-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AQe3n95U3/fXtl5NCza4P7o4br/xXczbaon4gjzbuGJs1wkw4zXdlOoUHj1eGj0z J1PkBhkUrr/OKH/nvTMZDw== 0000057183-01-000012.txt : 20010130 0000057183-01-000012.hdr.sgml : 20010130 ACCESSION NUMBER: 0000057183-01-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LACLEDE GAS CO CENTRAL INDEX KEY: 0000057183 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 430368139 STATE OF INCORPORATION: MO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01822 FILM NUMBER: 1516842 BUSINESS ADDRESS: STREET 1: 720 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143420500 MAIL ADDRESS: STREET 1: 720 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 10-Q 1 0001.txt QUARTERLY REPORT ON FORM 10-Q, 1/26/01 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended December 31, 2000 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 1-1822 LACLEDE GAS COMPANY (Exact name of registrant as specified in its charter) Missouri 43-0368139 (State of Incorporation) (I.R.S. Employer Identification Number) 720 Olive Street, St. Louis, Missouri 63101 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 314-342-0500 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. 18,877,987 shares, Common Stock, par value $1 per share at 1/26/01. Page 1 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES PART I FINANCIAL INFORMATION The interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Form 10-K for the year ended September 30, 2000. Page 2 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED) (In Thousands, Except Per Share Amounts) Three Months Ended December 31, 2000 1999 ---- ---- Operating Revenues: Utility operating revenues $323,814 $ 144,659 Non-utility operating revenues 21,211 6,695 ------------------- Total Operating Revenues 345,025 151,354 ------------------- Operating Expenses: Utility operating expenses Natural and propane gas 233,332 81,596 Other operation expenses 27,038 22,653 Maintenance 4,529 4,708 Depreciation and amortization 6,518 5,495 Taxes, other than income taxes 17,296 10,372 ------------------- Total utility operating expenses 288,713 124,824 Non-utility operating expenses 20,565 6,589 ------------------- Total Operating Expenses 309,278 131,413 ------------------- Operating Income 35,747 19,941 Other Income and Income Deductions - Net 992 850 ------------------- Income Before Interest and Income Taxes 36,739 20,791 ------------------- Interest Charges: Interest on long-term debt 4,377 3,784 Other interest charges 3,215 2,189 ------------------- Total Interest Charges 7,592 5,973 ------------------- Income Before Income Taxes 29,147 14,818 Income Taxes (Note 3) 10,630 5,237 ------------------- Net Income 18,517 9,581 Dividends on Preferred Stock 22 24 ------------------- Earnings Applicable to Common Stock $ 18,495 $ 9,557 =================== Average Number of Common Shares Outstanding 18,878 18,878 Earnings Per Share of Common Stock $ .98 $ .51 Dividends Declared Per Share of Common Stock $.335 $.335 See notes to consolidated financial statements. Page 3 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET Dec. 31 Sept. 30 2000 2000 ------- -------- (Thousands of Dollars) (UNAUDITED) ASSETS Utility Plant $ 930,389 $ 921,378 Less: Accumulated depreciation and amortization 375,856 372,545 ---------------------- Net Utility Plant 554,533 548,833 ---------------------- Other Property and Investments 27,912 26,546 ---------------------- Current Assets: Cash and cash equivalents 7,101 4,215 Accounts receivable - net 237,845 55,207 Materials, supplies, and merchandise at avg cost 6,062 5,491 Natural gas stored underground for current use at LIFO cost 61,937 94,787 Propane gas for current use at FIFO cost 9,717 12,201 Prepayments and other 4,178 3,303 Unamortized purchased gas adjustments 11,318 14,907 Delayed customer billings 6,208 - Deferred income taxes 4,531 2,485 ---------------------- Total Current Assets 348,897 192,596 ---------------------- Deferred Charges: Prepaid pension cost 100,714 97,229 Regulatory assets 66,566 64,336 Other 2,970 2,200 ---------------------- Total deferred charges 170,250 163,765 ---------------------- Total Assets $1,101,592 $ 931,740 ====================== See notes to consolidated financial statements. Page 4 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET (Continued) Dec. 31 Sept. 30 2000 2000 ------- -------- (Thousands of Dollars) (UNAUDITED) CAPITALIZATION AND LIABILITIES Capitalization: Common stock (20,743,625 shares issued) $ 20,744 $ 20,744 Paid-in capital 85,837 85,835 Retained earnings 212,595 200,423 Accumulated other comprehensive income - - Treasury stock, at cost (1,865,638 shares held) (24,017) (24,017) ---------------------- Total common stock equity 295,159 282,985 Redeemable preferred stock 1,763 1,763 Long-term debt (less sinking fund requirements) 234,394 234,408 ---------------------- Total Capitalization 531,316 519,156 ---------------------- Current Liabilities: Notes payable 198,800 127,000 Accounts payable 101,277 45,660 Advance customer billings - 15,290 Current portion of preferred stock 21 50 Taxes accrued 32,730 12,044 Other 30,541 31,060 ---------------------- Total Current Liabilities 363,369 231,104 ---------------------- Deferred Credits and Other Liabilities: Deferred income taxes 126,640 134,944 Unamortized investment tax credits 6,187 6,267 Pension and postretirement benefit costs 22,868 20,261 Regulatory liabilities 31,922 1,223 Other 19,290 18,785 ---------------------- Total Deferred Credits and Other Liabilities 206,907 181,480 ---------------------- Total Capitalization and Liabilities $1,101,592 $ 931,740 ====================== See notes to consolidated financial statements. Page 5 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) Three Months Ended December 31, 2000 1999 ---- ---- (Thousands of Dollars) Operating Activities: Net Income $ 18,517 $ 9,581 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,544 5,521 Deferred income taxes and investment tax credits (12,549) 5,000 Other - net (16) 127 Changes in assets and liabilities: Accounts receivable - net (182,638) (60,800) Unamortized purchased gas adjustments 3,589 (2,857) Deferred purchased gas costs 30,512 (2,023) Advanced customer billings - net (21,498) (5,214) Accounts payable 55,617 4,327 Refunds due customers (246) (234) Taxes accrued 20,686 (2,303) Natural gas stored underground 32,850 6,265 Other assets and liabilities (357) (10,562) -------------------- Net cash used in operating activities $(48,989) $(53,172) -------------------- Investing Activities: Construction expenditures (11,584) (13,401) Investments - non-utility (43) (216) Employee benefit trusts (1,398) (452) Other (527) (312) -------------------- Net cash used in investing activities $(13,552) $(14,381) -------------------- Financing Activities: Issuance of short-term debt - net 71,800 68,000 Dividends paid (6,346) (6,348) Preferred stock reacquired and other (27) (40) -------------------- Net cash provided by financing activities $ 65,427 $ 61,612 -------------------- Net Increase (Decrease)in Cash and Cash Equivalents $ 2,886 $ (5,941) Cash and Cash Equivalents at Beg of Period 4,215 9,352 -------------------- Cash and Cash Equivalents at End of Period $ 7,101 $ 3,411 ==================== Supplemental Disclosure of Cash Paid/(Refunded) During the Period for: Interest $ 11,227 $ 10,161 Income taxes (14) (28) See notes to consolidated financial statements. Page 6 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, this interim report includes all adjustments (consisting only of normal recurring accruals) necessary for the fair presentation of the results of the periods covered. 2. Laclede Gas Company is a natural gas distribution utility having a material seasonal cycle. As a result, this interim statement of consolidated income is not necessarily indicative of annual results nor representative of the succeeding quarters of the fiscal year. Due to the seasonal nature of the Company's business, earnings are typically concentrated in the first six months of the fiscal year, which generally corresponds with the heating season. Fiscal year earnings will likely be lower than earnings during the first six months of the fiscal year, reflecting typically lower summer sales volumes, partially offset by lower operating expenses. 3. Net provisions for income taxes were charged (credited) as follows during the periods set forth below: Three Months Ended December 31, ------------------ 2000 1999 ---- ---- (Thousands of Dollars) Federal Current $ 19,836 $ 212 Deferred (10,778) 4,201 State and Local Current 3,343 25 Deferred (1,771) 799 ------------------- Total $ 10,630 $ 5,237 =================== 4. The Missouri Public Service Commission extended the Company's Gas Supply Incentive Plan with specific modifications through September 30, 2001. Under the modified plan, the Company continues to share with its customers certain gains and losses related to the acquisition of its gas supply assets. Effective October 1, 1999, Laclede is permitted to retain all income resulting from sales made outside its traditional service area. As modified, total pretax income derived from the sharing provision of the Plan, excluding income derived from off system sales, cannot exceed $9.0 million for fiscal 2001. The Company, staff of the MoPSC and other parties have agreed to cooperate on the development of a mutually acceptable, multi-year incentive plan that includes a fixed price mechanism for implementation once the current plan expires. On November 17, 2000, the Company filed a proposal with the MoPSC to extend the incentive plan, add a fixed price component and make other modifications to the plan. A prehearing conference to discuss the Company's proposal was held January 19, 2001. Page 7 Results of the Plan and off system sales activities are set forth below. These results may not be representative of results in future periods due to the volatile and seasonal nature of these efforts. Three Months Ended December 31, ---------------------- 2000 1999 ---- ---- (Thousands of Dollars) Net Benefits to Customers and Shareholders $10,086 $ 8,870 ------------------------------------------------------- Shareholder Benefits Off system and Incentive Plan Revenues $ 8,529 $ 9,014 Off system and Incentive Plan Expense 5,512 6,502 ------- ------- Company Share - Pretax Income $ 3,017 $ 2,512 ======= ======= 5. Laclede Gas Company is a public utility engaged in the retail distribution of natural gas. The Company has also made investments in some non-utility businesses as part of a diversification program, none of which are reportable segments. These non-regulated operations are primarily conducted through five wholly-owned subsidiaries. There are no material intersegment revenues. Gas All Other (Thousands of Dollars) Utility (Non-Utility) Eliminations Consolidated ----------------------------------------------------------------------- Three Months Ended December 31, 2000 Operating revenues $ 323,814 $ 21,211 $ - $ 345,025 Net income (loss) 18,076 441 - 18,517 Total assets 1,090,125 24,874 (13,407) 1,101,592 Three Months Ended December 31, 1999 Operating revenues $ 144,659 $ 6,775 $ - $ 151,434 Net income (loss) 9,641 (60) - 9,581 Total assets 897,044 13,758 (13,581) 897,221 6. The Company is subject to various environmental laws and regulations. To date they have not materially affected the Company's financial position and results of operations. In the past, the Company operated various manufactured gas plants which produced certain by-products and residuals. With regard to the Company's former manufactured gas plant site located in Shrewsbury, Missouri, the Company and the state and federal environmental regulatory agencies have in the past agreed upon the actions needed at this site. Those actions are nearing completion. The Company currently estimates the overall costs of these actions will be approximately $1,729,000. As Page 8 of December 31, 2000, the Company has paid $1,335,000 and reserved $394,000 for these actions. In the course of recent site grading called for by the agreement, some site materials that proved to be manufactured gas wastes were released into an adjacent stream. The release was contained and appropriate authorities notified. The Company is dealing with this development as part of the remaining work being done at the site. If the regulatory agencies require any additional actions, Laclede will incur additional costs. The Missouri Department of Natural Resources (MoDNR), late in calendar year 2000, expressed a belief that a removal action at the Shrewsbury site had incurred natural resources damages to the forested riparian corridor of the stream adjacent to the site, for which Laclede could be held liable. Laclede believes that no such natural resource damages as alleged have occurred. However, should an appropriate natural resource damage assessment disclose such damages, Laclede may incur additional costs. The Company also applied to place the site of a different former manufactured gas plant in the City of St. Louis, Missouri into the Missouri Voluntary Cleanup Program (VCP). Laclede ceased its operations at and sold this site in 1950. Subsequent owners of this site used it as a coke manufacturing facility. MoDNR accepted the Company's VCP application. Acceptance provides opportunities to minimize costs of remediation while maximizing possibilities for site development. The Company submitted a site characterization report (SCR) to MoDNR on June 25, 1999. The SCR was accepted subject to the Company's development of a Remedial Action Plan (RAP) due MoDNR in early calendar year 2001. Laclede intends to seek an adjustment of this filing date due to ongoing discussions with the City of St. Louis over possible site development. The RAP will include plans to continue to monitor groundwater. Surface water sampling and the performance of other remedial measures will likely occur during site redevelopment. The Company will continue to inform MoDNR of site development possibilities as well. The Company currently estimates that the cost of the site investigations, agency oversight and related legal and engineering consulting may be approximately $585,000. Currently, the Company has paid $453,000 and reserved an additional $132,000. The Company has requested that other former site owners and operators participate in the cost of any site investigation. One former owner and operator agreed to participate in these costs and has reimbursed the Company to date for $150,000. The Company anticipates additional reimbursement from this party of approximately $54,000. The Company plans to seek proportionate reimbursement of all costs relative to this site from any other potentially responsible parties if practicable. While the scope of costs relative to the site in Shrewsbury are currently not believed to be significant, the scope of costs relative to the City of St. Louis site are unknown and may be material. The Company has notified its insurers that it intends to seek reimbursement from them of its costs at both these sites. None of the Company's insurers have agreed that its insurance covers the costs for which the Company intends to seek reimbursement. The majority of the insurers have sent Laclede letters reserving their rights with respect to the manufactured gas plant issues addressed in the Company's notices to them. While some of the insurers have denied coverage with respect to these issues, the Company continues to seek reimbursement from them. With regard to the Shrewsbury site, the denial of coverage is not currently believed to have any significant impact on the Company. With regard to the City of St. Louis site, since the scope of costs relative to this site are unknown and may be material, the denial of coverage may have a material impact on the Company. Page 9 Previously, the MoPSC approved the Company's use of a cost deferral mechanism for these costs. Deferral of such costs terminated July 31, 1999. The Commission authorized previously deferred costs to be included in rates without return on investment and amortized over a fifteen-year period, effective with the implementation of new rates on December 27, 1999. The Company is subject to various environmental laws and regulations. To date they have not materially affected the Company's financial position and results of operations. 