Exhibit 10.6
LOAN AGREEMENT
between
Duke Energy Field Services,
LLC
and
Duke Capital LLC
$766,700,000 Revolving Line of
Credit
February 25,
2005
LOAN AGREEMENT
THIS LOAN AGREEMENT
(this “ Agreement
”), dated as of February 25, 2005, is made and entered
into by and between
Duke Energy Field Services,
LLC, (the “
Lender ”), a Delaware company; and
Duke Capital LLC,
(the “ Borrower
”), a Delaware company.
Recitals
A. The Borrower has requested that
the Lender extend a $766,700,000 (USD seven hundred
sixty-six million, seven hundred thousand) revolving line of credit
to the Borrower, to be advanced by the Lender pursuant to the terms
and conditions hereof.
B. The Lender is willing to extend
the line of credit described above upon the terms and subject to
the conditions set forth in this Loan Agreement.
C. The Lender has also extended a
$333,300,000 (USD three hundred thirty three million, three hundred
thousand) revolving line of credit to Conoco Phillips Company dated
February 25, 2005 (the “ConocoPhillips Loan
Agreement”).
Agreement
NOW, THEREFORE
, in consideration of the premises,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to
induce the Lender to make the loans described herein, the parties
hereto hereby agree as follows:
ARTICLE I
REVOLVING LINE OF
CREDIT
Section 1.1 Revolving Line
of Credit. The Lender hereby establishes, on the terms and
conditions of this Agreement and in reliance upon the
representations and warranties made hereunder, a revolving line of
credit (the “ Revolving Line of Credit ”) in
favor of the Borrower in the aggregate principal amount of up to
seven hundred sixty-six million, seven hundred thousand United
States Dollars (USD 766,700,000). The Lender agrees to make and
remake one or more loans (the “ Revolving Loans
”) to the Borrower under the Revolving Line of Credit, from
time to time on any business day during the period from the date
hereof through the termination of this Agreement. The Borrower may
borrow, repay and reborrow Revolving Loans under the Revolving Line
of Credit, provided that the aggregate principal amount of
Revolving Loans outstanding at any one time under the Revolving
Line of Credit may not exceed the limit provided above. The
Revolving Loans shall be evidenced by a note (the “
Revolving Credit Note ”) in the form of Exhibit
A attached hereto.
Section 1.2 Term. The
initial term of the Revolving Line of Credit shall be for 364 days
from the date hereof, unless this Agreement is terminated in
accordance with Section 1.4 hereof, provided that at the end
of the first 364-day period, and for each 364-day period
thereafter, this Agreement will renew automatically for an
additional 364-day period unless either the Borrower or the Lender
terminates this Agreement by giving written notice of such
termination no later than 30 days prior to the termination of the
then current 364-day period.
Section 1.3
Interest.
(a) The Revolving Loans shall bear,
and the Borrower shall pay, interest at the 90 day LIBOR rate as
quoted by the British Bankers Association. The rate will be set on
the first day of the initial borrowing and shall reset each
calendar quarter using the LIBOR rate quoted on Bloomberg (page
BBAM) from two business days prior to the interest period. (A
business day will be defined as any day US banks are open).
Interest will be calculated based on the actual number of days in
the period based on a 360 day year. Advances occurring mid-quarter
will be added to the existing principal and charged the 90 day rate
set at the beginning of the quarter for the number of days
outstanding.
(b) Interest on the outstanding
principal balance of the Revolving Loans shall be due and payable
(i) quarterly on the fifth business day of each successive
calendar quarter, in arrears, until the entire principal amount of
the Revolving Loans plus accrued and outstanding interest thereon
is paid in full and (ii) on each date when all or any amount
of the unpaid principal balance of the Revolving Loans shall be due
(whether at maturity, by acceleration or otherwise), but only to
the extent accrued.
(c) The Borrower may choose to delay
interest payment with consent of the Lender. Unpaid interest will
accrue interest from the first day of the succeeding quarter until
it is paid.
Section 1.4 Repayment.
