
Eastern”
shall
have the meaning set forth in the preamble hereto.
“Permitted
Liens”
shall
mean any of the following Liens:
(c) Any
Lien:
(i) arising
by reason of deposits with or the giving of any form of security to any
Governmental Authority in connection with the financing of the acquisition
or
construction of property to be used in the business of a Loan
Party;
(ii) for
current taxes and assessments or taxes and assessments not at the time
delinquent and for which adequate reserves have been established to the extent
required by GAAP; or
(iii) for
taxes
and assessments which are delinquent but the validity of which is being
contested at the time by a Loan Party in good faith and by appropriate
proceedings and for which adequate reserves have been established to the extent
required by GAAP;
(d) Leases,
whether now or hereafter existing, in the ordinary course of business, of
property and assets now and hereafter owned by a Loan Party (excluding
Capitalized Leases) and any renewals or extensions thereof;
(e) Liens
reserved in leases, or arising by operation of law, for rent and for compliance
with the terms of the lease in the case of the leasehold estates;
(f) Liens
arising by reason of deposits with or the giving of any form of security to
any
Governmental Authority or any other governmental body created or approved by
law
or governmental regulation for any purpose at any time as required by law or
governmental regulation as a condition to the transaction of any business or
the
exercise of any privilege or license, or to enable a Loan Party to maintain
self-insurance or to participate in any fund for liability on any insurance
risks or in connection with workmen’s compensation, unemployment insurance, old
age pensions or other social security or to share in the privileges or benefits
required for companies participating in such arrangements;
(g) (i)
Mechanics’, materialmen’s, warehousemen’s, landlord’s or similar Liens or any
Lien arising by reason of pledges or deposits to secure payment of workmen’s
compensation or other insurance or social security legislation, (ii) good faith
deposits or downpayments in connection with tenders or leases of real estate,
bids or contracts (other than contracts for the payment of money), including
contracts for the acquisition of machinery and equipment, (iii) deposits to
secure public or statutory obligations, (iv) deposits to secure or in lieu
of
surety, stay or appeal bonds, (v) margin deposits (provided
that all
such margin deposits shall not exceed $2,000,000 in the aggregate at any time)
and (vi) deposits as security for the payment of taxes or assessments or other
similar charges;
(h) Liens
of
any judgments not constituting an Event of Default under Section 9.9
(Undischarged Judgment);
(i) Any
obligation or duties, affecting the property of a Loan Party, to any
Governmental Authority with respect to any franchise, grant, lease, license,
permit or similar arrangement with such Governmental Authority;
(j) Rights
reserved to or vested in any Governmental Authority by the terms of any right,
power, franchise, grant, license or permit or by any provision of law, to
terminate or to require annual or other periodic payments as a condition to
the
continuance of such right, power, franchise, grant, license or
permit;
(k) Rights
reserved to or vested in any Governmental Authority to control or regulate
any
property of a Loan Party, or to use such property in any manner which does
not
materially impair the use of such property for the purpose for which it is
held
by a Loan Party;
(l) Zoning
laws and ordinances;
(m) Restrictive
covenants, easements on, exceptions to or reservations in respect of any
property of a Loan Party granted or reserved for the purpose of electric lines,
fiber optic lines, water and sewer lines, pipelines, other utilities, roads,
streets, alleys, highways, railroad purposes, the removal of oil, gas,
hydrocarbon, coal or other minerals, and other like purposes, or for the use
of
real property or interests therein, facilities and equipment, which do not
materially impair the use thereof for the purposes for which it is held by
a
Loan Party, and any and all rents, royalties, reservations, Liens and rights
or
interests of third parties, in each case not securing any Debt, arising in
the
ordinary course of business of a Loan Party by virtue of any lease or
exploration, development, drilling, unitization, communitization or operating
agreement relating to or affecting any oil, gas, hydrocarbon, coal or other
mineral properties in which a Loan Party has an interest;
(n) Defects
or irregularities of title, and inaccuracies of legal descriptions, affecting
any portion of the property of a Loan Party or any of its Subsidiaries that
individually or in the aggregate do not materially interfere with the operation,
value of use of the properties of such Loan Party or such Subsidiaries taken
as
a whole;
(o) Liens
securing Debt with respect to Debt of any Person that becomes a Subsidiary
of a
Loan Party, provided
that
such Liens were in existence prior to the date on which such Person becomes
a
Subsidiary of such Loan Party and were not created in contemplation of such
Person becoming a Subsidiary of such Loan Party;
(p) Liens
on
any office equipment, data processing equipment (including computer and computer
peripheral equipment), or motor vehicles purchased in the ordinary course of
the
applicable Loan Party’s business; and
(q) Liens
created in the ordinary course of business in favor of banks and other financial
institutions over credit balances or any bank accounts of a Loan Party held
at
such banks or financial institutions.
“Person”
shall
mean an individual, partnership, joint venture, corporation, joint stock
company, bank, trust, unincorporated organization and/or a government or any
department or agency thereof.
“Plan”
shall
mean any plan subject to Title IV of ERISA and maintained for employees of
any
Loan Party or of any member of a “controlled group of corporations,” as such
term is defined in the Code, of which a Loan Party is a member, or any such
plan
to which a Loan Party thereof is required to contribute on behalf of its
employees.
“Prime
Rate”
shall
mean, on any day, the rate determined by the Agent and announced to its
customers as being its prime rate for that day. Without notice to the Borrower
or any other Person, the Prime Rate shall change automatically from time to
time
as and in the amount by which said Prime Rate shall fluctuate, with each such
change to be effective as of the date of each change in such Prime Rate. The
Prime Rate is a reference rate and does not necessarily represent the lowest
or
best rate actually charged to any customer. The Agent may make commercial or
other loans at rates of interest at, above or below the Prime Rate.
“Priority
Obligations Amount”
shall
mean the sum (without duplication) of (i) all Attributable Indebtedness with
respect to any Sale-Leaseback Transaction entered into by Panhandle Eastern
or
any of its Subsidiaries, (ii) all Debt of Panhandle Eastern or any of its
Subsidiaries secured by a Lien (other than Liens permitted by clauses (a)
through (c) of Section 6.2 (Liens, Etc.)) and (iii) all Debt of Subsidiaries
of
Panhandle Eastern (other than Borrower or TLNG), other than such Debt owed
to
Panhandle Eastern or another Subsidiary.
“Pro-Rata
Percentage”
shall
mean with respect to any Bank, a fraction (expressed as a percentage), the
numerator of which shall be the amount of such Bank’s outstanding Loans (or
Commitment) and the denominator of which shall be the aggregate amount of all
the outstanding Loans (or Commitments) of the Banks, as adjusted from time
to
time in accordance herewith.
“Property”
shall
mean any interest or right in any kind of property or asset, whether real,
personal, or mixed, owned or leased, tangible or intangible, and whether now
held or hereafter acquired.
“Register”
shall
have the meaning set forth in Section 12.14(d).
“Release”
shall
mean a “release”, as such term is defined in CERCLA.
“Restricted
Payment”
shall
mean a Person’s declaration or payment of any dividends, the purchase,
redemption, retirement, defeasance or other acquisition for value of any of
its
Equity Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as such,
making any distribution of assets, Equity Interests, obligations or securities
to its stockholders, partners or members (or the equivalent Persons thereof)
as
such or making of any interest payment on any Debt owing to its direct or
indirect parent (or any equity owner thereof).
“Required
Banks”
shall
mean, at any time, Banks having more than 66-2/3% of the aggregate amount of
the
Loans outstanding at such time.
“Sale-Leaseback
Transaction”
has the
meaning set forth in Section 6.8 (Sales and Leasebacks).
“Senior
Funded Debt”
shall
mean Funded Debt of Panhandle Eastern excluding Debt that is contractually
subordinated in right of payment to any other Debt of Panhandle
Eastern.
“Southern
Union”
shall
mean Southern Union Company.
“Subsidiary”
of any
Person shall mean any corporation, partnership, joint venture, limited liability
company, trust or estate of which (or in which) more than 50% of (a) the issued
and outstanding capital stock having ordinary voting power to elect a majority
of the Board of Directors (or similar board) of such Person (irrespective of
whether at the time capital stock of any other class or classes of such Person
shall or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such trust or estate
is at the time directly or indirectly owned or controlled by such Person, by
such Person and one or more of its other Subsidiaries or by one or more of
such
Person’s other Subsidiaries.
“SUG
Change of Control”
shall
occur if any Person or “group” (within the meaning of Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, as amended from time to time, and
any
successor statute) shall have acquired beneficial ownership of 50% or more
on a
fully diluted basis of the voting and/or economic interest in Southern
Union.
“TLNG”
shall
mean Trunkline LNG Company, LLC, a Delaware limited liability
company.
“Type”
shall
mean, with respect to any Loan, any Alternate Base Rate Loan or any Eurodollar
Rate Loan.
1.2 Computation
of Time Periods; Other Definitional Provisions.
In this
Agreement and the other Loan Documents in the computation of periods of time
from a specified date to a later specified date, the word “from”
shall
mean “from and including” and the words “to”
and
“until”
each
shall mean “to but excluding”. References in the Loan Documents to any agreement
or contract “as
amended”
shall
mean and be a reference to such agreement or contract as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with its terms.
1.3 Accounting
Terms.
All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles in effect from time
to
time in the United States of America (“GAAP”).
If,
at any time after the date of this Agreement, any material change is made to
GAAP or Panhandle Eastern’s, CCC’s or the Borrower’s accounting practices that
would affect in any material respect the determination of compliance with the
covenants set forth in this Agreement, the Borrower and the Agent shall
negotiate in good faith to amend any such covenant to restore the Borrower
and
the Banks to the position they occupied before the implementation of such
material change in GAAP or accounting practices if the Borrower notifies the
Agent of such change (or if the Agent notifies the Borrower that the Required
Banks request an amendment to any such covenant for such purpose); provided
that,
until so amended, such covenant shall continue to be computed on the basis
of
GAAP as in effect and applied immediately before such change shall have become
effective.
2. AMOUNTS
AND TERMS OF THE LOANS
2.1 The
Loans.
Each
Bank severally agrees, on the terms and conditions hereinafter set forth, to
make a single Loan (a “Loan”)
to the
Borrower on the Funding Date in an amount equal to such Bank’s Commitment at
such time. The initial Borrowing shall consist of Loans made simultaneously
by
the Banks ratably according to their Commitments. Amounts borrowed under this
Section 2.1 and repaid or prepaid may not be reborrowed.
2.2 Making
of the Loans.
(a) The
initial Borrowing shall be made on notice, given not later than 11:00 A.M.
(New
York City time) on the third Business Day prior to the date of such Borrowing
in
the case of a Borrowing consisting of Eurodollar Rate Loans, or not later than
9:00 A.M. (New York City time) on the date of such Borrowing in the case of
a
Borrowing consisting of Alternate Base Rate Loans, by the Borrower to the Agent,
which shall give to each Bank prompt notice thereof. The notice of the initial
Borrowing (the “Notice
of Borrowing”)
shall
be in writing, in form and substance satisfactory to the Agent, specifying
therein the requested (i) date of such Borrowing, (ii) Type of Loans comprising
such Borrowing, (iii) aggregate amount of such Borrowing, which shall not exceed
the aggregate amount of the Commitments and (iv) in the case of a Borrowing
consisting of Eurodollar Rate Loans, initial Interest Period for each such
Loan.
Each Bank shall, before 11:00 A.M. (New York City time) on the date of such
Borrowing, make available for the account of its Applicable Lending Office
to
the Agent at the Agent’s account, in same day funds, such Bank’s portion of such
Borrowing in accordance with Section 2.1 (The Loans). After the Agent’s receipt
of such funds and upon fulfillment of the applicable conditions set forth in
Section 4 (Conditions to Funding), the Agent will make such funds available
to
the Borrower by electronic transfer of same day funds to the Borrower’s account.
(b) The
Notice of Borrowing shall be irrevocable and binding on the Borrower. If the
Notice of Borrowing specifies the initial Borrowing is to be comprised of
Eurodollar Rate Loans, the Borrower shall indemnify each Bank against any loss,
cost or expense incurred by such Bank as a result of any failure to fulfill
on
or before the date specified in the Notice of Borrowing the applicable
conditions set forth in Section 4 (Conditions to Funding), including, without
limitation, any loss, cost or expense incurred by reason of the liquidation
or
reemployment of deposits or other funds acquired by such Bank to fund the Loan
to be made by such Bank as part of such Borrowing when such Loan, as a result
of
such failure, is not made on such date.
(c) Unless
the Agent shall have received written notice from a Bank prior to the date
of
the initial Borrowing that such Bank will not make available to the Agent such
Bank’s ratable portion of such Borrowing, the Agent may assume that such Bank
has made such portion available to the Agent on the date of such Borrowing
in
accordance with clause (a) of this Section 2.2 and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made
such ratable portion available to the Agent, such Bank and the Borrower
severally agree to repay or pay to the Agent forthwith on demand such
corresponding amount and to pay interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid or paid to the Agent, at (i) in the case of the Borrower, the interest
rate applicable at such time under Section 2.6 (Interest) to Loans comprising
such Borrowing and (ii) in the case of such Bank, the Federal Funds Rate. If
such Bank shall pay to the Agent such corresponding amount, such amount so
paid
shall constitute such Bank’s Loan as part of such Borrowing for all
purposes.
(d) The
failure of any Bank to make the Loan to be made by it as part of the initial
Borrowing shall not relieve any other Bank of its obligation, if any, hereunder
to make its Loan on the date of such Borrowing, but no Bank shall be responsible
for the failure of any other Bank to make the Loan to be made by such other
Bank
on the date of such Borrowing.
2.3 Repayment
of Loans.
The
Borrower shall repay to the Agent for the ratable account of the Banks the
aggregate outstanding principal amount of the Loans on the Maturity
Date.
2.4 Termination
of the Commitments.
The
Commitment of each Bank shall be automatically and permanently reduced to $0
on
the Funding Date.
2.5 Prepayments.
(a) Voluntary
Prepayments.
The
Borrower may, upon at least three Business Days’ notice in the case of
Eurodollar Rate Loans and at least one Business Day’s notice in the case of
Alternate Base Rate Loans, in each case to the Agent stating the proposed date
and aggregate principal amount of the prepayment, and if such notice is given
the Borrower shall, prepay the outstanding aggregate principal amount of the
Loans comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; provided,
however,
that (i)
each partial prepayment shall be in an aggregate principal amount of $1,000,000
in the case of Eurodollar Rate Loans and $1,000,000 in the case of Alternate
Base Rate Loans, or in each case an integral multiple of $1,000,000 in excess
thereof and (ii) if any prepayment of a Eurodollar Rate Loan is made on a date
other than the last day of an Interest Period for such Loan, the Borrower shall
also pay any amounts owing pursuant to Section 12.2(b) (Reimbursement of
Expenses-breakage expenses). Each such prepayment of any Loans shall be applied
to installments thereof as directed by the Borrower. The Agent shall promptly
notify each Bank of any notice received from Borrower pursuant to this Section
2.5.
(b) Mandatory
Prepayments.
No later
than the first Business Day following the date of receipt by Borrower or any
of
its Subsidiaries of any repayment of principal by or on behalf of CCC pursuant
to the Inter-Company Loan, Borrower shall prepay the Loan in an aggregate amount
equal to such proceeds; provided,
however,
that if
any prepayment of a Eurodollar Rate Loan is made on a date other than the last
day of an Interest Period for such Loan, the Borrower shall also pay any amounts
owing pursuant to Section 12.2(b) (Reimbursement of Expenses-breakage expenses).
Each such prepayment of any Loans shall be applied to installments thereof
as
directed by the Borrower.
2.6 Interest.
(a) The
Borrower shall pay interest on the unpaid principal amount of each Loan owing
to
each Bank from the date of such Loan until such principal amount shall be paid
in full, at the following rates per annum:
(i) During
such periods as such Loan is an Alternate Base Rate Loan, a rate per annum
equal
at all times to the sum of (a) the Alternate Base Rate in effect from time
to
time plus
(b) the
Applicable Margin in effect from time to time, payable in arrears quarterly
on
the last day of each March, June, September and December during such periods
and
on the date such Alternate Base Rate Loan shall be Converted or paid in
full.
(ii) During
such periods as such Loan is a Eurodollar Rate Loan, a rate per annum equal
at
all times during each Interest Period for such Loan to the sum of (a) the
Eurodollar Rate for such Interest Period for such Loan (b) the Applicable Margin
in effect on the first day of such Interest Period, payable in arrears on the
last day of such Interest Period and, if such Interest Period has a duration
of
more than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on the date
such Eurodollar Rate Loan shall be Converted or paid in full.
(b) To
the
fullest extent permitted by applicable law, the amount of any principal,
interest, fee or other amount payable under this Agreement or any other Loan
Document to any Agent or any Bank that is not paid when due, from the date
such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per
annum
equal at all times to 2% per annum above the rate per annum required to be
paid,
in the case of principal or interest, on the Type of Loan relating to such
principal or interest pursuant to clause (i) or (ii) of clause (a) above, as
applicable, and, in all other cases, on Alternate Base Rate Loans pursuant
to
clause (i) of clause (a) above.
(c) Promptly
after receipt of the Notice of Borrowing pursuant to Section 2.2(a) (Making
of
the Loans), a notice of Conversion pursuant to Section 2.8 (Conversion of Loans)
or a notice of selection of an Interest Period pursuant to the terms of the
definition of “Interest Period”, the Agent shall give notice to the Borrower and
each Bank of the applicable Interest Period and the applicable interest rate
determined by the Agent for purposes of clause (a)(i) or (a)(ii) above. If
the
Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Loans in accordance with the provisions contained in the
definition of “Interest Period”, the Agent will forthwith so notify the Borrower
and the Banks, whereupon the Borrower shall be deemed to have selected a
one-month Interest Period for each such Eurodollar Rate Loan.
2.7 Fees.
(a)
The
Borrower shall pay to the Agent for its own account such fees as may from time
to time be agreed between the Borrower and the Agent, including the fees
specified in the Fee Letter.
(b) All
fees
payable hereunder shall be paid on the dates due, in immediately available
funds, to the Agent. Fees paid shall not be refundable under any
circumstances.
2.8 Conversion
of Loans.