7. Certain prior-period amounts have been reclassified to conform to current-period presentation. These reclassifications did not affect consolidated net income for the periods presented. 8. This Form 10-Q should be read in conjunction with the Notes to Consolidated Financial Statements contained in the Company's Fiscal 2000 Form 10-K. Page 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Quarter Ended December 31, 2000 - ------------------------------- The quarter ended December 31, 2000, which is the first quarter of Laclede's fiscal year 2001, was the second coldest such quarter in the last 100 years with 28% colder than normal weather. In contrast, the same period last year was the fourth warmest comparable quarter for the century. As a result of this back-to-back extreme and opposite weather experience, the first quarter of fiscal 2001 was 56% colder than the comparable quarter last year, resulting in a substantial increase in the earnings level achieved this quarter as compared with the same quarter last year. Earnings were $.98 per share for the quarter ended December 31, 2000 compared with $.51 per share for the quarter ended December 31, 1999. In addition to the favorable impact of higher sales levels resulting from colder weather, earnings also increased due to the benefit of the general rate increase effective December 27, 1999 and, to a lesser extent, slightly higher income related to the Company's Gas Supply Incentive Plan and off system sales. These factors were partially offset by a higher provision for uncollectible accounts reflecting a significant increase in accounts receivable balances due to higher revenues. A dramatic and unprecedented rise across the nation in recent months in the wholesale cost of natural gas, coupled with the significantly higher sales levels arising from the colder weather, resulted in utility operating revenues for the quarter ended December 31, 2000 of $323.8 million compared with $144.7 million for the same quarter last year. Increases or decreases in the wholesale cost of natural gas are passed on to Laclede's customers in accordance with the Company's Purchased Gas Adjustment Clause. System therms sold and transported increased by 126.5 million therms, or 44.9%, above the quarter ended December 31, 1999. Non-utility operating revenues for this quarter increased $14.5 million from those revenues for the same quarter last year mainly due to increased gas marketing sales by Laclede Energy Resources, Inc., a wholly-owned non- utility subsidiary. Utility operating expenses for the quarter ended December 31, 2000 were $288.7 million compared with $124.8 million for the same period last year - mainly the result of the extraordinary nationwide increase in the wholesale cost of natural gas and the colder weather. Natural and propane gas expense this quarter increased $151.7 million above last year's level primarily due to the higher rates charged by the Company's suppliers and increased volumes purchased for sendout mainly because of colder weather. Other operation and maintenance expenses increased $4.2 million, or 15.4%, principally due to a higher provision for uncollectible accounts, higher wage rates, lower net pension credits and higher group insurance charges. Depreciation and amortization expense increased $1.0 million due to additional depreciable property and an increased proportion of amortization related to shorter- lived property. Taxes, other than income taxes, increased $6.9 million primarily due to higher gross receipts taxes (reflecting the increased revenues). Non-utility operating expenses increased $14.0 million this quarter mainly due to increased gas expense associated with gas marketing sales by Laclede Energy Resources, Inc. Page 11 Other income and income deductions-net increased $.1 million above the same period last year due to minor variations in several areas. The $1.6 million increase in interest expense is primarily due to increased short-term interest expense (reflecting higher average borrowings and increased rates) and to higher interest on long-term debt resulting from the issuance of $30 million of 7.90% first mortgage bonds in September 2000. The increase in income taxes is mainly due to higher pre-tax income. Updated Regulatory Matters - -------------------------- In June 2000, the Missouri Public Service Commission (MoPSC or Commission) approved an agreement Laclede had reached with the Commission staff to modify and extend the Company's Gas Supply Incentive Plan (GSIP) for an additional year, from October 1, 2000, through September 30, 2001. Under the GSIP, Laclede shares certain gains and losses related to the acquisition and management of its gas supply assets. Further, since October 1, 1999, the Company is permitted to retain all income resulting from sales made outside of its traditional service area. These activities continue to provide significant benefits to the Company's customers and its shareholders. During the quarter ended December 31, 2000, Laclede's efforts in this area resulted in cost savings of $7.1 million for its customers and $3.0 million in pretax income to its shareholders. In addition to the financial benefits of the program, the innovative structure under which the Company operates allows its customers to retain the reliability inherent in Laclede's long-standing supply relationships. On November 17, 2000, the Company filed a proposal with the MoPSC to extend the GSIP, add a fixed price component and make other modifications to the plan. A prehearing conference to discuss the Company's proposal was held January 19, 2001. In July 2000, the Commission approved the Company's request for a waiver of the Purchased Gas Adjustment (PGA) provisions of the Company's tariff so that it could make an unscheduled, out-of-cycle PGA change effective July 15, 2000. Through the PGA clause in the Company's tariff, it flows through to customers the cost of purchased gas supplies. The clause provides for only two scheduled PGA filings each year, one for the summer months and another for the winter period, with one unscheduled filing during the winter if certain conditions are met. However, this past summer an additional PGA filing was necessitated by the significant and unforeseen increase in natural gas prices that occurred since the Company had made its scheduled summer PGA filing in early April 2000. Gas prices continued to climb throughout the fall and winter, and the Company was forced to seek higher rate adjustments in its November 2000 winter PGA filing and in a January 2001 unscheduled PGA filing to cover the increased cost of natural gas supplies for the current winter. The Company's January 2001 unscheduled PGA filing was approved by the Commission on January 25, 2001. The MoPSC approved a Price Stabilization Program (PSP) for the fiscal 2000- 2002 heating seasons that authorizes the Company to purchase certain financial instruments designed to protect the Company and its customers from unusually large increases in the cost of natural gas during the heating season. The provisions of the program also allow the Company to share in gains and cost reductions achieved under the program. However, the PSP, like the Company's gas costs, has been adversely affected by inflated natural gas prices because of the related increases in the cost of these financial instruments. In June 2000, the Company notified the MoPSC that it would not be participating this year in one of the program's provisions to Page 12 share in gains achieved under the program. Also, in an effort to obtain more meaningful winter-time price protection for its customers, Laclede reached an agreement with the Commission staff and the Office of the Public Counsel in September 2000 to reduce the quantity of natural gas purchases that would be covered under the PSP. On September 28, 2000, the MoPSC approved this agreement. On December 22, 2000, the staff of the Commission filed a recommendation with the Commission that it terminate the third year of the PSP. Laclede filed a response in opposition to staff's recommendation on the grounds that significant financial benefits have been derived under the PSP as a result of the Company's management of its financial instruments portfolio. On May 11, 2000, the Company appealed to the Circuit Court of Cole County, Missouri the MoPSC's decision on one of the contested issues in the Company's 1999 rate case relating to the calculation of the Company's depreciation rates. On December 1, 2000, the court remanded this decision to the MoPSC based on inadequate findings of fact. The Company believes that any decision on this appeal would not adversely impact the $11.24 million increase in rates, which became effective December 27, 1999, or the Company's earnings; however, a favorable decision, when recognized in the Company's rates, would be expected to benefit the Company's cash flow. In response to recent price increases in the commodity cost of natural gas which have led to significant increases in the prices paid by customers of local distribution companies, on January 23, 2001 the MoPSC established a case to investigate the process for the recovery of natural gas commodity cost increases by such companies from their customers. Accounting Pronouncements - ------------------------- On October 1, 2000, the Company adopted Statements of Financial Accounting Standards (SFAS) No. 133 and 138. SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedge accounting. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. SFAS 133 requires that changes in the fair value of a derivative be recognized currently in earnings, unless specific hedge accounting criteria are met. SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities" amends portions of SFAS No. 133. Among other things, SFAS No. 138 provides an exception for contracts intended for the normal purchase and normal sale of something other than a financial instrument or derivative instrument, for which physical delivery is probable. Some of the Company's gas supply and transportation contracts are derivative instruments as defined under SFAS No. 133; however, all of these contracts qualify for the normal purchases and normal sales exception provided by SFAS No. 138. The financial instruments purchased by Laclede under its Price Stabilization Program are derivative instruments under SFAS No. 133. These financial instruments are purchased as hedges against significant increases in the price of natural gas, as approved by the MoPSC, and are accounted for in accordance with the Company's Purchased Gas Adjustment Clause. The effect of the Company's adoption of these statements on October 1, 2000 did not have a significant impact on the Company's financial position and results of operations as of that date. Page 13 Liquidity and Capital Resources - ------------------------------- The Company's short-term borrowing requirements typically peak during colder months when the Company borrows money to cover the gap between when the Company purchases its natural gas and when the Company's customers pay for that gas. These short-term cash requirements have traditionally been met through the sale of commercial paper supported by lines of credit with banks. The Company currently has a primary line of credit totaling $150 million extending through November 29, 2001. The Company also has various supplemental lines of credit of $100 million that provide for aggregate credit lines of $250 million through March 31, 2001. During fiscal 2001 to date, the Company sold commercial paper aggregating to a maximum of $199.1 million at any one time, but did not borrow from the banks under the aforementioned lines of credit. Short-term borrowings amounted to $198.8 million at December 31, 2000. Construction expenditures for utility purposes for the quarter were $11.6 million compared with $13.4 million for the same period last year. Capitalization at December 31, 2000 increased $12.2 million since September 30, 2000 and consisted of 55.6% common stock equity, .3% preferred stock equity and 44.1% long-term debt. The seasonal nature of the Company's sales affects the comparison of certain balance sheet items at December 31, 2000 and at September 30, 2000 such as Accounts Receivable - Net, Gas Stored Underground, Notes Payable, Accounts Payable, Regulatory Liabilities, and Advance and Delayed Customer Billings. Environmental Matters - --------------------- The Company is subject to various environmental laws and regulations. To date they have not materially affected the Company's financial position and results of operations. In the past, the Company operated various manufactured gas plants which produced certain by-products and residuals. With regard to the Company's former manufactured gas plant site located in Shrewsbury, Missouri, the Company and the state and federal environmental regulatory agencies have in the past agreed upon the actions needed at this site. Those actions are nearing completion. The Company currently estimates the overall costs of these actions will be approximately $1,729,000. As of December 31, 2000, the Company has paid $1,335,000 and reserved $394,000 for these actions. In the course of recent site grading called for by the agreement, some site materials that proved to be manufactured gas wastes were released into an adjacent stream. The release was contained and appropriate authorities notified. The Company is dealing with this development as part of the remaining work being done at the site. If the regulatory agencies require any additional actions, Laclede will incur additional costs. The Missouri Department of Natural Resources (MoDNR), late in calendar year 2000, expressed a belief that a removal action at the Shrewsbury site had incurred natural resources damages to the forested riparian corridor of the stream adjacent to the site, for which Laclede could be held liable. Laclede believes