<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-2700
------------------------
EL PASO NATURAL GAS COMPANY
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 74-0608280
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
EL PASO ENERGY BUILDING
1001 LOUISIANA, HOUSTON, TEXAS 77002
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's Telephone Number, Including Area Code: (713) 757-2131
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING
----- -----------
<S> <C>
Common Stock, par value $3.00 per share
as of November 11, 1997 59,798,452 shares
</TABLE>
================================================================================
<PAGE> 2
GLOSSARY
The following abbreviations, acronyms, or defined terms used in this Form
10-Q are defined below:
<TABLE>
<S> <C>
CAPSA................. Companias Asociadas Petroleras SA, a privately held integrated energy
company in Argentina
Company............... El Paso Natural Gas Company and its subsidiaries
Cornerstone........... Cornerstone Natural Gas, Inc.
Court of Appeals...... United States Court of Appeals for the District of Columbia Circuit
Distributions......... Various intercompany transfers and distributions which restructured,
divided and separated the businesses, assets and liabilities of Old
Tenneco and its subsidiaries so that all the assets, liabilities and
operations related to the automotive parts, packaging and administrative
services businesses and the shipbuilding business were spun-off to Old
Tenneco's then existing common stockholders
EPG................... El Paso Natural Gas Company, unless the context otherwise requires
EPTPC................. El Paso Tennessee Pipeline Co. (formerly Tenneco Inc.), an indirect
subsidiary of El Paso Natural Gas Company
FERC.................. The Federal Energy Regulatory Commission
GSR................... Gas supply realignment
Merger................ The acquisition of El Paso Tennessee Pipeline Co. by El Paso Natural Gas
Company in December 1996
MMcf/d................ Million cubic feet per day
MW(s)................. Megawatt(s)
NGL(s)................ Natural gas liquid(s)
New Tenneco........... Tenneco Inc., subsequent to the Merger and Distributions, consisting of
the automotive parts, packaging and administrative services businesses
Old Tenneco........... Tenneco Inc. (renamed El Paso Tennessee Pipeline Co.), prior to its
acquisition by the Company
PCB(s)................ Polychlorinated biphenyl(s)
Pemex................. Pemex Gas Petroquimica Basica, the Mexican state-owned energy company
PRP(s)................ Potentially responsible party(ies)
SFAS.................. Statement of Financial Accounting Standards
TGP................... Tennessee Gas Pipeline Company, a wholly owned subsidiary of El Paso
Tennessee Pipeline Co.
TransAmerican......... TransAmerican Natural Gas Corporation
</TABLE>
i
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EL PASO NATURAL GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER COMMON SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------- --------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operating revenues.................................... $1,251 $ 745 $ 4,061 $ 1,938
------ ------ ------- -------
Operating expenses
Cost of gas and other products...................... 876 576 2,934 1,430
Operation and maintenance........................... 174 71 489 218
Employee separation and asset impairment charge..... -- -- -- 99
Depreciation, depletion, and amortization........... 58 23 182 66
Taxes, other than income taxes...................... 23 9 72 31
------ ------ ------- -------
1,131 679 3,677 1,844
------ ------ ------- -------
Operating income...................................... 120 66 384 94
------ ------ ------- -------
Other (income) and expense
Interest and debt expense........................... 58 25 178 72
Other -- net........................................ (20) -- (44) (1)
------ ------ ------- -------
38 25 134 71
------ ------ ------- -------
Income before income taxes and minority interest...... 82 41 250 23
Income tax expense.................................... 31 16 96 9
------ ------ ------- -------
Income before minority interest....................... 51 25 154 14
Minority interest
Preferred stock dividend requirement of
subsidiary....................................... 7 -- 19 --
------ ------ ------- -------
Net income............................................ $ 44 $ 25 $ 135 $ 14
====== ====== ======= =======
Earnings per common share............................. $ .77 $ .70 $ 2.37 $ .40
====== ====== ======= =======
Average common shares outstanding..................... 57.4 35.3 56.8 35.0
====== ====== ======= =======
Dividends declared per common share................... $.3650 $.3475 $1.0950 $1.0425
====== ====== ======= =======
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
1
<PAGE> 4
EL PASO NATURAL GAS COMPANY
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30,
1997 DECEMBER 31,
(UNAUDITED) 1996
------------- ------------
<S> <C> <C>
Current assets
Cash and temporary investments............................ $ 99 $ 200
Accounts and notes receivable, net........................ 956 1,273
Inventories............................................... 74 87
Deferred income tax benefit............................... 104 141
Other..................................................... 344 395
------ ------
Total current assets.............................. 1,577 2,096
Property, plant, and equipment, net......................... 6,700 5,938
Other....................................................... 824 809
------ ------
Total assets...................................... $9,101 $8,843
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.......................................... $ 791 $1,089
Short-term borrowings (including current maturities of
long-term debt)........................................ 600 841
Accrual for regulatory issues............................. 22 309
Other..................................................... 705 604
------ ------
Total current liabilities......................... 2,118 2,843
------ ------
Long-term debt, less current maturities..................... 2,137 2,215
------ ------
Deferred income taxes....................................... 1,497 1,092
------ ------
Other....................................................... 1,091 720
------ ------
Commitments and contingencies (See Note 2)
Minority interest
Preferred stock of subsidiary............................. 300 296
------ ------
Other minority interest................................... 65 39
------ ------
Stockholders' equity
Common stock, par value $3 per share; authorized
100,000,000 shares; issued 60,891,492 and 56,726,734
shares................................................. 182 170
Additional paid-in capital................................ 1,540 1,355
Retained earnings......................................... 294 227
Less: Treasury stock (at cost) 1,474,076 and 1,451,922
shares........................................... 46 45
Deferred compensation.............................. 77 69
------ ------
Total stockholders' equity......................... 1,893 1,638
------ ------
Total liabilities and stockholders' equity......... $9,101 $8,843
====== ======
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
2
<PAGE> 5
EL PASO NATURAL GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
--------------------
1997 1996
--------- -------
<S> <C> <C>
Cash flows from operating activities
Net income................................................ $ 135 $ 14
Adjustments to reconcile net income to net cash from
operating activities
Depreciation, depletion, and amortization.............. 182 66
Deferred income tax expense (benefit).................. 215 (32)
Net employee separation and asset impairment charge.... -- 77
Working capital changes................................ (110) 83
Other.................................................. (14) --
------- -----
Net cash provided by operating activities......... 408 208
------- -----
Cash flows from investing activities
Capital expenditures...................................... (138) (75)
Investment in joint ventures and equity investees......... (196) (49)
Net cash flow impact of acquisitions...................... -- (99)
Collection of note receivable from partnership............ 53 --
Investment in annuity..................................... (42) --
Other..................................................... 12 13
------- -----
Net cash used in investing activities............. (311) (210)
------- -----
Cash flows from financing activities
Net commercial paper proceeds/(payments).................. 113 (74)
Revolving credit borrowings............................... -- 400
Revolving credit repayments............................... (1,200) (315)
Retirement of long-term debt.............................. (110) (23)
Net proceeds from long-term debt issuance................. 883 --
Net proceeds from equity offering......................... 152 --
Dividends paid on common stock............................ (56) (36)
Other..................................................... 20 63
------- -----
Net cash provided by (used in) financing
activities....................................... (198) 15
------- -----
Increase (decrease) in cash and temporary investments....... (101) 13
Cash and temporary investments
Beginning of period............................... 200 39
------- -----
End of period..................................... $ 99 $ 52
======= =====
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
3
<PAGE> 6
EL PASO NATURAL GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The 1996 Annual Report on Form 10-K for the Company includes a summary of
significant accounting policies and other disclosures and should be read in
conjunction with this Form 10-Q. The condensed consolidated balance sheet at
December 31, 1996, is derived from audited financial statements. The condensed
consolidated financial statements at September 30, 1997, and for the nine months
and quarters ended September 30, 1997, and 1996, are unaudited. These financial
statements do not include all disclosures required by generally accepted
accounting principles. In the opinion of management, all material adjustments
necessary to present fairly the results of operations for such periods have been
included. All such adjustments are of a normal recurring nature. Results of
operations for any interim period are not necessarily indicative of the results
of operations for the entire year due to the cyclical nature of the Company's
businesses. Financial statements for the previous periods include certain
reclassifications which were made to conform to current presentation. Such
reclassifications have no effect on reported net income or stockholders' equity.
Accounting for the Acquisition of EPTPC
On December 12, 1996, the Company acquired EPTPC through a business
combination accounted for as a purchase. To effect the purchase, a preliminary
allocation of the purchase price was assigned to the assets and liabilities
acquired pending the Company's analysis and assessment of its exposure to
contingencies assumed in the acquisition, as well as other components of the
purchase price allocation. As of September 30, 1997, the Company had
substantially completed its analysis and, accordingly, had made adjustments for
certain contingencies including, among other things, litigation, environmental,
and regulatory issues. In addition, an independent appraisal of the fair value
of the physical properties acquired, which supports the allocation to the
property, plant and equipment of EPTPC's interstate pipeline systems, was
completed in September 1997. The Company plans to finalize all adjustments in
the fourth quarter of 1997.
Derivative Financial Instruments
The Company utilizes derivative financial instruments to manage price risks
associated with certain energy commodities and interest and foreign currency
exchange rates. In its price risk management activities, the Company engages in
both trading and non-trading activities. The financial instruments used include
swap agreements, futures, options and hedge contracts.
Activities for trading purposes consist of services provided to the energy
sector and are accounted for using the mark-to-market method of accounting. Such
trading activities are conducted through a variety of financial instruments,
including forward contracts involving cash settlements or physical delivery of
an energy commodity, swap contracts which require payments to (or receipts from)
counterparties based on the differential between a fixed and variable price for
the commodity, options, and other contractual arrangements.
Under mark-to-market accounting, financial instruments with third parties
are reflected at estimated market value, with resulting unrealized gains and
losses recorded in operating income in the Consolidated Statements of Income.
The net gains or losses recognized in the current period result primarily from
transactions originating within the period and the impact of price movements on
transactions originating in previous periods. The assets and liabilities
resulting from mark-to-market accounting are presented as other current assets
and other current liabilities in the Consolidated Balance Sheets. Terms
regarding cash settlement of the contracts vary with respect to the actual
timing of cash receipts and payments. Receivables and payables resulting from
these timing differences are presented in accounts receivable, and accounts
payable in the Consolidated Balance Sheets. Cash inflows and outflows associated
with these price risk management activities are recognized in operating cash
flow as the settlements of transactions occur.
4
<PAGE> 7
The market value of these financial instruments reflects management's best
estimate considering various factors including exchange and over-the-counter
quotations, time value and volatility factors underlying the commitments. The
values are adjusted to reflect the potential impact of liquidating the Company's
position in an orderly manner over a reasonable period of time under present
market conditions.
Activities for non-trading purposes consist of transactions entered into by
the Company to hedge the impact of market fluctuations on assets, liabilities,
production, or other contractual commitments. In order to meet the requirements
of a hedge, the transactions must be designated as such, meet certain
correlation criteria, and reduce price risk. The Company uses forwards, swaps,
and other contracts to hedge the impact of market fluctuations. Changes in the
market value of these financial instruments are deferred until the gains or
losses on the hedged item are recognized. When the underlying asset being hedged
is sold, deferred gains or losses are recognized at the time of such sale.
Deferred gains or losses are also recognized at the time it becomes probable
that an anticipated hedged transaction or a portion thereof will not occur. Cash
inflows and outflows are recognized in operating cash flow as the settlement of
transactions occurs.
2. COMMITMENTS AND CONTINGENCIES
Rates and Regulatory Matters
TGP -- In February 1997, TGP filed with FERC a settlement of all issues
related to the recovery by TGP of its GSR and other transition costs and related
proceedings (the "GSR Stipulation and Agreement"). On April 16, 1997, FERC
approved the settlement and TGP implemented the settlement on May 1, 1997. Under
the terms of the GSR Stipulation and Agreement, TGP is entitled to collect from
customers a total of up to $770 million, of which approximately $665 million has
been collected as of September 30, 1997. TGP is entitled to recover additional
transition costs, up to the remaining $105 million, through a demand
transportation surcharge and an interruptible transportation surcharge. The
demand transportation surcharge portion is scheduled to be recovered over a
period extending through December 1998. There is no time limit for collection of
the interruptible transportation surcharge portion. The terms of the GSR
Stipulation and Agreement also provide for a rate case moratorium through
November 2000 (subject to certain limited exceptions) and provides an escalating
rate cap, indexed to inflation, through October 2005, for certain of TGP's
customers.
In April 1996, TGP filed with FERC a settlement that resolves the rates
that are the subject of TGP's December 1994 rate case. The settlement included a
structural rate design change that results in a larger portion of TGP's
transportation revenues being dependent upon throughput. In October 1996, FERC
approved the stipulation with certain modifications and clarifications which are
not material. In January 1997, FERC issued an order denying requests for
rehearing of the October 1996 order. Under the stipulation, TGP's refund
obligation was approximately $185 million, inclusive of interest, of which $161
million was refunded to customers in March 1997 and June 1997 with the remaining
$24 million refund obligation offset against GSR recoveries in accordance with
particular customer elections. TGP had provided a reserve for these rate refunds
as revenues were collected. One party to the rate proceeding, a competitor of
TGP, filed with the Court of Appeals a Petition for Review of the FERC orders
approving the stipulation. The Company believes the FERC orders will be upheld.
In July 1997, FERC issued an order on rehearing of its July 1996 order
addressing cost allocation and rate design issues of TGP's 1991 general rate
proceeding. All cost of service issues were previously resolved pursuant to a
settlement that was approved by FERC. In the July 1996 order, FERC remanded to
the presiding Administrative Law Judge the issue of proper allocation of TGP's
New England lateral costs. In the July 1997 order on rehearing, FERC clarified,
among other things, that although the ultimate resolution as to the proper
allocation of costs will be applied retroactively to July 1, 1995, the cost of
service settlement does not allow TGP to recover from other customers amounts
that TGP may ultimately be required to refund. TGP has filed a Petition for
Review with the Court of Appeals and a request for rehearing of the FERC order
on this issue. Management believes that the resolution of this issue will not
have a material impact on the financial position or results of operations of the
Company.
In October 1997, TGP filed its cashout report for the period September 1995
through August 1996, showing a cumulative loss of $11 million that would be
rolled forward to the next cashout period pursuant to
5
<PAGE> 8
its tariff. In October 1997, FERC issued an order requesting additional
information and justification from TGP as to its cashout methodology and
reports. Management believes that the resolution of this issue will not have a
material impact on the financial position or the results of operations of the
Company.
EPG -- In January 1997, the Chief Administrative Law Judge certified EPG's
March 1996 settlement to FERC and severed contesting parties. In April 1997,
FERC approved EPG's settlement as filed and determined that only Southern
California Edison Company should be severed for separate determination of the
rates it pays EPG. Hearings to determine Southern California Edison Company's
rates are scheduled to begin in January 1998. In July 1997, FERC issued an order
denying the requests for rehearing of the April 1997 order. Southern California
Edison Company and GPM Corporation have filed with the Court of Appeals a
petition for review of FERC's April 1997 and July 1997 orders. Under the
provisions of the settlement, EPG's refund obligation was approximately $194
million, including interest. The settlement also provides for the collection of
risk-sharing revenues from customers related to contract reductions and
expirations. The amount of risk-sharing revenues due from customers, excluding
Southern California Edison Company, totaled $294 million. In August 1997, EPG
made rate refunds of $61 million to customers. The remaining $133 million of the
rate refund obligation was offset against the amount of risk-sharing revenues
due from customers in accordance with particular customer elections. EPG
continues to provide a reserve for rate refunds for non-settled parties. In
accordance with the settlement, certain customers elected to pay $75 million in
the third quarter of 1997 which amount represented a prepayment of their portion
of the risk-sharing revenues. The remaining risk-sharing revenue balance of $85
million will be collected over future service periods totaling six years or
less. As of September 30, 1997, $189 million was recorded as unearned revenue
and is included in other liabilities on the Consolidated Balance Sheets. The
unearned revenue will be recognized over the settlement period through 2003 in
accordance with the occurrence of the contract reductions and expirations.
On November 6, 1997, EPG executed contracts with Natural Gas Clearinghouse
Corporation for approximately 1.3 billion cubic feet per day of firm capacity to
California on EPG's System. The contracts will take effect January 1, 1998, and
run for a two year term. These contracts will be subject to the revenue sharing
mechanism with EPG's customers in its current rate case settlement.
Under FERC procedures, take-or-pay cost recovery filings may be challenged
by pipeline customers on prudence and certain other grounds. Certain parties
sought review in the Court of Appeals of FERC's determination in the October
1992 order that certain buy-down/buy-out costs were eligible for recovery. In
January 1996, the Court of Appeals remanded the order to FERC with direction to
clarify the basis for its decision that the take-or-pay buy-down/buy-out costs
were eligible for recovery. In March 1996, FERC issued an order to the effect
that categories of costs which had been determined to be eligible for recovery
might in fact be ineligible for recovery and established a technical conference
which was held in May 1996. In March 1997, following a technical conference and
the submission of statements of position and replies, FERC issued an order
determining that the costs related to all but one of EPG's disputed contracts
were eligible for recovery. The costs ruled ineligible for recovery totaled
approximately $3 million, including interest, and were refunded to customers in
the second quarter of 1997. In October 1997, FERC issued an order denying the
request for rehearing of the March 1997 order in most respects, but determined
that the costs incurred pursuant to two additional EPG contracts were ineligible
for recovery. These costs, including interest, total about $10 million, and EPG
anticipates refunding this amount to its customers in the fourth quarter of
1997. EPG had previously provided reserves for this refund. EPG intends to seek
rehearing of this aspect of the FERC order.
Environmental Matters
In connection with the Company's assessment of its exposure to
contingencies assumed in the acquisition of EPTPC, the reserve for certain
environmental assessments and remediation activities has been increased by
approximately $40 million in the third quarter of 1997 to $276 million as of
September 30, 1997 (see Note 1).
Since 1988, TGP has been engaged in an internal project to identify and
deal with the presence of PCBs and other substances on the United States
Environmental Protection Agency List of Hazardous Substances, at
6
<PAGE> 9
compressor stations and other facilities operated by both its interstate and
intrastate natural gas pipeline systems.
In May 1995, following negotiations with its customers, TGP filed with FERC
a separate Stipulation and Agreement (the "Environmental Stipulation") that
established a mechanism for recovering a substantial portion of the
environmental costs identified in the internal project. In November 1995, FERC
issued an order approving the Environmental Stipulation. Although one shipper
filed for rehearing, FERC denied rehearing of its order in February 1996. This
shipper filed a Petition of Review in April 1996 in the Court of Appeals; TGP
believes the FERC order approving the Environmental Stipulation will be upheld
on appeal. The Environmental Stipulation was effective July 1, 1995. As of
September 30, 1997, a balance of $32 million remains to be collected under this
agreement.
The Company and certain of its subsidiaries have been designated, have
received notice that they should be designated, or have been asked for
information to determine whether they could be designated as a PRP with respect
to 32 sites under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA or Superfund) or state equivalents. The Company has sought
to resolve its liability as a PRP with respect to these Superfund sites through
indemnification by third parties and/or settlements which provide for the
payment of the Company's allocable share of remediation costs. Because the
clean-up costs are estimates and are subject to revision as more information
becomes available about the extent of remediation required, the Company's
estimate of its share of remediation costs could change. Moreover, liability
under the federal Superfund statute is joint and several, meaning that the
Company could be required to pay in excess of its pro rata share of remediation
costs if other parties are unable to pay. The Company's understanding of the
financial strength of other PRPs has been considered, where appropriate, in its
determination of its estimated liability as described herein.
In addition, the Company has identified a number of formerly owned or
leased sites, and certain other sites associated with its discontinued
operations, where environmental remediation may be required.
It is possible that new information or future developments could require
the Company to reassess its potential exposure related to environmental matters.
As such information becomes available, or developments occur, related accrual
amounts will be adjusted accordingly. While there are still uncertainties
relating to the ultimate costs which may be incurred, based upon the Company's
evaluation and experience to date, the Company believes that the recorded
estimate for the reserve is adequate.
Legal Proceedings
In November 1993, TransAmerican filed a complaint in a Texas state court,
TransAmerican Natural Gas Corporation v. El Paso Natural Gas Company, et al.,
alleging fraud, tortious interference with contractual relationships, economic
duress, civil conspiracy, and violation of state antitrust laws arising from a
settlement agreement entered into by EPG, TransAmerican, and others in 1990 to
settle litigation then pending and other potential claims. The complaint, as
amended, seeks unspecified actual and exemplary damages. EPG is defending the
matter in the State District Court of Dallas County, Texas. In April 1996, a
former employee of TransAmerican filed a related case in Harris County, Texas,
Vickroy Stone v. Godwin & Carlton, P.C., et al. (including EPG), seeking
indemnification and other damages in unspecified amounts relating to litigation
consulting work allegedly performed for various entities, including EPG, in
cases involving TransAmerican. EPG has filed a Motion for Summary Judgment
arguing that all claims are barred by the release executed by TransAmerican, by
previous court ruling, and by statute of limitation. A hearing on this motion is
scheduled for December 1997. The trials in TransAmerican and Stone are set to
commence in May 1998 and September 1998, respectively. Based on information
available at this time, management believes that the claims asserted against it
in both cases have no factual or legal basis and that the ultimate resolution of
these matters will not have a materially adverse effect on the Company's
financial position or results of operations.
In Commonwealth of Kentucky, Natural Resources and Environmental Protection
Cabinet v. Tennessee Gas Pipeline Company (Franklin County Circuit Court, Docket
No. 88-C1-1531, November 16, 1988), the Kentucky environmental agency alleged
that TGP discharged pollutants into the waters of the state without a permit and
disposed of PCBs without a permit. The agency sought an injunction against
future discharges,
7
<PAGE> 10
sought an order to remediate or remove PCBs, and sought a civil penalty. TGP has
entered into agreed orders with the agency to resolve many of the issues raised
in the original allegations, has received water discharge permits for its
Kentucky stations from the agency, and continues to work to resolve the
remaining issues. Management believes that the resolution of this issue will not
have a materially adverse effect on the Company's financial position or results
of operations.
The Company is a named defendant in numerous lawsuits and a named party in
numerous governmental proceedings arising in the ordinary course of business.
While the outcome of such lawsuits or other proceedings against the Company
cannot be predicted with certainty, management currently does not expect these
matters to have a materially adverse effect on the Company's financial position
or results of operations.
3. FINANCING TRANSACTIONS
The Company had short-term borrowings, including current maturities of long
term debt, at September 30, 1997 and December 31, 1996, as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
EPG Revolving Credit Facility............................... $ -- $ 17
EPTPC Revolving Credit Facility............................. 417 700
Commercial paper............................................ 113 --
Current maturities of long term debt........................ 70 124
---- ----
$600 $841
==== ====
</TABLE>
At December 31, 1996, EPTPC had an additional $900 million outstanding
under its credit facility which was reflected as long-term debt because it was
expected to be refinanced with long-term debt during the first quarter of 1997.
In January 1997, EPG's 6.90% notes, which had an aggregate principal amount
of $100 million, matured and were retired.
In February 1997, EPG issued an additional 3 million shares of common
stock. Proceeds of approximately $152 million, net of issuance costs, were used
to repay a portion of EPTPC's credit facility and for general corporate
purposes.
In March 1997, TGP closed the sale of $300 million aggregate principal of
7 1/2% debentures due 2017, $300 million aggregate principal of 7% debentures
due 2027, and $300 million aggregate principal of 7 5/8% debentures due 2037.
Proceeds of approximately $883 million, net of issuance costs, were used to
repay a portion of EPTPC's credit facility and for general corporate purposes.
In October 1997, EPG established a new $750 million 5-year revolving credit
and competitive advance facility and a new $750 million 364-day renewable
revolving credit and competitive advance facility (collectively, the "Revolving
Credit Facility"). Initially, the interest rate on amounts outstanding under the
Revolving Credit Facility will be a 32.5 basis point spread over LIBOR and the
spread will vary based on EPG's long-term debt credit rating. This facility
replaced EPG's $750 million five-year revolving credit facility and $250 million
364-day revolving credit facility which were established in November 1996. In
connection with the establishment of the Revolving Credit Facility, EPTPC's
revolving credit facility was also terminated, and the outstanding balance of
$417 million was refinanced under the 5-year portion of the new Revolving Credit
Facility with TGP designated as the borrower. The remainder of the availability
under the Revolving Credit Facility is expected to be used for general corporate
purposes including, but not limited to, backstopping EPG's $1 billion commercial
paper program.
8
<PAGE> 11
4. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment at September 30, 1997, and December 31,
1996, consisted of the following:
<TABLE>
<CAPTION>
1997 1996
------ ------
(IN MILLIONS)
<S> <C> <C>
Property, plant, and equipment, at cost..................... $5,580 $5,474
Less accumulated depreciation and depletion................. 1,351 1,207
------ ------
4,229 4,267
Additional acquisition cost assigned to utility plant, net
of accumulated amortization............................... 2,471 1,671
------ ------
Total property, plant, and equipment, net......... $6,700 $5,938
====== ======
</TABLE>
The increase in additional acquisition cost assigned to plant is a result
of the Company's continuing efforts to evaluate the fair market value of the
assets and liabilities acquired in conjunction with the Merger (see Note 1).
5. INVENTORIES
Inventories at September 30, 1997, and December 31, 1996, consisted of the
following:
<TABLE>
<CAPTION>
1997 1996
---- ----
(IN MILLIONS)
<S> <C> <C>
Materials and supplies...................................... $48 $51
Gas in storage.............................................. 26 36
--- ---
$74 $87
=== ===
</TABLE>
Materials and supplies and gas in storage are valued at the lower of cost
or market, with cost determined using the average cost method.
6. MINORITY INTEREST
At the end of the second quarter, the Company acquired for $26 million a 50
percent legal interest and controlling voting interest in a company that owns
and operates a 70 MW power plant located in Dunaujvaros, Hungary. During the
third quarter the Company began consolidating this investment. Accordingly, the
assets and liabilities of the acquired company are reflected in the Consolidated
Balance Sheets, while the equity not owned by the Company is included in other
minority interest in the Consolidated Balance Sheets. Revenues and expenses of
the acquired company are reflected in the Consolidated Statement of Income.
Contractually, the Company is entitled to receive 100 percent of the income of
the acquired company, and the other equity owners are income participants only
to the extent they receive reduced electricity rates; therefore, no minority
interest is presented in the Consolidated Statements of Income.
7. ACCOUNTING FOR REGULATED OPERATIONS
The Company's businesses that are subject to the regulations and accounting
requirements of FERC have followed the accounting requirements of SFAS No. 71,
Accounting for the Effects of Certain Types of Regulation, which may differ from
those accounting methods used by non-regulated entities. Changes in the
regulatory and economic environment may, at some point in the future, create
circumstances in which the application of regulatory accounting principles would
no longer be appropriate. During 1997, FERC approved TGP's GSR Stipulation and
Agreement and EPG's settlement (discussed previously in Rates and Regulatory
Matters of Note 2). The Company is currently evaluating the impact the FERC
approvals and the current economic environment may have on the continued
application of regulatory accounting principles. If the Company's regulated
businesses fail to qualify under these accounting principles, an amount would be
charged
9
<PAGE> 12
to earnings as an extraordinary item in accordance with SFAS No. 101, Regulated
Enterprises -- Accounting for Discontinuation of Application of SFAS No. 71. At
September 30, 1997, this amount was estimated to be approximately $58 million,
net of income taxes. Any potential charge would be non-cash and would not
directly effect the regulated companies' ability to seek recovery of the
underlying deferred costs in their future rate proceedings or their ability to
collect the rates set thereby.
8. RECENT PRONOUNCEMENTS
Earnings Per Share
In March 1997, the Financial Accounting Standards Board issued SFAS No.
128, Earnings Per Share, which establishes new guidelines for calculating
earnings per share. The pronouncement is effective for reporting periods ending
after December 15, 1997, with earlier application not permitted. SFAS No. 128
will require companies to present both a basic and diluted earnings per share
amount on the face of the statement of income and to restate prior period
earnings per share amounts. Pro forma basic and diluted earnings per share
amounts calculated in accordance with SFAS No. 128 are presented below for the
nine months and quarters ended September 30, 1997 and 1996.
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------------------- ---------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
BASIC DILUTED BASIC DILUTED BASIC DILUTED BASIC DILUTED
----- ------- ----- ------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(In millions, except per common
share amounts)
Net income......................... $ 44 $ 44 $ 25 $ 25 $ 135 $ 135 $ 14 $ 14
===== ===== ===== ===== ===== ===== ===== =====
Average common shares
outstanding...................... 57.4 57.4 35.3 35.3 56.8 56.8 35.0 35.0
Effect of dilutive securities
Restricted stock......... -- .5 -- 1.0 -- .5 -- .7
Stock options............ -- 1.0 -- -- -- 1.0 -- --
----- ----- ----- ----- ----- ----- ----- -----
Adjusted average common shares
outstanding...................... 57.4 58.9 35.3 36.3 56.8 58.3 35.0 35.7
===== ===== ===== ===== ===== ===== ===== =====
Earnings per common share.......... $ .77 $ .75 $ .70 $ .68 $2.37 $2.31 $ .40 $ .39
===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
Capital Structure
In March 1997, the Financial Accounting Standards Board issued SFAS No.
129, Disclosure of Information about Capital Structure, which consolidates
capital structure reporting requirements previously required by other accounting
standards. This pronouncement, which will become effective for reporting periods
ending after December 15, 1997, will have no impact on the Company's disclosure
of capital structure information.
Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income, which establishes standards for reporting and
display of comprehensive income and its components in a full set of
general-purpose financial statements. SFAS No. 130 requires that all items that
are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. This pronouncement is
effective for fiscal years beginning after December 15, 1997. The Company is
currently evaluating the impact of this pronouncement.
Segment Reporting
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information, which
establishes the way that public business enterprises report information about
operating segments in annual and interim financial statements issued to
10
<PAGE> 13
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. This pronouncement
is effective for financial statements for periods beginning after December 15,
1997. The Company is currently evaluating the impact of this pronouncement.
Derivative Disclosure
In February 1997, the Securities and Exchange Commission issued Financial
Reporting Release No. 48, Disclosure of Derivative and Other Financial
Instruments, which requires enhanced disclosure related to accounting policies
for derivatives and quantitative and qualitative disclosure concerning market
risk inherent in derivatives and other financial instruments.
The effective date for the enhanced accounting policy disclosure
requirements is for fiscal periods ending after June 15, 1997 (see Note 1).
Requirements for quantitative and qualitative disclosures about market risks are
effective for the Company for December 31, 1997. The Company is currently
evaluating the impact of this pronouncement.
Other
The Company adopted SFAS No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities, SFAS No. 127, Deferral of
the Effective Date of Certain Provisions of FASB Statement No. 125, and
Statement of Position No. 96-1, Environmental Remediation Liabilities, effective
January 1, 1997. The adoption of these pronouncements did not have a material
impact on the Company's financial position or results of operations.
11
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information contained in Item 2 updates, and should be read in
conjunction with, information set forth in Part II, Items 7 and 8, in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, in
addition to the interim consolidated financial statements and accompanying notes
presented in Item 1 of this Form 10-Q.
RESULTS OF OPERATIONS
NATURAL GAS TRANSMISSION
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
Operating revenues................................. $316 $130 $975 $384
Operating expenses................................. 185 73 560 230
---- ---- ---- ----
Operating income................................... $131 $ 57 $415 $154
==== ==== ==== ====
</TABLE>
Third Quarter 1997 Compared to Third Quarter 1996
Operating revenues for the quarter ended September 30, 1997, were $186
million higher than for the same period of 1996 primarily due to the acquisition
of EPTPC.
Operating expenses for the quarter ended September 30, 1997, were $112
million higher than for the same period of 1996 primarily due to the acquisition
of EPTPC. This increase in operating expenses was partially offset by lower
labor costs, benefit costs, and payroll taxes in 1997 which resulted from a
reduction in staffing levels during 1996.
Nine Months Ended 1997 Compared with Nine Months Ended 1996
Operating revenues for the nine months ended September 30, 1997, were $591
million higher than for the same period of 1996 primarily due to the acquisition
of EPTPC.
Operating expenses for the nine months ended September 30, 1997, were $330
million higher than for the same period of 1996 primarily due to the acquisition
of EPTPC. This increase in operating expenses was partially offset by lower
labor costs, benefit costs, and payroll taxes in 1997 which resulted from a
reduction in staffing levels during 1996.
FIELD AND MERCHANT SERVICES
<TABLE>
<CAPTION>
THIRD QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
Gathering and treating margin....................... $29 $18 $ 89 $ 55
Processing margin................................... 10 13 42 30
Marketing margin.................................... 14 12 6 42
Other............................................... 2 (2) 5 1
--- --- ---- ----
Total gross margin........................ 55 41 142 128
Operating expenses.................................. 42 30 124 85
--- --- ---- ----
Operating income.................................... $13 $11 $ 18 $ 43
=== === ==== ====
</TABLE>
12
<PAGE> 15
Third Quarter 1997 Compared to Third Quarter 1996
Total gross margin (revenue less cost of sales) for the quarter ended
September 30, 1997, was $14 million higher than for the same period of 1996. The
increase was primarily the result of higher San Juan Basin gathering and
treating volumes and rates as well as the EPTPC acquisition.
Operating expenses for the quarter ended September 30, 1997, were $12
million higher than for the same period of 1996 primarily due to the acquisition
of EPTPC.
Nine Months Ended 1997 Compared with Nine Months Ended 1996
Total gross margin for the nine months ended September 30, 1997, was $14
million higher than for the same period of 1996. The increases experienced in
the gathering and treating margin and the processing margin were primarily the
result of higher natural gas prices in the San Juan Basin, slightly higher NGL
prices, an increase in gathering and treating volumes due to the acquisitions of
Cornerstone and EPTPC, and an increase in NGLs attributable to the Chaco
cryogenic plant, which began processing in the second quarter of 1996. Partially
offsetting the increase in total gross margin was a decrease in the marketing
margin resulting from generally lower industry-wide gas marketing margins in the
second quarter of 1997, as well as extreme market volatility which negatively
impacted natural gas marketing activities and trading positions during the first
quarter of 1997.
Operating expenses for the nine months ended September 30, 1997, were $39
million higher than for the same period of 1996 primarily due to the
acquisitions of Cornerstone and EPTPC.
CORPORATE AND OTHER
The operating loss for the quarter ended September 30, 1997, was $21
million higher than for the same period of 1996 due to costs related to
discontinued operations assumed as part of the EPTPC acquisition, additional
development expenses related to the Company's expanding international
operations, severance and relocation costs, and the cost of certain employee
equity incentive plans.
The operating loss for the nine months ended September 30, 1997, was $54
million less than for the same period in 1996. The decrease was primarily the
result of the $99 million employee separation and asset impairment charge
recorded in March 1996. The decrease was partially offset by additional costs
related to the discontinued operations assumed as part of the EPTPC acquisition,
development expenses related to the Company's expanding international
operations, severance and relocation costs, and the cost of certain employee
equity incentive plans.
OTHER INCOME AND EXPENSE
Third Quarter 1997 Compared to Third Quarter 1996
Interest and debt expense for the quarter ended September 30, 1997, was $33
million higher than for the same period of 1996 due primarily to the debt
assumed in connection with the acquisition of EPTPC and the Company's debt and
capital realignment efforts.
Other income for the quarter ended September 30, 1997, was $20 million
higher than for the same period of 1996 primarily due to an increase in equity
and other income resulting from the acquisition of EPTPC and the Company's
expanding international activities.
Nine Months Ended 1997 Compared to Nine Months Ended 1996
Interest and debt expense for the nine months ended September 30, 1997, was
$106 million higher than for the same period of 1996 due primarily to the debt
assumed in connection with the acquisition of EPTPC and the Company's debt and
capital realignment efforts.
13
<PAGE> 16
Other income for the nine months ended September 30, 1997, was $43 million
higher than for the same period of 1996 primarily due to an increase in equity
and other income resulting from the acquisition of EPTPC and the Company's
expanding international activities.
LIQUIDITY AND CAPITAL RESOURCES
Cash From Operating Activities
Net cash provided by operating activities was $200 million higher for the
nine months ended September 30, 1997, compared to the same period of 1996. This
increase was primarily a result of the acquisition of EPTPC, an income tax
refund in 1997, and prepayments from EPG's customers for risk-sharing revenues.
The increase was partially offset by higher interest payments resulting from
debt assumed in the acquisition of EPTPC, dividends on EPTPC's Series A
Preferred Stock, a rate refund to TGP's customers paid in March 1997, and a rate
refund to EPG's customers paid in August 1997.
Cash From Investing Activities
Net cash used in investing activities was $101 million higher for the nine
months ended September 30, 1997, compared to the same period of 1996. The
increase was attributable to higher expenditures for joint ventures and equity
investments, capital expenditures, and the purchase of an annuity in the third
quarter of 1997 to be used to fund the monthly demand requirement of a long-term
gas supply contract. Expenditures related to joint ventures and equity
investments were primarily attributed to the Company's international operations.
The increase in capital expenditures was related to construction activities on
EPTPC's pipeline systems. Offsetting the increase was the June 1996 acquisition
of Cornerstone and the collection of a $53 million note receivable for the
Company's partnership in a 103 MW cogeneration plant near Bartow, Florida.
Future funding for capital expenditures, acquisitions, and other investing
expenditures is expected to be provided by internally generated funds, available
capacity under existing credit facilities, and/or the issuance of other
long-term debt or equity.
Cash From Financing Activities
Net cash used in financing activities was $213 million higher for the nine
months ended September 30, 1997, compared to the same period of 1996 due in
large part to the Company's efforts to realign its debt and capital structure
following the EPTPC acquisition, specifically, increased credit facility
repayments. Funds used to repay the credit facility were provided by internally
generated cash flows, the net proceeds of $883 million received from the sale of
long-term debt, and the net proceeds of $152 million from the sale of an
additional 3 million shares of common stock. Also contributing to the change
were the retirement of EPG's 6.90% notes in January 1997, increased common stock
dividends, a reduction in revolving credit borrowings, and an increase in
commercial paper proceeds.
During the third quarter of 1997, the Company issued additional commercial
paper for general corporate purposes of $42 million, with $113 million
outstanding at September 30, 1997.
The following table reflects quarterly dividends declared and paid on EPG's
common stock:
<TABLE>
<CAPTION>
AMOUNT PER
DECLARATION DATE COMMON SHARE PAYMENT DATE TOTAL AMOUNT
---------------- ------------ ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
October 11, 1996....................... 0$.3475 January 2, 1997 $ 13
January 22, 1997....................... 0$.3650 April 1, 1997 $ 22
April 23, 1997......................... 0$.3650 July 1, 1997 $ 22
July 18, 1997.......................... 0$.3650 October 1, 1997 $ 22
</TABLE>
On October 22, 1997, the Board declared a quarterly dividend of $.3650 per
share on EPG's common stock, payable on January 2, 1998, to stockholders of
record on December 5, 1997.
14
<PAGE> 17
At September 30, 1997, the Company had $1 billion available under its then
existing revolving credit facilities. In October 1997, EPG established a new
$750 million 5-year revolving credit and competitive advance facility and a new
$750 million 364-day renewable revolving credit and competitive advance facility
(collectively, the "Revolving Credit Facility"). Initially, the interest rate
will be a 32.5 basis point spread over LIBOR and the spread will vary based on
EPG's long-term credit rating. This facility replaced EPG's $750 million
five-year revolving credit facility and $250 million 364-day revolving credit
facility which were established in November 1996. In connection with the
establishment of the Revolving Credit Facility, EPTPC's revolving credit
facility was also terminated, and the outstanding balance of $417 million was
financed under the 5-year portion of the new Revolving Credit Facility with TGP
designated as the borrower. The remainder of the availability under the
Revolving Credit Facility is expected to be used for general corporate purposes
including, but not limited to, backstopping EPG's $1 billion commercial paper
program. The availability of borrowings under the Company's credit facilities is
subject to certain specified conditions, which management believes it currently
meets.
Future funding for long-term debt retirements, dividends, and other
financing expenditures are expected to be provided by internally generated
funds, commercial paper issuances, available credit facilities, and/or the
issuance of other long-term debt or equity.
COMMITMENTS AND CONTINGENCIES
Rates and Regulatory Matters
See Part I, Financial Information, Note 2, which is incorporated herein by
reference.
Legal Proceedings
See Part I, Financial Information, Note 2, which is incorporated herein by
reference.
Environmental Matters
See Part I, Financial Information, Note 2, which is incorporated herein by
reference.
OTHER
The Company intends to continue pursuing strategic acquisition and
investment opportunities. The timing, size, or success of any acquisition
effort, and the associated potential capital commitments, cannot be predicted.
The Company may fund future acquisitions and investments with internally
generated funds, available capacity under existing credit facilities, and/or the
issuance of other long-term debt or equity.
Acquisitions
PacifiCorp. In October 1997, the Company announced a significant expansion
of its offshore Gulf of Mexico gathering and processing activities through the
acquisition of 100 percent of the stock of PacifiCorp's Texas Gulf Coast
gathering and processing subsidiaries at a cash price of $195 million. These
systems include gathering facilities consisting of 360 miles of pipeline and a
cryogenic gas processing plant with current throughput of 550 and 250 MMcf/d,
respectively. The transaction is expected to close in late November 1997.
Gulf States Gas Pipeline Company. In October 1997, the Company completed
the acquisition of Gulf States Gas Pipeline Company. The assets purchased
include a 175-mile gathering and intrastate transmission system in Northwest
Louisiana with a capacity of 250 MMcf/d and a 10-mile interstate pipeline in
Texas with the ability to transport up to 75 MMcf/d from a processing plant in
East Texas to the Louisiana intrastate pipeline. Current transported volumes
through the systems are 105 MMcf/d. The purchase price was approximately $39
million which included the issuance of $21 million of common stock.
15
<PAGE> 18
Ongoing and Future Investment and Capital Projects
Significant events during the first nine months of 1997 impacting the
Company's development projects are discussed below.
International Operations
Australia Project. The Company's 30 percent owned Australian joint venture
was selected to construct the 270 mile expansion project on the Dampier to
Bunburry natural gas pipeline in Western Australia at an estimated cost of $250
million. The joint venture is evaluating project financing options and
anticipates completion of financing in early 1998. The expansion project is
expected to be operational in the third quarter of 1999.
Czech Republic Project. As of June 1997, the Company acquired a 31.2
percent interest in a $401 million project to expand to 343 MW, an existing gas
and coal-fired power plant located in Kladno, Czech Republic. Project financing
was finalized in June 1997 for approximately $300 million of the $401 million
expansion cost.
Mexico Project. During the second quarter, both FERC and the Comision
Reguladora de Energia of Mexico issued permits allowing construction, operation
and maintenance of the 45 mile pipeline expansion which connects EPG's existing
pipeline system in west Texas to Pemex's pipeline system in northern Mexico.
Construction began in the third quarter of 1997 with completion expected by
December 1997.
Hungary Project. The Company's $26 million acquisition of a 50 percent
interest in an operating 70 MW power plant located in Dunaujvaros, Hungary,
closed in the second quarter of 1997. The acquisition did not involve any
financing.
CAPSA. In August 1997, the Company exercised an option to acquire an
additional 4 percent interest bringing its total ownership and investment up to
33 percent and $179 million, respectively. The assets of CAPSA include an
interest in CAPEX, a company publicly traded on the Argentine and Luxembourg
stock exchanges which owns certain power plants and gas and oil reserves in
Argentina.
Aguaytia Project. During the first quarter of 1997, the Aguaytia project
consortium completed loan negotiations with the Inter-American Development Bank
which reduced the project equity requirements from 60 percent to approximately
40 percent. The Company's current interest in the $272 million project is
approximately 23 percent.
Manaus Project. In August 1997, the Company was selected to construct three
power generation plants totalling 240 MW of capacity in the City of Manaus, the
capital city of the State of Amazonas, Brazil. The projects will supply electric
power to the City of Manaus under a four year contract. Project costs are
anticipated to total $100 million, and the Company plans to finance the project
in early 1998. The Company and CAPEX of Argentina are equal partners in the
project.
Sulawesi Project. The Sengkang Power Plant began single cycle commercial
operations in September 1997, making it the first independent power plant to
operate in Indonesia. The plant has passed all performance and commissioning
tests and is dispatching at a 100 percent load factor. Combined cycle completion
is expected in the third quarter of 1998.
Natural Gas Transmission Operations
Portland. TGP owns a 17.8 percent interest in Portland Natural Gas
Transmission System ("Portland"), a partnership formed to construct and own a
292-mile interstate natural gas pipeline that will extend from the Canadian
border in the town of Pittsburg, New Hampshire to Westbrook, Maine and then to
Haverhill and Dracut, Massachusetts. Portland will link the growing gas markets
of the northeastern United States to the abundant gas supplies of western
Canada. Portland received its FERC certificate in September 1997, and is now
awaiting the approval of Canada's National Energy Board, expected in February
1998, for the extension of the TransQuebec & Maritimes Pipeline, which will
connect Portland with the TransCanada system. Targeted completion date for
Portland is November 1998, at an estimated total cost
16
<PAGE> 19
of $366 million. Portland is in the process of securing non-recourse debt
financing, with an expected February 1998 financial closing.
Eastern Express Project. TGP has announced that it is pursuing various
market and expansion opportunities in the northeast and mid-Atlantic regions of
the United States. TGP held an open season, which concluded in June 1997, to
gauge interest in the TGP Eastern Express Project designed to provide service to
these markets in 1999. TGP is pursuing discussions with customers that
participated in the open season to determine if their needs can be met by TGP.
The Company also announced a second phase of the Eastern Express Project to meet
the needs of shippers that expressed interest in alternate markets and/or
service commencing in the year 2000.
Express 500 Expansion Project. The Express 500 project is designed to meet
the growing needs of the Gulf of Mexico producers caused by significant
increases in deepwater production, and will provide a firm transportation
solution to existing and projected bottlenecks in the Gulf of Mexico supply
basin. TGP is soliciting shipper interest in an open season that will end
December 31, 1997. Service under Express 500 is scheduled to commence as early
as November 1999.
DOMAC Lateral Project. TGP proposes to construct a meter station and
pipeline extension from DOMAC's liquefied natural gas plant in Everett,
Massachusetts to a point on TGP's existing Revere Lateral in Saugus,
Massachusetts. TGP will transport up to 90,000 decatherms per day from the
liquefied natural gas plant to customers on the TGP system. The estimated total
cost of the proposed facilities is $26 million.
TransColorado. In late June 1997, EPG and its partners in the TransColorado
Pipeline Project ("TransColorado") announced a restructured partnership
arrangement for the project. Formerly, TransColorado was an equal one-third
partnership among affiliates of EPG, Questar Corporation and KN Energy, Inc.
Under the new arrangement, the affiliates of Questar Corporation and KN Energy,
Inc. will each retain a 50 percent interest in TransColorado, and EPG, while no
longer a partner, will continue as the operator and a revenue participant in the
constructed facilities of Phase I which includes 25 miles of pipe from the
discharge of Coyote Gulch Gas Plant to EPG's pipeline at Blanco, New Mexico.
EPG's participation in the project under the new arrangement will cease upon the
completion of the additional Phase II facilities.
Field and Merchant Services Operations
San Juan Global Compression Project. In June 1997, the Company entered into
contracts with three of its major natural gas producers in the San Juan Basin,
providing for new global compression services to reduce field delivery pressures
and increase production by an estimated 130 MMcf/d. The project will cost
approximately $50 million and includes the installation of approximately 36,000
horsepower of new field compression and construction of an additional 56 miles
of pipeline system. The project is expected to be in service by October 1998.
Viosca Knoll. During the second quarter of 1997, Viosca Knoll Gathering
Company, the Company's fifty-fifty joint venture with a subsidiary of Leviathan
Gas Pipeline Partners, L.P., announced its intent to construct, at an estimated
cost of $25 million, additional facilities to accommodate incremental capacity
requirements on its system, including a new 25-mile, 20-inch diameter pipeline
from Main Pass Block 261 to Viosca Knoll Block 817. Construction is expected to
be completed by the fourth quarter of 1997.
Berkshire Power Company, LLC. The Company entered into a joint development
agreement with Power Development, Inc. to develop a natural gas-fired combined
cycle electric generation facility in Agawam, Massachusetts. The facility will
have a nominal capacity of approximately 272 MWs. Construction of the $200
million facility is expected to begin in December 1997 and the facility is
scheduled to be operational in October 1999. The Company may invest up to $50
million representing a 100 percent equity interest in the project. The Company
will be responsible for the procurement and transportation of supplies of
natural gas to fuel the project and the marketing of electric power produced by
the project.
17
<PAGE> 20
Purchase Price Allocation
The Company has substantially completed its evaluation and allocation, and
believes that the final adjustments to the purchase price allocation will not
have a material impact on the Company's financial position or results of
operations. For a further discussion, see Part I, Financial Information, Note 1,
Note 2, and Note 4, which are incorporated herein by reference.
Accounting for Regulated Operations
The Company's interstate pipelines are subject to the regulations and
accounting procedures of FERC. The Company follows the reporting and accounting
requirements of SFAS No. 71, Accounting for the Effects of Certain Types of
Regulation for its interstate pipeline operations. For a further discussion, see
Part I, Financial Information, Note 7, which is incorporated herein by
reference.
Recent Pronouncements
See Part I, Financial Information, Note 8, which is incorporated herein by
reference.
18
<PAGE> 21
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Where any such forward-looking
statement includes a statement of the assumptions or bases underlying such
forward-looking statement, the Company cautions that, while such assumptions or
bases are believed to be reasonable and are made in good faith, assumed facts or
bases almost always vary from the actual results, and the differences between
assumed facts or bases and actual results can be material, depending upon the
circumstances. Where, in any forward-looking statement, the Company or its
management expresses an expectation or belief as to future results, such
expectation or belief is expressed in good faith and is believed to have a
reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished. The words
"believe," "expect," "estimate," "anticipate" and similar expressions may
identify forward-looking statements.
Important factors that could cause actual results to differ materially from
those in the forward-looking statements herein include increasing competition
within the Company's industry, the timing and extent of changes in commodity
prices for natural gas, uncertainties associated with acquisitions and joint
ventures, potential environmental liabilities, potential contingent liabilities
and tax liabilities related to the Merger, political and economic risks
associated with current and future operations in foreign countries, conditions
of the equity and other capital markets during the periods covered by the
forward-looking statements, and other risks, uncertainties and factors discussed
more completely in the Company's other filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year ended December
31, 1996.
19
<PAGE> 22
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Part I, Financial Information, Note 2, which is incorporated herein by
reference.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None.
ITEM 5. OTHER INFORMATION
On October 22, 1997, Eugenio Garza Laguera, 73, retired as a member of the
board of directors. Mr. Laguera had served since 1993 as a board member and as a
member of the audit committee. Also, on October 22, 1997, Juan Carlos Braniff
was elected to replace Mr. Laguera as a board member and a member of the audit
committee.
ITEM. 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Each exhibit identified below is filed as a part of this report.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.B -- By-laws of EPG, as amended October 22, 1997.
10.E -- $750 million 364-Day Revolving Credit and Competitive
Advance Facility Agreement dated as of October 29, 1997
between EPG, The Chase Manhattan Bank, Citibank, N.A.,
Morgan Guaranty Trust Company of New York, and certain
other banks.
10.F -- $750 million 5-Year Revolving Credit and Competitive
Advance Facility Agreement dated as of October 29, 1997
between EPG, The Chase Manhattan Bank, Citibank, N.A.,
Morgan Guaranty Trust Company of New York, and certain
other banks.
11 -- Computation of Earnings per Common Share.
27 -- Financial Data Schedule.
</TABLE>
Undertaking
The undersigned, EPG, hereby undertakes, pursuant to Regulation S-K,
Item 601(b), paragraph (4)(iii), to furnish to the Securities and Exchange
Commission upon request all constituent instruments defining the rights of
holders of long-term debt of EPG and its consolidated subsidiaries not
filed herewith for the reason that the total amount of securities
authorized under any of such instruments does not exceed 10 percent of the
total consolidated assets of EPG and its consolidated subsidiaries.
b. Reports on Form 8-K
On August 29, 1997, EPG filed a report under Item 5 and Item 7 on Form 8-K,
dated August 29, 1997, with respect to the Merger Agreement among the Company,
Gulf States Acquisition Company, Gulf States Gas Pipeline Company, and certain
shareholders of Gulf States Gas Pipeline Company.
20
<PAGE> 23
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.
EL PASO NATURAL GAS COMPANY
Date: November 13, 1997 /s/ H. BRENT AUSTIN
------------------------------------
H. Brent Austin
Executive Vice President and
Chief Financial Officer
Date: November 13, 1997 /s/ JEFFREY I. BEASON
------------------------------------
Jeffrey I. Beason
Vice President and Controller
(Chief Accounting Officer)
21
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.B -- By-laws of EPG, as amended October 22, 1997.
10.E -- $750 million 364-Day Revolving Credit and Competitive
Advance Facility Agreement dated as of October 29, 1997
between EPG, The Chase Manhattan Bank, Citibank, N.A.,
Morgan Guaranty Trust Company of New York, and certain
other banks.
10.F -- $750 million 5-Year Revolving Credit and Competitive
Advance Facility Agreement dated as of October 29, 1997
between EPG, The Chase Manhattan Bank, Citibank, N.A.,
Morgan Guaranty Trust Company of New York, and certain
other banks.
11 -- Computation of Earnings per Common Share.
27 -- Financial Data Schedule.