(a) The
Borrower may on any Business Day, upon notice given to the Agent not later
than
11:00 A.M. (New York City time) on the third Business Day prior to the date
of
the proposed Conversion and subject to the provisions of Section 2.6 (Interest)
and 2.9 (Increased Costs), Convert all or any portion of the Loans of one Type
comprising the same borrowing into Loans of the other Type; provided,
however,
that
any Conversion of Eurodollar Rate Loans into Alternate Base Rate Loans shall
be
made only on the last day of an Interest Period for such Eurodollar Rate Loans
and each Conversion of Loans shall be made ratably among the Banks in accordance
with their Pro Rata Percentages; and also provided
that,
upon giving effect to such Conversions, no more than five Interest Periods
shall
be in effect. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Loans to
be
Converted and (iii) if such Conversion is into Eurodollar Rate Loans, the
duration of the initial Interest Period for such Loans. Each notice of
Conversion shall be in writing and shall be irrevocable and binding on the
Borrower. The Agent shall promptly notify each Bank of any notice received
from
Borrower pursuant to this Section 2.8.
(b) Upon
the
occurrence and during the continuation of any Default and if the Required Banks
shall so direct, (i) each Eurodollar Rate Loan will automatically, on the last
day of the then existing Interest Period therefor, Convert into an Alternate
Base Rate Loan and (ii) the obligation of the Banks to make, or to Convert
Loans
into, Eurodollar Rate Loans shall be suspended.
2.9 Increased
Costs, Etc.
(a) If,
due
to a Change in Law, there shall be any increase in the cost to any Bank of
agreeing to make or of making, funding or maintaining Eurodollar Rate Loans
(excluding, for purposes of this Section 2.9, any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.11 (Taxes) shall govern),
(ii) changes in the rate of taxation or basis of taxation of overall net income
or overall gross income by the United States or by the foreign jurisdiction
or
state under the laws of which such Bank is organized or has its principal office
or Applicable Lending Office or any political subdivision thereof and (iii)
reserve requirements contemplated by Section 2.9(b) (Taxes)), then the Borrower
shall from time to time, within 10 days of receipt of a certificate from such
Bank setting forth in reasonable detail a calculation of the amount necessary
to
compensate such Bank (with a copy of such certificate to the Agent), pay to
the
Agent for the account of such Bank additional amounts sufficient to compensate
such Bank for such increased cost; provided,
however,
that a
Bank claiming additional amounts under this Section 2.9(a) agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost that may thereafter accrue and would not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
as to the amount of such increased cost, submitted to the Borrower by such
Bank,
shall be conclusive and binding for all purposes, absent manifest
error.
(b) The
Borrower shall pay to each Bank, as long as such Bank shall be required to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as “Eurocurrency
Liabilities”),
additional interest on the unpaid principal amount of each Eurodollar Rate
Loan
equal to the actual costs of such reserves allocated to such Loan by such Bank
(as determined by such Bank in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest
is
payable on such Loan, provided
the
Borrower shall have received at least 10 days’ prior notice (with a copy to the
Agent) of such additional interest from such Bank (which notice shall contain
a
calculation of such additional interest in reasonable detail). If a Bank fails
to give notice 10 days prior to the relevant date on which interest is payable,
such additional interest shall be due and payable 10 days from receipt of such
notice.
(c) If,
with
respect to any Eurodollar Rate Loans, the Majority Banks notify the Agent that
the Eurodollar Rate for any Interest Period for such Loans will not adequately
reflect the cost to the Banks of making, funding or maintaining their Eurodollar
Rate Loans for such Interest Period, the Agent shall forthwith so notify the
Borrower and the Banks, whereupon (i) each such Eurodollar Rate Loan will
automatically, on the last day of the then existing Interest Period therefor,
Convert into an Alternate Base Rate Loan and (ii) the obligation of the Banks
to
make, or to Convert Loans into, Eurodollar Rate Loans shall be suspended until
the Agent shall notify the Borrower that the Banks have determined that the
circumstances causing such suspension no longer exist.
(d) Notwithstanding
any other provision of this Agreement, if the introduction or effectiveness
of
or any change in or in the interpretation of any law or regulation shall make
it
unlawful, or any central bank or other Governmental Authority shall assert
that
it is unlawful, for any Bank or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Loans or to continue to fund
or
maintain Eurodollar Rate Loans hereunder, then, on notice thereof and demand
therefor by such Bank to the Borrower through the Agent, (i) each Eurodollar
Rate Loan will automatically, upon such demand, Convert into an Alternate Base
Rate Loan and (ii) the obligation of the Banks to make, or to Convert Loans
into, Eurodollar Rate Loans shall be suspended until the Agent shall notify
the
Borrower that such Bank has determined that the circumstances causing such
suspension no longer exist; provided,
however,
that,
before making any such demand, such Bank agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to
designate a different Eurodollar Lending Office if the making of such a
designation would allow such Bank or its Eurodollar Lending Office to continue
to perform its obligations to make Eurodollar Rate Loans or to continue to
fund
or maintain Eurodollar Rate Loans and would not, in the judgment of such Bank,
be otherwise disadvantageous to such Bank.
(e) A
Bank
shall only be entitled to recover increased costs pursuant to Section 2.9
(Increased Costs) to the extent such costs were incurred during any time or
period commencing not more than 120 days prior to the date on which such Bank
notifies the Agent and the Borrower that it proposes to demand such compensation
and identifies to the Agent and the Borrower the statute, regulation or other
basis upon which the claimed compensation is or will be based; provided
that, if
the Change in Law giving rise to such increased costs is retroactive, then
the
120-day period referred to above shall be extended to include the period of
retroactive effect thereof.
2.10 Payments
and Computations.
(a) The
Borrower shall make each payment hereunder and under the Notes, irrespective
of
any right of counterclaim or set-off, not later than 12:00 P.M. (New York City
time) on the day when due in U.S. dollars to the Agent at the Agent’s account in
same day funds, with payments being received by the Agent after such time being
deemed to have been received on the next succeeding Business Day. The Agent
will
promptly thereafter cause like funds to be distributed (x) if such payment
by
the Borrower is in respect of principal, interest or any other Obligation then
payable hereunder and under the Notes to more than one Bank, to such Banks
for
the account of their respective Applicable Lending Offices ratably in accordance
with the amounts of such respective Obligations then payable to such Banks
and
(y) if such payment by the Borrower is in respect of any Obligation then payable
hereunder to one Bank, to such Bank for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording
of
the information contained therein in the Register pursuant to Section 12.14(d)
(Sale or Assignment), from and after the effective date of such Assignment
and
Acceptance, the Agent shall make all payments hereunder and under the Notes
in
respect of the interest assigned thereby to the Bank assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The
Borrower hereby authorizes each Bank and each of its Affiliates, if and to
the
extent payment owed to such Bank is not made when due hereunder or, in the
case
of a Bank, under the Note held by such Bank, to charge from time to time, to
the
fullest extent permitted by law, against any or all of the Borrower’s accounts
with such Bank or such Affiliate any amount so due.
(c) All
computations of interest based on the Prime Rate shall be made by the Agent
on
the basis of a year of 365 or 366 days, as the case may be, and all computations
of interest based on the Eurodollar Rate or the Federal Funds Rate shall be
made
by the Agent on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring
in
the period for which such interest is payable. Each determination by the Agent
of an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever
any payment hereunder or under the Notes shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in
the
computation of payment of interest; provided,
however,
that if
such extension would cause payment of interest on or principal of Eurodollar
Rate Loans to be made in the next following calendar month, such payment shall
be made on the next preceding Business Day.
(e) Unless
the Agent shall have received notice from the Borrower prior to the date on
which any payment is due to any Bank hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each such Bank on such due date
an
amount equal to the amount then due such Bank. If and to the extent the Borrower
shall not have so made such payment in full to the Agent, each such Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
(f) If
the
Agent receives funds for application to the Obligations of the Loan Parties
under or in respect of the Loan Documents under circumstances for which the
Loan
Documents do not specify the Loans to which, or the manner in which, such funds
are to be applied, the Agent may, but shall not be obligated to, elect to
distribute such funds to each of the Banks in accordance with such Bank’s pro
rata share of the aggregate principal amount of all Loans outstanding at such
time, for application to such principal repayment installments thereof, as
the
Agent shall direct.
2.11 Taxes.
(a) Any
and
all payments by any Loan Party to or for the account of any Bank or any Agent
hereunder or under the Notes or any other Loan Document shall be made, in
accordance with Section 2.10 (Payments and Computations) or the applicable
provisions of such other Loan Document, if any, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding,
in the
case of each Bank and each Agent, taxes that are imposed on its overall net
income by the United States (and franchise taxes imposed in lieu thereof) and
taxes that are imposed on its overall net income (and franchise taxes imposed
in
lieu thereof) by the state or foreign jurisdiction under the laws of which
such
Bank or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Bank, taxes that are imposed on
its
overall net income (and franchise taxes imposed in lieu thereof) by the state
or
foreign jurisdiction of such Bank’s principal office or Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect
of
payments hereunder or under the Notes being hereinafter referred to as
“Taxes”).
If
any Loan Party shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note or any other Loan Document to
any
Bank or any Agent, (i) the sum payable by such Loan Party shall be increased
as
may be necessary so that after such Loan Party and the Agent have made all
required deductions (including deductions applicable to additional sums payable
under this Section 2.11) such Bank or such Agent, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Loan Party shall make all such deductions and (iii) such Loan
Party shall pay the full amount deducted to the relevant taxation authority
or
other authority in accordance with applicable law.
(b) In
addition, a Loan Party shall pay any present or future stamp, documentary,
excise, property or similar taxes, charges or levies that arise from any payment
made by such Loan Party hereunder or under any Notes or any other Loan Documents
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement, the Notes or the other Loan Documents
(hereinafter referred to as “Other
Taxes”).
(c) Panhandle
Eastern, Borrower and CCC shall indemnify each Bank and each Agent for and
hold
them harmless against the full amount of Taxes and Other Taxes, imposed on
or
paid by such Bank or such Agent (as the case may be) with respect to any payment
by or on account of any obligation of the Loan Parties hereunder (including
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 2.11) and any liability (including penalties, additions
to
tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Bank or such
Agent (as the case may be) makes written demand therefor.
(d) Within
30
days after the date of any payment of Taxes, the appropriate Loan Party shall
furnish to the Agent, at its address referred to in Section 12.3 (Notices),
the
original or a certified copy of a receipt evidencing such payment, to the extent
such a receipt is issued therefor, or other written proof of payment thereof
that is reasonably satisfactory to the Agent. In the case of any payment
hereunder or under the Notes or the other Loan Documents by or on behalf of
a
Loan Party through an account or branch outside the United States or by or
on
behalf of a Loan Party by a payor that is not a United States person, if such
Loan Party determines that no Taxes are payable in respect thereof, such Loan
Party shall furnish, or shall cause such payor to furnish, to the Agent, at
such
address, an opinion of counsel reasonably acceptable to the Agent stating that
such payment is exempt from Taxes. For purposes of subsections (d) and (e)
of
this Section 2.11, the terms “United
States”
and
“United
States person”
shall
have the meanings specified in Section 7701 of the Internal Revenue
Code.
(e) Each
Bank
organized under the laws of a jurisdiction outside the United States shall,
on
or prior to the date of its execution and delivery of this Agreement or on
the
date of the Assignment and Acceptance pursuant to which it becomes a Bank,
as
the case may be, and from time to time thereafter as reasonably requested in
writing by a Loan Party (but only so long thereafter as such Bank remains
lawfully able to do so), or upon the obsolescence or invalidity of any form
previously provided provide each of the Agent and such Loan Party with two
original Internal Revenue Service Forms W-8BEN or W-8ECI, as appropriate, or
any
other form prescribed by the Internal Revenue Service, certifying that such
Bank
is exempt from or entitled to a reduced rate of United States withholding tax
on
payments pursuant to this Agreement or the Notes or any other Loan Document,
or
(in the case of a Bank that is claiming exemption from U.S. federal withholding
with respect to payments of “portfolio interest” and has certified in writing to
the Agent that it is not (i) a “bank” as defined in Section 881(c)(3)(A) of the
Internal Revenue Code, (ii) a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of such Loan Party or (iii)
a
controlled foreign corporation related to such Loan Party (within the meaning
of
Section 864(d)(4) of the Internal Revenue Code)) Internal Revenue Service Form
W-8BEN, or any successor or other form prescribed by the Internal Revenue
Service, or, in the case of a Bank that has certified that it is not a “bank” as
described above, certifying that such Bank is a foreign corporation,
partnership, estate or trust. If the forms provided by a Bank at the time such
Bank first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall
be
considered excluded from Taxes unless and until such Bank provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; provided,
however,
that
if, at the effective date of the Assignment and Acceptance pursuant to which
a
Bank becomes a party to this Agreement, the Bank assignor was entitled to
payments under subsection (a) of this Section 2.11 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that
may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Bank assignee
on
such date. If any form or document referred to in this subsection (e) requires
the disclosure of information, other than information necessary to compute
the
tax payable and information required on the date hereof by Internal Revenue
Service Form W-8BEN or W-8ECI or the related certificate described above, that
the applicable Bank reasonably considers to be confidential, such Bank shall
give notice thereof to the applicable Loan Party and shall not be obligated
to
include in such form or document such confidential information.
(f) For
any
period with respect to which a Bank has failed to provide a Loan Party with
the
appropriate form, certificate or other document described in subsection (e)
above (other
than if
such
failure is due to a change in law, or in the interpretation or application
thereof, occurring after the date on which a form, certificate or other document
originally was required to be provided or if such form, certificate or other
document otherwise is not required under subsection (e) above), such Bank shall
not be entitled to indemnification under subsection (a) or (c) of this Section
2.11 with respect to Taxes imposed by the United States by reason of such
failure; provided,
however,
that
should a Bank become subject to Taxes because of its failure to deliver a form,
certificate or other document required hereunder, the Loan Parties shall, at
the
sole expense of such Bank, take such steps as such Bank shall reasonably request
to assist such Bank to recover such Taxes.
(g) Any
Bank
claiming any additional amounts payable pursuant to this Section 2.11 agrees
to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office or assign its rights and obligations under this Agreement to another
of
its offices, branches or Affiliates if the making of such a change or assignment
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Bank, be otherwise disadvantageous to such Bank.
(h) If
a Bank
or Agent actually receives a refund of any Taxes or Other Taxes as to which
it
has been indemnified by a Loan Party or with respect to which a Loan Party
has
paid additional amounts pursuant to this Section 2.11, it shall pay over such
refund to the Loan Party (but only to the extent of indemnity payments made,
or
additional amounts paid, by the Loan Party under this Section 2.11 with respect
to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Agent or such Bank or Agent and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided
that the
Loan Party, upon the request of the Agent or such Bank or Agent, agrees to
repay
the amount paid over to the Loan Party (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Agent or such
Bank or Agent in the event the Agent or such Bank or Agent is required to repay
such refund to such Governmental Authority. This Section 2.11(h) shall not
be
construed to require the Agent or any Bank or Agent to claim a refund or make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to the Loan Parties or any other Person.
2.12 Sharing
of Payments, Etc.
If any
Bank shall obtain at any time any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise, other than as a
result of an assignment pursuant to Section 12.14 (Sale and Assignment)) (a)
on
account of Obligations due and payable to such Bank hereunder and under the
Notes and the other Loan Documents at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Bank at such time to (ii) the aggregate amount of the
Obligations due and payable to all Banks hereunder and under the Notes and
the
other Loan Documents at such time) of payments on account of the Obligations
due
and payable to all Banks hereunder and under the Notes at such time obtained
by
all the Banks at such time or (b) on account of Obligations owing (but not
due
and payable) to such Bank hereunder and under the Notes and the other Loan
Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Bank at such
time
to (ii) the aggregate amount of the Obligations owing (but not due and payable)
to all Banks hereunder and under the Notes and the other Loan Documents at
such
time) of payments on account of the Obligations owing (but not due and payable)
to all Banks hereunder and under the Notes at such time obtained by all of
the
Banks at such time, such Bank shall forthwith purchase from the other Banks
such
interests or participating interests in the Obligations due and payable or
owing
to them, as the case may be, as shall be necessary to cause such purchasing
Bank
to share the excess payment ratably with each of them; provided,
however,
that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each other Bank shall be rescinded and
such
other Bank shall repay to the purchasing Bank the purchase price to the extent
of such Bank’s ratable share (according to the proportion of (i) the purchase
price paid to such Bank to (ii) the aggregate purchase price paid to all Banks)
of such recovery together with an amount equal to such Bank’s ratable share
(according to the proportion of (i) the amount of such other Bank’s required
repayment to (ii) the total amount so recovered from the purchasing Bank) of
any
interest or other amount paid or payable by the purchasing Bank in respect
of
the total amount so recovered; provided,
further
that, so
long as the Obligations under the Loan Documents shall not have been
accelerated, any excess payment received by any Bank shall be shared on a pro
rata basis only with other Banks. The Borrower agrees that any Bank so
purchasing an interest or participating interest from another Bank pursuant
to
this Section 2.12 may, to the fullest extent permitted by law, exercise all
its
rights of payment (including the right of set-off) with respect to such interest
or participating interest, as the case may be, as fully as if such Bank were
the
direct creditor of the Borrower in the amount of such interest or participating
interest, as the case may be.
2.13 Use
of Proceeds.
The
Borrower agrees that the proceeds of the Loans shall be used to make the
Inter-Company Loan to CCC. CCC shall cause the proceeds of the Inter-Company
Loan received by it to repay in full (a) the existing Debt under the
Amended and Restated Credit Agreement dated as of December 21, 2005 by and
among
Transwestern Holding Company, LLC, CCC, the lenders party thereto, Wachovia
Bank, National Association, as administrative agent, Bank of America, N.A.,
as
syndication agent, and JPMorgan Chase Bank, N.A., Sun Trust Bank and Calyon,
New
York Branch, as co-documentation agents and (b) the existing Debt under the
notes issued pursuant to the Note Purchase Agreement, dated as of November
17,
2004, between Transwestern Holding Company, LLC and the holders listed therein
(the Debt referred to in clause (a) and (b) shall collectively be referred
to as
the “Existing
TWH Indebtedness”).
2.14 Evidence
of Debt.
(a) (i)
Each
Bank shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Bank resulting from each
Loan owing to such Bank from time to time, including the amounts of principal
and interest payable and paid to such Bank from time to time hereunder. The
Borrower agrees that upon request by any Bank to the Borrower (with a copy
of
such request to the Agent) to the effect that a promissory note or other
evidence of indebtedness is required or appropriate in order for such Bank
to
evidence (whether for purposes of pledge, enforcement or otherwise) the Loans
owing to, or to be made by, such Bank, the Borrower shall promptly execute
and
deliver to such Bank, with a copy to the Agent, a Note payable to the order
of
such Bank in a principal amount equal to the Loans of such Bank. All references
to Notes in the Loan Documents shall mean Notes, if any, to the extent issued
hereunder.