that no such natural resource damages as alleged have occurred. However, should an appropriate natural resource damage assessment disclose such damages, Laclede may incur additional costs. Page 14 The Company also applied to place the site of a different former manufactured gas plant in the City of St. Louis, Missouri into the Missouri Voluntary Cleanup Program (VCP). Laclede ceased its operations at and sold this site in 1950. Subsequent owners of this site used it as a coke manufacturing facility. MoDNR accepted the Company's VCP application. Acceptance provides opportunities to minimize costs of remediation while maximizing possibilities for site development. The Company submitted a site characterization report (SCR) to MoDNR on June 25, 1999. The SCR was accepted subject to the Company's development of a Remedial Action Plan (RAP) due MoDNR in early calendar year 2001. Laclede intends to seek an adjustment of this filing date due to ongoing discussions with the City of St. Louis over possible site development. The RAP will include plans to continue to monitor groundwater. Surface water sampling and the performance of other remedial measures will likely occur during site redevelopment. The Company will continue to inform MoDNR of site development possibilities as well. The Company currently estimates that the cost of the site investigations, agency oversight and related legal and engineering consulting may be approximately $585,000. Currently, the Company has paid $453,000 and reserved an additional $132,000. The Company has requested that other former site owners and operators participate in the cost of any site investigation. One former owner and operator agreed to participate in these costs and has reimbursed the Company to date for $150,000. The Company anticipates additional reimbursement from this party of approximately $54,000. The Company plans to seek proportionate reimbursement of all costs relative to this site from any other potentially responsible parties if practicable. While the scope of costs relative to the site in Shrewsbury are currently not believed to be significant, the scope of costs relative to the City of St. Louis site are unknown and may be material. The Company has notified its insurers that it intends to seek reimbursement from them of its costs at both these sites. None of the Company's insurers have agreed that its insurance covers the costs for which the Company intends to seek reimbursement. The majority of the insurers have sent Laclede letters reserving their rights with respect to the manufactured gas plant issues addressed in the Company's notices to them. While some of the insurers have denied coverage with respect to these issues, the Company continues to seek reimbursement from them. With regard to the Shrewsbury site, the denial of coverage is not currently believed to have any significant impact on the Company. With regard to the City of St. Louis site, since the scope of costs relative to this site are unknown and may be material, the denial of coverage may have a material impact on the Company. Previously, the MoPSC approved the Company's use of a cost deferral mechanism for these costs. Deferral of such costs terminated July 31, 1999. The Commission authorized previously deferred costs to be included in rates without return on investment and amortized over a fifteen-year period, effective with the implementation of new rates on December 27, 1999. The Company is subject to various environmental laws and regulations. To date they have not materially affected the Company's financial position and results of operations. Page 15 Other Matters - ------------- On October 26, 2000, the Company announced its intention, subject to receipt of the necessary approvals, to reorganize its corporate structure to form a holding company known as The Laclede Group, Inc. As a result of the reorganization, The Laclede Group, Inc. would become a holding company under the Public Utility Holding Company Act of 1935 but would be exempt from all provisions of the Act except Section 9(a)(2) thereof. Laclede Gas is taking the necessary steps to obtain regulatory and shareholder approvals and filed a registration statement on Form S-4 with the Securities and Exchange Commission on October 27, 2000, which became effective on December 14, 2000. On December 12, 2000, the Company filed an application with the MoPSC requesting approval for the proposal to form a holding company and revise its corporate structure. The Commission issued an order directing that notice of the Company's application be given and establishing an intervention deadline of January 25, 2001. Under the new structure, Laclede Gas Company as the regulated utility, and the subsidiaries it currently holds, would become subsidiaries of The Laclede Group, Inc. Even after forming a holding company, the profile of Laclede Gas' regulated distribution business is expected to remain substantially the same. At the January 25, 2001 annual meeting, shareholders of record on December 11, 2000 voted and approved this proposal. Forward-Looking Statements - -------------------------- Certain statements in this 10-Q are forward-looking statements made based upon the Company's expectations and beliefs concerning future developments and their potential effect on Laclede. These statements, however, do not include financial statements and other statements of historical fact. The forward-looking statements may be identified by the use of such terms as "anticipate," "believe," "estimate," "expect," "intend," "plan," "seek" and similar expressions. Future developments may not be in accordance with the Company's expectations or beliefs and the effect of future developments on Laclede may not be those anticipated. Among the factors that may cause actual results to differ materially from those contemplated in any forward- looking statements are: - weather conditions and catastrophic events - changes in transportation and gas supply costs or availability - regulatory actions and initiatives of federal and state regulatory agencies, some of which could be retroactive, including those affecting: Page 16 -- financings -- allowed rates of return -- incentive regulation -- industry and rate structure -- purchased gas adjustment provisions -- franchise renewal -- environmental or safety requirements - the effects of any industry or corporate restructuring - the results of litigation - conservation efforts of our customers - collection of customer accounts receivable - economic factors such as changes in the conditions of capital markets, interest rates and rates of inflation - inability to retain existing customers or to attract new customers - ability to obtain funds from operations or the sale of debt or equity to finance necessary capital expenditures and other investments - employee workforce issues - statutory or tax changes and - changes in accounting standards The Company does not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. Page 17 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES Part II OTHER INFORMATION Page 18 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES Item 1. Legal Proceedings For a description of the Company's environmental matters, see Note 6 to the unaudited Notes to Consolidated Financial Statements on page 8. For a description of the Company's pending regulatory matters, see "Updated Regulatory Matters" and "Other Matters" in the "Management's Discussion and Analysis" section on pages 12 and 16. Item 6. Exhibits and Reports on Form 8-K (a) See Exhibit Index (b) Reports on Form 8-K The Company filed a Form 8-K during the quarter ended December 31, 2000. Item reported: On October 27, 2000, the Company filed an 8-K reporting its issuance of a news release announcing its financial results as of September 30, 2000 (attached as Exhibit 1 to Form 8-K) and of a press release announcing that the Company would seek authorization to form a holding company (attached as Exhibit 2 to Form 8-K). Date of Report (Date of Earliest Event Reported): October 26, 2000 Page 19 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES 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. LACLEDE GAS COMPANY Date: January 26, 2001 G. T. MCNEIVE, JR. ------------------------------ G. T. McNeive, Jr. Sr. Vice President - Finance and General Counsel (Authorized Signatory and Chief Financial Officer) Page 20 Index to Exhibits Sequentially Exhibit Numbered Number Exhibit Page - ------- ------- ------------ 3.01(ii) Bylaws of the Company adopted October 26, 2000 22 10.01 Revolving Credit Facility with Firstar Bank N.A., Bank One, N.A., The Fuji Bank, Ltd., Comerica Bank and Bank Hapoalim B.M. 39 10.02 Credit Agreement with Firstar Bank N.A. 81 27 Financial Data Schedule UT 98 Page 21 EX-3.01II 2 0002.txt Exhibit 3.01(ii) BYLAWS OF LACLEDE GAS COMPANY ARTICLE I OFFICES Section 1. Principal Office. The principal office of Laclede Gas Company ("Company") shall be at such place as the Board of Directors may from time to time determine, but until a change is effected, such principal office shall be at 720 Olive Street in the City of St. Louis, Missouri. Section 2. Other Offices. The Company may also have offices at such other places both within and without the State of Missouri as the Board may, from time to time, determine or the business of the Company may require. ARTICLE II SEAL The corporate seal shall have inscribed thereon the name of the Company and the words "Seal, St. Louis, Missouri." The seal may be used by causing it, or a facsimile thereof, to be impressed, affixed or reproduced. ARTICLE III SHAREHOLDERS' MEETINGS Section 1. Annual Meetings. The annual meeting of the shareholders of the Company shall be held at 10 o'clock A.M. on the fourth Thursday of January in each year if not a legal holiday, and if a legal holiday, then on the next succeeding business day not a legal holiday. The purpose of the meeting shall be to elect directors and to transact such other business as properly brought before the meeting. If the Company fails to hold said meeting for the election of directors on the date aforesaid, the Board of Directors shall cause the election to be held by the shareholders as soon thereafter as convenient. Section 2. Special Meetings. Special meetings of the shareholders may be called by or at the request of the Chairman of the Board, Chief Executive Officer or a majority of the number of Directors which the Company would have if there were no vacancies. Also, the Secretary shall call any such special meeting whenever requested in Page 22 writing so to do by the holders of record of not less than one-third of the shares of the capital stock of the Company then outstanding and entitled to vote thereat. Section 3. Notices of Meetings. Notice of each meeting of the shareholders stating the place, date and hour of the meeting, and, in case of a special meeting or where otherwise required by statute, the purpose or purposes for which the meeting is called, shall be sent or otherwise given in accordance with Section 4 of this Article not less than ten nor more than seventy days before the date of the meeting, by or at the direction of the person calling the meeting, to each shareholder entitled to vote at such meeting. Section 4. Method of Notice. Notice of any meeting of shareholders shall be given either personally or by mail, telecopy, telegram or other electronic or wireless means. Notices not personally delivered shall be sent charges prepaid and shall be addressed to the shareholder at the address of that shareholder appearing on the books of the Company. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telecopy, telegram or other electronic or wireless means. An affidavit of the mailing or other means of giving notice of any shareholders' meeting, executed by the Secretary, Assistant Secretary or any transfer agent of the Company giving the notice, shall be prima facie evidence of the giving of such notice. Section 5. Place of Meetings. Meetings of the Company's shareholders may be held at such place, either within or without the State of Missouri, as may be fixed from time to time by resolution of the Board of Directors and designated in the notice of meeting. Section 6. Quorum: Adjournments. The holders of a majority of the shares issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of the shareholders for the transaction of business, except as otherwise required by law, the Articles of Incorporation, as they may be amended (hereinafter the "Charter"), or these Bylaws. The shareholders present at a meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of such number of shareholders as to reduce the number of remaining shareholders to less than a quorum. The absence from any meeting of the number of shares required by law, the Charter or these Bylaws for action upon one matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if the number of shares required in respect of such other matters shall be present. Whether or not a quorum is present, the chairman of the meeting or a majority of the shareholders entitled to vote thereat, present in person or represented by proxy, shall have power, except as otherwise Page 23 provided by statute, successively to adjourn the meeting to such time and place as they may determine, to a date not longer than ninety days after each such adjournment, and no notice of any such adjournment need be given to shareholders other than the announcement of the adjournment at the meeting. Section 7. Voting: Proxies. At each meeting of the shareholders, each shareholder of record entitled to vote thereat may vote in person or by written proxy. A written proxy may be in the form of a telegram, cablegram or other means of electronic transmission signed by the shareholder and filed with the Secretary of the Company. If the instrument designates two (2) or more persons to act as proxies, a majority of the proxies present at the meeting may exercise all of the powers conferred by the instrument, unless the instrument provides otherwise. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. A proxy shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the shareholder or the shareholder's attorney- in-fact. In all elections for directors, each shareholder who is entitled to vote shall have the right to cast as many votes in the aggregate as shall equal the number of voting shares held by him or her in the Company, multiplied by the number of directors to be elected at such election; and each such shareholder may cast his or her whole number of votes, either in person or by proxy, for one candidate or distribute them among two or more candidates. The director nominees who receive the greatest number of affirmative votes will be elected. In voting on any proposition other than the election of directors, each shareholder shall have one vote for each share of stock which he or she is entitled to vote on such proposition, and, except as otherwise provided by law, the Charter or these Bylaws, the affirmative vote of a majority of the shares entitled to vote and present in person or represented by proxy at the meeting shall be the act of the shareholders. The date for determining the shareholders entitled to vote at a meeting shall be determined pursuant to Article IX, Section 3 of these Bylaws. Section 8. Organization. Every meeting of the shareholders for whatever purpose shall be convened by the Chairman of the Board, Chief Executive Officer, Secretary or other officer or person calling the meeting, and in the absence of such officer or person the meeting may be convened by any officer of the Company, and in the absence of an officer of the Company, the meeting may be convened by the person duly elected chairman of such meeting. Except as otherwise provided in these Bylaws, the officer or person convening the meeting shall act as chairman thereof. The Secretary of the Company shall act as Page 24 secretary of all meetings of shareholders and in his or her absence the chairman of the meeting may designate an assistant secretary of the Company or another person to act as secretary of the meeting. Except as may otherwise be required by applicable law or by rules and regulations adopted by the Board of Directors, the chairman of any meeting of shareholders shall prescribe such rules, regulations and procedures and do such acts, including causing the adjournment of the meeting without a vote of shareholders, that the chairman deems appropriate. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chair of the meeting, may include, but are not limited to, the following: (a) the establishment of an agenda or order of business for the meeting, including fixing the time for opening and closing the polls for voting on each matter; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to shareholders of record of the Company, their duly authorized and constituted proxies or such other persons as the chair shall permit; (d) restrictions on entry to the meeting after the time fixed for commencement thereof; and (e) limitation on the time allotted for questions or comments by participants. No nominations of persons for election to the Company's Board of Directors shall be made, and no business shall be conducted, at a meeting of shareholders except in accordance with the procedures set forth in Sections 9 and 10 of this Article III of these Bylaws. Unless and to the extent determined by the Board or the chair of the meeting, meetings of shareholders shall not be required to be held in accordance with rules of parliamentary procedure. Section 9. Notice of Shareholder Nominees for Directors. Only persons who are nominated in accordance with the procedures set forth in this Section shall be eligible for election as directors of the Company, except as may be otherwise provided in the Charter with respect to the rights of holders of preferred stock of the Company to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors of the Company may be made at any annual meeting of shareholders or at any special meeting of shareholders called for the purpose of electing directors: (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof); or (b) by any shareholder of the Company entitled to vote at such meeting for the election of directors and who complies with the procedures set forth in this Section. In addition to any other applicable requirements, for a nomination to be made by a shareholder, such shareholder must have given timely notice thereof in proper written form to the Secretary of the Company, as described in this Section, which notice is not withdrawn by such shareholder at or prior to such meeting. To be timely, a shareholder's notice must be delivered or mailed to, and received by, the Secretary of the Company at the principal executive offices of the Company: (a) in the case of an annual meeting Page 25 of shareholders, not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided, however, that in the event that the date of the annual meeting is changed by more than 30 days from such anniversary date, notice by the shareholder to be timely must be so received not earlier than 60 days prior to the date of the annual meeting and not later than the close of business on the 10th day following the earlier of the date on which such notice of the date of the annual meeting was sent or public disclosure of the date of the annual meeting was made; and (b) in the case of a special meeting of shareholders called for the purpose of electing directors, not later than 25 days prior to the date of the meeting; provided, however, that if less than 25 days' notice or prior public announcement of the date of the meeting is given or made to shareholders by the Company, notice by the shareholders to be timely must be so received not later than the tenth day following the day on which such notice of the date of the special meeting was sent or public disclosure was made, whichever occurs first. In no event shall the public disclosure of an adjournment of a shareholders' meeting commence a new time period for the giving of a shareholder's notice as described in this Section 9. For purposes of this Section 9, "public disclosure" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (hereinafter, in this Section 9 and in Section 10 of this Article III, called the "Exchange Act"), or any successor law or agency rule. To be in proper written form, a shareholder's notice must set forth in writing: (a) as to each person whom the shareholder proposes to nominate for election as a director (the "Proposed Nominee"): (i) the name, age, business address and residence address of the Proposed Nominee; (ii) the principal occupation or employment of such Proposed Nominee for the previous five years, (iii) the class or series and number of shares of the Company's capital stock owned beneficially or of record by Proposed Nominee, (iv) Proposed Nominee's written consent to being named in a proxy statement as a nominee and to serving as a director if elected, and (v) any other information relating to Proposed Nominee that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors, pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to each shareholder giving the notice and the beneficial owner of Company stock, if any, on whose behalf the nomination is made ("Beneficial Owner"): (i) the name and address, as they appear on the Company's shareholder records, of such shareholder and any such Beneficial Owner; (ii) the class or series and number of shares of the Company's capital stock which are owned beneficially and of record by such shareholder and any such Beneficial Owner; (iii) a description of all arrangements or understandings between such Page 26 shareholder or Beneficial Owner and each Proposed Nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder or Beneficial Owner, (iv) a representation that such shareholder or Beneficial Owner intends to appear in person or by proxy at the meeting to nominate the Proposed Nominee and (v) any other information relating to such shareholder or Beneficial Owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors and regulations promulgated thereunder. In the event that a shareholder seeks to nominate one or more directors, the chairman of the meeting shall determine whether a shareholder has complied with this Section. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination(s) was not properly brought before the meeting in accordance with this Section 9, and the defective nomination shall be disregarded. The chairman's ruling thereon shall be final and conclusive. Notwithstanding anything in these Bylaws to the contrary, no election of a director nominated by a shareholder shall become effective until the final termination of any proceeding that may have been commenced in any court of competent jurisdiction for an adjudication of any legal issues incident to determining the procedure pursuant to which the nomination of such director was brought before the shareholders, unless and until such court shall have determined that such proceedings are not being pursued expeditiously and in good faith. Section 10. Procedures for Submission of Shareholder Proposals at Shareholders' Meetings. At a meeting of the shareholders of the Company, only such business shall be conducted as shall have been brought before the meeting: (i) pursuant to the Company's notice of the meeting, (ii) by or at the direction of the Board of Directors (or a committee thereof); or (iii) by any shareholder of record of the Company entitled to vote on such business at such meeting who complies with the procedures set forth in this Section. In addition to any other requirements, for business properly to be brought before a meeting by a shareholder, the shareholder must have given timely notice thereof in proper written form to the Secretary of the Company as described in this Section, which notice is not withdrawn by such shareholder at or prior to such meeting. To be timely, a shareholder's notice must be delivered or mailed to, and received by, the Secretary of the Company at the principal executive offices of the Company: (a) in the case of an annual meeting of shareholders, not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided, however, that in the event that the date of the annual meeting is changed by more than 30 days from such Page 27 anniversary date, notice by the shareholder to be timely must be so received not earlier than 60 days prior to the date of the annual meeting and not later than the close of business on the 10th day following the earlier of the date on which notice of the date of the annual meeting was sent or public disclosure of the date of the annual meeting was made; and (b) in the case of a special meeting of shareholders, not less than 25 days prior to the date of the meeting; provided, however, that if less than 25 days' notice or prior public announcement of the date of the meeting is given or made to shareholders by the Company, notice by the shareholder to be timely must be so received not later than the tenth day following the day on which such notice of the date of the special meeting was sent or public disclosure was made, whichever occurs first. In no event shall the public disclosure of an adjournment of a meeting commence a new time period for the giving of a shareholder's notice as described in this Section 10. For purposes of this Section 10, "public disclosure" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act or any successor law or agency rule. To be in proper written form, a shareholder's notice must set forth in writing as to each matter the shareholder proposes to bring before the meeting of shareholders: (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and, if such business includes a proposal to amend the Charter, the language of the proposed amendment; (ii) the name and address, as they appear on the Company's shareholder records, of the shareholder proposing such business and of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the class or series and number of shares of the Company's capital stock which are owned beneficially and of record by such shareholder and any such beneficial owner on whose behalf the proposal is made; (iv) any material interest of the shareholder and any such beneficial owner in such business; (v) a representation that such shareholder intends to appear in person or by proxy at the meeting to bring such business before the meeting; and (vi) any other information relating to such shareholder, beneficial owner or matters to be brought before the meeting. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at a meeting of shareholders, except in accordance with the procedures set forth in Section 9 or Section 10 of this Article III of these Bylaws. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 10 and, if he or she should so determine and declare, any such business not properly brought before the meeting Page 28 shall not be transacted. If, however, the shareholder does not appear at the meeting, the proposal shall not be presented for a vote at the meeting, even though proxies regarding that vote have been received by the Company. The chairman's ruling thereon shall be final and conclusive. Notwithstanding any of the foregoing provisions of this Section 10, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder (or any successor law or agency rule) with respect to the matters set forth in this Section 10. Nothing in this Section 10 shall be deemed to affect any rights of shareholders to request inclusion of proposals in the Company's proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor law or agency rule). Notwithstanding anything in these Bylaws to the contrary, no business brought before a meeting of the shareholders by a shareholder shall become effective until the final termination of any proceeding that may have been commenced in any court of competent jurisdiction for an adjudication of any legal issues incident to determining the validity of such business and the procedure pursuant to which it was brought before the shareholders, unless and until such court shall have determined that such proceedings are not being pursued expeditiously and in good faith. ARTICLE IV DIRECTORS Section 1. General Powers. The Board of Directors shall control and manage the property, business and affairs of the Company. The Board of Directors may also exercise all such powers of the Company and do all such lawful acts and things as are not by law, the Charter or these Bylaws directed or required to be exercised or done by the shareholders or some particular officer of the Company. Section 2. Number, Classification and Term of Office. The number of directors shall be fixed from time to time by resolution of the Board of Directors provided that in no event shall the number of directors be less than 9 nor more than 12. The directors shall be elected in three classes, as nearly equal in number as possible (with one such class to be elected annually, and with each class of directors to serve until the third annual meeting of shareholders after the meeting at which such class of directors is elected). All directors shall serve for their respective terms and until their respective successors shall be duly elected and qualified. In the event of any increase in the number of directors, the additional director(s) shall be added to such class(es) as may be necessary so that all classes shall be as nearly equal as may be possible. In the event of any decrease in the number of directors, all classes of directors shall be decreased as nearly equally as may be Page 29 possible; provided that no decrease in the number of directors or reclassification of the Board caused by such reduction in the number of directors shall shorten the term of any incumbent director. Subject to the foregoing, the Board shall determine the class(es) to which any additional director(s) shall be added and the class(es) which shall be increased or decreased in the event of any increase or decrease in the number of director(s). In case of any vacancy or vacancies in the Board of Directors, the Board of Directors by a vote of a majority of the remaining directors may fill the vacancy or vacancies for the unexpired term. A vacancy that will occur at a specified