Exhibit 10.23
April 20, 2004
ONEOK, Inc.
100 West Fifth Street
Tulsa, Oklahoma 74102-0871
Ladies and Gentlemen:
We are pleased to inform you that
KBC Bank NV (the “Bank”) will make available to ONEOK,
Inc., an Oklahoma corporation (the “Borrower”) an
uncommitted line of credit facility for loans and letters of credit
for up to a maximum principal amount of Ten Million United States
Dollars ($10,000,000), which may at any time and from time to time
be requested by Borrower and extended by Bank in its sole
discretion.
The terms and conditions of this
letter agreement are as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms .
As used in this Agreement, the following terms shall be defined as
follows:
“Agreement” means this
letter agreement, together with all amendments, modifications and
supplements thereof.
“Base Rate” means a rate
of interest per annum equal to the higher of: (a) the rate of
interest publicly announced by the Bank from time to time as the
prime rate of the Bank effective in New York, New York, adjusted as
of the opening of the Bank’s business on the date of an
announcement in New York, New York of any change in such prime
rate, and (b) 1/2 of one percent per annum above the Federal Funds
Overnight Rate. The prime rate is determined from time to time by
the Bank as a means of pricing some loans to its borrowers and is
neither tied to any external rate of interest or index, nor
necessarily reflects the lowest rate interest actually charged by
the Bank to any particular class or category of customers. As used
herein, “Federal Funds Overnight Rate” means a rate per
day equal to the weighted average of rates on overnight federal
funds transactions with members of the Federal Reserve System only,
arranged by federal funds brokers, as published for such day by the
Federal Reserve Bank of New York.
“Business Day” means any
day other than a Saturday, Sunday or legal holiday, or a day on
which banking institutions located in the City of New York, New
York are required or authorized by law to remain closed.
“Closing Date” means the
date of execution and delivery of this Agreement.
“Credit Documents” means
this Agreement, the note, any Letter of Credit and any other
instrument or document executed in connection with this Agreement
or the issuance or maintenance of the Letters of Credit hereunder,
together with all amendments, modifications and supplements
thereof.
“Default” means any
event that, with the giving of notice or the passage of time or
both, as applicable, would become an Event of Default.
“Drawing” means a demand
for payment in accordance with the terms of a Letter of
Credit.
“Letter of Credit” means
each of the letters of credit issued by the Bank for the account of
the Borrower pursuant to this Agreement, whether as originally
issued or as the same may from time to time be supplemented,
modified, amended, renewed or extended.
“Loan” means each of the
loans made by the Bank to the Borrower pursuant to this
Agreement.
“Maximum Credit Amount”
means $10,000,000.
“Obligations” means any
and all of the Borrower’s present and future liabilities,
obligations, covenants, duties and debts owing to the Bank arising
under this Agreement and any other Credit Document.
Section 1.2 Rules of
Construction; Time of Day . In this Agreement, unless otherwise
indicated, (i) defined terms may be used in the singular or in the
plural and the use of any gender includes all genders, (ii) the
words “hereof”, “herein”,
“hereto”, “hereby” and
“hereunder” refer to this entire Agreement, and (iii)
all references to particular Sections are references to the
Sections of this Agreement. References to any time of day in this
Agreement shall refer to eastern standard time or eastern daylight
savings time, as in effect in New York, New York on such
day.
ARTICLE II
LOANS
Section 2.1 Credit Facility .
Subject in all respects to the terms and conditions of this
Agreement, the Bank, in its sole discretion, may make available to
the Borrower, as and when requested by the Borrower from time to
time, a maximum uncommitted credit facility of Ten Million United
States Dollars ($10,000,000) (the “Maximum Credit
Amount”). This Agreement shall remain in full force and
effect unless and until canceled by the Bank at any time; provided,
however, that any Obligations of the Borrower pursuant to this
Agreement which shall be outstanding as of the effective date of
such termination shall not be affected thereby.
Section 2.2 Borrowings .
