[on Enron letterhead]
Exhibit 10(t)
April 3, 2000
El Paso Energy
Corporation
1001 Louisiana
Street
Houston,
Texas 77002
Attention: Mr. John W. Somerhalder
II
Citrus
Corp.
1400 Smith
Street
Houston,
Texas 77002
Attention: Mr. Roderick J.
Hayalett
Gentlemen:
Reference is
made to that certain Capital Stock Agreement, dated June 30, 1986,
among El Paso Energy Corporation (as successor interest to Sonat,
Inc. (“Sonat”) by virtue of a merger) (“El
Paso”), Enron Corp. (as successor in interest to InterNorth,
Inc. by virtue of a name change and successor in interest to
Houston Natural Gas corporation by virtue of a merger)
(“Enron”) and Citrus Corp. (“Citrus”) (the
“Capital Stock Agreement”) relating to the ownership by
El Paso and Enron of the Capital Stock of Citrus and its wholly
owned subsidiaries, including particularly, Florida Gas
Transmission Company (“FGT”).
El Paso is
currently (or maybe) involved in a administrative proceeding with
the Federal Trade Commission and/or other applicable governmental
agencies or departments (each a “Governmental Agency”)
involving a review by a Governmental Agency of El Paso’s
announced planned merger with The Coastal Corporation (the
“Coastal Merger”). Enron and El Paso have
discussed the alternatives available under the Capital Stock
Agreement if in connection with obtaining governmental or
regulatory clearance for the Coastal Merger, El Paso is required to
divest its shares of Capital Stock (as defined in the Capital Stock
Agreement). In this regard, it is the desire of El Past,
Enron and Citrus to amend and supplement the Capital Stock
Agreement (x) eliminate Section 15 thereof and
(y) provide procedures with respect to the possible sale by El
Paso of its shares of Capital Stock.
Accordingly, it
is agreed by and between El Paso, Enron and Citrus as
follows:
1. The Capital Stock
Agreement is hereby amended to delete therefrom Section 15 thereof,
which section shall henceforth be of no further force and
effect.
2. In the event that
El Paso is required to divest its shares of Capital Stock owned by
it in connection with obtaining governmental or regulatory
clearance for the Coastal Merger:
El Paso Energy
Corporation
Citrus
Corp.
April 3,
2000
Page
2
(i) El Paso shall give
notice (a “First Offer Notice”) in writing to Enron
stating that El Paso intends to divest all of the shares of Capital
Stock owned by it and offering Enron the opportunity to purchase
such shares at a price proposed by El Paso (the “Proposed
Price”).
(ii) Within 30 days
from receipt of a First Offer Notice, Enron shall deliver a notice
to El Paso stating whether Enron accepts the offer contained in the
First Offer Notice and if Enron fails to deliver such notice within
such 30-day period, Enron shall be deemed conclusively to have
delivered a notice stating that Enron does not accept such
offer.
(iii) In the event that,
within 30 days of receipt of a First Offer Notice, Enron delivers a
notice (an “Acceptance Notice”) to El Paso to the
effect that Enron accepts the offer contained in the First Offer
Notice, the First Offer Notice and the Acceptance Notice delivered
by Enron shall constitute an agreement binding on El Paso and Enron
to sell and purchase the shares of Capital Stock of Citrus to be
sold by El Paso, subject to the approval of any governmental or
regulatory authority having jurisdiction, at the Proposed
Price. Any sale of Capital Stock pursuant to this
paragraph (iii) shall be (a) completed by payment of the Proposed
Price to El Paso in immediately available funds against delivery by
El Paso of the certificates for the Capital Stock duly endorsed in
blank, free and clear of all liens, claims or encumbrances and with
requisite transfer taxes, if any, fully paid and (b) closed at such
time and place as shall be agreed upon by Enron and El Paso and, if
no such agreement is reached, during normal business hours at the
principal offices of El Paso on the 5 th business day following the later of (x) a
Governmental Agency’s approval of a decree, order or
agreement requiring the divestitures of El Paso’s shares of
Capital Stock, and (y) the receipt of necessary government or
regulatory approval of the sale of shares of Capital Stock pursuant
to paragraph (iii).