</TABLE>
<PAGE> 1
EXHIBIT 3.B
BY-LAWS
OF
EL PASO NATURAL GAS COMPANY
As amended October 22, 1997
<PAGE> 2
<TABLE>
<CAPTION>
BY-LAWS
OF
EL PASO NATURAL GAS COMPANY
TABLE OF CONTENTS
<S> <C>
Page
ARTICLE I. OFFICES..........................................................................................1
Section 1 - Registered Office and Agent........................................................1
Section 2 - Other Offices......................................................................1
ARTICLE II. STOCKHOLDERS....................................................................................1
Section 1 - Annual Meetings....................................................................1
Section 2 - Special Meetings...................................................................1
Section 3 - Place of Meetings..................................................................2
Section 4 - Notice of Meetings.................................................................2
Section 5 - Fixing of Record Date for Determining Stockholders.................................2
Section 6 - Quorum.............................................................................3
Section 7 - Organization.......................................................................3
Section 8 - Voting.............................................................................4
Section 9 - Inspectors.........................................................................5
Section 10 - List of Stockholders...............................................................5
Section 11 - Stockholder Proposals..............................................................5
ARTICLE III. BOARD OF DIRECTORS.............................................................................6
Section 1 - Number, Qualification and Term of Office...........................................6
Section 2 - Vacancies..........................................................................6
Section 3 - Nominations of Directors...........................................................7
Section 4 - Resignations.......................................................................8
Section 5 - Removals...........................................................................8
Section 6 - Place of Meetings; Books and Records...............................................8
Section 7 - Annual Meeting of the Board........................................................8
Section 8 - Regular Meetings...................................................................9
Section 9 - Special Meetings...................................................................9
Section 10 - Quorum and Manner of Acting........................................................9
Section 11 - Organization.......................................................................9
Section 12 - Consent of Directors in Lieu of Meeting...........................................10
Section 13 - Telephonic Meetings...............................................................10
Section 14 - Compensation......................................................................10
Section 15 - Interested Directors..............................................................10
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV. COMMITTEES OF THE BOARD OF DIRECTORS...........................................................11
Section 1 - Executive Committee...............................................................11
Section 2 - Finance Committee.................................................................11
Section 3 - Audit Committee...................................................................11
Section 4 - Compensation Committee............................................................12
Section 5 - Committee Chairman, Books and Records.............................................12
Section 6 - Alternates........................................................................12
Section 7 - Other Committees..................................................................12
Section 8 - Quorum and Manner of Acting.......................................................13
ARTICLE V. OFFICERS........................................................................................13
Section 1 - Number............................................................................13
Section 2 - Election..........................................................................13
Section 3 - Resignations......................................................................13
Section 4 - Removals..........................................................................14
Section 5 - Vacancies.........................................................................14
Section 6 - Chairman of the Board.............................................................14
Section 7 - Chief Executive Officer...........................................................16
Section 8 - President.........................................................................16
Section 9 - Vice Chairman of the Board........................................................16
Section 10 - Chief Operating Officer...........................................................17
Section 11 - Chief Financial Officer...........................................................17
Section 12 - Vice Presidents...................................................................17
Section 13 - General Counsel...................................................................18
Section 14 - Secretary.........................................................................18
Section 15 - Treasurer.........................................................................18
Section 16 - Controller........................................................................19
Section 17 - Absence or Disability of Officers.................................................19
ARTICLE VI. STOCK CERTIFICATES AND TRANSFER THEREOF........................................................19
Section 1 - Stock Certificates................................................................19
Section 2 - Transfer of Stock.................................................................19
Section 3 - Transfer Agents and Registrars....................................................20
Section 4 - Additional Regulations............................................................20
Section 5 - Lost, Stolen or Destroyed Certificates............................................20
ARTICLE VII. DIVIDENDS, SURPLUS, ETC.......................................................................20
ARTICLE VIII. SEAL.........................................................................................20
ARTICLE IX. FISCAL YEAR....................................................................................21
ARTICLE X. INDEMNIFICATION.................................................................................21
Section 1 - Right to Indemnification..........................................................21
Section 2 - Right of Indemnitee to Bring Suit.................................................22
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 3 - Nonexclusivity of Rights..........................................................22
Section 4 - Insurance, Contracts and Funding..................................................22
Section 5 - Wholly Owned Subsidiaries.........................................................23
Section 6 - Indemnification of Agents of the Corporation......................................23
ARTICLE XI. CHECKS, DRAFTS, BANK ACCOUNTS, ETC.............................................................23
Section 1 - Checks, Drafts, Etc.; Loans.......................................................23
Section 2 - Deposits..........................................................................23
ARTICLE XII. AMENDMENTS....................................................................................23
ARTICLE XIII. MISCELLANEOUS................................................................................24
</TABLE>
iii
<PAGE> 5
BY-LAWS
OF
EL PASO NATURAL GAS COMPANY
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE AND AGENT
The registered office of the corporation is located at Corporation Trust
Center, 1209 Orange Street in the City of Wilmington, County of New Castle,
State of Delaware, and the name of its registered agent at such address is The
Corporation Trust Company.
SECTION 2. OTHER OFFICES
The corporation may have offices at such other places both within and
without the State of Delaware as the Board of Directors (the "Board") may from
time to time determine or the business of the corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS
A meeting of the stockholders for the purpose of electing Directors and for
the transaction of such other business as may properly be brought before the
meeting shall be held annually at 9:00 o'clock A.M. on the third Thursday of
April, or at such other time on such other date as shall be fixed by resolution
of the Board. If the day fixed for the annual meeting shall be a legal holiday
such meeting shall be held on the next succeeding business day.
SECTION 2. SPECIAL MEETINGS
Special meetings of the stockholders for any purpose or purposes may be
called only by a majority of the Board, the Chairman of the Board, the Chief
Executive Officer, the President or the Vice Chairman of the Board.
<PAGE> 6
SECTION 3. PLACE OF MEETINGS
The annual meeting of the stockholders of the corporation shall be held at
the general offices of the corporation in the City of Houston, State of Texas,
or at such other place in the United States as may be stated in the notice of
the meeting. All other meetings of the stockholders shall be held at such places
within or without the State of Delaware as shall be stated in the notice of the
meeting.
SECTION 4. NOTICE OF MEETINGS
4.1 GIVING OF NOTICE. Except as otherwise provided by statute, written
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder entitled to vote at such meeting. If mailed, notice shall be
given when deposited in the United States mails, postage prepaid, directed to
such stockholder at his address as it appears in the stock ledger of the
corporation. Each such notice shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called.
4.2 NOTICE OF ADJOURNED MEETINGS. When a meeting is adjourned to another
time and place, notice of the adjourned meeting need not be given if the time
and place thereof are announced at the meeting at which the adjournment is
given. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
4.3 WAIVER OF NOTICE
4.3.1 Whenever any notice is required to be given to any stockholder under
the provisions of these By-laws, the Restated Certificate of Incorporation or
the general Corporation Law of the State of Delaware, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
4.3.2 The attendance of a stockholder at a meeting shall constitute a
waiver of notice of such meeting, except when a stockholder attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 5. FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
5.1 MEETINGS. For the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board, and
which record date shall not be more than sixty nor less than ten days before the
date of such meeting. If no record date is fixed by the Board, the record date
for determining stockholders shall be at the close of business on the day next
preceding the day on
2
<PAGE> 7
which notice is given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at the meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board may fix a new record date for the adjourned meeting.
5.2 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS. For the purpose of
determining stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to exercise
any rights in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty days
prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
SECTION 6. QUORUM
A majority of the outstanding shares of stock of the corporation entitled
to vote, present in person or represented by proxy, shall constitute a quorum at
a meeting of the stockholders; provided that where a separate vote by a class or
classes or by a series of a class is required, a majority of the outstanding
shares of such class or classes or of such series of a class, present in person
or represented by proxy at the meeting, shall constitute a quorum entitled to
take action with respect to the vote on that matter. Shares of stock will be
counted toward a quorum if they are either (i) present in person at the meeting
or (ii) represented at the meeting by a valid proxy, whether the instrument
granting such proxy is marked as casting a vote or abstaining, is left blank or
does not empower such proxy to vote with respect to some or all matters to be
voted upon at the meeting. If less than a majority of the outstanding shares
entitled to vote are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. If
a quorum is present or represented at a reconvened meeting following such an
adjournment, any business may be transacted that might have been transacted at
the meeting as originally called. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
SECTION 7. ORGANIZATION
At each meeting of the stockholders, the Chairman of the Board, or in his
absence the Chief Executive Officer, the President or the Vice Chairman of the
Board, or if all of the said officers are absent, a person designated by the
Board, the Chairman of the Board, the Chief Executive Officer, the President or
the Vice Chairman of the Board, or in the absence of such designated person, a
person elected by the holders of a majority in number of shares of stock present
in person or represented by proxy and entitled to vote, shall act as chairman of
the meeting.
The Secretary, or in his absence or in the event he shall be presiding over
the meeting in accordance with the provisions of this Section, an Assistant
Secretary or, in the absence of the
3
<PAGE> 8
Secretary and all of the Assistant Secretaries, any person appointed by the
chairman of the meeting, shall act as secretary of the meeting.
SECTION 8. VOTING
8.1 GENERAL PROVISIONS. Unless otherwise provided in the Restated
Certificate of Incorporation or a resolution of the Board creating a series of
stock, at each meeting of the stockholders, each holder of any share of any
series or class of stock entitled to vote at such meeting shall be entitled to
one vote for each share of stock having voting power in respect of each matter
upon which a vote is to be taken, standing in his name on the stock ledger of
the corporation on the record date fixed as provided in these By-laws for
determining the stockholders entitled to vote at such meeting. In all matters
other than the election of Directors, if a quorum is present, the affirmative
vote of the majority of the shares present in person or represented by proxy at
the meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the vote of a greater number is required by these By-laws,
the Restated Certificate of Incorporation or the General Corporation Law of the
State of Delaware. In determining the number of votes cast for or against a
proposal, shares abstaining from voting on a matter (including elections) will
not be treated as a vote for or against the proposal. A non-vote by a broker
will be treated as if the broker never voted, but a non-vote by a stockholder
will be counted as a vote "for" the management's position. Where a separate vote
by a class or classes or by a series of a class is required, if a quorum is
present, the affirmative vote of the majority of shares of such class or classes
or series of a class present in person or represented by proxy at the meeting
shall be the act of such class or classes or series of a class. The provisions
of this Section will govern with respect to all votes of stockholders except as
otherwise provided for in these By-laws, the Restated Certificate of
Incorporation or the General Corporation Law of the State of Delaware.
8.2 VOTING FOR DIRECTORS. At each election of Directors the voting shall be
by written ballot. Directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of Directors.
8.3 SHARES HELD OR CONTROLLED BY THE CORPORATION. Shares of its own capital
stock belonging to the corporation, or to another corporation if a majority of
the shares entitled to vote in the election of Directors of such other
corporation is held by the corporation, shall neither be entitled to vote nor
counted for quorum purposes.
8.4 PROXIES. A stockholder may vote by proxy executed in writing by the
stockholder or by his attorney-in-fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the meeting. A stockholder
may revoke any proxy which is not irrevocable by attending the meeting and
voting in person or by filing an instrument in writing revoking the proxy or
another duly executed proxy bearing a later date with the Secretary of the
corporation. A proxy shall become invalid three years after the date of its
execution, unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
4
<PAGE> 9
SECTION 9. INSPECTORS
Prior to each meeting of stockholders, the Board shall appoint at least one
Inspector who is not a Director, candidate for Director or officer of the
corporation, who shall receive and determine the validity of proxies and the
qualifications of voters, and receive, inspect, count and report to the meeting
in writing the votes cast on all matters submitted to a vote at such meeting. In
case of failure of the Board to make such appointments or in case of failure of
any Inspector so appointed to act, the Chairman of the Board shall make such
appointment or fill such vacancies. Each Inspector, immediately before entering
upon his duties, shall subscribe to an oath or affirmation faithfully to execute
the duties of Inspector at such meeting with strict impartiality and according
to the best of his ability.
SECTION 10. LIST OF STOCKHOLDERS
The Secretary or other officer or agent having charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
said meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares of each class and series registered in the
name of each such stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. Such list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. The stock ledger shall be the only evidence as to
who are the stockholders entitled to examine the stock ledger, the list required
by this section, or the books of the corporation, or to vote in person or by
proxy at any such meeting.
SECTION 11. STOCKHOLDER PROPOSALS
At an annual meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
properly brought before the annual meeting of stockholders (a) by, or at the
direction of, the Board or (b) by a stockholder of the corporation who complies
with the procedures set forth in this Section 11. For business or a proposal to
be properly brought before an annual meeting of stockholders by a stockholder,
the stockholder must have given timely notice thereof in writing to the
Secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 60 days nor more than 90 days prior to the scheduled
date of the annual meeting, regardless of any postponement, deferral or
adjournment of that meeting to a later date; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the annual
meeting is given or made to stockholders, notice by the stockholder to be timely
must be so delivered or received not later than the close of business on the
10th day following the earlier of (i) the day on which such notice of the date
of the meeting was mailed or (ii) the day on which such public disclosure was
made.
5
<PAGE> 10
A stockholder's notice to the Secretary shall set forth as to each matter
the stockholder proposes to bring before an annual meeting of stockholders (i) a
description, in 500 words or less, of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the corporation's books,
of the stockholders known by such stockholder to be supporting such proposal,
(iii) the class and number of shares of the corporation which are beneficially
owned by such stockholder on the date of such stockholder's notice and by any
other stockholders known by such stockholder to be supporting such proposal on
the date of such stockholder's notice, (iv) a description, in 500 words or less,
of any interest of the stockholder in such proposal, and (v) a representation
that the stockholder is a holder of record of stock of the corporation and
intends to appear in person or by proxy at the meeting to present the proposal
specified in the notice. Notwithstanding anything in these By-laws to the
contrary, no business shall be conducted at a meeting of stockholders except in
accordance with the procedures set forth in this Section 11.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that the business was not properly brought before the
meeting in accordance with the procedures prescribed by this Section 11, and if
he should so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted. Notwithstanding
the foregoing, nothing in this Section 11 shall be interpreted or construed to
require the inclusion of information about any such proposal in any proxy
statement distributed by, at the direction of, or on behalf of, the Board.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. NUMBER, QUALIFICATION AND TERM OF OFFICE
The business, property and affairs of the corporation shall be managed by a
Board consisting of not less than one Director. The Board shall from time to
time by a vote of a majority of the Directors then in office fix the specific
number of Directors to constitute the Board. At each annual meeting of
stockholders a Board shall be elected by the stockholders for a term of one
year. Each Director shall serve until his successor is duly elected and shall
qualify.
SECTION 2. VACANCIES
Vacancies in the Board and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a vote of the
majority of the Directors then in office, although less than a quorum, or by a
sole remaining Director, at any regular or special meeting of the Board.
6
<PAGE> 11
SECTION 3. NOMINATIONS OF DIRECTORS
Subject to the rights, if any, of the holders of any series of preferred
stock then outstanding, only persons nominated in accordance with the procedures
set forth in this Section 3 shall be eligible for election as Directors.
Nominations of persons for election to the Board may be made at an annual
meeting of stockholders or special meeting of stockholders called by the Board
for the purpose of electing Directors (i) by or at the direction of the Board or
(ii) by any stockholder of the corporation entitled to vote for the election of
Directors at such meeting who complies with the notice procedure set forth in
this Section 3. Such nominations, other than those made by or at the direction
of the Board, shall be made pursuant to timely notice in writing to the
Secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 60 days nor more than 90 days prior to the scheduled
date of the meeting, regardless of any postponement, deferral or adjournment of
that meeting to a later date; provided, however, that if less than 70 days'
notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so delivered or
received not later than the close of business on the 10th day following the
earlier of (i) the day on which such notice of the date of the meeting was
mailed or (ii) the day on which such public disclosure was made.
A stockholder's notice to the Secretary shall set forth (i) as to each
person whom the stockholder proposes to nominate for election or reelection as a
Director (a) the name, age, business address and residence address of such
person, (b) the principal occupation or employment of such person, (c) the class
and number of shares of the corporation which are beneficially owned by such
person on the date of such stockholder's notice and (d) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of Directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended, or any successor statute thereto (the "Exchange Act") (including
without limitation such person's written consent to being named in the proxy
statement as a nominee and to serving as a Director if elected); (ii) as to the
stockholder giving the notice (a) the name and address, as they appear on the
corporation's (or its agent's) books, of such stockholder and any other
stockholders known by such stockholder to be supporting such nominee(s), (b) the
class and number of shares of the corporation which are beneficially owned by
such stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such nominee(s) on the
date of such stockholder's notice (c) a representation that the stockholder is a
holder of record of stock of the corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; and (iii) a description of all
arrangements or understandings between the stockholder and each nominee and
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder.
No person shall be eligible for election as a Director of the corporation
unless nominated in accordance with the procedures set forth in this Section 3.
The chairman of the meeting shall, if the facts warrant, determine and declare
to the meeting that a nomination was not made in
7
<PAGE> 12
accordance with the procedures prescribed by this Section and if he should so
determine, he shall so declare to the meeting and the defective nomination
shall be disregarded.
SECTION 4. RESIGNATIONS
Any Director may resign at any time upon written notice to the Board, the
Chairman of the Board, the Chief Executive Officer, the President, the Vice
Chairman of the Board or the Secretary of the corporation. Such resignation
shall take effect on the date of receipt of such notice or at any later time
specified therein; and the acceptance of such resignation, unless otherwise
required by the terms thereof, shall not be necessary to make it effective. When
one or more Directors shall resign effective at a future date, a majority of the
Directors then in office, including those who have resigned, shall have power to
fill such vacancy or vacancies to take effect when such resignation or
resignations shall become effective.
SECTION 5. REMOVALS
Any Director may be removed, with or without cause, at any special meeting
of the stockholders called for that purpose, by the affirmative vote of the
holders of a majority in number of shares of the corporation entitled to vote
for the election of such Director, and the vacancy in the Board caused by any
such removal may be filled by the stockholders at such a meeting.
SECTION 6. PLACE OF MEETINGS; BOOKS AND RECORDS
The Board may hold its meetings, and have an office or offices, at such
place or places within or without the State of Delaware as the Board from time
to time may determine.
The Board, subject to the provisions of applicable statutes, may authorize
the books and records of the corporation, and offices or agencies for the issue,
transfer and registration of the capital stock of the corporation, to be kept at
such place or places outside of the State of Delaware as, from time to time, may
be designated by the Board.
SECTION 7. ANNUAL MEETING OF THE BOARD
The first meeting of each newly elected Board, to be known as the Annual
Meeting of the Board, for the purpose of electing officers, designating
committees and the transaction of such other business as may come before the
Board, shall be held as soon as practicable after the adjournment of the annual
meeting of stockholders, and no notice of such meeting shall be necessary to the
newly elected Directors, provided a quorum shall be present. In the event such
meeting is not held due to the absence of a quorum, the meeting may be held at
such time and place as shall be specified in a notice given as hereinafter
provided for special meetings of the Board, or as shall be specified in a
written waiver signed by all of the newly elected Directors.
8
<PAGE> 13
SECTION 8. REGULAR MEETINGS
The Board shall provide for regular meetings of the Board at such times and
at such places as it deems desirable. Notice of regular meetings need not be
given.
SECTION 9. SPECIAL MEETINGS
Special meetings of the Board may be called by the Chairman of the Board,
the Chief Executive Officer, the President or the Vice Chairman of the Board and
shall be called by the Secretary on the written request of three Directors on
such notice as the person or persons calling the meeting shall deem appropriate
in the circumstances. Notice of each such special meeting shall be mailed to
each Director or delivered to him by telephone, telegraph or any other means of
electronic communication, in each case addressed to his residence or usual place
of business, or delivered to him in person or given to him orally. The notice of
meeting shall state the time and place of the meeting but need not state the
purpose thereof. Whenever any notice is required to be given to any Director
under the provisions of these By-laws, the Restated Certificate of Incorporation
or the General Corporation Law of the State of Delaware, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board or any committee appointed by the Board
need be specified in the waiver of notice of such meeting. Attendance of a
Director at any meeting shall constitute a waiver of notice of such meeting
except when a Director attends a meeting for the express purpose of objecting to
the transaction of any business because the meeting was not lawfully called or
convened.
SECTION 10. QUORUM AND MANNER OF ACTING
Except as otherwise provided by statute, the Restated Certificate of
Incorporation, or these By-laws, the presence of a majority of the total number
of Directors shall constitute a quorum for the transaction of business at any
regular or special meeting of the Board, and the act of a majority of the
Directors present at any such meeting at which a quorum is present shall be the
act of the Board. In the absence of a quorum, a majority of the Directors
present may adjourn the meeting, from time to time, until a quorum is present.
Notice of any such adjourned meeting need not be given.
SECTION 11. ORGANIZATION
At every meeting of the Board, the Chairman of the Board or in his absence
the Chief Executive Officer, the President or the Vice Chairman of the Board, or
if all of the said officers are absent, a chairman chosen by a majority of the
Directors present shall act as chairman of the meeting. The Secretary, or in his
absence, an Assistant Secretary, or in the absence of the Secretary and all the
Assistant Secretaries, any person appointed by the chairman of the meeting,
shall act as secretary of the meeting.
9
<PAGE> 14
SECTION 12. CONSENT OF DIRECTORS IN LIEU OF MEETING
Unless otherwise restricted by the Restated Certificate of Incorporation or
by these By-laws, any action required or permitted to be taken at any meeting of
the Board, or any committee designated by the Board, may be taken without a
meeting if all members of the Board or committee consent thereto in writing, and
such written consent is filed with the minutes of the proceedings of the Board
or committee.
SECTION 13. TELEPHONIC MEETINGS
Members of the Board, or any committee designated by the Board, may
participate in any meeting of the Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such a
meeting shall constitute presence in person at such meeting.
SECTION 14. COMPENSATION
Each Director, who is not a full-time salaried officer of the corporation
or any of its wholly owned subsidiaries, when authorized by resolution of the
Board, may receive as a Director a stated salary or an annual retainer, and any
other benefits as the Board may determine, and in addition may be allowed a
fixed fee or reimbursement of his reasonable expenses for attendance at each
regular or special meeting of the Board or any committee thereof.
SECTION 15. INTERESTED DIRECTORS
No contract or transaction between the corporation and one or more of its
Directors or officers, or between the corporation and any other corporation,
partnership, association or other organization in which one or more of its
Directors or officers are Directors or officers of this corporation, or have a
financial interest in such contract or transaction, shall be void or voidable
solely for this reason, or solely because the Director or officer is present at
or participates in the meeting of the Board or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if: (1) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board or the committee, and the Board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested Directors, even though the disinterested Directors be less than a
quorum; or (2) the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (3) the contract or
transaction is fair as to the corporation as of the time it is authorized,
approved or ratified by the Board, a committee thereof or the stockholders.
Common or interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board or of a committee which authorizes the contract
or transaction.
10
<PAGE> 15
ARTICLE IV
COMMITTEES OF THE BOARD OF DIRECTORS
SECTION 1. EXECUTIVE COMMITTEE
The Board may, in its discretion, designate an Executive Committee,
consisting of such number of Directors as the Board may from time to time
determine. The committee shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
corporation and may authorize the seal of the corporation to be affixed to all
papers which may require it, but the committee shall have no power or authority
to amend the Restated Certificate of Incorporation (except that the committee
may, to the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board, fix the designations and any
of the preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation or fix the number of shares of any series of stock or authorize the
increase or decrease of the shares of any series). The committee shall have such
other powers as the Board may from time to time prescribe.
SECTION 2. FINANCE COMMITTEE
The Board may, in its discretion, designate a Finance Committee, consisting
of such number of Directors as the Board may from time to time determine. The
committee shall monitor, review, appraise and recommend to the Board appropriate
action with respect to the corporation's capital structure, its source of funds
and its financial position; review and recommend appropriate delegations of
authority to management on expenditures and other financial commitments; review
terms and conditions of financing plans; develop and recommend dividend policies
and recommend to the Board specific dividend payments; and review the
performance of the trustee of the corporation's pension trust fund, and any
proposed change in the investment policy of the trustee with respect to such
fund. The committee shall have such other duties, functions and powers as the
Board may from time to time prescribe.
SECTION 3. AUDIT COMMITTEE
The Board shall designate annually an Audit Committee consisting of not
less than two Directors as it may from time to time determine, none of whom
shall be officers or employees of the corporation. The committee shall review
with the independent accountants the corporation's financial statements, basic
accounting and financial policies and practices, adequacy of controls, standard
and special tests used in verifying the corporation's statements of account and
in determining the soundness of the corporation's financial condition, and the
committee shall report to the Board the results of such reviews; review the
policies and practices pertaining to publication of quarterly and annual
statements to assure consistency with audited results and the implementation of
policies and practices recommended by the independent accountants; ensure that
suitable independent audits are made of the operations and results of subsidiary
corporations
11
<PAGE> 16
and affiliates; and monitor compliance with the corporation's code
of business conduct. The committee shall have such other duties, functions and
powers as the Board may from time to time prescribe.
SECTION 4. COMPENSATION COMMITTEE
The Board shall designate annually a Compensation Committee consisting of
not less than two Directors as it may from time to time determine, none of whom
shall be officers or employees of the corporation. The committee shall
administer the corporation's executive compensation plans and programs. In
addition, the committee shall consider proposals with respect to the creation of
and changes to executive compensation plans and will review appropriate criteria
for establishing certain performance measures and determining annual corporate
and executive performance ratings under applicable corporation plans and
programs. The committee shall have such other duties, functions and powers as
the Board may from time to time prescribe.
SECTION 5. COMMITTEE CHAIRMAN, BOOKS AND RECORDS
Each committee shall elect a chairman to serve for such term as it may
determine, shall fix its own rules of procedure and shall meet at such times and
places and upon such call or notice as shall be provided by such rules. It shall
keep a record of its acts and proceedings, and all action of the committee shall
be reported to the Board at the next meeting of the Board.
SECTION 6. ALTERNATES
Alternate members of the committees prescribed by this Article IV may be
designated by the Board from among the Directors to serve as occasion may
require. Whenever a quorum cannot be secured for any meeting of any such
committee from among the regular members thereof and designated alternates, the
member or members of such committee present at such meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the Board to act at the meeting in the place of such
absent or disqualified member.
Alternative members of such committees shall receive a reimbursement for
expenses and compensation at the same rate as regular members of such
committees.
SECTION 7. OTHER COMMITTEES
The Board may designate such other committees, consisting of such number of
Directors as the Board may from time to time determine, and each such committee
shall serve for such term and shall have and may exercise, during intervals
between meetings of the Board, such duties, functions and powers as the Board
may from time to time prescribe.
12
<PAGE> 17
SECTION 8. QUORUM AND MANNER OF ACTING
At each meeting of any committee the presence of a majority of the members
of such committee, whether regular or alternate, shall be necessary to
constitute a quorum for the transaction of business, and if a quorum is present
the concurrence of a majority of those present shall be necessary for the taking
of any action; provided, however, that no action may be taken by the Executive
Committee or the Finance Committee when one or more officers of the corporation
are present as members at a meeting of either such committee unless such action
shall be concurred in by the vote of at least one member of such committee who
is not an officer of the corporation.
ARTICLE V
OFFICERS
SECTION 1. NUMBER
The officers of the corporation shall consist of such of the following as
the Board may from time to time elect or appoint, or as the Chairman of the
Board may from time to time appoint pursuant to Section 6 of this Article V: a
Chairman of the Board, a Chief Executive Officer, a President, a Vice Chairman
of the Board, a Chief Operating Officer, a Chief Financial Officer, a General
Counsel, a Secretary, a Treasurer, a Controller and one or more of the
following: Executive Vice President, Senior Vice President, Vice President,
Assistant Vice President, Associate or Assistant General Counsel, Assistant
Secretary, Assistant Treasurer, Assistant Controller and such other officers
with such titles and powers and/or duties as the Board or the Chairman of the
Board, as the case may be, shall from time to time determine. Officers of the
corporation may simultaneously serve as officers of subsidiaries or divisions
thereof. Any number of offices may be held by the same person.
SECTION 2. ELECTION
The officers of the corporation, except those who may be appointed by the
Chairman of the Board as provided in Section 6 of this Article V, shall be
elected or appointed as soon as practicable after the annual meeting of
stockholders in each year to hold office until the first meeting of the Board
after the annual meeting of stockholders next succeeding his election, or until
his successor is elected and qualified or until his earlier death, resignation
or removal.
SECTION 3. RESIGNATIONS
Any elected or appointed officer may resign at any time upon written notice
to the Chairman of the Board or the Secretary of the corporation. Such
resignation shall take effect upon the date of its receipt or at such later time
as may be specified therein, and unless otherwise required by the terms thereof,
no acceptance of such resignation shall be necessary to make it effective.
13
<PAGE> 18
SECTION 4. REMOVALS
Any elected or appointed officer may be removed, with or without cause, by
the Board at any regular or special meeting of the Board, and in the case of an
officer appointed pursuant to Section 6 of this Article V, may be so removed by
the Chairman of the Board. Any such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation, but the
election or appointment of any officer shall not of itself create contractual
rights.
SECTION 5. VACANCIES
Any vacancy occurring in any office by death, resignation, removal or
otherwise may be filled for the unexpired portion of the term by the Board at
any regular or special meeting or as otherwise provided in these By-laws.
SECTION 6. CHAIRMAN OF THE BOARD
The Chairman of the Board shall, when present, preside at all meetings of
the stockholders and the Board; have authority to call special meetings of the
stockholders and of the Board; have authority to sign and acknowledge in the
name and on behalf of the corporation all stock certificates, contracts or other
documents and instruments except where the signing thereof shall be expressly
delegated to some other officer or agent by the Board or required by law to be
otherwise signed or executed and, unless otherwise provided by law or by the
Board may authorize any officer, employee or agent of the corporation to sign,
execute and acknowledge in his place and stead all such documents and
instruments; he shall fix the compensation of officers of the corporation, other
than his own compensation, and the compensation of officers of its principal
operating subsidiaries reporting directly to him unless such authority is
otherwise reserved to the Board or a committee thereof; and he shall approve
proposed employee compensation and benefit plans of subsidiary companies not
involving the issuance or purchase of capital stock of the corporation. He shall
have the power to appoint and remove any Vice President, Controller, General
Counsel, Secretary or Treasurer of the corporation. He shall also have the power
to appoint and remove such associate or assistant officers of the corporation
with such titles and duties as he may from time to time deem necessary or
appropriate. He shall have such other powers and perform such other duties as
from time to time may be assigned to him by the Board or the Executive
Committee.
The Chairman of the Board is hereby authorized, without further approval
of the Finance Committee or the Board:
(a) To approve individual expenditures by the corporation of up to $20
million each for individual expenditures in categories not presented
to the Board in the annual budget or plan, including but not limited
to individual expenditures pertaining to operating expenses,
purchases, leases, options to purchase or lease assets, investments,
business acquisitions, land purchases, products or services
acquisitions, bid or performance bonds (provided however, that the
authority to issue such a bond shall not be deemed to
14
<PAGE> 19
authorize the activity covered thereby unless such activity would
itself be authorized hereunder), litigation settlements, charitable
donations and political contributions.
(b) To approve expenditures by the corporation for the amounts (subject to
subparagraph (c) below) presented to the Board in the annual budget or
plan, including but not limited to individual expenditures pertaining
to operating and capital expenses, purchases, leases, options to
purchase or lease assets, investments, business acquisitions, land
purchases, products or services acquisitions, bid or performance bonds
(provided however, that the authority to issue such a bond shall not
be deemed to authorize the activity covered thereby unless such
activity would itself be authorized hereunder), litigation
settlements, charitable donations and political contributions.
(c) To approve individual cost overruns of up to 10% of any amounts
approved by or presented to the Board.
(d) To enter into leases or extensions thereof and other agreements with
respect to the assets of the corporation, including interests in
minerals and real estate, for a term of not more than 10 years or for
an unlimited term if the aggregate initial rentals, over the term of
the lease, including renewal options, do not exceed $20 million.
(e) To approve capital contributions to the corporation's subsidiaries and
to enter into performance and financial guarantees for the benefit of
the corporation's subsidiaries.
(f) To approve disposition of assets and interests in securities of
subsidiaries or related commitments, provided that the aggregate
market value of the assets being disposed of in any one such
transaction does not exceed $20 million.
(g) To approve increases in the capital budgets of the corporation's
operating subsidiaries provided such increases in the aggregate do not
exceed 10% of the corporation's capital budget for the fiscal year.
(h) To approve in emergency situations commitments in excess of the
above-described limits provided they are in the interests of the
corporation.
The above delegation of authority does not authorize the corporation or its
subsidiaries to make a significant change in its business or to issue the
corporation's capital stock without the specific approval of the Board.
Notwithstanding the foregoing limitations, the Chairman of the Board shall have
such power and authority as is usual, customary and desirable to perform all the
duties of the office (including, but not limited to, the approval of payments or
arrangements made in connection with the corporation's debt, interest, tax,
contractual, and regulatory obligations) necessary to, and consistent with, the
businesses of the corporation and its subsidiaries. The Chairman of the Board
(and other officers of the corporation as delegated by the Chairman of the Board
or as authorized in these By-laws) may delegate the foregoing authorization to
other officers, employees, and agents of the corporation by either written
authorization (including
15
<PAGE> 20
powers of attorney) or otherwise, unless such authorization is expressly
reserved for the Chairman of the Board or other officer, as applicable.
SECTION 7. CHIEF EXECUTIVE OFFICER
The Chief Executive Officer shall assist the Chairman of the Board in the
performance of his duties and shall perform those duties assigned to him in
other provisions of the By-laws and such other duties as may from time to time
be assigned to him by the Board or the Chairman of the Board. In the absence or
disability of the Chairman of the Board, or at his request, the Chief Executive
Officer may preside at any meeting of the stockholders or of the Board and, in
such circumstances, may exercise any of the other powers or perform any of the
other duties of the Chairman of the Board. Subject to delegations by the
Chairman of the Board pursuant to Section 6 of this Article V, the Chief
Executive Officer may sign or execute, in the name of the corporation, all stock
certificates, deeds, mortgages, bonds, contracts or other documents and
instruments, except in cases where the signing or execution thereof shall be
required by law or shall have been expressly delegated by the Board or these
By-laws to some other officer or agent of the corporation.
SECTION 8. PRESIDENT
The President shall have general authority over the property, business and
affairs of the corporation, and over all subordinate officers, agents and
employees of the corporation, subject to the control and direction of the Board,
the Executive Committee, the Chairman of the Board and the Chief Executive
Officer, including the power to sign and acknowledge in the name and on behalf
of the corporation all stock certificates, deeds, mortgages, bonds, contracts or
other documents and instruments except when the signing thereof shall be
expressly delegated to some other officer or agent by the Board or required by
law to be otherwise signed or executed and, unless otherwise provided by law or
by the Board, may delegate to any officer, employee or agent of the corporation
authority to sign, execute and acknowledge in his place and stead all such
documents and instruments.
SECTION 9. VICE CHAIRMAN OF THE BOARD
The Vice Chairman of the Board shall assist the Chairman of the Board, the
Chief Executive Officer and the President, in the performance of their duties
and shall perform those duties assigned to him in other provisions of the
By-laws and such other duties as may from time to time be assigned to him by the
Board, the Chairman of the Board, the Chief Executive Officer or the President.
In the absence or disability of the Chairman of the Board, the Chief Executive
Officer or the President, or at the request of any of them, the Vice Chairman of
the Board may preside at any meeting of the stockholders or of the Board and, in
such circumstances, may exercise any of the other powers or perform any of the
other duties of the Chairman of the Board, the Chief Executive Officer or the
President. Subject to delegations by the Chairman of the Board pursuant to
Section 6 of this Article V, the Vice Chairman of the Board may sign or execute,
in the name of the corporation, all stock certificates, deeds, mortgages, bonds,
contracts or other documents and instruments, except in cases where the signing
or execution thereof shall
16
<PAGE> 21
be required by law or shall have been expressly delegated by the Board or these
By-laws to some other officer or agent of the corporation.
SECTION 10. CHIEF OPERATING OFFICER
The Chief Operating Officer shall have direct management responsibility for
the general business operations of the corporation, and he shall have such
powers and perform such duties as may be incident to the office of chief
operating officer of a corporation, those duties assigned to him by other
provisions of the By-laws, and such other duties as may from time to time be
assigned to him either directly or indirectly by the Board, the Chairman of the
Board, the Chief Executive Officer, the President or the Vice Chairman of the
Board. Subject to delegations by the Chairman of the Board pursuant to Section 6
of this Article V, the Chief Operating Officer may sign or execute, in the name
of the corporation, all stock certificates, deeds, mortgages, bonds, contracts
or other documents and instruments, except in cases where the signing or
execution thereof shall be required by law or shall have been expressly
delegated by the Board or these By-laws to some other officer or agent of the
corporation.
SECTION 11. CHIEF FINANCIAL OFFICER
The Chief Financial Officer shall have responsibility for development and
administration of the corporation's financial plans and all financial
arrangements, its cash deposits and short term investments, its accounting
policies and its federal and state tax returns. The Chief Financial Officer
shall also be responsible for the corporation's internal control procedures and
for its relationship with the financial community. The Chief Financial Officer
shall perform all the duties incident to the office of chief financial officer
of a corporation, those duties assigned to him by other provisions of these
By-laws and such other duties as may be assigned to him either directly or
indirectly by the Board, the Chairman of the Board, the Chief Executive Officer,
the President, the Vice Chairman of the Board or the Chief Operating Officer, or
as may be provided by law.
SECTION 12. VICE PRESIDENTS
Each Executive Vice President, Senior Vice President and Vice President
shall have such powers and perform such duties as may from time to time be
assigned to him, directly or indirectly, either generally or in specific
instances, by the Board, the Chairman of the Board, the Chief Executive Officer,
the President, the Vice Chairman of the Board or the Chief Operating Officer.
Subject to delegations by the Chairman of the Board pursuant to Section 6
of this Article V, each Executive Vice President, Senior Vice President and Vice
President shall perform all duties incident to the office of vice president of a
corporation and shall have authority to sign or execute, in the name of the
corporation, all stock certificates, deeds, mortgages, bonds, contracts or other
documents or instruments, except in cases where the signing or execution thereof
shall have been expressly delegated by the Board or these By-laws to some other
officer or agent of the corporation.
17
<PAGE> 22
SECTION 13. GENERAL COUNSEL
The General Counsel shall be the chief legal advisor of the corporation and
shall have responsibility for the management of the legal affairs and litigation
of the corporation and, in general, he shall perform the duties incident to the
office of general counsel of a corporation and such other duties as may be
assigned to him either directly or indirectly by the Board, the Chairman of the
Board, the Chief Executive Officer, the President or the Vice Chairman of the
Board, or as may be provided by law.
SECTION 14. SECRETARY
The Secretary shall keep the minutes of meetings of the stockholders and of
the Board in books provided for the purpose; he shall see that all notices are
duly given in accordance with the provisions of these By-laws or as required by
law; he shall be custodian of the records and of the corporate seal or seals of
the corporation; he shall see that the corporate seal is affixed to all
documents requiring same, the execution of which, on behalf of the corporation,
under its seal, is duly authorized, and when said seal is so affixed he may
attest same; and, in general, he shall perform all duties incident to the office
of the secretary of a corporation, and such other duties as from time to time
may be assigned to him directly or indirectly by the Board, the Chairman of the
Board, the Chief Executive Officer, the President, the Vice Chairman of the
Board or the General Counsel, or as may be provided by law. Any Assistant
Secretary may perform any of the duties or exercise any of the powers of the
Secretary at the request of, or in the absence or disability of, the Secretary
or otherwise as occasion may require in the administration of the business and
affairs of the corporation.
SECTION 15. TREASURER
The Treasurer shall have charge of and be responsible for all funds,
securities, receipts and disbursements of the corporation, and shall deposit, or
cause to be deposited, in the name of the corporation, all moneys or other
valuable effects in such banks, trust companies or other depositaries as shall,
from time to time, be selected by or under authority of the Board; if required
by the Board, he shall give a bond for the faithful discharge of his duties,
with such surety or sureties as the Board may determine; he shall keep or cause
to be kept full and accurate records of all receipts and disbursements in books
of the corporation; and, in general, he shall perform the duties incident to the
office of treasurer of a corporation and such other duties as may be assigned to
him directly or indirectly by the Board, the Chairman of the Board, the Chief
Executive Officer, the President, the Vice Chairman of the Board, the Chief
Operating Officer or the Chief Financial Officer, or as may be provided by law.
Any Assistant Treasurer may perform any of the duties or exercise any of the
powers of the Treasurer at the request of, or in the absence or disability of,
the Treasurer or otherwise as occasion may require in the administration of the
business and affairs of the corporation.
18
<PAGE> 23
SECTION 16. CONTROLLER
The Controller shall be the chief accounting officer of the corporation. He
shall keep full and accurate accounts of the assets, liabilities, commitments,
receipts, disbursements and other financial transactions of the corporation;
shall cause regular audits of the books and records of account of the
corporation and shall supervise the preparation of the corporation's financial
statements; and, in general, he shall perform the duties incident to the office
of controller of a corporation and such other duties as may be assigned to him
directly or indirectly by the Board, the Audit Committee, the Chairman of the
Board, the Chief Executive Officer, the President, the Vice Chairman of the
Board, the Chief Operating Officer or the Chief Financial Officer, or as may be
provided by law.
SECTION 17. ABSENCE OR DISABILITY OF OFFICERS
In the absence or disability of the Chairman of the Board, the Chief
Executive Officer, the President or the Vice Chairman of the Board, the Board or
a committee thereof may designate individuals to perform the duties of those
absent or disabled.
ARTICLE VI
STOCK CERTIFICATES AND TRANSFER THEREOF
SECTION 1. STOCK CERTIFICATES
Except as otherwise permitted by statute, the Restated Certificate of
Incorporation or resolution or resolutions of the Board, every holder of stock
in the corporation shall be entitled to have a certificate, signed by or in the
name of the corporation by the Chairman of the Board, the Chief Executive
Officer, the President, the Vice Chairman of the Board, the Chief Operating
Officer, the Chief Financial Officer or any Vice President and by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares, and the class and series thereof,
owned by him in the corporation. Any and all of the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
The Board or the Chairman of the Board shall determine the form of stock
certificate of the corporation.
SECTION 2. TRANSFER OF STOCK
Transfer of shares of the capital stock of the corporation shall be made
only on the books (whether physically or electronically) of the corporation by
the holder thereof, or by his attorney duly authorized, and on surrender of the
certificate or certificates for such shares. A person in whose name shares of
stock stand on the books of the corporation shall be deemed the owner
19
<PAGE> 24
thereof as regards the corporation, and the corporation shall not, except as
expressly required by statute, be bound to recognize any equitable or other
claim to, or interest in, such shares on the part of any other person whether or
not it shall have express or other notice thereof.
SECTION 3. TRANSFER AGENTS AND REGISTRARS
The Board or the Chairman of the Board, as appropriate, may appoint
responsible banks or trust companies from time to time to act as transfer agents
and registrars of the stock of the corporation, as may be required by and in
accordance with applicable laws, rules and regulations. Except as otherwise
provided by the Board or the Chairman of the Board, as appropriate, in respect
of temporary certificates, no certificates for shares of capital stock of the
corporation shall be valid unless countersigned by a transfer agent and
registered by one of such registrars.
SECTION 4. ADDITIONAL REGULATIONS
The Board or the Chairman of the Board, as appropriate, may make such
additional rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates for shares of the capital stock of the
corporation.
SECTION 5. LOST, STOLEN OR DESTROYED CERTIFICATES
The Board or the Chairman of the Board may provide for the issuance of new
certificates of stock to replace certificates of stock lost, stolen or
destroyed, or alleged to be lost, stolen or destroyed, upon such terms and in
accordance with such procedures as the Board or the Chairman of the Board shall
deem proper and prescribe.
ARTICLE VII
DIVIDENDS, SURPLUS, ETC.
Except as otherwise provided by statute or the Restated Certificate of
Incorporation, the Board may declare dividends upon the shares of its capital
stock either (1) out of its surplus, or (2) in case there shall be no surplus,
out of its net profits for the fiscal year, whenever, and in such amounts as, in
its opinion, the condition of the affairs of the corporation shall render it
advisable. Dividends may be paid in cash, in property, or in shares of the
capital stock of the corporation.
ARTICLE VIII
SEAL
The corporation may have a corporate seal which shall have inscribed
thereon the name of the corporation, the year of its organization and the words
"Corporate Seal, Delaware." The
20
<PAGE> 25
corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of January
of each year, or on such other day as may be fixed from time to time by the
Board.
ARTICLE X
INDEMNIFICATION
SECTION 1. RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a party
to or is involved (including, without limitation, as a witness) in any actual or
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a "proceeding"), by reason of the fact that he is
or was a Director, officer or employee of the corporation or is or was serving
at the request of the corporation as a Director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a Director, officer, employee or agent or in
any other capacity while serving as such a Director, officer, employee or agent,
shall be indemnified and held harmless by the corporation to the full extent
authorized by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such amendment), or by other applicable law as then in effect, against all
expense, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts to be paid in settlement) actually and
reasonably incurred or suffered by such indemnitee in connection therewith and
such indemnification shall continue as to an indemnitee who has ceased to be a
Director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that except
as provided in Section 2 of this Article with respect to proceedings seeking to
enforce rights to indemnification, the corporation shall indemnify any such
indemnitee seeking indemnification in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of the corporation. The right to indemnification
conferred in this Section shall be a contract right and shall include the right
to be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter an "advancement of
expenses"); further provided, however, that, if the General Corporation Law of
the State of Delaware requires, an advancement of expenses incurred by an
21
<PAGE> 26
indemnitee in his capacity as a Director, officer or employee (and not in any
other capacity in which service was or is rendered by such indemnitee while a
Director, officer or employee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the corporation of an
undertaking, by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined that such indemnitee is not
entitled to be indemnified under this Section 1, or otherwise.
SECTION 2. RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under Section 1 of this Article is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at any
time thereafter bring suit against the corporation to recover the unpaid amount
of the claim and, to the extent successful in whole or in part, the indemnitee
shall be entitled to be paid also the expense of prosecuting such suit. The
indemnitee shall be presumed to be entitled to indemnification under this
Article upon submission of a written claim (and, in an action brought to enforce
a claim for an advancement of expenses, where the required undertaking, if any
is required, has been tendered to the corporation), and thereafter the
corporation shall have the burden of proof to overcome the presumption that the
indemnitee is not so entitled. Neither the failure of the corporation (including
its Board, independent legal counsel, or its stockholders), to have made a
determination prior to the commencement of such suit that indemnification of the
indemnitee is proper in the circumstances, nor an actual determination by the
corporation (including its Board, independent legal counsel or its stockholders)
that the indemnitee is not entitled to indemnification, shall be a defense to
the suit or create a presumption that the indemnitee is not so entitled.
SECTION 3. NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses conferred
in this Article shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Restated
Certificate of Incorporation, By-law, agreement, vote of stockholders or
disinterested Directors or otherwise.
SECTION 4. INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the
General Corporation Law of the State of Delaware. The corporation may enter into
contracts with any indemnitee in furtherance of the provisions of this Article
and may create a trust fund, grant a security interest or use other means
(including, without limitation, a letter of credit) to ensure the payment of
such amounts as may be necessary to effect indemnification as provided in this
Article.
22
<PAGE> 27
SECTION 5. WHOLLY OWNED SUBSIDIARIES
Any person who is or was serving as a Director of a wholly owned subsidiary
of the corporation shall be deemed, for purposes of this Article only, to be a
Director, officer or employee of the corporation entitled to indemnification
under this Article.
SECTION 6. INDEMNIFICATION OF AGENTS OF THE CORPORATION
The corporation may, by action of the Board from time to time, grant rights
to indemnification and advancement of expenses to agents of the corporation with
the same scope and effect as the provisions of this Article with respect to the
indemnification and advancement of expenses of Directors, officers and employees
of the corporation.
ARTICLE XI
CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. CHECKS, DRAFTS, ETC.; LOANS
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall, from time to time, be determined by resolution of the Board. No
loans shall be contracted on behalf of the corporation unless authorized by the
Board. Such authority may be general or confined to specific circumstances.
SECTION 2. DEPOSITS
All funds of the corporation shall be deposited, from time to time, to the
credit of the corporation in such banks, trust companies or other depositories
as the Board may select, or as may be selected by any officer or officers, agent
or agents of the corporation to whom such power may, from time to time, be
delegated by the Board; and for the purpose of such deposit, the Chairman of the
Board, the Chief Executive Officer, the President, the Vice Chairman of the
Board, any Executive Vice President, any Senior Vice President, any Vice
President, the Treasurer or any Assistant Treasurer, or any other officer or
agent to whom such power may be delegated by the Board, may endorse, assign and
deliver checks, drafts and other order for the payment of money which are
payable to the order of the corporation.
ARTICLE XII
AMENDMENTS
These By-laws may be altered or repealed and new By-laws may be made by the
affirmative vote, at any meeting of the Board, of a majority of the entire
Board, subject to the rights of the
23
<PAGE> 28
stockholders of the corporation to amend or repeal By-laws made or amended by
the Board by the affirmative vote of the holders of record of a majority in
number of shares of the outstanding stock of the corporation present or
represented at any meeting of the stockholders and entitled to vote thereon,
provided that notice of the proposed action be included in the notice of such
meeting.
ARTICLE XIII
MISCELLANEOUS
All references and uses herein of the masculine pronouns "he" or "his"
shall have equal applicability to and shall also mean their feminine counterpart
pronouns, such as "she" or "her."
24
<PAGE> 1
EXHIBIT 10.E
================================================================================
EL PASO NATURAL GAS COMPANY
-------------------------------------
$750,000,000 364-DAY
REVOLVING CREDIT AND COMPETITIVE
ADVANCE FACILITY AGREEMENT
Dated as of October 29, 1997
-------------------------------------
THE CHASE MANHATTAN BANK,
as Administrative Agent
and CAF Advance Agent
CITIBANK, N.A.,
as Documentation Agent
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Syndication Agent
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE 1
<S> <C>
DEFINITIONS AND ACCOUNTING TERMS............................. 1
SECTION 1.1 Certain Defined Terms...................................... 1
SECTION 1.2 Computation of Time Periods................................ 18
SECTION 1.3 Accounting Terms........................................... 18
SECTION 1.4 References................................................. 18
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES............................ 19
SECTION 2.1 The Revolving Credit Advances.............................. 19
SECTION 2.2 Making the Revolving Credit Advances....................... 19
SECTION 2.3 Evidence of Debt........................................... 21
SECTION 2.4 CAF Advances............................................... 21
SECTION 2.5 Procedure for CAF Advance Borrowings....................... 22
SECTION 2.6 CAF Advance Payments....................................... 25
SECTION 2.7 Evidence of Debt........................................... 26
SECTION 2.8 Fees....................................................... 26
SECTION 2.9 Reduction of the Commitments............................... 27
SECTION 2.10 Repayment of Advances..................................... 27
SECTION 2.11 Interest on Revolving Credit Advances..................... 27
SECTION 2.12 Additional Interest on Eurodollar Rate Advances........... 28
SECTION 2.13 Interest Rate Determination............................... 29
SECTION 2.14 Voluntary Conversion of Advances.......................... 31
SECTION 2.15 Optional and Mandatory Prepayments........................ 31
SECTION 2.16 Increased Costs........................................... 32
SECTION 2.17 Increased Capital......................................... 33
SECTION 2.18 Illegality................................................ 34
SECTION 2.19 Pro Rata Treatment, Payments and Computations............. 34
SECTION 2.20 Taxes..................................................... 36
SECTION 2.21 Sharing of Payments, Etc.................................. 38
SECTION 2.22 Use of Proceeds........................................... 39
SECTION 2.23 Extension of Stated Termination Date...................... 39
SECTION 2.24 Commitment Increases...................................... 41
SECTION 2.25 Replacement of Lenders.................................... 42
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING...................... 43
SECTION 3.1 Conditions Precedent to Effectiveness of this Agreement.... 43
SECTION 3.2 Conditions Precedent to Initial Advances................... 44
SECTION 3.3 Conditions Precedent to Initial Advances
to Any Borrowing Subsidiary or Holding......................... 45
SECTION 3.4 Conditions Precedent to Each Borrowing..................... 46
ARTICLE IV
REPRESENTATIONS AND WARRANTIES............................... 46
SECTION 4.1 Representations and Warranties of the Borrowers............ 46
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE V
<S> <C>
COVENANTS OF THE BORROWERS................................... 50
SECTION 5.1 Affirmative Covenants...................................... 50
SECTION 5.2 Negative Covenants......................................... 51
SECTION 5.3 Reporting Requirements..................................... 55
SECTION 5.4 Restrictions on Material Subsidiaries...................... 58
ARTICLE VI
GUARANTEE.................................................... 58
SECTION 6.1 Guarantees................................................. 58
SECTION 6.2 No Subrogation............................................. 59
SECTION 6.3 Amendments, etc. with respect to the
Obligations; Waiver of Rights.................................. 59
SECTION 6.4 Guarantee Absolute and Unconditional....................... 60
SECTION 6.5 Reinstatement.............................................. 61
ARTICLE VII
EVENTS OF DEFAULT............................................ 62
SECTION 7.1 Event of Default........................................... 62
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE CAF ADVANCE AGENT........... 65
SECTION 8.1 Authorization and Action................................... 65
SECTION 8.2 Administrative Agent's and CAF Advance
Agent's Reliance, Etc.......................................... 66
SECTION 8.3 Chase and Affiliates....................................... 67
SECTION 8.4 Lender Credit Decision..................................... 67
SECTION 8.5 Indemnification............................................ 67
SECTION 8.6 Successor Administrative Agent and CAF Advance Agent....... 68
ARTICLE IX
MISCELLANEOUS................................................ 68
SECTION 9.1 Amendments, Etc............................................ 68
SECTION 9.2 Notices, Etc............................................... 69
SECTION 9.3 No Waiver; Remedies........................................ 70
SECTION 9.4 Costs and Expenses; Indemnity.............................. 70
SECTION 9.5 Right of Set-Off........................................... 71
SECTION 9.6 Binding Effect............................................. 71
SECTION 9.7 Assignments and Participations............................. 72
SECTION 9.8 Confidentiality............................................ 75
SECTION 9.9 Consent to Jurisdiction.................................... 75
SECTION 9.10 GOVERNING LAW............................................. 76
SECTION 9.11 Rate of Interest.......................................... 76
SECTION 9.12 Execution in Counterparts................................. 77
</TABLE>
-ii-
<PAGE> 4
SCHEDULE
Schedule I Commitments, Addresses, Etc.