Subject in all respects to the terms and conditions of this
Agreement, the Bank may, in its sole discretion and upon the
request of the Borrower, make
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Loans to the Borrower which the Borrower may
request from time to time. The aggregate principal amount of all
Loans on the date of any borrowing shall not at any time exceed:
(a) Maximum Credit Amount; minus (b) (i) the aggregate undrawn
amount of the outstanding Letters of Credit at such time and (ii)
the aggregate unreimbursed amount at such time of all payments made
by the Bank and costs and expenses incurred by the Bank in
connection with the Letters of Credit.
Section 2.3 Procedures for
Borrowing . (a) The Borrower shall request a Loan by providing
a completed loan request form duly signed by authorized officers of
the Borrower (a “Loan Request”), to be received by the
Bank not later than 11:00 a.m. (New York time) on the Business Day
for which the Loan has been requested to be made. Each Loan Request
shall include: (i) the date of the proposed Loan, which shall be a
Business Day; (ii) the amount of the proposed Loan; (iii) the
maturity date of the proposed Loan, (iv) the proposed interest rate
base; and (v) wire transfer instructions with respect to the
proceeds of the Loan.
(b) The Bank will notify the
Borrower by telephone whether it accepts or rejects the Loan
Request submitted by the Borrower.
Section 2.4 Accrual and Payment
of Interest. The Borrower shall pay interest on each Loan made
to it at the rate of interest per annum agreed upon by the Bank and
the Borrower for such Loan. Accrued interest on the Loans shall be
due and payable at maturity. All interest shall be computed on a
daily basis for the actual number of days elapsed over a year of
360 days. In no event shall the rate of interest and other charges
exceed the maximum rate permitted by laws governing this Agreement.
If the interest and other charges collected exceed the maximum
amount permitted by such laws, such excess shall be deemed received
on the account of, and shall automatically be applied to, reduce
the principal balance of the Loans.
Section 2.5 Note . The
Obligations of the Borrower to repay any and all Loans shall be
evidenced by a master promissory note (the “Note”) of
the Borrower payable to the order of the Bank, substantially in the
form attached hereto as Exhibit A . The Bank is authorized
to record the date, amount, interest rate, and maturity date of
each Loan made by the Bank, and the date and amount of each payment
thereof made by the Borrower, on Schedule I attached thereto and
made a part thereof; the Bank may add additional pages to such
schedule as necessary. Such recordation shall constitute
prima facie evidence of the information so recorded;
provided, however, that Bank’s failure to make any such
recordation shall not affect the Bank’s rights with respect
to any Loan or the Borrower’s obligation to pay the principal
of and accrued interest on all Loans made by the Bank to the
Borrower in accordance with this Agreement and the Borrower’s
Note.
ARTICLE III
LETTER OF CREDIT
Section 3.1 Letters of Credit
. Subject to the terms and conditions of this Agreement, the Bank
may, in its sole discretion and upon the request of a Borrower,
open Letters of Credit for the account of the Borrower. The
Borrower shall request the opening of any and all Letters
of
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Credit in writing by providing a completed
letter of credit request form (“Letter of Credit
Request”), duly executed by an authorized officer of the
Borrower, specifying the amount of the Letter of Credit requested,
the beneficiary, the dates of effectiveness and termination of the
Letter of Credit, the text of any statement that must accompany a
draft presented by the beneficiary under the Letter of Credit, and
a summary description of the transaction in connection with which
the Letter of Credit is requested. Each of the Letters of the
Credit will be subject to all the terms and conditions of this
Agreement. (However, if any term or condition of such Letter of
Credit Request conflicts or is inconsistent with a term or
condition of this Agreement, the term or condition of this
Agreement will control.) Without intending to limit the
Bank’s sole discretion to accept or reject a request for a
Letter of Credit, the Borrower agrees that the Bank will not open
any Letter of Credit if the sum of: (a) the maximum face amount of
the requested Letter of Credit; (b) the aggregate undrawn face
amount of all then outstanding Letters of Credit opened for the
account of the Borrower; (c) the aggregate unreimbursed amount at
that time of all payments made by the Bank and costs and expenses
incurred by the Bank in connection with the Letters of Credit
opened for the account of the Borrower; and (d) the aggregate
outstanding principal balance of the Loans to all the Borrowers at
that time; would exceed the Maximum Credit Amount. Each Letter of
Credit shall be for a term not to exceed one year.