(b) The
Register maintained by the Agent pursuant to Section 12.14(d) (Sale and
Assignment) shall include a control account, and a subsidiary account for each
Bank, in which accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made hereunder, the Type of Loans comprising such
Borrowing and, if appropriate, the Interest Period applicable thereto, (ii)
the
terms of each Assignment and Acceptance delivered to and accepted by it, (iii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Bank hereunder, and (iv) the amount of any
sum
received by the Agent from the Borrower hereunder and each Bank’s share
thereof.
(c) Entries
made in good faith by the Agent in the Register pursuant to subsection (b)
above, and by each Bank in its account or accounts pursuant to subsection (a)
above, shall be prima
facie
evidence
of the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Bank and, in
the
case of such account or accounts, such Bank, under this Agreement, absent
manifest error; provided,
however,
that
the failure of the Agent or such Bank to make an entry, or any finding that
an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this
Agreement.
2.15 Replacement
of Banks.
If (a)
any Bank requests compensation under Section 2.9 (Increased Costs) or asserts,
pursuant to Section 2.9(d) that it is unlawful for such Bank to make Eurodollar
Rate Loans, (b) the Borrower is required to pay any additional amount to any
Bank or any Governmental Authority for the account of any Bank pursuant to
Section 2.11 (Taxes), (c) any Bank defaults in its obligation to fund Loans
hereunder, or (d) with respect of any Bank that does not approve any amendment
or waiver of any provision of any Loan Document that requires the unanimous
consent of all of the Banks pursuant to Section 12.1 (Amendments; Waivers,
Etc.), if such amendment or waiver is agreed to by the Required Banks, then
the
Borrower may, at its sole expense, upon prior notice to such Bank and the Agent,
require such Bank to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 12.14 (Sale and
Assignment)), all its interests, rights and obligations under this Agreement
to
an assignee that shall assume such obligations (which assignee may be another
Bank, if a Bank accepts such assignment); provided
that (i)
to the extent required under Section 12.14 (Sale and Assignment), the Borrower
shall have received the prior written consent of the Agent, which consent shall
not unreasonably be withheld, (ii) such Bank shall have received payment of
an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest
and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.9
(Increased Costs) or payments required to be made pursuant to Section 2.11
(Taxes), such assignment will result in a reduction in such compensation or
payments. A Bank shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Bank or otherwise,
the circumstances entitling the Borrower to require such assignment and
delegation cease to apply.
3. REPRESENTATIONS
AND WARRANTIES OF THE LOAN PARTIES
Each
of
Panhandle Eastern, Borrower and CCC represents and warrants that:
3.1 Organization
and Qualification.
Such
Loan Party:
(a) is
duly
organized, validly existing, and in good standing under the laws of its state
of
organization;
(b) has
the
corporate or organizational power to own its properties and to carry on its
respective businesses as now conducted; and
(c) is
duly
qualified as a foreign limited partnership or limited liability company, as
applicable, to do business and is in good standing in every jurisdiction where
such qualification is necessary except when the failure to so qualify would
not
or does not have a Material Adverse Effect.
The
Borrower has the Subsidiaries as applicable listed on Schedule
3.1
attached
hereto and made a part hereof for all purposes, and no others, each of which
is
a Delaware limited liability company unless otherwise noted on Schedule
3.1.
3.2 Authorization,
Validity, Etc.
Each
such Loan Party has the limited liability company or limited partnership power
and authority to make, execute, deliver and perform under this Agreement, the
Loan Documents and the Inter-Company Note to which it is a party and the
transactions contemplated herein and therein, and all such action has been
duly
authorized by all necessary limited partnership or limited liability company
proceedings on its part. Each Loan Document and the Inter-Company Note to which
a Loan Party is a party has been duly and validly executed and delivered by
such
Loan Party and constitutes the valid and legally binding agreement of such
Loan
Party enforceable against such Loan Party in accordance with its terms, except
as limited by Debtor Laws.
3.3 Conflicting
or Adverse Agreements or Restrictions.
No Loan
Party is a party to any contract or agreement or subject to any restriction
which would materially adversely affect the ability of any Loan Party to perform
its obligations under the Loan Documents and the Inter-Company Note to which
it
is a party. Neither the execution and delivery of this Agreement, any other
Loan
Document or the Inter-Company Note by any Loan Party that is or is to become
a
party thereto, nor the consummation of the transactions contemplated hereby
or
thereby, nor the fulfillment of and compliance with the respective terms,
conditions and provisions hereof or thereof or of any instruments required
hereby will conflict with or result in a breach of any of the terms, conditions
or provisions of, or constitute a default under, or result in any violation
of,
or result in the creation or imposition of any lien (other than as contemplated
or permitted by this Agreement) on any of the property of such Loan Party
pursuant to (a) the charter or bylaws or similar organizational documents
applicable to such Loan Party; (b) any law or any regulation of any Government
Authority; (c) any order, writ, injunction or decree of any court; or (d) the
terms, conditions or provisions of any agreement or instrument to which such
Loan Party is a party or by which it is bound or to which it is subject
(including, without limitation, Section 7.8 of the April 2005 Credit Agreement),
except in the case of clauses (b), (c) and (d) for conflicts, breaches,
defaults, violations or the creation or imposition of liens that could not
be
reasonably expected to have a Material Adverse Effect.
3.4 No
Consents Required.
No
action, approval, consent, waiver, exemption, variance, franchise, order,
permit, authorization, right or license of or from a Governmental Authority,
and
no notice to or filing with, any Governmental Authority (including without
limitation the SEC under PUHCA) or any other third party is required for (a)
the
due execution, delivery or performance by any Loan Party of any Loan Document
or
the Inter-Company Note to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby, including without
limitation the incurrence of Debt under this Agreement and the Inter-Company
Note and the borrowing and repayment of Loans hereunder and thereunder; or
(b)
the exercise by any Agent or any Bank of its rights under the Loan Documents,
except for those authorizations, approvals, actions, notices and filings (A)
which have been duly obtained or made or which are not required under the terms
of the Loan Documents to have been obtained or made on or prior to such date
or
(B) with respect to the consummation of the transactions contemplated hereby,
the failure of which to be obtained or made could not reasonably be expected
to
have a Material Adverse Effect.
3.5 Financial
Statements.
(a) Panhandle
Eastern has furnished the Banks with its audited financial report as of the
fiscal year ending December 31, 2005 and its unaudited financial reports as
of
each of the quarterly periods ending March 31, 2006, June 30, 2006 and September
30, 2006. These statements are complete and correct and present fairly, in
all
material respects, in accordance with GAAP, consistently applied throughout
the
periods involved, the Consolidated financial position of Panhandle Eastern
and
its Subsidiaries and the results of their operations as at the dates and for
the
periods indicated.
(b) The
Borrower has furnished the Banks with the Borrower’s unaudited financial report
as of the fiscal year ending December 31, 2005 and its unaudited financial
reports as of each of the quarterly periods ending March 31, 2006, June 30,
2006
and September 30, 2006. These statements are complete and correct and present
fairly, in all material respects, in accordance with GAAP, consistently applied
throughout the periods involved, the Consolidated financial position of the
Borrower and its Subsidiaries and the results of their operations as at the
dates and for the periods indicated.
(c) CCC
has
furnished the Banks with its unaudited financial report as of the fiscal year
ending December 31, 2005 and its unaudited financial reports as of each of
the
quarterly periods ending March 31, 2006, June 30, 2006 and September 30, 2006.
These statements are complete and correct and present fairly, in all material
respects, in accordance with GAAP, consistently applied throughout the periods
involved, the financial position of CCC and the results of its operations as
at
the dates and for the periods indicated.
(d) Since
December 31, 2005, there has not occurred any event or condition which,
individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Material Adverse Change respecting Panhandle Eastern,
Borrower or CCC.
3.6 Litigation.
Except
as disclosed pursuant to Section 3.17 (Environmental Matters), there is no:
(a)
action or proceeding pending or, to the knowledge of Panhandle Eastern, Borrower
or CCC, threatened against any Loan Party before any court, administrative
agency or arbitrator which is reasonably expected to have a Material Adverse
Effect; (b) unsatisfied judgment outstanding against such Loan Party for the
payment of money; or (c) other outstanding judgment, order or decree affecting
such Loan Party before or by any administrative or governmental authority,
compliance with or satisfaction of which may reasonably be expected to have
a
Material Adverse Effect.
3.7 Default.
No Loan
Party is in default under or in violation of the provisions of any instrument
evidencing any Debt or of any agreement relating thereto or any judgment, order,
writ, injunction or decree of any court or any order, regulation or demand
of
any administrative or governmental instrumentality, which default or violation
could reasonably be expected to have a Material Adverse Effect.
3.8 Compliance.
Each
Loan Party is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
3.9 Title
to Assets.
Each
Loan Party has good title to its respective assets, subject to no Liens except
those permitted in Section 6.2 (Liens, Etc.), Section 7.1 (Liens, Etc.), Section
8.1 (Liens, Etc.) and Permitted Encumbrances. For purposes of this Section
3.9,
“Permitted
Encumbrances”
shall
mean easements, rights-of-way, restrictions, minor defects or irregularities
in
title and other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of such Loan
Party.
3.10 Payment
of Taxes.
Each
Loan Party has filed all material tax returns required to be filed and has
paid
all taxes shown on said returns and all assessments which are due and payable
(except such as are being contested in good faith by appropriate proceedings
for
which adequate reserves for their payment have been provided in a manner
consistent with the accounting practices followed by the applicable Loan Party
as of December 31, 2005). No Loan Party is aware of any pending investigation
by
any taxing authority or of any claims by any Governmental Authority for any
unpaid taxes. Except as disclosed on Schedule
3.10,
no Loan
Party is party to any tax sharing agreement or arrangement.
3.11 Investment
Company Act Not Applicable.
No Loan
Party is an “investment company” or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as
amended.
3.12 Public
Utility Holding Company Act Not Applicable.
No Loan
Party is a “holding company”, or a “subsidiary company” of a “holding company”,
or an “affiliate” of a “holding company”, or an “affiliate” of a “subsidiary
company” of a “holding company”, as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
3.13 Regulations
G, T, U and X.
No Loan
shall be a “purpose credit secured directly or indirectly by margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (“margin stock”); none of the proceeds of any Loan will be used
by any Loan Party to extend credit to others for the purpose of purchasing
or
carrying any margin stock, or for any other purpose which would constitute
this
transaction a “purpose credit secured directly or indirectly by margin stock”
within the meaning of said Regulation U, as now in effect or as the same may
hereafter be in effect. No Loan Party will take or permit any action which
would
involve the Banks in a violation of Regulation G, Regulation T, Regulation
U,
Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or a violation of the Securities Exchange Act of 1934, in each
case as now or hereafter in effect.
3.14 ERISA.
No
Reportable Event (as defined in § 4043(c) of ERISA) has occurred with respect to
any Plan. Except
as
provided in Schedule
3.14,
each
Plan
complies in all material respects with applicable provisions of ERISA, and
each
Loan Party has filed all reports required by ERISA and the Code to be filed
with
respect to each Plan. No Loan Party has any knowledge of any event which could
result in a liability of a Loan Party to the Pension Benefit Guaranty
Corporation. Each Loan Party has met all requirements with respect to funding
the Plans imposed by ERISA or the Code. Since the effective date of Title IV
of
ERISA, there have not been any, nor are there now existing any, events or
conditions that would permit any Plan to be terminated under circumstances
which
would cause the lien provided under § 4068 of ERISA to attach to any property of
a Loan Party.
3.15 No
Financing of Certain Security Acquisitions.
None of
the proceeds of any Loan will be used to acquire any security in any transaction
that is subject to §13 or §14 of the Securities Exchange Act of 1934, as
amended.
3.16 Franchises,
Co-Licenses, Etc.
Each
Loan Party owns or has obtained all the material governmental permits,
certificates of authority, leases, patents, trademarks, service marks, trade
names, copyrights, franchises and licenses, and rights with respect thereto,
required or necessary (or, in the sole and independent judgment of the Borrower,
prudent) in connection with the conduct of their respective businesses as
presently conducted or as proposed to be conducted, except where the failure
to
have any of the foregoing could not be reasonably expected to have a Material
Adverse Effect.
3.17 Environmental
Matters.
Except
as disclosed in Schedule
3.17,
(a) all
facilities and property owned or leased by a Loan Party have been and continue
to be, owned or leased and operated by such Loan Party in material compliance
with all Environmental Laws; (b) there has not been (during the period of
such Loan Party’s ownership or lease) any Release of Hazardous Materials at, on,
under or from any property now (or, to such Loan Party’s knowledge, previously)
owned or leased by such Loan Party (i) that required, or may reasonably be
expected to require, such Loan Party to expend funds on remediation or cleanup
activities pursuant to any Environmental Law except for remediation or clean-up
activities that would not be reasonably expected to have a Material Adverse
Effect, or (ii) that otherwise, singly or in the aggregate, has, or may
reasonably be expected to have, a Material Adverse Effect; (c) each Loan Party
has been issued and is in material compliance with all permits, certificates,
approvals, orders, licenses and other authorizations relating to environmental
matters necessary for the conduct of its businesses; (d) there are no
polychlorinated biphenyls (PCB’s) or asbestos-containing materials or surface
impoundments in any of the facilities now (or, to the knowledge of such Loan
Party, previously) owned or leased by such Loan Party, except for PCB’s and
asbestos-containing materials of the type and in quantities that, to the
knowledge of such Loan Party, do not currently require remediation, and if
remediation of such PCB’s and asbestos-containing materials is hereafter
required for any reason, such remediation activities would not reasonably be
expected to have a Material Adverse Effect; (e) Hazardous Materials have not
been generated, used, treated, recycled, stored or disposed of at, on, under
or
from any of the facilities or property now (or, to the knowledge of such Loan
Party, previously) owned or leased by such Loan Party during the time of such
Loan Party’s ownership or lease of such property that may require remediation or
clean-up activities that would be reasonably expected to have a Material Adverse
Effect; and (f) all underground storage tanks located on the property now (or,
to the knowledge of such Loan Party, previously) owned or leased by such Loan
Party have been (and to the extent currently owned or leased are) operated
in
material compliance with all applicable Environmental Laws.
3.18 Existing
Liens.
There
shall not exist any Liens on any Property of the Borrower or its Subsidiaries
other than Permitted Liens. There shall not exist any Liens on any Property
of
CCC or its Subsidiaries.
3.19 Disclosure.
No
written information (other than any projections) concerning any Loan Party
and
the transactions contemplated hereby furnished by or on behalf of such Loan
Party to the Agent or any Bank in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished), taken as a whole, contains any untrue statement
of a
material fact or omits to state a material fact necessary in order to make
the
statements contained therein not misleading in any material respect in light
of
the circumstances under which such statements were or are made. The projections
were prepared by or on behalf of each Loan Party in good faith based upon
assumptions that such Loan Party believes to be reasonable as of the Closing
Date and the Funding Date (it being understood that such projections are subject
to significant uncertainties and contingencies, many of which are beyond such
Loan Party’s control, and accordingly no assurance can be given and no
representations are made that the assumptions are correct or that the
projections will be realized).
3.20 Insurance.
Each
Loan Party has insurance with a responsible and reputable insurer covering
its
assets against loss or damage of the kinds customarily insured against by
companies similarly situated in the industry in which such Person conducts
its
business, in such amounts and with such deductibles as are customary for
similarly situated companies; and such Person (a) has not received notice from
any insurer or agent of such insurer that any material capital improvements
or
other material expenditures are required or necessary to be made in order to
continue such insurance or (b) does not have any reason to believe that it
will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage at commercially available rates from
similar insurers as may be necessary to continue its business.
3.21 Subsidiaries.
TLNG is
wholly owned by the Borrower. The Borrower is wholly owned by Panhandle Eastern.
CCC is an Affiliate of the Borrower and is wholly owned by Southern
Union.
4. CONDITIONS
TO FUNDING
The
obligation of the Banks to make any Loans is subject to the following
conditions:
4.1 Representations
True and No Defaults.
(a) The
representations and warranties contained in Section 3 (Representations and
Warranties of the Loan Parties) shall be true and correct on and as of the
Funding Date as though made on and as of such date;
(b) None
of
Panhandle Eastern, Borrower or CCC shall be in default in the due performance
of
any covenant on its part contained in this Agreement;
(c) No
Material Adverse Change shall have occurred with respect to (i) Panhandle
Eastern reflected in the Consolidated annual financial statements of Panhandle
Eastern dated December 31, 2005, (ii) the Borrower reflected in the Consolidated
annual financial statements of the Borrower dated December 31, 2005, or (iii)
CCC reflected in the annual financial statements of CCC dated December 31,
2005;
and
(d) No
Event
of Default or Default shall have occurred and be continuing.
4.2 Intentionally
Omitted.
4.3 Compliance
With Law.
The
business and operations of each Loan Party as conducted at all times relevant
to
the transactions contemplated by this Agreement to and including the close
of
business on the Funding Date shall have been and shall be in compliance in
all
material respects with all applicable State and Federal laws, regulations and
orders affecting such Loan Party and the business and operations of any of
them.
4.4 Notice
of Borrowing and Other Documents.
The
Banks shall have received (a) the Notice of Borrowing; and (b) such other
documents and certificates relating to the transactions herein contemplated
as
the Banks may reasonably request.
4.5 Payment
of Fees and Expenses.
The
Borrower shall have paid (a) all expenses of the type described in Section
12.2
(Reimbursement of Expenses) through the date of such Loan and (b) all closing,
structuring and other invoiced fees owed as of the Funding Date to the Agent
or
any of the Banks by the Borrower under this Agreement or any other written
agreement between a Loan Party and the Agent, the applicable Bank(s), or any
of
their Affiliates.
4.6 Repayment
of Debt.
Simultaneously with the funding of the Loans, (i) CCC shall cause to be
repaid all of the obligations under the Existing TWH Indebtedness, (ii) the
obligations of CCC under the Existing TWH Indebtedness shall be extinguished
and
(iii) the commitments of any lenders in respect of any Existing TWH
Indebtedness shall be terminated.
4.7 Loan
Documents Satisfactory.
The
Agent shall have received a copy of each of the Loan Documents, each of which
shall be in form and substance reasonably satisfactory to the
Agent.
4.8 Inter-Company
Note Satisfactory.
The
Agent shall have received a copy of the Inter-Company Note, which shall be
in
form and substance reasonably satisfactory to the Agent.
4.9 Loan
Documents, Opinions and Other Instruments.