(iv) If Enron declines
the offer contained in the First Offer Notice or fails to accept
that offer within the 30-day period specified above, El Paso shall
be free to sell such Capital Stock to any unaffiliated third-party
purchaser (such sale, a “Third Party Sale”) without
complying with the provisions of Section 3(d) of the Capital Stock
Agreement (and notwithstanding any limitations contained in Section
3 of the Capital Stock Agreement) so long as:
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El Paso enters
into an agreement with respect to such Third Party Sale within six
months of the date of receipt by Enron of the First Offer
Notice;
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the Third Party
Sale is a cash transaction at a price no loss than the Proposed
Price; and
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the third-party
purchaser shall, before the consummation of the Third Party Sale,
have entered into an agreement with Enron, in form and substance
reasonably satisfactory to Enron, whereby such purchaser assumes
the same obligations and becomes entitled to the same benefits as
El Paso under the terms of the Capital Stock Agreement (as amended
pursuant to this letter agreement).
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El Paso Energy
Corporation
Citrus
Corp.
April 3,
2000
Page
3
Any Third Party
Sale in accordance with clauses (a), (b), and (c) of this paragraph
(iv) is referred to as a “Permitted Sale.”
(v) If (x) Enron
declines the offer contained in the First Offer Notice or fails to
accept that offer within the 30-day period specified above and (y)
El Paso agrees to sell shares of Capital Stock other than in a
Permitted Sale, El Paso shall, prior to consummating such sale,
provide Enron with a right of first refusal in compliance with the
terms of Section 3(d) of the Capital Stock Agreement (but without
regard for any limitation contained in Section 3(h) of the Capital
Stock Agreement), except that the references in Section 3(d) of the
Capital Stock Agreement to “60 days,” “60-day
period” and “120 th day” shall be deemed to be “30
days,” “30-day period” and “30
th day,” respectively.
(vi) Any sale or
transfer of Capital Stock other than pursuant to paragraphs (iii),
(iv) and (v) above shall be subject to the terms of the Capital
Stock Agreement (as amended by Sections 1, 3 and 4
hereof).
3. Notwithstanding
anything to the contrary contained in this letter agreement or the
Capital Stock Agreement, any party (a “Purchaser
Party”) required to purchase shares of Capital Stock pursuant
to the terms of this letter or the Capital Stock Agreement may
delegate to a third-party the right to purchase such Capital Stock,
provided that (x) such purchase shall be consummated otherwise in
accordance with the terms of this letter and/or the Capital Stock
Agreement, as applicable, and (y) such delegation shall not relieve
that Purchaser Party of its obligation to purchase such Capital
Stock in the event that such third-party fails to so consummate
such purchase.
4. In addition, Enron
and El Paso shall cause Citrus to, and Citrus shall cause its
subsidiaries to, cooperate in connection with any proposed sale of
Capital Stock, including (x) in the preparation by the selling
party of any offering memorandum or similar document relating
thereto and (y) with any reasonable due diligence investigation of
Citrus, its subsidiaries and their respective assets and businesses
(which shall include customary management presentations) sought to
be performed by any potential purchaser so long as such potential
purchaser executes a confidentiality agreement containing customary
terms.
5. As amended and
supplemented above, the provisions of the Capital Stock Agreement
are confirmed by the parties to be and remain in full force and
effect.
El Paso Energy
Corporation
Citrus
Corp.
April 3,
2000
Page
4
If the foregoing sets forth the terms of our
agreement, please sign both copies of this letter in the designated
space and return one (1) copy to the undersigned.
By: /s/
STANLEY C. HORTON
AGREED TO AND
ACKNOWLEDGED
this 4
th day of April, 2000.
EL PASO ENERGY
CORPORATION
By: /s/ JOHN
W. SOMERHALDER
El Paso Energy
Pipeline Group
CITRUS
CORP.
By: /s/
RODERICK J. HAYALETT
CAPITAL STOCK AGREEMENT
In
Connection With The
CAPITAL STOCK OF CITRUS CORP.