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of CAF Advance Request
Exhibit D Form of CAF Advance Offer
Exhibit E Form of CAF Advance Confirmation
Exhibit F Form of Assignment and Acceptance
Exhibit G Form of Opinion of [Associate] General Counsel
of the Company
Exhibit H Form of Opinion of New York Counsel to the
Company
Exhibit I Form of Process Agent Letter
Exhibit J Form of Joinder Agreement
Exhibit K Form of Opinion of [Associate] General Counsel of
the Company
Exhibit L Form of Opinion of New York Counsel to the Company
Exhibit M Form of Extension Request
Exhibit N Form of New Lender Supplement
Exhibit O Form of Commitment Increase Supplement
-iii-
<PAGE> 5
$750,000,000 364-DAY REVOLVING CREDIT AND COMPETITIVE ADVANCE
FACILITY AGREEMENT, dated as of October 29, 1997, among EL PASO NATURAL GAS
COMPANY, a Delaware corporation ("EPNGC"), TENNESSEE GAS PIPELINE COMPANY, a
Delaware corporation ("Tennessee"), the several banks and other financial
institutions from time to time parties to this Agreement (the "Lenders"), THE
CHASE MANHATTAN BANK, a New York banking corporation, as administrative agent
(in such capacity, the "Administrative Agent") and as CAF Advance Agent (in such
capacity, the "CAF Advance Agent") for the Lenders hereunder, CITIBANK, N.A., as
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as syndication agent (in
such capacity, the "Syndication Agent") for the Lenders.
The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION I.1 Certain Defined Terms. As used in
this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Administrative Agent" has the meaning assigned to such term
in the preamble hereof.
"Advance" means an advance by a Lender to any Borrower
pursuant to Article II, and refers to a Base Rate Advance, a Eurodollar
Rate Advance or a CAF Advance.
"Affiliate" means as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
The term "control" (including the terms "controlled by" or "under
common control with") means, with respect to any Person, the
possession, direct or indirect, of the power to vote 20% or more of the
securities having ordinary voting power for the election of directors
of such Person or to direct or cause the direction of the management
and policies of such Person, whether through ownership of voting
securities or by contract or otherwise.
"Agreement" means this $750,000,000 364-Day Revolving Credit
and Competitive Advance Facility, as amended, supplemented or otherwise
modified from time to time.
"Alternate Program" means any program providing for the sale
or other disposition of trade or other receivables entered into by the
Company or a Principal Subsidiary (or for purposes of Section 5.2(a)
only, any Restricted Affiliate) which is in addition to or in
replacement of the
<PAGE> 6
2
program evidenced by either Receivables Purchase and Sale
Agreement(whether or not either Receivables Purchase and Sale
Agreement shall then be in effect), provided that such program is on
terms (a) substantially similar to either Receivables Purchase and
Sale Agreement (as modified to comply with FASB 125 or similar
policies or guidelines from time to time in effect) or (b) customary
for similar transactions as reasonably determined by the
Administrative Agent.
"Applicable LIBO Rate" means in respect of any CAF Advance
requested pursuant to a LIBO Rate CAF Advance Request, an interest rate
per annum equal to the rate which appears on Page 3750 of the Telerate
Service (or any successor or substitute page of such Service, or any
successor to or substitute for such service providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes
of providing quotations of interest rates applicable to Dollar deposits
in the London interbank market) as at approximately 11:00 A.M., London
time, two Business Days prior to the beginning of the period for which
such CAF Advance is to be outstanding as the rate for Dollar deposits
with a maturity comparable to such period.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit F.
"Base CD Rate" means the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate.
"Base Rate" means for any day, a rate per annum (adjusted to
the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, rounded
upwards to the next highest 1/16 of 1%) equal to the greatest of (a)
the Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1/2 of 1% and (c) the Effective Federal Funds Rate in
effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the
Effective Federal Funds Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Effective Federal Funds Rate,
respectively.
"Base Rate Advance" means an Advance which bears interest as
provided in Section 2.11(a)(i).
"Borrowers" means the collective reference to EPNGC, each
Borrowing Subsidiary and Holding once Holding executes and delivers a
Joinder Agreement; each, a "Borrower".
<PAGE> 7
3
"Borrowing" means a borrowing consisting of Advances of the
same Type made on the same day by the Lenders, it being understood that
there may be more than one Borrowing on a particular day.
"Borrowing Subsidiary" means Tennessee and each other domestic
Subsidiary of the Company which has been designated by the Company as a
"Borrowing Subsidiary" by written notice to the Administrative Agent,
which designation shall not have been revoked by written notice by the
Company to the Administrative Agent (provided, that no such designation
shall be revoked if either (a) any Default or Event of Default shall
have occurred and be continuing or (b) any Advance to such Borrowing
Subsidiary, or any interest accrued thereon, shall be outstanding);
collectively, the "Borrowing Subsidiaries". For avoidance of doubt, (i)
Tennessee may be undesignated as a Borrowing Subsidiary by written
notice to the Administrative Agent by the Company and (ii) EPNGC shall
always be a Borrower hereunder.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York, New York and, if the
applicable Business Day relates to any Eurodollar Rate Advances or LIBO
Rate CAF Advances, on which dealings are carried on in the London
interbank market.
"CAF Advance" means an Advance made pursuant to Sections 2.4
and 2.5.
"CAF Advance Agent" has the meaning assigned to such term in
the preamble hereof.
"CAF Advance Availability Period" means the period from and
including the Closing Date until the earlier of (a) the date which is 7
days prior to the Stated Termination Date and (b) the Termination Date.
"CAF Advance Confirmation" means each confirmation by the
applicable Borrower of its acceptance of CAF Advance Offers, which CAF
Advance Confirmation shall be substantially in the form of Exhibit E
and shall be delivered to the CAF Advance Agent by telecopy.
"CAF Advance Interest Payment Date" means as to each CAF
Advance, each interest payment date specified by the applicable
Borrower for such CAF Advance in the related CAF Advance Request.
"CAF Advance Lenders" means Lenders from time to time
designated by the Company, in consultation with the CAF Advance Agent,
as CAF Advance Lenders as provided in Section 2.4.
"CAF Advance Maturity Date" means as to any CAF Advance, the
date specified by the applicable Borrower
<PAGE> 8
4
pursuant to Section 2.5(d)(ii) in its acceptance of the related CAF
Advance Offer.
"CAF Advance Offer" means each offer by a CAF Advance Lender
to make CAF Advances pursuant to a CAF Advance Request, which CAF
Advance Offer shall contain the information specified in Exhibit D and
shall be delivered to the CAF Advance Agent by telephone, immediately
confirmed by telecopy.
"CAF Advance Request" means each request by the applicable
Borrower for CAF Advance Lenders to submit bids to make CAF Advances,
which request shall contain the information in respect of such
requested CAF Advances specified in Exhibit C and shall be delivered to
the CAF Advance Agent in writing, by telecopy, or by telephone,
immediately confirmed by telecopy.
"Capitalization" of any Person means the sum (without
duplication) of (a) consolidated Debt of such Person and its
consolidated Subsidiaries, plus (b) the aggregate amount of Guaranties
entered into by such Person and its consolidated Subsidiaries, plus (c)
the consolidated common and preferred stockholders' equity of such
Person and its consolidated Subsidiaries.
"C/D Assessment Rate" means for any day as applied to any Base
Rate Advance, the annual assessment rate determined by Chase to be
payable on such day to the Federal Deposit Insurance Corporation (the
"FDIC") for the FDIC's (or any successor's) insuring time deposits at
offices of Chase in the United States.
"C/D Reserve Percentage" means for any day as applied to any
Base Rate Advance, that percentage (expressed as a decimal) which is in
effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) (the "Board"), for
determining the then current reserve requirement for the Administrative
Agent in respect of new non-personal time deposits in Dollars having a
maturity of 30 days or more.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
"Closing Date" has the meaning assigned to such term in
Section 3.2.
"Commitment" means as to any Lender, the obligation of such
Lender to make Revolving Credit Advances to the Borrowers hereunder in
an aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule I (as such
Schedule I is amended from time to time pursuant to Section 9.7(c)), as
such amount may be reduced from time to time in accordance with the
provisions of this Agreement.
<PAGE> 9
5
"Commitment Expiration Date" has the meaning assigned to such
term in Section 2.23(a).
"Commitment Percentage" means as to any Lender at any time,
the percentage which such Lender's Commitment then constitutes of the
aggregate Commitments (or, at any time after the Commitments shall have
expired or terminated, the percentage which the aggregate principal
amount of such Lender's Advances then outstanding constitutes of the
aggregate principal amount of the Advances then outstanding).
"Commitment Increase Notice" has the meaning assigned to such
term in Section 2.24(a).
"Commitment Increase Supplement" has the meaning assigned to
such term in Section 2.24(c).
"Company" means (a) at all times prior to Holding becoming a
Borrower, EPNGC, and (b) thereafter, Holding.
"Contingent Guaranty" has the meaning assigned to such term in
the definition of the term "Guaranty" contained in this Section 1.1.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of another Type
pursuant to Section 2.13, 2.14 or 2.18.
"Debt" means, as to any Person, all Indebtedness of such
Person other than (a) any Project Financing of such Person, (b) in the
case of the Company or a Principal Subsidiary, any liabilities of the
Company or such Principal Subsidiary, as the case may be, under any
Alternate Program, or any document executed by the Company or such
Principal Subsidiary, as the case may be, in connection therewith and
(c) any obligations of the Company or a Principal Subsidiary with
respect to lease payments for the headquarters building of EPNGC
located in Houston, Texas; provided, however, that for purposes of
Article V, "Debt" shall not include up to an aggregate amount
(determined without duplication of amount) of $200,000,000 of (i) the
amount of optional payments in lieu of asset repurchase or other
payments to similar effect, including extension or renewal payments, on
off balance sheet leases and (ii) the amount of the purchase price for
optional acquisition of such asset (in either case, calculated at the
lower amount payable in respect of such asset under clause (i) or (ii)
above).
"Default" means any event that would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both.
"Documentation Agent" has the meaning assigned to such term in
the preamble hereof.
<PAGE> 10
6
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Effective Date" means the date on which the conditions
precedent set forth in Section 3.1 have been satisfied (or compliance
therewith shall have been waived by the Lenders).
"Effective Federal Funds Rate" means, for any day, the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Eligible Assignee" means, with respect to any particular
assignment under Section 9.7, any bank or other financial institution
approved in writing by the Company expressly with respect to such
assignment and, except as to such an assignment by Chase so long as
Chase is the Administrative Agent hereunder, the Administrative Agent
as an Eligible Assignee for purposes of this Agreement, provided that
(i) neither the Administrative Agent's nor the Company's approval shall
be unreasonably withheld and (ii) neither the Administrative Agent's
nor the Company's approval shall be required if the assignee is another
Lender or an Affiliate of the assigning Lender.
"EPNGC" has the meaning assigned to such term in the preamble
hereof.
"EPTPC" means El Paso Tennessee Pipeline Co., a Delaware
corporation.
"EPTPC Facility" means the $3,000,000,000 Revolving Credit and
Competitive Advance Facility Agreement, dated as of November 4, 1996,
among EPTPC, the several financial institutions from time to time
parties thereto, and The Chase Manhattan Bank, as administrative agent
and CAF advance agent thereunder, as the same may be amended, modified
or supplemented from time to time.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued from time to time thereunder.
"ERISA Affiliate" means any Person who is a member of the
Company's controlled group within the meaning of Section 4001(a)(14)(A)
of ERISA.
<PAGE> 11
7
"Eurocurrency Liabilities" has 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 Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate which appears on Page 3750 of
the Telerate Service (or on any successor or substitute page of such
service, or any successor to or substitute for such service providing
rate quotations comparable to those currently provided on such page of
such service, as determined by the Administrative Agent from time to
time for purposes of providing quotations of interest rates applicable
to Dollar deposits in the London interbank market) as at approximately
11:00 A.M. (London, England time) two Business Days before the first
day of such Interest Period as the rate for Dollar deposits with a
maturity comparable to such Interest Period; provided that if such rate
is not available at such time for any reason, the Eurodollar Rate for
such Borrowing for such Interest Period shall be the interest rate per
annum equal to the average (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in Dollars are
offered by the principal office of each of the Reference Lenders in
London, England, to prime banks in the London interbank market as at
approximately 11:00 A.M. (London, England time) two Business Days
before the first day of such Interest Period, in an approximate amount
of each such Reference Lender's share of the relevant Borrowing for the
applicable Interest Period. The Eurodollar Rate for the Interest Period
for each Eurodollar Rate Advance comprising part of the same Borrowing,
when being determined pursuant to the foregoing proviso clause, shall
be determined by the Administrative Agent on the basis of applicable
rates furnished to and received by the Administrative Agent from the
Reference Lenders two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.13.
"Eurodollar Rate Advance" means an Advance which bears
interest determined by reference to the Eurodollar Rate, as provided in
Section 2.11(a)(ii).
"Eurodollar Rate Margin" means for any day the rate per annum
set forth below opposite the applicable S&P Bond Rating and Moody's
Bond Rating in effect on such day:
<PAGE> 12
8
<TABLE>
<CAPTION>
Bond Rating Eurodollar
(S&P/Moody's) Level Rate Margin
------------- ----- -----------
<S> <C> <C>
A/A2 or higher I .145%
A-/A3 II .175%
BBB+/Baa1 III .205%
BBB/Baa2 IV .235%
BBB-/Baa3 V .300%
BB+/Ba1 or lower VI .500%;
</TABLE>
provided that if the ratings of such rating agencies do not fall within
the same Level, the Eurodollar Rate Margin applicable to such day will
be the lower Eurodollar Rate Margin and provided, further, that in the
event a rating is not available from a rating agency, such rating
agency will be deemed to have assigned its lowest rating.
"Eurodollar Reserve Percentage" for any Lender for any
Interest Period for any Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so
applicable) for determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a
term equal to such Interest Period.
"Events of Default" has the meaning assigned to such term in
Section 7.1.
"Excluded Acquisition Debt" means (a) Debt, Guaranties or
reimbursement obligations of any corporation acquired by the Company or
any of its Subsidiaries and which Debt, Guaranties or reimbursement
obligations exist immediately prior to such acquisition (provided that
(i) such Debt, Guaranties or reimbursement obligations are not incurred
solely in anticipation of such acquisition and (ii) immediately prior
to such acquisition such corporation is not a Subsidiary of the
Company), (b) Debt, Guaranties or reimbursement obligations of EPTPC
and its Subsidiaries in existence on the date of the merger of EPTPC
with El Paso Merger Company or (c) Debt, Guaranties or reimbursement
obligations in respect of any asset acquired by the Company or any of
its Subsidiaries and which Debt, Guaranties or reimbursement
obligations exists immediately prior to such acquisition (provided that
(i) such Debt, Guaranties or reimbursement obligations are not incurred
solely in anticipation of such acquisition and (ii) immediately prior
to such acquisition such asset is not an asset of the Company or any of
its Subsidiaries).
<PAGE> 13
9
"Existing Facilities" means the collective reference to (a)
the $750,000,000 Revolving Credit and Competitive Advance Facility
Agreement and the $250,000,000 Revolving Credit and Competitive Advance
Facility Agreement, each dated November 4, 1996, among EPNGC, the
several financial institutions from time to time parties thereto and
Chase, as Administrative Agent and CAF Advance Agent and (b) the EPTPC
Facility.
"Exposure" means (a) with respect to an Objecting Lender at
any time, the aggregate outstanding principal amount of its Revolving
Credit Advances and (b) with respect to any other Lender at any time,
the maximum amount of the Commitment of such Lender.
"Extension Request" means each request by the Borrowers made
pursuant to Section 2.23 for the Lenders to extend the Stated
Termination Date, which shall contain the information in respect of
such extension specified in Exhibit M and shall be delivered to the
Administrative Agent in writing.
"Facility Fee Commencement Date" means the date hereof.
"FERC" means the Federal Energy Regulatory Commission, or any
agency or authority of the United States from time to time succeeding
to its function.
"Fixed Rate CAF Advance" means any CAF Advance made pursuant
to a Fixed Rate CAF Advance Request.
"Fixed Rate CAF Advance Request" means any CAF Advance Request
requesting the CAF Advance Lenders to offer to make CAF Advances at a
fixed rate (as opposed to a rate composed of the Applicable LIBO Rate
plus (or minus) a margin).
"Guaranty", "Guaranteed" and "Guaranteeing" each means any act
by which any Person assumes, guarantees, endorses or otherwise incurs
direct or contingent liability in connection with, or agrees to
purchase or otherwise acquire or otherwise assures a creditor against
loss in respect of, any Debt or Project Financing of any Person other
than the Company or any of its consolidated Subsidiaries (excluding (a)
any liability by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(b) any liability in connection with obligations of the Company, any of
its consolidated Subsidiaries or any Restricted Affiliate, including,
without limitation, obligations under any conditional sales agreement,
equipment trust financing or equipment lease and any liability of any
Restricted Affiliate in respect of obligations of EPNGC or its
consolidated Subsidiaries and (c) any such act in connection with a
Project Financing that either (i) guarantees performance of the
completion of the project which is financed by such Project Financing,
until such time, if any, that such guaranty becomes a guaranty of
payment of such Project Financing (other than a guaranty of
<PAGE> 14
10
payment of the type referred to in subclause (ii) below) or
(ii) is contingent upon, or the obligation to pay or perform under
which is contingent upon, the occurrence of any event other than or in
addition to the passage of time or any Project Financing becoming due
(any such act referred to in this clause (c) being a "Contingent
Guaranty"); provided, however, that for purposes of this definition
the liability of the Company or any of its Subsidiaries with respect
to any obligation as to which a third party or parties are jointly, or
jointly and severally, liable as a guarantor or otherwise as
contemplated hereby and have not defaulted on its or their portions
thereof, shall be only its pro rata portion of such obligation.
"Holding" means any domestic parent holding company of both
EPNGC and EPTPC which directly or indirectly owns 100% of the common
stock of EPNGC and 100% of the common stock of EPTPC; provided,
however, that immediately after Holding becomes EPNGC's and EPTPC's
parent holding company, not less than 80% of the shareholders of common
stock of Holding are the same shareholders of common stock of EPNGC
immediately prior to Holding becoming EPNGC's and EPTPC's parent
holding company.
"Holding Guarantee" has the meaning assigned to such term in
Section 5.1(g).
"Indebtedness" of any Person means, without duplication (a)
indebtedness of such Person for borrowed money, (b) obligations of such
Person (other than any portion of any trade payable obligation of such
Person which shall not have remained unpaid for 91 days or more from
the original due date of such portion) to pay the deferred purchase
price of property or services, and (c) obligations of such Person as
lessee under leases which shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital
leases, except that where such indebtedness or obligation of such
Person is made jointly, or jointly and severally, with any third party
or parties other than any consolidated Subsidiary of such Person, the
amount thereof for the purposes of this definition only shall be the
pro rata portion thereof payable by such Person, so long as such third
party or parties have not defaulted on its or their joint and several
portions thereof.
"Indemnified Party" means any or all of the Lenders, the
Administrative Agent and the CAF Advance Agent.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period beginning on the date
of such Advance or the date of the Conversion of any Advance into such
an Advance and ending on the last day of the period selected by the
applicable Borrower pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the
<PAGE> 15
11
immediately preceding Interest Period and ending on the last
day of the period selected by the applicable Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, or, subject to availability to each
Lender, nine or twelve months, in each case as the applicable Borrower
may, upon notice received by the Administrative Agent not later than
12:00 noon (New York City time) on the third Business Day prior to the
first day of such Interest Period with respect to Eurodollar Rate
Advances, select; provided, however, that:
(a) the duration of any Interest Period which
commences before the second anniversary of the Termination
Date and would otherwise end after the second anniversary of
the Termination Date shall end on the second anniversary of
the Termination Date;
(b) if the last day of such Interest Period
would otherwise occur on a day which is not a Business Day,
such last day shall be extended to the next succeeding
Business Day, except if such extension would cause such last
day to occur in a new calendar month, then such last day shall
occur on the next preceding Business Day;
(c) Interest Periods commencing on the same
date for Advances comprising the same Borrowing shall be of
the same duration; and
(d) with respect to Advances made by an
Objecting Lender, no Interest Period with respect to such
Advances shall end after the second anniversary of such
Objecting Lender's Commitment Expiration Date.
"Joinder Agreement" means a Joinder Agreement, substantially
in the form of Exhibit J hereto, duly executed and delivered by the
Company and the Borrowing Subsidiary party thereto or Holding, as the
case may be.
"Lenders" has the meaning assigned to such term in the
preamble hereof.
"LIBO Rate CAF Advance" means any CAF Advance made pursuant to
a LIBO Rate CAF Advance Request.
"LIBO Rate CAF Advance Request" means any CAF Advance Request
requesting the CAF Advance Lenders to offer to make CAF Advances at an
interest rate equal to the Applicable LIBO Rate plus (or minus) a
margin.
"Lien" means any lien, security interest or other charge or
encumbrance, or any assignment of the right to receive income, or any
other type of preferential arrangement, in each case to secure any
Indebtedness or any Guaranty of any Person.
<PAGE> 16
12
"Majority Lenders" means Lenders the Commitment Percentages of
which aggregate at least 51%, provided, that at any time after the
Commitment Expiration Date with respect to any Objecting Lender (but
prior to the termination of all the Commitments), "Majority Lenders"
shall mean Lenders whose Exposure aggregates at least 51% of the
aggregate Exposure of all the Lenders.
"Margin Stock" means "margin stock" as defined in Regulation U
of the Board of Governors of the Federal Reserve System, as in effect
from time to time.
"Material Adverse Effect" means a material adverse effect on
the financial condition or operations of the Company and its
consolidated Subsidiaries on a consolidated basis.
"Material Subsidiary" means any Subsidiary of Holding (other
than a Project Financing Subsidiary) that itself (on an unconsolidated,
stand-alone basis) owns in excess of 10% of the consolidated net
property, plant and equipment of Holding and its consolidated
Subsidiaries.
"Mojave" means Mojave Pipeline Company.
"Moody's Bond Rating" means, subject to Section 2.11(a)(ii),
(a) for any day prior to the Ratings Change Date, the rating of EPNGC's
senior long-term unsecured debt by Moody's Investors Service, Inc. in
effect at 11:00 A.M., New York City time, on such day and (b) for any
day that is on or after the Ratings Change Date, the rating of
Holding's senior long-term unsecured debt by Moody's Investors Service,
Inc. in effect at 11:00 A.M., New York City time, on such day.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Company or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions and in respect of which the Company or
an ERISA Affiliate has any liability (contingent or otherwise), such
plan being maintained pursuant to one or more collective bargaining
agreements.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (a) is maintained for
employees of the Company or an ERISA Affiliate and at least one Person
other than the Company and its ERISA Affiliates or (b) was so
maintained and in respect of which the Company or an ERISA Affiliate
could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"Net Worth" means with respect to the Company, as of
<PAGE> 17
13
any date of determination, the sum of the preferred stock and
stockholders' equity of the Company as shown on the most recent
consolidated balance sheet of the Company delivered pursuant to
Section 5.3.
"New Lender" has the meaning assigned to such term in Section
2.24(b).
"New Lender Supplement" has the meaning assigned to such term
in Section 2.24(b).
"Note" has the meaning assigned to such term in Section
2.3(d).
"Notice of Borrowing" has the meaning specified in Section
2.2(a).
"Obligations" means the collective reference to the unpaid
principal of and interest on the Advances and the Notes and all other
financial liabilities of the Borrowers to the Administrative Agent,
the CAF Advance Agent and the Lenders (including, without limitation,
interest accruing at the then applicable rate provided in this
Agreement after the maturity of the Advances and interest accruing at
the then applicable rate provided in this Agreement after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Borrower whether or
not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, this Agreement or the
Notes, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent, the CAF Advance Agent or to
the Lenders that are required to be paid by any Borrower pursuant to
this Agreement).
"Objecting Lenders" has the meaning assigned to such term in
Section 2.23(a).
"Offered Increase Amount" has the meaning assigned to such
term in Section 2.24(a).
"Other Taxes" has the meaning assigned to such term in Section
2.20(b).
"Party" has the meaning assigned to such term in Section 9.8.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Claims" has the meaning assigned to such
<PAGE> 18
14
term in Section 9.9(a).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a country
or any political subdivision thereof or any agency or instrumentality
of such country or subdivision.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City. The Prime Rate is not intended to be
the lowest rate of interest charged by Chase in connection with
extensions of credit to debtors.
"Principal Subsidiary" means, at any time, any Subsidiary of
the Company (other than a Project Financing Subsidiary) either (a)
having assets that are, or owning Subsidiaries with assets that
together with its assets are, at such time greater than or equal to 5%
of the consolidated assets of the Company and its consolidated
Subsidiaries at such time or (b) constituting a Borrowing Subsidiary.
"Process Agent" has the meaning specified in Section 9.9(a).
"Project Financing" means any Indebtedness incurred to finance
a project, other than any portion of such Indebtedness permitting or
providing for recourse against the Company or any of its Subsidiaries
(or for purposes of Section 5.2(a) only, any Restricted Affiliate)
other than (a) recourse to the stock or assets of the Project Financing
Subsidiary, if any, incurring or Guaranteeing such Indebtedness, and
(b) such recourse as exists under any Contingent Guaranty.
"Project Financing Subsidiary" means any Subsidiary of the
Company (or for purposes of Section 5.2(a) only, any Restricted
Affiliate) whose principal purpose is to incur Project Financing, or to
become a partner, member or other equity participant in a partnership,
limited liability company or other entity so created, and substantially
all the assets of which Subsidiary, partnership limited liability
company or other entity are limited to those assets being financed (or
to be financed) in whole or in part by a Project Financing.
"Ratings Change Date" means the earliest to occur of (a) the
date on which Holding becomes a Borrower hereunder and (b) the date on
which Holding becomes a "Borrower" under the $750,000,000 5-Year
Revolving Credit and Competitive Advance Facility Agreement, dated as
of the date hereof, among EPNGC, the lenders parties thereto and Chase,
as
<PAGE> 19
15
administrative agent and CAF advance agent.
"Re-Allocation Date" has the meaning assigned to such term in
Section 2.24(e).
"Receivables Purchase and Sale Agreement" means the collective
reference to (a) the Receivables Purchase and Sale Agreement dated as
of January 14, 1992 among EPNGC, CIESCO L.P., a New York limited
partnership, Corporate Asset Funding Company, a Delaware corporation
and Citicorp North America, Inc., as agent, as amended as of the date
hereof, and (b) the Amended and Restated Receivables Sale Agreement
dated as of December 31, 1996 among El Paso Energy Credit Corporation,
Asset Securitization Cooperative Corporation and Canadian Imperial Bank
of Commerce, as administrative agent, as such Agreement may be amended,
supplemented, restated or otherwise modified from time to time,
provided that no such amendment, supplement, restatement or
modification shall change the scope of such Agreement from that of a
receivables securitization transaction.
"Reference Lenders" means Chase, Morgan Guaranty Trust Company
of New York and Citibank, N.A..
"Register" has the meaning specified in Section 9.7(c).
"Required Lenders" means Lenders (a) which are not Objecting
Lenders with respect to any previous Extension Request and (b) which
have Commitment Percentages aggregating at least 66-2/3% of the
aggregate Commitment Percentages of such non-Objecting Lenders.
"Restricted Affiliate" means any Affiliate of EPNGC (other
than a Subsidiary of EPNGC) designated by EPNGC as a "Restricted
Affiliate" by written notice to the Administrative Agent; provided that
such Affiliate shall not become a Restricted Affiliate until such time
that (a) such Affiliate executes and delivers a guaranty (in form and
substance reasonably satisfactory to the Administrative Agent) (each a
"Restricted Affiliate Guaranty") in favor of the Administrative Agent,
for the ratable benefit of the Lenders, guaranteeing the prompt and
complete payment by each Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations owing by
such Borrower and (b) the Administrative Agent receives legal opinions
from the General Counsel or Associate General Counsel of Holding and
from New York counsel to Holding reasonably acceptable to the
Administrative Agent, which legal opinions shall be in form and
substance satisfactory to the Administrative Agent; provided, further,
that after such time as such Affiliate becomes a Restricted Affiliate,
EPNGC may terminate the designation of such Affiliate as a Restricted
Affiliate by written notice to the Administrative Agent at which time
the aforementioned guaranty of such Affiliate shall also terminate.
<PAGE> 20
16
"Restricted Affiliate Guaranty" has the meaning assigned to
such term in the definition of Restricted Affiliate.
"Revolving Credit Advances" has the meaning assigned to such
term in Section 2.1.
"S&P Bond Rating" means, subject to Section 2.11(a)(ii), (a)
for any day prior to the Ratings Change Date, the rating of EPNGC's
senior long-term unsecured debt by Standard & Poor's Ratings Group in
effect at 11:00 A.M., New York City time, on such day and (b) for any
day that is on or after the Ratings Change Date, the rating of
Holding's senior long-term unsecured debt by Standard & Poor's Ratings
Group in effect at 11:00 A.M., New York City time, on such day.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Company or an ERISA Affiliate and no Person other than
the Company and its ERISA Affiliates or (b) was so maintained and in
respect of which the Company or an ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"Stated Termination Date" means October 28, 1988 or such later
date as shall be determined pursuant to the provisions of Section 2.23
with respect to non-Objecting Lenders.
"Subsidiary" means, as to any Person, any corporation of which
at least a majority of the outstanding stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall or
might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly beneficially owned or controlled
by such Person or one or more of its Subsidiaries or such Person and
one or more of the Subsidiaries of such Person.
"Syndication Agent" has the meaning assigned to such term in
the preamble hereof.
"Taxes" has the meaning assigned to such term in Section
2.20(a).
"Tennessee" has the meaning assigned to such term in the
preamble hereof, and its successors.
"Termination Date" means the earlier of (a) the Stated
Termination Date and (b) the date of termination in whole of the
Commitments pursuant to Section 2.9 or 7.1.
<PAGE> 21
17
"Termination Event" means (a) a "reportable event," as such
term is described in Section 4043 of ERISA (other than a "reportable
event" not subject to the provision for 30-day notice to the PBGC under
subsection .11, .12, .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss.
2615), or an event described in Section 4062(e) of ERISA, or (b) the
withdrawal of the Company or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a "substantial
employer," as such term is defined in Section 4001(a)(2) of ERISA or
the incurrence of liability by the Company or any ERISA Affiliate under
Section 4064 of ERISA upon the termination of a Multiple Employer Plan,
or (c) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate a Plan by the
PBGC under Section 4042 of ERISA, or (e) the conditions set forth in
Section 302(f)(1)(A) and (B) of ERISA to the creation of a lien upon
property or rights to property of the Company or any ERISA Affiliate
for failure to make a required payment to a Plan are satisfied, or (f)
the adoption of an amendment to a Plan requiring the provision of
security to such Plan, pursuant to Section 307 of ERISA, or (g) the
occurrence of any other event or the existence of any other condition
which would reasonably be expected to result in the termination of, or
the appointment of a trustee to administer, any Plan under Section 4042
of ERISA.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate (adjusted to the basis of a year of 365 or 366
days, as the case may be) for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board of
Governors of the Federal Reserve System (the "Board") through the
public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it.
"Type" means (a) as to any Revolving Credit Advance, its
nature as a Base Rate Advance or a Eurodollar Rate Advance and (b) as
to any CAF Advance, its nature as a Fixed Rate CAF Advance or a LIBO
Rate CAF Advance.
"Withdrawal Liability" has the meaning given such term under
Part 1 of Subtitle E of Title IV of ERISA.
<PAGE> 22
18
SECTION I.2 Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
SECTION I.3 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles either (a) consistent with those principles
applied in the preparation of the financial statements referred to in Section
4.1(e) or (b) not materially inconsistent with such principles (so that no
covenant contained in Section 5.1 or 5.2 would be calculated or construed in a
materially different manner or with materially different results than if such
covenant were calculated or construed in accordance with clause (a) of this
Section 1.3).
SECTION I.4 References. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION II.1 The Revolving Credit Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
revolving credit advances ("Revolving Credit Advances") to the Borrowers or any
one or more of them from time to time on any Business Day during the period from
the date hereof to and including the Termination Date in an aggregate amount not
to exceed at any time outstanding the amount of such Lender's Commitment;
provided that the aggregate amount of the Advances (other than Advances of
Objecting Lenders) outstanding shall not at any time exceed the aggregate amount
of the Commitments. Each Borrowing shall be in an aggregate amount of $5,000,000
in the case of a Borrowing comprised of Base Rate Advances and $20,000,000 in
the case of a Borrowing comprised of Eurodollar Rate Advances, or, in each case,
an integral multiple of $1,000,000 in excess thereof (or, in the case of a
Borrowing of Base Rate Advances, the aggregate unused Commitments, if less) and
shall consist of Revolving Credit Advances of the same Type made on the same day
by the Lenders ratably according to their respective Commitments. Within the
limits of each Lender's Commitment, any Borrower may make more than one
Borrowing on any Business Day and may borrow, repay pursuant to Section 2.10 or
prepay pursuant to Section 2.15, and reborrow under this Section 2.1.
SECTION II.2 Making the Revolving Credit Advances. (a) Each
Borrowing of Revolving Credit Advances shall be made on notice by the Company to
the Administrative Agent (a "Notice of
<PAGE> 23
19
Borrowing") received by the Administrative Agent, (i) in the case of a proposed
Borrowing comprised of Base Rate Advances, not later than 10:00 A.M. (New York
City time) on the Business Day of such proposed Borrowing and (ii) in the case
of a proposed Borrowing comprised of Eurodollar Rate Advances, not later than
12:00 noon (New York City time) on the third Business Day prior to the date of
such proposed Borrowing. Each Notice of Borrowing shall be by telecopy or
telephone (and if by telephone, confirmed promptly by telecopier), in
substantially the form of Exhibit B, specifying therein the requested (A)
Borrower, (B) date of such Borrowing, (C) Type of Revolving Credit Advances
comprising such Borrowing, (D) aggregate amount of such Borrowing, and (E) in
the case of a Borrowing comprised of Eurodollar Rate Advances, the initial
Interest Period for each such Advance. Each Lender shall, before 1:00 P.M. (New
York City time) on the date of such Borrowing, make available to the
Administrative Agent at its address at 270 Park Avenue, New York, New York,
10017, Reference: El Paso Natural Gas Company, or at such other address
designated by notice from the Administrative Agent to the Lenders pursuant to
Section 9.2, in same day funds, such Lender's ratable portion of such Borrowing.
Immediately after the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the applicable Borrower
at Chase, 270 Park Avenue, New York, New York, 10017, Account No. 323291503,
Reference: El Paso Natural Gas Company, or at such other account of the
applicable Borrower maintained by the Administrative Agent (or any successor
Administrative Agent) designated by the applicable Borrower and agreed to by the
Administrative Agent (or such successor Administrative Agent), in same day
funds.
(b) Each Notice of Borrowing shall be irrevocable and binding
on the applicable Borrower. In the case of any Borrowing which the related
Notice of Borrowing specified is to be comprised of Eurodollar Rate Advances, if
such Advances are not made as a result of any failure to fulfill on or before
the date specified for such Borrowing the applicable conditions set forth in
Article III, the applicable Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of such failure,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.2 and the Administrative Agent
may, in reliance upon such assumption, make available to the applicable Borrower
on such date a corresponding amount. If and to the extent such Lender
<PAGE> 24
20
shall not have so made such ratable portion available to the Administrative
Agent, such Lender and the applicable Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the applicable Borrower until the date such amount is repaid to the
Administrative Agent, at the Effective Federal Funds Rate for such day. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Advance to the applicable
Borrower as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION II.3 Evidence of Debt. (a) Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of each Borrower to such Lender resulting from each Revolving
Credit Advance of such Lender to such Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time in respect of such Revolving Credit Advance.
(b) The Administrative Agent shall maintain the Register
pursuant to Section 9.7(c), and a subaccount therein for each Lender, in which
shall be recorded (i) the amount of each Revolving Credit Advance made
hereunder, the Type thereof and each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from each Borrower on account of such Revolving Credit Advance to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from each Borrower and each Lender's share
thereof.
(c) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.3(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of each Borrower to repay (with applicable interest) the Revolving
Credit Advances made to each such Borrower by such Lender in accordance with the
terms of this Agreement.
(d) Each Borrower agrees that, upon the request to the
Administrative Agent by any Lender, such Borrower will execute and deliver to
such Lender a promissory note of such Borrower evidencing the Revolving Credit
Advances of such Lender to such Borrower, substantially in the form of Exhibit A
with appropriate
<PAGE> 25
21
insertions as to date and principal amount (a "Note").
SECTION II.4 CAF Advances. Subject to the terms and conditions
of this Agreement, the Borrowers or any one or more of them may borrow CAF
Advances from time to time during the CAF Advance Availability Period on any
Business Day. The Company shall, in consultation with the CAF Advance Agent,
designate Lenders from time to time as CAF Advance Lenders by written notice to
the CAF Advance Agent. The CAF Advance Agent shall transmit each such notice of
designation promptly to each designated CAF Advance Lender. CAF Advances shall
be borrowed in amounts such that the aggregate amount of Advances outstanding at
any time shall not exceed the aggregate amount of the Commitments at such time.
Any CAF Advance Lender may make CAF Advances in amounts which, individually and
together with the aggregate amount of other Advances of such CAF Advance Lender,
exceed such CAF Advance Lender's Commitment, and such CAF Advance Lender's CAF
Advances shall not be deemed to utilize such CAF Advance Lender's Commitment.
Within the limits and on the conditions hereinafter set forth with respect to
CAF Advances, the Borrowers from time to time may borrow, repay and reborrow CAF
Advances.
SECTION II.5 Procedure for CAF Advance Borrowings. (a) A
Borrower, or the Company on behalf of a Borrower, shall request CAF Advances by
delivering a CAF Advance Request to the CAF Advance Agent, not later than 12:00
Noon (New York City time) four Business Days prior to the date of the proposed
Borrowing (in the case of a LIBO Rate CAF Advance Request), and not later than
10:00 A.M. (New York City time) one Business Day prior to the date of the
proposed Borrowing (in the case of a Fixed Rate CAF Advance Request). Each CAF
Advance Request may solicit bids for CAF Advances in an aggregate principal
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and having not more than five alternative maturity dates. The maturity date for
each CAF Advance shall be not less than 7 days nor more than 360 days after the
date of the Borrowing therefor (and in any event shall be not later than the
Stated Termination Date); provided that each LIBO Rate CAF Advance shall mature
one, two, three or six months or, if available, nine [or twelve] months after
the date of the Borrowing therefor. The CAF Advance Agent shall notify each CAF
Advance Lender promptly by telecopy of the contents of each CAF Advance Request
received by the CAF Advance Agent.
(b) In the case of a LIBO Rate CAF Advance Request, upon
receipt of notice from the CAF Advance Agent of the contents of such CAF Advance
Request, each CAF Advance Lender may elect, in its sole discretion, to offer
irrevocably to make one or more CAF Advances at the Applicable LIBO Rate plus
(or minus) a margin determined by such CAF Advance Lender in its sole discretion
for each such CAF Advance. Any such irrevocable offer shall be made by
delivering a CAF Advance Offer to the CAF Advance Agent, before 10:30 A.M. (New
York City time) on the day that is three Business Days before the date of the
proposed Borrowing, setting forth:
<PAGE> 26
22
(i) the maximum amount of CAF Advances for each maturity date
and the aggregate maximum amount of CAF Advances for all maturity dates
which such CAF Advance Lender would be willing to make (which amounts
may, subject to Section 2.4, exceed such CAF Advance Lender's
Commitment); and
(ii) the margin above or below the Applicable LIBO Rate at
which such CAF Advance Lender is willing to make each such CAF Advance.
The CAF Advance Agent shall advise the Company and the applicable Borrower
before 11:00 A.M. (New York City time) on the date which is three Business Days
before the proposed date of the Borrowing of the contents of each such CAF
Advance Offer received by it. If the CAF Advance Agent, in its capacity as a CAF
Advance Lender, shall elect, in its sole discretion, to make any such CAF
Advance Offer, it shall advise the Company and the applicable Borrower of the
contents of its CAF Advance Offer before 10:15 A.M. (New York City time) on the
date which is three Business Days before the proposed date of the Borrowing.
(c) In the case of a Fixed Rate CAF Advance Request, upon
receipt of notice from the CAF Advance Agent of the contents of such CAF Advance
Request, each CAF Advance Lender may elect, in its sole discretion, to offer
irrevocably to make one or more CAF Advances at a rate of interest determined by
such CAF Advance Lender in its sole discretion for each such CAF Advance. Any
such irrevocable offer shall be made by delivering a CAF Advance Offer to the
CAF Advance Agent before 9:30 A.M. (New York City time) on the proposed date of
the Borrowing, setting forth:
(i) the maximum amount of CAF Advances for each maturity date,
and the aggregate maximum amount for all maturity dates, which such CAF
Advance Lender would be willing to make (which amounts may, subject to
Section 2.4, exceed such CAF Advance Lender's Commitment); and
(ii) the rate of interest at which such CAF Advance Lender is
willing to make each such CAF Advance.
The CAF Advance Agent shall advise the Company and the applicable Borrower
before 10:00 A.M. (New York City time) on the proposed date of the Borrowing of
the contents of each such CAF Advance Offer received by it. If the CAF Advance
Agent, in its capacity as a CAF Advance Lender, shall elect, in its sole
discretion, to make any such CAF Advance Offer, it shall advise the Company and
the applicable Borrower of the contents of its CAF Advance Offer before 9:15
A.M. (New York City time) on the proposed date of the Borrowing.
(d) Before 11:30 A.M. (New York City time) three Business Days
before the proposed date of the Borrowing (in the case of CAF Advances requested
by a LIBO Rate CAF Advance Request) and before 10:30 A.M. (New York City time)
on the proposed date of the Borrowing (in the case of CAF Advances
<PAGE> 27
23
requested by a Fixed Rate CAF Advance Request), the Company, in its absolute
discretion, shall:
(i) cancel such CAF Advance Request by giving the CAF Advance
Agent telephone notice to that effect, or
(ii) by giving telephone notice to the CAF Advance Agent
(immediately confirmed by delivery to the CAF Advance Agent of a CAF
Advance Confirmation in writing or by telecopy) (A) subject to the
provisions of Section 2.5(e), accept one or more of the offers made by
any CAF Advance Lender or CAF Advance Lenders pursuant to Section
2.5(b) or Section 2.5(c), as the case may be, of the amount of CAF
Advances for each relevant maturity date and (B) reject any remaining
offers made by CAF Advance Lenders pursuant to Section 2.5(b) or
Section 2.5(c), as the case may be.
(e) The Company's acceptance of CAF Advances in response to
any CAF Advance Request shall be subject to the following limitations:
(i) the amount of CAF Advances accepted for each maturity date
specified by any CAF Advance Lender in its CAF Advance Offer shall not
exceed the maximum amount for such maturity date specified in such CAF
Advance Offer;
(ii) the aggregate amount of CAF Advances accepted for all
maturity dates specified by any CAF Advance Lender in its CAF Advance
Offer shall not exceed the aggregate maximum amount specified in such
CAF Advance Offer for all such maturity dates;
(iii) the Company may not accept offers for CAF Advances for
any maturity date in an aggregate principal amount in excess of the
maximum principal amount requested in the related CAF Advance Request;
and
(iv) if the Company accepts any of such offers, it must accept
offers based solely upon pricing for such relevant maturity date and
upon no other criteria whatsoever and if two or more CAF Advance
Lenders submit offers for any maturity date at identical pricing and
the Company accepts any of such offers but does not wish to (or by
reason of the limitations set forth in Section 2.4 or in Section
2.5(e)(iii), cannot) borrow the total amount offered by such CAF
Advance Lenders with such identical pricing, the Company shall accept
offers from all of such CAF Advance Lenders in amounts allocated among
them pro rata according to the amounts offered by such CAF Advance
Lenders (or as nearly pro rata as shall be practicable after giving
effect to the requirement that CAF Advances made by a CAF Advance
Lender on a date of the Borrowing for each relevant maturity date shall
be in a principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof; provided that if the number of CAF
Advance Lenders that submit offers for any maturity date at identical
pricing is such that, after the
<PAGE> 28
24
Company accepts such offers pro rata in accordance with the foregoing,
the CAF Advance to be made by such CAF Advance Lenders would be less
than $5,000,000 principal amount, the number of such CAF Advance
Lenders shall be reduced by the CAF Advance Agent by lot until the CAF
Advances to be made by such remaining CAF Advance Lenders would be in
a principal amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof).
(f) If the Company notifies the CAF Advance Agent that a CAF
Advance Request is cancelled pursuant to Section 2.5(d)(i), the CAF Advance
Agent shall give prompt telephone notice thereof to the CAF Advance Lenders.
(g) If the Company accepts pursuant to Section 2.5(d)(ii) one
or more of the offers made by any CAF Advance Lender or CAF Advance Lenders, the
CAF Advance Agent promptly shall notify each CAF Advance Lender which has made
such a CAF Advance Offer of (i) the aggregate amount of such CAF Advances to be
made on such Borrowing Date for each maturity date and (ii) the acceptance or
rejection of any offers to make such CAF Advances made by such CAF Advance
Lender. Before 1:00 P.M. (New York City time) on the date of the Borrowing
specified in the applicable CAF Advance Request, each CAF Advance Lender whose
CAF Advance Offer has been accepted shall make available to the Administrative
Agent at its office set forth in Section 9.2 the amount of CAF Advances to be
made by such CAF Advance Lender, in same day funds. The Administrative Agent
will make such funds available to the applicable Borrower as soon as practicable
on such date at the Administrative Agent's aforesaid address. As soon as
practicable after each Borrowing Date, the CAF Advance Agent shall notify each
Lender of the aggregate amount of CAF Advances advanced on such Borrowing Date
and the respective maturity dates thereof.
(h) The failure of any CAF Advance Lender to make the CAF
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its CAF Advance on the date
of such Borrowing, but no CAF Lender shall be responsible for the failure of any
other CAF Advance Lender to make the CAF Advance to be made by such CAF Advance
Lender on the date of any Borrowing.
(i) A CAF Advance Request may request offers for CAF Advances
to be made on not more than one Borrowing Date and to mature on not more than
five CAF Advance Maturity Dates. No CAF Advance Request may be submitted earlier
than five Business Days after submission of any other CAF Advance Request.
SECTION II.6 CAF Advance Payments. (a) The applicable Borrower
shall repay to the Administrative Agent, for the account of each CAF Advance
Lender which has made a CAF Advance to it, on the applicable CAF Advance
Maturity Date the then unpaid principal amount of such CAF Advance. The
Borrowers shall not have the right to prepay any principal amount of any CAF
Advance.
<PAGE> 29
25
(b) The applicable Borrower shall pay interest on the unpaid
principal amount of each CAF Advance to it from the date of the Borrowing to the
applicable CAF Advance Maturity Date at the rate of interest specified in the
CAF Advance Offer accepted by the applicable Borrower in connection with such
CAF Advance (calculated on the basis of a 360-day year for actual days elapsed),
payable on each applicable CAF Advance Interest Payment Date.
(c) If all or a portion of the principal amount of any CAF
Advance shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount shall, without
limiting any rights of any Lender under this Agreement, bear interest from the
date on which such payment was due at a rate per annum which is 1% above the
rate which would otherwise be applicable pursuant to such CAF Advance until the
stated maturity date of such CAF Advance, and for each day thereafter at a rate
per annum which is 2% above the Base Rate, in each case until paid in full (as
well after as before judgment). Interest accruing pursuant to this paragraph (c)
shall be payable from time to time on demand.
SECTION II.7 Evidence of Debt. Each Lender shall maintain in
accordance with its usual practice appropriate records evidencing indebtedness
of each Borrower to such Lender resulting from each CAF Advance of such Lender
to such Borrower from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time in respect of such
CAF Advance. The Administrative Agent shall maintain the Register pursuant to
Section 9.7(c) and a record therein for each Lender, in which shall be recorded
(i) the amount of each CAF Advance made by such Lender to each Borrower, the CAF
Advance Maturity Date thereof, the interest rate applicable thereto and each CAF
Advance Interest Payment Date applicable thereto, and (ii) the amount of any sum
received by the Administrative Agent hereunder from a Borrower on account of
such CAF Advance. The entries made in the Register and the records of each
Lender maintained pursuant to this Section 2.7 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such record, or any error therein, shall not in any manner affect the
obligation of each Borrower to repay (with applicable interest) the CAF Advances
made by such Lender in accordance with the terms of this Agreement.
SECTION II.8 Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee for the
period from and including the Facility Fee Commencement Date until all Advances
have been paid in full and all Commitments have been terminated, computed at a
variable rate per annum on the average daily amount of the greater of (i) the
Commitment of such Lender and (ii) the outstanding principal amount of Revolving
Credit Advances of such Lender during the
<PAGE> 30
26
period for which payment is made, which rate will vary according to the S&P Bond
Rating and the Moody's Bond Rating as follows:
<TABLE>
<CAPTION>
Bond Rating Facility
(S&P/Moody's) Level Fee Rate
------------- ----- --------
<S> <C> <C>
A/A2 or higher I .04%
A-/A3 II .05%
BBB+/Baa1 III .07%
BBB/Baa2 IV .09%
BBB-/Baa3 V .10%
BB+/Ba1 or lower VI .15%;
</TABLE>
provided that if the ratings of such rating agencies do not fall within the same
Level, the rate applicable to such day will be the lower facility fee rate and
provided, further, that in the event a rating is not available from either
rating agency, such rating agency will be deemed to have assigned its lowest
rating. Such facility fees shall be payable quarterly in arrears on the last day
of each March, June, September and December and on the Termination Date or such
earlier date on which the Commitments shall terminate as provided herein, and,
if the Lender is an Objecting Lender, on the Commitment Expiration Date
applicable to such Lender and on the second anniversary of the Termination Date
(or if the Lender is an Objecting Lender, the second anniversary of the
Commitment Expiration Date applicable to such Lender) or such earlier date on
which the Advances are repaid in full, commencing on the first of such dates to
occur after the date hereof.
(b) The Company agrees to pay to Chase Securities Inc., the
Administrative Agent and the CAF Advance Agent the fees set forth in the letter,
dated October 6, 1997, from Chase Securities Inc. and Chase to EPNGC.
SECTION II.9 Reduction of the Commitments. The Company shall
have the right, upon at least three Business Days' notice to the Administrative
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, provided that each partial reduction
shall be in the aggregate amount of $10,000,000 or any whole multiple of
$1,000,000 in excess thereof.
SECTION II.10 Repayment of Advances. The Borrowers shall repay
to each Lender on the second anniversary of the Termination Date the aggregate
principal amount of the Advances then owing to such Lender; provided that the
Revolving Credit Advances made by Objecting Lenders shall be repaid as provided
in Section 2.23.
SECTION II.11 Interest on Revolving Credit Advances. (a)
Ordinary Interest. The Borrowers shall pay interest on the unpaid principal
amount of each Revolving Credit Advance owing to each Lender from the date of
such Advance until such principal amount is due (whether at stated maturity, by
acceleration or otherwise), at the following rates:
<PAGE> 31
27
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all times to
the Base Rate in effect from time to time, payable quarterly in arrears
on the last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or
due (whether at stated maturity, by acceleration or otherwise).
(ii) Eurodollar Rate Advances. During such periods as
such Advance is a Eurodollar Rate Advance, at a rate per annum equal at
all times during each Interest Period for such Advance to the sum of
the Eurodollar Rate for such Interest Period plus the Eurodollar Rate
Margin (provided that notwithstanding the definitions of Moody's Bond
Rating and S&P Bond Rating, in the case of Eurodollar Rate Advances to
EPNGC and its Subsidiaries, whether before, on or after the Ratings
Change Date, the Eurodollar Rate Margin shall be based on the Moody's
Bond Rating and S&P Bond Rating of EPNGC, and, in the case of all other
Borrowers, shall be based on the Moody's Bond Rating and S&P Bond
Rating of Holding) in effect from time to time, payable on the last day
of each such Interest Period and, if any such Interest Period has a
duration of more than three months, on each day which occurs during
such Interest Period every three months from the first day of such
Interest Period, and on the date such Advance shall be Converted or due
(whether at stated maturity, by acceleration or otherwise).
(b) Default Interest. The applicable Borrower shall pay
interest on the unpaid principal amount of each Revolving Credit Advance to it
that is not paid when due (whether at stated maturity, by acceleration or
otherwise) from the date on which such amount is due until such amount is paid
in full, payable on demand, at a rate per annum equal at all times (i) from such
due date to the last day of the then existing Interest Period in the case of
each Eurodollar Rate Advance, to 1% per annum above the interest rate per annum
required to be paid on such Advance immediately prior to the date on which such
amount became due, and (ii) from and after the last day of the then existing
Interest Period, and at all times in the case of any Base Rate Advance, to 1%
per annum above the Base Rate in effect from time to time.
SECTION II.12 Additional Interest on Eurodollar Rate Advances.