As of
the Funding Date, the Loan Parties shall have delivered to the Agent the
following:
(a) this
Agreement, each of the Notes, all other Loan Documents and the Inter-Company
Note required by the Agent and the Banks to be executed and delivered by the
applicable Loan Parties in connection with this Agreement;
(b) a
certificate from the Secretary of State of the State of Delaware as to the
continued existence and good standing of Panhandle Eastern, Borrower and CCC
in
the State of Delaware;
(c) a
certificate from Secretary of State of each State in which such certification
is
necessary as to the good standing of TLNG and each Loan Party as a foreign
entity to do business in such State;
(d) a
Secretary’s Certificate executed by the duly elected Secretary or a duly elected
Assistant Secretary of Panhandle Eastern, Borrower and CCC, in a form acceptable
to the Agent, whereby such Secretary or Assistant Secretary certifies that
one
or more resolutions adopted by the Board of Managers of such Loan Party (or,
in
the case of Panhandle Eastern, the Board of Managers of its general partner)
remain in full force and effect authorizing such Loan Party to enter into the
transactions contemplated hereby and perform its obligations under the Loan
Documents and the Inter-Company Note; and
(e) a
legal
opinion from in house counsel for the Borrower and each Guarantor, and New
York
counsel to the Agent and the Banks, each dated as of the Funding Date, addressed
to the Agent and the Banks and otherwise acceptable in all respects to the
Agent
in its discretion.
5. AFFIRMATIVE
COVENANTS OF THE LOAN PARTIES
Each
of
Panhandle Eastern, Borrower and CCC covenants and agrees that, so long as the
Borrower may borrow hereunder and until payment in full of the Obligations,
each
of Panhandle Eastern, Borrower and CCC, as applicable, will:
5.1 Financial
Statements and Information.
Deliver
to the Banks:
(a) as
soon
as available, and in any event within 120 days after the end of each fiscal
year
of Panhandle Eastern, a copy of the annual audit report of Panhandle Eastern
and
its Subsidiaries for such fiscal year containing a balance sheet, statement
of
income and stockholders equity and a cash flow statement, all in reasonable
detail and certified by PriceWaterhouseCoopers or another independent certified
public accountant of recognized standing reasonably satisfactory to the Banks;
and
(b) as
soon
as available, and in any event within 120 days after the end of each fiscal
year
of the Borrower and CCC, an unaudited financial report of the Borrower and
its
Subsidiaries and an unaudited report of CCC and its Subsidiaries for such fiscal
year containing a balance sheet, statement of income and stockholders equity
and
cash flow statement, all in reasonable detail and certified by a financial
officer of such Loan Party to have been prepared in accordance with GAAP, except
as may be explained in such certificate; and
(c) as
soon
as available, and in any event within 60 days after the end of each quarterly
accounting period in each fiscal year of Panhandle Eastern, CCC and the Borrower
(excluding the fourth quarter), an unaudited financial report of Panhandle
Eastern and its Subsidiaries, CCC and its Subsidiaries and the Borrower and
its
Subsidiaries as at the end of such quarter and for the period then ended,
containing a balance sheet, statements of income and stockholders equity and
a
cash flow statement, all in reasonable detail and certified by a financial
officer of such Loan Party to have been prepared in accordance with GAAP, except
as may be explained in such certificate;
(d) such
additional financial or other information as the Banks may reasonably request;
and
(e) copies
of
all regular, periodic and special reports, and all registration statements,
that
such Loan Party files with the SEC or any governmental authority that may be
substituted therefor, or with any national securities exchange.
All
financial statements specified in clauses (a), (b) and (c) above shall be
furnished in Consolidated form for Panhandle Eastern and its Subsidiaries,
CCC
and its Subsidiaries and the Borrower and its Subsidiaries with comparative
Consolidated figures for the corresponding period in the preceding year.
Together with each delivery of financial statements required by clauses (a),
(b)
and (c) above, each of Panhandle Eastern, CCC and the Borrower, as applicable,
will deliver to the Banks an Officer’s Certificate stating that there exists no
Event of Default or Default, or, if any such Event of Default or Default exists,
stating the nature thereof, the period of existence thereof and what action
the
Borrower has taken or proposes to take with respect thereto. Together with
each
delivery of financial statements required by clauses (a) and (c) above,
Panhandle Eastern will deliver to the Banks an Officer’s Certificate
demonstrating compliance with the covenants set forth in Section 6.1 (Financial
Covenants). The Banks are authorized to deliver a copy of any financial
statement delivered to it to any regulatory body having jurisdiction over them,
and to disclose same to any prospective assignees or participant
Banks.
5.2 Books
and Records.
Maintain, and cause each of its Subsidiaries to maintain, proper books of record
and account in accordance with sound accounting practices in which true, full
and correct entries will be made of all their respective dealings and business
affairs.
5.3 Insurance.
Maintain, and cause each of its Subsidiaries to maintain, insurance with
financially sound, responsible and reputable companies in such types and amounts
and against such casualties, risks and contingencies as is customarily carried
by owners of similar businesses and properties.
5.4 Maintenance
of Property.
Maintain and preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in the conduct of its
business in accordance with such Loan Party’s established maintenance plan as in
effect from time to time consistent with past practices.
5.5 Inspection
of Property and Records.
Permit
any officer, director or agent of the Agent or any Bank, on written notice
and
at such Bank’s expense, to visit and inspect during normal business hours any of
the properties, corporate books and financial records of each Loan Party and
discuss their respective affairs and finances with their principal officers,
all
at such times as the Agent or any Bank may reasonably request.
5.6 Existence,
Laws, Obligations, Taxes.
Maintain, and cause each of its Subsidiaries to maintain, its corporate
existence and franchises, and any license agreements and tariffs that permit
the
recovery of a return that such Loan Party considers to be fair (and as to
licenses, franchises, and tariffs that are subject to regulatory determinations
of recovery of returns, such Loan Party has presented or is presenting favorable
defense thereof); and to comply, and cause each of its Subsidiaries to comply,
with all statutes and governmental regulations noncompliance with which might
have a Material Adverse Effect, and pay, and cause each of its Subsidiaries
to
pay, all taxes, assessments, governmental charges, claims for labor, supplies,
rent and other obligations which if unpaid might become a lien against the
property of such Loan Party and its Subsidiaries except liabilities being
contested in good faith.
5.7 Notice
of Certain Matters.
Notify
the Agent promptly upon acquiring knowledge of the occurrence of any of the
following events:
(a) the
institution or threatened institution of any lawsuit or administrative
proceeding affecting a Loan Party that is not covered by insurance (less
applicable deductible amounts) and which, if determined adversely to such Loan
Party, could reasonably be expected to have a Material Adverse Effect;
(b) the
occurrence of any Material Adverse Change, or of any event that in the good
faith opinion of such Loan Party is likely to result in a Material Adverse
Change, affecting such Loan Party;
(c) the
occurrence of any Event of Default or any Default;
(d) a
change
by Moody’s Investors Service, Inc. or by Standard and Poor’s Ratings Group in
the rating of the Funded Debt of Panhandle Eastern; and
(e) such
other information respecting the business, financial condition, operations
or
assets of the Loan Parties as any Agent, or any Bank through the Agent, may
from
time to time reasonably request.
5.8 ERISA.
At all
times:
(a) to
the
extent required of a Loan Party under applicable law, maintain
and keep in full force and effect each Plan,
subject
to Southern Union’s right, in accordance with applicable legal requirements, (i)
to amend any such Plans, (ii) to merge any such Plans, and to (iii) cease
benefit accruals under any such Plans;
(b) to
the
extent required of a Loan Party under applicable law, make
contributions to each Plan in a timely manner and in an amount sufficient to
comply with the minimum funding standards requirements of ERISA;
(c) promptly
after acquiring knowledge of any “reportable event” or of any “prohibited
transaction” (as such terms are defined in § 4043 and
§
406
of ERISA)
in
connection with any Plan, furnish the Banks with a statement executed by the
president or chief financial officer of a Loan Party setting forth the details
thereof and the action which the Borrower proposes to take with respect thereto
and, when known, any action taken by the Internal Revenue Service with respect
thereto;
(d) notify
the Banks promptly upon receipt by a Loan Party or any Subsidiary of any notice
of the institution of any proceeding or other action which may result in the
termination of any Plan and furnish to the Banks copies of such
notice;
(e) to
the
extent required of a Loan Party under applicable law,
acquire
and maintain Pension Benefit Guaranty Corporation employer liability coverage
insurance required under ERISA;
(f) furnish
the Banks with copies of the summary annual report for each Plan filed with
the
Internal Revenue Service as the Agent or the Banks may request; and
(g) furnish
the Banks with copies of any request for waiver of the funding standards or
extension of the amortization periods required by § 303 and § 304 of ERISA or §
412 of the Code promptly after the request is submitted to the Secretary of
the
Treasury, the Department of Labor or the Internal Revenue Service, as the case
may be.
5.9 Compliance
with Environmental Laws.
At all
times:
(a) (i)
use
and operate, and cause each of its Subsidiaries to use and operate, all of
their
respective facilities and properties in material compliance with all
Environmental Laws; (ii) keep, and cause each of its Subsidiaries to keep,
all
necessary permits, approvals, orders, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
material compliance therewith; (iii) handle, and cause each of its Subsidiaries
to handle, all Hazardous Materials in material compliance with all applicable
Environmental Laws; and (iv) dispose, and cause each of its Subsidiaries to
dispose, of all Hazardous Materials with carriers that maintain valid permits,
approvals, certificates, licenses or other authorizations for such disposal
in
material compliance with applicable Environmental Laws;
(b) promptly
notify the Agent and provide copies upon receipt of all written claims,
complaints, notices or inquiries relating to the condition of the facilities
and
properties of such Loan Party under, or their respective compliance with,
applicable Environmental Laws wherein the condition or the noncompliance that
is
the subject of such claim, complaint, notice, or inquiry involves, or could
reasonably be expected to involve, liability of or expenditures of (1) in the
case of Borrower, CCC or any of their respective Subsidiaries, $10,000,000
or
more, and (2) in the case of Panhandle Eastern and its Subsidiaries taken as
a
whole, $30,000,000 or more, to the extent in each case that such matters are
not
reflected in the financial statements provided pursuant to Sections 3.5 (a)
and
(b) hereof for the period ended September 30, 2006; and
(c) provide
such information and certifications which the Banks may reasonably request
from
time to time to evidence compliance with this Section 5.9.
6. NEGATIVE
COVENANTS OF PANHANDLE EASTERN
So
long
as the Borrower may borrow hereunder and until payment in full of the
Obligations, except with the written consent of the Banks:
6.1 Financial
Covenants.
Panhandle Eastern will not
(a) Permit
the Interest Coverage Ratio as of the end of any fiscal quarter to be less
than
2.00 to 1.00.
(b) Permit
its Debt/Capitalization Ratio as of the last day of any fiscal quarter to be
greater than 65.0%.
6.2 Liens,
Etc.
Panhandle Eastern will not, and will not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Lien on or with respect to any
of
its Property, or sign or file or suffer to exist, under the Uniform Commercial
Code of any jurisdiction, a financing statement that names Panhandle Eastern
or
any of its Subsidiaries as debtor, or sign or suffer to exist any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign any accounts or other right to receive income,
except:
(a) Permitted
Liens for Panhandle Eastern and its Subsidiaries;
(b) Liens
existing on the date hereof and any replacement, extension or renewal of the
indebtedness secured by such Lien, provided
that the
amount of Debt or other obligations secured thereby is not increased and is
not
secured by any additional assets; and
(c) Liens
arising in connection with Capitalized Leases; provided
that no
such Lien shall extend to or cover any assets other than the assets subject
to
such Capitalized Leases) and purchase money Liens upon or in real property,
equipment or other fixed or capital assets acquired or held by Panhandle Eastern
or any of its Subsidiaries to secure the purchase price of such property,
equipment or other fixed or capital assets or to secure Debt incurred for the
purpose of financing the acquisition, construction or improvement of any such
property, equipment or other fixed or capital assets, or Liens existing on
any
such property, equipment or other fixed or capital assets at the time of
acquisition, or extensions, renewals or replacements of any of the foregoing
for
the same or a lesser amount (provided
that no
such Lien shall extend to or cover any property other than the property,
equipment or other fixed or capital assets being acquired, constructed or
improved, and no such extension, renewal or replacement shall extend to or
cover
any property not theretofore subject to the Lien being extended, renewed or
replaced); provided
that the
aggregate principal amount of the Debt secured by Liens permitted by this clause
(c) shall not exceed $50,000,000 at any time outstanding;
provided,
however,
that
Panhandle Eastern or any of its Subsidiaries may create or assume any other
Lien
securing Debt if, after giving effect to such Debt, the Priority Obligations
Amount does not exceed 10% of the Consolidated Net Tangible Assets.
6.3 Debt.
Panhandle Eastern will not, and will not permit any Subsidiary (other than
the
Borrower or TLNG) to, create, incur, assume or suffer to exist any Debt, unless
if after giving effect to such Debt, the Priority Obligations Amount does not
exceed 10% of the Consolidated Net Tangible Assets.
6.4 Change
in Nature of Business.
Panhandle Eastern will not make any material change in the nature of Panhandle
Eastern’s business as carried on at the date hereof.
6.5 Mergers,
Consolidation.
Panhandle Eastern will not merge into or consolidate with any Person or permit
any Person to merge into it, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), or permit any of its Subsidiaries to do so,
except that:
(a) any
Subsidiary of Panhandle Eastern may merge into or consolidate with Panhandle
Eastern, provided
that
Panhandle Eastern is the continuing or surviving Person;
(b) any
Subsidiary of Panhandle Eastern may merge into or consolidate with any other
Subsidiary of Panhandle Eastern; provided
that if
such Subsidiary is the Borrower, such transaction shall comply with Section
7.3(c);
(c) any
Subsidiary of Panhandle Eastern may be liquidated or dissolved if Panhandle
Eastern determines in good faith that such liquidation or dissolution is in
the
best interest of Panhandle Eastern and is not materially disadvantageous to
the
Banks;
(d) any
Subsidiary of Panhandle Eastern may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate with it;
provided
that
either (i) the Person surviving such merger shall be a Subsidiary of Panhandle
Eastern or (ii) such transaction complies with Sections 6.6(b), 7.3 and 7.4;
and
(e) Panhandle
Eastern may merge with any Person; provided
that
if
Panhandle Eastern is not the surviving entity, the surviving entity agrees
to
assume and be bound by the terms and conditions of this Agreement pursuant
to
documentation satisfactory to the Agent to such effect;
provided,
however,
that in
each case, immediately before and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing and such transaction
shall not cause or have caused a Material Adverse Effect.
6.6 Sale
of Assets.
Panhandle Eastern will not, and will not permit any of its Subsidiaries to,
sell, lease, transfer or otherwise dispose of, in one transaction or in a series
of transactions, assets representing all or substantially all of the
Consolidated assets of Panhandle Eastern, except:
(a) in
a
transaction authorized by Section 6.5 (Mergers); and
(b) sales,
transfers or other dispositions of assets among Panhandle Eastern and its
Subsidiaries.
6.7 Restricted
Payments.
Panhandle Eastern will not, and will not permit any of its Subsidiaries to,
pay
or declare any Restricted Payment, except that, (a) any of its Subsidiaries
may
make Restricted Payments to Panhandle Eastern or another Subsidiary of Panhandle
Eastern (except that the Borrower may not make any such payment to any Person
other than Panhandle Eastern and Subsidiaries of the Borrower may not make
any
such payment to any Person other than Borrower or Panhandle Eastern) and (b)
so
long as no Event of Default has occurred and is continuing and Panhandle Eastern
is in pro forma compliance with Section 6.1(b) (Financial Covenants) after
giving effect to such Restricted Payments, Panhandle Eastern may make
distributions to Southern Union and Southern Union Panhandle, LLC.
6.8 Sales
and Leasebacks.
Panhandle Eastern will not enter into any arrangement with any Person (other
than Subsidiaries of Panhandle Eastern) providing for the leasing by Panhandle
Eastern or any Subsidiary of real or personal property that has been or is
to be
sold or transferred by Panhandle Eastern or such Subsidiary to such Person
or to
any other Person to whom funds have been or are to be advanced by such Person
on
the security of such property or rental obligations of Panhandle Eastern or
such
Subsidiary (each a “Sale-Leaseback
Transaction”),
unless if after giving effect to such Sale-Leaseback Transaction, the Priority
Obligations Amount does not exceed 10% of the Consolidated Net Tangible
Assets.
6.9 Transactions
with Related Parties.
Panhandle Eastern will not, and will not permit any Subsidiary to, enter into
any transaction or agreement with any officer, director or holder (other than
Southern Union and its Subsidiaries) of ten percent (10%) or more of any class
of the outstanding capital stock of Panhandle Eastern or any Subsidiary (or
any
Affiliate of any such Person) unless the same is upon terms substantially
similar to those obtainable from wholly unrelated sources.
6.10 Hazardous
Materials.
Panhandle Eastern will not, and will not permit any Subsidiary to, (a) cause
or
permit any Hazardous Materials to be placed, held, used, located, or disposed
of
on, under or at any of such Person’s property or any part thereof by any Person
in a manner which could reasonably be expected to have a Material Adverse
Effect; (b) cause or permit any part of any of such Person’s property to be used
as a manufacturing, storage, treatment or disposal site for Hazardous Materials,
where such action could reasonably be expected to have a Material Adverse
Effect; or (c) cause or suffer any liens to be recorded against any of such
Person’s property as a consequence of, or in any way related to, the presence,
remediation, or disposal of Hazardous Materials in or about any of such Person’s
property, including any so-called state, federal or local “superfund” lien
relating to such matters, where such recordation could reasonably be expected
to
have a Material Adverse Effect.
7. NEGATIVE
COVENANTS OF THE BORROWER
So
long
as the Borrower may borrow hereunder and until payment in full of the Notes,
except with the written consent of the Banks:
7.1 Liens,
Etc.
The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or suffer to exist any Lien on or with respect to any of its Property, or sign
or file or suffer to exist, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Borrower or any of its
Subsidiaries as debtor, or sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement,
or
assign any accounts or other right to receive income, except:
(a) Permitted
Liens for the Borrower and its Subsidiaries;
(b) Liens
existing on the date hereof and any replacement, extension or renewal of the
indebtedness secured by such Lien, provided
that the
amount of Debt or other obligations secured thereby is not increased and is
not
secured by any additional assets; and
(c) Liens
arising in connection with Capitalized Leases; provided
that no
such Lien shall extend to or cover any assets other than the assets subject
to
such Capitalized Leases) and purchase money Liens upon or in real property,
equipment or other fixed or capital assets acquired or held by the Borrower
or
any of its Subsidiaries to secure the purchase price of such property, equipment
or other fixed or capital assets or to secure Debt incurred for the purpose
of
financing the acquisition, construction or improvement of any such property,
equipment or other fixed or capital assets, or Liens existing on any such
property, equipment or other fixed or capital assets at the time of acquisition,
or extensions, renewals or replacements of any of the foregoing for the same
or
a lesser amount (provided
that no
such Lien shall extend to or cover any property other than the property,
equipment or other fixed or capital assets being acquired, constructed or
improved, and no such extension, renewal or replacement shall extend to or
cover
any property not theretofore subject to the Lien being extended, renewed or
replaced); provided
that the
aggregate principal amount of the Debt secured by Liens permitted by this clause
(c) shall not exceed $10,000,000 at any time outstanding.