later date, by reason of a resignation effective at a later date, may be filled before the vacancy occurs, but the new director shall not take office until the vacancy occurs. Section 3. Compensation. Directors who are not officers or employees of the Company may receive for their service as directors such annual compensation as may be determined by resolution of the Board of Directors. In addition, all directors as such shall receive their expenses, if any, for attending meetings of the Board of Directors and may receive a fixed sum for attendance as may be determined by resolution of the Board of Directors; provided, that nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees of the Board of Directors shall receive their expenses, if any, for attending committee meetings and may receive a fixed sum for attendance at committee meetings as may be determined by resolution of the Board of Directors. Section 4. Qualifications. Directors need not be shareholders of the Company. At least one director shall be a bona fide citizen and resident of the State of Missouri. No person shall be eligible for election as a director to any term commencing after April 24, 1980, if at the time of such election such person has reached the age of 71 years. ARTICLE V MEETINGS OF THE BOARD OF DIRECTORS Section 1. Regular Annual Meeting. A regular annual meeting of the Board, including newly elected directors, shall be held immediately following the annual meeting of shareholders and shall be held at the principal office of the Company, unless another time or place shall be fixed therefor by the directors. No notice of such meeting shall be necessary to the directors in order, legally, to constitute a meeting, provided a majority of the whole Board shall be present. In the event such annual meeting of the Board is not held at the time and place Page 30 specified herein, or at such other time and place as may be fixed by the directors, the meeting may be held at such time and place as shall be specified in a notice given in the same manner as provided in Section 3(a) or (b) of this Article for special meetings or as specified in a written waiver signed by all of the directors. Section 2. Regular Meetings. Additional regular meetings of the Board of Directors shall be held without notice if the times of such meetings are fixed by the Board. If the time of a meeting is not so fixed by the Board, notice shall be given in the same manner as provided in Section 3(a) or (b) of this Article for special meetings. Regular meetings of the Board may be held at any place within or without the State of Missouri that has been designated from time to time by resolution of the Board. In the absence of such a designation, regular meetings shall be held at the principal executive office of the Company. Section 3. Special Meetings. Special meetings of the Board of Directors may be called upon request of the Chairman of the Board, the Chief Executive Officer or three members of the Board of Directors. The person(s) authorized to call a special meeting of the Board may fix the time and place of the meeting. Notice of the time, place and purpose of such meeting shall be given by any one or more of the following methods, and the method used need not be the same for each director being notified: (a) written notice sent by mail at least three days prior to the meeting; (b) personal service of the notice, telephonic notice or facsimile or other electronic or wireless transmission of the notice, in any case at least 24 hours prior to the date of the meeting. Section 4. Quorum: Voting: Adjournments. At all meetings of the Board of Directors, a majority of the duly elected Board shall be necessary to constitute a quorum for the transaction of business, and no action shall be taken (except adjournment, as provided below, and to fill vacancies, as provided in Article IV, Section 2) until after a quorum has been established. The act of a majority of the directors present at any meeting shall be the act of the Board of Directors, regardless of whether or not a quorum is present at the time such action is taken, except as may be otherwise specifically provided by the Charter or by these Bylaws. In the absence of a quorum, a majority of the directors present shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 5. Telephonic Participation. Members of the Board of Directors may participate in a meeting of the Board by means of conference telephone or similar communications equipment by means Page 31 of which all persons participating in the meeting can hear each other, and participation in the meeting in this manner shall constitute presence at such meeting. Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors (or of any committee thereof) may be taken without a meeting if all members of the Board (or committee) consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board (or committee). Section 7. Organization. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in his or her absence by the chairman of the Executive Committee, if any, or in his or her absence by the Chief Executive Officer. In the absence of all such directors, a chairman pro tem chosen by a majority of the directors present shall preside at the meeting. The Secretary of the Company, or in his or her absence an Assistant Secretary or any person designated from time to time by the Board, shall act as its Secretary. ARTICLE VI COMMITTEES Section 1. Executive Committee. The Board of Directors, by resolution adopted by a majority of the whole Board, may designate two or more from their number, in addition to the Chief Executive Officer, who shall be a member, to constitute an Executive Committee and may appoint a Chairman of the Executive Committee. The Executive Committee, to the extent provided in said resolution, shall have and exercise all of the authority of the Board of Directors during the intervals between the meetings of the Board, including power to cause the seal of the Company to be affixed to all papers that may require it; but the Executive Committee shall not have the power or authority with respect to amending the Charter, adopting an agreement of merger or consolidation, or recommending to the shareholders the sale, lease or exchange of all or substantially all of the Company's property or assets, nor shall the Executive Committee have the power or authority to declare a dividend. A meeting of the Executive Committee may be held on call by the Chairman of the Executive Committee, the Chief Executive Officer or on the call of any three members of the Committee. The Executive Committee may hold meetings and make rules for the conduct of its business and appoint such committees and assistants as it shall from time to time deem necessary. A majority of the members of the Executive Committee shall constitute a quorum. Any one or more members of the Executive Committee may participate by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. Page 32 The Executive Committee shall keep a record of its proceedings, which shall be reported to the Board of Directors at the next regular meeting of the Board. The Chief Executive Officer may designate from time to time a member of the Board of Directors to act as a member of the Executive Committee at any meeting or meetings thereof in the place of any member of the Executive Committee absent therefrom. Section 2. Other Committees. The Board of Directors may, in its discretion, by resolution, appoint other committees, composed of two or more members, which shall have and may exercise such powers as shall be conferred or authorized by the resolution appointing them. Unless otherwise provided by the Board, a majority of the members of any such committee shall constitute a quorum and the acts of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee. The Board shall have the power at any time to change the membership of any such committee, to fill vacancies and to discharge any such committee. ARTICLE VII OFFICERS Section 1. Titles. The officers of the Company shall be elected by the Board of Directors and shall consist of a Chairman of the Board, a President, at least one Vice President, a Secretary and a Treasurer. The Chief Executive Officer shall be determined as provided in Article VIII, Section 2. The Board may also elect one or more additional Vice Presidents, a Controller, one or more Assistant Treasurers, Assistant Secretaries, Assistant Controllers and such other officers as the Board may deem appropriate. The following offices may not be held by the same person: President and Vice President, Chief Executive Officer and Vice President, President and Secretary, or Chief Executive Officer and Secretary. Vice Presidents may be given distinctive designations such as Executive Vice President, Group Vice President, Senior Vice President and the like. Section 2. Election. The Board shall elect the officers at the Board's annual meeting. The officers shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. In connection with the election of any officer of the Company, the Board may determine that such officers, in addition to the title of the office to which he or she is elected, shall have a further title such as Chief Administrative Officer, Chief Operating Officer or such other title as the Board may designate, and the Board may prescribe powers to be exercised and duties to be performed by any such officer to whom any such additional title of office is given in addition to those powers and duties provided for by these Bylaws for such office. Page 33 Section 3. Removal. Any officer or officers elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the whole Board of Directors. Any vacancy occurring in any office may be filled only by the Board. Section 4. Salaries. The salaries of all officers of the Company shall be fixed by the Board of Directors. ARTICLE VIII DUTIES OF OFFICERS Section 1. Chairman of the Board. The Chairman of the Board (a) shall preside as chairman of all meetings of the Board of Directors and of the shareholders at which the Chairman shall be present, (b) shall be, ex- officio, a member of all standing Board Committees and (c) shall have such other powers, responsibilities and duties as shall be assigned by the Board. In the absence or disability of the Chief Executive Officer or the President, the Chairman shall exercise all of the powers and discharge all of the duties of the Chief Executive Officer or the President. Section 2. Chief Executive Officer. The Chief Executive Officer of the Company shall be that person designated by the Board of Directors from among the Chairman of the Board, the Chairman of the Executive Committee or the President. In the absence of such a designation, the President shall be the Chief Executive Officer. The Chief Executive Officer shall have general supervision and control over all of the business and property of the Company and shall be responsible at all times to the Board of Directors and the Executive Committee. The Chief Executive Officer shall have the power to suspend any subordinate officer appointed by the Board until such Board may be convened. The Chief Executive Officer shall have full authority in respect to the signing and execution of deeds, bonds, mortgages, contracts and other instruments of the Company. In the absence or the disability of the Chairman of the Board or President, when the Chief Executive Officer is not the Chairman of the Board or President, the Chief Executive Officer shall exercise all of the powers and discharge all of the duties of the Chairman of the Board or the President, as applicable. In the event the Chief Executive Officer shall fail or for any reason be unable to serve, the Board of Directors shall promptly act to fill such vacancy. Section 3. President. The President shall be a director and shall have such powers, responsibilities and duties as shall be assigned by the Board of Directors, or, when he or she is not the Chief Executive Officer, by the Chief Executive Officer. The President shall have equal authority with the Chief Executive Officer with respect to the signing and execution of deeds, bonds, mortgages, contracts and other instruments of the Company. In the absence or disability of the Chief Page 34 Executive Officer, when the Chief Executive Officer also serves as the Chairman of the Board and the President is not the Chief Executive Officer, the President shall exercise all of the powers and discharge all of the duties of the Chairman of the Board and Chief Executive Officer. Section 4. Vice-Presidents. Each Vice President shall perform and exercise such duties and powers as shall be assigned to that Vice President by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President. Section 5. Treasurer and Assistant Treasurer. The Treasurer shall have charge of the funds of the Company; shall keep the same in depositories designated by the Board or by officers of the Company authorized by the Board to make such designations; shall cause said funds to be disbursed upon checks, drafts, bills of exchange or orders for payment of money signed in such manner as the Board or authorized officers of the Company may, from time to time, direct; shall perform such other duties as are incident to his or her office, or as may be prescribed by the Chief Executive Officer, President or the Board of Directors from time to time; and if required by the Board of Directors, give bond for the faithful discharge of his or her duties, in such form and amount and with such surety or sureties as may be determined by the Board of Directors. The Assistant Treasurer(s) shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall have such other duties and powers as the Board may prescribe. Section 6. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the shareholders and record all votes and the minutes of all proceedings of the same. He or she shall give notice of all meetings of shareholders and special meetings of the Board of Directors and, when appropriate, shall cause the corporate seal to be affixed to any instrument executed on behalf of the Company. The Secretary shall also superintend the keeping and have charge of the books, records and papers of the Company. Except when a Transfer Agent and Registrar for the stock of the Company is employed, the Secretary shall keep a register of the address of each shareholder, and make all proper changes in such register, retaining and filing his or her authority for all such entries. The Secretary shall perform such other duties as may be prescribed by the Chief Executive Officer, President or the Board of Directors from time to time, or as may be incident to his or her office. The Assistant Secretaries, if any, shall, during the absence of the Secretary, perform the duties and functions and exercise the powers of the Secretary. Each Assistant Secretary shall perform such other duties as the Chief Executive Officer, President, or Chairman of the Board of Directors shall, from time to time, assign. Page 35 ARTICLE IX STOCK Section 1. Certificates of Stock. The certificates of stock of the Company shall be consecutively numbered in the order of their issue, and the names of the owners, the number and class of shares and the date of issue shall be entered in the books of the Company. The certificates shall be in such form, consistent with the Charter, as the Board of Directors shall approve, and shall be signed either manually by the President or a Vice President and also by the Secretary or an Assistant Secretary or with facsimile signatures of the foregoing officers, and shall be sealed with the corporate seal, or have a facsimile thereof printed thereon, and they may also be registered and counter-signed by a Registrar and Transfer Agent as may be appointed by the Board of Directors. In case any officer who has signed, or whose facsimile signature has been placed upon, a certificate shall cease to be such officer before such certificate is issued, the certificate may be issued by the Company with the same effect as if he or she were such officer at the date of issue. Section 2. Transfers. Transfers of stock may be made on the books of the Company only by the person(s) named in the certificate(s) or by the attorney lawfully constituted in writing representing such named person(s), and upon surrender of the certificate representing the same, properly endorsed. Section 3. Record Date. The Board of Directors may close the transfer books in its discretion for a period not exceeding 70 days preceding the day appointed for any meeting, annual or special, of the shareholders, or the payment of a dividend or the allotment of rights, or in its discretion the Board of Directors may fix a date not exceeding 70 days preceding any such appointed day as a record date for the determination of shareholders entitled to notice of, and to vote at, such meeting or to receive such dividend or rights, as the case may be. Section 4. Determination of Holders. The Company shall be entitled to treat the holder of record of any share(s) of stock as the holder in fact thereof and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the laws of the State of Missouri. Section 5. Transfer Agent and Registrar. The Board of Directors may appoint one or more Transfer Agents and Registrars for its stock, and may require all stock certificates to bear the signature either of a Transfer Agent or of a Registrar, or both. Page 36 Section 6. Lost or Destroyed Certificates. Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of that fact and advertise the same in such manner as the Board of Directors may require, and shall give the Company, its Transfer Agents and Registrars, if they shall so require, a bond of indemnity, in form and with one or more sureties satisfactory to the Board, the Transfer Agents and the Registrars of the Company, in the form and with such provisions as the Transfer Agent or Registrar may deem reasonably satisfactory, whereupon a new certificate may be issued of the same tenor and for the same number of shares as the one alleged to be lost or destroyed. ARTICLE X MISCELLANEOUS Section 1. Dividends. Subject to law and the provisions of the Charter, the Board of Directors shall have absolute discretion in the declaration of dividends and in fixing and changing the date for the declaration and payment of dividends. Before payment of any dividend or making any distribution of profits, the Board of Directors may set aside, out of the surplus or net profits of the Company, such sum or sums as the Board of Directors may from time to time in its absolute discretion deem proper as a reserve fund for depreciation or working capital, or for any other purpose which the Board of Directors shall deem conducive to the interests of the Company. Section 2. Books and Records. When entitled to do so under applicable law, shareholders may inspect the books of the Company at the office of the Company during the usual business hours of the Company and in the presence of a representative of the Company, and under such other reasonable regulations as the officers of the Company may prescribe in the particular instance. Section 3. Checks, Drafts, Evidence of Indebtedness. All checks, bills, notes, drafts, vouchers, and other evidences of indebtedness of the Company shall be signed for the Company by the Chief Executive Officer, the President, or Treasurer and may also be signed and countersigned by such person(s) as the Chief Executive Officer or President may designate, provided that instruments requiring execution with the formality of deeds shall be signed by the Chief Executive Officer, the President, Treasurer or a Vice President and impressed with the seal of the Company, duly attested by the Secretary or an Assistant Secretary. Section 4. Contracts. All contracts, deeds, mortgages, leases or instruments that require the seal of the Company to be affixed thereto shall be signed by the Chief Executive Officer, the President or a Vice President, and by the Secretary or an Assistant Secretary, or by such other officer(s) or person(s) as the Board of Directors or Executive Committee may by resolution prescribe. Page 37 Section 5. Fiscal Year. The fiscal year of the Company shall begin on the first day of October and end on the thirtieth day of September of each year. Section 6. Amendments. As provided by the Charter, the power to make, alter, amend or repeal these Bylaws is vested in the Board of Directors. Such power may be exercised by the vote of a majority of all of the directors at any annual or regular meeting or at a duly called special meeting. Page 38 EX-10.01 3 0003.txt Exhibit 10.01 LOAN AGREEMENT THIS LOAN AGREEMENT (this "Agreement") is made and entered into as of the 30th day of November, 2000, by and among LACLEDE GAS COMPANY, a Missouri corporation ("Borrower"), and the Banks from time to time party hereto, including FIRSTAR BANK, N.A. in its capacity as a Bank and as agent for the Banks under this Agreement (the "Agent"). WITNESSETH: WHEREAS, Borrower has applied for a revolving credit facility from the Banks in the aggregate principal amount of up to $150,000,000.00; and WHEREAS, the Banks are willing to make said revolving credit facility available to Borrower upon, and subject to, the terms, provisions and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, the Banks and the Agent hereby mutually covenant and agree as follows: SECTION 1. DEFINITIONS. 1.01 Definitions. In addition to the terms defined elsewhere in this Agreement or in any Exhibit or Schedule hereto, when used in this Agreement, the following terms shall have the following meanings (such meanings shall be equally applicable to the singular and plural forms of the terms used, as the context requires): Affected Bank shall have the meaning ascribed thereto in Section 2.19. Agent shall mean Firstar Bank, N.A. in its capacity as agent for the Banks under this Agreement and certain of the other Transaction Documents and its successors in such capacity. Assignee shall have the meaning ascribed thereto in Section 8.10(c). Bank shall mean each bank from time to time party to this Agreement and its successors and permitted assigns; and Banks shall mean all of the Banks. Page 39 Borrower's Obligations shall mean any and all present and future indebtedness (principal, interest, fees, collection costs and expenses, attorneys' fees and other amounts), liabilities and obligations (including, without limitation, indemnity obligations) of Borrower to the Agent and/or any Bank evidenced by or arising under or in respect of this Agreement, the Notes and/or any of the other Transaction Documents. Default shall mean any event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. Domestic Business Day shall mean any day except a Saturday, Sunday or legal holiday observed by the Agent or any Bank. Eurodollar Business Day shall mean any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London. Event of Default shall have the meaning ascribed thereto in Section 6. Fed Funds Base Rate shall mean, as of the date of any determination thereof, the rate per annum (rounded upwards, if necessary, to the next higher 1/100 of 1%) for overnight Federal Funds transactions which appears on the Telerate Page 5 as of 9:00 a.m. (St. Louis time) on such date. Fed Funds Rate shall mean a rate per annum equal to One-Quarter of One Percent (1/4%) over and above the Fed Funds Base Rate, which Fed Funds Rate shall fluctuate as and when said Fed Funds Base Rate changes. Firstar shall mean Firstar Bank, N.A., a national banking association, in its individual corporate capacity as a Bank hereunder and not as the Agent hereunder. Floating Rate shall mean a rate per annum equal to (a) the Fed Funds Rate if such rate is available or (b) if the Fed Funds Rate is not available, the Prime Rate. The Floating Rate shall fluctuate as and when the Fed Funds Rate or the Prime Rate, as applicable, changes. Floating Rate Loan shall mean any Loan bearing interest based on the Floating Rate. GAAP shall mean, at any time, generally accepted accounting principles at such time in the United States. Granting Bank shall have the meaning ascribed thereto in Section 8.10(e). Page 40 Interest Period shall mean with respect to each LIBOR Loan: (a) initially, the period commencing on the date of such Loan and ending 1, 2, 3 or 6 months thereafter (or such other period agreed upon in writing by Borrower and each Bank), as Borrower may elect in the applicable Notice of Borrowing; and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such Loan and ending 1, 2, 3 or 6 months thereafter (or such other period agreed upon in writing by Borrower and each Bank), as Borrower may elect pursuant to Section 2.04(a); provided that: (c) subject to clauses (d) and (e) below, any Interest Period which would otherwise end on a day which is not a Eurodollar Business Day shall be extended to the next succeeding Eurodollar Business Day unless such Eurodollar Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Eurodollar Business Day; (d) subject to clause (e) below, any Interest Period which begins on the last Eurodollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Eurodollar Business Day of a calendar month; and (e) no Interest Period may extend beyond the last day of the Revolving Credit Period. LIBOR Base Rate shall mean, with respect to the applicable Interest Period, (a) the LIBOR Index Rate for such Interest Period, if such rate is available or (b) if the LIBOR Index Rate is not available, the average (rounded upward, if necessary, to the next higher 1/10,000 of 1%) of the respective rates per annum of interest at which deposits in U.S. Dollars are offered to Firstar in the London interbank market by two (2) Eurodollar dealers of recognized standing, selected by Firstar in its sole discretion, at or about 11:00 a.m. (London time) on the date two (2) Eurodollar Business Days before the first day of such Interest Period, for delivery on the first day of the applicable Interest Period for a number of days comparable to the number of days in such Interest Period and in an amount approximately equal to the principal amount of the LIBOR Loan to which such Interest Period is to apply. LIBOR Index Rate shall mean, with respect to the applicable Interest Period, a rate per annum (rounded upwards, if necessary, to the next higher 1/10,000 of 1%) equal to the British Bankers' Association interest settlement rates for U.S. Dollar deposits for such Interest Period as of 11:00 a.m. (London time) on the day two (2) Eurodollar Business Days before the first day of such Interest Period as Page 41 published by Bloomberg Financial Services, Dow Jones Market Service, Telerate, Reuters or any other service from time to time used by Firstar. LIBOR Loan shall mean any Loan bearing interest based on the LIBOR Rate. LIBOR Rate shall mean (a) the quotient of the (i) LIBOR Base Rate divided by (ii) one minus the applicable LIBOR Reserve Percentage plus (b) One-Quarter of One Percent (1/4%) per annum. The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the LIBOR Reserve Percentage. LIBOR Reserve Percentage shall mean for any day 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), for determining the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special or marginal reserves) with respect to "Eurocurrency liabilities" as defined in Regulation D or with respect to any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined, whether or not any Bank has any Eurocurrency liabilities subject to such reserve requirement at such time. LIBOR Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without the benefit of any credits for proration, exceptions or offsets which may be available from time to time to any Bank. The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the LIBOR Reserve Percentage. Loan and Loans shall have the meanings ascribed thereto in Section 2.01(a). Material Adverse Effect shall mean (a) a material adverse effect on the properties, assets, liabilities, business, operations, prospects, income or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole, (b) material impairment of Borrower's ability to perform any of its obligations under this Agreement, any of the Notes or any of the other Transaction Documents or (c) material impairment of the enforceability of the rights of, or benefits available to, the Agent or any of the Banks under this Agreement, any of the Notes or any of the other Transaction Documents. Notes shall have the meaning ascribed thereto in Section 2.03(a). Notice of Borrowing shall have the meaning ascribed thereto in Section 2.02. Participant shall have the meaning ascribed thereto in Section 8.10(b). Page 42 Person shall mean any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, entity or government (whether national, Federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof). Prime Rate shall mean the interest rate announced from time to time by Firstar as its "prime rate" (which rate shall fluctuate as and when said prime rate shall change). Borrower acknowledges that such "prime rate" is a reference rate and does not necessarily represent the lowest or best rate offered by Firstar or any Bank to its customers. Pro Rata Share shall mean for the item at issue, with respect to each Bank, a fraction (expressed as a percentage), the numerator of which is the portion of such item owned or held by such Bank and the denominator of which is the total amount of such item owned or held by all of the Banks. For example, (a) if the amount of the Revolving Credit Commitment of a Bank is $1,000,000.00 and the total amount of the Revolving Credit Commitments of all of the Banks is $5,000,000.00, such Bank's Pro Rata Share of the Revolving Credit Commitments would be Twenty Percent (20%) and (b) if the original principal amount of a Loan is $5,000,000.00 and the portion of such Loan made by one Bank is $500,000.00, such Bank's Pro Rata Share of such Loan would be Ten Percent (10%). As of the date of this Agreement, the Pro Rata Shares of the Banks with respect to the Revolving Credit Commitments and the Loans are as follows: (a) Firstar - Thirty-Three and One-Third Percent (33-1/3%); (b) Bank One, NA - Sixteen and Two-Thirds Percent (16- 2/3%); (c) The Fuji Bank Limited - Sixteen