If any Lender shall determine in good faith that reserves under regulations of
the Board of Governors of the Federal Reserve System are required to be
maintained by it in respect of, or a portion of its costs of maintaining
reserves under such regulations is properly attributable to, one or more of its
Eurodollar Rate Advances, the applicable Borrower shall pay to such Lender
additional interest on the unpaid principal amount of each such Eurodollar Rate
Advance to it (other than any such additional interest accruing to a particular
Lender in respect of periods prior to the 30th day preceding the date
<PAGE> 32
28
notice of such interest is given by such Lender as provided in this Section
2.12), payable on the same day or days on which interest is payable on such
Advance, at an interest rate per annum equal at all times during each Interest
Period for such Advance to the excess of (i) the rate obtained by dividing the
Eurodollar Rate for such Interest Period by a percentage equal to 100% minus the
Eurodollar Reserve Percentage, if any, for such Lender for such Interest Period
over (ii) the Eurodollar Rate for such Interest Period. The amount of such
additional interest (if any) shall be determined by each Lender, and such Lender
shall furnish written notice of the amount of such additional interest to the
Company and the Administrative Agent, which notice shall be conclusive and
binding for all purposes, absent manifest error.
SECTION II.13 Interest Rate Determination. (a) Each Reference
Lender agrees to furnish to the Administrative Agent timely information for the
purpose of determining the Eurodollar Rate. If any one or more of the Reference
Lenders shall not furnish such timely information to the Administrative Agent
for the purpose of determining any such interest rate, the Administrative Agent
shall determine such interest rate on the basis of timely information furnished
by the remaining Reference Lenders.
(b) The Administrative Agent shall give prompt notice to the
Company and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.11(a)(i) or (ii), and the
applicable rate, if any, furnished by each Reference Lender for the purpose of
determining the applicable interest rate under Section 2.11(a)(ii).
(c) If fewer than two Reference Lenders furnish timely
information to the Administrative Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,
(i) the Administrative Agent shall give the Company and
each Lender prompt notice thereof by telephone (confirmed in writing)
that the interest rate cannot be determined for such Eurodollar Rate
Advances,
(ii) each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base
Rate Advance (or if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(iii) the obligations of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Company and the Lenders
that the circumstances causing such suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders determine and give notice to the Administrative Agent that, as
a result of conditions in or
<PAGE> 33
29
generally affecting the London interbank eurodollar market, the rates of
interest determined on the basis of the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Company and the Lenders, whereupon,
(i) each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base
Rate Advance, and
(ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist.
(e) If the applicable Borrower shall fail to select the
duration of any Interest Period for any Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest Period" in Section
1.1, the Administrative Agent will forthwith so notify the applicable Borrower
and the Lenders and such Advances will automatically, on the last day of the
then existing Interest Period therefor, Convert into Base Rate Advances.
(f) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $10,000,000, such
Eurodollar Rate Advances shall automatically Convert into Base Rate Advances,
and on and after such date the right of the applicable Borrower to Convert such
Advances into Eurodollar Rate Advances shall terminate; provided, however, that
if and so long as each such Eurodollar Rate Advance shall have the same Interest
Period as Eurodollar Rate Advances comprising another Borrowing or other
Borrowings, and the aggregate unpaid principal amount of all such Eurodollar
Rate Advances shall equal or exceed $20,000,000, the applicable Borrower shall
have the right to continue all such Advances as, or to Convert all such Advances
into Eurodollar Rate Advances having the same Interest Period.
(g) If any Reference Lender shall for any reason no longer
have a Commitment or any Revolving Credit Advances, such Reference Lender shall
thereupon cease to be a Reference Lender, and if, as a result, there shall only
be one Reference Lender remaining, the Administrative Agent (after consultation
with the Company and the Lenders) shall, by notice to the Company and the
Lenders, designate another Lender as a Reference Lender so that there shall at
all times be at least two Reference Lenders.
SECTION II.14 Voluntary Conversion of Advances. Any Borrower
may on any Business Day, upon notice given to the Administrative Agent, not
later than 10:00 A.M. (New York City time) on the Business Day of the proposed
Conversion of
<PAGE> 34
30
Eurodollar Rate Advances to Base Rate Advances and not later than 12:00 noon
(New York City time) on the third Business Day prior to the date of the proposed
Conversion in the case of a Conversion of Base Rate Advances to Eurodollar Rate
Advances, and subject to the provisions of Sections 2.13, 2.16 and 2.18, Convert
all Advances of one Type comprising the same Borrowing into Advances of another
Type; provided, however, that any Conversion of any Eurodollar Rate Advances
into Base Rate Advances made on any day other than the last day of an Interest
Period for such Eurodollar Rate Advances shall be subject to the provisions of
Section 9.4(b); and provided, further, that no Revolving Credit Advance may be
converted into a Eurodollar Rate Advance after the date that is one month prior
to (a) in the case of a Revolving Credit Advance made by an Objecting Lender,
the second anniversary of such Objecting Lender's Commitment Expiration Date,
and (b) in the case of all Revolving Credit Advances, the second anniversary of
the Termination Date and provided, still further, that no Revolving Credit
Advance may be converted into a Eurodollar Rate Advance if an Event of Default
has occurred and is continuing. Each such notice of a Conversion shall, within
the restrictions specified above, specify (a) the date of such Conversion, (b)
the Advances to be Converted, and (c) if such Conversion is into Eurodollar Rate
Advances, the duration of the Interest Period for each such Advance.
SECTION II.15 Optional and Mandatory Prepayments. (a) Optional
Prepayments. Any Borrower may upon (i) in the case of Eurodollar Rate Advances,
at least two Business Days' notice and (ii) in the case of Base Rate Advances,
telephonic notice not later than 12:00 noon (New York City time) on the date of
prepayment, to the Administrative Agent which specifies the proposed date and
aggregate principal amount of the prepayment and the Type of Advances to be
prepaid, and if such notice is given such Borrower shall, prepay the outstanding
principal amounts of the Revolving Credit Advances comprising the same Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the amount prepaid; provided, however, that (A) each partial
prepayment shall be in an aggregate principal amount not less than $10,000,000
or an integral multiple of $1,000,000 in excess thereof and (B) in the event of
any such prepayment of Eurodollar Rate Advances on any day other than the last
day of an Interest Period for such Eurodollar Rate Advances, such Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to, and to the
extent required by, Section 9.4(b); provided, further, however, that such
Borrower will use its best efforts to give notice to the Administrative Agent of
the proposed prepayment of Base Rate Advances on the Business Day prior to the
date of such proposed prepayment.
(b) Mandatory Prepayments. If, at any time and from time to
time, the aggregate principal amount of Advances (other than Advances of
Objecting Lenders) then outstanding exceeds the Commitments of all the Lenders
after giving effect to any reduction of the Commitments pursuant to Section 2.9,
the Borrowers shall immediately prepay the Revolving Credit Advances
<PAGE> 35
31
of Lenders (other than Objecting Lenders) (to the extent there are such
outstanding Revolving Credit Advances) by an amount equal to such excess.
SECTION II.16 Increased Costs. (a) If, due to either (i) the
introduction after the date of this Agreement of or any change after the date of
this Agreement (including any change by way of imposition or increase of reserve
requirements or assessments other than those referred to in the definition of
"Eurodollar Reserve Percentage," "C/D Reserve Percentage" or "C/D Assessment
Rate" contained in Section 1.1) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request issued or made
after the date of this Agreement from or by any central bank or other
governmental authority (whether or not having the force of law), in each case
above other than those referred to in Section 2.17, there shall be any increase
in the cost to any Lender of agreeing to make, fund or maintain, or of making,
funding or maintaining, Eurodollar Rate Advances funded in the interbank
Eurodollar market, then the Borrowers shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to reimburse such Lender for all such increased costs (except those
costs incurred more than 60 days prior to the date of such demand; for the
purposes hereof any cost or expense allocable to a period prior to the
publication or effective date of such an introduction, change, guideline or
request shall be deemed to be incurred on the later of such publication or
effective date). Each Lender agrees to use its best efforts promptly to notify
the Company of any event referred to in clause (i) or (ii) above, provided that
the failure to give such notice shall not affect the rights of any Lender under
this Section 2.16(a) (except as otherwise expressly provided above in this
Section 2.16(a)). A certificate as to the amount of such increased cost,
submitted to the Company and the Administrative Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error. After one or
more Lenders have notified the Company of any increased costs pursuant to this
Section 2.16, the Company may specify by notice to the Administrative Agent and
the affected Lenders that, after the date of such notice whenever the election
of Eurodollar Rate Advances by the applicable Borrower for an Interest Period or
portion thereof would give rise to such increased costs, such election shall not
apply to the Revolving Credit Advances of such Lenders during such Interest
Period or portion thereof, and, in lieu thereof, such Revolving Credit Advances
shall during such Interest Period or portion thereof be Base Rate Advances. Each
Lender agrees to use its best efforts (including, without limitation, a
reasonable effort to change its lending office or to transfer its affected
Advances to an affiliate of such Lender) to avoid, or minimize the amount of,
any demand for payment from the Borrowers under this Section 2.16.
(b) In the event that any Lender shall change its lending
office and such change results (at the time of such change) in increased costs
to such Lender, the Borrowers shall
<PAGE> 36
32
not be liable to such Lender for such increased costs incurred by such Lender to
the extent, but only to the extent, that such increased costs shall exceed the
increased costs which such Lender would have incurred if the lending office of
such Lender had not been so changed, but, subject to subsection (a) above and to
Section 2.18, nothing herein shall require any Lender to change its lending
office for any reason.
SECTION II.17 Increased Capital. If either (a) the
introduction of or any change in or in the interpretation of any law or
regulation or (b) compliance by any Lender with any guideline or request from
any central bank or other governmental authority (whether or not having the
force of law) affects or would affect the amount of capital required or expected
to be maintained by such Lender or any corporation controlling such Lender and
such Lender determines that the amount of such capital is increased by or based
upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, within ten days after demand, and delivery to
the Company of the certificate referred to in the last sentence of this Section
2.17 by such Lender (with a copy of such demand to the Administrative Agent),
the applicable Borrowers shall pay to the Administrative Agent for the account
of such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender or such corporation in the light of
such circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend hereunder (except any such increase in capital incurred more than, or
compensation attributable to the period before, 90 days prior to the date of
such demand; for the purposes hereof any increase in capital allocable to, or
compensation attributable to, a period prior to the publication or effective
date of such an introduction, change, guideline or request shall be deemed to be
incurred on the later of such publication or effective date). Each Lender agrees
to use its best efforts promptly to notify the Company of any event referred to
in clause (a) or (b) above, provided that the failure to give such notice shall
not affect the rights of any Lender under this Section 2.17 (except as otherwise
expressly provided above in this Section 2.17). A certificate in reasonable
detail as to the basis for, and the amount of, such compensation submitted to
the Company by such Lender shall, in the absence of manifest error, be
conclusive and binding for all purposes.
SECTION II.18 Illegality. Notwithstanding any other provision
of this Agreement, if the introduction 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
Lender or its lending office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain such Advances
hereunder, such Lender may, by notice to the Company and the Administrative
Agent, suspend the right of the Borrowers to elect Eurodollar Rate Advances from
such Lender and, if necessary in the reasonable opinion of such Lender to comply
with such law or
<PAGE> 37
33
regulation, Convert all such Eurodollar Rate Advances of such Lender to Base
Rate Advances at the latest time permitted by the applicable law or regulation,
and such suspension and, if applicable, such Conversion shall continue until
such Lender notifies the Company and the Administrative Agent that the
circumstances making it unlawful for such Lender to perform such obligations no
longer exist (which such Lender shall promptly do when such circumstances no
longer exist). So long as the obligation of any Lender to make Eurodollar Rate
Advances has been suspended under this Section 2.18, all Notices of Borrowing
specifying Advances of such Type shall be deemed, as to such Lender, to be
requests for Base Rate Advances. Each Lender agrees to use its best efforts
(including, without limitation, a reasonable effort to change its lending office
or to transfer its affected Advances to an affiliate) to avoid any such
illegality.
SECTION II.19 Pro Rata Treatment, Payments and Computations.
(a) Each Borrowing by any Borrower in respect of Revolving Credit Advances
(subject to the provisions of Section 2.24(e)) shall be made pro rata according
to the respective Commitment Percentages of the Lenders. The Borrowers shall
make each payment hereunder (including, without limitation, under Section 2.6,
2.8, 2.10 or 2.11) and under the Notes, whether the amount so paid is owing to
any or all of the Lenders or to the Administrative Agent, not later than 12:00
noon (New York City time) without setoff, counterclaim, or any other deduction
whatsoever, on the day when due in Dollars to the Administrative Agent at its
address at 270 Park Avenue, New York, New York 10017, Reference: El Paso Natural
Gas Company, or at such other location designated by notice to the Company from
the Administrative Agent and agreed to by the Company, in same day funds. The
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or facility fees ratably (other
than amounts payable pursuant to Section 2.12, 2.16, 2.17, 2.18 or 2.20)
according to the respective amounts of such principal, interest or facility fees
then due and owing to the Lenders, and like funds relating to the payment of any
other amount payable to any Lender to such Lender, 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 9.7(d), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender 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) All computations of interest based on the Prime Rate and
of facility fees shall be made by the Administrative 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, the Base CD Rate or the Effective Federal Funds
Rate shall be made by the Administrative Agent, and all computations of
<PAGE> 38
34
interest pursuant to Section 2.12 shall be made by each Lender with respect to
its own Advances, 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 or fees are payable. Each
determination by the Administrative Agent (or, in the case of Section 2.12,
2.16, 2.17, 2.18 or 2.20, by each Lender with respect to its own Advances) of an
interest rate or an increased cost or increased capital or of illegality
hereunder shall be conclusive and binding for all purposes if made reasonably
and in good faith.
(c) 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,
if such extension would cause payment of interest on or principal of Eurodollar
Rate Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Company or any other applicable Borrower prior to the date on which any
payment is due to the Lenders hereunder that the applicable Borrower will not
make such payment in full, the Administrative Agent may assume that the
applicable Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the applicable Borrower shall
not have so made such payment in full to the Administrative Agent, each Lender
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at a rate equal to the Effective
Federal Funds Rate for such day.
SECTION II.20 Taxes. (a) Any and all payments by the Borrowers
hereunder or under the Notes to each Indemnified Party shall be made, in
accordance with Section 2.19, 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 all taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, imposed by the jurisdiction under the laws of which such
Indemnified Party is organized, domiciled, resident or doing business, or any
political subdivision thereof or by any jurisdiction in which such Indemnified
Party holds any interest in connection with this Agreement or any Note
(including, without limitation, in the case of each Lender, the jurisdiction of
such Lender's lending office) or any political subdivision thereof, other than
by any jurisdiction with which the Indemnified Party's connection arises solely
from having executed, delivered or performed obligations
<PAGE> 39
35
or received a payment under, or enforced, this Agreement or any Note (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Indemnified Party, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.20) such Indemnified Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make or
cause to be made such deductions and (iii) such Borrower shall pay or cause to
be paid the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, provided that the Borrowers shall
not be required to pay any additional amount (and shall be relieved of any
liability with respect thereto) pursuant to this subsection (a) to any
Indemnified Party that either (A) on the date such Lender became an Indemnified
Party hereunder, (I) was not entitled to submit a U.S. Internal Revenue Service
form 1001 (relating to such Indemnified Party, and entitling it to a complete
exemption from United States withholding taxes on all amounts to be received by
such Indemnified Party pursuant to this Agreement) and a U.S. Internal Revenue
Service form 4224 (relating to all amounts to be received by such Indemnified
Party pursuant to this Agreement) and (II) was not a United States person (as
such term is defined in Section 7701(a)(30) of the Internal Revenue Code) or (B)
has failed to submit any form or certificate that it was required to file or
provide pursuant to subsection (d) of this Section 2.20 and is entitled to file
or give, as applicable, under applicable law, provided, further, that should an
Indemnified Party become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrowers shall take such steps as such Indemnified
Party shall reasonably request to assist such Indemnified Party to recover such
Taxes, and provided, further, that each Indemnified Party, with respect to
itself, agrees to indemnify and hold harmless the Borrowers from any taxes,
penalties, interest and other expenses, costs and losses incurred or payable by
the Borrowers as a result of the failure of any of the Borrowers to comply with
its obligations under clause (ii) or (iii) above in reliance on any form or
certificate provided to it by such Indemnified Party pursuant to this Section
2.20. If any Indemnified Party receives a net credit or refund in respect of
such Taxes or amounts so paid by the Borrowers, it shall promptly notify the
Company of such net credit or refund and shall promptly pay such net credit or
refund to the applicable Borrower, provided that the applicable Borrower agrees
to return such net credit or refund if the Indemnified Party to which such net
credit or refund is applicable is required to repay it.
(b) In addition, each Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made by such Borrower hereunder
or under the Notes or from the execution, delivery or performance of, or
otherwise with
<PAGE> 40
36
respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) Each Borrower will indemnify each Indemnified Party and
the Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.20) paid by such Indemnified Party and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto except as a result of the gross negligence (which shall in any
event include the failure of such Indemnified Party to provide to the Borrowers
any form or certificate that it was required to provide pursuant to subsection
(d) below) or willful misconduct of such Indemnified Party, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This indemnification
shall be made within 30 days from the date such Indemnified Party makes written
demand therefor.
(d) On or prior to the date on which each Indemnified Party
organized under the laws of a jurisdiction outside the United States becomes an
Indemnified Party hereunder, such Indemnified Party shall provide the Company
with U.S. Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the U.S. Internal Revenue Service, certifying that
such Indemnified Party is fully exempt from United States withholding taxes with
respect to all payments to be made to such Indemnified Party hereunder, or other
documents satisfactory to the Company indicating that all payments to be made to
such Indemnified Party hereunder are fully exempt from such taxes. Thereafter
and from time to time (but only so long as such Indemnified Party remains
lawfully able to do so), each such Indemnified Party shall submit to the Company
such additional duly completed and signed copies of one or the other of such
Forms (or such successor Forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may be (i) notified by any
Borrower to such Indemnified Party and (ii) required under then-current United
States law or regulations to avoid United States withholding taxes on payments
in respect of all amounts to be received by such Indemnified Party pursuant to
this Agreement or the Notes. Upon the request of any Borrower from time to time,
each Indemnified Party that is a United States person (as such term is defined
in Section 7701(a)(30) of the Internal Revenue Code) shall submit to the Company
a certificate to the effect that it is such a United States person. If any
Indemnified Party determines, as a result of any change in applicable law,
regulation or treaty, or in any official application or interpretation thereof,
that it is unable to submit to the Company any form or certificate that such
Indemnified Party is obligated to submit pursuant to this subsection (d), or
that such Indemnified Party is required to withdraw or cancel any such form or
certificate previously submitted, such Indemnified Party shall promptly notify
the Company of such fact.
(e) Any Indemnified Party claiming any additional amounts
payable pursuant to this Section 2.20 shall use its best
<PAGE> 41
37
efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its lending office if the making of
such a change would avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue and would not, in the reasonable
judgment of such Indemnified Party, be otherwise disadvantageous to such
Indemnified Party.
(f) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers and
each Indemnified Party contained in this Section 2.20 shall survive the payment
in full of principal and interest hereunder and under the Notes.
(g) Any other provision of this Agreement to the contrary
notwithstanding, any amounts which are payable by any Borrower under this
Section 2.20 shall not be payable under Section 2.16.
SECTION II.21 Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances made by it (other
than pursuant to Section 2.12, 2.16, 2.17, 2.18 or 2.20) in excess of its
ratable share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Advances made by them as shall be necessary to cause such
purchasing Lender 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 Lender, such purchase from each Lender
shall be rescinded and each Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (a) the amount of
such Lender's required repayment to (b) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Each Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation.
SECTION II.22 Use of Proceeds. Proceeds of the Advances may be
used for general corporate purposes of the Borrowers and their respective
Subsidiaries, including, without limitation, for acquisitions and for payment of
commercial paper issued by the Borrowers and to refinance the loans under the
Existing Facilities.
SECTION II.23 Extension of Stated Termination Date. (a) Not
less than 45 days and not more than 60 days prior to the Stated Termination Date
then in effect, provided that no Event of Default shall have occurred and be
continuing, the Company may
<PAGE> 42
38
request an extension of such Stated Termination Date by submitting to the
Administrative Agent an Extension Request containing the information in respect
of such extension specified in Exhibit M, which the Administrative Agent shall
promptly furnish to each Lender. Each Lender shall, not less than 30 days and
not more than 60 days prior to the Stated Termination Date then in effect,
notify the Company and the Administrative Agent of its election to extend or not
extend the Stated Termination Date as requested in such Extension Request.
Notwithstanding any provision of this Agreement to the contrary, any notice by
any Lender of its willingness to extend the Stated Termination Date shall be
revocable by such Lender in its sole and absolute discretion at any time prior
to the date which is 30 days prior to the Stated Termination Date then in
effect. If the Required Lenders shall approve in writing the extension of the
Stated Termination Date requested in such Extension Request, the Stated
Termination Date shall automatically and without any further action by any
Person be extended for the period specified in such Extension Request; provided
that (i) each extension pursuant to this Section 2.23 shall be for a maximum of
364 days and (ii) the Commitment of any Lender that does not consent in writing,
or which revokes, in accordance with the provisions of this Section 2.23, its
consent to such extension not less than 30 days and not more than 60 days prior
to the Stated Termination Date then in effect and has not thereafter reinstated
its consent (an "Objecting Lender") shall, unless earlier terminated in
accordance with this Agreement, expire on the Stated Termination Date in effect
on the date of such Extension Request (such Stated Termination Date, if any,
referred to as the "Commitment Expiration Date" with respect to such Objecting
Lender). If, not less than 30 days and not more than 60 days prior to the Stated
Termination Date then in effect, the Required Lenders shall not approve in
writing the extension of the Stated Termination Date requested in an Extension
Request, the Stated Termination Date shall not be extended pursuant to such
Extension Request. The Administrative Agent shall promptly notify (y) the
Lenders and the Company of any extension of the Stated Termination Date pursuant
to this Section 2.23 and (z) the Company and the Lenders of any Lender which
becomes an Objecting Lender.
(b) Revolving Credit Advances owing to any Objecting Lender on
the Commitment Expiration Date with respect to such Lender shall be repaid in
full on or before the date that is two years after such Commitment Expiration
Date.
(c) The Borrowers shall have the right, so long as no Event of
Default has occurred and is then continuing, upon giving notice to the
Administrative Agent and the Objecting Lenders in accordance with Section 2.15,
to prepay in full the Revolving Credit Advances of the Objecting Lenders,
together with accrued interest thereon, any amounts payable pursuant to Sections
2.11, 2.12, 2.16, 2.17, 2.18, 2.20 and 9.4(b) and any accrued and unpaid
facility fee or other amounts payable to the Objecting Lenders hereunder and/or,
upon giving not less than three Business Days' notice to the Objecting Lenders
and the Administrative Agent, to cancel the whole or part of the
<PAGE> 43
39
Commitments of the Objecting Lenders.
(d) Notwithstanding the foregoing, if any Lender becomes an
Objecting Lender, the Borrower may, at its own expense and in its sole
discretion and prior to the then Stated Termination Date, require such Lender to
transfer or assign, in whole or in part, without recourse (in accordance with
Section 9.7), all or part of its interests, rights and obligations under this
Agreement to an Eligible Assignee (provided that the Borrower, with the full
cooperation of such Lender, can identify an Eligible Assignee that is ready,
willing and able to be an assignee with respect thereto) which shall assume such
assigned obligations (which assignee may be another Lender, if such assignee
Lender accepts such assignment); provided that (A) the assignee or the Borrower,
as the case may be, shall have paid to such Lender in immediately available
funds the principal of and interest accrued to the date of such payment on the
Advances made by it hereunder and all other amounts owed to it hereunder,
including, without limitation, any amounts owing pursuant to Section 9.4(b) and
any amounts that would be owing under said Section if such Advances were prepaid
on the date of such assignment, and (B) such assignment does not conflict with
any law, rule or regulation or order of any governmental authority. Any assignee
which becomes a Lender as a result of such an assignment made pursuant to this
paragraph (d) shall be deemed to have consented to the applicable Extension
Request and, therefore, shall not be an Objecting Lender.
SECTION II.24 Commitment Increases. (a) At any time after the
Closing Date, provided that no Event of Default shall have occurred and be
continuing, the Company may request an increase of the aggregate Commitments by
notice to the Administrative Agent in writing of the amount (the "Offered
Increase Amount") of such proposed increase (such notice, a "Commitment Increase
Notice"), provided that the first such increase shall be in an amount equal to
at least $93,750,000 and the second such increase shall be in an amount equal to
$187,500,000 less the amount of the first such increase. Any such Commitment
Increase Notice must offer each Lender the opportunity to subscribe for its pro
rata share of the increased Commitments. If any portion of the increased
Commitments is not subscribed for by the Lenders, the Company may, with the
consent of the Administrative Agent as to any Person that is not at such time a
Lender (which consent shall not be unreasonably withheld), offer to any existing
Lender or to one or more additional banks or financial institutions the
opportunity to participate in all or a portion of such unsubscribed portion of
the increased Commitments pursuant to paragraph (b) below.
(b) Any additional bank or financial institution that the
Company selects to offer participation in the increased Commitments, and that
elects to become a party to this Agreement and obtain a Commitment shall execute
a New Lender Supplement with the Company and the Administrative Agent,
substantially in the form of Exhibit N (a "New Lender Supplement"), whereupon
such bank or financial institution (a "New Lender") shall become a
<PAGE> 44
40
Lender for all purposes and to the same extent as if originally a party hereto
and shall be bound by and entitled to the benefits of this Agreement, and
Schedule I shall be deemed to be amended to add the name and Commitment of such
New Lender, provided that the Commitment of any such New Lender shall be in an
amount not less than $10,000,000.
(c) Any Lender that accepts an offer to it by the Company to
increase its Commitment pursuant to this Section 2.24 shall, in each case,
execute a Commitment Increase Supplement with the Company and the Administrative
Agent, substantially in the form of Exhibit O (a "Commitment Increase
Supplement"), whereupon such Lender shall be bound by and entitled to the
benefits of this Agreement with respect to the full amount of its Commitment as
so increased, and Schedule I shall be deemed to be amended to so increase the
Commitment of such Lender.
(d) The effectiveness of any New Lender Supplement or
Commitment Increase Supplement shall be contingent upon receipt by the
Administrative Agent of such corporate resolutions of the Borrowers and legal
opinions of counsel to the Borrowers as the Administrative Agent shall
reasonably request with respect thereto, in each case, in form and substance
satisfactory to the Administrative Agent.
(e) If any bank or financial institution becomes a New Lender
pursuant to Section 2.24(b) or any Lender's Commitment is increased pursuant to
Section 2.24(c), additional Revolving Credit Advances made on or after the
effectiveness thereof (the "Re-Allocation Date") shall be made pro rata based on
the Commitment Percentages in effect on and after such Re-Allocation Date
(except to the extent that any such pro rata borrowings would result in any
Lender making an aggregate principal amount of Revolving Credit Advances in
excess of its Commitment, in which case such excess amount will be allocated to,
and made by, such new Lender and/or Lenders with such increased Commitments to
the extent of, and pro rata based on, their respective Commitments), and
continuations of Eurodollar Rate Advances outstanding on such Re-Allocation Date
shall be effected by repayment of such Eurodollar Rate Advances on the last day
of the Interest Period applicable thereto and the making of new Eurodollar Rate
Advances pro rata based on such new Commitment Percentages. In the event that on
any such Re-Allocation Date there is an unpaid principal amount of Base Rate
Advances, the Borrower shall make prepayments thereof and borrowings of Base
Rate Advances so that, after giving effect thereto, the Base Rate Advances
outstanding are held pro rata based on such new Commitment Percentages. In the
event that on any such Re-Allocation Date there is an unpaid principal amount of
Eurodollar Rate Advances, such Eurodollar Rate Advances shall remain outstanding
with the respective holders thereof until the expiration of their respective
Interest Periods (unless the applicable Borrower elects to prepay any thereof in
accordance with the applicable provisions of this Agreement), and interest on
and repayments of such Eurodollar Rate Advances will be paid thereon to the
respective Lenders holding such Eurodollar Rate
<PAGE> 45
41
Advances pro rata based on the respective principal amounts thereof outstanding.
(f) Notwithstanding anything to the contrary in this Section
2.24, (i) in no event shall any transaction effected pursuant to this Section
2.24 cause the aggregate Commitments to exceed $937,500,000, (ii) no increase
pursuant to this Section 2.24 shall be effective without the consent of the
Required Lenders and (iii) no Lender shall have any obligation to increase its
Commitment unless it agrees to do so in its sole discretion.
(g) The Borrowers, at their own expense, shall execute and
deliver to the Administrative Agent in exchange for the surrendered Notes of any
Lender, if any, new Notes to the order of such Lender, if requested, in an
amount equal to the Commitment of such Lender after giving effect to any
increase in such Lender's Commitment.
SECTION II.25 Replacement of Lenders. If any Lender requests
compensation under Sections 2.12, 2.16 or 2.17 or if any Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.20, or if any Lender defaults in its
obligation to fund Advances hereunder, then the Company may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.7), all its interests, rights
and obligations under this Agreement (other than any outstanding CAF Advances
held by it) to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Company shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Advances (other than CAF Advances), 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 Borrowers (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Sections 2.12 , 2.16 or 2.17 or
payments required to be made pursuant to Section 2.20, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
<PAGE> 46
42
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING
SECTION III.1 Conditions Precedent to Effectiveness of this
Agreement. This Agreement shall become effective (the "Effective Date") when (i)
it shall have been executed by EPNGC, Tennessee, the Administrative Agent, the
CAF Advance Agent, the Documentation Agent and the Syndication Agent and (ii)
the Administrative Agent and EPNGC either shall have been notified by each
Lender that such Lender has executed it or shall have received a counterpart of
this Agreement executed by such Lender. Anything in this Agreement to the
contrary notwithstanding, if all of the conditions to effectiveness of this
Agreement specified in this Section 3.1 shall not have been fulfilled on or
before December 31, 1997, (i) the Company shall on such date pay all accrued and
unpaid facility fees pursuant to Section 2.8 and (ii) this Agreement, and all of
the obligations of EPNGC, the Lenders, the Administrative Agent and the CAF
Advance Agent hereunder, shall be terminated on and as of 5:00 P.M. (New York
City time) on December 31, 1997; provided, however, that as soon as the
Administrative Agent determines that all of the conditions to effectiveness of
this Agreement specified in this Section 3.1 shall have been fulfilled on or
before December 31, 1997, the Administrative Agent shall furnish written notice
to EPNGC and the Lenders to the effect that it has so determined, and such
notice by the Administrative Agent shall constitute conclusive evidence that
this Agreement shall have become effective for all purposes. Notwithstanding the
foregoing, the obligations of the Company to pay fees pursuant to Section 2.8 as
well as all obligations of the Borrowers pursuant to Section 9.4 shall survive
the termination of this Agreement.
SECTION III.2 Conditions Precedent to Initial Advances. The
agreement of each Lender to make the initial Advances to be made by it to the
Borrowers hereunder is subject to (the date upon which all conditions listed in
Section 3.2(a) and 3.2(b) are satisfied, the "Closing Date") (a) the occurrence
of the Effective Date hereunder and (b) the receipt by the Administrative Agent
of the following in form and substance satisfactory to the Administrative Agent
and in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the Board of
Directors of each of EPNGC and Tennessee approving the borrowings
contemplated hereby and authorizing the execution of this Agreement and
the Notes, and of all documents evidencing other necessary corporate
action of each of EPNGC and Tennessee and governmental approvals to
each of EPNGC and Tennessee, if any, with respect to this Agreement and
the Notes.
(ii) A certificate of the Secretary or an Assistant Secretary
of each of EPNGC and Tennessee certifying the names and true signatures
of the officers of each of EPNGC and Tennessee authorized to sign this
Agreement and the
<PAGE> 47
43
other documents to be delivered by it hereunder.
(iii) A favorable opinion of the General Counsel of EPNGC, or
the Associate General Counsel of EPNGC, in substantially the form of
Exhibit G.
(iv) A favorable opinion of Jones, Day, Reavis & Pogue, New
York counsel to EPNGC and Tennessee, in substantially the form of
Exhibit H.
(v) A letter from the Process Agent, in substantially the form
of Exhibit I, agreeing to act as Process Agent for each of EPNGC and
Tennessee and to forward forthwith all process received by it to EPNGC
and Tennessee, as applicable.
(vi) Evidence satisfactory to the Administrative Agent that
all advances, accrued interest and other fees and any other amounts
(except as provided under Section 9.12 of the $750,000,000 5-Year
Revolving Credit and Competitive Advance Facility Agreement, dated as
of the date hereof, among EPNGC, the lenders parties thereto and Chase,
as Administrative Agent and CAF Advance Agent) owing to the lenders and
the agents under the Existing Facilities shall have been, or
simultaneously with the initial Advances are being, paid in full, and
the commitments to make advances thereunder shall have been cancelled.
SECTION III.3 Conditions Precedent to Initial Advances to Any
Borrowing Subsidiary or Holding. The agreement of each Lender to make the
initial Advances to be made by it to any Borrowing Subsidiary (other than
Tennessee) or Holding is further subject to the Administrative Agent receiving
the following, in form and substance satisfactory to the Administrative Agent
and (except for the Notes) in sufficient copies for each Lender (provided that
no Subsidiary of Holding which is not a Subsidiary of EPNGC may become a
Borrower hereunder unless Holding is a Borrower hereunder):
(a) A Joinder Agreement executed and delivered by such
Borrowing Subsidiary or Holding, as the case may be, conforming to the
requirements hereof.
(b) Notes, dated the date such Borrowing Subsidiary or
Holding, as the case may be, executes and delivers its Joinder
Agreement, made by such Borrowing Subsidiary or Holding, as the case
may be, to the order of each Lender requesting a Note, respectively.
(c) A certificate of the Secretary or an Assistant Secretary
of such Borrowing Subsidiary or Holding, as the case may be, certifying
the names and true signature of the officers of such Borrowing
Subsidiary or Holding, as the case may be, authorized to sign the
Joinder Agreement and the other documents to be delivered by it
hereunder.
<PAGE> 48
44
(d) A favorable opinion of the General Counsel or Associate
General Counsel of the Company, given upon the express instructions of
the Company, in substantially the form of Exhibit K, and as to such
other matters as any Lender through the Administrative Agent may
reasonably request, with such assumptions, qualifications and
exceptions as the Administrative Agent may approve.
(e) A favorable opinion of Jones, Day, Reavis & Pogue or other
New York counsel to the Company reasonably satisfactory to the
Administrative Agent, in substantially the form of Exhibit L, and as to
such other matters as any Lender through the Administrative Agent may
reasonably request, with such assumptions, qualifications and
exceptions as the Administrative Agent may approve.
(f) A letter from the Process Agent, in substantially the form
of Exhibit I, agreeing to act as Process Agent for such Borrowing
Subsidiary or Holding, as the case may be, and to forward forthwith all
process received by it to such Borrowing Subsidiary or Holding, as the
case may be.
SECTION III.4 Conditions Precedent to Each Borrowing. The
obligation of each Lender to make an Advance (including the initial Advance, but
excluding any continuation or Conversion of an Advance) on the occasion of any
Borrowing shall be subject to the conditions precedent that on the date of such
Borrowing this Agreement shall have become effective pursuant to Section 3.1
and, before and immediately after giving effect to such Borrowing and to the
application of the proceeds therefrom, the following statements shall be true
and correct, and the giving by the applicable Borrower or the Company on such
Borrower's behalf of the applicable Notice of Borrowing and the acceptance by
the applicable Borrower of the proceeds of such Borrowing shall constitute its
representation and warranty that on and as of the date of such Borrowing, before
and immediately after giving effect thereto and to the application of the
proceeds therefrom, the following statements are true and correct:
(i) each representation and warranty contained in Section 4.1
is correct in all material respects as though made on and as of such
date; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing, which constitutes an Event of Default or a
Default.
<PAGE> 49
45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION IV.1 Representations and Warranties of the Borrowers.
Each Borrower represents and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
Each Principal Subsidiary and each Restricted Affiliate is duly
incorporated, validly existing and in good standing in the jurisdiction
of its incorporation. The Company, each Principal Subsidiary and each
Restricted Affiliate possess all corporate powers and all other
authorizations and licenses necessary to engage in its business and
operations as now conducted, the failure to obtain or maintain which
would have a Material Adverse Effect.
(b) The execution, delivery and performance by (i) each
Borrower of this Agreement, each Joinder Agreement, if any, to which it
is a party and its Notes (as applicable) and (ii) each Restricted
Affiliate of its Restricted Affiliate Guaranty are within such
Borrower's or Restricted Affiliate's, as the case may be, corporate
powers, have been duly authorized by all necessary corporate action,
and do not contravene (A) such Borrower's or Restricted Affiliate's, as
the case may be, charter or by-laws or (B) any law or any material
contractual restriction binding on or affecting such Borrower or
Restricted Affiliate, as the case may be.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by (i) such
Borrower of this Agreement, each Joinder Agreement, if any, to which it
is a party or its Notes (as applicable) or (ii) any Restricted
Affiliate of its Restricted Affiliate Guaranty, except filings
necessary to comply with laws, rules, regulations and orders required
in the ordinary course to comply with ongoing obligations of such
Borrower under Section 5.1(a) and (b).
(d) This Agreement constitutes, its Notes and each Joinder
Agreement, if any, to which it is a party (as applicable) when
delivered hereunder shall constitute and its Restricted Affiliate
Guaranty when delivered hereunder shall constitute, the legal, valid
and binding obligations of each Borrower or Restricted Affiliate, as
the case may be, enforceable against such Borrower or Restricted
Affiliate, as the case may be, in accordance with their respective
terms, except as may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity.
<PAGE> 50
46
(e) The consolidated balance sheet of EPNGC and its
consolidated Subsidiaries as at December 31, 1996, and the related
consolidated statements of income and cash flows of EPNGC and its
consolidated Subsidiaries for the fiscal year then ended, reported on
by Coopers & Lybrand LLP, independent public accountants, copies of
which have been furnished to the Administrative Agent and the Lenders
prior to the date hereof, fairly present the consolidated financial
condition of EPNGC and its consolidated Subsidiaries as at such date
and the consolidated results of the operations of EPNGC and its
consolidated Subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently
applied, and since December 31, 1996, there has been no material
adverse change in such condition or operations. The unaudited
consolidated balance sheet of EPNGC and its consolidated Subsidiaries
as of June 30, 1997, and the related consolidated statements of income
and cash flows of EPNGC and its consolidated Subsidiaries for the six
months then ended, certified by the chief financial officer of EPNGC,
copies of which have been furnished to the Administrative Agent and the
Lenders prior to the date hereof, fairly present the consolidated
results of operations of EPNGC and its consolidated Subsidiaries for
the three months then ended, all in accordance with generally accepted
accounting principles consistently applied (except as approved by the
chief financial officer of EPNGC and as disclosed therein) and subject
to normal year-end audit adjustments.
(f) Each of the Company and its Subsidiaries is in compliance
with all laws, rules, regulations and orders of any governmental
authority applicable to it or its property except where the failure to
comply, individually or in the aggregate, would not in the reasonable
judgment of the Company be expected to result in a Material Adverse
Effect.
(g) There is no action, suit or proceeding pending, or to the
knowledge of any Borrower threatened, against or involving the Company,
any Principal Subsidiary or any Restricted Affiliate in any court, or
before any arbitrator of any kind, or before or by any governmental
body, which in the reasonable judgment of the Company (taking into
account the exhaustion of all appeals) would have a Material Adverse
Effect, or which purports to affect the legality, validity, binding
effect or enforceability of this Agreement or the Notes.
(h) The Company, each Principal Subsidiary and each Restricted
Affiliate have duly filed all tax returns required to be filed, and
have duly paid and discharged all taxes, assessments and governmental
charges upon it or against its properties now due and payable, the
failure to pay which would have a Material Adverse Effect, unless and
to the extent only that the same are being contested in good
<PAGE> 51
47
faith and by appropriate proceedings by the Company, the appropriate
Subsidiary or the appropriate Restricted Affiliate.
(i) The Company, each Principal Subsidiary and each Restricted
Affiliate have good title to their respective properties and assets,
free and clear of all mortgages, liens and encumbrances, except for
mortgages, liens and encumbrances (including covenants, restrictions,
rights, easements and minor irregularities in title) which do not
materially interfere with the business or operations of the Company,
such Subsidiary or such Restricted Affiliate as presently conducted or
which are permitted by Section 5.2(a), and except that no
representation or warranty is being made with respect to Margin Stock.
(j) No Termination Event has occurred or is reasonably
expected to occur with respect to any Plan which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default
under Section 7.1(g).
(k) Each Plan has complied with the applicable provisions of
ERISA and the Code where the failure to so comply would reasonably be
expected to result in an aggregate liability that would exceed 10% of
the Net Worth of the Company.
(l) The statement of assets and liabilities of each Plan and
the statements of changes in fund balance and in financial position, or
the statement of changes in net assets available for plan benefits, for
the most recent plan year for which an accountant's report with respect
to such Plan has been prepared, copies of which report have been
furnished to the Administrative Agent, fairly present the financial
condition of such Plan as at such date and the results of operations of
such Plan for the plan year ended on such date.
(m) Neither the Company nor any ERISA Affiliate has incurred,
or is reasonably expected to incur, any Withdrawal Liability to any
Multiemployer Plan which, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with
Withdrawal Liability (as of the date of determination), would exceed
10% of the Net Worth of the Company.
(n) Neither the Company nor any ERISA Affiliate has received
any notification that any Multiemployer Plan is in reorganization,
insolvent or has been terminated, within the meaning of Title IV of
ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization, insolvent or to be terminated within the meaning of
Title IV of ERISA the effect of which reorganization, insolvency or
termination would be the occurrence of an Event of Default under
Section 7.1(i).
<PAGE> 52
48
(o) The Borrowers are not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to extend credit to others (other
than to any Subsidiary of the Company) for the purpose of purchasing or
carrying Margin Stock.
(p) No Borrower is an "investment company" or a "company"
controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(q) No Borrower is a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(r) The borrowings by the Borrowers under this Agreement and
the Notes and the applications of the proceeds thereof as provided
herein will not violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
All representations and warranties made by the Borrowers herein or made in any
certificate delivered pursuant hereto shall survive the making of the Advances
and the execution and delivery to the Lenders of this Agreement and the Notes.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION V.1 Affirmative Covenants. So long as any amount
payable by any Borrower hereunder or under any Note shall remain unpaid or any
Lender shall have any Commitment hereunder, each Borrower will, unless the
Majority Lenders shall otherwise consent in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain, and, in the case of the Company, cause each Principal
Subsidiary and each Restricted Affiliate to preserve and maintain, its
corporate existence, rights (charter and statutory) and material
franchises, except as otherwise permitted by Section 5.2(d) or 5.2(e).
(b) Compliance with Laws, Etc. Comply, and, in the case of the
Company, cause each Principal Subsidiary and each Restricted Affiliate
to comply, in all material respects with all applicable laws, rules,
regulations and orders (including, without limitation, all
environmental laws and laws requiring payment of all taxes, assessments
and governmental charges imposed upon it or upon its property except to
the extent contested in good faith by appropriate proceedings) the
failure to comply with which would have a Material Adverse Effect.
<PAGE> 53
49
(c) Visitation Rights. At any reasonable time and from time to
time, permit the Administrative Agent or any of the Lenders or any
agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the
properties of, the Company, any of its Subsidiaries and any Restricted
Affiliate, and to discuss the affairs, finances and accounts of the
Company, any of its Subsidiaries and any Restricted Affiliate with any
of their officers and with their independent certified public
accountants.
(d) Books and Records. Keep, and, in the case of the Company,
cause each of its Subsidiaries and each Restricted Affiliate to keep,
proper books of record and account, in which full and correct entries
shall be made of all its respective financial transactions and the
assets and business of the Company, each of its Subsidiaries and each
Restricted Affiliate, as applicable, in accordance with generally
accepted accounting principles either (i) consistently applied or (ii)
applied in a changed manner provided such change shall have been
disclosed to the Administrative Agent and shall have been consented to
by the accountants which (as required by Section 5.3(b)) report on the
financial statements of the Company and its consolidated Subsidiaries
for the fiscal year in which such change shall have occurred.
(e) Maintenance of Properties, Etc. Maintain and preserve,
and, in the case of the Company, cause each Principal Subsidiary and
each Restricted Affiliate to maintain and preserve, all of its
properties which are used in the conduct of its business in good
working order and condition, ordinary wear and tear excepted, to the
extent that any failure to do so would have a Material Adverse Effect.
(f) Maintenance of Insurance. Maintain, and, in the case of
the Company, cause each Principal Subsidiary and each Restricted
Affiliate to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Company, such Subsidiary or such Restricted Affiliate operates.
(g) Holding. Once Holding is formed, cause (i) Holding to
execute and deliver a guaranty (in form and substance reasonably
satisfactory to the Administrative Agent) (the "Holding Guarantee") in
favor of the Administrative Agent, for the ratable benefit of the
Lenders, guaranteeing the prompt and complete payment by each Borrower
when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations owing by such Borrower and (ii) the delivery to the
Administrative Agent of legal opinions from the General Counsel or the
Associate
<PAGE> 54
50
General Counsel of Holding and from New York counsel to Holding
reasonably acceptable to the Administrative Agent, which legal
opinions shall be in form and substance reasonably satisfactory to the
Administrative Agent.
SECTION V.2 Negative Covenants. So long as any amount payable
by any Borrower hereunder or under any Note shall remain unpaid or any Lender
shall have any Commitment hereunder, each Borrower will not, unless the Majority
Lenders shall otherwise consent in writing:
(a) Liens, Etc. (i) Create, assume or suffer to exist, or, in
the case of the Company, permit any Principal Subsidiary to create,
assume or suffer to exist, any Liens upon or with respect to any of the
capital stock of any Principal Subsidiary, whether now owned or
hereafter acquired, or (ii) create or assume, or, in the case of the
Company, permit any Principal Subsidiary or any Restricted Affiliate to
create or assume, any Liens upon or with respect to any other assets
material to the consolidated operations of the Company and its
consolidated Subsidiaries taken as a whole securing the payment of
Indebtedness and Guaranties in an aggregate amount (determined without
duplication of amount (so that the amount of a Guarantee will be
excluded to the extent the Indebtedness Guaranteed thereby is included
in computing such aggregate amount)) exceeding $100,000,000; provided,
however, that this subsection (a) shall not apply to:
(A) Liens on the stock or assets of any Project
Financing Subsidiary or any Restricted Affiliate (or any
partnership, member or other equity interest in or assets of
any partnership, limited liability company or other entity of
which the Project Financing Subsidiary is a partner, member or
other equity participant) securing the payment of a Project
Financing and related obligations;
(B) Liens on assets acquired by the Company, any of
its Subsidiaries or any Restricted Affiliate after February
11, 1992 to the extent that such Liens existed at the time of
such acquisition and were not placed thereon by or with the
consent of the Company in contemplation of such acquisition;
(C) Liens created by any Alternate Program or any
document executed by any Borrower or any Restricted Affiliate
in connection therewith;
(D) Liens on Margin Stock; and
(E) Liens for taxes, assessments or governmental
charges or levies not yet overdue.
(b) Consolidated Debt and Guarantees to Capitalization.
(i) Permit the ratio of (A) the sum of (1)
<PAGE> 55
51
the aggregate amount of consolidated Debt of EPNGC and its consolidated
Subsidiaries and all Restricted Affiliates and their consolidated
Subsidiaries (without duplication of amount under this clause (A) and
determined as to all of the foregoing entities on a consolidated basis)
plus (2) the aggregate amount of consolidated Guaranties of EPNGC and
its consolidated Subsidiaries and all Restricted Affiliates and their
consolidated Subsidiaries (without duplication of amount under this
clause (A) and determined as to all of the foregoing entities on a
consolidated basis) to (B) Capitalization of EPNGC and all Restricted
Affiliates (without duplication and determined as to all of the
foregoing entities on a consolidated basis) to exceed .7 to 1; and (ii)
from and after the date that Holding becomes a Borrower hereunder,
permit the ratio of (A) the sum of (1) the aggregate amount of
consolidated Debt of Holding and its consolidated Subsidiaries plus (2)
the aggregate amount of consolidated Guaranties of Holding and its
consolidated Subsidiaries to (B) Capitalization of Holding to exceed .7
to 1.
(c) Debt, Etc. In the case of the Company, permit any of its
consolidated Subsidiaries to create or suffer to exist any Debt, any
Guaranty or any reimbursement obligation with respect to any letter of
credit (other than any Project Financing), if, immediately after giving
effect to such Debt, Guaranty or reimbursement obligation and the
receipt and application of any proceeds thereof or value received in
connection therewith, the aggregate amount (determined without
duplication of amount) of Debt, Guaranties and letter of credit
reimbursement obligations of the Company's consolidated Subsidiaries
(other than any Project Financing) determined on a consolidated basis
would exceed $300,000,000; provided, however, that the following Debt,
Guaranties or reimbursement obligations shall be excluded from the
application of, and calculation set forth in, this paragraph (c): (A)
Debt, Guaranties or reimbursement obligations incurred by (x) Mojave or
(y) so long as it is a Borrower, EPNGC, (B) Debt, Guaranties or
reimbursement obligations arising under (x) the EPTPC Facility and
permanently repaid in full on the Closing Date or (y) this Agreement or
the $750,000,000 5-Year Revolving Credit and Competitive Advance
Facility Agreement, dated as of the date hereof, among EPNGC, the
lenders parties thereto and Chase, as Administrative Agent and CAF
Advance Agent, (C) Debt, Guaranties or reimbursement obligations
incurred by El Paso Field Services Company up to an amount not to
exceed at any time outstanding the tangible net worth of El Paso Field
Services Company, provided that such Debt may be guaranteed by the
Company, (D) Excluded Acquisition Debt and (E) successive extensions,
refinancings or replacements (at the same Subsidiary or at any other
consolidated Subsidiary of the Company) of Debt, Guaranties or
reimbursement obligations (or commitments in respect thereof) referred
to in clauses (A), (B) and (D) above and in an amount not in excess of
the amounts so extended, refinanced or replaced
<PAGE> 56
52
(or the amount of commitments in respect thereof).
(d) Sale, Etc. of Assets. Sell, lease or otherwise transfer,
or, in the case of the Company, permit any Principal Subsidiary to
sell, lease or otherwise transfer, (in either case, whether in one
transaction or in a series of transactions) assets constituting a
material portion of the consolidated assets of the Company and its
Principal Subsidiaries taken as a whole, provided that provisions of
this subsection (d) shall not apply to:
(i) any sale of receivables and related rights
pursuant to any Alternate Program;
(ii) any Project Financing Subsidiary and the
assets thereof;
(iii) sales, leases or other transfers of assets
or capital stock of any Subsidiary of the Company other than
any Principal Subsidiary;
(iv) any sale of Margin Stock;
(v) any sale of up to 20% of the equity of El
Paso Field Services Company in an initial public offering of
such corporation's equity securities;
(vi) any sale, lease or other transfer to the
Company or any Principal Subsidiary, or to any corporation
which after giving effect to such transfer will become and be
either (A) a Principal Subsidiary in which the Company's
direct or indirect equity interest will be at least as great
as its direct or indirect equity interest in the transferor
immediately prior thereto or (B) a directly or indirectly
wholly-owned Principal Subsidiary;
(vii) any transfer permitted by Section 5.2(e);
and
(viii) any transfer to Holding or any of its
Subsidiaries of any stock or assets other than FERC regulated
assets (or stock or any other equity interest in an entity
owning FERC regulated assets) used in the mainline gas
transmission business; provided that (A) no Event of Default,
or event that with the giving of notice or lapse of time or
both would constitute an Event of Default, shall have occurred
and be continuing before and after giving effect to such
transfer and (B) no Borrower may be so transferred unless
Holding is also a Borrower.
(e) Mergers, Etc. Merge or consolidate with any person, or
permit any of its Principal Subsidiaries to merge or consolidate with
any Person, except that (i) any Principal Subsidiary may merge or
consolidate with (or
<PAGE> 57
53
liquidate into) any other Subsidiary (other than a Project Financing
Subsidiary, unless the successor corporation is not treated as a
Project Financing Subsidiary under this Agreement) or may merge or
consolidate with (or liquidate into) the Company, provided that (A) if
such Principal Subsidiary merges or consolidates with (or liquidates
into) the Company, the Company shall be the continuing or surviving
corporation and (B) if any such Principal Subsidiary merges or
consolidates with (or liquidates into) any other Subsidiary of the
Company, one of such Subsidiaries is the surviving corporation and, if
either such Subsidiary is not wholly-owned by the Company, such merger
or consolidation is on an arm's length basis, and (ii) the Company or
any Principal Subsidiary may merge or consolidate with any other
corporation (that is, in addition to the Company or any Principal
Subsidiary of the Company), provided that (A) if the Company merges or
consolidates with any such other corporation, the Company is the
surviving corporation, (B) if any Principal Subsidiary merges or
consolidates with any such other corporation, the surviving
corporation is a wholly-owned Principal Subsidiary of the Company, and
(C) if either the Company or any Principal Subsidiary merges or
consolidates with any such other corporation, after giving effect to
such merger or consolidation no Event of Default, and no event which
with lapse of time or the giving of notice, or both, would constitute
an Event of Default, shall have occurred and be continuing.