7.2 Debt.
The
Borrower will not, and will not permit any Subsidiary to, incur or permit to
exist any Debt, except:
(a) Debt
under this Agreement;
(b) Debt
of
TLNG to the Borrower and unsecured Debt of the Borrower to any Subsidiary;
(c) [Intentionally
omitted.]
(d) Debt
under the April 2005 Credit Agreement;
(e) endorsements
in the ordinary course of business of negotiable instruments in the course
of
collection;
(f) Debt
of
TLNG or any other Subsidiary of the Borrower subordinated to the Loans on terms
and pursuant to documentation satisfactory to the Agent;
(g) Unsecured
Debt of the Borrower; and
(h) Capitalized
Leases of the Borrower with Subsidiaries as permitted pursuant to
7.1(c).
7.3 Merger,
Consolidation.
The
Borrower will not, and will not permit any Subsidiary to, merge or consolidate
with any other Person or sell, lease, transfer or otherwise dispose of (whether
in one transaction or a series of transactions) all or a substantial part of
its
assets or acquire (whether in one transaction or a series of transactions)
all
or a substantial part of the assets of any Person, except that:
(a) any
Subsidiary of the Borrower may merge or consolidate with the Borrower
(provided
that the
Borrower shall be the continuing or surviving corporation) or with any one
or
more Subsidiaries of the Borrower;
(b) any
Subsidiary of the Borrower may sell, lease, transfer or otherwise dispose of
any
of its assets to the Borrower or another Subsidiary of the
Borrower;
(c) the
Borrower may acquire the assets of or merge with any Person, provided
that if
Borrower is not the surviving entity, the surviving entity agrees to assume
and
be bound by the terms and conditions of this Agreement pursuant to documentation
satisfactory to the Agent; and
(d) the
Borrower or any Subsidiary of the Borrower may sell, lease, assign or otherwise
dispose of assets as otherwise permitted under Section 7.4 (Sale of Assets),
which shall include without limitation the transfer of assets to a Subsidiary
and the subsequent sale of the equity interests in such Subsidiary;
provided
that,
after giving effect to any transaction, no Default or Event of Default shall
have occurred and be continuing and such transaction shall not cause or have
caused a Material Adverse Effect.
7.4 Sale
of Assets.
The
Borrower will not, and will not permit any Subsidiary to, except as permitted
under this Section 7.4, sell, assign, lease, or otherwise dispose of (whether
in
one transaction or in a series of transactions) all or any part of its Property
(whether now owned or hereafter acquired); provided,
however,
that
(a) the
Borrower or any Subsidiary may in the ordinary course of business dispose of
(i)
Property consisting of Inventory; and (ii) Property consisting of goods or
equipment that are, in the opinion of the Borrower or any Subsidiary of the
Borrower, obsolete or unproductive, but if in the good faith judgment of the
Borrower or any Subsidiary of the Borrower such disposition without replacement
thereof would have a Material Adverse Effect, such goods and equipment shall
be
replaced, or their utility and function substituted, by new or existing goods
or
equipment; and
(b) the
Borrower or any Subsidiary may dispose of Property other than Inventory (in
consideration of such amount as in the good faith judgment of the Borrower
or
such Subsidiary represents a fair consideration therefor), provided
that the
aggregate value of such property disposed of (determined after depreciation
and
in accordance with GAAP) after the Funding Date does not exceed ten percent
(10%) of the aggregate value of all of the Borrower’s and its Subsidiaries’ real
property and tangible personal property other than Inventory considered on
a
Consolidated basis and determined after depreciation and in accordance with
GAAP, as of December 31, 2005.
7.5 Restricted
Payment.
The
Borrower will not pay or declare any Restricted Payment to any Person other
than
to Panhandle Eastern. The Borrower will not permit any Subsidiary to pay or
declare any Restricted Payment to any Person other than the
Borrower.
7.6 Securities
Credit Regulations.
Neither
the Borrower nor any Subsidiary will take or permit any action which might
cause
the Loans or this Agreement to violate Regulation G, Regulation T, Regulation
U,
Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or a violation of the Securities Exchange Act of 1934, in each
case as now or hereafter in effect.
7.7 Nature
of Business.
The
Borrower will not, and will not permit any Subsidiary, to, make any material
change in the nature of the Borrower’s business as carried on at the date
hereof.
7.8 Transactions
with Related Parties.
The
Borrower will not, and will not permit any Subsidiary to, enter into any
transaction or agreement with any officer, director or holder (other than
Southern Union and its Subsidiaries) of ten percent (10%) or more of any class
of the outstanding capital stock of the Borrower or any Subsidiary (or any
Affiliate of any such Person) unless the same is upon terms substantially
similar to those obtainable from wholly unrelated sources.
7.9 Hazardous
Materials.
The
Borrower will not, and will not permit any Subsidiary to, (a) cause or permit
any Hazardous Materials to be placed, held, used, located, or disposed of on,
under or at any of such Person’s property or any part thereof by any Person in a
manner which could reasonably be expected to have a Material Adverse Effect;
(b)
cause or permit any part of any of such Person’s property to be used as a
manufacturing, storage, treatment or disposal site for Hazardous Materials,
where such action could reasonably be expected to have a Material Adverse
Effect; or (c) cause or suffer any liens to be recorded against any of such
Person’s property as a consequence of, or in any way related to, the presence,
remediation, or disposal of Hazardous Materials in or about any of such Person’s
property, including any so-called state, federal or local “superfund” lien
relating to such matters, where such recordation could reasonably be expected
to
have a Material Adverse Effect.
7.10 Use
of Proceeds.
The
Borrower will not, and will not permit any Subsidiary to, use the proceeds
of
any Loan for any purpose other than for purposes set forth in Section 2.13
(Use
of Proceeds); or use any such proceeds in a manner which violates or results
in
a violation of any law or regulation.
7.11 Other
Documents.
The
Borrower will not, and will not permit any Subsidiary to, amend, restate or
otherwise modify or waive any provision or condition of (a) any instrument
or agreement relating to any secured Debt of such Person if the effect of such
modification or waiver is to increase the obligations of such Person in a manner
that is adverse to the Banks without the consent of the Majority Banks or (b)
the Inter-Company Note if the effect of such modification or waiver is to
violate Section 7.8 (Transactions with Related Parties), decrease the interest
rate to a rate below the interest rate under this Agreement in effect at such
time, alter the frequency of interest payments if the effect of such
alteration would be that CCC pays interest less frequently than once per
calendar quarter or extend the maturity date thereof to a date that is later
than the Maturity Date.
8. NEGATIVE
COVENANTS OF CCC
So
long
as the Borrower may borrow hereunder and until payment in full of the
Obligations, except with the written consent of the Banks:
8.1 Liens,
Etc.
CCC
will not, and will not permit any Subsidiary to, create, incur, assume or suffer
to exist any Lien on or with respect to any of its Property, or sign or file
or
suffer to exist, under the Uniform Commercial Code of any jurisdiction, a
financing statement that names CCC or any of its Subsidiaries as debtor, or
sign
or suffer to exist any security agreement authorizing any secured party
thereunder to file such financing statement, or assign any accounts or other
right to receive income, except:
(a) Permitted
Liens for CCC and its Subsidiaries;
(b) Liens
arising in connection with Capitalized Leases; provided
that no
such Lien shall extend to or cover any assets other than the assets subject
to
such Capitalized Leases) and purchase money Liens upon or in real property,
equipment or other fixed or capital assets acquired or held by CCC or any of
its
Subsidiaries to secure the purchase price of such property, equipment or other
fixed or capital assets or to secure Debt incurred for the purpose of financing
the acquisition, construction or improvement of any such property, equipment
or
other fixed or capital assets, or Liens existing on any such property, equipment
or other fixed or capital assets at the time of acquisition, or extensions,
renewals or replacements of any of the foregoing for the same or a lesser amount
(provided
that no
such Lien shall extend to or cover any property other than the property,
equipment or other fixed or capital assets being acquired, constructed or
improved, and no such extension, renewal or replacement shall extend to or
cover
any property not theretofore subject to the Lien being extended, renewed or
replaced); provided
that the
aggregate principal amount of the Debt secured by Liens permitted by this clause
(c) shall not exceed $10,000,000 at any time outstanding.
8.2 Debt.
CCC will
not, and will not permit any Subsidiary to, incur or permit to exist any Debt,
except:
(a) Debt
under this Agreement;
(b) Debt
under the Inter-Company Note;
(c) Debt
existing as of September 30, 2006 as reflected on CCC’s financial statements
delivered under Section 3.2 (Financial Statements) and refinancings thereof,
other than the Debt under the Existing TWH Indebtedness;
(d) endorsements
in the ordinary course of business of negotiable instruments in the course
of
collection;
(e) Debt
of
Subsidiaries of CCC subordinated to the Loans on terms and pursuant to
documentation satisfactory to the Agent;
(f) Unsecured
Debt of CCC in a principal amount not to exceed $10,000,000; and
(g) Capitalized
Leases of CCC with Subsidiaries as permitted pursuant to 8.1(b).
8.3 Merger,
Consolidation.
CCC
will not, and will not permit any Subsidiary to, merge or consolidate with
any
other Person or sell, lease, transfer or otherwise dispose of (whether in one
transaction or a series of transactions) all or a substantial part of its assets
or acquire (whether in one transaction or a series of transactions) all or
a
substantial part of the assets of any Person, except that:
(a) any
Subsidiary of CCC may merge or consolidate with CCC (provided
that CCC
shall be the continuing or surviving corporation) or with any one or more
Subsidiaries of CCC;
(b) any
Subsidiary of CCC may sell, lease, transfer or otherwise dispose of any of
its
assets to CCC or another Subsidiary of CCC;
(c) CCC
may
acquire the assets of or merge with any Person, provided
that if
Borrower is not the surviving entity, the surviving entity agrees to assume
and
be bound by the terms and conditions of this Agreement pursuant to documentation
satisfactory to the Agent.
(d) CCC
or
any Subsidiary of CCC may sell, lease, assign or otherwise dispose of assets
as
otherwise permitted under Section 8.4 (Sale of Assets), which shall include
without limitation the transfer of assets to a Subsidiary and the subsequent
sale of the equity interests in such Subsidiary;
provided
that,
after giving effect to any transaction, no Default or Event of Default shall
have occurred and be continuing and such transaction shall not cause or have
caused a Material Adverse Effect.
8.4 Sale
of Assets.
CCC
will not, and will not permit any Subsidiary to, except as permitted under
this
Section 8.4, sell, assign, lease, or otherwise dispose of (whether in one
transaction or in a series of transactions) all or any part of its Property
(whether now owned or hereafter acquired); provided,
however,
that
(a) CCC
or
any Subsidiary may in the ordinary course of business dispose of (i) Property
consisting of Inventory; and (ii) Property consisting of goods or equipment
that
are, in the opinion of CCC or any Subsidiary of CCC, obsolete or unproductive,
but if in the good faith judgment of CCC or any Subsidiary of CCC such
disposition without replacement thereof would have a Material Adverse Effect,
such goods and equipment shall be replaced, or their utility and function
substituted, by new or existing goods or equipment; and
(b) CCC
or
any Subsidiary may dispose of Property other than Inventory (in consideration
of
such amount as in the good faith judgment of CCC 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 Funding Date does not exceed ten percent
(10%) of the aggregate value of all of CCC’s and its Subsidiaries’ real property
and tangible personal property other than Inventory considered on a Consolidated
basis and determined after depreciation and in accordance with GAAP, as of
December 31, 2005.
8.5 Restricted
Payment.
CCC
will not pay or declare any Restricted Payment to any Person other than to
Southern Union and its Subsidiaries. Restricted Payments by CCC in any period
shall not exceed the sum of (i) Consolidated Net Income of CCC in such period
(provided
that for
purpose of this Section 8.5(i), Consolidated Net Income shall not include
special dividends and distributions received by CCC) and (ii) 75% of
(a) special dividends or distributions received by CCC in such period less
(b) any special dividends that are required to be paid by CCC to third
parties under indemnification or refund arrangements with such third parties
in
such period , provided
that,
concurrent with the making of a Restricted Payment by CCC based on a special
dividend or distribution received, CCC shall prepay the Inter-Company Loan
in an
amount equal to 25% of (a) special dividends or distributions received by
CCC in such period less (b) any special dividends that are required to be
paid by CCC to third parties under indemnification or refund arrangements with
such third parties in such period. Notwithstanding the foregoing, CCC may
use the proceeds of the Inter-Company Loan as contemplated by Section 2.13
(Use
of Proceeds). CCC will not permit any Subsidiary to pay or declare any
Restricted Payment to any Person other than CCC.
8.6 Securities
Credit Regulations.
Neither
CCC nor any Subsidiary will take or permit any action which might cause the
Loans or this Agreement to violate Regulation G, Regulation T, Regulation U,
Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or a violation of the Securities Exchange Act of 1934, in each
case as now or hereafter in effect.
8.7 Nature
of Business.
CCC
will not, and will not permit any Subsidiary to, make any material change in
the
nature of CCC’s business as carried on at the date hereof.
8.8 Transactions
with Related Parties.
CCC
will not, and will not permit any Subsidiary to, enter into any transaction
or
agreement with any officer director or holder (other than Southern Union and
its
Subsidiaries) of ten percent (10%) or more of any class of the outstanding
capital stock of CCC 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.
8.9 Hazardous
Materials.
CCC
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.
8.10 Use
of Proceeds.
CCC
will not, and will not permit any Subsidiary to, use the proceeds of any Loan
for any purpose other than for purposes set forth in Section 2.13 (Use of
Proceeds); or use any such proceeds in a manner which violates or results in
a
violation of any law or regulation.
8.11 Other
Documents.
CCC
will not, and will not permit any Subsidiary to, amend, restate or otherwise
modify or waive any provision or condition of any instrument or agreement
relating to any secured Debt of such Person if the effect of such modification
or waiver is to increase the obligations of such Person in a manner that is
adverse to the Banks without the consent of the Majority Banks.
9. EVENTS
OF DEFAULT; REMEDIES
If
any of
the following events shall occur, then the Agent shall at the request, or may
with the consent, of the Majority Banks, declare the Notes and all interest
accrued and unpaid thereon, and all other amounts payable under the Notes,
this
Agreement and the other Loan Documents, to be forthwith due and payable,
whereupon the Notes, all such interest and all such other amounts, shall become
and be forthwith due and payable without presentment, demand, protest, or
further notice of any kind (including, without limitation, notice of default,
notice of intent to accelerate and notice of acceleration), all of which are
hereby expressly waived by the Borrower; provided,
however,
that
with respect to any Event of Default described in Sections 9.7 (Bankruptcy)
or
9.8 (Dissolution) hereof, the entire unpaid principal amount of the Notes,
all
interest accrued and unpaid thereon, and all such other amounts payable under
the Notes, this Agreement and the other Loan Documents, shall automatically
become immediately due and payable, without presentment, demand, protest, or
any
notice of any kind (including, without limitation, notice of default, notice
of
intent to accelerate and notice of acceleration), all of which are hereby
expressly waived by the Borrower:
9.1 Failure
to Pay Obligations When Due.
The
Borrower fails to pay, repay or prepay any principal on the date when due,
or
any other Obligation within five Business Days after the date when
due.
9.2 Intentionally
Omitted.
9.3 Failure
to Pay Other Debt.
(a) The
Borrower or any Subsidiary of the Borrower fails to pay principal or interest
on
any unsecured Debt aggregating more than $10,000,000 or any secured Debt when
due and any related grace period has expired, or the holder of any of such
other
Debt declares such Debt due prior to its stated maturity because of the
Borrower’s or any Subsidiary’s default thereunder and the expiration of any
related grace period; (b) Panhandle Eastern or any of its Subsidiaries fails
to
pay principal or interest on any other Debt aggregating more than $50,000,000
when due and any related grace period has expired, or the holder of any of
such
other Debt declares such Debt due prior to its stated maturity because of
Panhandle Eastern’s or any such Subsidiary’s default thereunder and the
expiration of any related grace period; (c) CCC or any of its Subsidiaries
fails
to pay principal or interest on any other Debt aggregating more than $10,000,000
when due and any related grace period has expired, or the holder of any of
such
other Debt declares such Debt due prior to its stated maturity because of CCC’s
or any such Subsidiary’s default thereunder and the expiration of any related
grace period; or (d) the holder of any Debt aggregating more than
$10,000,000 of Citrus Corp. declares such Debt due prior to its stated maturity
because of Citrus Corp.’s default thereunder and the expiration of any related
grace period.
9.4 Misrepresentation
or Breach of Warranty.
Any
representation or warranty made by any Loan Party herein or otherwise furnished
to the Bank in connection with this Agreement or any other Loan Document shall
be incorrect, false or misleading in any material respect when
made.
9.5 Violation
of Certain Covenants.
Any
Loan Party violates any covenant, agreement or condition contained in Sections
5.6 (Existence), 5.7(c) (Notice of Defaults), 6.1 (Financial Covenants), 6.2
(Liens), 6.3 (Debt), 6.5 (Merger), 6.6 (Sale of Assets), 6.7 (Restricted
Payments), 7.1 (Liens), 7.2 (Debt), 7.3 (Merger, Consolidation), 7.4 (Sale
of
Assets), 7.5 (Restricted Payments), 8.1 (Liens), 8.2 (Debt), 8.3 (Merger,
Consolidation), 8.4 (Sale of Assets) or 8.5 (Restricted Payments).
9.6 Violation
of Other Covenants, Etc.
Any Loan
Party violates any other covenant, agreement or condition contained herein
(other than the covenants, agreements and conditions set forth or described
in
Sections 9.1 (Failure to Pay Obligations When Due), 9.3 (Cross Default), 9.4
(Representations), and 9.5 (Certain Covenants) above) or in any other Loan
Document and such violation shall not have been remedied within (30) days after
the earlier of (i) actual discovery by a Loan Party of such violation or (ii)
written notice has been received by the Borrower from the Bank or the holder
of
the Note.
9.7 Bankruptcy
and Other Matters.