The Borrower shall repay the Revolving Loans:
(a) In full or in part, as the
Lender elects, within thirty days of the date on which the Lender
makes demand for payment of the Revolving Loans. The Lender’s
demand for payment may be made at any time and in the
Lender’s sole discretion. Provided, however, if the Lender
makes demand for payment under this Agreement, the Lender must also
demand payment pro-rata under the ConocoPhillips Loan
Agreement.
(b) In full, upon the occurrence of
an Event of Default (as hereinafter defined) and notice of the same
by the Lender to the Borrower.
(c) In full, upon termination of
this Agreement.
(d) In part or in full, at any other
time as the Borrower may choose to repay all or a portion of the
Revolving Credit Note.
Prepayments will be applied first to
unpaid interest and then to principal. The Revolving Line of Credit
shall terminate automatically if the Lender provides notice for the
repayment in full of the Revolving Loans pursuant to paragraphs
(a) or (b) of this Section 1.4.
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ARTICLE II
ADDITIONAL PROVISIONS APPLICABLE
TO THE REVOLVING LINE OF CREDIT
Section 2.1 Disbursement of
Loan Proceeds. The Borrower shall provide a written request to
the Lender for a Revolving Loan on or before the date such
Revolving Loan is to be made to the Borrower. Such notice shall
specify the date on which the Revolving Loan shall be made, the
amount of the Revolving Loan and the Borrower’s account into
which the proceeds from the Revolving Loan shall be deposited. All
Revolving Loans made by the Lender to the Borrower pursuant to this
Agreement and all repayments of the principal thereof shall be
recorded at the Lender’s accounting records, but failure to
make any such records shall not affect Borrower’s obligations
in respect to such Revolving Loans. Lender’s accounting
records shall be conclusive and shall be binding absent manifest
error.
Section 2.2 Default
Rate. Notwithstanding any other provision of this Agreement to
the contrary, upon and during the continuance of any Event of
Default under this Agreement, at the option of the Lender without
any required notice to the Borrower, the outstanding principal
amount of the Revolving Loans, and to the full extent permitted by
law, all interest accrued on the Revolving Loans, shall bear
interest at the interest rate that is in effect at such time plus
2% per annum. Such default interest shall be payable on
demand.
Section 2.3 Payment. All
payments (including prepayments) by the Borrower on account of
principal and interest on the Revolving Loans shall be made in
immediately available funds to the Lender’s account
910-2771343 at JP Morgan, New York, ABA: 021000021 or to another
account as instructed by the Lender.
Section 2.4 Taxes. All
payments of principal, interest and fees and all other amounts to
be made by the Borrower pursuant to this Agreement with respect to
the Revolving Loans or fees relating thereto shall be paid without
deduction for, and free from, any tax, imposts, levies, duties,
deductions, or withholdings of any nature now or at any time
hereafter imposed on or measured by any governmental authority or
by any taxing authority thereof, or therein, excluding
(i) taxes imposed on or measured by the Lender’s net
income and (ii) franchise taxes imposed on the Lender by the
jurisdiction under the laws of which the Lender is organized or any
political subdivision thereof.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES
The Borrower represents and warrants
to the Lender as follows:
Section 3.1 Corporate
Organization and Power. The Borrower (a) is a company duly
organized, validly existing and in good standing under the laws of
Delaware; (b) is duly qualified or licensed to do business and
is in good standing in every other jurisdiction where the nature of
its business or its properties makes such qualification or
licensing necessary (except where the failure to be so qualified or
licensed would not have a material adverse effect); (c) has
the corporate power and authority to own or lease its properties
and to carry on its business as it is now being conducted, and
(d) has all governmental licenses, permits, franchises,
certificates,
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inspections, authorizations, consents and
approvals required to carry on its business as it is now being
conducted (except where the failure to have such governmental
authorization would not have a material adverse effect).
Section 3.2 Corporate
Authority: No Conflict with Other Instruments or Law . The
execution, delivery and performance of this Agreement and the
Revolving Credit Note and the consummation of the transactions
contemplated hereby and thereby (a)&nb