SECTION V.3 Reporting Requirements. So long as any amount
payable by any Borrower hereunder or under any Note shall remain unpaid or any
Lender shall have any Commitment hereunder, the Company will furnish to each
Lender in such reasonable quantities as shall from time to time be requested by
such Lender:
(a) as soon as publicly available and in any event within 60
days after the end of each of the first three fiscal quarters of each
fiscal year of each of EPNGC and, following its formation, Holding, a
consolidated balance sheet of each of EPNGC and, following its
formation, Holding and its respective consolidated subsidiaries as of
the end of such quarter, and consolidated statements of income and cash
flows of each of EPNGC and, following its formation, Holding and its
respective consolidated subsidiaries each for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, certified (subject to normal year-end adjustments) as being
fairly stated in all material respects by the chief financial officer,
controller or treasurer of the Company and accompanied by a certificate
of such officer stating (i) whether or not such officer has knowledge
of the occurrence of any Event of Default which is continuing hereunder
or of any event not theretofore remedied which with notice or lapse of
time or both would constitute such an Event of Default and, if so,
stating in reasonable detail the facts
<PAGE> 58
54
with respect thereto, (ii) all relevant facts in reasonable detail to
evidence, and the computations as to, whether or not the Company is in
compliance with the requirements set forth in subsections (b) and (c)
of Section 5.2, and (iii) a listing of all Principal Subsidiaries and
consolidated Subsidiaries of the Company showing the extent of its
direct and indirect holdings of their stocks;
(b) as soon as publicly available and in any event within 120
days after the end of each fiscal year of each of EPNGC and, following
its formation, Holding, a copy of the annual report for such year for
each of EPNGC and, following its formation, Holding and its respective
consolidated Subsidiaries containing financial statements for such year
reported by nationally recognized independent public accountants
acceptable to the Lenders, accompanied by (i) a report signed by said
accountants stating that such financial statements have been prepared
in accordance with generally accepted accounting principles and (ii) a
letter from such accountants stating that in making the investigations
necessary for such report they obtained no knowledge, except as
specifically stated therein, of any Event of Default which is
continuing hereunder or of any event not theretofore remedied which
with notice or lapse of time or both would constitute such an Event of
Default;
(c) within 120 days after the close of each of the Company's
fiscal years, a certificate of the chief financial officer, controller
or treasurer of the Company stating (i) whether or not he has knowledge
of the occurrence of any Event of Default which is continuing hereunder
or of any event not theretofore remedied which with notice or lapse of
time or both would constitute such an Event of Default and, if so,
stating in reasonable detail the facts with respect thereto, (ii) all
relevant facts in reasonable detail to evidence, and the computations
as to, whether or not the Company is in compliance with the
requirements set forth in subsections (b) and (c) of Section 5.2 and
(iii) a listing of all Principal Subsidiaries and consolidated
Subsidiaries of the Company showing the extent of its direct and
indirect holdings of their stocks;
(d) promptly after the sending or filing thereof, copies of
all publicly available reports which the Company, any Principal
Subsidiary or any Restricted Affiliate sends to any of its security
holders and copies of all publicly available reports and registration
statements which the Company, any Principal Subsidiary or any
Restricted Affiliate files with the Securities and Exchange Commission
or any national securities exchange other than registration statements
relating to employee benefit plans and to registrations of securities
for selling security holders;
(e) within 10 days after sending or filing thereof, a copy of
FERC Form No. 2: Annual Report of Major Natural Gas Companies, sent or
filed by the Company to or with the FERC
<PAGE> 59
55
with respect to each fiscal year of the Company;
(f) promptly in writing, notice of all litigation and of all
proceedings before any governmental or regulatory agencies against or
involving the Company, any Principal Subsidiary or any Restricted
Affiliate, except any litigation or proceeding which in the reasonable
judgment of the Company (taking into account the exhaustion of all
appeals) is not likely to have a material adverse effect on the
consolidated financial condition of the Company and its consolidated
Subsidiaries taken as a whole;
(g) within three Business Days after an executive officer of
the Company obtains knowledge of the occurrence of any Event of Default
which is continuing or of any event not theretofore remedied which with
notice or lapse of time, or both, would constitute an Event of Default,
notice of such occurrence together with a detailed statement by a
responsible officer of the Company of the steps being taken by the
Company or the appropriate Subsidiary to cure the effect of such event;
(h) as soon as practicable and in any event (i) within 30 days
after the Company or any ERISA Affiliate knows or has reason to know
that any Termination Event described in clause (a) of the definition of
Termination Event with respect to any Plan has occurred and (ii) within
10 days after the Company or any ERISA Affiliate knows or has reason to
know that any other Termination Event has occurred, a statement of the
chief financial officer or treasurer of the Company describing such
Termination Event and the action, if any, which the Company or such
ERISA Affiliate proposes to take with respect thereto;
(i) promptly and in any event within two Business Days after
receipt thereof by the Company or any ERISA Affiliate, copies of each
notice received by the Company or any ERISA Affiliate from the PBGC
stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(j) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Single Employer Plan;
(k) promptly and in any event within five Business Days after
receipt thereof by the Company or any ERISA Affiliate from the sponsor
of a Multiemployer Plan, a copy of each notice received by the Company
or any ERISA Affiliate concerning (i) the imposition of Withdrawal
Liability by a Multiemployer Plan, (ii) the determination that a
Multiemployer Plan is, or is expected to be, in reorganization or
insolvent within the meaning of Title IV of ERISA, (iii) the
termination of a Multiemployer Plan
<PAGE> 60
56
within the meaning of Title IV of ERISA, or (iv) the amount of
liability incurred, or expected to be incurred, by the Company or any
ERISA Affiliate in connection with any event described in clause (i),
(ii) or (iii) above; and
(l) as soon as practicable but in any event within 60 days of
any notice of request therefor, such other information respecting the
financial condition and results of operations of the Company or any
Subsidiary of the Company as any Lender through the Administrative
Agent may from time to time reasonably request.
Each balance sheet and other financial statement furnished
pursuant to subsections (a) and (b) of this Section 5.3 shall contain
comparative financial information which conforms to the presentation required in
Form 10-Q and 10-K, as appropriate, under the Securities Exchange Act of 1934,
as amended.
SECTION V.4 Restrictions on Material Subsidiaries. Upon
Holding becoming a Borrower hereunder, Holding will not, and will not permit any
Material Subsidiary, to enter into any agreement or understanding pursuant to
which (a) any non-equity interest claim Holding may have against any Material
Subsidiary would be subordinate in any manner to the payment of any other
obligation of such Material Subsidiary (other than waivers or subordination of
subrogation, contribution or similar rights under Guaranties and similar
agreements) or (b) by its terms limits or restricts the ability of such Material
Subsidiary to make funds available to Holding (whether by dividend or other
distribution, by replacement of any inter-company advance or otherwise) if, in
any such case referred to in this Section 5.4, there is, at the time any such
agreement is entered into, a reasonable likelihood that all such agreements and
understandings, considered together, would materially and adversely affect the
ability of Holding to meet its obligations as they become due.
ARTICLE VI
GUARANTEES
SECTION VI.1 Guarantees. (a) Subject to the provisions of
Section 6.1(b), each Borrower hereby unconditionally and irrevocably guarantees
to the Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment by each other Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations owing by such other
Borrower.
(b) Anything in this Article VI to the contrary
notwithstanding, the maximum liability of each Borrower (other than a Borrower
which is guaranteeing the Obligations of its Subsidiaries) under this Article VI
shall in no event exceed the amount which can be guaranteed by such Borrowing
Subsidiary under
<PAGE> 61
57
applicable federal and state laws relating to the insolvency of debtors.
(c) Each Borrower agrees that the Obligations owing by any
other Borrower may at any time and from time to time exceed the amount of the
liability of such other Borrower under this Article VI without impairing the
guarantee of such Borrower under this Article VI or affecting the rights and
remedies of the Administrative Agent or any Lender under this Article VI.
(d) No payment or payments made by any Borrower or any other
Person or received or collected by the Administrative Agent or any Lender from
any Borrower or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Borrowers under this Article VI
which shall, notwithstanding any such payment or payments, continue until the
Obligations are paid in full and the Commitments are terminated.
(e) Each Borrower agrees that whenever, at any time, or from
time to time, it shall make any payment to the Administrative Agent or any
Lender on account of its liability under this Article VI, it will notify the
Administrative Agent in writing that such payment is made under this Article VI
for such purpose.
SECTION VI.2 No Subrogation. Notwithstanding any payment or
payments made by any Borrower under this Article VI or any set-off or
application of funds of such Borrower by the Administrative Agent or any Lender,
such Borrower shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against any other Borrower or against any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Lender for the payment of the Obligations, nor shall such Borrower
seek or be entitled to seek any contribution or reimbursement from any other
Borrower in respect of payments made by such Borrower hereunder, until all
amounts owing to the Administrative Agent and the Lenders by the other Borrowers
on account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Borrower on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Borrower in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Borrower, and shall, forthwith upon receipt by such Borrower, be turned over to
the Administrative Agent in the exact form received by such Borrower (duly
indorsed by such Borrower to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.
SECTION VI.3 Amendments, etc. with respect to the
Obligations; Waiver of Rights. Each Borrower shall remain obligated under this
Article VI notwithstanding that, without any
<PAGE> 62
58
reservation of rights against such Borrower, and without notice to or further
assent by such Borrower, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by the Administrative
Agent or such Lender, and any of the Obligations continued, and the Obligations,
or the liability of any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and this Agreement, any Notes and any
other documents executed and delivered in connection herewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Majority Lenders, as the case may be) may deem advisable from time
to time, and any collateral security, guarantee or right of offset at any time
held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for this Agreement or any property subject thereto. When making
any demand hereunder against any Borrower, the Administrative Agent or any
Lender may, but shall be under no obligation to, make a similar demand on the
applicable Borrowing Subsidiaries or any other guarantor, and any failure by the
Administrative Agent or any Lender to make any such demand or to collect any
payments from the other Borrowers or any such other guarantor or any release of
the other Borrowers or such other guarantor shall not relieve such Borrower of
its obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of the
Administrative Agent or any Lender against such Borrower for the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
SECTION VI.4 Guarantee Absolute and Unconditional. Each
Borrower waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon this Agreement or acceptance of this
Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Agreement; and all dealings between any Borrower,
on the one hand, and the Administrative Agent and the Lenders, on the other,
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Agreement. Each Borrower waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
other Borrowers with respect to the Obligations. The guarantee contained in this
Article VI shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of this Agreement, any Note, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the
<PAGE> 63
59
Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by any Borrower against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of any Borrower) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any Borrower for the Obligations,
or of the Borrowers under this Agreement, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against any Borrower,
the Administrative Agent and any Lender may, but shall be under no obligation
to, pursue such rights and remedies as it may have against any other Borrower or
any other Person or against any collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from other Borrowers or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of any other Borrower or any such other Person or of any
such collateral security, guarantee or right of offset, shall not relieve any
Borrower of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against such Borrower. The guarantees
contained in this Article VI shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Borrower and
its successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of the Borrowers under this Agreement shall have been satisfied by
payment in full and the Commitments shall be terminated, notwithstanding that
from time to time during the term of this Agreement the Borrowers may be free
from any Obligations.
SECTION VI.5 Reinstatement. The provisions of this Article VI
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
any Borrower or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, any Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
<PAGE> 64
60
ARTICLE VII
EVENTS OF DEFAULT
SECTION VII.1 Event of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) Any Borrower shall fail to pay any installment of
principal of any of its Advances or Notes when due, or any interest on
any of its Advances or Notes or any other amount payable by it
hereunder within five Business Days after the same shall be due; or
(b) Any representation or warranty made or deemed made by any
Borrower herein or by any Borrower (or any of its officers) in
connection with this Agreement shall prove to have been incorrect in
any material respect when made or deemed made; or
(c) Any Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part to
be performed or observed and any such failure shall remain unremedied
for 30 days after written notice thereof shall have been given to such
Borrower by the Administrative Agent or by any Lender with a copy to
the Administrative Agent; or
(d) The Company, any Principal Subsidiary or any Restricted
Affiliate shall fail to pay any Debt or Guaranty (excluding Debt
incurred pursuant hereto) of the Company, such Principal Subsidiary or
such Restricted Affiliate (as the case may be) in an aggregate
principal amount of $100,000,000 or more, or any installment of
principal thereof or interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Debt or Guaranty; or any other default under any agreement or
instrument relating to any such Debt, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such default or event
is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated
maturity thereof, as a result of either (i) any default under any
agreement or instrument relating to any such Debt or (ii) the
occurrence of any other event (other than an issuance, sale or other
disposition of stock or other assets, or an incurrence or issuance of
Indebtedness or other obligations, giving rise to a repayment or
prepayment obligation in respect of such Debt) the effect of which
would otherwise be to accelerate or to permit the
<PAGE> 65
61
acceleration of the maturity of such Debt; provided that,
notwithstanding any provision contained in this subsection (d) to the
contrary, to the extent that pursuant to the terms of any agreement or
instrument relating to any Debt or Guaranty referred to in this
subsection (d) (or in the case of any such Guaranty, relating to any
obligations Guaranteed thereby), any sale, pledge or disposal of
Margin Stock, or utilization of the proceeds of such sale, pledge or
disposal, would result in a breach of any covenant contained therein
or otherwise give rise to a default or event of default thereunder
and/or acceleration of the maturity of the Debt or obligations
extended pursuant thereto, or payment pursuant to any Guaranty, and as
a result of such terms or of such sale, pledge, disposal, utilization,
breach, default, event of default or acceleration or nonpayment under
such Guaranty, or the provisions thereof relating thereto, this
Agreement or any Advance hereunder would otherwise be subject to the
margin requirements or any other restriction under Regulation U issued
by the Board of Governors of the Federal Reserve System, then such
breach, default, event of default or acceleration, or nonpayment under
any Guaranty, shall not constitute a default or Event of Default under
this subsection (d); or
(e)(i) The Company, any Principal Subsidiary or any Restricted
Affiliate shall (A) generally not pay its debts as such debts become
due; or (B) admit in writing its inability to pay its debts generally;
or (C) make a general assignment for the benefit of creditors; or (ii)
any proceeding shall be instituted or consented to by the Company, any
Principal Subsidiary or any Restricted Affiliate seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property; or (iii) any such proceeding shall have been instituted
against the Company, any Principal Subsidiary or any Restricted
Affiliate and either such proceeding shall not be stayed or dismissed
for 60 consecutive days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against it or the appointment of a receiver, trustee, custodian or
other similar official for it or any substantial part of its property)
shall occur; or (iv) the Company, any Principal Subsidiary or any
Restricted Affiliate shall take any corporate action to authorize any
of the actions set forth above in this subsection (e); or
(f) Any judgment or order of any court for the payment of
money in excess of $50,000,000 shall be rendered against the Company,
any Principal Subsidiary or any Restricted Affiliate and either (i)
enforcement proceedings shall have been commenced by any creditor upon
such judgment or order
<PAGE> 66
62
(other than any enforcement proceedings consisting of the mere
obtaining and filing of a judgment lien or obtaining of a garnishment
or similar order so long as no foreclosure, levy or similar process in
respect of such lien, or payment over in respect of such garnishment
or similar order, has commenced) or (ii) there shall be any period of
30 consecutive days during which a stay of execution or of enforcement
proceedings (other than those referred to in the parenthesis in clause
(i) above) in respect of such judgment or order, by reason of a
pending appeal, bonding or otherwise, shall not be in effect; or
(g) (i) Any Termination Event with respect to a Plan shall
have occurred and, 30 days after notice thereof shall have been given
to the Company by the Administrative Agent, such Termination Event
shall still exist; or (ii) the Company or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan; or (iii) the
Company or any ERISA Affiliate shall have been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in
reorganization, or is insolvent or is being terminated, within the
meaning of Title IV of ERISA; or (iv) any Person shall engage in a
"prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan; and in each case in clauses (i)
through (iv) above, such event or condition, together with all other
such events or conditions, if any, would result in an aggregate
liability of the Company or any ERISA Affiliate that would exceed 10%
of the Net Worth of the Company.
(h) Upon completion of, and pursuant to, a transaction, or a
series of transactions (which may include prior acquisitions of capital
stock of EPNGC or Holding in the open market or otherwise), involving a
tender offer (i) a "person" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934) other than EPNGC or Holding, a
Subsidiary of EPNGC or Holding or any employee benefit plan maintained
for employees of EPNGC or Holding and/or any of their respective
Subsidiaries or the trustee therefor, shall have acquired direct or
indirect ownership of and paid for in excess of 50% of the outstanding
capital stock of EPNGC or Holding entitled to vote in elections for
directors of EPNGC or Holding and (ii) at any time before the later of
(A) six months after the completion of such tender offer and (B) the
next annual meeting of the shareholders of EPNGC or Holding following
the completion of such tender offer more than half of the directors of
EPNGC or Holding consists of individuals who (1) were not directors
before the completion of such tender offer and (2) were not appointed,
elected or nominated by the Board of Directors in office prior to the
completion of such tender offer (other than any such appointment,
election or nomination required or agreed to in connection with, or as
a result of, the completion of such tender offer); or
<PAGE> 67
63
(i) Any event of default shall occur under any agreement or
instrument relating to or evidencing any Debt now or hereafter existing
of the Company or any Principal Subsidiary or Restricted Affiliate as
the result of any change of control of the Company; or
(j) Any of (i) the guarantees contained in Article VI, (ii)
the Restricted Affiliate Guarantees or (iii) the Holding Guarantee
shall cease, for any reason, to be in full force and effect or any
Borrower, any Restricted Affiliate or Holding shall so assert;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Company, (i)
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) declare the Advances and
the Notes, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances and the Notes,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrowers; provided, however, that
if an Event of Default under subsection (e) of this Section 7.1 (except under
clause (i)(A) thereof) shall occur, (A) the obligation of each Lender to make
Advances shall automatically be terminated and (B) the Advances and the Notes,
all interest thereon and all other amounts payable under this Agreement shall
automatically become and be forthwith due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrowers.
<PAGE> 68
64
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE CAF ADVANCE AGENT
SECTION VIII.1 Authorization and Action. Each Lender hereby
appoints and authorizes the Administrative Agent and the CAF Advance Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent and the CAF Advance Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement of this Agreement or collection of
the Notes), the Administrative Agent and the CAF Advance 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 Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent and the CAF Advance Agent shall
not be required to take any action which exposes the Administrative Agent or the
CAF Advance Agent to personal liability or which is contrary to this Agreement
or applicable law. The Administrative Agent and the CAF Advance Agent agree to
give to each Lender prompt notice of each notice given to it by any Borrower
pursuant to the terms of this Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the parties hereto hereby agree that
neither the Documentation Agent nor the Syndication Agent shall have any rights,
duties or responsibilities in its capacity as Documentation Agent or Syndication
Agent, as applicable, hereunder and neither the Documentation Agent nor the
Syndication Agent shall have the authority to take any action hereunder in its
capacity as such.
SECTION VIII.2 Administrative Agent's and CAF Advance Agent's
Reliance, Etc. None of the Administrative Agent, the CAF Advance Agent or any of
its respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent and the CAF Advance Agent: (i) may treat the payee of any
Note as the holder thereof until the Administrative Agent receives and accepts
an Assignment and Acceptance entered into by the Lender which is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.7; (ii) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the
<PAGE> 69
65
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrowers or to inspect the property (including the
books and records) of the Borrowers; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopier, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION VIII.3 Chase and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Chase shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Administrative Agent or the CAF
Advance Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Chase in its individual capacity. Chase and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Company,
any of its Subsidiaries and any Person who may do business with or own
securities of the Company or any of its Subsidiaries, all as if Chase were not
the Administrative Agent or the CAF Advance Agent and without any duty to
account therefor to the other Lenders.
SECTION VIII.4 Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the CAF Advance Agent or any other Lender and based on the
financial statements referred to in Section 4.1 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent, the CAF
Advance Agent or any other Lender 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.
SECTION VIII.5 Indemnification. The Lenders agree to indemnify
the Administrative Agent and the CAF Advance Agent (to the extent not reimbursed
by the Borrowers), ratably according to the respective principal amounts of the
Advances then outstanding by each of them (or if no Advances are at the time
outstanding or if any Notes are held by Persons which are not Lenders, ratably
according to the respective amounts of their aggregate Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent or the CAF Advance Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Administrative Agent
or the CAF Advance Agent under this Agreement, provided that no Lender shall be
<PAGE> 70
66
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's or the CAF Advance Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent and the CAF Advance Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Administrative Agent or the CAF Advance Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings, in bankruptcy or insolvency proceedings, or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Administrative Agent or the CAF Advance Agent is not reimbursed
for such expenses by the Borrowers.
<PAGE> 71
67
SECTION VIII.6 Successor Administrative Agent and CAF Advance
Agent. The Administrative Agent and the CAF Advance Agent may resign at any time
by giving written notice thereof to the Lenders and the Company and may be
removed at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent or the CAF Advance Agent. If no successor
Administrative Agent or CAF Advance Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's or the CAF Advance Agent giving of notice of
resignation or the Majority Lenders' removal of the retiring Administrative
Agent or CAF Advance Agent, then such retiring Administrative Agent or CAF
Advance Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent or CAF Advance Agent, which shall be a Lender and a commercial bank
organized, or authorized to conduct a banking business, 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
Administrative Agent or CAF Advance Agent hereunder by a successor
Administrative Agent or CAF Advance Agent, such successor Administrative Agent
or CAF Advance Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent or
CAF Advance Agent, and the retiring Administrative Agent or CAF Advance Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's or CAF Advance Agent's resignation or
removal hereunder as Administrative Agent or CAF Advance Agent, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent or CAF Advance Agent
under this Agreement.
<PAGE> 72
68
ARTICLE IX
MISCELLANEOUS
SECTION IX.1 Amendments, Etc. An amendment or waiver of any
provision of this Agreement or the Notes, or a consent to any departure by any
Borrower therefrom, shall be effective against the Lenders and all holders of
the Notes if, but only if, it shall be in writing and signed by the Majority
Lenders, and then such a waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, be effective to: (a) waive any of the conditions
specified in Article III, (b) increase or extend the Commitments of the Lenders
or subject the Lenders to any additional obligations, (c) reduce the principal
of, or interest on, any Advance or the Notes or any facility fees hereunder, (d)
postpone any date fixed for any payment of principal of, or interest on, any
Advance or the Notes or any facility fees hereunder, (e) change the percentage
of the Commitments or of the aggregate unpaid principal amount of any Advance or
the Notes, or the number of Lenders, which shall be required for the Lenders or
any of them to take any action under this Agreement, (f) amend this Section 9.1,
(g) amend, waive or consent to any departure of any provision in Article VI or
(h) except as provided below, release any Borrower or Holding or any Restricted
Affiliate from its guarantee in Article VI, the Holding Guarantee or any
Restricted Affiliate Guarantee, as the case may be; provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent and the CAF Advance Agent in addition to the Lenders
required hereinabove to take such action, affect the rights or duties of the
Administrative Agent or the CAF Advance Agent under this Agreement or any Note;
provided, still further, that the guarantee of a Borrower under Article VI and
of a Restricted Affiliate under its Restricted Affiliate Guarantee shall be
released automatically upon (i) the sale by the Company of such Borrower or
Restricted Affiliate, provided that such sale is permitted under this Agreement,
or (ii) such Borrower or Restricted Affiliate ceasing to be a Borrower or a
Restricted Affiliate hereunder.
SECTION IX.2 Notices, Etc. Except as otherwise provided in
Section 2.2(a), 2.5(d) or 2.15(b), all notices and other communications provided
for hereunder shall be in writing (including telecopier and other readable
communication) and mailed by certified mail, return receipt requested,
telecopied or otherwise transmitted or delivered, if to any Borrower, c/o the
Company at El Paso Energy Building, 1001 Louisiana Street, Houston, Texas 77002,
Attention: Executive Vice President and Chief Financial Officer, Telecopier:
(713) 757-4975; if to any Lender, at its address set forth under its name on
Schedule I; if to the Administrative Agent, at 270 Park Avenue, 32nd floor, New
York, New York 10017, Attention: Peter Ling, Telecopier: (212) 383-0361; and if
to the CAF Advance Agent, at One Chase Manhattan Plaza, Third Floor, New York,
New York 10081, Attention: Sandra Miklave, Telecopier: (212) 552-5700,
Telephone: (212) 552-7953; or, as to each party and each Borrowing Subsidiary,
at such other address as shall be designated by such party in a written notice
to the other parties. All such notices and communications shall,
<PAGE> 73
69
if so mailed, telecopied or otherwise transmitted, be effective when received,
if mailed, or when the appropriate answerback or other evidence of receipt is
given, if telecopied or otherwise transmitted, respectively. A notice received
by the Administrative Agent, the CAF Advance Agent or a Lender by telephone
pursuant to Section 2.2(a), 2.5(d) or 2.15(b) shall be effective if the
Administrative Agent or Lender believes in good faith that it was given by an
authorized representative of the applicable Borrower and acts pursuant thereto,
notwithstanding the absence of written confirmation or any contradictory
provision thereof.
SECTION IX.3 No Waiver; Remedies. No failure on the part of
any Lender, the Administrative Agent or the CAF Advance Agent to exercise, and
no delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
or under any Note preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION IX.4 Costs and Expenses; Indemnity. (a) Each Borrower
agrees to pay on demand (to the extent not reimbursed by any other Borrower) (i)
all reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent in connection with the preparation, execution and delivery of this
Agreement, the Notes and the other documents to be delivered hereunder and the
fulfillment or attempted fulfillment of conditions precedent hereunder, (ii) all
reasonable costs and expenses incurred by the Administrative Agent and its
Affiliates in initially syndicating all or any portion of the Commitments
hereunder, including, without limitation, the related reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent or its
Affiliates, travel expenses, duplication and printing costs and courier and
postage fees, and excluding any syndication fees paid to other parties joining
the syndicate and (iii) all out-of-pocket costs and expenses, if any, incurred
by the Administrative Agent, the CAF Advance Agent and the Lenders in connection
with the enforcement (whether through negotiations, legal proceedings in
bankruptcy or insolvency proceedings, or otherwise) of this Agreement, the Notes
and the other documents to be delivered hereunder and thereunder, including the
reasonable fees and out-of-pocket expenses of counsel.
(b) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or CAF Advance is made by any Borrower to or for the
account of a Lender on any day other than the last day of the Interest Period
for such Advance, as a result of a prepayment pursuant to Section 2.15 or a
Conversion pursuant to Section 2.13(f) or Section 2.14 or due to acceleration of
the maturity of the Advances and the Notes pursuant to Section 7.1 or due to any
other reason attributable to such Borrower, or if any Borrower shall fail to
make a borrowing of Eurodollar Rate Advances or CAF Advances after such Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement, such Borrower shall, upon demand by such Lender (with
<PAGE> 74
70
a copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, Conversion or failure to borrow, including,
without limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance.
(c) Each Borrower agrees to indemnify and hold harmless the
Administrative Agent, the CAF Advance Agent and each Lender (to the extent not
reimbursed by any other Borrower) from and against any and all claims, damages,
liabilities and expenses (including, without limitation, fees and disbursements
of counsel) which may be incurred by or asserted against the Administrative
Agent, the CAF Advance Agent or such Lender in connection with or arising out of
any investigation, litigation, or proceeding (whether or not the Administrative
Agent, the CAF Advance Agent or such Lender is party thereto) related to any
acquisition or proposed acquisition by the Company, or by any Subsidiary of the
Company, of all or any portion of the stock or substantially all the assets of
any Person or any use or proposed use of the Advances by any Borrower (excluding
any claims, damages, liabilities or expenses incurred by reason of the gross
negligence or willful misconduct of the party to be indemnified or its employees
or agents, or by reason of any use or disclosure of information relating to any
such acquisition or use or proposed use of the proceeds by the party to be
indemnified or its employees or agents).
SECTION IX.5 Right of Set-Off. Upon the declaration of the
Advances and the Notes as due and payable pursuant to the provisions of Section
7.1, each Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the applicable Borrower against any and all of the obligations of
such Borrower now or hereafter existing under this Agreement and the Notes of
such Borrower held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement or such Notes and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Company
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 9.5 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
SECTION IX.6 Binding Effect. This Agreement shall become
effective in accordance with the provisions of Section 3.1, and thereafter shall
be binding upon and inure to the benefit of the Borrowers, the Administrative
Agent, the CAF
<PAGE> 75
71
Advance Agent and each Lender and their respective successors and assigns,
except that no Borrower shall have the right to assign its rights or obligations
hereunder or any interest herein without the prior written consent of all of the
Lenders.
SECTION IX.7 Assignments and Participations. (a) Each Lender
may assign to one or more banks or other financial institutions all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Notes held by it); provided, however, that (i) each such assignment shall be of
a constant, and not a varying, percentage of all rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $15,000,000 (or, if less, the entire Commitment of the assigning
Lender) and shall be an integral multiple of $1,000,000, (iii) each such
assignment shall be to an Eligible Assignee, and (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Notes subject to such assignment and a processing and recordation fee
of $2,500, and shall send to the Company an executed counterpart of such
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (A) 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 Lender
hereunder and (B) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance,
each Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of each Borrower or the performance or observance by each Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms
<PAGE> 76
72
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.1 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 the Administrative Agent, the CAF
Advance Agent, such assigning Lender or any other Lender 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 Administrative Agent and the CAF Advance
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent and the CAF
Advance Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 9.2 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 Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
each Borrower, the Administrative Agent, the CAF Advance Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by any Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice. Upon the acceptance of any Assignment
and Acceptance for recordation in the Register, Schedule I hereto shall be
deemed to be amended to reflect the revised Commitments of the Lenders parties
to such Assignment and Acceptance as well as administrative information with
respect to any new Lender as such information is recorded in the Register.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and as assignee representing that it is an Eligible
Assignee, together with any Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit G hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company; within five Business Days after
its receipt of such notice and its receipt of an executed counterpart of such
Assignment and Acceptance, the Borrowers, at their own expense, shall execute
and deliver to the Administrative Agent in exchange for the surrendered Notes,
if any, new Notes to the order of such Eligible Assignee, if requested, in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
<PAGE> 77
73
Acceptance and, if the assigning Lender has retained a Commitment hereunder, new
Notes, if requested, to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Notes, if any, shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Notes, if any, shall be dated (A) in the case of Notes made by
EPNGC, the Closing Date and (B) in the case of Notes made by any other Borrower,
the date such other Borrower executes and delivers its Joinder Agreement, and
shall otherwise be in substantially the form of Exhibit A.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, and the Advances owing to it and the Notes held by it); provided,
however, that (i) such Lender's obligations under this Agreement (including,
without limitation, its Commitment to the Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Notes for all purposes of this Agreement, (iv) the
Borrowers, the Administrative Agent, the CAF Advance Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, (v) such Lender shall
continue to be able to agree to any modification or amendment of this Agreement
or any waiver hereunder without the consent, approval or vote of any such
participant or group of participants, other than modifications, amendments and
waivers which (A) postpone any date fixed for any payment of, or reduce any
payment of, principal of or interest on such Lender's Advances or Notes or any
facility fees payable under this Agreement, or (B) increase the amount of such
Lender's Commitment in a manner which would have the effect of increasing the
amount of a participant's participation, or (C) reduce the interest rate payable
under this Agreement and such Lender's Notes, or (D) consent to the assignment
or the transfer by any Borrower of any of its rights and obligations under the
Agreement, and (vi) except as contemplated by the immediately preceding clause
(v), no participant shall be deemed to be or to have any of the rights or
obligations of a "Lender" hereunder.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.7, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree in
writing for the benefit of the Borrowers to preserve the confidentiality of any
confidential information relating to the Borrowers received by it from such
Lender in a manner consistent with Section 9.8.
(g) Anything in this Agreement to the contrary
<PAGE> 78
74
notwithstanding, any Lender may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it) and the Notes issued to it hereunder in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System (or any successor regulation) and the applicable
operating circular of such Federal Reserve Bank.
SECTION IX.8 Confidentiality. Each Lender, the Administrative
Agent and the CAF Advance Agent (each, a "Party") agrees that it will use its
best efforts not to disclose, without the prior consent of the Company (other
than to its, or its Affiliate's, employees, auditors, accountants, counsel or
other representatives, whether existing at the date of this Agreement or any
subsequent time), any information with respect to the Borrowers which is
furnished pursuant to this Agreement, provided that any Party may disclose any
such information (i) as has become generally available to the public, (ii) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such party or to the Board of Governors of the Federal Reserve
System or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (iii) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation or regulatory proceeding, (iv) in order to comply with any
law, order, regulation or ruling applicable to such party, or (v) to any
prospective assignee or participant in connection with any contemplated
assignment of any rights or obligations hereunder, or any sale of any
participation therein, by such Party pursuant to Section 9.7, if such
prospective assignee or participant, as the case may be, executes an agreement
with the Company containing provisions substantially similar to those contained
in this Section 9.8; provided, however, that the Company acknowledges that the
Administrative Agent has disclosed and may continue to disclose such information
as the Administrative Agent in its sole discretion determines is appropriate to
the Lenders from time to time.
SECTION IX.9 Consent to Jurisdiction. (a) Each Borrower hereby
irrevocably submits to the jurisdiction of any New York State or Federal court
sitting in New York City and any appellate court from any thereof in any action
or proceeding by the Administrative Agent, the CAF Advance Agent, any Lender or
the holder of any Note in respect of, but only in respect of, any claims or
causes of action arising out of or relating to this Agreement or the Notes (such
claims and causes of action, collectively, being "Permitted Claims"), and each
Borrower hereby irrevocably agrees that all Permitted Claims may be heard and
determined in such New York State court or in such Federal court. Each Borrower
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any aforementioned court in respect of Permitted Claims. Each Borrower hereby
irrevocably appoints CT Corporation System (the "Process Agent"), with an office
on the date hereof at 1633
<PAGE> 79
75
Broadway, New York, New York 10019, as its agent to receive on behalf of such
Borrower and its property service of copies of the summons and complaint and any
other process which may be served by the Administrative Agent, any Lender or the
holder of any Note in any such action or proceeding in any aforementioned court
in respect of Permitted Claims. Such service may be made by delivering a copy of
such process to the Company by courier and by certified mail (return receipt
requested), fees and postage prepaid, both (i) in care of the Process Agent at
the Process Agent's above address and (ii) at the Company's address specified
pursuant to Section 9.2, and each Borrower hereby irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. Each Borrower
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(b) Nothing in this Section 9.9 (i) shall affect the right of
any Lender, the holder of any Note or the Administrative Agent or the CAF
Advance Agent to serve legal process in any other manner permitted by law or
affect any right otherwise existing of any Lender, the holder of any Note or the
Administrative Agent or the CAF Advance Agent to bring any action or proceeding
against any Borrower or its property in the courts of other jurisdictions or
(ii) shall be deemed to be a general consent to jurisdiction in any particular
court or a general waiver of any defense or a consent to jurisdiction of the
courts expressly referred to in subsection (a) above in any action or proceeding
in respect of any claim or cause of action other than Permitted Claims.
SECTION IX.10 GOVERNING LAW. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION IX.11 Rate of Interest. It is the intention of the
parties hereto that each Lender shall each conform strictly to usury laws
applicable to it. Accordingly, if the transactions contemplated hereby would be
usurious as to any Lender under laws applicable to it, then, in that event,
notwithstanding anything to the contrary in this Agreement or in the Notes to
the order of such Lender, it is agreed as follows: (a) the aggregate of all
consideration which constitutes interest under law applicable to such Lender
that is contracted for, taken, reserved, charged or received by such Lender
hereunder, or under such Notes or otherwise, shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
credited by such Lender on the principal amount of the sums owed to such Lender
(or, if all amounts owing to such Lender shall have been paid in full, refunded
by such Lender to the applicable Borrower); or (b) in the event that a
prepayment of any Advances owed to any Lender is required, then such
consideration that constitutes interest under law applicable to such Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for shall be cancelled automatically by such
Lender as
<PAGE> 80
76
of the date of such prepayment and, if theretofore paid, shall be credited by
such Lender on the principal amount of such prepayment obligation (or, if the
principal amount of such prepayment obligation shall have been paid in full,
refunded by such Lender to the applicable Borrower). To the extent that Article
5069-1.04 of the Texas Revised Civil Statutes is relevant to any Lender for the
purpose of determining the maximum amount of interest allowed by applicable law,
such Lender hereby elects to determine the applicable rate ceiling under such
Article by the indicated (weekly) rate ceiling from time to time in effect,
subject to such Lender's right subsequently to change such method in accordance
with applicable law. In no event, however, shall Article 5069, Chapter 15, of
the Texas Revised Civil Statutes apply to this Agreement or the Notes or the
transactions contemplated hereby.
SECTION IX.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery to the Administrative Agent of a counterpart executed by a
Lender shall constitute delivery of such counterpart to all of the Lenders. This
Agreement may be delivered by facsimile transmission of the relevant signature
pages hereof.
<PAGE> 81
77
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
EL PASO NATURAL GAS COMPANY
By:
Title:
TENNESSEE GAS PIPELINE COMPANY
By:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent, CAF Advance
Agent and a Lender
By:
Title:
CITIBANK, N.A., as Documentation
Agent and as a Lender
By:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Syndication Agent
and as a Lender
By:
Title:
<PAGE> 82
78
ABN-AMRO BANK, N.V.
By:
Title:
By:
Title:
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED
By:
Title:
BANK OF AMERICA NT & SA
By:
Title:
BANKBOSTON, N.A.
By:
Title:
BANK OF MONTREAL IRELAND PLC
By:
Title:
THE BANK OF NEW YORK
By:
Title:
<PAGE> 83
79
THE BANK OF NOVA SCOTIA
By:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:
Title:
BANQUE NATIONALE DE PARIS, HOUSTON
AGENCY
By:
Title:
BARCLAYS BANK PLC
By:
Title:
BAYERISCHE VEREINSBANK AG,
LOS ANGELES AGENCY
By:
Title:
By:
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By:
Title:
<PAGE> 84
80
CIBC INC.
By:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Title:
THE DAI-ICHI KANGYO BANK, LIMITED
By:
Title:
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By:
Title:
By:
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By:
Title:
By:
Title:
<PAGE> 85
81
THE FUJI BANK, LIMITED-HOUSTON
AGENCY
By:
Title:
THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY
By:
Title:
KREDIETBANK N.V., GRAND CAYMAN
BRANCH
By:
Title:
By:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By:
Title:
MELLON BANK, N.A.
By:
Title:
By:
Title:
<PAGE> 86
82
NATIONAL WESTMINSTER BANK PLC NEW
YORK BRANCH
By:
Title:
NATIONAL WESTMINSTER BANK PLC
NASSAU BRANCH
By:
Title:
NATIONSBANK OF TEXAS, N.A.
By:
Title:
NORINCHUKIN BANK, NEW YORK BRANCH
By:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
Title:
ROYAL BANK OF CANADA
By:
Title:
<PAGE> 87
83
THE SAKURA BANK, LIMITED - NEW YORK
BRANCH
By:
Title:
SOCIETE GENERALE, SOUTHWEST AGENCY
By:
Title:
THE SUMITOMO BANK, LIMITED
By:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
Title:
UNION BANK OF SWITZERLAND, HOUSTON
AGENCY
By:
Title:
By:
Title:
THE YASUDA TRUST & BANKING, CO.,
LTD.
By:
Title:
<PAGE> 88
SCHEDULE I
COMMITMENTS, ADDRESSES, ETC.
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
The Chase Manhattan Bank $42,500,000
Global Oil & Gas
270 Park Avenue, 32nd Floor
New York, New York 10017
Attention: Peter Ling
Telephone: 212-270-4676
Telecopier: 212-270-3897
ABN AMRO Bank, N.V. $27,500,000
135 South LaSalle, Suite 625
Chicago, Illinois 60603
Attention: Loan Administration
Telephone: 312-904-8865
Telecopier: 312-904-6893
Australia and New Zealand Banking $12,500,000
Group Limited
1177 Avenue of the Americas
New York, New York 10036
Attention: Kyle Loughlin
Telephone: 212-801-9853
Telecopier: 212-801-9131
Bank of America NT & SA $27,500,000
231 South LaSalle
Chicago, Illinois 60697
Attention: Debbie Aguilar
Telephone: 312-828-3793
Telecopier: 312-974-9626
with a copy to
Bank of America NT & SA
333 Clay Street
Suite 4550
Houston, Texas 77000
Attention: Paula Veazey
Telephone: 713-651-4877
Telecopier: 713-651-4807
<PAGE> 89
2
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
BankBoston, N.A. $12,500,000
100 Federal Street
Mailstop 01-08-02
Boston, Massachusetts 02110
Attention: Debora Williams
Telephone: 617-434-9623
Telecopier: 617-434-9820
Bank of Montreal Ireland Plc $12,500,000
4th Floor, Segrave House
19/20 Earlsfort Terrace
Dublin 2, Ireland
Attention: Eric Lindstrom
Telephone: 353-1-662-9300
Telecopier: 353-1-662-9301
with a copy to:
Bank of Montreal
Suite 4400
700 Louisiana Street
Houston, Texas 77002
Attention: Natasha Gilossop
Telephone: (713) 546-9752
Telecopier: (713) 223-4007
The Bank of New York $20,000,000
One Wall Street, 19th Floor
New York, New York 10286
Attention: Terri Foran
Telephone: 212-635-7921
Telecopier: 212-635-7923
The Bank of Nova Scotia $20,000,000
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: F.C.H. Ashby
Telephone: 404-877-1500
Telecopier: 404-888-8998
with a copy to:
The Bank of Nova Scotia
Houston Representative Office
1100 Louisiana, Suite 3000
Houston, Texas 77002
Attention: Jamie Conn
Telephone: 713-752-0900
Telecopier: 713-752-2425
<PAGE> 90
3
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
The Bank of Tokyo-Mitsubishi, Ltd. $27,500,000
1100 Louisiana, Suite 2800
Houston, Texas 77002-5216
Attention: J.M. McIntyre
Telephone: 713-655-3845
Telecopier: 713-655-3855
Banque Nationale de Paris,
Houston Agency $12,500,000
333 Clay Street, Suite 3400
Houston, Texas 77002
Attention: Mike Shryock
Telephone: 713-951-1224
Telecopier: 713-659-1414
Barclays Bank PLC $20,000,000
222 Broadway
New York, New York 10038
Attention: Sal Esposito
Telephone: 212-412-1516
Telecopier: 212-412-7585
Bayerische Vereinsbank AG,
Los Angeles Agency $12,500,000
800 Wilshire Blvd., Suite 1600
Los Angeles, California 90017
Attention: John Carlson/Jarunee Hanpachern
Telephone: 213-629-1821
Telecopier: 213-622-6341
Caisse Nationale de Credit Agricole $12,500,000
55 East Monroe Street, Suite 4700
Chicago, Illinois 60303
Attention: Karen Bergstrom
Telephone: 312-917-7420
Telecopier: 312-372-2628
CIBC Inc. $27,500,000
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Mark Wolf
Telephone: 713-655-5226
Telecopier: 713-650-3727
Citibank, N.A. $35,000,000
One Court Square
Long Island City, New York 11120
Attention: Leena Caligiure
Telephone: 718-248-5762
Telecopier: 718-248-4844/4845
<PAGE> 91
4
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
Credit Lyonnais New York Branch $27,500,000
1000 Louisiana Street, Suite 5360
Houston, Texas 77002
Attention: Bernadette Archie
Telephone: 713-753-8723
Telecopier: 713-751-0307
The Dai-Ichi Kangyo Bank, Ltd. $12,500,000
One World Trade Center, Suite 4911
New York, New York 10048
Attention: Christine Dell'Aira
Telephone: 212-432-8841
Telecopier: 212-432-0194
Deutsche Bank AG New York and/
or Cayman Islands Branches $27,500,000
31 West 52nd Street
New York, New York 10019
Attention: Stephan A. Wiedemann
Telephone: 212-469-8663
Telecopier: 212-469-8212
Dresdner Bank AG, New York and Grand Cayman Branches $12,500,000
75 Wall Street
New York, New York 10005
Attention: Mike Terry
Telephone: 212-429-2224
Telecopier: 212-429-2129
The Fuji Bank, Limited-Houston Agency $20,000,000
One Houston Center, Suite 4100
1221 McKinney Street
Houston, Texas 77010
Attention: Charles van Ravenswaay
Telephone: 713-650-7829
Telecopier: 713-759-0048
The Industrial Bank of Japan $12,500,000
Trust Company
Allen Three Center
333 Clay, Suite 4850
Houston, Texas 77002
Attention: W. Lynn Williford
Telephone: 713-651-9444
Telecopier: 713-651-9209
<PAGE> 92
5
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
Kredietbank N.V., New York Branch $27,500,000
125 West 55th Street
New York, New York 10019
Attention: Lynda Resuma/
Loan Administration
Telephone: 212-541-0657
Telecopier: 212-956-5581
The Long-Term Credit Bank of Japan, Ltd. $12,500,000
165 Broadway
New York, New York 10006
Attention: Bob Pacifici
Telephone: 212-335-4801
Telecopier: 212-608-3452
with a copy to:
2200 Ross Avenue, Suite 4700 West
Dallas, Texas 75201
Attention: Doug Whiddon
Telephone: 214-969-5352
Telecopier: 214-969-5357
Mellon Bank, N.A. $20,000,000
1100 Louisiana, Suite 3600
Houston, Texas 77002
Attention: Janet Jenkins
Telephone: 713-759-3040
Telecopier: 713-650-3409
Morgan Guaranty Trust Company of
New York $35,000,000
60 Wall Street
22nd Floor
New York, New York 10260
Attention: John Kowalczuk
Telephone: 212-648-7612
Telecopier: 212-648-5014
National Westminster Bank Plc $12,500,000
New York Branch
175 Water Street, 19th Floor
New York, New York 10038
Attention: Commercial Lending Unit
Telephone: 212-602-4180
Telecopier: 212-602-4118
<PAGE> 93
6
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
NationsBank of Texas, N.A. $27,500,000
700 Louisiana, 8th Floor
Houston, Texas 77002
Attention: Patrick M. Delaney
Telephone: 713-247-7373
Telecopier: 713-247-6568
Norinchukin Bank, New York Branch $20,000,000
245 Park Avenue, 29th Floor
New York, New York 10167
Attention: Tsuneo Tsukagaki
Telephone: 212-697-1717
Telecopier: 212-697-5754
PNC Bank, National Association $20,000,000
One PNC Bank Plaza
249 Fifth Avenue, 3rd Floor
Pittsburgh, Pennsylvania 15222-2707
Attention: Thomas K. Grundman
Telephone: 412-762-3025
Telecopier: 412-762-2571
Royal Bank of Canada $27,500,000
Financial Square
23rd Floor
New York, New York 10005-2531
Attention: Assistant Manager,
Loan Processing
Telephone: 212-428-6321
Telecopier: 212-428-2372
with copies to:
Royal Bank of Canada
12450 Greenspoint Drive
Suite 1450
Houston, Texas 77060
Attention: Doug Frost
Telephone: 281-874-5664
Telecopier: 281-874-0081
<PAGE> 94
7
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
The Sakura Bank, Limited -
New York Branch $12,500,000
277 Park Avenue, 45th Floor
New York, New York 10172
Attention: David Speir
Telephone: 212-756-6778
Telecopier: 212-888-7651
Societe Generale,
Southwest Agency $20,000,000
2001 Ross Avenue
Suite 4800
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Lia Grerra
Telephone: 214-979-2769
Telecopier: 214-754-0171
The Sumitomo Bank, Limited $20,000,000
277 Park Avenue
New York,New York 10172
Attention: Jessica Cueto
Telephone: 212-224-4132
Telecopier: 212-224-4537
with a copy to:
The Sumitomo Bank, Limited
700 Louisiana Street
Suite 1750
Houston, Texas 77002
Attention: Energy Group
Toronto Dominion (Texas), Inc. $27,500,000
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Frederic Hawley
Telephone: 713-653-8281
Telecopier: 713-951-9921
Union Bank of Switzerland,
Houston Agency $20,000,000
1100 Louisiana, Suite 4500
Houston, Texas 77002
Attention: Evans Swann
Telephone: 713-655-6500
Telecopier: 713-655-6555
The Yasuda Trust & Banking, Co., Ltd. $12,500,000
666 Fifth Avenue, Suite 801
New York, New York 10103
Attention: Andrew Orsen
Telephone: 212-373-5879
Telecopier: 212-373-5796
<PAGE> 95
EXHIBIT A
FORM OF
NOTE
$__________________ New York, New York
October 29, 1997
FOR VALUE RECEIVED, the undersigned, ___________________, a ________
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of (the "Lender") at the office of The Chase Manhattan Bank, located at
270 Park Avenue, New York, New York 10017, in lawful money of the United States
of America and in same day funds, on the second anniversary of the Termination
Date (or if the Lender is an Objecting Lender, the second anniversary of the
Commitment Expiration Date applicable to the Lender) the principal amount of (a)
DOLLARS ($ ), or, if less, (b) the aggregate unpaid principal amount of all
Revolving Credit Advances made by the Lender to the Borrower pursuant to
subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in the Credit Agreement.
The holder of this Note is authorized to, and prior to any transfer
hereof shall, endorse on the schedules attached hereto and made a part hereof or
on a continuation thereof which shall be attached hereto and made a part hereof
the date, Type and amount of each Revolving Credit Advance made pursuant to
subsection 2.1 of the Credit Agreement and the date and amount of each payment
or prepayment of principal thereof, each continuation thereof, each conversion
of all or a portion thereof to another Type and, in the case of Eurodollar Rate
Advances, the length of each Interest Period with respect thereto. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement shall not affect
the obligations of the Borrower in respect of such Revolving Credit Advance.
This Note (a) is one of the Notes referred to in the $750,000,000
364-Day Revolving Credit and Competitive Advance Facility Agreement, dated as of
October 29, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among El Paso Natural Gas Company, Tennessee Gas
Pipeline Company, the Lender, the other banks and financial institutions from
time to time parties thereto, The Chase Manhattan Bank, as Administrative Agent
and CAF Advance Agent, Citibank, N.A., as Documentation Agent, and Morgan
Guaranty Trust
<PAGE> 96
A-2
Company of New York, as Syndication Agent (b) is subject to the provisions of
the Credit Agreement and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind except those
expressly required under the Credit Agreement.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[BORROWER]
By __________________
Title:
<PAGE> 97
Schedule A to Note
ADVANCES, CONVERSIONS AND REPAYMENTS OF BASE RATE ADVANCES
<TABLE>
<CAPTION>
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
Amount of Base Rate
Amount Amount of Principal of Advances Converted to Unpaid Principal
Amount of Base Converted to Base Rate Advances Eurodollar Rate Balance of Base Rate Notation
Rate Advances Base Rate Advances Repaid Advances Advances Made By
Date
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
<S> <C> <C> <C> <C> <C> <C>
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
- ----------- ---------------- ---------------------- ------------------------ ---------------------- --------------------- --------
</TABLE>
<PAGE> 98
Schedule B to Note
ADVANCES, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR RATE ADVANCES
<TABLE>
<CAPTION>
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
Interest Period and Amount of Principal Amount of Eurodollar Unpaid Principal
Amount of Amount Converted Eurodollar Rate with of Eurodollar Rate Rate Advances Balance of Notation
Date Eurodollar Rate to Eurodollar Rate Respect Thereto Advances Repaid Converted to Base Eurodollar Rate Made By
Advances Advances Rate Advances Advances
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
- ---- --------------- -------------------- -------------------- ------------------- -------------------- ---------------- --------
</TABLE>
<PAGE> 1
EXHIBIT 10.F
================================================================================
EL PASO NATURAL GAS COMPANY
-------------------------------------
$750,000,000 5-YEAR
REVOLVING CREDIT AND COMPETITIVE
ADVANCE FACILITY AGREEMENT
DATED AS OF OCTOBER 29, 1997
-------------------------------------
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
AND CAF ADVANCE AGENT
CITIBANK, N.A.,
AS DOCUMENTATION AGENT
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
AS SYNDICATION AGENT
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS................... 1
SECTION 1.1 Certain Defined Terms......................................... 1
SECTION 1.2 Computation of Time Periods................................... 18
SECTION 1.3 Accounting Terms.............................................. 18
SECTION 1.4 References.................................................... 18
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES................... 19
SECTION 2.1 The Revolving Credit Advances................................. 19
SECTION 2.2 Making the Revolving Credit Advances.......................... 19
SECTION 2.3 Evidence of Debt.............................................. 21
SECTION 2.4 CAF Advances.................................................. 21
SECTION 2.5 Procedure for CAF Advance Borrowings.......................... 22
SECTION 2.6 CAF Advance Payments.......................................... 25
SECTION 2.7 Evidence of Debt.............................................. 26
SECTION 2.8 Fees.......................................................... 26
SECTION 2.9 Reduction of the Commitments.................................. 27
SECTION 2.10 Repayment of Advances......................................... 27
SECTION 2.11 Interest on Revolving Credit Advances......................... 27
SECTION 2.12 Additional Interest on Eurodollar Rate Advances............... 28
SECTION 2.13 Interest Rate Determination................................... 29
SECTION 2.14 Voluntary Conversion of Advances.............................. 30
SECTION 2.15 Optional and Mandatory Prepayments............................ 31
SECTION 2.16 Increased Costs............................................... 32
SECTION 2.17 Increased Capital............................................. 33
SECTION 2.18 Illegality.................................................... 33
SECTION 2.19 Pro Rata Treatment, Payments and Computations................. 34
SECTION 2.20 Taxes......................................................... 35
SECTION 2.21 Sharing of Payments, Etc...................................... 38
SECTION 2.22 Use of Proceeds............................................... 39
SECTION 2.23 Extension of Stated Termination Date.......................... 39
SECTION 2.24 Commitment Increases.......................................... 40
SECTION 2.25 Replacement of Lenders........................................ 42
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING............... 43
SECTION 3.1 Conditions Precedent to Effectiveness of this Agreement....... 43
SECTION 3.2 Conditions Precedent to Initial Advances...................... 43
SECTION 3.3 Conditions Precedent to Initial Advances to Any Borrowing
Subsidiary or Holding...................................... 44
SECTION 3.4 Conditions Precedent to Each Borrowing........................ 45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..................... 46
SECTION 4.1 Representations and Warranties of the Borrowers............... 46
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE V
COVENANTS OF THE BORROWERS......................... 49
SECTION 5.1 Affirmative Covenants......................................... 49
SECTION 5.2 Negative Covenants............................................ 51
SECTION 5.3 Reporting Requirements........................................ 54
SECTION 5.4 Restrictions on Material Subsidiaries......................... 57
ARTICLE VI
GUARANTEE............................... 58
SECTION 6.1 Guarantees.................................................... 58
SECTION 6.2 No Subrogation................................................ 59
SECTION 6.3 Amendments, etc. with respect to the Obligations; Waiver of
Rights...................................................... 59
SECTION 6.4 Guarantee Absolute and Unconditional.......................... 60
SECTION 6.5 Reinstatement................................................. 61
ARTICLE VII
EVENTS OF DEFAULT............................ 61
SECTION 7.1 Event of Default.............................................. 61
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE CAF ADVANCE AGENT............ 65
SECTION 8.1 Authorization and Action...................................... 65
SECTION 8.2 Administrative Agent's and CAF Advance Agent's Reliance,
Etc......................................................... 65
SECTION 8.3 Chase and Affiliates.......................................... 66
SECTION 8.4 Lender Credit Decision........................................ 66
SECTION 8.5 Indemnification............................................... 67
SECTION 8.6 Successor Administrative Agent and CAF Advance Agent.......... 67
ARTICLE IX
MISCELLANEOUS............................. 68
SECTION 9.1 Amendments, Etc............................................... 68
SECTION 9.2 Notices, Etc.................................................. 69
SECTION 9.3 No Waiver; Remedies........................................... 69
SECTION 9.4 Costs and Expenses; Indemnity................................. 69
SECTION 9.5 Right of Set-Off.............................................. 71
SECTION 9.6 Binding Effect................................................ 71
SECTION 9.7 Assignments and Participations................................ 71
SECTION 9.8 Confidentiality............................................... 74
SECTION 9.9 Consent to Jurisdiction....................................... 75
SECTION 9.10 GOVERNING LAW................................................. 76
SECTION 9.11 Rate of Interest.............................................. 76
SECTION 9.12 Effect on Outstanding CAF Advances............................ 76
SECTION 9.13 Execution in Counterparts..................................... 77
</TABLE>
SCHEDULE
Schedule I Commitments, Addresses, Etc.