Any
Loan Party or Southern Union (a) makes an assignment for the benefit of
creditors; or (b) admits in writing its inability to pay its debts generally
as
they become due; or (c) generally fails to pay its debts as they become due;
or
(d) files a petition or answer seeking for itself, or consenting to or
acquiescing in, any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any applicable Debtor Law
(including, without limitation, the Federal Bankruptcy Code); or (e) there
is
appointed a receiver, custodian, liquidator, fiscal agent, or trustee of any
Loan Party or Southern Union or of the whole or any substantial part of their
respective assets; or (f) any court enters an order, judgment or decree
approving a petition filed against any Loan Party or Southern Union seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any Debtor Law and either such order,
decree or judgment so filed against it is not dismissed or stayed (unless and
until such stay is no longer in effect) within thirty (30) days of entry thereof
or an order for relief is entered pursuant to any such law.
9.8 Dissolution.
Any
order is entered in any proceeding against any Loan Party or Southern Union
decreeing the dissolution, liquidation, winding-up or split-up of any Loan
Party
or Southern Union, and such order remains in effect for thirty (30)
days.
9.9 Undischarged
Judgment.
(a) A
final judgment or judgments in the aggregate, that might be or give rise to
Liens on any property of the Borrower or any of its Subsidiaries, for the
payment of money in excess of $10,000,000 shall be rendered against the Borrower
or any of its Subsidiaries and the same shall remain undischarged for a period
of sixty (60) days during which execution shall not be effectively stayed,
(b) a
final judgment or judgments in the aggregate, that might be or give rise to
Liens on any property of Panhandle Eastern or any of its Subsidiaries, for
the
payment of money in excess of $50,000,000 shall be rendered against Panhandle
Eastern or any of its Subsidiaries and the same shall remain undischarged for
a
period of sixty (60) days during which execution shall not be effectively stayed
or (c) a final judgment or judgments in the aggregate, that might be or give
rise to Liens on any property of CCC or any of its Subsidiaries, for the payment
of money in excess of $10,000,000 shall be rendered against CCC or any of its
Subsidiaries and the same shall remain undischarged for a period of sixty (60)
days during which execution shall not be effectively stayed.
9.10 Loan
Documents.
Any
material provision in any Loan Document or the Inter-Company Note shall for
any
reason cease to be valid and binding on any party thereto except upon
fulfillment of such party’s obligations thereunder (or any such party shall so
state in writing), or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any party thereto (other than
the
Agent and the Banks) or any Governmental Authority, or any such party shall
deny
in writing that it has any liability or obligation thereunder, except upon
fulfillment of its obligations thereunder.
9.11 Change
of Control. Any
of
the following events shall occur:
(a) Panhandle
Eastern shall cease to own or control, directly or indirectly, 100% of the
Equity Interests and voting power of the Borrower;
(b) Southern
Union shall cease to own, or control, directly or indirectly, at least 51%
of
the Equity Interests and voting power of Panhandle Eastern or of
CCC;
(c) CCC
shall
cease to own or control, directly or indirectly, at least 50% of the Equity
Interests and voting power of Citrus Corp.; or
(d) CCC
shall
cease to own or control, directly or indirectly, at least 40% of the Equity
Interests and voting power of Florida Gas Transmission Company.
9.12 Other
Remedies.
In
addition to and cumulative of any rights or remedies expressly provided for
in
this Section 9, if any one or more Events of Default shall have occurred, the
Agent shall at the request, and may with the consent, of the Majority Banks
proceed to protect and enforce the rights of the Banks hereunder by any
appropriate proceedings. The Agent shall at the request, and may with the
consent, of the Majority Banks also proceed either by the specific performance
of any covenant or agreement contained in this Agreement or by enforcing the
payment of the Notes or by enforcing any other legal or equitable right provided
under this Agreement or the Notes or otherwise existing under any law in favor
of the holder of the Notes.
9.13 Remedies
Cumulative.
No
remedy, right or power conferred upon the Banks is intended to be exclusive
of
any other remedy, right or power given hereunder or now or hereafter existing
at
law, in equity, or otherwise, and all such remedies, rights and powers shall
be
cumulative.
10. THE
AGENT
10.1 Authorization
and Action.
Each
Bank hereby appoints HVB as its Agent under and irrevocably authorizes the
Agent
(subject to this Section 10.1 and Section 10.7 (Successor Agent)) to take such
action as the Agent on its behalf and to exercise such powers under this
Agreement, the Loan Documents and the Notes as are delegated to the Agent by
the
terms thereof, together with such powers as are reasonably incidental thereto.
Without limitation of the foregoing, each Bank expressly authorizes the Agent
to
execute, deliver, and perform its obligations under this Agreement and the
Loan
Documents, and to exercise all rights, powers, and remedies that the Agent
may
have hereunder and thereunder. As to any matters not expressly provided for
by
this Agreement (including, without limitation, enforcement or collection of
the
Notes), the Agent shall not be required to exercise any discretion or take
any
action, but shall be required to act, or to refrain from acting (and shall
be
fully protected in so acting or refraining from acting), upon the instructions
of the Majority Banks, and such instructions shall be binding upon all the
Banks
and all holders of any Note; provided,
however,
that
the Agent shall not be required to take any action which exposes the Agent
to
personal 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.
10.2 Agent’s
Reliance, Etc.
Neither
the Agent nor any of its directors, officers, agents, or employees shall be
liable to any Bank for any action taken or omitted to be taken by it or them
under or in connection with this Agreement, the Notes and the other Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the original or any successor holder of any Note as the holder thereof until
the
Agent receives notice from the Bank which is the payee of such Note concerning
the assignment of such Note; (b) may employ and consult with legal counsel
(including counsel for the Borrower), independent public accountants, and other
experts selected by it and shall not be liable to any Bank for any action taken,
or omitted to be taken, in good faith by it or them in accordance with the
advice of such counsel, accountants, or experts received in such consultations
and shall not be liable for any negligence or misconduct of any such counsel,
accountants, or other experts; (c) makes no warranty or representation to any
Bank and shall not be responsible to any Bank for any opinions, certifications,
statements, warranties, or representations made in or in connection with this
Agreement; (d) shall not have any duty to any Bank to ascertain or to inquire
as
to the performance or observance of any of the terms, covenants, or conditions
of this Agreement or any other instrument or document furnished pursuant thereto
or to satisfy itself that all conditions to and requirements for any Loan have
been met or that the Borrower is entitled to any Loan or to inspect the property
(including the books and records) of the Borrower or any Subsidiary; (e) shall
not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement or any
other instrument or document furnished pursuant thereto; and (f) shall incur
no
liability under or in respect of this Agreement by acing upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties.
10.3 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 10.7 (Successor
Agent)) take such action with respect to such Default; provided
that,
unless and until the Agent shall have received the directions referred to in
Sections 10.1 (Authorization and Action) or 10.7 (Successor Agent), the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall deem advisable and in
the
best interest of the Banks.
10.4 HVB
and Affiliates.
With
respect to its Commitment, any Loan made by it, and the Note issued to it,
HVB
shall have the same rights and powers under this Agreement as any other Bank
and
may exercise the same as though it were not the Agent; and the term “Bank” or
“Banks” shall, unless otherwise expressly indicated, include HVB in its
individual capacity. HVB and its respective Affiliates may accept deposits
from,
lend money to, act as trustee under indentures of, and generally engage in
any
kind of business with, the Borrower, any of its respective Affiliates and any
Person who may do business with or own securities of the Borrower or any such
Affiliate, all as if HVB were not the Agent and without any duty to account
therefor to the Banks.
10.5 Non-Reliance
on Agent and Other Banks.
Each
Bank agrees that it has, independently and without reliance on the Agent or
any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and each Subsidiary
and its decision to enter into the transactions contemplated by this Agreement
and that it will, independently and without reliance upon the Agent or any
other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement. The Agent shall not be required to keep
itself informed as to the performance or observance by the Borrower of this
Agreement or to inspect the properties or books of Panhandle Eastern, the
Borrower or any Subsidiary. Except for notices, reports, and other documents
and
information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition, or business of Southern Union, Panhandle Eastern, the Borrower or
any
Subsidiary (or any of their Affiliates) which may come into the possession
of
the Agent or any of its Affiliates.
10.6 Indemnification.
Notwithstanding anything to the contrary herein contained, the Agent shall
be
fully justified in failing or refusing to take any action hereunder unless
it
shall first be indemnified to its satisfaction by the Banks against any and
all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, and disbursements of any kind or nature whatsoever which may
be
imposed on, incurred by or asserted against the Agent in any way relating to
or
arising out of its taking or continuing to take any action. Each Bank agrees
to
indemnify the Agent (to the extent not reimbursed by the Borrower), according
to
such Bank’s Pro Rata Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent in any way relating
to or
arising out of this Agreement or the Notes or any action taken or omitted by
the
Agent under this Agreement or the Notes; provided
that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting from the gross negligence or willful misconduct of the person being
indemnified; and provided,
further,
that it
is the intention of each Bank to indemnify the Agent against the consequences
of
the Agent’s own negligence, whether such negligence be sole, joint, concurrent,
active or passive. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its Pro Rata Percentage of any
out-of-pocket expenses (including attorneys’ fees) incurred by the Agent in
connection with the preparation, administration, or enforcement of, or legal
advice in respect of rights or responsibilities under, this Agreement and the
Notes, to the extent that the Agent is not reimbursed for such expenses by
the
Borrower.
10.7 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. 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 10
shall inure to its benefit as to any actions taken or omitted to be taken by
it
while it was Agent under this Agreement.
10.8 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.
11. GUARANTY
11.1 Guaranty.
Each
Guarantor hereby absolutely, unconditionally and irrevocably guarantees the
punctual payment when due, whether at scheduled maturity or by acceleration,
demand or otherwise, of all Obligations of the Borrower now or hereafter
existing under or in respect of the Loan Documents (including, without
limitation, any extensions, modifications, substitutions, amendments or renewals
of any or all of the foregoing Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the “Guaranteed
Obligations”).
11.2 Guaranty
Absolute.
Each
Guarantor guarantees that the Guaranteed Obligations will be paid strictly
in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any
of such terms or the rights of any Bank with respect thereto. The Obligations
of
each Guarantor under or in respect of this Guaranty are independent of any
Obligations of the Borrower under or in respect of the Loan Documents, and
a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce this Guaranty, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
The liability of each Guarantor under this Guaranty shall be irrevocable,
absolute and unconditional irrespective of, and each Guarantor hereby
irrevocably waives any defenses it may now have or hereafter acquire in any
way
relating to, any or all of the following:
(a) any
lack
of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;
(b) any
change in the time, manner or place of payment of, or in any other term of,
all
or any of the Guaranteed Obligations or any other Obligations of the Borrower
under or in respect of the Loan Documents, or any other amendment or waiver
of
or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Loan Party or any of its Subsidiaries
or
otherwise;
(c) any
taking, exchange, release or non-perfection of any collateral, or any taking,
release or amendment or waiver of, or consent to departure from, any other
guaranty, for all or any of the Guaranteed Obligations;
(d) any
manner of application of any collateral, or proceeds thereof, to all or any
of
the Guaranteed Obligations, or any manner of sale or other disposition of any
collateral for all or any of the Guaranteed Obligations or any other Obligations
of any Loan Party under the Loan Documents or any other assets of any Loan
Party
or any of its Subsidiaries;
(e) any
change, restructuring or termination of the corporate structure or existence
of
any Loan Party or any of its Subsidiaries;
(f) any
failure of any Bank to disclose to any Loan Party any information relating
to
the business, operations, financial condition, assets or prospects of any other
Loan Party now or hereafter known to such Bank (each Guarantor waiving any
duty
on the part of the Banks to disclose such information);
(g) the
failure of any other Person to execute or deliver any other guaranty or
agreement or the release or reduction of liability of any other guarantor or
surety with respect to the Guaranteed Obligations; or
(h) any
other
circumstance (including, without limitation, any statute of limitations) or
any
existence of or reliance on any representation by any Bank that might otherwise
constitute a defense available to, or a discharge of, any Loan Party or any
other guarantor or surety.
This
Guaranty shall continue to be effective or be reinstated, as the case may be,
if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by any Bank or any other Person upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
11.3 Waivers
and Acknowledgments.
(a) Each
Guarantor hereby unconditionally and irrevocably waives promptness, diligence,
notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that any Bank protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against any
Loan Party or any other Person or any collateral.
(b) Each
Guarantor hereby unconditionally and irrevocably waives any right to revoke
this
Guaranty and acknowledges that this Guaranty is continuing in nature and applies
to all Guaranteed Obligations, whether existing now or in the
future.
(c) Each
Guarantor hereby unconditionally and irrevocably waives (i) any defense arising
by reason of any claim or defense based upon an election of remedies by any
Bank
that in any manner impairs, reduces, releases or otherwise adversely affects
the
subrogation, reimbursement, exoneration, contribution or indemnification rights
of each Guarantor or other rights of such Guarantor to proceed against the
Borrower, any other guarantor or any other Person and (ii) any defense based
on
any right of set-off or counterclaim against or in respect of the Obligations
of
such Guarantor hereunder.
(d) Each
Guarantor hereby unconditionally and irrevocably waives any duty on the part
of
any Bank to disclose to any Guarantor any matter, fact or thing relating to
the
business, operations, financial condition, assets or prospects of the Borrower
or any of its Subsidiaries now or hereafter known by such Bank.
(e) Each
Guarantor acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated by the Loan Documents
and
that the waivers set forth in Section 11.2 (Guaranty Absolute) and this Section
11.3 are knowingly made in contemplation of such benefits.
11.4 Subrogation.
Each
Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against the Borrower that
arise
from the existence, payment, performance or enforcement of such Guarantor’s
Obligations under or in respect of this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any
claim or remedy of any Bank against the Borrower or any other insider guarantor,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Borrower, directly or indirectly, in cash or other property
or
by set-off or in any other manner, payment or security on account of such claim,
remedy or right, unless and until all of the Guaranteed Obligations and all
other amounts payable under this Guaranty shall have been paid in full in cash
and the Commitments shall have expired or been terminated. If any amount shall
be paid to any Guarantor in violation of the immediately preceding sentence
at
any time prior to the later of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty and (b) the
Maturity Date, such amount shall be received and held in trust for the benefit
of the Banks, shall be segregated from other property and funds of such
Guarantor and shall forthwith be paid or delivered to the Agent in the same
form
as so received (with any necessary endorsement or assignment) to be credited
and
applied to the Guaranteed Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the terms of the
Loan
Documents or other amounts payable under this Guaranty thereafter arising.
If
(i) any Guarantor shall make payment to any Bank of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been paid in full in cash and
(iii) the Maturity Date shall have occurred, the Banks will, at such Guarantor’s
request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary
to
evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by such Guarantor
pursuant to this Guaranty.
11.5 Subordination.
Each
Guarantor hereby subordinates any and all debts, liabilities and other
Obligations owed to such Guarantor by the Borrower (the “Subordinated
Obligations”)
to the
Guaranteed Obligations to the extent and in the manner hereinafter set forth
in
this Section 11.5:
(a) Except
during the continuance of a Default (including the commencement and continuation
of any proceeding under any Debtor Law relating to the Borrower), a Guarantor
may receive regularly scheduled payments from the Borrower on account of the
Subordinated Obligations. After the occurrence and during the continuance of
any
Default (including the commencement and continuation of any proceeding under
any
Debtor Law relating to the Borrower), however, unless the Agent otherwise
agrees, no Guarantor shall demand, accept or take any action to collect any
payment on account of the Subordinated Obligations.
(b) In
any
proceeding under any Debtor Law relating to the Borrower, each Guarantor agrees
that the Banks shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after
the
commencement of a proceeding under any Debtor Law, whether or not constituting
an allowed claim in such proceeding (“Post
Petition Interest”))
before any Guarantor receives payment of any Subordinated
Obligations.
(c) After
the
occurrence and during the continuance of any Default (including the commencement
and continuation of any proceeding under any Debtor Law relating to the
Borrower), each Guarantor shall, if the Agent so requests, collect, enforce
and
receive payments on account of the Subordinated Obligations as trustee for
the
Banks and deliver such payments to the Agent on account of the Guaranteed
Obligations (including all Post Petition Interest), together with any necessary
endorsements or other instruments of transfer, but without reducing or affecting
in any manner the liability of such Guarantor under the other provisions of
this
Guaranty.
(d) After
the
occurrence and during the continuance of any Default (including the commencement
and continuation of any proceeding under any Debtor Law relating to the
Borrower), the Agent is authorized and empowered (but without any obligation
to
so do), in its discretion, (i) in the name of a Guarantor, to collect and
enforce, and to submit claims in respect of, Subordinated Obligations and to
apply any amounts received thereon to the Guaranteed Obligations (including
any
and all Post Petition Interest), and (ii) to require each Guarantor (A) to
collect and enforce, and to submit claims in respect of, Subordinated
Obligations and (B) to pay any amounts received on such obligations to the
Agent
for application to the Guaranteed Obligations (including any and all Post
Petition Interest).
11.6 Continuing
Guaranty.
This
Guaranty is a continuing guaranty and shall remain in full force and effect
until the later of (a) the payment in full in cash of the Guaranteed Obligations
and all other amounts payable under this Guaranty and (b) the Maturity
Date.
12. MISCELLANEOUS
12.1 Amendments,
Waivers, Etc.
No
amendment or waiver of any provision of any Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless
the
same shall be in writing and signed by the Borrower and the Majority Banks,
and
then such waiver or consent shall be effective only in the specific instance
and
for the specific purpose for which given; provided,
however,
that no
amendment, waiver or consent shall, unless in writing and signed by each Bank,
do any of the following:
(a) waive
any
of the conditions specified in Section 4 (Conditions to Funding);
(b) increase
the Commitment of any Bank or alter the term thereof, or subject any Bank to
any
additional or extended obligations;
(c) change
the principal of, or decrease the rate of interest on, the Loans or any Note,
or
any fees or other amounts payable hereunder (except that the Majority Banks
may
waive in writing the increase in Applicable Margin resulting from the occurrence
of an SUG Change of Control);
(d) postpone
any date fixed for any payment of principal of, or interest on, the Loans or
any
Note, or any fees (including, without limitation, any fee) or other amounts
payable hereunder;
(e) change
the definition of “Majority Banks” or the number of Banks which shall be
required for Banks, or any of them, to take any action hereunder;
(f) amend
this Section 12.1; or
(g) reduce
or
limit the obligations of any Guarantor under the Loan Documents or release
any
Guarantor from its obligations under the Loan Documents;
and
provided,
further,
that no
amendment, waiver or consent shall, unless in writing and signed by the Agent
in
addition to each Bank, affect the rights or duties of the Agent under any Loan
Document. No failure or delay on the part of any Bank or the Agent in exercising
any power or right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or
further exercise thereof or the exercise of any other right or power. 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.
12.2 Reimbursement
of Expenses.