Section 3.2 Obligations
Absolute . The obligations of the Borrower under this Agreement
shall be absolute, unconditional and irrevocable, shall be
performed strictly in accordance with the terms of this Agreement,
under all circumstances whatsoever, including without limitation
the following circumstances: (i) any lack of validity or
enforceability of the Letters of Credit, any of the Credit
Documents or any other agreement or document relating thereto; (ii)
any amendment or waiver of or any consent to or departure from the
Letters of Credit, any of the Credit Documents or any document
relating thereto; (iii) the existence of any claim, set-off,
defense or other right which the Borrower or any other person may
have at any time against any beneficiary, the Bank, or any other
person or entity, whether in connection with the Letters of Credit,
this Agreement, any other Credit Document, the transactions
described herein or therein or any unrelated transaction; or (iv)
any of the circumstances contemplated in clauses (1) through (7),
inclusive, of Section 3.4.
Section 3.3 Indemnification .
In addition to any and all rights of reimbursement,
indemnification, subrogation or an other rights pursuant hereto or
under law or equity, to the extent permitted by applicable law, the
Borrower hereby indemnifies and holds harmless the Bank, its
officers, directors, employees and agents from and against any and
all claims, damages, losses, liabilities, costs or expenses
(including reasonable attorneys’ fees for counsel of the
Bank’s) whatsoever which the Bank may incur (or which may be
claimed against the Bank by any person or entity whatsoever) by
reason or in connection with (a) the issuance or a transfer of, or
payment or failure to pay under, the Letters of Credit, (b) any
breach by the Borrower of any representation, warranty, covenant,
term or condition in, or the occurrence of any default by the
Borrower under this Agreement or the other Credit Documents,
including all reasonable fees or expenses resulting from the
settlement or defense of any claims or liabilities arising as a
result of any such breach or default, or (c) involvement of the
Bank in any legal suit, investigation, proceeding, inquiry or
action as a consequence, direct or indirect, of the Bank’s
issuance of the Letters of Credit, its entering into this Agreement
or action taken thereunder or under any of the Credit Documents or
any other event or transaction in connection with or contemplated
by any of
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the foregoing; provided the Borrower shall not
be required to indemnify the Bank for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the
extent, caused by (i) the willful misconduct or gross negligence of
the Bank in determining whether documents presented under a Letter
of Credit complied with the terms of such Letter of Credit or (ii)
the Bank’s willful failure to pay under a Letter of Credit
after the presentation to it by the beneficiary of drawing
documents strictly complying with the terms and conditions of such
Letter of Credit, unless the Bank in good faith believes that it is
prohibited by law or other legal authority from making such
payment. Nothing in this Section is intended to limit the
Borrower’s reimbursement and interest payment obligations
contained in Sections 4.3 and 4.4. The obligations of the Borrower
under this Section shall survive the termination of this
Agreement.