and Two-Thirds Percent (16-2/3%); (d) Comerica Bank - Sixteen and Two-Thirds Percent (16-2/3%); and (e) Bank Hapoalim B.M. - Sixteen and Two-Thirds Percent (16-2/3%). Purchasing Bank and Purchasing Banks shall have the respective meanings ascribed thereto in Section 2.19. Regulation D shall mean Regulation D of the Board of Governors of the Federal Reserve System, as amended. Regulatory Change shall have the meaning ascribed thereto in Section 2.12. Required Banks shall mean at any time Banks having at least Sixty Percent (60%) of the aggregate amount of Loans then outstanding or, if no Loans are then outstanding, at least Sixty Percent (60%) of the total Revolving Credit Commitments of all of the Banks. Revolving Credit Commitment shall mean, subject to (a) any reduction of the Revolving Credit Commitments pursuant to Section 2.01(c) and (b) assignments of the Revolving Credit Commitments by the Banks to the extent permitted by Section 8.10: (i) with respect to Page 43 Firstar, $50,000,000.00; (ii) with respect to Bank One, NA, $25,000,000.00; (iii) with respect to The Fuji Bank Limited, $25,000,000.00; (iv) with respect to Comerica Bank, $25,000,000.00; and (v) with respect to Bank Hapoalim B.M., $25,000,000.00. Revolving Credit Period shall mean the period commencing on the date of this Agreement and ending November 29, 2001. SPC shall have the meaning ascribed thereto in Section 8.10(e). Subsidiary shall mean any corporation or other entity of which more than Fifty Percent (50%) of the issued and outstanding capital stock or other equity interests entitled to vote for the election of directors or persons performing similar functions (other than by reason of default in the payment of dividends or other distributions) is at the time owned directly or indirectly by Borrower or any Subsidiary. Telerate Page 5 shall mean the display designated as "Page 5" on the Telerate Service (or such other page as may replace Page 5 on that service or such other service as may be used by the Agent for the purpose of determining the rate per annum for overnight Federal Funds transactions). Transaction Documents shall mean this Agreement, the Notes and any and all other agreements, documents and instruments heretofore, now or hereafter delivered to the Agent or any Bank with respect to or in connection with or pursuant to this Agreement, any Loans made hereunder or any of the other Borrower's Obligations, and executed by or on behalf of Borrower, all as the same may from time to time be amended, modified, extended, renewed or restated. SECTION 2. THE LOANS. 2.01 Revolving Credit Commitments. (a) Subject to the terms and conditions set forth in this Agreement and so long as no Default or Event of Default has occurred and is continuing, during the Revolving Credit Period, each Bank severally agrees to make such loans to Borrower (individually, a "Loan" and collectively, the "Loans") as Borrower may from time to time request pursuant to Section 2.02. Each Loan under this Section 2.01(a) which is a Floating Rate Loan shall be for an aggregate principal amount of at least $50,000.00 or any larger multiple of $10,000.00. Each Loan under this Section 2.01(a) which is a LIBOR Loan shall be for an aggregate principal amount of at least $2,500,000.00 or any larger multiple of $500,000.00. The aggregate principal amount of Loans which each Bank shall be required to have outstanding under this Agreement as of any date shall not exceed the amount of such Bank's Revolving Credit Commitment; provided, however, that in no event shall (i) the aggregate principal amount of all Loans outstanding as of any date Page 44 exceed the total Revolving Credit Commitments of all of the Banks as of such date or (ii) the aggregate principal amount of all outstanding Loans made by any Bank exceed such Bank's Pro Rata Share of the total Revolving Credit Commitments of all of the Banks. Each Loan under this Section 2.01 shall be made from the several Banks ratably in proportion to their respective Pro Rata Shares. Within the foregoing limits, Borrower may borrow under this Section 2.01(a), prepay under Section 2.08 and reborrow at any time during the Revolving Credit Period under this Section 2.01(a). All Loans not paid prior to the last day of the Revolving Credit Period, together with all accrued and unpaid interest thereon and all fees and other amounts owing by Borrower to the Agent and/or any Bank with respect thereto, shall be due and payable on the last day of the Revolving Credit Period. The failure of any Bank to make any Loan required under this Agreement shall not release any other Bank from its obligation to make Loans as provided herein. (b) If the total Revolving Credit Commitments of all of the Banks on any date should be less than the aggregate principal amount of Loans outstanding on such date, whether as a result of Borrower's election to decrease the amount of the Revolving Credit Commitments of the Banks pursuant to Section 2.01(c) or otherwise, Borrower shall be automatically required (without demand or notice of any kind by the Agent or any Bank, all of which are hereby expressly waived by Borrower) to immediately repay the Loans in an amount sufficient to reduce the aggregate principal amount of outstanding Loans to an amount equal to or less than the total Revolving Credit Commitments of all of the Banks. (c) Borrower may, upon five (5) Domestic Business Days' prior written notice to the Agent and each Bank, terminate entirely at any time, or proportionately reduce from time to time on a pro rata basis among the Banks based on their respective Pro Rata Shares by an aggregate amount of $5,000,000.00 or any larger multiple of $1,000,000.00 the unused portions of the Revolving Credit Commitments; provided, however, that (i) at no time shall the Revolving Credit Commitments be reduced to a figure less than the aggregate principal amount of outstanding Loans, (ii) at no time shall the Revolving Credit Commitments be reduced to a figure greater than zero but less than $50,000,000.00 and (iii) any such termination or reduction shall be permanent and Borrower shall have no right to thereafter reinstate or increase, as the case may be, the Revolving Credit Commitment of any Bank. 2.02 Method of Borrowing. (a) Borrower shall give notice (a "Notice of Borrowing") to the Agent by 10:00 a.m. (St. Louis time) on the Domestic Business Day of each Floating Rate Loan to be made to Borrower, and by 10:00 a.m. (St. Louis time) at least three (3) Eurodollar Business Days before each LIBOR Loan to be made to Borrower, specifying: Page 45 (i) the date of such Loan, which shall be a Domestic Business Day during the Revolving Credit Period in the case of a Floating Rate Loan and a Eurodollar Business Day during the Revolving Credit Period in the case of a LIBOR Loan; (ii) the aggregate principal amount of such Loan; (iii) whether such Loan is to be a Floating Rate Loan or a LIBOR Loan; and (iv) in the case of a LIBOR Loan, the duration of the initial Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. (b) Upon receipt of a Notice of Borrowing given to it, the Agent shall notify each Bank by 11:00 a.m. (St. Louis time) on the date of receipt of such Notice of Borrowing by the Agent (which must be a Domestic Business Day) of the contents thereof and of such Bank's Pro Rata Share of such Loan. A Notice of Borrowing shall not be revocable by Borrower. (c) Not later than 1:00 p.m. (St. Louis time) on the date of each Loan, each Bank shall (except as provided in subsection (d) of this Section) make available its Pro Rata Share of such Loan, in Federal or other funds immediately available in St. Louis, Missouri, to the Agent at its address specified in or pursuant to Section 8.05. Unless the Agent determines that any applicable condition specified in Section 3 has not been satisfied, the Agent will make the funds so received from the Banks available to Borrower immediately thereafter at the Agent's aforesaid address by crediting such funds to a demand deposit account of Borrower at Firstar specified by Borrower (or such other account mutually agreed upon in writing between the Agent and Borrower). The Agent shall not be required to make any amount available to Borrower hereunder except to the extent the Agent shall have received such amounts from the Banks as set forth herein, provided, however, that unless the Agent shall have been notified by a Bank prior to the time a Loan is to be made hereunder that such Bank does not intend to make its Pro Rata Share of such Loan available to the Agent, the Agent may assume that such Bank has made such Pro Rata Share available to the Agent prior to such time, and the Agent may in reliance upon such assumption make available to Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Agent by such Bank and the Agent has made such amount available to Borrower, the Agent shall be entitled to receive such amount from such Bank forthwith upon its demand, together with interest thereon in respect of each day during the period from and including the date such amount was made available to Borrower to but excluding the date the Agent recovers such amount from such Bank at a rate per annum equal to the Fed Funds Base Rate. Page 46 (d) If any Bank makes a new Loan to Borrower under this Agreement on a day on which Borrower is required to or has elected to repay all or any part of an outstanding Loan to Borrower from such Bank, such Bank shall apply the proceeds of its new Loan to make such repayment and only an amount equal to the difference (if any) between the amount being borrowed and the amount being repaid shall be made available by such Bank to the Agent as provided in subsection (c) of this Section, or remitted by Borrower to the Agent as provided in Section 2.09, as the case may be. (e) Borrower hereby irrevocably authorizes the Agent to rely on telephonic, telegraphic, telecopy, telex or written instructions of any person identifying himself or herself as one of the individuals listed on Schedule 2.02 attached hereto (or any other individual from time to time authorized to act on behalf of Borrower pursuant to a resolution adopted by the Board of Directors of Borrower and certified by the Secretary of Borrower and delivered to the Agent) with respect to any request to make a Loan or a repayment hereunder, and on any signature which the Agent believes to be genuine, and Borrower shall be bound thereby in the same manner as if such individual were actually authorized or such signature were genuine. Borrower also hereby agrees to defend and indemnify the Agent and each Bank and hold the Agent and each Bank harmless from and against any and all claims, demands, damages, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) relating to or arising out of or in connection with the acceptance of instructions for making Loans or repayments under this Agreement. 2.03 Notes. (a) The Loans of each Bank to Borrower shall be evidenced by a Revolving Credit Note of Borrower payable to the order of such Bank in a principal amount equal to the amount of such Bank's Revolving Credit Commitment, each of which Revolving Credit Notes shall be in substantially the form of Exhibit A attached hereto and incorporated herein by reference (with appropriate insertions) (collectively, as the same may from time to time be amended, modified, extended, renewed, restated or replaced (including, without limitation, any Revolving Credit Note issued in full or partial replacement of an existing Revolving Credit Note as a result of an assignment by a Bank), the "Notes"). (b) Each Bank shall record in its books and records the date, amount, type and maturity of each Loan made by it to Borrower and the date and amount of each payment of principal and/or interest made by Borrower with respect thereto; provided, however, that the obligation of Borrower to repay each Loan made by a Bank to Borrower under this Agreement shall be absolute and unconditional, notwithstanding any failure of such Bank to make any such recordation or any mistake by such Bank in connection with any such recordation. The books and records of each Bank showing the account between such Bank and Borrower shall be conclusive evidence of the items set forth therein in the absence of manifest error. Page 47 2.04 Duration of Interest Periods and Selection of Interest Rates. (a) The duration of the initial Interest Period for each LIBOR Loan shall be as specified in the applicable Notice of Borrowing. Borrower shall elect the duration of each subsequent Interest Period applicable to such LIBOR Loan and the interest rate to be applicable during such subsequent Interest Period (and Borrower shall have the option (i) in the case of any Floating Rate Loan, to elect that such Floating Rate Loan become a LIBOR Loan and the Interest Period to be applicable thereto, and (ii) in the case of any LIBOR Loan, to elect that such LIBOR Loan become a Floating Rate Loan), by giving notice of such election to the Agent by 10:00 a.m. (St. Louis time) on the Domestic Business Day of, in the case of the election of the Floating Rate, and by 10:00 a.m. (St. Louis time) at least three (3) Eurodollar Business Days before, in the case of the election of the LIBOR Rate, the end of the immediately preceding Interest Period applicable thereto, if any; provided, however, that notwithstanding the foregoing, in addition to and without limiting the rights and remedies of the Agent and the Banks under Section 6 hereof, so long as any Default or Event of Default under this Agreement has occurred and is continuing, Borrower shall not be permitted to renew any LIBOR Loan as a LIBOR Loan or to convert any Floating Rate Loan into a LIBOR Loan. Upon receipt of any such notice given by Borrower to the Agent under this Section 2.04, the Agent shall notify each Bank by 11:00 a.m. (St. Louis time) on the date of receipt of such notice (which must be a Domestic Business Day) of the contents thereof. If the Agent does not receive a notice of election for a Loan pursuant to this Section 2.04(a) within the applicable time limits specified herein, Borrower shall be deemed to have elected to pay such Loan in whole pursuant to Section 2.09 on the last day of the current Interest Period with respect thereto and to reborrow the principal amount of such Loan on such date as a Floating Rate Loan. (b) Borrower may not have outstanding and the Banks shall not be obligated to make more than eight (8) LIBOR Loans at any one time. 2.05 Interest Rates. (a) So long as no Event of Default under this Agreement has occurred and is continuing, each Floating Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Floating Rate. So long as any Event of Default under this Agreement has occurred and is continuing, each Floating Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Floating Rate is made until it becomes due, at a rate per annum equal to Two Percent (2%) over and above the Floating Rate. Such interest shall be payable monthly in arrears on the last day of each month commencing on the first such date after such Floating Rate Loan is made, and at the maturity of the Notes (whether by reason of acceleration or otherwise). From and after the maturity of the Notes, whether by reason of acceleration or otherwise, each Floating Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to Two Percent (2%) over and above the Floating Rate. Page 48 (b) So long as no Event of Default under this Agreement has occurred and is continuing, each LIBOR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period applicable thereto at a rate per annum equal to the applicable LIBOR Rate. So long as any Event of Default under this Agreement has occurred and is continuing, each LIBOR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period applicable thereto at a rate per annum equal to Two Percent (2%) over and above the applicable LIBOR Rate. Interest shall be payable for each Interest Period on the last day thereof, unless the duration of such Interest Period exceeds three (3) months, in which case such interest shall be payable at the end of the first three (3) months of such Interest Period and on the last day of such Interest Period, and at the maturity of the Notes (whether by reason of acceleration or otherwise). From and after the maturity of the Notes, whether by reason of acceleration or otherwise, each LIBOR Loan shall bear interest, payable on demand, for each day until paid, at a rate per annum equal to Two Percent (2%) over and above the higher of (i) the LIBOR Rate for the immediately preceding Interest Period applicable to such LIBOR Loan or (ii) the Floating Rate. (c) The Agent shall determine each interest rate applicable to the Loans hereunder and its determination thereof shall be conclusive in the absence of manifest error. 