(a) The
Borrower agrees to pay on demand (and whether or not the Funding Date occurs)
(1) all reasonable and documented out-of-pocket costs and expenses of the Agent,
including reasonable and documented fees and expenses of a single counsel for
the Agent, in connection with the syndication of the credit facilities provided
for herein, the preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions hereof, and (2) all
costs
and expenses of the Agent and each Bank in connection with the enforcement
of
the Loan Documents, whether in any action, suit or litigation, or any
bankruptcy, insolvency or other similar proceeding affecting creditors’ rights
generally (including, without limitation, the reasonable fees and expenses
of
counsel for the Agent and each Bank with respect thereto). The Borrower further
agrees to pay any stamp or other taxes that may be payable in connection with
the execution or delivery of any Loan Document.
(b) If
any
payment of principal of, or Conversion of, any Eurodollar Rate Loan is made
by
the Borrower to or for the account of a Bank other than on the last day of
the
Interest Period for such Loan, as a result of a payment or Conversion pursuant
to Section 2.5 (Prepayments), 2.8 (Conversion of Loans) or 2.9(d) (Increased
Costs, Etc.), acceleration of the maturity of the Notes pursuant to Section
9
(Events of Default; Remedies) or for any other reason, or by an Eligible
Assignee to a Bank other than on the last day of the Interest Period for such
Loan upon an assignment of rights and obligations under this Agreement pursuant
to Section 12.14 (Sale or Assignment) as a result of a demand by the Borrower
pursuant to Section 12.14(a), or if the Borrower fails to make any payment
or
prepayment of a Loan for which a notice of prepayment has been given, whether
pursuant to Section 2.3 (Repayment of Loans), 2.5 (Prepayments) or Section
9
(Events of Default; Remedies) or otherwise, the Borrower shall, upon demand
by
such Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Bank any amounts required to compensate such Bank for any
additional losses, costs or expenses reasonably incurred by such Bank as a
result of such payment or Conversion or such failure to pay or prepay, as the
case may be, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by any Bank to fund or maintain such Loan.
(c) The
obligations of the Borrower under this Section 12.2 shall survive the
termination of this Agreement and/or the payment of the Notes.
12.3 Notices.
Any
communications between the parties hereto or notices provided herein to be
given
shall be given to the following addresses:
(a) If
to
Panhandle Eastern, to: Panhandle
Eastern Pipe Line Company, LP
c/o
Southern Union Company
5444
Westheimer Road
Houston,
Texas 77056
|
Attn:
|
Richard
N. Marshall,
|
Senior
Vice President and
Chief
Financial Officer
Phone:
(713) 989-7000
Fax:
(713) 989-1213
with
copies
to: Southern
Union Company
5444
Westheimer Road
Houston,
Texas 77056
|
Attn:
|
Monica
M. Gaudiosi,
|
Senior
Vice President and
Associate
General Counsel
Phone:
(713) 989-7567
Fax:
(713) 989-1213
and
Fleischman
and Walsh, L.L.P.
1919
Pennsylvania Avenue, N.W.
Suite
600
Washington,
D.C. 20006
Attn:
Seth M. Warner
Phone:
(202) 939-7945
Fax:
(202) 265-5706
(b) If
to the Borrower,
to: Trunkline
LNG Holdings LLC
c/o
Southern Union Company
5444
Westheimer Road
Houston,
Texas 77056
|
Attn:
|
Richard
N. Marshall,
|
Senior
Vice President and
Chief
Financial Officer
Phone:
(713) 989-7000
Fax:
(713) 989-1213
with
copies
to: Southern
Union Company
5444
Westheimer Road
Houston,
Texas 77056
|
Attn:
|
Monica
M. Gaudiosi,
|
Senior
Vice President and
Associate
General Counsel
Phone:
(713) 989-7567
Fax:
(713) 989-1213
and
Fleischman
and Walsh, L.L.P.
1919
Pennsylvania Avenue, N.W.
Suite
600
Washington,
D.C. 20006
Attn:
Seth M. Warner
Phone:
(202) 939-7945
Fax:
(202) 265-5706
(c) If
to
CCC, to: CrossCountry
Citrus, LLC
c/o
Southern Union Company
5444
Westheimer Road
Houston,
Texas 77056
|
Attn:
|
Richard
N. Marshall,
|
Senior
Vice President and
Chief
Financial Officer
Phone:
(713) 989-7000
Fax:
(713) 989-1213
with
copies
to: Southern
Union Company
5444
Westheimer Road
Houston,
Texas 77056
|
Attn:
|
Monica
M. Gaudiosi,
|
Senior
Vice President and
Associate
General Counsel
Phone:
(713) 989-7567
Fax:
(713) 989-1213
and
Fleischman
and Walsh, L.L.P.
1919
Pennsylvania Avenue, N.W.
Suite
600
Washington,
D.C. 20006
Attn:
Seth M. Warner
Phone:
(202) 939-7945
Fax:
(202) 265-5706
If
to the Agent,
to: Bayerische
Hypo- und Vereinsbank AG, New York Branch
150
East
42nd Street
New
York,
NY 10017-4679
Attn:
Agency Services, Wayne Miller
Tel:
212-672-5930
Fax:
212-672-6025
with
copies
to: DLA
Piper
US LLP
1251
Avenue of the Americas
New
York,
NY 10020
Attn:
Nicolai Sarad
Phone:
(212) 335-4642
Fax:
(212) 884-8542
and
if to
any Bank, at the address specified below its name on the signature pages hereof,
or as to the Borrower or the Agent, to such other address as shall be designated
by such party in a written notice to the other party and, as to each other
party, at such other address as shall be designated by such party in a written
notice to the Borrower and the Agent. All notices or other communications
required or permitted to be given hereunder shall be in writing and shall be
considered as properly given (a) if delivered in person, (b) if sent by
overnight delivery service (including Federal Express, UPS, ETA, Emery, DHL,
AirBorne and other similar overnight delivery services), (c) if mailed by first
class United States Mail, postage prepaid, registered or certified with return
receipt requested or (d) if sent by facsimile or other electronic transmission.
Notice so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by direct written electronic means shall
be deemed to have been validly and effectively given on the day (if a Business
Day and, if not, on the next following Business Day) on which it is transmitted
if transmitted before 4:00 p.m. (New York time), recipient’s time, and if
transmitted after that time, on the next following Business Day; provided,
however,
that if
any notice is tendered to an addressee and the delivery thereof is refused
by
such addressee, such notice shall be effective upon such tender. Any party
shall
have the right to change its address for notice hereunder to any other location
within the continental United States by giving of 30 days’ notice to the other
parties in the manner set forth above.
12.4 Governing
Law.
This
Agreement, and any instrument or agreement required hereunder (to the extent
not
otherwise expressly provided for therein), shall be governed by, and construed
under, the laws of the State of New York, without reference to conflicts of
laws
(other than Section 5-1401 and Section 5-1402 of the New York General
Obligations Law).
12.5 Waiver
of Jury Trial.
THE
AGENT, THE BANKS AND EACH LOAN PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OR CONDUCT, COURSE
OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS, OF THE AGENT,
THE
BANKS OR THE LOAN PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
BANKS
TO ENTER INTO THIS AGREEMENT.
12.6 Consent
to Jurisdiction.
The
Agent, the Banks and each Loan Party agree that any legal action or proceeding
by or against any Loan Party or with respect to or arising out of this Agreement
or any other Loan Document may be brought in or removed to the Supreme Court
of
the State of New York, in and for the County of New York, or the United States
District Court for the Southern District of New York, and any court of appeals
from either therefrom as the Agent may elect. By execution and delivery of
the
Agreement, each of the Banks, the Agent and each Loan Party accepts, for
themselves and in respect of their property, generally and unconditionally,
the
jurisdiction of the aforesaid courts. The Agent, the Banks and each Loan Party
irrevocably consent to the service of process out of any of the aforementioned
courts in any manner permitted by law. Nothing herein shall affect the right
of
the Agent and the Banks to bring legal action or proceedings in any other
competent jurisdiction. The Agent, the Banks and each Loan Party further agree
that the aforesaid courts of the State of New York and of the United States
of
America shall have exclusive jurisdiction with respect to any claim or
counterclaim of any Loan Party based upon the assertion that the rate of
interest charged by the Banks on or under this Agreement, the Loans and/or
the
other Loan Documents is usurious. The Agent, the Banks and each Loan Party
hereby waive any right to stay or dismiss any action or proceeding under or
in
connection with this Agreement or any other Loan Document brought before the
foregoing courts on the basis of an inconvenient forum.
12.7 Survival
of Representations, Warranties and Covenants.
All
representations, warranties and covenants contained herein or made in writing
by
any Loan Party in connection herewith shall survive the execution and delivery
of the Loan Documents and the Notes, and will bind and inure to the benefit
of
the respective successors and assigns of the parties hereto, whether so
expressed or not, provided
that the
undertaking of the Banks to make the Loans to the Borrower shall not inure
to
the benefit of any successor or assign of the Borrower. No investigation at
any
time made by or on behalf of the Banks shall diminish the Banks’ rights to rely
on any representations made herein or in connection herewith. All statements
contained in any certificate or other written instrument delivered by any Loan
Party or by any Person authorized by the Borrower under or pursuant to this
Agreement or in connection with the transactions contemplated hereby shall
constitute representations and warranties hereunder as of the time made by
such
Loan Party.
12.8 Counterparts.
This
Agreement may be executed in several counterparts, and by the parties hereto
on
separate counterparts, and each counterpart, when so executed and delivered,
shall constitute an original instrument and all such separate counterparts
shall
constitute but one and the same instrument.
12.9 Severability.
Should
any clause, sentence, paragraph or section of this Agreement be judicially
declared to be invalid, unenforceable or void, such decision shall not have
the
effect of invalidating or voiding the remainder of this Agreement, and the
parties hereto agree that the part or parts of this Agreement so held to be
invalid, unenforceable or void will be deemed to have been stricken herefrom
and
the remainder will have the same force and effectiveness as if such part or
parts had never been included herein. Each covenant contained in this Agreement
shall be construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance with any
one
covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with one or more other covenants.
12.10 Descriptive
Headings.
The
section headings in this Agreement have been inserted for convenience only
and
shall be given no substantive meaning or significance whatsoever in construing
the terms and provisions of this Agreement.
12.11 Accounting
Terms.
All
accounting terms used herein which are not expressly defined in the Agreement,
or the respective meanings of which are not otherwise qualified, shall have
the
respective meanings given to them in accordance with GAAP.
12.12 Limitation
of Liability.
No
claim may be made by any Person for any special, indirect, consequential, or
punitive damages in respect to any claim for breach of contract arising out
of
or related to the transactions contemplated by this Agreement, or any act,
omission, or event occurring in connection herewith and the parties hereto
hereby waive, release, and agree not to sue upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
12.13 Set-Off.
Each
Loan Party hereby gives and confirms to each Bank a right of set-off of all
moneys, securities and other property of such Loan Party (whether special,
general or limited) and the proceeds thereof, now or hereafter delivered to
remain with or in transit in any manner to such Bank, its Affiliates,
correspondents or agents from or for such Loan Party, whether for safekeeping,
custody, pledge, transmission, collection or otherwise or coming into possession
of such Bank, its Affiliates, correspondents or agents in any way, and also,
any
balance of any deposit accounts and credits of such Loan Party with, and any
and
all claims of security for the payment of the Loans and of all other liabilities
and obligations now or hereafter owed by any Loan Party to such Bank, contracted
with or acquired by such Bank, whether such liabilities and obligations be
joint, several, absolute, contingent, secured, unsecured, matured or unmatured,
and each Loan Party hereby authorizes each Bank, its Affiliates, correspondents
or agents at any time or times, without prior notice, to apply such money,
securities, other property, proceeds, balances, credits of claims, or any part
of the foregoing, to such liabilities in such amounts as it may select, whether
such liabilities be contingent, unmatured or otherwise, and whether any
collateral security therefor is deemed adequate or not. The rights described
herein shall be in addition to any collateral security, if any, described in
any
separate agreement executed by any Loan Party.
12.14 Sale
or Assignment.
(a) Each
Bank
may assign and, so long as no Default shall have occurred and be continuing
pursuant to Section 9.1 (Failure to Pay Obligations When Due) or 9.7 (Bankruptcy
and Other Matters), if demanded by the Borrower (pursuant to Section 2.15
(Replacement of Banks)) upon at least five Business Days’ notice to such Bank
and the Agent, a Bank will assign, to one or more Eligible Assignees all or
a
portion of its rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of the Loans owing
to
it and the Note or Notes held by it); provided,
however,
that
(i) each
such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations under and in respect of the Loan Agreement;
(ii) except
in
the case of an assignment of all of a Bank’s rights and obligations under this
Agreement or any assignment to any Bank, an Affiliate of any Bank or an Approved
Fund, the aggregate amount of the Loans being assigned to such assignee pursuant
to such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than
$1,000,000;
(iii) except
in
the case of an assignment to a Person that, immediately prior to such
assignment, was a Bank, an Affiliate of any Bank or an Approved Fund, such
assignment shall be approved by the Agent, and so long as no Default shall
have
occurred and be continuing pursuant to Section 9.1 (Failure to Pay Obligations
When Due) or 9.7 (Bankruptcy and Other Matters) at the time of effectiveness
of
such assignment, the Borrower (in each case such approvals not to be
unreasonably withheld or delayed); provided
that no
Borrower approval shall be required for any assignment made by HVB to any
Eligible Assignee from the Closing Date through and including the two-month
anniversary of the Funding Date;
(iv) each
such
assignment made as a result of a demand by the Borrower pursuant to this Section
12.14 shall be made in accordance with Section 2.15 (Replacement of
Banks);
(v) no
Bank
shall be obligated to make any such assignment as a result of a demand by the
Borrower pursuant to this Section 12.14 unless and until such Bank shall have
received one or more payments from either the Borrower or one or more assignees
in an aggregate amount at least equal to the aggregate outstanding principal
amount of the Loans owing to such Bank, together with accrued interest thereon
to the date of payment of such principal amount and all other amounts payable
to
such Bank under this Agreement;
(vi) the
parties to each such assignment shall execute and deliver to the Agent, for
its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500 (provided,
however,
that
for each such assignment made as a result of a demand by the Borrower pursuant
to this Section 12.14, the Borrower shall pay to the Agent the applicable
processing and recordation fee); and
(vii) the
assignee, if it shall not be a Bank, shall deliver to the Agent an
administrative questionnaire in the form prepared by the Agent.
(b) Upon
such
execution, delivery, acceptance and recording, from and after the effective
date
specified in such Assignment and Acceptance,
(i) the
assignee thereunder shall be a party hereto and, to the extent that rights
and
obligations hereunder have been assigned to it pursuant to such Assignment
and
Acceptance, have the rights and obligations of a Bank hereunder and
(ii) the
Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (other than its rights under Sections 2.9 (Increased Costs), 2.11
(Taxes) and 12.2 (Reimbursement of Expenses)) to the extent any claim thereunder
relates to an event arising prior to such assignment) and be released from
its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Bank’s rights
and obligations under this Agreement, such Bank shall cease to be a party
hereto).
(c) By
executing and delivering an Assignment and Acceptance, each Bank assignor
thereunder and each assignee thereunder confirm to and agree with each other
and
the other parties thereto and hereto as follows:
(i) other
than as provided in such Assignment and Acceptance, such assigning Bank makes
no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any
Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant
thereto;
(ii) such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or the performance
or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto;
(iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements most recently delivered hereunder and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such
assignee will, independently and without reliance upon any Agent, such assigning
Bank or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement;
(v) such
assignee confirms that it is an Eligible Assignee;
(vi) such
assignee appoints and authorizes the Agent to take such action as agent on
its
behalf and to exercise such powers and discretion under the Loan Documents
as
are delegated to such Agent by the terms hereof and thereof, together with
such
powers and discretion as are reasonably incidental thereto; and
(vii) such
assignee agrees that it will perform in accordance with their terms all of
the
obligations that by the terms of this Agreement are required to be performed
by
it as a Bank.
(d) The
Agent
shall maintain at its address a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks and the principal amount of the Loans owing to, each
Bank
from time to time (the “Register”).
The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes
of
this Agreement. The Register shall be available for inspection by the Borrower
or any Agent or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon
its
receipt of an Assignment and Acceptance executed by an assigning Bank and an
assignee, together with any Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (1) accept such Assignment and
Acceptance, (2) record the information contained therein in the Register and
(3)
give prompt notice thereof to the Borrower. In the case of any assignment by
a
Bank, within five Business Days after its receipt of such notice, the Borrower,
at its own expense, shall execute and deliver to the Agent in exchange for
the
surrendered Note or Notes a new Note to the order of such Eligible Assignee
in
an amount equal to the Loans assumed by it pursuant to such Assignment and
Acceptance and, if any assigning Bank has retained any Loans hereunder, a new
Note to the order of such assigning Bank in an amount equal to the Loans
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes and shall be dated the effective date of such Assignment and
Acceptance. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this Section
12.14.
(f) Each
Bank
may sell participations to one or more Persons (other than any Loan Party or
any
of its Affiliates) in or to all or a portion of its rights and obligations
under
this Agreement (including, without limitation, all or a portion of its
Commitments, the Loans owing to it and the Note or Notes (if any) held by it);
provided,
however,
that
(1) such Bank’s obligations under this Agreement shall remain unchanged, (2)
such Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (3) such Bank shall remain the holder of any
such Note for all purposes of this Agreement, (4) the Borrower, the Agent and
the other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank’s rights and obligations under this Agreement and (5)
no participant under any such participation shall have any right to approve
any
amendment or waiver of any provision of any Loan Document, or any consent to
any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes
or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, postpone any date fixed for any payment of principal
of,
or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or release any Guarantor.
Subject to the last two sentences of this clause (f), the Borrower agrees that
each participant shall be entitled to the benefits of Section 2.9 (Increased
Costs), 2.11 (Taxes) and 12.2(b) (Breakage Expenses) to the same extent as
if it
were a Bank and had acquired its interest by assignment. To the extent permitted
by law, each participant also shall be entitled to the benefits of Section
12.13
(Set-Off) as though it were a Bank, provided
such
participant agrees to be subject to Section 2.12 (Sharing of Payments, Etc.)
as
though it were a Bank. A participant shall not be entitled to receive any
greater payment under Section 2.9 (Increased Costs) or 2.11 (Taxes) than the
applicable Bank would have been entitled to receive with respect to the
participation sold to such participant, unless the sale of the participation
to
such participant is made with the Borrower’s prior written consent. A
participant that is organized under the laws of a jurisdiction outside the
United States shall not be entitled to the benefits of Section 2.11 (Taxes)
unless the Borrower is notified of the participation sold to such participant
and such participant agrees, for the benefit of the Borrower, to comply with
Section 2.11(e) as though it were a Bank.