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Notice of Borrowing
-ii-
<PAGE> 4
Exhibit C Form of CAF Advance Request
Exhibit D Form of CAF Advance Offer
Exhibit E Form of CAF Advance Confirmation
Exhibit F Form of Assignment and Acceptance
Exhibit G Form of Opinion of [Associate] General Counsel
of the Company
Exhibit H Form of Opinion of New York Counsel to the
Company
Exhibit I Form of Process Agent Letter
Exhibit J Form of Joinder Agreement
Exhibit K Form of Opinion of [Associate] General Counsel of
the Company
Exhibit L Form of Opinion of New York Counsel to the Company
Exhibit M Form of Extension Request
Exhibit N Form of New Lender Supplement
Exhibit O Form of Commitment Increase Supplement
-iii-
<PAGE> 5
$750,000,000 5-YEAR REVOLVING CREDIT AND COMPETITIVE ADVANCE
FACILITY AGREEMENT, dated as of October 29, 1997, among EL PASO NATURAL GAS
COMPANY, a Delaware corporation ("EPNGC"), TENNESSEE GAS PIPELINE COMPANY, a
Delaware corporation ("Tennessee"), the several banks and other financial
institutions from time to time parties to this Agreement (the "Lenders"), THE
CHASE MANHATTAN BANK, a New York banking corporation, as administrative agent
(in such capacity, the "Administrative Agent") and as CAF Advance Agent (in such
capacity, the "CAF Advance Agent") for the Lenders hereunder, CITIBANK, N.A., as
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as syndication agent (in
such capacity, the "Syndication Agent") for the Lenders.
The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION I.1 Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Administrative Agent" has the meaning assigned to such term
in the preamble hereof.
"Advance" means an advance by a Lender to any Borrower
pursuant to Article II, and refers to a Base Rate Advance, a Eurodollar
Rate Advance or a CAF Advance.
"Affiliate" means as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
The term "control" (including the terms "controlled by" or "under
common control with") means, with respect to any Person, the
possession, direct or indirect, of the power to vote 20% or more of the
securities having ordinary voting power for the election of directors
of such Person or to direct or cause the direction of the management
and policies of such Person, whether through ownership of voting
securities or by contract or otherwise.
"Agreement" means this $750,000,000 5-Year Revolving Credit
and Competitive Advance Facility, as amended, supplemented or otherwise
modified from time to time.
"Alternate Program" means any program providing for the sale
or other disposition of trade or other receivables entered into by the
Company or a Principal Subsidiary (or for purposes of Section 5.2(a)
only, any Restricted Affiliate) which is in addition to or in
replacement of the
<PAGE> 6
2
program evidenced by either Receivables Purchase and Sale Agreement
(whether or not either Receivables Purchase and Sale Agreement shall
then be in effect), provided that such program is on terms (a)
substantially similar to either Receivables Purchase and Sale Agreement
(as modified to comply with FASB 125 or similar policies or guidelines
from time to time in effect) or (b) customary for similar transactions
as reasonably determined by the Administrative Agent.
"Applicable LIBO Rate" means in respect of any CAF Advance
requested pursuant to a LIBO Rate CAF Advance Request, an interest rate
per annum equal to the rate which appears on Page 3750 of the Telerate
Service (or any successor or substitute page of such Service, or any
successor to or substitute for such service providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes
of providing quotations of interest rates applicable to Dollar deposits
in the London interbank market) as at approximately 11:00 A.M., London
time, two Business Days prior to the beginning of the period for which
such CAF Advance is to be outstanding as the rate for Dollar deposits
with a maturity comparable to such period.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit F.
"Base CD Rate" means the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate.
"Base Rate" means for any day, a rate per annum (adjusted to
the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, rounded
upwards to the next highest 1/16 of 1%) equal to the greatest of (a)
the Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1/2 of 1% and (c) the Effective Federal Funds Rate in
effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the
Effective Federal Funds Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Effective Federal Funds Rate,
respectively.
"Base Rate Advance" means an Advance which bears interest as
provided in Section 2.11(a)(i).
"Borrowers" means the collective reference to EPNGC, each
Borrowing Subsidiary and Holding once Holding executes and delivers a
Joinder Agreement; each, a "Borrower".
<PAGE> 7
3
"Borrowing" means a borrowing consisting of Advances of the
same Type made on the same day by the Lenders, it being understood that
there may be more than one Borrowing on a particular day.
"Borrowing Subsidiary" means Tennessee and each other domestic
Subsidiary of the Company which has been designated by the Company as a
"Borrowing Subsidiary" by written notice to the Administrative Agent,
which designation shall not have been revoked by written notice by the
Company to the Administrative Agent (provided, that no such designation
shall be revoked if either (a) any Default or Event of Default shall
have occurred and be continuing or (b) any Advance to such Borrowing
Subsidiary, or any interest accrued thereon, shall be outstanding);
collectively, the "Borrowing Subsidiaries". For avoidance of doubt, (i)
Tennessee may be undesignated as a Borrowing Subsidiary by written
notice to the Administrative Agent by the Company and (ii) EPNGC shall
always be a Borrower hereunder.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York, New York and, if the
applicable Business Day relates to any Eurodollar Rate Advances or LIBO
Rate CAF Advances, on which dealings are carried on in the London
interbank market.
"CAF Advance" means an Advance made pursuant to Sections 2.4
and 2.5.
"CAF Advance Agent" has the meaning assigned to such term in
the preamble hereof.
"CAF Advance Availability Period" means the period from and
including the Closing Date until the earlier of (a) the date which is 7
days prior to the Stated Termination Date and (b) the Termination Date.
"CAF Advance Confirmation" means each confirmation by the
applicable Borrower of its acceptance of CAF Advance Offers, which CAF
Advance Confirmation shall be substantially in the form of Exhibit E
and shall be delivered to the CAF Advance Agent by telecopy.
"CAF Advance Interest Payment Date" means as to each CAF
Advance, each interest payment date specified by the applicable
Borrower for such CAF Advance in the related CAF Advance Request.
"CAF Advance Lenders" means Lenders from time to time
designated by the Company, in consultation with the CAF Advance Agent,
as CAF Advance Lenders as provided in Section 2.4.
"CAF Advance Maturity Date" means as to any CAF Advance, the
date specified by the applicable Borrower
<PAGE> 8
4
pursuant to Section 2.5(d)(ii) in its acceptance of the related CAF
Advance Offer.
"CAF Advance Offer" means each offer by a CAF Advance Lender
to make CAF Advances pursuant to a CAF Advance Request, which CAF
Advance Offer shall contain the information specified in Exhibit D and
shall be delivered to the CAF Advance Agent by telephone, immediately
confirmed by telecopy.
"CAF Advance Request" means each request by the applicable
Borrower for CAF Advance Lenders to submit bids to make CAF Advances,
which request shall contain the information in respect of such
requested CAF Advances specified in Exhibit C and shall be delivered to
the CAF Advance Agent in writing, by telecopy, or by telephone,
immediately confirmed by telecopy.
"Capitalization" of any Person means the sum (without
duplication) of (a) consolidated Debt of such Person and its
consolidated Subsidiaries, plus (b) the aggregate amount of Guaranties
entered into by such Person and its consolidated Subsidiaries, plus (c)
the consolidated common and preferred stockholders' equity of such
Person and its consolidated Subsidiaries.
"C/D Assessment Rate" means for any day as applied to any Base
Rate Advance, the annual assessment rate determined by Chase to be
payable on such day to the Federal Deposit Insurance Corporation (the
"FDIC") for the FDIC's (or any successor's) insuring time deposits at
offices of Chase in the United States.
"C/D Reserve Percentage" means for any day as applied to any
Base Rate Advance, that percentage (expressed as a decimal) which is in
effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) (the "Board"), for
determining the then current reserve requirement for the Administrative
Agent in respect of new non-personal time deposits in Dollars having a
maturity of 30 days or more.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
"Closing Date" has the meaning assigned to such term in
Section 3.2.
"Commitment" means as to any Lender, the obligation of such
Lender to make Revolving Credit Advances to the Borrowers hereunder in
an aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule I (as such
Schedule I is amended from time to time pursuant to Section 9.7(c)), as
such amount may be reduced from time to time in accordance with the
provisions of this Agreement.
<PAGE> 9
5
"Commitment Expiration Date" has the meaning assigned to such
term in Section 2.23(a).
"Commitment Percentage" means as to any Lender at any time,
the percentage which such Lender's Commitment then constitutes of the
aggregate Commitments (or, at any time after the Commitments shall have
expired or terminated, the percentage which the aggregate principal
amount of such Lender's Advances then outstanding constitutes of the
aggregate principal amount of the Advances then outstanding).
"Commitment Increase Notice" has the meaning assigned to such
term in Section 2.24(a).
"Commitment Increase Supplement" has the meaning assigned to
such term in Section 2.24(c).
"Company" means (a) at all times prior to Holding becoming a
Borrower, EPNGC, and (b) thereafter, Holding.
"Contingent Guaranty" has the meaning assigned to such term in
the definition of the term "Guaranty" contained in this Section 1.1.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of another Type
pursuant to Section 2.13, 2.14 or 2.18.
"Debt" means, as to any Person, all Indebtedness of such
Person other than (a) any Project Financing of such Person, (b) in the
case of the Company or a Principal Subsidiary, any liabilities of the
Company or such Principal Subsidiary, as the case may be, under any
Alternate Program, or any document executed by the Company or such
Principal Subsidiary, as the case may be, in connection therewith and
(c) any obligations of the Company or a Principal Subsidiary with
respect to lease payments for the headquarters building of EPNGC
located in Houston, Texas; provided, however, that for purposes of
Article V, "Debt" shall not include up to an aggregate amount
(determined without duplication of amount) of $200,000,000 of (i) the
amount of optional payments in lieu of asset repurchase or other
payments to similar effect, including extension or renewal payments, on
off balance sheet leases and (ii) the amount of the purchase price for
optional acquisition of such asset (in either case, calculated at the
lower amount payable in respect of such asset under clause (i) or (ii)
above).
"Default" means any event that would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both.
"Documentation Agent" has the meaning assigned to such term in
the preamble hereof.
<PAGE> 10
6
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Effective Date" means the date on which the conditions
precedent set forth in Section 3.1 have been satisfied (or compliance
therewith shall have been waived by the Lenders).
"Effective Federal Funds Rate" means, for any day, the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Eligible Assignee" means, with respect to any particular
assignment under Section 9.7, any bank or other financial institution
approved in writing by the Company expressly with respect to such
assignment and, except as to such an assignment by Chase so long as
Chase is the Administrative Agent hereunder, the Administrative Agent
as an Eligible Assignee for purposes of this Agreement, provided that
(i) neither the Administrative Agent's nor the Company's approval shall
be unreasonably withheld and (ii) neither the Administrative Agent's
nor the Company's approval shall be required if the assignee is another
Lender or an Affiliate of the assigning Lender.
"EPNGC" has the meaning assigned to such term in the preamble
hereof.
"EPTPC" means El Paso Tennessee Pipeline Co., a Delaware
corporation.
"EPTPC Facility" means the $3,000,000,000 Revolving Credit and
Competitive Advance Facility Agreement, dated as of November 4, 1996,
among EPTPC, the several financial institutions from time to time
parties thereto, and The Chase Manhattan Bank, as administrative agent
and CAF advance agent thereunder, as the same may be amended, modified
or supplemented from time to time.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued from time to time thereunder.
"ERISA Affiliate" means any Person who is a member of the
Company's controlled group within the meaning of Section 4001(a)(14)(A)
of ERISA.
<PAGE> 11
7
"Eurocurrency Liabilities" has 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 Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate which appears on Page 3750 of
the Telerate Service (or on any successor or substitute page of such
service, or any successor to or substitute for such service providing
rate quotations comparable to those currently provided on such page of
such service, as determined by the Administrative Agent from time to
time for purposes of providing quotations of interest rates applicable
to Dollar deposits in the London interbank market) as at approximately
11:00 A.M. (London, England time) two Business Days before the first
day of such Interest Period as the rate for Dollar deposits with a
maturity comparable to such Interest Period; provided that if such rate
is not available at such time for any reason, the Eurodollar Rate for
such Borrowing for such Interest Period shall be the interest rate per
annum equal to the average (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in Dollars are
offered by the principal office of each of the Reference Lenders in
London, England, to prime banks in the London interbank market as at
approximately 11:00 A.M. (London, England time) two Business Days
before the first day of such Interest Period, in an approximate amount
of each such Reference Lender's share of the relevant Borrowing for the
applicable Interest Period. The Eurodollar Rate for the Interest Period
for each Eurodollar Rate Advance comprising part of the same Borrowing,
when being determined pursuant to the foregoing proviso clause, shall
be determined by the Administrative Agent on the basis of applicable
rates furnished to and received by the Administrative Agent from the
Reference Lenders two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.13.
"Eurodollar Rate Advance" means an Advance which bears
interest determined by reference to the Eurodollar Rate, as provided in
Section 2.11(a)(ii).
"Eurodollar Rate Margin" means for any day the rate per annum
set forth below opposite the applicable S&P Bond Rating and Moody's
Bond Rating in effect on such day:
<PAGE> 12
8
<TABLE>
<CAPTION>
Bond Rating Eurodollar
(S&P/Moody's) Level Rate Margin
------------- ----- -----------
<S> <C> <C>
A/A2 or higher I .125%
A-/A3 II .155%
BBB+/Baa1 III .185%
BBB/Baa2 IV .215%
BBB-/Baa3 V .275%
BB+/Ba1 or lower VI .450%;
</TABLE>
provided that if the ratings of such rating agencies do not fall within
the same Level, the Eurodollar Rate Margin applicable to such day will
be the lower Eurodollar Rate Margin and provided, further, that in the
event a rating is not available from a rating agency, such rating
agency will be deemed to have assigned its lowest rating.
"Eurodollar Reserve Percentage" for any Lender for any
Interest Period for any Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so
applicable) for determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a
term equal to such Interest Period.
"Events of Default" has the meaning assigned to such term in
Section 7.1.
"Excluded Acquisition Debt" means (a) Debt, Guaranties or
reimbursement obligations of any corporation acquired by the Company or
any of its Subsidiaries and which Debt, Guaranties or reimbursement
obligations exist immediately prior to such acquisition (provided that
(i) such Debt, Guaranties or reimbursement obligations are not incurred
solely in anticipation of such acquisition and (ii) immediately prior
to such acquisition such corporation is not a Subsidiary of the
Company), (b) Debt, Guaranties or reimbursement obligations of EPTPC
and its Subsidiaries in existence on the date of the merger of EPTPC
with El Paso Merger Company or (c) Debt, Guaranties or reimbursement
obligations in respect of any asset acquired by the Company or any of
its Subsidiaries and which Debt, Guaranties or reimbursement
obligations exists immediately prior to such acquisition (provided that
(i) such Debt, Guaranties or reimbursement obligations are not incurred
solely in anticipation of such acquisition and (ii) immediately prior
to such acquisition such asset is not an asset of the Company or any of
its Subsidiaries).
<PAGE> 13
9
"Existing Facilities" means the collective reference to (a)
the $750,000,000 Revolving Credit and Competitive Advance Facility
Agreement and the $250,000,000 Revolving Credit and Competitive Advance
Facility Agreement, each dated November 4, 1996, among EPNGC, the
several financial institutions from time to time parties thereto and
Chase, as Administrative Agent and CAF Advance Agent and (b) the EPTPC
Facility.
"Exposure" means (a) with respect to an Objecting Lender at
any time, the aggregate outstanding principal amount of its Revolving
Credit Advances and (b) with respect to any other Lender at any time,
the maximum amount of the Commitment of such Lender.
"Extension Request" means each request by the Borrowers made
pursuant to Section 2.23 for the Lenders to extend the Stated
Termination Date, which shall contain the information in respect of
such extension specified in Exhibit M and shall be delivered to the
Administrative Agent in writing.
"Facility Fee Commencement Date" means the date hereof.
"FERC" means the Federal Energy Regulatory Commission, or any
agency or authority of the United States from time to time succeeding
to its function.
"Fixed Rate CAF Advance" means any CAF Advance made pursuant
to a Fixed Rate CAF Advance Request.
"Fixed Rate CAF Advance Request" means any CAF Advance Request
requesting the CAF Advance Lenders to offer to make CAF Advances at a
fixed rate (as opposed to a rate composed of the Applicable LIBO Rate
plus (or minus) a margin).
"Guaranty", "Guaranteed" and "Guaranteeing" each means any act
by which any Person assumes, guarantees, endorses or otherwise incurs
direct or contingent liability in connection with, or agrees to
purchase or otherwise acquire or otherwise assures a creditor against
loss in respect of, any Debt or Project Financing of any Person other
than the Company or any of its consolidated Subsidiaries (excluding (a)
any liability by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(b) any liability in connection with obligations of the Company, any of
its consolidated Subsidiaries or any Restricted Affiliate, including,
without limitation, obligations under any conditional sales agreement,
equipment trust financing or equipment lease and any liability of any
Restricted Affiliate in respect of obligations of EPNGC or its
consolidated Subsidiaries and (c) any such act in connection with a
Project Financing that either (i) guarantees performance of the
completion of the project which is financed by such Project Financing,
until such time, if any, that such guaranty becomes a guaranty of
payment of such Project Financing (other than a guaranty of
<PAGE> 14
10
payment of the type referred to in subclause (ii) below) or (ii) is
contingent upon, or the obligation to pay or perform under which is
contingent upon, the occurrence of any event other than or in addition
to the passage of time or any Project Financing becoming due (any such
act referred to in this clause (c) being a "Contingent Guaranty");
provided, however, that for purposes of this definition the liability
of the Company or any of its Subsidiaries with respect to any
obligation as to which a third party or parties are jointly, or jointly
and severally, liable as a guarantor or otherwise as contemplated
hereby and have not defaulted on its or their portions thereof, shall
be only its pro rata portion of such obligation.
"Holding" means any domestic parent holding company of both
EPNGC and EPTPC which directly or indirectly owns 100% of the common
stock of EPNGC and 100% of the common stock of EPTPC; provided,
however, that immediately after Holding becomes EPNGC's and EPTPC's
parent holding company, not less than 80% of the shareholders of common
stock of Holding are the same shareholders of common stock of EPNGC
immediately prior to Holding becoming EPNGC's and EPTPC's parent
holding company.
"Holding Guarantee" has the meaning assigned to such term in
Section 5.1(g).
"Indebtedness" of any Person means, without duplication (a)
indebtedness of such Person for borrowed money, (b) obligations of such
Person (other than any portion of any trade payable obligation of such
Person which shall not have remained unpaid for 91 days or more from
the original due date of such portion) to pay the deferred purchase
price of property or services, and (c) obligations of such Person as
lessee under leases which shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital
leases, except that where such indebtedness or obligation of such
Person is made jointly, or jointly and severally, with any third party
or parties other than any consolidated Subsidiary of such Person, the
amount thereof for the purposes of this definition only shall be the
pro rata portion thereof payable by such Person, so long as such third
party or parties have not defaulted on its or their joint and several
portions thereof.
"Indemnified Party" means any or all of the Lenders, the
Administrative Agent and the CAF Advance Agent.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period beginning on the date
of such Advance or the date of the Conversion of any Advance into such
an Advance and ending on the last day of the period selected by the
applicable Borrower pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the
<PAGE> 15
11
immediately preceding Interest Period and ending on the last day of the
period selected by the applicable Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be one, two,
three or six months, or, subject to availability to each Lender, nine
or twelve months, in each case as the applicable Borrower may, upon
notice received by the Administrative Agent not later than 12:00 noon
(New York City time) on the third Business Day prior to the first day
of such Interest Period with respect to Eurodollar Rate Advances,
select; provided, however, that:
(a) the duration of any Interest Period which
commences before the Termination Date and would otherwise end
after the Termination Date shall end on the Termination Date;
(b) if the last day of such Interest Period
would otherwise occur on a day which is not a Business Day,
such last day shall be extended to the next succeeding
Business Day, except if such extension would cause such last
day to occur in a new calendar month, then such last day shall
occur on the next preceding Business Day;
(c) Interest Periods commencing on the same
date for Advances comprising the same Borrowing shall be of
the same duration; and
(d) with respect to Advances made by an
Objecting Lender, no Interest Period with respect to such
Advances shall end after such Objecting Lender's Commitment
Expiration Date.
"Joinder Agreement" means a Joinder Agreement, substantially
in the form of Exhibit J hereto, duly executed and delivered by the
Company and the Borrowing Subsidiary party thereto or Holding, as the
case may be.
"Lenders" has the meaning assigned to such term in the
preamble hereof.
"LIBO Rate CAF Advance" means any CAF Advance made pursuant to
a LIBO Rate CAF Advance Request.
"LIBO Rate CAF Advance Request" means any CAF Advance Request
requesting the CAF Advance Lenders to offer to make CAF Advances at an
interest rate equal to the Applicable LIBO Rate plus (or minus) a
margin.
"Lien" means any lien, security interest or other charge or
encumbrance, or any assignment of the right to receive income, or any
other type of preferential arrangement, in each case to secure any
Indebtedness or any Guaranty of any Person.
<PAGE> 16
12
"Majority Lenders" means Lenders the Commitment Percentages of
which aggregate at least 51%, provided, that at any time after the
Commitment Expiration Date with respect to any Objecting Lender (but
prior to the termination of all the Commitments), "Majority Lenders"
shall mean Lenders whose Exposure aggregates at least 51% of the
aggregate Exposure of all the Lenders.
"Margin Stock" means "margin stock" as defined in Regulation U
of the Board of Governors of the Federal Reserve System, as in effect
from time to time.
"Material Adverse Effect" means a material adverse effect on
the financial condition or operations of the Company and its
consolidated Subsidiaries on a consolidated basis.
"Material Subsidiary" means any Subsidiary of Holding (other
than a Project Financing Subsidiary) that itself (on an unconsolidated,
stand-alone basis) owns in excess of 10% of the consolidated net
property, plant and equipment of Holding and its consolidated
Subsidiaries.
"Mojave" means Mojave Pipeline Company.
"Moody's Bond Rating" means, subject to Section 2.11(a)(ii),
(a) for any day prior to the Ratings Change Date, the rating of EPNGC's
senior long-term unsecured debt by Moody's Investors Service, Inc. in
effect at 11:00 A.M., New York City time, on such day and (b) for any
day that is on or after the Ratings Change Date, the rating of
Holding's senior long-term unsecured debt by Moody's Investors Service,
Inc. in effect at 11:00 A.M., New York City time, on such day.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Company or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions and in respect of which the Company or
an ERISA Affiliate has any liability (contingent or otherwise), such
plan being maintained pursuant to one or more collective bargaining
agreements.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (a) is maintained for
employees of the Company or an ERISA Affiliate and at least one Person
other than the Company and its ERISA Affiliates or (b) was so
maintained and in respect of which the Company or an ERISA Affiliate
could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"Net Worth" means with respect to the Company, as of any date
of determination, the sum of the preferred stock
<PAGE> 17
13
and stockholders' equity of the Company as shown on the most recent
consolidated balance sheet of the Company delivered pursuant to Section
5.3.
"New Lender" has the meaning assigned to such term in Section
2.24(b).
"New Lender Supplement" has the meaning assigned to such term
in Section 2.24(b).
"Note" has the meaning assigned to such term in Section
2.3(d).
"Notice of Borrowing" has the meaning specified in Section
2.2(a).
"Obligations" means the collective reference to the unpaid
principal of and interest on the Advances and the Notes and all other
financial liabilities of the Borrowers to the Administrative Agent, the
CAF Advance Agent and the Lenders (including, without limitation,
interest accruing at the then applicable rate provided in this
Agreement after the maturity of the Advances and interest accruing at
the then applicable rate provided in this Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Borrower whether or
not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, this Agreement or the
Notes, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent, the CAF Advance Agent or to the
Lenders that are required to be paid by any Borrower pursuant to this
Agreement).
"Objecting Lenders" has the meaning assigned to such term in
Section 2.23(a).
"Offered Increase Amount" has the meaning assigned to such
term in Section 2.24(a).
"Other Taxes" has the meaning assigned to such term in Section
2.20(b).
"Party" has the meaning assigned to such term in Section 9.8.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Claims" has the meaning assigned to such term in
Section 9.9(a).
<PAGE> 18
14
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a country
or any political subdivision thereof or any agency or instrumentality
of such country or subdivision.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City. The Prime Rate is not intended to be
the lowest rate of interest charged by Chase in connection with
extensions of credit to debtors.
"Principal Subsidiary" means, at any time, any Subsidiary of
the Company (other than a Project Financing Subsidiary) either (a)
having assets that are, or owning Subsidiaries with assets that
together with its assets are, at such time greater than or equal to 5%
of the consolidated assets of the Company and its consolidated
Subsidiaries at such time or (b) constituting a Borrowing Subsidiary.
"Process Agent" has the meaning specified in Section 9.9(a).
"Project Financing" means any Indebtedness incurred to finance
a project, other than any portion of such Indebtedness permitting or
providing for recourse against the Company or any of its Subsidiaries
(or for purposes of Section 5.2(a) only, any Restricted Affiliate)
other than (a) recourse to the stock or assets of the Project Financing
Subsidiary, if any, incurring or Guaranteeing such Indebtedness, and
(b) such recourse as exists under any Contingent Guaranty.
"Project Financing Subsidiary" means any Subsidiary of the
Company (or for purposes of Section 5.2(a) only, any Restricted
Affiliate) whose principal purpose is to incur Project Financing, or to
become a partner, member or other equity participant in a partnership,
limited liability company or other entity so created, and substantially
all the assets of which Subsidiary, partnership limited liability
company or other entity are limited to those assets being financed (or
to be financed) in whole or in part by a Project Financing.
"Ratings Change Date" means the earliest to occur of (a) the
date on which Holding becomes a Borrower hereunder and (b) the date on
which Holding becomes a "Borrower" under the $750,000,000 364-Day
Revolving Credit and Competitive Advance Facility Agreement, dated as
of the date hereof, among EPNGC, the lenders parties thereto and Chase,
as administrative agent and CAF advance agent.
<PAGE> 19
15
"Re-Allocation Date" has the meaning assigned to such term in
Section 2.24(e).
"Receivables Purchase and Sale Agreement" means the collective
reference to (a) the Receivables Purchase and Sale Agreement dated as
of January 14, 1992 among EPNGC, CIESCO L.P., a New York limited
partnership, Corporate Asset Funding Company, a Delaware corporation
and Citicorp North America, Inc., as agent, as amended as of the date
hereof, and (b) the Amended and Restated Receivables Sale Agreement
dated as of December 31, 1996 among El Paso Energy Credit Corporation,
Asset Securitization Cooperative Corporation and Canadian Imperial Bank
of Commerce, as administrative agent, as such Agreement may be amended,
supplemented, restated or otherwise modified from time to time,
provided that no such amendment, supplement, restatement or
modification shall change the scope of such Agreement from that of a
receivables securitization transaction.
"Reference Lenders" means Chase, Morgan Guaranty Trust Company
of New York and Citibank, N.A..
"Register" has the meaning specified in Section 9.7(c).
"Required Lenders" means Lenders (a) which are not Objecting
Lenders with respect to any previous Extension Request and (b) which
have Commitment Percentages aggregating at least 66-2/3% of the
aggregate Commitment Percentages of such non-Objecting Lenders.
"Restricted Affiliate" means any Affiliate of EPNGC (other
than a Subsidiary of EPNGC) designated by EPNGC as a "Restricted
Affiliate" by written notice to the Administrative Agent; provided that
such Affiliate shall not become a Restricted Affiliate until such time
that (a) such Affiliate executes and delivers a guaranty (in form and
substance reasonably satisfactory to the Administrative Agent) (each a
"Restricted Affiliate Guaranty") in favor of the Administrative Agent,
for the ratable benefit of the Lenders, guaranteeing the prompt and
complete payment by each Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations owing by
such Borrower and (b) the Administrative Agent receives legal opinions
from the General Counsel or Associate General Counsel of Holding and
from New York counsel to Holding reasonably acceptable to the
Administrative Agent, which legal opinions shall be in form and
substance satisfactory to the Administrative Agent; provided, further,
that after such time as such Affiliate becomes a Restricted Affiliate,
EPNGC may terminate the designation of such Affiliate as a Restricted
Affiliate by written notice to the Administrative Agent at which time
the aforementioned guaranty of such Affiliate shall also terminate.
"Restricted Affiliate Guaranty" has the meaning
<PAGE> 20
16
assigned to such term in the definition of Restricted Affiliate.
"Revolving Credit Advances" has the meaning assigned to such
term in Section 2.1.
"S&P Bond Rating" means, subject to Section 2.11(a)(ii), (a)
for any day prior to the Ratings Change Date, the rating of EPNGC's
senior long-term unsecured debt by Standard & Poor's Ratings Group in
effect at 11:00 A.M., New York City time, on such day and (b) for any
day that is on or after the Ratings Change Date, the rating of
Holding's senior long-term unsecured debt by Standard & Poor's Ratings
Group in effect at 11:00 A.M., New York City time, on such day.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Company or an ERISA Affiliate and no Person other than
the Company and its ERISA Affiliates or (b) was so maintained and in
respect of which the Company or an ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"Stated Termination Date" means October 28, 2002 or such later
date as shall be determined pursuant to the provisions of Section 2.23
with respect to non-Objecting Lenders.
"Subsidiary" means, as to any Person, any corporation of which
at least a majority of the outstanding stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall or
might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly beneficially owned or controlled
by such Person or one or more of its Subsidiaries or such Person and
one or more of the Subsidiaries of such Person.
"Syndication Agent" has the meaning assigned to such term in
the preamble hereof.
"Taxes" has the meaning assigned to such term in Section
2.20(a).
"Tennessee" has the meaning assigned to such term in the
preamble hereof, and its successors.
"Termination Date" means the earlier of (a) the Stated
Termination Date and (b) the date of termination in whole of the
Commitments pursuant to Section 2.9 or 7.1.
"Termination Event" means (a) a "reportable event," as
<PAGE> 21
17
such term is described in Section 4043 of ERISA (other than a
"reportable event" not subject to the provision for 30-day notice to
the PBGC under subsection .11, .12, .13, .14, .16, .18, .19 or .20 of
PBGC Reg. ss. 2615), or an event described in Section 4062(e) of ERISA,
or (b) the withdrawal of the Company or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a
"substantial employer," as such term is defined in Section 4001(a)(2)
of ERISA or the incurrence of liability by the Company or any ERISA
Affiliate under Section 4064 of ERISA upon the termination of a
Multiple Employer Plan, or (c) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, or (d) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA, or (e) the
conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the
creation of a lien upon property or rights to property of the Company
or any ERISA Affiliate for failure to make a required payment to a Plan
are satisfied, or (f) the adoption of an amendment to a Plan requiring
the provision of security to such Plan, pursuant to Section 307 of
ERISA, or (g) the occurrence of any other event or the existence of any
other condition which would reasonably be expected to result in the
termination of, or the appointment of a trustee to administer, any Plan
under Section 4042 of ERISA.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate (adjusted to the basis of a year of 365 or 366
days, as the case may be) for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board of
Governors of the Federal Reserve System (the "Board") through the
public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it.
"Type" means (a) as to any Revolving Credit Advance, its
nature as a Base Rate Advance or a Eurodollar Rate Advance and (b) as
to any CAF Advance, its nature as a Fixed Rate CAF Advance or a LIBO
Rate CAF Advance.
"Withdrawal Liability" has the meaning given such term under
Part 1 of Subtitle E of Title IV of ERISA.
SECTION I.2 Computation of Time Periods. Unless
<PAGE> 22
18
otherwise stated in this Agreement, in the computation of a period of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
SECTION I.3 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles either (a) consistent with those principles
applied in the preparation of the financial statements referred to in Section
4.1(e) or (b) not materially inconsistent with such principles (so that no
covenant contained in Section 5.1 or 5.2 would be calculated or construed in a
materially different manner or with materially different results than if such
covenant were calculated or construed in accordance with clause (a) of this
Section 1.3).
SECTION I.4 References. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION II.1 The Revolving Credit Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
revolving credit advances ("Revolving Credit Advances") to the Borrowers or any
one or more of them from time to time on any Business Day during the period from
the date hereof to and including the Termination Date in an aggregate amount not
to exceed at any time outstanding the amount of such Lender's Commitment;
provided that the aggregate amount of the Advances (other than Advances of
Objecting Lenders) outstanding shall not at any time exceed the aggregate amount
of the Commitments. Each Borrowing shall be in an aggregate amount of $5,000,000
in the case of a Borrowing comprised of Base Rate Advances and $20,000,000 in
the case of a Borrowing comprised of Eurodollar Rate Advances, or, in each case,
an integral multiple of $1,000,000 in excess thereof (or, in the case of a
Borrowing of Base Rate Advances, the aggregate unused Commitments, if less) and
shall consist of Revolving Credit Advances of the same Type made on the same day
by the Lenders ratably according to their respective Commitments. Within the
limits of each Lender's Commitment, any Borrower may make more than one
Borrowing on any Business Day and may borrow, repay pursuant to Section 2.10 or
prepay pursuant to Section 2.15, and reborrow under this Section 2.1.
SECTION II.2 Making the Revolving Credit Advances. (a) Each
Borrowing of Revolving Credit Advances shall be made on notice by the Company to
the Administrative Agent (a "Notice of Borrowing") received by the
Administrative Agent, (i) in the case
<PAGE> 23
19
of a proposed Borrowing comprised of Base Rate Advances, not later than 10:00
A.M. (New York City time) on the Business Day of such proposed Borrowing and
(ii) in the case of a proposed Borrowing comprised of Eurodollar Rate Advances,
not later than 12:00 noon (New York City time) on the third Business Day prior
to the date of such proposed Borrowing. Each Notice of Borrowing shall be by
telecopy or telephone (and if by telephone, confirmed promptly by telecopier),
in substantially the form of Exhibit B, specifying therein the requested (A)
Borrower, (B) date of such Borrowing, (C) Type of Revolving Credit Advances
comprising such Borrowing, (D) aggregate amount of such Borrowing, and (E) in
the case of a Borrowing comprised of Eurodollar Rate Advances, the initial
Interest Period for each such Advance. Each Lender shall, before 1:00 P.M. (New
York City time) on the date of such Borrowing, make available to the
Administrative Agent at its address at 270 Park Avenue, New York, New York,
10017, Reference: El Paso Natural Gas Company, or at such other address
designated by notice from the Administrative Agent to the Lenders pursuant to
Section 9.2, in same day funds, such Lender's ratable portion of such Borrowing.
Immediately after the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the applicable Borrower
at Chase, 270 Park Avenue, New York, New York, 10017, Account No. 323291503,
Reference: El Paso Natural Gas Company, or at such other account of the
applicable Borrower maintained by the Administrative Agent (or any successor
Administrative Agent) designated by the applicable Borrower and agreed to by the
Administrative Agent (or such successor Administrative Agent), in same day
funds.
(b) Each Notice of Borrowing shall be irrevocable and binding
on the applicable Borrower. In the case of any Borrowing which the related
Notice of Borrowing specified is to be comprised of Eurodollar Rate Advances, if
such Advances are not made as a result of any failure to fulfill on or before
the date specified for such Borrowing the applicable conditions set forth in
Article III, the applicable Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of such failure,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.2 and the Administrative Agent
may, in reliance upon such assumption, make available to the applicable Borrower
on such date a corresponding amount. If and to the extent such Lender shall not
have so made such ratable portion available to the
<PAGE> 24
20
Administrative Agent, such Lender and the applicable Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the applicable Borrower until the date such amount is repaid to the
Administrative Agent, at the Effective Federal Funds Rate for such day. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Advance to the applicable
Borrower as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION II.3 Evidence of Debt. (a) Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of each Borrower to such Lender resulting from each Revolving
Credit Advance of such Lender to such Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time in respect of such Revolving Credit Advance.
(b) The Administrative Agent shall maintain the Register
pursuant to Section 9.7(c), and a subaccount therein for each Lender, in which
shall be recorded (i) the amount of each Revolving Credit Advance made
hereunder, the Type thereof and each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from each Borrower on account of such Revolving Credit Advance to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from each Borrower and each Lender's share
thereof.
(c) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.3(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of each Borrower to repay (with applicable interest) the Revolving
Credit Advances made to each such Borrower by such Lender in accordance with the
terms of this Agreement.
(d) Each Borrower agrees that, upon the request to the
Administrative Agent by any Lender, such Borrower will execute and deliver to
such Lender a promissory note of such Borrower evidencing the Revolving Credit
Advances of such Lender to such Borrower, substantially in the form of Exhibit A
with appropriate insertions as to date and principal amount (a "Note").
<PAGE> 25
21
SECTION II.4 CAF Advances. Subject to the terms and conditions
of this Agreement, the Borrowers or any one or more of them may borrow CAF
Advances from time to time during the CAF Advance Availability Period on any
Business Day. The Company shall, in consultation with the CAF Advance Agent,
designate Lenders from time to time as CAF Advance Lenders by written notice to
the CAF Advance Agent. The CAF Advance Agent shall transmit each such notice of
designation promptly to each designated CAF Advance Lender. CAF Advances shall
be borrowed in amounts such that the aggregate amount of Advances outstanding at
any time shall not exceed the aggregate amount of the Commitments at such time.
Any CAF Advance Lender may make CAF Advances in amounts which, individually and
together with the aggregate amount of other Advances of such CAF Advance Lender,
exceed such CAF Advance Lender's Commitment, and such CAF Advance Lender's CAF
Advances shall not be deemed to utilize such CAF Advance Lender's Commitment.
Within the limits and on the conditions hereinafter set forth with respect to
CAF Advances, the Borrowers from time to time may borrow, repay and reborrow CAF
Advances.
SECTION II.5 Procedure for CAF Advance Borrowings. (a) A
Borrower, or the Company on behalf of a Borrower, shall request CAF Advances by
delivering a CAF Advance Request to the CAF Advance Agent, not later than 12:00
Noon (New York City time) four Business Days prior to the date of the proposed
Borrowing (in the case of a LIBO Rate CAF Advance Request), and not later than
10:00 A.M. (New York City time) one Business Day prior to the date of the
proposed Borrowing (in the case of a Fixed Rate CAF Advance Request). Each CAF
Advance Request may solicit bids for CAF Advances in an aggregate principal
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and having not more than five alternative maturity dates. The maturity date for
each CAF Advance shall be not less than 7 days nor more than 360 days after the
date of the Borrowing therefor (and in any event shall be not later than the
Stated Termination Date); provided that each LIBO Rate CAF Advance shall mature
one, two, three or six months or, if available, nine [or twelve] months after
the date of the Borrowing therefor. The CAF Advance Agent shall notify each CAF
Advance Lender promptly by telecopy of the contents of each CAF Advance Request
received by the CAF Advance Agent.
(b) In the case of a LIBO Rate CAF Advance Request, upon
receipt of notice from the CAF Advance Agent of the contents of such CAF Advance
Request, each CAF Advance Lender may elect, in its sole discretion, to offer
irrevocably to make one or more CAF Advances at the Applicable LIBO Rate plus
(or minus) a margin determined by such CAF Advance Lender in its sole discretion
for each such CAF Advance. Any such irrevocable offer shall be made by
delivering a CAF Advance Offer to the CAF Advance Agent, before 10:30 A.M. (New
York City time) on the day that is three Business Days before the date of the
proposed Borrowing, setting forth:
<PAGE> 26
22
(i) the maximum amount of CAF Advances for each maturity date
and the aggregate maximum amount of CAF Advances for all maturity dates
which such CAF Advance Lender would be willing to make (which amounts
may, subject to Section 2.4, exceed such CAF Advance Lender's
Commitment); and
(ii) the margin above or below the Applicable LIBO Rate at
which such CAF Advance Lender is willing to make each such CAF Advance.
The CAF Advance Agent shall advise the Company and the applicable Borrower
before 11:00 A.M. (New York City time) on the date which is three Business Days
before the proposed date of the Borrowing of the contents of each such CAF
Advance Offer received by it. If the CAF Advance Agent, in its capacity as a CAF
Advance Lender, shall elect, in its sole discretion, to make any such CAF
Advance Offer, it shall advise the Company and the applicable Borrower of the
contents of its CAF Advance Offer before 10:15 A.M. (New York City time) on the
date which is three Business Days before the proposed date of the Borrowing.
(c) In the case of a Fixed Rate CAF Advance Request, upon
receipt of notice from the CAF Advance Agent of the contents of such CAF Advance
Request, each CAF Advance Lender may elect, in its sole discretion, to offer
irrevocably to make one or more CAF Advances at a rate of interest determined by
such CAF Advance Lender in its sole discretion for each such CAF Advance. Any
such irrevocable offer shall be made by delivering a CAF Advance Offer to the
CAF Advance Agent before 9:30 A.M. (New York City time) on the proposed date of
the Borrowing, setting forth:
(i) the maximum amount of CAF Advances for each maturity date,
and the aggregate maximum amount for all maturity dates, which such CAF
Advance Lender would be willing to make (which amounts may, subject to
Section 2.4, exceed such CAF Advance Lender's Commitment); and
(ii) the rate of interest at which such CAF Advance Lender is
willing to make each such CAF Advance.
The CAF Advance Agent shall advise the Company and the applicable Borrower
before 10:00 A.M. (New York City time) on the proposed date of the Borrowing of
the contents of each such CAF Advance Offer received by it. If the CAF Advance
Agent, in its capacity as a CAF Advance Lender, shall elect, in its sole
discretion, to make any such CAF Advance Offer, it shall advise the Company and
the applicable Borrower of the contents of its CAF Advance Offer before 9:15
A.M. (New York City time) on the proposed date of the Borrowing.
(d) Before 11:30 A.M. (New York City time) three Business Days
before the proposed date of the Borrowing (in the case of CAF Advances requested
by a LIBO Rate CAF Advance Request) and before 10:30 A.M. (New York City time)
on the proposed date of the Borrowing (in the case of CAF Advances requested by
a Fixed Rate CAF Advance Request), the Company, in its absolute discretion,
shall:
<PAGE> 27
23
(i) cancel such CAF Advance Request by giving the CAF Advance
Agent telephone notice to that effect, or
(ii) by giving telephone notice to the CAF Advance Agent
(immediately confirmed by delivery to the CAF Advance Agent of a CAF
Advance Confirmation in writing or by telecopy) (A) subject to the
provisions of Section 2.5(e), accept one or more of the offers made by
any CAF Advance Lender or CAF Advance Lenders pursuant to Section
2.5(b) or Section 2.5(c), as the case may be, of the amount of CAF
Advances for each relevant maturity date and (B) reject any remaining
offers made by CAF Advance Lenders pursuant to Section 2.5(b) or
Section 2.5(c), as the case may be.
(e) The Company's acceptance of CAF Advances in response to
any CAF Advance Request shall be subject to the following limitations:
(i) the amount of CAF Advances accepted for each maturity date
specified by any CAF Advance Lender in its CAF Advance Offer shall not
exceed the maximum amount for such maturity date specified in such CAF
Advance Offer;
(ii) the aggregate amount of CAF Advances accepted for all
maturity dates specified by any CAF Advance Lender in its CAF Advance
Offer shall not exceed the aggregate maximum amount specified in such
CAF Advance Offer for all such maturity dates;
(iii) the Company may not accept offers for CAF Advances for
any maturity date in an aggregate principal amount in excess of the
maximum principal amount requested in the related CAF Advance Request;
and
(iv) if the Company accepts any of such offers, it must accept
offers based solely upon pricing for such relevant maturity date and
upon no other criteria whatsoever and if two or more CAF Advance
Lenders submit offers for any maturity date at identical pricing and
the Company accepts any of such offers but does not wish to (or by
reason of the limitations set forth in Section 2.4 or in Section
2.5(e)(iii), cannot) borrow the total amount offered by such CAF
Advance Lenders with such identical pricing, the Company shall accept
offers from all of such CAF Advance Lenders in amounts allocated among
them pro rata according to the amounts offered by such CAF Advance
Lenders (or as nearly pro rata as shall be practicable after giving
effect to the requirement that CAF Advances made by a CAF Advance
Lender on a date of the Borrowing for each relevant maturity date shall
be in a principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof; provided that if the number of CAF
Advance Lenders that submit offers for any maturity date at identical
pricing is such that, after the Company accepts such offers pro rata in
accordance with the
<PAGE> 28
24
foregoing, the CAF Advance to be made by such CAF Advance Lenders would
be less than $5,000,000 principal amount, the number of such CAF
Advance Lenders shall be reduced by the CAF Advance Agent by lot until
the CAF Advances to be made by such remaining CAF Advance Lenders would
be in a principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof).
(f) If the Company notifies the CAF Advance Agent that a CAF
Advance Request is cancelled pursuant to Section 2.5(d)(i), the CAF Advance
Agent shall give prompt telephone notice thereof to the CAF Advance Lenders.
(g) If the Company accepts pursuant to Section 2.5(d)(ii) one
or more of the offers made by any CAF Advance Lender or CAF Advance Lenders, the
CAF Advance Agent promptly shall notify each CAF Advance Lender which has made
such a CAF Advance Offer of (i) the aggregate amount of such CAF Advances to be
made on such Borrowing Date for each maturity date and (ii) the acceptance or
rejection of any offers to make such CAF Advances made by such CAF Advance
Lender. Before 1:00 P.M. (New York City time) on the date of the Borrowing
specified in the applicable CAF Advance Request, each CAF Advance Lender whose
CAF Advance Offer has been accepted shall make available to the Administrative
Agent at its office set forth in Section 9.2 the amount of CAF Advances to be
made by such CAF Advance Lender, in same day funds. The Administrative Agent
will make such funds available to the applicable Borrower as soon as practicable
on such date at the Administrative Agent's aforesaid address. As soon as
practicable after each Borrowing Date, the CAF Advance Agent shall notify each
Lender of the aggregate amount of CAF Advances advanced on such Borrowing Date
and the respective maturity dates thereof.
(h) The failure of any CAF Advance Lender to make the CAF
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its CAF Advance on the date
of such Borrowing, but no CAF Lender shall be responsible for the failure of any
other CAF Advance Lender to make the CAF Advance to be made by such CAF Advance
Lender on the date of any Borrowing.
(i) A CAF Advance Request may request offers for CAF Advances
to be made on not more than one Borrowing Date and to mature on not more than
five CAF Advance Maturity Dates. No CAF Advance Request may be submitted earlier
than five Business Days after submission of any other CAF Advance Request.
SECTION II.6 CAF Advance Payments. (a) The applicable Borrower
shall repay to the Administrative Agent, for the account of each CAF Advance
Lender which has made a CAF Advance to it, on the applicable CAF Advance
Maturity Date the then unpaid principal amount of such CAF Advance. The
Borrowers shall not have the right to prepay any principal amount of any CAF
Advance.
<PAGE> 29
25
(b) The applicable Borrower shall pay interest on the unpaid
principal amount of each CAF Advance to it from the date of the Borrowing to the
applicable CAF Advance Maturity Date at the rate of interest specified in the
CAF Advance Offer accepted by the applicable Borrower in connection with such
CAF Advance (calculated on the basis of a 360-day year for actual days elapsed),
payable on each applicable CAF Advance Interest Payment Date.
(c) If all or a portion of the principal amount of any CAF
Advance shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount shall, without
limiting any rights of any Lender under this Agreement, bear interest from the
date on which such payment was due at a rate per annum which is 1% above the
rate which would otherwise be applicable pursuant to such CAF Advance until the
stated maturity date of such CAF Advance, and for each day thereafter at a rate
per annum which is 2% above the Base Rate, in each case until paid in full (as
well after as before judgment). Interest accruing pursuant to this paragraph (c)
shall be payable from time to time on demand.
SECTION II.7 Evidence of Debt. Each Lender shall maintain in
accordance with its usual practice appropriate records evidencing indebtedness
of each Borrower to such Lender resulting from each CAF Advance of such Lender
to such Borrower from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time in respect of such
CAF Advance. The Administrative Agent shall maintain the Register pursuant to
Section 9.7(c) and a record therein for each Lender, in which shall be recorded
(i) the amount of each CAF Advance made by such Lender to each Borrower, the CAF
Advance Maturity Date thereof, the interest rate applicable thereto and each CAF
Advance Interest Payment Date applicable thereto, and (ii) the amount of any sum
received by the Administrative Agent hereunder from a Borrower on account of
such CAF Advance. The entries made in the Register and the records of each
Lender maintained pursuant to this Section 2.7 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such record, or any error therein, shall not in any manner affect the
obligation of each Borrower to repay (with applicable interest) the CAF Advances
made by such Lender in accordance with the terms of this Agreement.
SECTION II.8 Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee for the
period from and including the Facility Fee Commencement Date until all Advances
have been paid in full and all Commitments have been terminated, computed at a
variable rate per annum on the average daily amount of the greater of (i) the
Commitment of such Lender and (ii) the outstanding principal amount of Revolving
Credit Advances of such Lender during the period for which payment is made,
which rate will vary according to the S&P Bond Rating and the Moody's Bond
Rating as follows:
<PAGE> 30
26
<TABLE>
<CAPTION>
Bond Rating Facility
(S&P/Moody's) Level Fee Rate
------------- ----- --------
<S> <C> <C>
A/A2 or higher I .060%
A-/A3 II .070%
BBB+/Baa1 III .090%
BBB/Baa2 IV .110%
BBB-/Baa3 V .125%
BB+/Ba1 or lower VI .200%;
</TABLE>
provided that if the ratings of such rating agencies do not fall within the same
Level, the rate applicable to such day will be the lower facility fee rate and
provided, further, that in the event a rating is not available from either
rating agency, such rating agency will be deemed to have assigned its lowest
rating. Such facility fees shall be payable quarterly in arrears on the last day
of each March, June, September and December and on the Termination Date or such
earlier date on which the Commitments shall terminate as provided herein, and,
if the Lender is an Objecting Lender, on the Commitment Expiration Date
applicable to such Lender or such earlier date on which the Advances are repaid
in full, commencing on the first of such dates to occur after the date hereof.
(b) The Company agrees to pay to Chase Securities Inc., the
Administrative Agent and the CAF Advance Agent the fees set forth in the letter,
dated October 6, 1997, from Chase Securities Inc. and Chase to EPNGC.
SECTION II.9 Reduction of the Commitments. The Company shall
have the right, upon at least three Business Days' notice to the Administrative
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, provided that each partial reduction
shall be in the aggregate amount of $10,000,000 or any whole multiple of
$1,000,000 in excess thereof.
SECTION II.10 Repayment of Advances. The Borrowers shall repay
to each Lender on the Termination Date the aggregate principal amount of the
Advances then owing to such Lender; provided that the Revolving Credit Advances
made by Objecting Lenders shall be repaid as provided in Section 2.23.
SECTION II.11 Interest on Revolving Credit Advances. (a)
Ordinary Interest. The Borrowers shall pay interest on the unpaid principal
amount of each Revolving Credit Advance owing to each Lender from the date of
such Advance until such principal amount is due (whether at stated maturity, by
acceleration or otherwise), at the following rates:
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all times to
the Base Rate in effect from time to time, payable quarterly in arrears
on the last day of each March,
<PAGE> 31
27
June, September and December during such periods and on the date such
Base Rate Advance shall be Converted or due (whether at stated
maturity, by acceleration or otherwise).