June 30, 1986
SONAT INC.
ENRON CORP.
HOUSTON NATURAL GAS CORPORATION
CITRUS CORP.
TABLE OF CONTENTS
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Page
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SECTION
1 -
DEFINITIONS...................................................................................................................................................................................................................................................................................
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2
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SECTION 2 -
INVESTMENT
REPRESENTATION..............................................................................................................................................................................................................................................
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8
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SECTION 3 -
CAPITAL STOCK OF
CITRUS.......................................................................................................................................................................................................................................................
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8
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(a) Ownership
and Original
Issuance.....................................................................................................................................................................................................................................
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8
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(b) Transfers of Shares Between
Principals
and Their
Subsidiaries.....................................................................................................................................................................................................................................................
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8
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(c)
Disposition of
Shares.........................................................................................................................................................................................................................................................
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10
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(d) Sale of
Shares......................................................................................................................................................................................................................................................................
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11
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(e)
Pledge of Shares and Rights under
this Agreement �
.................................................................................................................................................................................................
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14
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(f)
Opinion of
Counsel.............................................................................................................................................................................................................................................................
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15
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(g)
Legend on
Certificates.......................................................................................................................................................................................................................................................
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16
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(h)
Limitations...........................................................................................................................................................................................................................................................................
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16
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SECTION 4 -
BOARD OF
DIRECTORS................................................................................................................................................................................................................................................................
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17
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SECTION 5 -
CHAIRMAN OF THE
BOARD......................................................................................................................................................................................................................................................
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18
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SECTION 6 -
INFORMAL MEETINGS OF
PRINCIPALS.................................................................................................................................................................................................................................
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19
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SECTION 7 -
PERFORMANCE OF
AGREEMENTS..........................................................................................................................................................................................................................................
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19
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SECTION S -
PRINCIPAL OFFICE OF
CITRUS.................................................................................................................................................................................................................................................
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19
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SECTION 9 -
AUDITORS.....................................................................................................................................................................................................................................................................................
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19
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SECTION 10 -
INSPECTION; BOOKS AND
RECORDS..................................................................................................................................................................................................................................
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20
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SECTION
1l-OPERATING
AGREEMENT..........................................................................................................................................................................................................................................................
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20
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SECTION 12 -
PIPELINE
EXPANSION..............................................................................................................................................................................................................................................................
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20
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SECTION 13 -
FINANCING.................................................................................................................................................................................................................................................................................
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SECTION 14 -
VOTING SECURITIES OF THE
PRINCIPALS........................................................................................................................................................................................................................
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SECTION 15 -
BUY-SELL
RIGHTS.....................................................................................................................................................................................................................................................................
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SECTION 16 -
CHANGE OF
CONTROL............................................................................................................................................................................................................................................................
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SECTION 17 -
TERM OF
AGREEMENT............................................................................................................................................................................................................................................................
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31
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SECTION 18 -
NOTICE.........................................................................................................................................................................................................................................................................................
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32
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SECTION 19 -
GOVERNING
LAW......................................................................................................................................................................................................................................................................
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33
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SECTION 20 -
HEADINGS...................................................................................................................................................................................................................................................................................
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SECTION 21 -
SUCCESSORS
BOUND...............................................................................................................................................................................................................................................................
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SECTION 22 - NO
WAIVER................................................................................................................................................................................................................................................................................
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34
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SIGNATURES........................................................................................................................................................................................................................................................................................................
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34
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ii.
THIS AGREEMENT dated June 30, 1986, among
SONAT INC. ("Sonat"), a Delaware corporation, ENRON CORP.
("Enron"), a Delaware corporation, formerly named InterNorth, Inc.,
HOUSTON NATURAL GAS CORPORATION ("HNG"), a Texas corporation and
wholly owned subsidiary of Enron, and CITRUS CORP. ("Citrus"), a
Delaware corporation.