(g) Any
Bank
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 12.14, disclose to the assignee or
participant or proposed assignee or participant any information relating to
the
Borrower furnished to such Bank by or on behalf of the Borrower; provided,
however,
that,
prior to any such disclosure, the assignee or participant or proposed assignee
or participant shall agree to preserve the confidentiality of any Confidential
Information received by it from such Bank.
(h) Notwithstanding
any other provision to the contrary set forth in this Agreement, any Bank may
at
any time create a security interest in all or any portion of its rights under
this Agreement and the other Loan Documents (including, without limitation,
the
Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank.
(i) Notwithstanding
anything to the contrary contained herein, any Bank that is a fund that invests
in bank loans may create a security interest in all or any portion of the Loans
owing to it and the Note or Notes held by it to the trustee for holders of
obligations owed, or securities issued, by such fund as security for such
obligations or securities, provided,
that
unless and until such trustee actually becomes a Bank in compliance with the
other provisions of this Section 12.14, (1) no such pledge shall release the
pledging Bank from any of its obligations under the Loan Documents and (2)
such
trustee shall not be entitled to exercise any of the rights of a Bank under
the
Loan Documents even though such trustee may have acquired ownership rights
with
respect to the pledged interest through foreclosure or otherwise.
12.15 Interest.
All
agreements between a Loan Party, the Agent or any Bank, whether now existing
or
hereafter arising and whether written or oral, are hereby expressly limited
so
that in no contingency or event whatsoever, whether by reason of demand being
made on any Note or otherwise, shall the amount paid, or agreed to be paid,
to
the Agent or any Bank for the use, forbearance, or detention of the money to
be
loaned under this Agreement or otherwise or for the payment or performance
of
any covenant or obligation contained herein or in any document related hereto
exceed the amount permissible at the Highest Lawful Rate. If, as a result of
any
circumstances whatsoever, fulfillment of any provision hereof or of any of
such
documents, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable usury law, then,
ipso
facto,
the
obligation to be filled shall be reduced to the limit of such validity, and
if,
from any such circumstance, the Agent or any Bank shall ever receive interest
or
anything which might be deemed interest under applicable law which would exceed
the amount permissible at the Highest Lawful Rate, such amount which would
be
excessive interest shall be applied to the reduction of the principal amount
owing on account of the Notes or the amounts owing on other obligations of
the
Borrower to the Agent or any Bank under this Agreement or any document related
hereto and not to the payment of interest, or if such excessive interest exceeds
the unpaid principal balance of the Notes and the amounts owing on other
obligations of the Borrower to the Agent or any Bank under this Agreement or
any
document related hereto, as the case may be, such excess shall be refunded
to
the Borrower. All sums paid or agreed to be paid to the Agent or any Bank for
the use, forbearance, or detention of the indebtedness of the Borrower to the
Agent or any Bank shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full term of such
indebtedness until payment in full of the principal thereof (including the
period of any renewal or extension thereof) so that the interest on account
of
such indebtedness 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, ACTIONS, SUITS, AND OTHER LEGAL PROCEEDINGS, DAMAGES,
COSTS, INTEREST, CHARGES, TAXES, COUNSEL FEES, AND OTHER EXPENSES AND PENALTIES
(INCLUDING WITHOUT LIMITATION ALL ATTORNEY FEES AND COSTS OR EXPENSES OF
SETTLEMENT) WHICH ANY OF THE INDEMNIFIED PARTIES MAY SUSTAIN OR INCUR BY REASON
OF OR ARISING OUT OF (a) THE MAKING OF ANY LOAN HEREUNDER, THE EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE NOTES AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THE EXERCISE OF ANY OF THE BANKS’ RIGHTS
UNDER THIS AGREEMENT AND THE NOTES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,
DAMAGES, COSTS, AND EXPENSES INCURRED BY ANY OF THE INDEMNIFIED PARTIES IN
INVESTIGATING, PREPARING FOR, DEFENDING AGAINST, OR PROVIDING EVIDENCE,
PRODUCING DOCUMENTS, OR TAKING ANY OTHER ACTION IN RESPECT OF ANY COMMENCED
OR
THREATENED LITIGATION UNDER ANY FEDERAL SECURITIES LAW OR ANY SIMILAR LAW OF
ANY
JURISDICTION OR AT COMMON LAW OR (b) ANY AND ALL CLAIMS OR PROCEEDINGS (WHETHER
BROUGHT BY A PRIVATE PARTY, GOVERNMENTAL AUTHORITY OR OTHERWISE) FOR BODILY
INJURY, PROPERTY DAMAGE, ABATEMENT, REMEDIATION, ENVIRONMENTAL DAMAGE, OR
IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING FROM OR RELATING TO THE
RELEASE OF ANY HAZARDOUS MATERIALS LOCATED UPON, MIGRATING INTO, FROM, OR
THROUGH OR OTHERWISE RELATING TO ANY PROPERTY OWNED OR LEASED BY THE BORROWER
OR
ANY SUBSIDIARY (WHETHER OR NOT THE RELEASE OF SUCH HAZARDOUS MATERIALS WAS
CAUSED BY THE BORROWER, ANY SUBSIDIARY, A TENANT, OR SUBTENANT OF THE BORROWER
OR ANY SUBSIDIARY, A PRIOR OWNER, A TENANT, OR SUBTENANT OF ANY PRIOR OWNER
OR
ANY OTHER PARTY AND WHETHER OR NOT THE ALLEGED LIABILITY IS ATTRIBUTABLE TO
THE
HANDLING, STORAGE, GENERATION, TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS
MATERIALS OR THE MERE PRESENCE OF ANY HAZARDOUS MATERIALS ON SUCH PROPERTY;
PROVIDED
THAT THE
BORROWER SHALL NOT BE LIABLE TO THE INDEMNIFIED PARTIES WHERE THE RELEASE OF
SUCH HAZARDOUS MATERIALS OCCURS AT ANY TIME AT WHICH THE BORROWER OR ANY
SUBSIDIARY CEASES TO OWN OR LEASE SUCH PROPERTY); AND PROVIDED
FURTHER
THAT NO
INDEMNIFIED PARTY SHALL BE ENTITLED TO THE BENEFITS OF THIS SECTION 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. 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 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 December 1, 2006.
|
TRUNKLINE
LNG HOLDINGS LLC
As
Borrower
|
|||||
|
By:
|
/s/
Richard N. Marshall
|
||||
|
Name:
|
Richard
N. Marshall
|
||||
|
Title:
|
Senior
Vice President and Chief Financial Officer
|
||||
|
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
As
a Guarantor
|
|||||
|
By:
|
/s/
Richard N. Marshall
|
||||
|
Name:
|
Richard
N. Marshall
|
||||
|
Title:
|
Senior
Vice President and Chief Financial Officer
|
||||
|
CROSSCOUNTRY
CITRUS, LLC
As
a Guarantor
|
|||||
|
By:
|
/s/
Richard N. Marshall
|
||||
|
Name:
|
Richard
N. Marshall
|
||||
|
Title:
|
Senior Vice President and Chief Financial
Officer
|
||||
|
Commitment:
$465,000,000
|
BAYERISCHE
HYPO- UND VEREINSBANK AG, NEW YORK BRANCH
|
||||
|
For
itself and as Agent for the Banks
|
|||||
|
By:
|
/s/
William W. Hunter
|
||||
|
Name:
|
William
W. Hunter
|
||||
|
Title:
|
Director
|
||||
|
By:
|
/s/
Shannon Batchman
|
||||
|
Name:
|
Shannon
Batchman
|
||||
|
Title:
|
Director
|
||||
|
ADDRESS
FOR NOTICES IN ITS CAPACITY AS A BANK:
Bayerische
Hypo- und Vereinsbank AG,
New
York Branch
150
East 42nd Street
New
York, NY 10017-4679
Attn:
Yoram Dankner and William Hunter
Tel:
212-672-5446 and 212-672-5340
Fax:
212-672-5530
|
|||||
EXHIBIT
A
NOTE
$_______________________,
200__
FOR
VALUE
RECEIVED, the undersigned, TRUNKLINE LNG HOLDINGS LLC, a limited liability
company organized under the laws of Delaware (the “Borrower”),
HEREBY PROMISES TO PAY to the order of ___________________________________
(the
“Bank”),
on or
before April 4, 2008 (the “Maturity
Date”),
the
principal sum of ________________ Million and No/ 100ths Dollars ($_,000,000)
in
accordance with the terms and provisions of that certain Credit Agreement dated
as of December 1, 2006, by and among the Borrower, Panhandle Eastern Pipe Line
Company, LP and CrossCountry Citrus, LLC, as Guarantors, the Bank, the other
banks named on the signature pages thereof, and BAYERISCHE HYPO- UND VEREINSBANK
AG, NEW YORK BRANCH, as Agent (as same may be amended, modified, increased,
supplemented and/or restated from time to time, 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 Note shall be payable at the Maturity
Date. The Borrower promises to pay interest on the unpaid principal balance
of
this Note from the date of any Loan evidenced by this Note until the principal
balance thereof is paid in full. Interest shall accrue on the outstanding
principal balance of this Note from and including the date of any Loan evidenced
by this 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 2.6(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 Bayerische Hypo- und Vereinsbank
AG, New York Branch in New York, New York (or such other address as the Agent
under the Credit Agreement may specify) not later than noon (New York 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 Note may at its option, by notice to the Borrower,
declare the unpaid, principal balance of this Note, all accrued and unpaid
interest thereon and all other amounts payable under this Note to be forthwith
due and payable, whereupon this 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.
If
any
payment of principal or interest on this 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 Note, the Borrower agrees
to pay (a) all reasonable costs and expenses incurred by the Agent and all
owners and holders of this Note in collecting this Note through any probate,
reorganization bankruptcy or any other proceeding and (b) reasonable attorneys’
fees when and if this 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
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 Note or otherwise or for the payment or
performance of any covenant or obligation contained in the Credit Agreement
or
this 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 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 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)
prorate, allocate and spread in equal parts during the period of the full stated
term of this Note, all interest at any time contracted for, charged, received
or
reserved in connection with the indebtedness evidenced by this
Note.
This
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 Note shall require the payment or permit the collection of
interest in excess of the Highest Lawful Rate. It is contemplated that by reason
of prepayments or repayments hereon prior to the Maturity Date, there may be
times when no indebtedness is owing hereunder prior to such date; but
notwithstanding such occurrence this 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
NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF
NEW YORK AND APPLICABLE FEDERAL LAW.
IN
WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered
by its officer thereunto duly authorized effective as of the date first above
written.
|
TRUNKLINE
LNG HOLDINGS LLC
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
EXHIBIT
B
ASSIGNMENT
AND ACCEPTANCE
[NAME
AND
ADDRESS OF
ASSIGNING
BANK]
_______________,
200__
________________
________________
________________
________________
Re: Trunkline
LNG Holdings Credit Agreement
Ladies
and Gentlemen:
We
have
entered into a Credit Agreement dated as of December 1, 2006 (as same may be
amended, modified, increased, supplemented and/or restated from time to time,
the “Credit
Agreement”),
among
certain banks (including us), Bayerische Hypo- und Vereinsbank AG, New York
Branch (the “Agent”)
and
Trunkline LNG Holdings LLC (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 New York times.
1. Assignment.
We
hereby sell 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 our Note and 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 _____%] (collectively, the “Assigned
Obligations”)
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 10 (The Agent) 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 Loan Document or
any
security interest created thereunder, (ii) the truthfulness and accuracy of
any
representation contained in any Loan Document, (iii) the filing or recording
of
any Loan Document necessary to perfect any security interest created thereunder,
(iv) the financial condition of the Company or any other Person obligated under
any Loan Document, any financial or other information, certificate, receipt
or
other document furnished or to be furnished under any Loan Document or (v)
any
other matter not specifically set forth herein having any relation to any Loan
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 creditworthiness of the Company and the structure of the
transaction.
3. Governing
Law; Jurisdiction.
This
Agreement, and any instrument or agreement required hereunder (to the
extent
not otherwise expressly provided for therein), shall be governed by, and
construed under, the laws of the State of New York, without reference to
conflicts of laws (other than Section 5-1401 and Section 5-1402 of the New
York
General Obligations Law).
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, electronic mail, telecopy; five days after
deposit in the mails, if mailed; and when delivered, if given by other
means.
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:
|
||||||||||
|
[Street
Address]
|
||||||||||
|
[City,
State, Zip Code]
|
||||||||||
|
Telephone:
|
||||||||||
|
Telecopy:
|
||||||||||
|
AGREED
AND ACCEPTED:
|
||||||||||
|
By:
|
||||||||||
|
Attention:
|
||||||||||
|
Telephone:
|
||||||||||
|
Telecopy:
|
||||||||||
|
Account
for Payments:
|
||||||||||
ASSIGNMENT
APPROVED PURSUANT TO SECTION 12.14 (SALE OR ASSIGNMENT) OF THE CREDIT AGREEMENT
AND RELEASE APPROVED IN SECTION 2 OF THIS AGREEMENT:
|
TRUNKLINE
LNG HOLDINGS LLC
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
Schedule
3.1
Subsidiaries
Trunkline
LNG Company, LLC
Schedule
3.10
Tax
Matters
Tax
Sharing Agreement, effective as of April 25, 2005, among Panhandle Eastern
Pipe
Line Company, LP, Trunkline LNG Holdings LLC, Trunkline LNG Company, LLC,
PanGas
Storage, LLC, Panhandle Holdings, LLC, Trunkline Gas Company, LLC, Trunkline
Field Services, LLC, Panhandle Storage, LLC, Trunkline Offshore Pipeline,
LLC,
Trunkline Deepwater Pipeline, LLC, Sea Robin Pipeline Company, LLC, Panhandle
Lake Charles Generation, LLC and any other subsidiaries that may become
a part
of the Panhandle group
Schedule
3.14
ERISA
Matters
Southern
Union and the members of its
“controlled group of corporations,” as defined in the Code, which include two of
the Loan Parties, Borrower and Panhandle Eastern, inadvertently failed to
timely
submit the information required by ERISA Section 4010 to the Pension Benefit
Guaranty Corporation (the “PBGC”) for the information year ending December 31,
2003. This information was required to be filed by April 15, 2004.
Upon discovery of this inadvertent failure, Eric Herschmann, Acting General
Counsel of Southern Union, advised the PBGC and requested a waiver of any
penalties that might otherwise be assessed against Southern Union, and Borrower
and Panhandle Eastern, as members of Southern Union’s controlled group.
For the information years ending December 31, 2004 and December 31, 2005,
Southern Union submitted the information required by ERISA Section 4010 to
the
PBGC on a timely basis.
Schedule
3.17
Environmental
Matters
None.
$465,000,000
60;
December
1, 2006
FOR
VALUE
RECEIVED, CROSSCOUNTRY CITRUS, LLC,
a
Delaware limited liability company (“Borrower” or “CCC”), promises to pay to the
order of TRUNKLINE LNG HOLDINGS LLC, a Delaware limited liability company
(“Holder” or “Trunkline LNG”), the principal sum of Four Hundred Sixty-Five
Million Dollars ($465,000,000),
together with interest thereon at a
rate
per annum equal to the sum of (i) the interest rate payable from time to time
by
Trunkline LNG to the banks under that certain Credit Agreement, of even date
herewith (the “Credit Agreement”), among Trunkline LNG, as borrower, Panhandle
Eastern Pipe Line Company, LP and CCC, as guarantors, the financial institutions
listed on the signature pages thereof, and Bayerische Hypo-Und Vereinsbank
AG,
New York Branch, as administrative agent for the banks thereunder, plus (ii)
112.5 basis points (the “Interest Rate”).
No
later
than the thirtieth (30th)
day
after the end of each fiscal quarter of the Borrower (with the first payment
due
no later than January 30, 2007), the Borrower shall pay to Holder an amount
equal to the sum of (i) accrued interest on the principal amount from time
to
time outstanding hereunder calculated at the Interest Rate plus (ii) the amount
equal to the cash dividends received by Borrower from Citrus Corp. (only to
the
extent of Consolidated Net Income (as defined in the Credit Agreement) of Citrus
Corp.) during such fiscal quarter less any expenses or other liabilities of
Borrower (including, without limitation, the interest amounts required to be
paid under this Note) for such fiscal quarter plus (iii) 25% of (a) special
dividends or distributions received by Borrower in such period less (b) any
special dividends or distributions that are required to be paid by Borrower
to
third parties under indemnification or refund arrangements with such third
parties during such period, which amounts shall be deemed payments of principal
hereunder. Such amounts shall be payable by Borrower to Holder at 5444
Westheimer Road, Houston, TX 77056, or at such other place as Holder may
designate in writing.
In
the
event Borrower fails to make any payment of principal or interest owing
hereunder within ten (10) days of the date when such payment is due and payable,
Borrower shall pay to Holder a late charge of two percent (2%) per annum of
the
amount of such overdue payment.
The
entire principal amount outstanding, and all accrued and unpaid interest, under
this Note shall be due and payable upon the earlier to occur of (i) demand
by
Holder and (ii) April 4, 2008. Upon payment or prepayment of the entire
principal amount of this Note outstanding, and all accrued interest thereon,
Holder shall surrender the original copy of this Note to Holder for
cancellation. This Note may be prepaid at any time without premium or penalty
(other than the reimbursement by CCC of any breakage fees owed by Holder to
the
lenders under the Credit Agreement).
Borrower
expressly waives presentment, demand, protest and notice of every
kind.
NOTWITHSTANDING
ANY OTHER PROVISION CONTAINED IN THIS DOCUMENT TO THE CONTRARY, THIS NOTE IS
FULLY NONRECOURSE AS TO THE MEMBER OF BORROWER, AND HOLDER HEREBY AGREES TO
LOOK
ONLY TO BORROWER TO DISCHARGE ALL OF ITS OBLIGATIONS UNDER THIS
NOTE.
IN
NO
EVENT SHALL HOLDER LOOK TO THE MEMBER OF BORROWER, ITS AFFILIATES OR ANY ENTITY
RELATED THERETO TO SATISFY THE OBLIGATIONS UNDER THIS NOTE.
If
the
debt hereby evidenced is not paid as it matures and is collected by suit or
attorney, it is further agreed that Borrower shall pay all court costs and
reasonable attorneys’ fees incurred by Holder in connection
therewith.
THIS
NOTE
shall be governed by and construed in accordance with the laws of the State
of
Texas, without giving effect to the principles of conflict of laws
thereof.
[Signature
on next page.]
IN
WITNESS WHEREOF, Borrower has caused this Note to be duly executed by its
authorized officer as of the date first written above.
CROSSCOUNTRY
CITRUS, LLC
By:
/s/
Richard N. Marshall
Richard
N. Marshall
Senior Vice President and Chief Financial Officer