(ii) Eurodollar Rate Advances. During such periods as
such Advance is a Eurodollar Rate Advance, at a rate per annum equal at
all times during each Interest Period for such Advance to the sum of
the Eurodollar Rate for such Interest Period plus the Eurodollar Rate
Margin (provided that notwithstanding the definitions of Moody's Bond
Rating and S&P Bond Rating, in the case of Eurodollar Rate Advances to
EPNGC and its Subsidiaries, whether before, on or after the Ratings
Change Date, the Eurodollar Rate Margin shall be based on the Moody's
Bond Rating and S&P Bond Rating of EPNGC, and, in the case of all other
Borrowers, shall be based on the Moody's Bond Rating and S&P Bond
Rating of Holding) in effect from time to time, payable on the last day
of each such Interest Period and, if any such Interest Period has a
duration of more than three months, on each day which occurs during
such Interest Period every three months from the first day of such
Interest Period, and on the date such Advance shall be Converted or due
(whether at stated maturity, by acceleration or otherwise).
(b) Default Interest. The applicable Borrower shall pay
interest on the unpaid principal amount of each Revolving Credit Advance to it
that is not paid when due (whether at stated maturity, by acceleration or
otherwise) from the date on which such amount is due until such amount is paid
in full, payable on demand, at a rate per annum equal at all times (i) from such
due date to the last day of the then existing Interest Period in the case of
each Eurodollar Rate Advance, to 1% per annum above the interest rate per annum
required to be paid on such Advance immediately prior to the date on which such
amount became due, and (ii) from and after the last day of the then existing
Interest Period, and at all times in the case of any Base Rate Advance, to 1%
per annum above the Base Rate in effect from time to time.
SECTION II.12 Additional Interest on Eurodollar Rate Advances.
If any Lender shall determine in good faith that reserves under regulations of
the Board of Governors of the Federal Reserve System are required to be
maintained by it in respect of, or a portion of its costs of maintaining
reserves under such regulations is properly attributable to, one or more of its
Eurodollar Rate Advances, the applicable Borrower shall pay to such Lender
additional interest on the unpaid principal amount of each such Eurodollar Rate
Advance to it (other than any such additional interest accruing to a particular
Lender in respect of periods prior to the 30th day preceding the date notice of
such interest is given by such Lender as provided in this Section 2.12), payable
on the same day or days on which interest is payable on such Advance, at an
interest rate per annum equal at all times during each Interest Period for such
Advance to the excess of (i) the rate obtained by dividing the
<PAGE> 32
28
Eurodollar Rate for such Interest Period by a percentage equal to 100% minus the
Eurodollar Reserve Percentage, if any, for such Lender for such Interest Period
over (ii) the Eurodollar Rate for such Interest Period. The amount of such
additional interest (if any) shall be determined by each Lender, and such Lender
shall furnish written notice of the amount of such additional interest to the
Company and the Administrative Agent, which notice shall be conclusive and
binding for all purposes, absent manifest error.
SECTION II.13 Interest Rate Determination. (a) Each Reference
Lender agrees to furnish to the Administrative Agent timely information for the
purpose of determining the Eurodollar Rate. If any one or more of the Reference
Lenders shall not furnish such timely information to the Administrative Agent
for the purpose of determining any such interest rate, the Administrative Agent
shall determine such interest rate on the basis of timely information furnished
by the remaining Reference Lenders.
(b) The Administrative Agent shall give prompt notice to the
Company and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.11(a)(i) or (ii), and the
applicable rate, if any, furnished by each Reference Lender for the purpose of
determining the applicable interest rate under Section 2.11(a)(ii).
(c) If fewer than two Reference Lenders furnish timely
information to the Administrative Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,
(i) the Administrative Agent shall give the Company and
each Lender prompt notice thereof by telephone (confirmed in writing)
that the interest rate cannot be determined for such Eurodollar Rate
Advances,
(ii) each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base
Rate Advance (or if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(iii) the obligations of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Company and the Lenders
that the circumstances causing such suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders determine and give notice to the Administrative Agent that, as
a result of conditions in or generally affecting the London interbank eurodollar
market, the rates of interest determined on the basis of the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Majority Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances for such
<PAGE> 33
29
Interest Period, the Administrative Agent shall forthwith so notify the Company
and the Lenders, whereupon,
(i) each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base
Rate Advance, and
(ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist.
(e) If the applicable Borrower shall fail to select the
duration of any Interest Period for any Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest Period" in Section
1.1, the Administrative Agent will forthwith so notify the applicable Borrower
and the Lenders and such Advances will automatically, on the last day of the
then existing Interest Period therefor, Convert into Base Rate Advances.
(f) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $10,000,000, such
Eurodollar Rate Advances shall automatically Convert into Base Rate Advances,
and on and after such date the right of the applicable Borrower to Convert such
Advances into Eurodollar Rate Advances shall terminate; provided, however, that
if and so long as each such Eurodollar Rate Advance shall have the same Interest
Period as Eurodollar Rate Advances comprising another Borrowing or other
Borrowings, and the aggregate unpaid principal amount of all such Eurodollar
Rate Advances shall equal or exceed $20,000,000, the applicable Borrower shall
have the right to continue all such Advances as, or to Convert all such Advances
into Eurodollar Rate Advances having the same Interest Period.
(g) If any Reference Lender shall for any reason no longer
have a Commitment or any Revolving Credit Advances, such Reference Lender shall
thereupon cease to be a Reference Lender, and if, as a result, there shall only
be one Reference Lender remaining, the Administrative Agent (after consultation
with the Company and the Lenders) shall, by notice to the Company and the
Lenders, designate another Lender as a Reference Lender so that there shall at
all times be at least two Reference Lenders.
SECTION II.14 Voluntary Conversion of Advances. Any Borrower
may on any Business Day, upon notice given to the Administrative Agent, not
later than 10:00 A.M. (New York City time) on the Business Day of the proposed
Conversion of Eurodollar Rate Advances to Base Rate Advances and not later than
12:00 noon (New York City time) on the third Business Day prior to the date of
the proposed Conversion in the case of a Conversion of Base Rate Advances to
Eurodollar Rate Advances, and subject to the provisions of Sections 2.13, 2.16
and 2.18,
<PAGE> 34
30
Convert all Advances of one Type comprising the same Borrowing into Advances of
another Type; provided, however, that any Conversion of any Eurodollar Rate
Advances into Base Rate Advances made on any day other than the last day of an
Interest Period for such Eurodollar Rate Advances shall be subject to the
provisions of Section 9.4(b); and provided, further, that no Revolving Credit
Advance may be converted into a Eurodollar Rate Advance after the date that is
one month prior to (a) in the case of a Revolving Credit Advance made by an
Objecting Lender, such Objecting Lender's Commitment Expiration Date, and (b) in
the case of all Revolving Credit Advances, the Termination Date and provided,
still further, that no Revolving Credit Advance may be converted into a
Eurodollar Rate Advance if an Event of Default has occurred and is continuing.
Each such notice of a Conversion shall, within the restrictions specified above,
specify (a) the date of such Conversion, (b) the Advances to be Converted, and
(c) if such Conversion is into Eurodollar Rate Advances, the duration of the
Interest Period for each such Advance.
SECTION II.15 Optional and Mandatory Prepayments. (a) Optional
Prepayments. Any Borrower may upon (i) in the case of Eurodollar Rate Advances,
at least two Business Days' notice and (ii) in the case of Base Rate Advances,
telephonic notice not later than 12:00 noon (New York City time) on the date of
prepayment, to the Administrative Agent which specifies the proposed date and
aggregate principal amount of the prepayment and the Type of Advances to be
prepaid, and if such notice is given such Borrower shall, prepay the outstanding
principal amounts of the Revolving Credit Advances comprising the same Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the amount prepaid; provided, however, that (A) each partial
prepayment shall be in an aggregate principal amount not less than $10,000,000
or an integral multiple of $1,000,000 in excess thereof and (B) in the event of
any such prepayment of Eurodollar Rate Advances on any day other than the last
day of an Interest Period for such Eurodollar Rate Advances, such Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to, and to the
extent required by, Section 9.4(b); provided, further, however, that such
Borrower will use its best efforts to give notice to the Administrative Agent of
the proposed prepayment of Base Rate Advances on the Business Day prior to the
date of such proposed prepayment.
(b) Mandatory Prepayments. If, at any time and from time to
time, the aggregate principal amount of Advances (other than Advances of
Objecting Lenders) then outstanding exceeds the Commitments of all the Lenders
after giving effect to any reduction of the Commitments pursuant to Section 2.9,
the Borrowers shall immediately prepay the Revolving Credit Advances of Lenders
(other than Objecting Lenders) (to the extent there are such outstanding
Revolving Credit Advances) by an amount equal to such excess.
SECTION II.16 Increased Costs. (a) If, due to either (i) the
introduction after the date of this Agreement of or any
<PAGE> 35
31
change after the date of this Agreement (including any change by way of
imposition or increase of reserve requirements or assessments other than those
referred to in the definition of "Eurodollar Reserve Percentage," "C/D Reserve
Percentage" or "C/D Assessment Rate" contained in Section 1.1) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request issued or made after the date of this Agreement from or by
any central bank or other governmental authority (whether or not having the
force of law), in each case above other than those referred to in Section 2.17,
there shall be any increase in the cost to any Lender of agreeing to make, fund
or maintain, or of making, funding or maintaining, Eurodollar Rate Advances
funded in the interbank Eurodollar market, then the Borrowers shall from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to reimburse such Lender for all such
increased costs (except those costs incurred more than 60 days prior to the date
of such demand; for the purposes hereof any cost or expense allocable to a
period prior to the publication or effective date of such an introduction,
change, guideline or request shall be deemed to be incurred on the later of such
publication or effective date). Each Lender agrees to use its best efforts
promptly to notify the Company of any event referred to in clause (i) or (ii)
above, provided that the failure to give such notice shall not affect the rights
of any Lender under this Section 2.16(a) (except as otherwise expressly provided
above in this Section 2.16(a)). A certificate as to the amount of such increased
cost, submitted to the Company and the Administrative Agent by such Lender,
shall be conclusive and binding for all purposes, absent manifest error. After
one or more Lenders have notified the Company of any increased costs pursuant to
this Section 2.16, the Company may specify by notice to the Administrative Agent
and the affected Lenders that, after the date of such notice whenever the
election of Eurodollar Rate Advances by the applicable Borrower for an Interest
Period or portion thereof would give rise to such increased costs, such election
shall not apply to the Revolving Credit Advances of such Lenders during such
Interest Period or portion thereof, and, in lieu thereof, such Revolving Credit
Advances shall during such Interest Period or portion thereof be Base Rate
Advances. Each Lender agrees to use its best efforts (including, without
limitation, a reasonable effort to change its lending office or to transfer its
affected Advances to an affiliate of such Lender) to avoid, or minimize the
amount of, any demand for payment from the Borrowers under this Section 2.16.
(b) In the event that any Lender shall change its lending
office and such change results (at the time of such change) in increased costs
to such Lender, the Borrowers shall not be liable to such Lender for such
increased costs incurred by such Lender to the extent, but only to the extent,
that such increased costs shall exceed the increased costs which such Lender
would have incurred if the lending office of such Lender had not been so
changed, but, subject to subsection (a) above and to Section 2.18, nothing
herein shall require any Lender to change its lending office for any reason.
<PAGE> 36
32
SECTION II.17 Increased Capital. If either (a) the
introduction of or any change in or in the interpretation of any law or
regulation or (b) compliance by any Lender with any guideline or request from
any central bank or other governmental authority (whether or not having the
force of law) affects or would affect the amount of capital required or expected
to be maintained by such Lender or any corporation controlling such Lender and
such Lender determines that the amount of such capital is increased by or based
upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, within ten days after demand, and delivery to
the Company of the certificate referred to in the last sentence of this Section
2.17 by such Lender (with a copy of such demand to the Administrative Agent),
the applicable Borrowers shall pay to the Administrative Agent for the account
of such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender or such corporation in the light of
such circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend hereunder (except any such increase in capital incurred more than, or
compensation attributable to the period before, 90 days prior to the date of
such demand; for the purposes hereof any increase in capital allocable to, or
compensation attributable to, a period prior to the publication or effective
date of such an introduction, change, guideline or request shall be deemed to be
incurred on the later of such publication or effective date). Each Lender agrees
to use its best efforts promptly to notify the Company of any event referred to
in clause (a) or (b) above, provided that the failure to give such notice shall
not affect the rights of any Lender under this Section 2.17 (except as otherwise
expressly provided above in this Section 2.17). A certificate in reasonable
detail as to the basis for, and the amount of, such compensation submitted to
the Company by such Lender shall, in the absence of manifest error, be
conclusive and binding for all purposes.
SECTION II.18 Illegality. Notwithstanding any other provision
of this Agreement, if the introduction 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
Lender or its lending office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain such Advances
hereunder, such Lender may, by notice to the Company and the Administrative
Agent, suspend the right of the Borrowers to elect Eurodollar Rate Advances from
such Lender and, if necessary in the reasonable opinion of such Lender to comply
with such law or regulation, Convert all such Eurodollar Rate Advances of such
Lender to Base Rate Advances at the latest time permitted by the applicable law
or regulation, and such suspension and, if applicable, such Conversion shall
continue until such Lender notifies the Company and the Administrative Agent
that the circumstances making it unlawful for such Lender to perform such
<PAGE> 37
33
obligations no longer exist (which such Lender shall promptly do when such
circumstances no longer exist). So long as the obligation of any Lender to make
Eurodollar Rate Advances has been suspended under this Section 2.18, all Notices
of Borrowing specifying Advances of such Type shall be deemed, as to such
Lender, to be requests for Base Rate Advances. Each Lender agrees to use its
best efforts (including, without limitation, a reasonable effort to change its
lending office or to transfer its affected Advances to an affiliate) to avoid
any such illegality.
SECTION II.19 Pro Rata Treatment, Payments and Computations.
(a) Each Borrowing by any Borrower in respect of Revolving Credit Advances
(subject to the provisions of Section 2.24(e)) shall be made pro rata according
to the respective Commitment Percentages of the Lenders. The Borrowers shall
make each payment hereunder (including, without limitation, under Section 2.6,
2.8, 2.10 or 2.11) and under the Notes, whether the amount so paid is owing to
any or all of the Lenders or to the Administrative Agent, not later than 12:00
noon (New York City time) without setoff, counterclaim, or any other deduction
whatsoever, on the day when due in Dollars to the Administrative Agent at its
address at 270 Park Avenue, New York, New York 10017, Reference: El Paso Natural
Gas Company, or at such other location designated by notice to the Company from
the Administrative Agent and agreed to by the Company, in same day funds. The
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or facility fees ratably (other
than amounts payable pursuant to Section 2.12, 2.16, 2.17, 2.18 or 2.20)
according to the respective amounts of such principal, interest or facility fees
then due and owing to the Lenders, and like funds relating to the payment of any
other amount payable to any Lender to such Lender, 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 9.7(d), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender 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) All computations of interest based on the Prime Rate and
of facility fees shall be made by the Administrative 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, the Base CD Rate or the Effective Federal Funds
Rate shall be made by the Administrative Agent, and all computations of interest
pursuant to Section 2.12 shall be made by each Lender with respect to its own
Advances, 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 or fees are payable. Each determination by the
Administrative Agent (or, in the case of Section 2.12, 2.16,
<PAGE> 38
34
2.17, 2.18 or 2.20, by each Lender with respect to its own Advances) of an
interest rate or an increased cost or increased capital or of illegality
hereunder shall be conclusive and binding for all purposes if made reasonably
and in good faith.
(c) 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,
if such extension would cause payment of interest on or principal of Eurodollar
Rate Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Company or any other applicable Borrower prior to the date on which any
payment is due to the Lenders hereunder that the applicable Borrower will not
make such payment in full, the Administrative Agent may assume that the
applicable Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the applicable Borrower shall
not have so made such payment in full to the Administrative Agent, each Lender
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at a rate equal to the Effective
Federal Funds Rate for such day.
SECTION II.20 Taxes. (a) Any and all payments by the Borrowers
hereunder or under the Notes to each Indemnified Party shall be made, in
accordance with Section 2.19, 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 all taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, imposed by the jurisdiction under the laws of which such
Indemnified Party is organized, domiciled, resident or doing business, or any
political subdivision thereof or by any jurisdiction in which such Indemnified
Party holds any interest in connection with this Agreement or any Note
(including, without limitation, in the case of each Lender, the jurisdiction of
such Lender's lending office) or any political subdivision thereof, other than
by any jurisdiction with which the Indemnified Party's connection arises solely
from having executed, delivered or performed obligations or received a payment
under, or enforced, this Agreement or any Note (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Indemnified Party, (i) the sum payable
<PAGE> 39
35
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.20) such Indemnified Party receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrower shall
make or cause to be made such deductions and (iii) such Borrower shall pay or
cause to be paid the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law, provided that the Borrowers
shall not be required to pay any additional amount (and shall be relieved of any
liability with respect thereto) pursuant to this subsection (a) to any
Indemnified Party that either (A) on the date such Lender became an Indemnified
Party hereunder, (I) was not entitled to submit a U.S. Internal Revenue Service
form 1001 (relating to such Indemnified Party, and entitling it to a complete
exemption from United States withholding taxes on all amounts to be received by
such Indemnified Party pursuant to this Agreement) and a U.S. Internal Revenue
Service form 4224 (relating to all amounts to be received by such Indemnified
Party pursuant to this Agreement) and (II) was not a United States person (as
such term is defined in Section 7701(a)(30) of the Internal Revenue Code) or (B)
has failed to submit any form or certificate that it was required to file or
provide pursuant to subsection (d) of this Section 2.20 and is entitled to file
or give, as applicable, under applicable law, provided, further, that should an
Indemnified Party become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrowers shall take such steps as such Indemnified
Party shall reasonably request to assist such Indemnified Party to recover such
Taxes, and provided, further, that each Indemnified Party, with respect to
itself, agrees to indemnify and hold harmless the Borrowers from any taxes,
penalties, interest and other expenses, costs and losses incurred or payable by
the Borrowers as a result of the failure of any of the Borrowers to comply with
its obligations under clause (ii) or (iii) above in reliance on any form or
certificate provided to it by such Indemnified Party pursuant to this Section
2.20. If any Indemnified Party receives a net credit or refund in respect of
such Taxes or amounts so paid by the Borrowers, it shall promptly notify the
Company of such net credit or refund and shall promptly pay such net credit or
refund to the applicable Borrower, provided that the applicable Borrower agrees
to return such net credit or refund if the Indemnified Party to which such net
credit or refund is applicable is required to repay it.
(b) In addition, each Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made by such Borrower hereunder
or under the Notes or from the execution, delivery or performance of, or
otherwise with respect to, this Agreement or the Notes (hereinafter referred to
as "Other Taxes").
(c) Each Borrower will indemnify each Indemnified Party and
the Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other
<PAGE> 40
36
Taxes imposed by any jurisdiction on amounts payable under this Section 2.20)
paid by such Indemnified Party and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto except as a result of
the gross negligence (which shall in any event include the failure of such
Indemnified Party to provide to the Borrowers any form or certificate that it
was required to provide pursuant to subsection (d) below) or willful misconduct
of such Indemnified Party, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Indemnified Party makes written demand therefor.
(d) On or prior to the date on which each Indemnified Party
organized under the laws of a jurisdiction outside the United States becomes an
Indemnified Party hereunder, such Indemnified Party shall provide the Company
with U.S. Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the U.S. Internal Revenue Service, certifying that
such Indemnified Party is fully exempt from United States withholding taxes with
respect to all payments to be made to such Indemnified Party hereunder, or other
documents satisfactory to the Company indicating that all payments to be made to
such Indemnified Party hereunder are fully exempt from such taxes. Thereafter
and from time to time (but only so long as such Indemnified Party remains
lawfully able to do so), each such Indemnified Party shall submit to the Company
such additional duly completed and signed copies of one or the other of such
Forms (or such successor Forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may be (i) notified by any
Borrower to such Indemnified Party and (ii) required under then-current United
States law or regulations to avoid United States withholding taxes on payments
in respect of all amounts to be received by such Indemnified Party pursuant to
this Agreement or the Notes. Upon the request of any Borrower from time to time,
each Indemnified Party that is a United States person (as such term is defined
in Section 7701(a)(30) of the Internal Revenue Code) shall submit to the Company
a certificate to the effect that it is such a United States person. If any
Indemnified Party determines, as a result of any change in applicable law,
regulation or treaty, or in any official application or interpretation thereof,
that it is unable to submit to the Company any form or certificate that such
Indemnified Party is obligated to submit pursuant to this subsection (d), or
that such Indemnified Party is required to withdraw or cancel any such form or
certificate previously submitted, such Indemnified Party shall promptly notify
the Company of such fact.
(e) Any Indemnified Party claiming any additional amounts
payable pursuant to this Section 2.20 shall use its best efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of such Indemnified
Party, be otherwise disadvantageous to such Indemnified Party.
<PAGE> 41
37
(f) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers and
each Indemnified Party contained in this Section 2.20 shall survive the payment
in full of principal and interest hereunder and under the Notes.
(g) Any other provision of this Agreement to the contrary
notwithstanding, any amounts which are payable by any Borrower under this
Section 2.20 shall not be payable under Section 2.16.
SECTION II.21 Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances made by it (other
than pursuant to Section 2.12, 2.16, 2.17, 2.18 or 2.20) in excess of its
ratable share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Advances made by them as shall be necessary to cause such
purchasing Lender 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 Lender, such purchase from each Lender
shall be rescinded and each Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (a) the amount of
such Lender's required repayment to (b) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Each Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation.
SECTION II.22 Use of Proceeds. Proceeds of the Advances may be
used for general corporate purposes of the Borrowers and their respective
Subsidiaries, including, without limitation, for acquisitions and for payment of
commercial paper issued by the Borrowers and to refinance the loans under the
Existing Facilities.
SECTION II.23 Extension of Stated Termination Date. (a) Not
less than 45 days prior to the Stated Termination Date then in effect, provided
that no Event of Default shall have occurred and be continuing, the Company may
request an extension of such Stated Termination Date by submitting to the
Administrative Agent an Extension Request containing the information in respect
of such extension specified in Exhibit M, which the Administrative Agent shall
promptly furnish to each Lender. Each Lender shall, no later than 30 days after
receiving from the Administrative Agent the applicable Extension Request,
<PAGE> 42
38
notify the Company and the Administrative Agent of its election to extend or not
extend the Stated Termination Date as requested in such Extension Request. If
the Required Lenders shall approve in writing the extension of the Stated
Termination Date requested in such Extension Request, the Stated Termination
Date shall automatically and without any further action by any Person be
extended for the period specified in such Extension Request; provided that (i)
each extension pursuant to this Section 2.23 shall be for a maximum of one year,
(ii) the Commitment of any Lender that does not consent in writing within 30
days after receiving from the Administrative Agent the applicable Extension
Request (an "Objecting Lender") shall, unless earlier terminated in accordance
with this Agreement, expire on the Stated Termination Date in effect on the date
of such Extension Request (such Stated Termination Date, if any, referred to as
the "Commitment Expiration Date" with respect to such Objecting Lender) and
(iii) the Company may exercise no more than two extensions pursuant to this
Section 2.23, so that the Stated Termination Date shall not in any event extend
beyond seven years from the Closing Date. If, within 30 days after receiving
from the Administrative Agent the applicable Extension Request, the Required
Lenders shall not approve in writing the extension of the Stated Termination
Date requested in an Extension Request, the Stated Termination Date shall not be
extended pursuant to such Extension Request. The Administrative Agent shall
promptly notify (y) the Lenders and the Company of any extension of the Stated
Termination Date pursuant to this Section 2.23 and (z) the Company and the
Lenders of any Lender which becomes an Objecting Lender.
(b) Revolving Credit Advances owing to any Objecting Lender on
the Commitment Expiration Date with respect to such Lender shall be repaid in
full on or before the Commitment Expiration Date.
(c) The Borrowers shall have the right, so long as no Event of
Default has occurred and is then continuing, upon giving notice to the
Administrative Agent and the Objecting Lenders in accordance with Section 2.15,
to prepay in full the Revolving Credit Advances of the Objecting Lenders,
together with accrued interest thereon, any amounts payable pursuant to Sections
2.11, 2.12, 2.16, 2.17, 2.18, 2.20 and 9.4(b) and any accrued and unpaid
facility fee or other amounts payable to the Objecting Lenders hereunder and/or,
upon giving not less than three Business Days' notice to the Objecting Lenders
and the Administrative Agent, to cancel the whole or part of the Commitments of
the Objecting Lenders.
(d) Notwithstanding the foregoing, if any Lender becomes an
Objecting Lender, the Borrower may, at its own expense and in its sole
discretion and prior to the then Stated Termination Date, require such Lender to
transfer or assign, in whole or in part, without recourse (in accordance with
Section 9.7), all or part of its interests, rights and obligations under this
Agreement to an Eligible Assignee (provided that the Borrower, with the full
cooperation of such Lender, can identify
<PAGE> 43
39
an Eligible Assignee that is ready, willing and able to be an assignee with
respect thereto) which shall assume such assigned obligations (which assignee
may be another Lender, if such assignee Lender accepts such assignment);
provided that (A) the assignee or the Borrower, as the case may be, shall have
paid to such Lender in immediately available funds the principal of and interest
accrued to the date of such payment on the Advances made by it hereunder and all
other amounts owed to it hereunder, including, without limitation, any amounts
owing pursuant to Section 9.4(b) and any amounts that would be owing under said
Section if such Advances were prepaid on the date of such assignment, and (B)
such assignment does not conflict with any law, rule or regulation or order of
any governmental authority. Any assignee which becomes a Lender as a result of
such an assignment made pursuant to this paragraph (d) shall be deemed to have
consented to the applicable Extension Request and, therefore, shall not be an
Objecting Lender.
SECTION II.24 Commitment Increases. (a) At any time after the
Closing Date, provided that no Event of Default shall have occurred and be
continuing, the Company may request an increase of the aggregate Commitments by
notice to the Administrative Agent in writing of the amount (the "Offered
Increase Amount") of such proposed increase (such notice, a "Commitment Increase
Notice"), provided that the first such increase shall be in an amount equal to
at least $93,750,000 and the second such increase shall be in an amount equal to
$187,500,000 less the amount of the first such increase. Any such Commitment
Increase Notice must offer each Lender the opportunity to subscribe for its pro
rata share of the increased Commitments. If any portion of the increased
Commitments is not subscribed for by the Lenders, the Company may, with the
consent of the Administrative Agent as to any Person that is not at such time a
Lender (which consent shall not be unreasonably withheld), offer to any existing
Lender or to one or more additional banks or financial institutions the
opportunity to participate in all or a portion of such unsubscribed portion of
the increased Commitments pursuant to paragraph (b) below.
(b) Any additional bank or financial institution that the
Company selects to offer participation in the increased Commitments, and that
elects to become a party to this Agreement and obtain a Commitment shall execute
a New Lender Supplement with the Company and the Administrative Agent,
substantially in the form of Exhibit N (a "New Lender Supplement"), whereupon
such bank or financial institution (a "New Lender") shall become a Lender for
all purposes and to the same extent as if originally a party hereto and shall be
bound by and entitled to the benefits of this Agreement, and Schedule I shall be
deemed to be amended to add the name and Commitment of such New Lender, provided
that the Commitment of any such New Lender shall be in an amount not less than
$10,000,000.
(c) Any Lender that accepts an offer to it by the Company to
increase its Commitment pursuant to this Section 2.24 shall, in each case,
execute a Commitment Increase Supplement
<PAGE> 44
40
with the Company and the Administrative Agent, substantially in the form of
Exhibit O (a "Commitment Increase Supplement"), whereupon such Lender shall be
bound by and entitled to the benefits of this Agreement with respect to the full
amount of its Commitment as so increased, and Schedule I shall be deemed to be
amended to so increase the Commitment of such Lender.
(d) The effectiveness of any New Lender Supplement or
Commitment Increase Supplement shall be contingent upon receipt by the
Administrative Agent of such corporate resolutions of the Borrowers and legal
opinions of counsel to the Borrowers as the Administrative Agent shall
reasonably request with respect thereto, in each case, in form and substance
satisfactory to the Administrative Agent.
(e) If any bank or financial institution becomes a New Lender
pursuant to Section 2.24(b) or any Lender's Commitment is increased pursuant to
Section 2.24(c), additional Revolving Credit Advances made on or after the
effectiveness thereof (the "Re-Allocation Date") shall be made pro rata based on
the Commitment Percentages in effect on and after such Re-Allocation Date
(except to the extent that any such pro rata borrowings would result in any
Lender making an aggregate principal amount of Revolving Credit Advances in
excess of its Commitment, in which case such excess amount will be allocated to,
and made by, such new Lender and/or Lenders with such increased Commitments to
the extent of, and pro rata based on, their respective Commitments), and
continuations of Eurodollar Rate Advances outstanding on such Re-Allocation Date
shall be effected by repayment of such Eurodollar Rate Advances on the last day
of the Interest Period applicable thereto and the making of new Eurodollar Rate
Advances pro rata based on such new Commitment Percentages. In the event that on
any such Re-Allocation Date there is an unpaid principal amount of Base Rate
Advances, the Borrower shall make prepayments thereof and borrowings of Base
Rate Advances so that, after giving effect thereto, the Base Rate Advances
outstanding are held pro rata based on such new Commitment Percentages. In the
event that on any such Re-Allocation Date there is an unpaid principal amount of
Eurodollar Rate Advances, such Eurodollar Rate Advances shall remain outstanding
with the respective holders thereof until the expiration of their respective
Interest Periods (unless the applicable Borrower elects to prepay any thereof in
accordance with the applicable provisions of this Agreement), and interest on
and repayments of such Eurodollar Rate Advances will be paid thereon to the
respective Lenders holding such Eurodollar Rate Advances pro rata based on the
respective principal amounts thereof outstanding.
(f) Notwithstanding anything to the contrary in this Section
2.24, (i) in no event shall any transaction effected pursuant to this Section
2.24 cause the aggregate Commitments to exceed $937,500,000, (ii) no increase
pursuant to this Section 2.24 shall be effective without the consent of the
Required Lenders and (iii) no Lender shall have any obligation to increase its
Commitment unless it agrees to do so in its sole discretion.
<PAGE> 45
41
(g) The Borrowers, at their own expense, shall execute and
deliver to the Administrative Agent in exchange for the surrendered Notes of any
Lender, if any, new Notes to the order of such Lender, if requested, in an
amount equal to the Commitment of such Lender after giving effect to any
increase in such Lender's Commitment.
SECTION II.25 Replacement of Lenders. If any Lender requests
compensation under Sections 2.12, 2.16 or 2.17 or if any Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.20, or if any Lender defaults in its
obligation to fund Advances hereunder, then the Company may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.7), all its interests, rights
and obligations under this Agreement (other than any outstanding CAF Advances
held by it) to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Company shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Advances (other than CAF Advances), 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 Borrowers (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Sections 2.12 , 2.16 or 2.17 or
payments required to be made pursuant to Section 2.20, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
<PAGE> 46
42
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING
SECTION III.1 Conditions Precedent to Effectiveness of this
Agreement. This Agreement shall become effective (the "Effective Date") when (i)
it shall have been executed by EPNGC, Tennessee, the Administrative Agent, the
CAF Advance Agent, the Documentation Agent and the Syndication Agent and (ii)
the Administrative Agent and EPNGC either shall have been notified by each
Lender that such Lender has executed it or shall have received a counterpart of
this Agreement executed by such Lender. Anything in this Agreement to the
contrary notwithstanding, if all of the conditions to effectiveness of this
Agreement specified in this Section 3.1 shall not have been fulfilled on or
before December 31, 1997, (i) the Company shall on such date pay all accrued and
unpaid facility fees pursuant to Section 2.8 and (ii) this Agreement, and all of
the obligations of EPNGC, the Lenders, the Administrative Agent and the CAF
Advance Agent hereunder, shall be terminated on and as of 5:00 P.M. (New York
City time) on December 31, 1997; provided, however, that as soon as the
Administrative Agent determines that all of the conditions to effectiveness of
this Agreement specified in this Section 3.1 shall have been fulfilled on or
before December 31, 1997, the Administrative Agent shall furnish written notice
to EPNGC and the Lenders to the effect that it has so determined, and such
notice by the Administrative Agent shall constitute conclusive evidence that
this Agreement shall have become effective for all purposes. Notwithstanding the
foregoing, the obligations of the Company to pay fees pursuant to Section 2.8 as
well as all obligations of the Borrowers pursuant to Section 9.4 shall survive
the termination of this Agreement.
SECTION III.2 Conditions Precedent to Initial Advances. The
agreement of each Lender to make the initial Advances to be made by it to the
Borrowers hereunder is subject to (the date upon which all conditions listed in
Section 3.2(a) and 3.2(b) are satisfied, the "Closing Date") (a) the occurrence
of the Effective Date hereunder and (b) the receipt by the Administrative Agent
of the following in form and substance satisfactory to the Administrative Agent
and in sufficient copies for each Lender:
(i) Certified copies of the resolutions of the Board of
Directors of each of EPNGC and Tennessee approving the borrowings
contemplated hereby and authorizing the execution of this Agreement and
the Notes, and of all documents evidencing other necessary corporate
action of each of EPNGC and Tennessee and governmental approvals to
each of EPNGC and Tennessee, if any, with respect to this Agreement and
the Notes.
(ii) A certificate of the Secretary or an Assistant Secretary
of each of EPNGC and Tennessee certifying the names and true signatures
of the officers of each of EPNGC and Tennessee authorized to sign this
Agreement and the other documents to be delivered by it hereunder.
<PAGE> 47
43
(iii) A favorable opinion of the General Counsel of EPNGC, or
the Associate General Counsel of EPNGC, in substantially the form of
Exhibit G.
(iv) A favorable opinion of Jones, Day, Reavis & Pogue, New
York counsel to EPNGC and Tennessee, in substantially the form of
Exhibit H.
(v) A letter from the Process Agent, in substantially the form
of Exhibit I, agreeing to act as Process Agent for each of EPNGC and
Tennessee and to forward forthwith all process received by it to EPNGC
and Tennessee, as applicable.
(vi) Evidence satisfactory to the Administrative Agent that
all advances, accrued interest and other fees and any other amounts
(except as provided under Section 9.12) owing to the lenders and the
agents under the Existing Facilities shall have been, or simultaneously
with the initial Advances are being, paid in full, and the commitments
to make advances thereunder shall have been cancelled.
SECTION III.3 Conditions Precedent to Initial Advances to Any
Borrowing Subsidiary or Holding. The agreement of each Lender to make the
initial Advances to be made by it to any Borrowing Subsidiary (other than
Tennessee) or Holding is further subject to the Administrative Agent receiving
the following, in form and substance satisfactory to the Administrative Agent
and (except for the Notes) in sufficient copies for each Lender (provided that
no Subsidiary of Holding which is not a Subsidiary of EPNGC may become a
Borrower hereunder unless Holding is a Borrower hereunder):
(a) A Joinder Agreement executed and delivered by such
Borrowing Subsidiary or Holding, as the case may be, conforming to the
requirements hereof.
(b) Notes, dated the date such Borrowing Subsidiary or
Holding, as the case may be, executes and delivers its Joinder
Agreement, made by such Borrowing Subsidiary or Holding, as the case
may be, to the order of each Lender requesting a Note, respectively.
(c) A certificate of the Secretary or an Assistant Secretary
of such Borrowing Subsidiary or Holding, as the case may be, certifying
the names and true signature of the officers of such Borrowing
Subsidiary or Holding, as the case may be, authorized to sign the
Joinder Agreement and the other documents to be delivered by it
hereunder.
(d) A favorable opinion of the General Counsel or Associate
General Counsel of the Company, given upon the express instructions of
the Company, in substantially the form of Exhibit K, and as to such
other matters as any
<PAGE> 48
44
Lender through the Administrative Agent may reasonably request, with
such assumptions, qualifications and exceptions as the Administrative
Agent may approve.
(e) A favorable opinion of Jones, Day, Reavis & Pogue or other
New York counsel to the Company reasonably satisfactory to the
Administrative Agent, in substantially the form of Exhibit L, and as to
such other matters as any Lender through the Administrative Agent may
reasonably request, with such assumptions, qualifications and
exceptions as the Administrative Agent may approve.
(f) A letter from the Process Agent, in substantially the form
of Exhibit I, agreeing to act as Process Agent for such Borrowing
Subsidiary or Holding, as the case may be, and to forward forthwith all
process received by it to such Borrowing Subsidiary or Holding, as the
case may be.
SECTION III.4 Conditions Precedent to Each Borrowing. The
obligation of each Lender to make an Advance (including the initial Advance, but
excluding any continuation or Conversion of an Advance) on the occasion of any
Borrowing shall be subject to the conditions precedent that on the date of such
Borrowing this Agreement shall have become effective pursuant to Section 3.1
and, before and immediately after giving effect to such Borrowing and to the
application of the proceeds therefrom, the following statements shall be true
and correct, and the giving by the applicable Borrower or the Company on such
Borrower's behalf of the applicable Notice of Borrowing and the acceptance by
the applicable Borrower of the proceeds of such Borrowing shall constitute its
representation and warranty that on and as of the date of such Borrowing, before
and immediately after giving effect thereto and to the application of the
proceeds therefrom, the following statements are true and correct:
(i) each representation and warranty contained in Section 4.1
is correct in all material respects as though made on and as of such
date; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing, which constitutes an Event of Default or a
Default.
<PAGE> 49
45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION IV.1 Representations and Warranties of the Borrowers.
Each Borrower represents and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
Each Principal Subsidiary and each Restricted Affiliate is duly
incorporated, validly existing and in good standing in the jurisdiction
of its incorporation. The Company, each Principal Subsidiary and each
Restricted Affiliate possess all corporate powers and all other
authorizations and licenses necessary to engage in its business and
operations as now conducted, the failure to obtain or maintain which
would have a Material Adverse Effect.
(b) The execution, delivery and performance by (i) each
Borrower of this Agreement, each Joinder Agreement, if any, to which it
is a party and its Notes (as applicable) and (ii) each Restricted
Affiliate of its Restricted Affiliate Guaranty are within such
Borrower's or Restricted Affiliate's, as the case may be, corporate
powers, have been duly authorized by all necessary corporate action,
and do not contravene (A) such Borrower's or Restricted Affiliate's, as
the case may be, charter or by-laws or (B) any law or any material
contractual restriction binding on or affecting such Borrower or
Restricted Affiliate, as the case may be.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by (i) such
Borrower of this Agreement, each Joinder Agreement, if any, to which it
is a party or its Notes (as applicable) or (ii) any Restricted
Affiliate of its Restricted Affiliate Guaranty, except filings
necessary to comply with laws, rules, regulations and orders required
in the ordinary course to comply with ongoing obligations of such
Borrower under Section 5.1(a) and (b).
(d) This Agreement constitutes, its Notes and each Joinder
Agreement, if any, to which it is a party (as applicable) when
delivered hereunder shall constitute and its Restricted Affiliate
Guaranty when delivered hereunder shall constitute, the legal, valid
and binding obligations of each Borrower or Restricted Affiliate, as
the case may be, enforceable against such Borrower or Restricted
Affiliate, as the case may be, in accordance with their respective
terms, except as may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity.
<PAGE> 50
46
(e) The consolidated balance sheet of EPNGC and its
consolidated Subsidiaries as at December 31, 1996, and the related
consolidated statements of income and cash flows of EPNGC and its
consolidated Subsidiaries for the fiscal year then ended, reported on
by Coopers & Lybrand LLP, independent public accountants, copies of
which have been furnished to the Administrative Agent and the Lenders
prior to the date hereof, fairly present the consolidated financial
condition of EPNGC and its consolidated Subsidiaries as at such date
and the consolidated results of the operations of EPNGC and its
consolidated Subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently
applied, and since December 31, 1996, there has been no material
adverse change in such condition or operations. The unaudited
consolidated balance sheet of EPNGC and its consolidated Subsidiaries
as of June 30, 1997, and the related consolidated statements of income
and cash flows of EPNGC and its consolidated Subsidiaries for the six
months then ended, certified by the chief financial officer of EPNGC,
copies of which have been furnished to the Administrative Agent and the
Lenders prior to the date hereof, fairly present the consolidated
results of operations of EPNGC and its consolidated Subsidiaries for
the three months then ended, all in accordance with generally accepted
accounting principles consistently applied (except as approved by the
chief financial officer of EPNGC and as disclosed therein) and subject
to normal year-end audit adjustments.
(f) Each of the Company and its Subsidiaries is in compliance
with all laws, rules, regulations and orders of any governmental
authority applicable to it or its property except where the failure to
comply, individually or in the aggregate, would not in the reasonable
judgment of the Company be expected to result in a Material Adverse
Effect.
(g) There is no action, suit or proceeding pending, or to the
knowledge of any Borrower threatened, against or involving the Company,
any Principal Subsidiary or any Restricted Affiliate in any court, or
before any arbitrator of any kind, or before or by any governmental
body, which in the reasonable judgment of the Company (taking into
account the exhaustion of all appeals) would have a Material Adverse
Effect, or which purports to affect the legality, validity, binding
effect or enforceability of this Agreement or the Notes.
(h) The Company, each Principal Subsidiary and each Restricted
Affiliate have duly filed all tax returns required to be filed, and
have duly paid and discharged all taxes, assessments and governmental
charges upon it or against its properties now due and payable, the
failure to pay which would have a Material Adverse Effect, unless and
to the extent only that the same are being contested in good
<PAGE> 51
47
faith and by appropriate proceedings by the Company, the appropriate
Subsidiary or the appropriate Restricted Affiliate.
(i) The Company, each Principal Subsidiary and each Restricted
Affiliate have good title to their respective properties and assets,
free and clear of all mortgages, liens and encumbrances, except for
mortgages, liens and encumbrances (including covenants, restrictions,
rights, easements and minor irregularities in title) which do not
materially interfere with the business or operations of the Company,
such Subsidiary or such Restricted Affiliate as presently conducted or
which are permitted by Section 5.2(a), and except that no
representation or warranty is being made with respect to Margin Stock.
(j) No Termination Event has occurred or is reasonably
expected to occur with respect to any Plan which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default
under Section 7.1(g).
(k) Each Plan has complied with the applicable provisions of
ERISA and the Code where the failure to so comply would reasonably be
expected to result in an aggregate liability that would exceed 10% of
the Net Worth of the Company.
(l) The statement of assets and liabilities of each Plan and
the statements of changes in fund balance and in financial position, or
the statement of changes in net assets available for plan benefits, for
the most recent plan year for which an accountant's report with respect
to such Plan has been prepared, copies of which report have been
furnished to the Administrative Agent, fairly present the financial
condition of such Plan as at such date and the results of operations of
such Plan for the plan year ended on such date.
(m) Neither the Company nor any ERISA Affiliate has incurred,
or is reasonably expected to incur, any Withdrawal Liability to any
Multiemployer Plan which, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with
Withdrawal Liability (as of the date of determination), would exceed
10% of the Net Worth of the Company.
(n) Neither the Company nor any ERISA Affiliate has received
any notification that any Multiemployer Plan is in reorganization,
insolvent or has been terminated, within the meaning of Title IV of
ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization, insolvent or to be terminated within the meaning of
Title IV of ERISA the effect of which reorganization, insolvency or
termination would be the occurrence of an Event of Default under
Section 7.1(i).
<PAGE> 52
48
(o) The Borrowers are not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to extend credit to others (other
than to any Subsidiary of the Company) for the purpose of purchasing or
carrying Margin Stock.
(p) No Borrower is an "investment company" or a "company"
controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(q) No Borrower is a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(r) The borrowings by the Borrowers under this Agreement and
the Notes and the applications of the proceeds thereof as provided
herein will not violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
All representations and warranties made by the Borrowers herein or made in any
certificate delivered pursuant hereto shall survive the making of the Advances
and the execution and delivery to the Lenders of this Agreement and the Notes.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION V.1 Affirmative Covenants. So long as any amount
payable by any Borrower hereunder or under any Note shall remain unpaid or any
Lender shall have any Commitment hereunder, each Borrower will, unless the
Majority Lenders shall otherwise consent in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain, and, in the case of the Company, cause each Principal
Subsidiary and each Restricted Affiliate to preserve and maintain, its
corporate existence, rights (charter and statutory) and material
franchises, except as otherwise permitted by Section 5.2(d) or 5.2(e).
(b) Compliance with Laws, Etc. Comply, and, in the case of the
Company, cause each Principal Subsidiary and each Restricted Affiliate
to comply, in all material respects with all applicable laws, rules,
regulations and orders (including, without limitation, all
environmental laws and laws requiring payment of all taxes, assessments
and governmental charges imposed upon it or upon its property except to
the extent contested in good faith by appropriate proceedings) the
failure to comply with which would have a Material Adverse Effect.
<PAGE> 53
49
(c) Visitation Rights. At any reasonable time and from time to
time, permit the Administrative Agent or any of the Lenders or any
agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the
properties of, the Company, any of its Subsidiaries and any Restricted
Affiliate, and to discuss the affairs, finances and accounts of the
Company, any of its Subsidiaries and any Restricted Affiliate with any
of their officers and with their independent certified public
accountants.
(d) Books and Records. Keep, and, in the case of the Company,
cause each of its Subsidiaries and each Restricted Affiliate to keep,
proper books of record and account, in which full and correct entries
shall be made of all its respective financial transactions and the
assets and business of the Company, each of its Subsidiaries and each
Restricted Affiliate, as applicable, in accordance with generally
accepted accounting principles either (i) consistently applied or (ii)
applied in a changed manner provided such change shall have been
disclosed to the Administrative Agent and shall have been consented to
by the accountants which (as required by Section 5.3(b)) report on the
financial statements of the Company and its consolidated Subsidiaries
for the fiscal year in which such change shall have occurred.
(e) Maintenance of Properties, Etc. Maintain and preserve,
and, in the case of the Company, cause each Principal Subsidiary and
each Restricted Affiliate to maintain and preserve, all of its
properties which are used in the conduct of its business in good
working order and condition, ordinary wear and tear excepted, to the
extent that any failure to do so would have a Material Adverse Effect.
(f) Maintenance of Insurance. Maintain, and, in the case of
the Company, cause each Principal Subsidiary and each Restricted
Affiliate to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Company, such Subsidiary or such Restricted Affiliate operates.
(g) Holding. Once Holding is formed, cause (i) Holding to
execute and deliver a guaranty (in form and substance reasonably
satisfactory to the Administrative Agent) (the "Holding Guarantee") in
favor of the Administrative Agent, for the ratable benefit of the
Lenders, guaranteeing the prompt and complete payment by each Borrower
when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations owing by such Borrower and (ii) the delivery to the
Administrative Agent of legal opinions from the General Counsel or the
Associate
<PAGE> 54
50
General Counsel of Holding and from New York counsel to Holding
reasonably acceptable to the Administrative Agent, which legal opinions
shall be in form and substance reasonably satisfactory to the
Administrative Agent.
SECTION V.2 Negative Covenants. So long as any amount payable
by any Borrower hereunder or under any Note shall remain unpaid or any Lender
shall have any Commitment hereunder, each Borrower will not, unless the Majority
Lenders shall otherwise consent in writing:
(a) Liens, Etc. (i) Create, assume or suffer to exist, or, in
the case of the Company, permit any Principal Subsidiary to create,
assume or suffer to exist, any Liens upon or with respect to any of the
capital stock of any Principal Subsidiary, whether now owned or
hereafter acquired, or (ii) create or assume, or, in the case of the
Company, permit any Principal Subsidiary or any Restricted Affiliate to
create or assume, any Liens upon or with respect to any other assets
material to the consolidated operations of the Company and its
consolidated Subsidiaries taken as a whole securing the payment of
Indebtedness and Guaranties in an aggregate amount (determined without
duplication of amount (so that the amount of a Guarantee will be
excluded to the extent the Indebtedness Guaranteed thereby is included
in computing such aggregate amount)) exceeding $100,000,000; provided,
however, that this subsection (a) shall not apply to:
(A) Liens on the stock or assets of any Project
Financing Subsidiary or any Restricted Affiliate (or any
partnership, member or other equity interest in or assets of
any partnership, limited liability company or other entity of
which the Project Financing Subsidiary is a partner, member or
other equity participant) securing the payment of a Project
Financing and related obligations;
(B) Liens on assets acquired by the Company, any of
its Subsidiaries or any Restricted Affiliate after February
11, 1992 to the extent that such Liens existed at the time of
such acquisition and were not placed thereon by or with the
consent of the Company in contemplation of such acquisition;
(C) Liens created by any Alternate Program or any
document executed by any Borrower or any Restricted
Affiliate in connection therewith;
(D) Liens on Margin Stock; and
(E) Liens for taxes, assessments or governmental
charges or levies not yet overdue.
(b) Consolidated Debt and Guarantees to Capitalization. (i)
Permit the ratio of (A) the sum of (1)
<PAGE> 55
51
the aggregate amount of consolidated Debt of EPNGC and its consolidated
Subsidiaries and all Restricted Affiliates and their consolidated
Subsidiaries (without duplication of amount under this clause (A) and
determined as to all of the foregoing entities on a consolidated basis)
plus (2) the aggregate amount of consolidated Guaranties of EPNGC and
its consolidated Subsidiaries and all Restricted Affiliates and their
consolidated Subsidiaries (without duplication of amount under this
clause (A) and determined as to all of the foregoing entities on a
consolidated basis) to (B) Capitalization of EPNGC and all Restricted
Affiliates (without duplication and determined as to all of the
foregoing entities on a consolidated basis) to exceed .7 to 1; and (ii)
from and after the date that Holding becomes a Borrower hereunder,
permit the ratio of (A) the sum of (1) the aggregate amount of
consolidated Debt of Holding and its consolidated Subsidiaries plus (2)
the aggregate amount of consolidated Guaranties of Holding and its
consolidated Subsidiaries to (B) Capitalization of Holding to exceed .7
to 1.
(c) Debt, Etc. In the case of the Company, permit any of its
consolidated Subsidiaries to create or suffer to exist any Debt, any
Guaranty or any reimbursement obligation with respect to any letter of
credit (other than any Project Financing), if, immediately after giving
effect to such Debt, Guaranty or reimbursement obligation and the
receipt and application of any proceeds thereof or value received in
connection therewith, the aggregate amount (determined without
duplication of amount) of Debt, Guaranties and letter of credit
reimbursement obligations of the Company's consolidated Subsidiaries
(other than any Project Financing) determined on a consolidated basis
would exceed $300,000,000; provided, however, that the following Debt,
Guaranties or reimbursement obligations shall be excluded from the
application of, and calculation set forth in, this paragraph (c): (A)
Debt, Guaranties or reimbursement obligations incurred by (x) Mojave or
(y) so long as it is a Borrower, EPNGC, (B) Debt, Guaranties or
reimbursement obligations arising under (x) the EPTPC Facility and
permanently repaid in full on the Closing Date or (y) this Agreement or
the $750,000,000 364-Day Revolving Credit and Competitive Advance
Facility Agreement, dated as of the date hereof, among EPNGC, the
lenders parties thereto and Chase, as Administrative Agent and CAF
Advance Agent, (C) Debt, Guaranties or reimbursement obligations
incurred by El Paso Field Services Company up to an amount not to
exceed at any time outstanding the tangible net worth of El Paso Field
Services Company, provided that such Debt may be guaranteed by the
Company, (D) Excluded Acquisition Debt and (E) successive extensions,
refinancings or replacements (at the same Subsidiary or at any other
consolidated Subsidiary of the Company) of Debt, Guaranties or
reimbursement obligations (or commitments in respect thereof) referred
to in clauses (A), (B) and (D) above and in an amount not in excess of
the amounts so extended, refinanced or replaced (or the amount of
commitments in respect thereof).
<PAGE> 56
52
(d) Sale, Etc. of Assets. Sell, lease or otherwise transfer,
or, in the case of the Company, permit any Principal Subsidiary to
sell, lease or otherwise transfer, (in either case, whether in one
transaction or in a series of transactions) assets constituting a
material portion of the consolidated assets of the Company and its
Principal Subsidiaries taken as a whole, provided that provisions of
this subsection (d) shall not apply to:
(i) any sale of receivables and related rights
pursuant to any Alternate Program;
(ii) any Project Financing Subsidiary and the
assets thereof;
(iii) sales, leases or other transfers of assets
or capital stock of any Subsidiary of the Company other than
any Principal Subsidiary;
(iv) any sale of Margin Stock;
(v) any sale of up to 20% of the equity of El
Paso Field Services Company in an initial public offering of
such corporation's equity securities;
(vi) any sale, lease or other transfer to the
Company or any Principal Subsidiary, or to any corporation
which after giving effect to such transfer will become and be
either (A) a Principal Subsidiary in which the Company's
direct or indirect equity interest will be at least as great
as its direct or indirect equity interest in the transferor
immediately prior thereto or (B) a directly or indirectly
wholly-owned Principal Subsidiary;
(vii) any transfer permitted by Section 5.2(e);
and
(viii) any transfer to Holding or any of its
Subsidiaries of any stock or assets other than FERC regulated
assets (or stock or any other equity interest in an entity
owning FERC regulated assets) used in the mainline gas
transmission business; provided that (A) no Event of Default,
or event that with the giving of notice or lapse of time or
both would constitute an Event of Default, shall have occurred
and be continuing before and after giving effect to such
transfer and (B) no Borrower may be so transferred unless
Holding is also a Borrower.