WITNESSETH:
WHEREAS, Citrus has, at the date of this
Agreement, an authorized capital stock of 1,000 shares of Common
Stock, $1 par value ("Common Stock"), consisting of 500 shares of
Class A Common Stock ("Class A Common Stock") and 500 shares of
Class B Common Stock ("Class B Common Stock"); and
WHEREAS, at the date of this Agreement, the
shares of capital stock of Citrus which are issued and outstanding
are 500 shares of Class A Common Stock, which are owned and held by
Sonat, and 500 shares of Class H Common Stock, which are owned and
held by HNG; and
WHEREAS, Citrus has two wholly owned
subsidiaries, Florida Gas Transmission Company ("Florida Gas"), a
Delaware corporation, and Florida Intrastate Pipeline Company
("Florida Intrastate"), a Florida corporation; and
WHEREAS, Sonat and HNG wish to make certain
representations in connection with the shares of Common Stock now
owned by them; and
WHEREAS, the parties hereto wish to enter into
certain agreements relating to the ownership and disposition of the
capital stock of Citrus, certain business arrangements regarding
the management of Citrus and related matters;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the parties
hereto agree as follows:
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1.
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Definitions. For the purposes of this
Agreement:
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(a)
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date of this
Agreement.
(b)
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i)
which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii)
which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, or upon
the exercise of
conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however , that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for purchase; or (B) the right to vote or dispose of
pursuant to any agreement, arrangement or understanding;
provided, however , that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under
this clause (B) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement
or understanding (1) arises solely from a revocable proxy given to
such Person in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are
beneficially owned, directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to clause (B) of
subparagraph (ii) of this paragraph (b)} or disposing of any
securities of a Principal.
(c)
"Capital Stock" means the Common Stock and any class of capital
stock of Citrus hereafter authorized and includes any security of
Citrus convertible into such stock and any right to purchase or
acquire any such stock or any security convertible into such
stock.
(d)
A "Change of Control" of a Principal shall be deemed to have
occurred if (i) any Person shall become the Beneficial Owner of
securities representing 50%or more of the aggregate voting power of
such Principal's outstanding Voting Securities or (ii) there shall
occur a change in the composition of a majority of the Board of
Directors of such Principal that shall not have received the prior
approval of the Continuing Directors of such Principal;
provided, however, that neither of the foregoing events
shall be deemed to be a Change of Control if such event has been
approved by the Continuing Directors of the Principal prior to such
Person (or any Affiliate or Associate of such Person) becoming the
Beneficial
Owner of 20% or more of the aggregate voting
power of such Principal's outstanding Voting Securities.
(e) A "Continuing Director" of a Principal
means each member of such Principal's Board of Directors as of
March 27, 1986 and any successor of a Continuing Director who is
recommended to succeed a Continuing Director by a majority of the
Continuing Directors then in office.
(f) "Expansion" means the construction of
necessary pipeline, compression and appurtenant facilities to
increase Florida Gas's capability to deliver gas along its main
pipeline system, generally from Compressor Station 8 in West Baton
Rouge Parish, Louisiana, to Compressor Station 20 in St. Lucie
County, Florida, and all gas purchase, transportation and sale
agreements relating to the increased capacity resulting from the
expansion. Said Expansion, which may be accomplished in phases, is
projected to be an increase in delivery capacity of Florida Gas's
main pipeline system of approximately 200,000 MCFD and is intended
to serve existing and new customers along Florida Gas's system in
peninsular Florida.
(g) "Formula Price" shall equal the Purchase
Price as determined in and paid pursuant to the Stock Purchase
Agreement minus one-half of the decrease or plus one-half of the
increase (as the case may be) in the Net Worth of Citrus from
the end of the month in which the closing
referred to in the Stock Purchase Agreement occurs until the end of
the second month preceding the closing referred to in Section
16.
(h) "Net Worth of Citrus" means the
consolidated net worth of Citrus and its subsidiaries determined in
accordance with the generally accepted accounting principles
followed by Citrus, applied on a consistent basis.
(i) "Operating
Agreement" means the Operating Agreement of even date herewith
between Citrus and HNG Interstate Pipeline Company.
(j) "Parent"
means, with respect to a Subsidiary, its ultimate corporate parent,
Sonat or Enron, as the case may be.
(k)
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporate
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