Section 3.4 Liability of Bank
. As between the Borrower and the Bank, the Borrower assumes all
risks of the acts and omissions of the beneficiary with respect to
the beneficiary’s use of the Letters of Credit. Neither the
Bank nor any of its officers or directors shall be liable or
responsible for: (1) the use which may be made by the beneficiary
of the Letters of Credit or for any acts or omissions of the
beneficiary in connection therewith; (2) the form, validity,
sufficiency, accuracy or genuineness of any documents (including
without limitation any documents presented under the Letters of
Credit), or of any statement therein or endorsement thereon, even
if any such documents, statements, or endorsements should in fact
prove to be in any or all respects invalid, insufficient,
fraudulent, forged, inaccurate or untrue; (3) the payment by the
Bank against presentation of documents which do not comply with the
terms of the respective Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the
respective Letter of Credit, or any other failure by the
beneficiary to comply fully with conditions required in order to
effect a drawing under a Letter of Credit; (4) the validity or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign the Letters of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason;
(5) errors, omissions, interruptions, losses or delays in
transmission or delivery of any messages by mail, cable, telegraph,
telex, telephone or otherwise; (6) any loss or delay in the
transmission or otherwise of any document or draft required in
order to make a drawing under a Letter of Credit; or (7) any other
circumstances whatsoever in making or failing to make payment under
a Letter of Credit; except only that the Borrower shall have a
claim against the Bank, and the Bank shall be liable to the
Borrower, to the extent, but only to the extent, of any direct, as
opposed to special, exemplary, consequential or punitive, damages
suffered by the Borrower which the Borrower proves were caused by
(i) the willful misconduct or gross negligence of the Bank in
determining whether documents presented under a Letter of Credit or
(ii) the Bank’s willful failure to pay under a Letter of
Credit after the presentation to it by the beneficiary of drawing
documents strictly complying with the terms and conditions of such
Letter of Credit, unless the Bank in good faith believes that it is
prohibited by law or other legal authority from making such
payment. In furtherance and not in limitation of the foregoing, the
Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any
notice or information to the contrary; provided that if the Bank
shall receive timely written notification from the beneficiary that
documents conforming to the terms of a Letter of Credit presented
to the Bank are not to be honored, the Bank agrees that it will not
honor such documents.
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ARTICLE IV
PAYMENTS
Section 4.1 Payment of Loans
. The Borrower shall repay the principal amount of each Loan,
together with accrued interest, on the maturity date agreed upon by
the Bank and the Borrower (the “Maturity Date”) and in
accordance with the provisions of the Loan Request and the
Note.
Section 4.2 Prepayment of
Loans . The Borrower, at its option, shall be permitted to
prepay the principal balance of any outstanding Loan made to it. In
addition, if the aggregate outstanding principal amount of the
Loans, exceed the Maximum Credit Amount at any time, the Borrower
shall prepay an amount of the Loans equal to such excess. Each
prepayment, voluntary or required, must be accompanied by the
payment of accrued interest on the Loans to the date of prepayment.
In the event of prepayment, however, the Borrower shall compensate
Bank, on demand, for all losses, expenses and liabilities actually
incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by Bank to fund or maintain Bank’s
Loans to the Borrower which Bank sustains as a result of (i) the
making of any prepayment of any Loan for any reason on a date which
is not the Maturity Date of such Loan, and (ii) default by such
Borrower in making any prepayment after such Borrower has given a
notice thereof.
Section 4.3 Reimbursement
Payment . The Borrower agrees to pay to the Bank with respect
to each Letter of Credit, not later than 3:00 p.m. on each date
that any amount is drawn under such Letter of Credit, an amount
equal to the amount of such drawing.
Section 4.4 Default Rate . If
any amount payable by the Borrower hereunder is not paid when due,
then the Borrower shall pay to the Bank on demand interest on such
amount from the due date until fully paid at a rate per annum equal
to the Base Rate plus three percent (3%), calculated on a daily
basis for the actual days elapsed over a 360 day year.
Section 4.5 Transaction and
Transfer Charges . The Borrower shall pay to the Bank all
reasonable transaction charges that the Bank may make for drawings
under the Letters of Credit (as of the date hereof, the transaction
charge for each such drawing shall be $200). Such transaction
charges shall be payable upon submission to the Borrower by the
Bank of the Bank’s bill therefor. In addition, the Borrower
shall pay to the Bank on demand any and all reasonable charges and
expenses which the Bank may incur relative to the Letters of
Credit. Fees to be mutually agreed upon between the Borrower and
the Bank.
Section 4.6 Increased Costs .
If after the date of this Agreement any enactment, promulgation or
adoption of or change in any applicable foreign or domestic law,
regulation or rule or in the interpretation or administration
thereof by any court, administrative or governmental authority,
central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Bank (or any
controlling affiliate) with any guideline, request or directive
issued after the date hereof (whether or not having the force of
law) of any such authority, central bank or comparable agency,
shall either (i) impose, modify or deem applicable any reserve,
special