(e) Mergers, Etc. Merge or consolidate with any person, or
permit any of its Principal Subsidiaries to merge or consolidate with
any Person, except that (i) any Principal Subsidiary may merge or
consolidate with (or
<PAGE> 57
53
liquidate into) any other Subsidiary (other than a Project Financing
Subsidiary, unless the successor corporation is not treated as a
Project Financing Subsidiary under this Agreement) or may merge or
consolidate with (or liquidate into) the Company, provided that (A) if
such Principal Subsidiary merges or consolidates with (or liquidates
into) the Company, the Company shall be the continuing or surviving
corporation and (B) if any such Principal Subsidiary merges or
consolidates with (or liquidates into) any other Subsidiary of the
Company, one of such Subsidiaries is the surviving corporation and, if
either such Subsidiary is not wholly-owned by the Company, such merger
or consolidation is on an arm's length basis, and (ii) the Company or
any Principal Subsidiary may merge or consolidate with any other
corporation (that is, in addition to the Company or any Principal
Subsidiary of the Company), provided that (A) if the Company merges or
consolidates with any such other corporation, the Company is the
surviving corporation, (B) if any Principal Subsidiary merges or
consolidates with any such other corporation, the surviving corporation
is a wholly-owned Principal Subsidiary of the Company, and (C) if
either the Company or any Principal Subsidiary merges or consolidates
with any such other corporation, after giving effect to such merger or
consolidation no Event of Default, and no event which with lapse of
time or the giving of notice, or both, would constitute an Event of
Default, shall have occurred and be continuing.
SECTION V.3 Reporting Requirements. So long as any amount
payable by any Borrower hereunder or under any Note shall remain unpaid or any
Lender shall have any Commitment hereunder, the Company will furnish to each
Lender in such reasonable quantities as shall from time to time be requested by
such Lender:
(a) as soon as publicly available and in any event within 60
days after the end of each of the first three fiscal quarters of each
fiscal year of each of EPNGC and, following its formation, Holding, a
consolidated balance sheet of each of EPNGC and, following its
formation, Holding and its respective consolidated subsidiaries as of
the end of such quarter, and consolidated statements of income and cash
flows of each of EPNGC and, following its formation, Holding and its
respective consolidated subsidiaries each for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, certified (subject to normal year-end adjustments) as being
fairly stated in all material respects by the chief financial officer,
controller or treasurer of the Company and accompanied by a certificate
of such officer stating (i) whether or not such officer has knowledge
of the occurrence of any Event of Default which is continuing hereunder
or of any event not theretofore remedied which with notice or lapse of
time or both would constitute such an Event of Default and, if so,
stating in reasonable detail the facts
<PAGE> 58
54
with respect thereto, (ii) all relevant facts in reasonable detail to
evidence, and the computations as to, whether or not the Company is in
compliance with the requirements set forth in subsections (b) and (c)
of Section 5.2, and (iii) a listing of all Principal Subsidiaries and
consolidated Subsidiaries of the Company showing the extent of its
direct and indirect holdings of their stocks;
(b) as soon as publicly available and in any event within 120
days after the end of each fiscal year of each of EPNGC and, following
its formation, Holding, a copy of the annual report for such year for
each of EPNGC and, following its formation, Holding and its respective
consolidated Subsidiaries containing financial statements for such year
reported by nationally recognized independent public accountants
acceptable to the Lenders, accompanied by (i) a report signed by said
accountants stating that such financial statements have been prepared
in accordance with generally accepted accounting principles and (ii) a
letter from such accountants stating that in making the investigations
necessary for such report they obtained no knowledge, except as
specifically stated therein, of any Event of Default which is
continuing hereunder or of any event not theretofore remedied which
with notice or lapse of time or both would constitute such an Event of
Default;
(c) within 120 days after the close of each of the Company's
fiscal years, a certificate of the chief financial officer, controller
or treasurer of the Company stating (i) whether or not he has knowledge
of the occurrence of any Event of Default which is continuing hereunder
or of any event not theretofore remedied which with notice or lapse of
time or both would constitute such an Event of Default and, if so,
stating in reasonable detail the facts with respect thereto, (ii) all
relevant facts in reasonable detail to evidence, and the computations
as to, whether or not the Company is in compliance with the
requirements set forth in subsections (b) and (c) of Section 5.2 and
(iii) a listing of all Principal Subsidiaries and consolidated
Subsidiaries of the Company showing the extent of its direct and
indirect holdings of their stocks;
(d) promptly after the sending or filing thereof, copies of
all publicly available reports which the Company, any Principal
Subsidiary or any Restricted Affiliate sends to any of its security
holders and copies of all publicly available reports and registration
statements which the Company, any Principal Subsidiary or any
Restricted Affiliate files with the Securities and Exchange Commission
or any national securities exchange other than registration statements
relating to employee benefit plans and to registrations of securities
for selling security holders;
(e) within 10 days after sending or filing thereof, a copy of
FERC Form No. 2: Annual Report of Major Natural Gas Companies, sent or
filed by the Company to or with the FERC
<PAGE> 59
55
with respect to each fiscal year of the Company;
(f) promptly in writing, notice of all litigation and of all
proceedings before any governmental or regulatory agencies against or
involving the Company, any Principal Subsidiary or any Restricted
Affiliate, except any litigation or proceeding which in the reasonable
judgment of the Company (taking into account the exhaustion of all
appeals) is not likely to have a material adverse effect on the
consolidated financial condition of the Company and its consolidated
Subsidiaries taken as a whole;
(g) within three Business Days after an executive officer of
the Company obtains knowledge of the occurrence of any Event of Default
which is continuing or of any event not theretofore remedied which with
notice or lapse of time, or both, would constitute an Event of Default,
notice of such occurrence together with a detailed statement by a
responsible officer of the Company of the steps being taken by the
Company or the appropriate Subsidiary to cure the effect of such event;
(h) as soon as practicable and in any event (i) within 30 days
after the Company or any ERISA Affiliate knows or has reason to know
that any Termination Event described in clause (a) of the definition of
Termination Event with respect to any Plan has occurred and (ii) within
10 days after the Company or any ERISA Affiliate knows or has reason to
know that any other Termination Event has occurred, a statement of the
chief financial officer or treasurer of the Company describing such
Termination Event and the action, if any, which the Company or such
ERISA Affiliate proposes to take with respect thereto;
(i) promptly and in any event within two Business Days after
receipt thereof by the Company or any ERISA Affiliate, copies of each
notice received by the Company or any ERISA Affiliate from the PBGC
stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(j) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Single Employer Plan;
(k) promptly and in any event within five Business Days after
receipt thereof by the Company or any ERISA Affiliate from the sponsor
of a Multiemployer Plan, a copy of each notice received by the Company
or any ERISA Affiliate concerning (i) the imposition of Withdrawal
Liability by a Multiemployer Plan, (ii) the determination that a
Multiemployer Plan is, or is expected to be, in reorganization or
insolvent within the meaning of Title IV of ERISA, (iii) the
termination of a Multiemployer Plan
<PAGE> 60
56
within the meaning of Title IV of ERISA, or (iv) the amount of
liability incurred, or expected to be incurred, by the Company or any
ERISA Affiliate in connection with any event described in clause (i),
(ii) or (iii) above; and
(l) as soon as practicable but in any event within 60 days of
any notice of request therefor, such other information respecting the
financial condition and results of operations of the Company or any
Subsidiary of the Company as any Lender through the Administrative
Agent may from time to time reasonably request.
Each balance sheet and other financial statement furnished
pursuant to subsections (a) and (b) of this Section 5.3 shall contain
comparative financial information which conforms to the presentation required in
Form 10-Q and 10-K, as appropriate, under the Securities Exchange Act of 1934,
as amended.
SECTION V.4 Restrictions on Material Subsidiaries. Upon
Holding becoming a Borrower hereunder, Holding will not, and will not permit any
Material Subsidiary, to enter into any agreement or understanding pursuant to
which (a) any non-equity interest claim Holding may have against any Material
Subsidiary would be subordinate in any manner to the payment of any other
obligation of such Material Subsidiary (other than waivers or subordination of
subrogation, contribution or similar rights under Guaranties and similar
agreements) or (b) by its terms limits or restricts the ability of such Material
Subsidiary to make funds available to Holding (whether by dividend or other
distribution, by replacement of any inter-company advance or otherwise) if, in
any such case referred to in this Section 5.4, there is, at the time any such
agreement is entered into, a reasonable likelihood that all such agreements and
understandings, considered together, would materially and adversely affect the
ability of Holding to meet its obligations as they become due.
ARTICLE VI
GUARANTEES
SECTION VI.1 Guarantees. (a) Subject to the provisions of
Section 6.1(b), each Borrower hereby unconditionally and irrevocably guarantees
to the Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment by each other Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations owing by such other
Borrower.
(b) Anything in this Article VI to the contrary
notwithstanding, the maximum liability of each Borrower (other than a Borrower
which is guaranteeing the Obligations of its Subsidiaries) under this Article VI
shall in no event exceed the amount which can be guaranteed by such Borrowing
Subsidiary under
<PAGE> 61
57
applicable federal and state laws relating to the insolvency of debtors.
(c) Each Borrower agrees that the Obligations owing by any
other Borrower may at any time and from time to time exceed the amount of the
liability of such other Borrower under this Article VI without impairing the
guarantee of such Borrower under this Article VI or affecting the rights and
remedies of the Administrative Agent or any Lender under this Article VI.
(d) No payment or payments made by any Borrower or any other
Person or received or collected by the Administrative Agent or any Lender from
any Borrower or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Borrowers under this Article VI
which shall, notwithstanding any such payment or payments, continue until the
Obligations are paid in full and the Commitments are terminated.
(e) Each Borrower agrees that whenever, at any time, or from
time to time, it shall make any payment to the Administrative Agent or any
Lender on account of its liability under this Article VI, it will notify the
Administrative Agent in writing that such payment is made under this Article VI
for such purpose.
SECTION VI.2 No Subrogation. Notwithstanding any payment or
payments made by any Borrower under this Article VI or any set-off or
application of funds of such Borrower by the Administrative Agent or any Lender,
such Borrower shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against any other Borrower or against any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Lender for the payment of the Obligations, nor shall such Borrower
seek or be entitled to seek any contribution or reimbursement from any other
Borrower in respect of payments made by such Borrower hereunder, until all
amounts owing to the Administrative Agent and the Lenders by the other Borrowers
on account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Borrower on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Borrower in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Borrower, and shall, forthwith upon receipt by such Borrower, be turned over to
the Administrative Agent in the exact form received by such Borrower (duly
indorsed by such Borrower to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.
SECTION VI.3 Amendments, etc. with respect to the Obligations;
Waiver of Rights. Each Borrower shall remain obligated under this Article VI
notwithstanding that, without any
<PAGE> 62
58
reservation of rights against such Borrower, and without notice to or further
assent by such Borrower, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by the Administrative
Agent or such Lender, and any of the Obligations continued, and the Obligations,
or the liability of any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and this Agreement, any Notes and any
other documents executed and delivered in connection herewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Majority Lenders, as the case may be) may deem advisable from time
to time, and any collateral security, guarantee or right of offset at any time
held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for this Agreement or any property subject thereto. When making
any demand hereunder against any Borrower, the Administrative Agent or any
Lender may, but shall be under no obligation to, make a similar demand on the
applicable Borrowing Subsidiaries or any other guarantor, and any failure by the
Administrative Agent or any Lender to make any such demand or to collect any
payments from the other Borrowers or any such other guarantor or any release of
the other Borrowers or such other guarantor shall not relieve such Borrower of
its obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of the
Administrative Agent or any Lender against such Borrower for the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
SECTION VI.4 Guarantee Absolute and Unconditional. Each
Borrower waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon this Agreement or acceptance of this
Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Agreement; and all dealings between any Borrower,
on the one hand, and the Administrative Agent and the Lenders, on the other,
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Agreement. Each Borrower waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
other Borrowers with respect to the Obligations. The guarantee contained in this
Article VI shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of this Agreement, any Note, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the
<PAGE> 63
59
Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by any Borrower against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of any Borrower) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any Borrower for the Obligations,
or of the Borrowers under this Agreement, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against any Borrower,
the Administrative Agent and any Lender may, but shall be under no obligation
to, pursue such rights and remedies as it may have against any other Borrower or
any other Person or against any collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from other Borrowers or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of any other Borrower or any such other Person or of any
such collateral security, guarantee or right of offset, shall not relieve any
Borrower of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against such Borrower. The guarantees
contained in this Article VI shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Borrower and
its successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of the Borrowers under this Agreement shall have been satisfied by
payment in full and the Commitments shall be terminated, notwithstanding that
from time to time during the term of this Agreement the Borrowers may be free
from any Obligations.
SECTION VI.5 Reinstatement. The provisions of this Article VI
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
any Borrower or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, any Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
<PAGE> 64
60
ARTICLE VII
EVENTS OF DEFAULT
SECTION VII.1 Event of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) Any Borrower shall fail to pay any installment of
principal of any of its Advances or Notes when due, or any interest on
any of its Advances or Notes or any other amount payable by it
hereunder within five Business Days after the same shall be due; or
(b) Any representation or warranty made or deemed made by any
Borrower herein or by any Borrower (or any of its officers) in
connection with this Agreement shall prove to have been incorrect in
any material respect when made or deemed made; or
(c) Any Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part to
be performed or observed and any such failure shall remain unremedied
for 30 days after written notice thereof shall have been given to such
Borrower by the Administrative Agent or by any Lender with a copy to
the Administrative Agent; or
(d) The Company, any Principal Subsidiary or any Restricted
Affiliate shall fail to pay any Debt or Guaranty (excluding Debt
incurred pursuant hereto) of the Company, such Principal Subsidiary or
such Restricted Affiliate (as the case may be) in an aggregate
principal amount of $100,000,000 or more, or any installment of
principal thereof or interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Debt or Guaranty; or any other default under any agreement or
instrument relating to any such Debt, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such default or event
is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated
maturity thereof, as a result of either (i) any default under any
agreement or instrument relating to any such Debt or (ii) the
occurrence of any other event (other than an issuance, sale or other
disposition of stock or other assets, or an incurrence or issuance of
Indebtedness or other obligations, giving rise to a repayment or
prepayment obligation in respect of such Debt) the effect of which
would otherwise be to accelerate or to permit the
<PAGE> 65
61
acceleration of the maturity of such Debt; provided that,
notwithstanding any provision contained in this subsection (d) to the
contrary, to the extent that pursuant to the terms of any agreement or
instrument relating to any Debt or Guaranty referred to in this
subsection (d) (or in the case of any such Guaranty, relating to any
obligations Guaranteed thereby), any sale, pledge or disposal of Margin
Stock, or utilization of the proceeds of such sale, pledge or disposal,
would result in a breach of any covenant contained therein or otherwise
give rise to a default or event of default thereunder and/or
acceleration of the maturity of the Debt or obligations extended
pursuant thereto, or payment pursuant to any Guaranty, and as a result
of such terms or of such sale, pledge, disposal, utilization, breach,
default, event of default or acceleration or nonpayment under such
Guaranty, or the provisions thereof relating thereto, this Agreement or
any Advance hereunder would otherwise be subject to the margin
requirements or any other restriction under Regulation U issued by the
Board of Governors of the Federal Reserve System, then such breach,
default, event of default or acceleration, or nonpayment under any
Guaranty, shall not constitute a default or Event of Default under this
subsection (d); or
(e)(i) The Company, any Principal Subsidiary or any Restricted
Affiliate shall (A) generally not pay its debts as such debts become
due; or (B) admit in writing its inability to pay its debts generally;
or (C) make a general assignment for the benefit of creditors; or (ii)
any proceeding shall be instituted or consented to by the Company, any
Principal Subsidiary or any Restricted Affiliate seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property; or (iii) any such proceeding shall have been instituted
against the Company, any Principal Subsidiary or any Restricted
Affiliate and either such proceeding shall not be stayed or dismissed
for 60 consecutive days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against it or the appointment of a receiver, trustee, custodian or
other similar official for it or any substantial part of its property)
shall occur; or (iv) the Company, any Principal Subsidiary or any
Restricted Affiliate shall take any corporate action to authorize any
of the actions set forth above in this subsection (e); or
(f) Any judgment or order of any court for the payment of
money in excess of $50,000,000 shall be rendered against the Company,
any Principal Subsidiary or any Restricted Affiliate and either (i)
enforcement proceedings shall have been commenced by any creditor upon
such judgment or order
<PAGE> 66
62
(other than any enforcement proceedings consisting of the mere
obtaining and filing of a judgment lien or obtaining of a garnishment
or similar order so long as no foreclosure, levy or similar process in
respect of such lien, or payment over in respect of such garnishment or
similar order, has commenced) or (ii) there shall be any period of 30
consecutive days during which a stay of execution or of enforcement
proceedings (other than those referred to in the parenthesis in clause
(i) above) in respect of such judgment or order, by reason of a pending
appeal, bonding or otherwise, shall not be in effect; or
(g) (i) Any Termination Event with respect to a Plan shall
have occurred and, 30 days after notice thereof shall have been given
to the Company by the Administrative Agent, such Termination Event
shall still exist; or (ii) the Company or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan; or (iii) the
Company or any ERISA Affiliate shall have been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in
reorganization, or is insolvent or is being terminated, within the
meaning of Title IV of ERISA; or (iv) any Person shall engage in a
"prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan; and in each case in clauses (i)
through (iv) above, such event or condition, together with all other
such events or conditions, if any, would result in an aggregate
liability of the Company or any ERISA Affiliate that would exceed 10%
of the Net Worth of the Company.
(h) Upon completion of, and pursuant to, a transaction, or a
series of transactions (which may include prior acquisitions of capital
stock of EPNGC or Holding in the open market or otherwise), involving a
tender offer (i) a "person" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934) other than EPNGC or Holding, a
Subsidiary of EPNGC or Holding or any employee benefit plan maintained
for employees of EPNGC or Holding and/or any of their respective
Subsidiaries or the trustee therefor, shall have acquired direct or
indirect ownership of and paid for in excess of 50% of the outstanding
capital stock of EPNGC or Holding entitled to vote in elections for
directors of EPNGC or Holding and (ii) at any time before the later of
(A) six months after the completion of such tender offer and (B) the
next annual meeting of the shareholders of EPNGC or Holding following
the completion of such tender offer more than half of the directors of
EPNGC or Holding consists of individuals who (1) were not directors
before the completion of such tender offer and (2) were not appointed,
elected or nominated by the Board of Directors in office prior to the
completion of such tender offer (other than any such appointment,
election or nomination required or agreed to in connection with, or as
a result of, the completion of such tender offer); or
<PAGE> 67
63
(i) Any event of default shall occur under any agreement or
instrument relating to or evidencing any Debt now or hereafter existing
of the Company or any Principal Subsidiary or Restricted Affiliate as
the result of any change of control of the Company; or
(j) Any of (i) the guarantees contained in Article VI, (ii)
the Restricted Affiliate Guarantees or (iii) the Holding Guarantee
shall cease, for any reason, to be in full force and effect or any
Borrower, any Restricted Affiliate or Holding shall so assert;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Company, (i)
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) declare the Advances and
the Notes, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances and the Notes,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrowers; provided, however, that
if an Event of Default under subsection (e) of this Section 7.1 (except under
clause (i)(A) thereof) shall occur, (A) the obligation of each Lender to make
Advances shall automatically be terminated and (B) the Advances and the Notes,
all interest thereon and all other amounts payable under this Agreement shall
automatically become and be forthwith due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrowers.
<PAGE> 68
64
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE CAF ADVANCE AGENT
SECTION VIII.1 Authorization and Action. Each Lender hereby
appoints and authorizes the Administrative Agent and the CAF Advance Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent and the CAF Advance Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement of this Agreement or collection of
the Notes), the Administrative Agent and the CAF Advance 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 Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent and the CAF Advance Agent shall
not be required to take any action which exposes the Administrative Agent or the
CAF Advance Agent to personal liability or which is contrary to this Agreement
or applicable law. The Administrative Agent and the CAF Advance Agent agree to
give to each Lender prompt notice of each notice given to it by any Borrower
pursuant to the terms of this Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the parties hereto hereby agree that
neither the Documentation Agent nor the Syndication Agent shall have any rights,
duties or responsibilities in its capacity as Documentation Agent or Syndication
Agent, as applicable, hereunder and neither the Documentation Agent nor the
Syndication Agent shall have the authority to take any action hereunder in its
capacity as such.
SECTION VIII.2 Administrative Agent's and CAF Advance Agent's
Reliance, Etc. None of the Administrative Agent, the CAF Advance Agent or any of
its respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent and the CAF Advance Agent: (i) may treat the payee of any
Note as the holder thereof until the Administrative Agent receives and accepts
an Assignment and Acceptance entered into by the Lender which is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.7; (ii) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the
<PAGE> 69
65
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrowers or to inspect the property (including the
books and records) of the Borrowers; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopier, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION VIII.3 Chase and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Chase shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Administrative Agent or the CAF
Advance Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Chase in its individual capacity. Chase and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Company,
any of its Subsidiaries and any Person who may do business with or own
securities of the Company or any of its Subsidiaries, all as if Chase were not
the Administrative Agent or the CAF Advance Agent and without any duty to
account therefor to the other Lenders.
SECTION VIII.4 Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the CAF Advance Agent or any other Lender and based on the
financial statements referred to in Section 4.1 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent, the CAF
Advance Agent or any other Lender 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.
SECTION VIII.5 Indemnification. The Lenders agree to indemnify
the Administrative Agent and the CAF Advance Agent (to the extent not reimbursed
by the Borrowers), ratably according to the respective principal amounts of the
Advances then outstanding by each of them (or if no Advances are at the time
outstanding or if any Notes are held by Persons which are not Lenders, ratably
according to the respective amounts of their aggregate Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent or the CAF Advance Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Administrative Agent
or the CAF Advance Agent under this Agreement, provided that no Lender shall be
<PAGE> 70
66
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's or the CAF Advance Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent and the CAF Advance Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Administrative Agent or the CAF Advance Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings, in bankruptcy or insolvency proceedings, or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Administrative Agent or the CAF Advance Agent is not reimbursed
for such expenses by the Borrowers.
<PAGE> 71
67
SECTION VIII.6 Successor Administrative Agent and CAF Advance
Agent. The Administrative Agent and the CAF Advance Agent may resign at any time
by giving written notice thereof to the Lenders and the Company and may be
removed at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent or the CAF Advance Agent. If no successor
Administrative Agent or CAF Advance Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's or the CAF Advance Agent giving of notice of
resignation or the Majority Lenders' removal of the retiring Administrative
Agent or CAF Advance Agent, then such retiring Administrative Agent or CAF
Advance Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent or CAF Advance Agent, which shall be a Lender and a commercial bank
organized, or authorized to conduct a banking business, 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
Administrative Agent or CAF Advance Agent hereunder by a successor
Administrative Agent or CAF Advance Agent, such successor Administrative Agent
or CAF Advance Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent or
CAF Advance Agent, and the retiring Administrative Agent or CAF Advance Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's or CAF Advance Agent's resignation or
removal hereunder as Administrative Agent or CAF Advance Agent, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent or CAF Advance Agent
under this Agreement.
<PAGE> 72
68
ARTICLE IX
MISCELLANEOUS
SECTION IX.1 Amendments, Etc. An amendment or waiver of any
provision of this Agreement or the Notes, or a consent to any departure by any
Borrower therefrom, shall be effective against the Lenders and all holders of
the Notes if, but only if, it shall be in writing and signed by the Majority
Lenders, and then such a waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, be effective to: (a) waive any of the conditions
specified in Article III, (b) increase or extend the Commitments of the Lenders
or subject the Lenders to any additional obligations, (c) reduce the principal
of, or interest on, any Advance or the Notes or any facility fees hereunder, (d)
postpone any date fixed for any payment of principal of, or interest on, any
Advance or the Notes or any facility fees hereunder, (e) change the percentage
of the Commitments or of the aggregate unpaid principal amount of any Advance or
the Notes, or the number of Lenders, which shall be required for the Lenders or
any of them to take any action under this Agreement, (f) amend this Section 9.1,
(g) amend, waive or consent to any departure of any provision in Article VI or
(h) except as provided below, release any Borrower or Holding or any Restricted
Affiliate from its guarantee in Article VI, the Holding Guarantee or any
Restricted Affiliate Guarantee, as the case may be; provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent and the CAF Advance Agent in addition to the Lenders
required hereinabove to take such action, affect the rights or duties of the
Administrative Agent or the CAF Advance Agent under this Agreement or any Note;
provided, still further, that the guarantee of a Borrower under Article VI and
of a Restricted Affiliate under its Restricted Affiliate Guarantee shall be
released automatically upon (i) the sale by the Company of such Borrower or
Restricted Affiliate, provided that such sale is permitted under this Agreement,
or (ii) such Borrower or Restricted Affiliate ceasing to be a Borrower or a
Restricted Affiliate hereunder.
SECTION IX.2 Notices, Etc. Except as otherwise provided in
Section 2.2(a), 2.5(d) or 2.15(b), all notices and other communications provided
for hereunder shall be in writing (including telecopier and other readable
communication) and mailed by certified mail, return receipt requested,
telecopied or otherwise transmitted or delivered, if to any Borrower, c/o the
Company at El Paso Energy Building, 1001 Louisiana Street, Houston, Texas 77002,
Attention: Executive Vice President and Chief Financial Officer, Telecopier:
(713) 757-4975; if to any Lender, at its address set forth under its name on
Schedule I; if to the Administrative Agent, at 270 Park Avenue, 32nd floor, New
York, New York 10017, Attention: Peter Ling, Telecopier: (212) 383-0361; and if
to the CAF Advance Agent, at One Chase Manhattan Plaza, Third Floor, New York,
New York 10081, Attention: Sandra Miklave, Telecopier: (212) 552-5700,
Telephone: (212) 552-7953; or, as to each party and each Borrowing Subsidiary,
at such other address as shall be designated by such party in a written notice
to the other parties. All such notices and communications shall,
<PAGE> 73
69
if so mailed, telecopied or otherwise transmitted, be effective when received,
if mailed, or when the appropriate answerback or other evidence of receipt is
given, if telecopied or otherwise transmitted, respectively. A notice received
by the Administrative Agent, the CAF Advance Agent or a Lender by telephone
pursuant to Section 2.2(a), 2.5(d) or 2.15(b) shall be effective if the
Administrative Agent or Lender believes in good faith that it was given by an
authorized representative of the applicable Borrower and acts pursuant thereto,
notwithstanding the absence of written confirmation or any contradictory
provision thereof.
SECTION IX.3 No Waiver; Remedies. No failure on the part of
any Lender, the Administrative Agent or the CAF Advance Agent to exercise, and
no delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
or under any Note preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION IX.4 Costs and Expenses; Indemnity. (a) Each Borrower
agrees to pay on demand (to the extent not reimbursed by any other Borrower) (i)
all reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent in connection with the preparation, execution and delivery of this
Agreement, the Notes and the other documents to be delivered hereunder and the
fulfillment or attempted fulfillment of conditions precedent hereunder, (ii) all
reasonable costs and expenses incurred by the Administrative Agent and its
Affiliates in initially syndicating all or any portion of the Commitments
hereunder, including, without limitation, the related reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent or its
Affiliates, travel expenses, duplication and printing costs and courier and
postage fees, and excluding any syndication fees paid to other parties joining
the syndicate and (iii) all out-of-pocket costs and expenses, if any, incurred
by the Administrative Agent, the CAF Advance Agent and the Lenders in connection
with the enforcement (whether through negotiations, legal proceedings in
bankruptcy or insolvency proceedings, or otherwise) of this Agreement, the Notes
and the other documents to be delivered hereunder and thereunder, including the
reasonable fees and out-of-pocket expenses of counsel.
(b) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or CAF Advance is made by any Borrower to or for the
account of a Lender on any day other than the last day of the Interest Period
for such Advance, as a result of a prepayment pursuant to Section 2.15 or a
Conversion pursuant to Section 2.13(f) or Section 2.14 or due to acceleration of
the maturity of the Advances and the Notes pursuant to Section 7.1 or due to any
other reason attributable to such Borrower, or if any Borrower shall fail to
make a borrowing of Eurodollar Rate Advances or CAF Advances after such Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement, such Borrower shall, upon demand by such Lender (with
<PAGE> 74
70
a copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, Conversion or failure to borrow, including,
without limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance.
(c) Each Borrower agrees to indemnify and hold harmless the
Administrative Agent, the CAF Advance Agent and each Lender (to the extent not
reimbursed by any other Borrower) from and against any and all claims, damages,
liabilities and expenses (including, without limitation, fees and disbursements
of counsel) which may be incurred by or asserted against the Administrative
Agent, the CAF Advance Agent or such Lender in connection with or arising out of
any investigation, litigation, or proceeding (whether or not the Administrative
Agent, the CAF Advance Agent or such Lender is party thereto) related to any
acquisition or proposed acquisition by the Company, or by any Subsidiary of the
Company, of all or any portion of the stock or substantially all the assets of
any Person or any use or proposed use of the Advances by any Borrower (excluding
any claims, damages, liabilities or expenses incurred by reason of the gross
negligence or willful misconduct of the party to be indemnified or its employees
or agents, or by reason of any use or disclosure of information relating to any
such acquisition or use or proposed use of the proceeds by the party to be
indemnified or its employees or agents).
SECTION IX.5 Right of Set-Off. Upon the declaration of the
Advances and the Notes as due and payable pursuant to the provisions of Section
7.1, each Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the applicable Borrower against any and all of the obligations of
such Borrower now or hereafter existing under this Agreement and the Notes of
such Borrower held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement or such Notes and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Company
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 9.5 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
SECTION IX.6 Binding Effect. This Agreement shall become
effective in accordance with the provisions of Section 3.1, and thereafter shall
be binding upon and inure to the benefit of the Borrowers, the Administrative
Agent, the CAF
<PAGE> 75
71
Advance Agent and each Lender and their respective successors and assigns,
except that no Borrower shall have the right to assign its rights or obligations
hereunder or any interest herein without the prior written consent of all of the
Lenders.
SECTION IX.7 Assignments and Participations. (a) Each Lender
may assign to one or more banks or other financial institutions all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Notes held by it); provided, however, that (i) each such assignment shall be of
a constant, and not a varying, percentage of all rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $15,000,000 (or, if less, the entire Commitment of the assigning
Lender) and shall be an integral multiple of $1,000,000, (iii) each such
assignment shall be to an Eligible Assignee, and (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Notes subject to such assignment and a processing and recordation fee
of $2,500, and shall send to the Company an executed counterpart of such
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (A) 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 Lender
hereunder and (B) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance,
each Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of each Borrower or the performance or observance by each Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms
<PAGE> 76
72
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.1 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 the Administrative Agent, the CAF
Advance Agent, such assigning Lender or any other Lender 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 Administrative Agent and the CAF Advance
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent and the CAF
Advance Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 9.2 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 Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
each Borrower, the Administrative Agent, the CAF Advance Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by any Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice. Upon the acceptance of any Assignment
and Acceptance for recordation in the Register, Schedule I hereto shall be
deemed to be amended to reflect the revised Commitments of the Lenders parties
to such Assignment and Acceptance as well as administrative information with
respect to any new Lender as such information is recorded in the Register.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and as assignee representing that it is an Eligible
Assignee, together with any Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit G hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company; within five Business Days after
its receipt of such notice and its receipt of an executed counterpart of such
Assignment and Acceptance, the Borrowers, at their own expense, shall execute
and deliver to the Administrative Agent in exchange for the surrendered Notes,
if any, new Notes to the order of such Eligible Assignee, if requested, in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
<PAGE> 77
73
Acceptance and, if the assigning Lender has retained a Commitment hereunder, new
Notes, if requested, to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Notes, if any, shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Notes, if any, shall be dated (A) in the case of Notes made by
EPNGC, the Closing Date and (B) in the case of Notes made by any other Borrower,
the date such other Borrower executes and delivers its Joinder Agreement, and
shall otherwise be in substantially the form of Exhibit A.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, and the Advances owing to it and the Notes held by it); provided,
however, that (i) such Lender's obligations under this Agreement (including,
without limitation, its Commitment to the Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Notes for all purposes of this Agreement, (iv) the
Borrowers, the Administrative Agent, the CAF Advance Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, (v) such Lender shall
continue to be able to agree to any modification or amendment of this Agreement
or any waiver hereunder without the consent, approval or vote of any such
participant or group of participants, other than modifications, amendments and
waivers which (A) postpone any date fixed for any payment of, or reduce any
payment of, principal of or interest on such Lender's Advances or Notes or any
facility fees payable under this Agreement, or (B) increase the amount of such
Lender's Commitment in a manner which would have the effect of increasing the
amount of a participant's participation, or (C) reduce the interest rate payable
under this Agreement and such Lender's Notes, or (D) consent to the assignment
or the transfer by any Borrower of any of its rights and obligations under the
Agreement, and (vi) except as contemplated by the immediately preceding clause
(v), no participant shall be deemed to be or to have any of the rights or
obligations of a "Lender" hereunder.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.7, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree in
writing for the benefit of the Borrowers to preserve the confidentiality of any
confidential information relating to the Borrowers received by it from such
Lender in a manner consistent with Section 9.8.
<PAGE> 78
74
(g) Anything in this Agreement to the contrary
notwithstanding, any Lender may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it) and the Notes issued to it hereunder in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System (or any successor regulation) and the applicable
operating circular of such Federal Reserve Bank.
SECTION IX.8 Confidentiality. Each Lender, the Administrative
Agent and the CAF Advance Agent (each, a "Party") agrees that it will use its
best efforts not to disclose, without the prior consent of the Company (other
than to its, or its Affiliate's, employees, auditors, accountants, counsel or
other representatives, whether existing at the date of this Agreement or any
subsequent time), any information with respect to the Borrowers which is
furnished pursuant to this Agreement, provided that any Party may disclose any
such information (i) as has become generally available to the public, (ii) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such party or to the Board of Governors of the Federal Reserve
System or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (iii) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation or regulatory proceeding, (iv) in order to comply with any
law, order, regulation or ruling applicable to such party, or (v) to any
prospective assignee or participant in connection with any contemplated
assignment of any rights or obligations hereunder, or any sale of any
participation therein, by such Party pursuant to Section 9.7, if such
prospective assignee or participant, as the case may be, executes an agreement
with the Company containing provisions substantially similar to those contained
in this Section 9.8; provided, however, that the Company acknowledges that the
Administrative Agent has disclosed and may continue to disclose such information
as the Administrative Agent in its sole discretion determines is appropriate to
the Lenders from time to time.
SECTION IX.9 Consent to Jurisdiction. (a) Each Borrower hereby
irrevocably submits to the jurisdiction of any New York State or Federal court
sitting in New York City and any appellate court from any thereof in any action
or proceeding by the Administrative Agent, the CAF Advance Agent, any Lender or
the holder of any Note in respect of, but only in respect of, any claims or
causes of action arising out of or relating to this Agreement or the Notes (such
claims and causes of action, collectively, being "Permitted Claims"), and each
Borrower hereby irrevocably agrees that all Permitted Claims may be heard and
determined in such New York State court or in such Federal court. Each Borrower
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any aforementioned court in respect of Permitted Claims. Each Borrower hereby
irrevocably appoints CT Corporation System (the "Process Agent"), with an office
on the date hereof at 1633
<PAGE> 79
75
Broadway, New York, New York 10019, as its agent to receive on behalf of such
Borrower and its property service of copies of the summons and complaint and any
other process which may be served by the Administrative Agent, any Lender or the
holder of any Note in any such action or proceeding in any aforementioned court
in respect of Permitted Claims. Such service may be made by delivering a copy of
such process to the Company by courier and by certified mail (return receipt
requested), fees and postage prepaid, both (i) in care of the Process Agent at
the Process Agent's above address and (ii) at the Company's address specified
pursuant to Section 9.2, and each Borrower hereby irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. Each Borrower
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(b) Nothing in this Section 9.9 (i) shall affect the right of
any Lender, the holder of any Note or the Administrative Agent or the CAF
Advance Agent to serve legal process in any other manner permitted by law or
affect any right otherwise existing of any Lender, the holder of any Note or the
Administrative Agent or the CAF Advance Agent to bring any action or proceeding
against any Borrower or its property in the courts of other jurisdictions or
(ii) shall be deemed to be a general consent to jurisdiction in any particular
court or a general waiver of any defense or a consent to jurisdiction of the
courts expressly referred to in subsection (a) above in any action or proceeding
in respect of any claim or cause of action other than Permitted Claims.
SECTION IX.10 GOVERNING LAW. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION IX.11 Rate of Interest. It is the intention of the
parties hereto that each Lender shall each conform strictly to usury laws
applicable to it. Accordingly, if the transactions contemplated hereby would be
usurious as to any Lender under laws applicable to it, then, in that event,
notwithstanding anything to the contrary in this Agreement or in the Notes to
the order of such Lender, it is agreed as follows: (a) the aggregate of all
consideration which constitutes interest under law applicable to such Lender
that is contracted for, taken, reserved, charged or received by such Lender
hereunder, or under such Notes or otherwise, shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
credited by such Lender on the principal amount of the sums owed to such Lender
(or, if all amounts owing to such Lender shall have been paid in full, refunded
by such Lender to the applicable Borrower); or (b) in the event that a
prepayment of any Advances owed to any Lender is required, then such
consideration that constitutes interest under law applicable to such Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for shall be cancelled automatically by such
Lender as
<PAGE> 80
76
of the date of such prepayment and, if theretofore paid, shall be credited by
such Lender on the principal amount of such prepayment obligation (or, if the
principal amount of such prepayment obligation shall have been paid in full,
refunded by such Lender to the applicable Borrower). To the extent that Article
5069-1.04 of the Texas Revised Civil Statutes is relevant to any Lender for the
purpose of determining the maximum amount of interest allowed by applicable law,
such Lender hereby elects to determine the applicable rate ceiling under such
Article by the indicated (weekly) rate ceiling from time to time in effect,
subject to such Lender's right subsequently to change such method in accordance
with applicable law. In no event, however, shall Article 5069, Chapter 15, of
the Texas Revised Civil Statutes apply to this Agreement or the Notes or the
transactions contemplated hereby.
SECTION IX.12 Effect on Outstanding CAF Advances. The parties
hereto acknowledge and agree that upon the effectiveness of this Agreement all
"CAF Advances" under the Existing Facilities immediately before the
effectiveness of this Agreement will be converted to CAF Advances hereunder on
terms and conditions set forth in this Agreement.
SECTION IX.13 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery to the Administrative Agent of a counterpart executed by a
Lender shall constitute delivery of such counterpart to all of the Lenders. This
Agreement may be delivered by facsimile transmission of the relevant signature
pages hereof.
<PAGE> 81
77
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
EL PASO NATURAL GAS COMPANY
By:
Title:
TENNESSEE GAS PIPELINE COMPANY
By:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent, CAF Advance
Agent and a Lender
By:
Title:
CITIBANK, N.A., as Documentation
Agent and as a Lender
By:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Syndication Agent
and as a Lender
By:
Title:
<PAGE> 82
78
ABN-AMRO BANK, N.V.
By:
Title:
By:
Title:
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED
By:
Title:
BANK OF AMERICA NT & SA
By:
Title:
BANKBOSTON, N.A.
By:
Title:
BANK OF MONTREAL IRELAND PLC
By:
Title:
THE BANK OF NEW YORK
By:
Title:
<PAGE> 83
79
THE BANK OF NOVA SCOTIA
By:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:
Title:
BANQUE NATIONALE DE PARIS, HOUSTON
AGENCY
By:
Title:
BARCLAYS BANK PLC
By:
Title:
BAYERISCHE VEREINSBANK AG,
LOS ANGELES AGENCY
By:
Title:
By:
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By:
Title:
<PAGE> 84
80
CIBC INC.
By:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Title:
THE DAI-ICHI KANGYO BANK, LIMITED
By:
Title:
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By:
Title:
By:
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By:
Title:
By:
Title:
<PAGE> 85
81
THE FUJI BANK, LIMITED-HOUSTON
AGENCY
By:
Title:
THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY
By:
Title:
KREDIETBANK N.V., GRAND CAYMAN
BRANCH
By:
Title:
By:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By:
Title:
MELLON BANK, N.A.
By:
Title:
By:
Title:
<PAGE> 86
82
NATIONAL WESTMINSTER BANK PLC NEW
YORK BRANCH
By:
Title:
NATIONAL WESTMINSTER BANK PLC
NASSAU BRANCH
By:
Title:
NATIONSBANK OF TEXAS, N.A.
By:
Title:
NORINCHUKIN BANK, NEW YORK BRANCH
By:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
Title:
ROYAL BANK OF CANADA
By:
Title:
<PAGE> 87
83
THE SAKURA BANK, LIMITED - NEW YORK
BRANCH
By:
Title:
SOCIETE GENERALE, SOUTHWEST AGENCY
By:
Title:
THE SUMITOMO BANK, LIMITED
By:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
Title:
UNION BANK OF SWITZERLAND, HOUSTON
AGENCY
By:
Title:
By:
Title:
THE YASUDA TRUST & BANKING, CO.,
LTD.
By:
Title:
<PAGE> 88
SCHEDULE I
COMMITMENTS, ADDRESSES, ETC.
<TABLE>
<CAPTION>
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
<S> <C>
The Chase Manhattan Bank $42,500,000
Global Oil & Gas
270 Park Avenue, 32nd Floor
New York, New York 10017
Attention: Peter Ling
Telephone: 212-270-4676
Telecopier: 212-270-3897
ABN AMRO Bank, N.V. $27,500,000
135 South LaSalle, Suite 625
Chicago, Illinois 60603
Attention: Loan Administration
Telephone: 312-904-8865
Telecopier: 312-904-6893
Australia and New Zealand Banking $12,500,000
Group Limited
1177 Avenue of the Americas
New York, New York 10036
Attention: Kyle Loughlin
Telephone: 212-801-9853
Telecopier: 212-801-9131
Bank of America NT & SA $27,500,000
231 South LaSalle
Chicago, Illinois 60697
Attention: Debbie Aguilar
Telephone: 312-828-3793
Telecopier: 312-974-9626
with a copy to
Bank of America NT & SA
333 Clay Street
Suite 4550
Houston, Texas 77000
Attention: Paula Veazey
Telephone: 713-651-4877
Telecopier: 713-651-4807
</TABLE>
<PAGE> 89
2
<TABLE>
<CAPTION>
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
<S> <C>
BankBoston, N.A. $12,500,000
100 Federal Street
Mailstop 01-08-02
Boston, Massachusetts 02110
Attention: Debora Williams
Telephone: 617-434-9623
Telecopier: 617-434-9820
Bank of Montreal Ireland Plc $12,500,000
4th Floor, Segrave House
19/20 Earlsfort Terrace
Dublin 2, Ireland
Attention: Eric Lindstrom
Telephone: 353-1-662-9300
Telecopier: 353-1-662-9301
with a copy to:
Bank of Montreal
Suite 4400
700 Louisiana Street
Houston, Texas 77002
Attention: Natasha Gilossop
Telephone: (713) 546-9752
Telecopier: (713) 223-4007
The Bank of New York $20,000,000
One Wall Street, 19th Floor
New York, New York 10286
Attention: Terri Foran
Telephone: 212-635-7921
Telecopier: 212-635-7923
The Bank of Nova Scotia $20,000,000
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: F.C.H. Ashby
Telephone: 404-877-1500
Telecopier: 404-888-8998
with a copy to:
The Bank of Nova Scotia
Houston Representative Office
1100 Louisiana, Suite 3000
Houston, Texas 77002
Attention: Jamie Conn
Telephone: 713-752-0900
Telecopier: 713-752-2425
</TABLE>
<PAGE> 90
3
<TABLE>
<CAPTION>
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
<S> <C>
The Bank of Tokyo-Mitsubishi, Ltd. $27,500,000
1100 Louisiana, Suite 2800
Houston, Texas 77002-5216
Attention: J.M. McIntyre
Telephone: 713-655-3845
Telecopier: 713-655-3855
Banque Nationale de Paris,
Houston Agency $12,500,000
333 Clay Street, Suite 3400
Houston, Texas 77002
Attention: Mike Shryock
Telephone: 713-951-1224
Telecopier: 713-659-1414
Barclays Bank PLC $20,000,000
222 Broadway
New York, New York 10038
Attention: Sal Esposito
Telephone: 212-412-1516
Telecopier: 212-412-7585
Bayerische Vereinsbank AG,
Los Angeles Agency $12,500,000
800 Wilshire Blvd., Suite 1600
Los Angeles, California 90017
Attention: John Carlson/Jarunee
Hanpachern
Telephone: 213-629-1821
Telecopier: 213-622-6341
Caisse Nationale de Credit Agricole $12,500,000
55 East Monroe Street, Suite 4700
Chicago, Illinois 60303
Attention: Karen Bergstrom
Telephone: 312-917-7420
Telecopier: 312-372-2628
CIBC Inc. $27,500,000
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Mark Wolf
Telephone: 713-655-5226
Telecopier: 713-650-3727
Citibank, N.A. $35,000,000
One Court Square
Long Island City, New York 11120
Attention: Leena Caligiure
Telephone: 718-248-5762
Telecopier: 718-248-4844/4845
</TABLE>
<PAGE> 91
4
<TABLE>
<CAPTION>
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
<S> <C>
Credit Lyonnais New York Branch $27,500,000
1000 Louisiana Street, Suite 5360
Houston, Texas 77002
Attention: Bernadette Archie
Telephone: 713-753-8723
Telecopier: 713-751-0307
The Dai-Ichi Kangyo Bank, Ltd. $12,500,000
One World Trade Center, Suite 4911
New York, New York 10048
Attention: Christine Dell'Aira
Telephone: 212-432-8841
Telecopier: 212-432-0194
Deutsche Bank AG New York and/
or Cayman Islands Branches $27,500,000
31 West 52nd Street
New York, New York 10019
Attention: Stephan A. Wiedemann
Telephone: 212-469-8663
Telecopier: 212-469-8212
Dresdner Bank AG, New York and Grand $12,500,000
Cayman Branches
75 Wall Street
New York, New York 10005
Attention: Mike Terry
Telephone: 212-429-2224
Telecopier: 212-429-2129
The Fuji Bank, Limited-Houston Agency $20,000,000
One Houston Center, Suite 4100
1221 McKinney Street
Houston, Texas 77010
Attention: Charles van Ravenswaay
Telephone: 713-650-7829
Telecopier: 713-759-0048
The Industrial Bank of Japan $12,500,000
Trust Company
Allen Three Center
333 Clay, Suite 4850
Houston, Texas 77002
Attention: W. Lynn Williford
Telephone: 713-651-9444
Telecopier: 713-651-9209
</TABLE>
<PAGE> 92
5
<TABLE>
<CAPTION>
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
<S> <C>
Kredietbank N.V., New York Branch $27,500,000
125 West 55th Street
New York, New York 10019
Attention: Lynda Resuma/
Loan Administration
Telephone: 212-541-0657
Telecopier: 212-956-5581
The Long-Term Credit Bank of Japan, Ltd. $12,500,000
165 Broadway
New York, New York 10006
Attention: Bob Pacifici
Telephone: 212-335-4801
Telecopier: 212-608-3452
with a copy to:
2200 Ross Avenue, Suite 4700 West
Dallas, Texas 75201
Attention: Doug Whiddon
Telephone: 214-969-5352
Telecopier: 214-969-5357
Mellon Bank, N.A. $20,000,000
1100 Louisiana, Suite 3600
Houston, Texas 77002
Attention: Janet Jenkins
Telephone: 713-759-3040
Telecopier: 713-650-3409
Morgan Guaranty Trust Company of
New York $35,000,000
60 Wall Street
22nd Floor
New York, New York 10260
Attention: John Kowalczuk
Telephone: 212-648-7612
Telecopier: 212-648-5014
National Westminster Bank Plc $12,500,000
New York Branch
175 Water Street, 19th Floor
New York, New York 10038
Attention: Commercial Lending Unit
Telephone: 212-602-4180
Telecopier: 212-602-4118
</TABLE>
<PAGE> 93
6
<TABLE>
<CAPTION>
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
<S> <C>
NationsBank of Texas, N.A. $27,500,000
700 Louisiana, 8th Floor
Houston, Texas 77002
Attention: Patrick M. Delaney
Telephone: 713-247-7373
Telecopier: 713-247-6568
Norinchukin Bank, New York Branch $20,000,000
245 Park Avenue, 29th Floor
New York, New York 10167
Attention: Tsuneo Tsukagaki
Telephone: 212-697-1717
Telecopier: 212-697-5754
PNC Bank, National Association $20,000,000
One PNC Bank Plaza
249 Fifth Avenue, 3rd Floor
Pittsburgh, Pennsylvania 15222-2707
Attention: Thomas K. Grundman
Telephone: 412-762-3025
Telecopier: 412-762-2571
Royal Bank of Canada $27,500,000
Financial Square
23rd Floor
New York, New York 10005-2531
Attention: Assistant Manager,
Loan Processing
Telephone: 212-428-6321
Telecopier: 212-428-2372
with copies to:
Royal Bank of Canada
12450 Greenspoint Drive
Suite 1450
Houston, Texas 77060
Attention: Doug Frost
Telephone: 281-874-5664
Telecopier: 281-874-0081
</TABLE>
<PAGE> 94
7
<TABLE>
<CAPTION>
Name and Address of Lender Amount of Commitment
- -------------------------- --------------------
<S> <C>
The Sakura Bank, Limited -
New York Branch $12,500,000
277 Park Avenue, 45th Floor
New York, New York 10172
Attention: David Speir
Telephone: 212-756-6778
Telecopier: 212-888-7651
Societe Generale,
Southwest Agency $20,000,000
Suite 4800
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Lia Grerra
Telephone: 214-979-2769
Telecopier: 214-754-0171
The Sumitomo Bank, Limited $20,000,000
277 Park Avenue
New York,New York 10172
Attention: Jessica Cueto
Telephone: 212-224-4132
Telecopier: 212-224-4537
with a copy to:
The Sumitomo Bank, Limited
700 Louisiana Street
Suite 1750
Houston, Texas 77002
Attention: Energy Group
Toronto Dominion (Texas), Inc. $27,500,000
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Frederic Hawley
Telephone: 713-653-8281
Telecopier: 713-951-9921
Union Bank of Switzerland,
Houston Agency $20,000,000
1100 Louisiana, Suite 4500
Houston, Texas 77002
Attention: Evans Swann
Telephone: 713-655-6500
Telecopier: 713-655-6555
The Yasuda Trust & Banking, Co., Ltd. $12,500,000
666 Fifth Avenue, Suite 801
New York, New York 10103
Attention: Andrew Orsen
Telephone: 212-373-5879
Telecopier: 212-373-5796
</TABLE>
<PAGE> 95
EXHIBIT A
FORM OF
NOTE
$______________ New York, New York
October 29, 1997
FOR VALUE RECEIVED, the undersigned, ___________________, a ________
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of (the "Lender") at the office of The Chase Manhattan Bank,
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in same day funds, on the Termination Date (or if
the Lender is an Objecting Lender, the Commitment Expiration Date applicable to
the Lender) the principal amount of (a) DOLLARS ($ ), or, if less,
(b) the aggregate unpaid principal amount of all Revolving Credit Advances made
by the Lender to the Borrower pursuant to subsection 2.1 of the Credit
Agreement, as hereinafter defined. The Borrower further agrees to pay interest
in like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in the Credit
Agreement.
The holder of this Note is authorized to, and prior to any transfer
hereof shall, endorse on the schedules attached hereto and made a part hereof or
on a continuation thereof which shall be attached hereto and made a part hereof
the date, Type and amount of each Revolving Credit Advance made pursuant to
subsection 2.1 of the Credit Agreement and the date and amount of each payment
or prepayment of principal thereof, each continuation thereof, each conversion
of all or a portion thereof to another Type and, in the case of Eurodollar Rate
Advances, the length of each Interest Period with respect thereto. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement shall not affect
the obligations of the Borrower in respect of such Revolving Credit Advance.
This Note (a) is one of the Notes referred to in the $750,000,000
5-Year Revolving Credit and Competitive Advance Facility Agreement, dated as of
October 29, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among El Paso Natural Gas Company, Tennessee Gas
Pipeline Company, the Lender, the other banks and financial institutions from
time to time parties thereto, The Chase Manhattan Bank, as Administrative Agent
and CAF Advance Agent, Citibank, N.A., as Documentation Agent, and Morgan
Guaranty Trust Company of New York, as Syndication Agent (b) is subject to the
<PAGE> 96
A-2
provisions of the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind except those
expressly required under the Credit Agreement.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[BORROWER]
By____________________________________
Title:
<PAGE> 1
EXHIBIT 11
EL PASO NATURAL GAS COMPANY
EARNINGS PER COMMON SHARE
Form 10-Q
(In Thousands, except earnings per share)
<TABLE>
<CAPTION>
Third Quarter Nine Months
----------------- -------------------
1997 1996 1997 1996
------- ------- -------- -------
<S> <C> <C> <C> <C>
Income available for common stock dividends $44,171 $24,807 $134,666 $13,984
Primary average common shares outstanding 58,907 36,319 58,285 35,667
Primary earnings per share $0.7498 $0.6830 $2.3105 $0.3921
Fully diluted average common shares
outstanding 59,068 37,306 58,473 36,603
Fully diluted earnings per common share $0.7478 $0.6650 $2.3030 $0.3820
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
STATEMENTS OF INCOME AND CONSOLIDATED BALANCE SHEETS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 99
<SECURITIES> 0
<RECEIVABLES> 956
<ALLOWANCES> 0<F1>
<INVENTORY> 74
<CURRENT-ASSETS> 1,577
<PP&E> 6,700
<DEPRECIATION> 0<F1>
<TOTAL-ASSETS> 9,101
<CURRENT-LIABILITIES> 2,118
<BONDS> 2,137
0
0
<COMMON> 182
<OTHER-SE> 1,711
<TOTAL-LIABILITY-AND-EQUITY> 9,101
<SALES> 0
<TOTAL-REVENUES> 4,061
<CGS> 0
<TOTAL-COSTS> 3,677
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 178
<INCOME-PRETAX> 250
<INCOME-TAX> 96
<INCOME-CONTINUING> 135
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 135
<EPS-PRIMARY> 2.37
<EPS-DILUTED> 0
<FN>
<F1>Not separately identified in the Consolidated Financial Statements or
accompanying notes thereto.
</FN>
</TABLE>