2.06 Computation of Interest. Interest on Floating Rate Loans hereunder shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). Interest on LIBOR Loans shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed, calculated as to each Interest Period from and including the first day thereof to but excluding the last day thereof. 2.07 Fees. (a) Contemporaneously with the execution of this Agreement, Borrower shall pay to the Agent for the account of each Bank a nonrefundable upfront fee in an amount equal to .025% of the amount of such Bank's Revolving Credit Commitment. (b) From and including the date of this Agreement to but excluding the last day of the Revolving Credit Period, Borrower shall pay to the Agent for the account of each Bank a nonrefundable commitment fee on the unused portion of the Revolving Credit Commitment of such Bank (determined by subtracting the aggregate principal amount of outstanding Loans made by such Bank to Borrower from such Bank's Revolving Credit Commitment) at the rate of One-Eighth of One Percent (1/8%) per annum. Said commitment fee shall be (i) calculated on a daily basis, (ii) payable quarterly in arrears on each March 31, June 30, September 30 and December 31 during the Revolving Credit Period commencing December 31, 2000, and on the last day of the Revolving Credit Period and (iii) calculated on an actual day, 360-day year basis. Page 49 (c) Borrower agrees to pay the Agent for its own account certain fees in the amounts set forth in a letter agreement between Borrower and the Agent dated October 19, 2000, as the same may from time to time be amended, modified, extended, renewed or restated. 2.08 Prepayments. (a) Borrower may, upon notice to the Agent specifying that it is paying the Floating Rate Loans, pay without penalty or premium the Floating Rate Loans in whole at any time or in part from time to time, by paying the principal amount to be paid. Each such optional payment shall be applied to pay the Floating Rate Loans of the several Banks in proportion to their respective Pro Rata Shares. (b) Borrower may, upon at least three (3) Eurodollar Business Day's notice to the Agent specifying that it is paying the LIBOR Loans, pay the LIBOR Loans to which a given Interest Period applies, in whole, or in part in amounts aggregating $2,500,000.00 or any larger multiple of $500,000.00, by paying the principal amount to be paid together with all accrued and unpaid interest thereon to and including the date of payment and any funding losses and other amounts payable under Section 2.10; provided, however, that in no event may Borrower make a partial payment of LIBOR Loans which results in the total outstanding LIBOR Loans with respect to which a given Interest Period applies being greater than $0.00 but less than $2,500,000.00. Each such optional payment shall be applied to pay the LIBOR Loans of the several Banks in proportion to their respective Pro Rata Shares. (c) Upon receipt of a notice of payment pursuant to this Section, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's Pro Rata Share of such payment and such notice shall not thereafter be revocable by Borrower. 2.09 General Provisions as to Payments. Borrower shall make each payment of principal of, and interest on, the Loans and of fees and all other amounts payable by Borrower under this Agreement, not later than 12:00 noon (St. Louis time) on the date when due and payable, without condition or deduction for any counterclaim, defense, recoupment or setoff, in Federal or other funds immediately available in St. Louis, Missouri, to the Agent at its address referred to in Section 8.05. All payments received by the Agent after 12:00 noon (St. Louis time) shall be deemed to have been received by the Agent on the next succeeding Domestic Business Day. The Agent will distribute to each Bank in immediately available funds its Pro Rata Share of each such payment received by the Agent for the account of the Banks by 2:00 p.m. (St. Louis time) on the day of receipt of such payment by the Agent if such payment is received by the Agent from Borrower by 12:00 noon (St. Louis time) on such day or by 12:00 noon (St. Louis time) on the next succeeding Domestic Business Day if such payment is received by the Agent from Borrower after 12:00 noon (St. Louis time) on such day. Any such payment owed by the Agent to any Bank which is not paid within the applicable time period shall bear Page 50 interest until paid (payable by the Agent) at the Fed Funds Base Rate. Whenever any payment of principal of, or interest on, the Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon, at the then applicable rate, shall be payable for such extended time. 2.10 Funding Losses. Notwithstanding any provision contained in this Agreement to the contrary, (a) if Borrower makes any payment of principal with respect to any LIBOR Loan (pursuant to Sections 2 or 6 or otherwise) on any day other than the last day of the Interest Period applicable thereto, or if Borrower fails to borrow or pay any LIBOR Loan after notice has been given by Borrower to the Agent in accordance with Section 2.02, 2.04, 2.08 or otherwise, Borrower shall reimburse each Bank on demand for any resulting losses and expenses incurred by it, including, without limitation, any losses incurred in obtaining, liquidating or employing deposits from third parties but excluding any loss of margin for the period after any such payment, provided that such Bank shall have delivered to Borrower a certificate setting forth in reasonable detail the calculation of the amount of such losses and expenses, which calculation shall be conclusive in the absence of manifest error. 2.11 Basis for Determining Interest Rate Inadequate or Unfair. If with respect to any Interest Period: (a) deposits in U.S. Dollars (in the applicable amounts) are not being offered to any Bank in the relevant market for such Interest Period, or (b) any Bank determines in good faith that the LIBOR Rate as determined pursuant to the definition thereof will not adequately and fairly reflect the cost to such Bank of maintaining or funding the LIBOR Loans for such Interest Period, such Bank shall forthwith give notice thereof to the Agent and Borrower which notice shall set forth in detail the basis for such notice, whereupon until such Bank notifies the Agent and Borrower that the circumstances giving rise to such suspension no longer exist, (i) the LIBOR Rate shall not be available to Borrower as an interest rate option on any Loans made by such Bank and (ii) all of the then outstanding LIBOR Loans made by such Bank shall automatically convert to Floating Rate Loans on the last day of the then current Interest Period applicable to each such LIBOR Loan. Interest accrued on each such LIBOR Loan prior to any such conversion shall be due and payable on the date of such conversion. 2.12 Illegality. If, after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any Page 51 governmental or regulatory authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank with any request or directive (whether or not having the force of law) of any such governmental or regulatory authority, central bank or comparable agency (a "Regulatory Change") shall make it unlawful or impossible for any Bank to make, maintain or fund its LIBOR Loans to Borrower, such Bank shall forthwith give notice thereof to the Agent and Borrower. Upon receipt of such notice, Borrower shall convert all of its then outstanding LIBOR Loans from such Bank on either (a) the last day of the then current Interest Period applicable to such LIBOR Loan if such Bank may lawfully continue to maintain and fund such LIBOR Loan to such day or (b) immediately if such Bank may not lawfully continue to fund and maintain such LIBOR Loan to such day, to a Floating Rate Loan in an equal principal amount. Interest accrued on each such LIBOR Loan prior to any such conversion shall be due and payable on the date of such conversion together with any funding losses and other amounts due under Section 2.10. 2.13 Increased Cost. (a) If (i) Regulation D or (ii) a Regulatory Change: (A) shall subject any Bank to any tax, duty or other charge with respect to its LIBOR Loans, its Note or its obligation to make LIBOR Loans, or shall change the basis of taxation of payments to any Bank of the principal of or interest on its LIBOR Loans or any other amounts due under this Agreement in respect of its LIBOR Loans or its obligation to make LIBOR Loans (except for taxes on or changes in the rate of tax on the overall net income of such Bank); or (B) shall impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by the Board of Governors of the Federal Reserve System), special deposit, capital or similar requirement against assets of, deposits with or for the account of, or credit extended or committed to be extended by, any Bank or shall, with respect to any Bank impose, modify or deem applicable any other condition affecting such Bank's LIBOR Loans, such Bank's Note or such Bank's obligation to make LIBOR Loans; and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D, to impose a cost on or increase the cost to) such Bank of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable by such Bank under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank to be material, and if such Bank is not otherwise fully compensated for such increase in cost or reduction in amount received or receivable by virtue of the inclusion of the reference to "LIBOR Reserve Percentage" in the calculation of the LIBOR Rate, then upon notice by such Bank to the Agent and Borrower, which notice Page 52 shall set forth such Bank's supporting calculations and the details of the Regulatory Change, Borrower shall pay such Bank, as additional interest, such additional amount or amounts as will compensate such Bank for such increased cost or reduction. The determination by any Bank under this Section of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount or amounts, the Banks may use any reasonable averaging and attribution methods. (b) If any Bank demands compensation under Section 2.13(a) above, Borrower may at any time, upon at least three (3) Eurodollar Business Day's prior notice to such Bank, convert its then outstanding LIBOR Loans to Floating Rate Loans in an equal principal amount. Interest accrued on each such LIBOR Loan prior to any such conversion shall be due and payable on the date of such conversion together with any funding losses and other amounts due under Section 2.10 and this Section 2.13. 2.14 Floating Rate Loans Substituted for Affected LIBOR Loans. If notice has been given by a Bank pursuant to Sections 2.11 or 2.12 or by Borrower pursuant to Section 2.13 requiring LIBOR Loans of any Bank to be repaid, then, unless and until such Bank notifies the Agent and Borrower that the circumstances giving rise to such repayment no longer apply, all Loans which would otherwise be made by such Bank to Borrower as LIBOR Loans shall be made instead as Floating Rate Loans. Such Bank shall promptly notify the Agent and Borrower if and when the circumstances giving rise to such repayment no longer apply. 2.15 Capital Adequacy. If, after the date of this Agreement, any Bank shall have determined in good faith that a Regulatory Change has occurred which has or will have the effect of reducing the rate of return on such Bank's capital in respect of its obligations hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to capital adequacy), then from time to time Borrower shall pay to such Bank upon demand such additional amount or amounts as will compensate such Bank for such reduction. All determinations made in good faith by such Bank of the additional amount or amounts required to compensate such Bank in respect of the foregoing shall be conclusive in the absence of manifest error. In determining such amount or amounts, such Bank may use any reasonable averaging and attribution methods. 2.16 Survival of Indemnities. All indemnities and all provisions relating to reimbursement to the Banks of amounts sufficient to protect the yield to the Banks with respect to the Loans, including, without limitation, Sections 2.10, 2.13 and 2.15 hereof, shall survive the payment of the Notes and the other Borrower's Obligations and the expiration or termination of this Agreement. Notwithstanding the foregoing, if any Bank fails to notify Page 53 Borrower of any event which will entitle such Bank to compensation pursuant to Sections 2.10, 2.13 and/or 2.15 hereof within one hundred eighty (180) days after such Bank obtains knowledge of such event, then such Bank shall not be entitled to any compensation from Borrower for any loss, expense, increased cost and/or reduction of return arising from such event. 2.17 Discretion of Banks as to Manner of Funding. Notwithstanding any provision contained in this Agreement to the contrary, each Bank shall be entitled to fund and maintain its funding of all or any part of its LIBOR Loans in any manner it elects, it being understood, however, that for purposes of this Agreement all determinations hereunder (including, without limitation, the determination of each Bank's funding losses and expenses under Section 2.10) shall be made as if such Bank had actually funded and maintained each LIBOR Loan through the purchase of deposits having a maturity corresponding to the maturity of the applicable Interest Period relating to the applicable LIBOR Loan and bearing an interest rate equal to the applicable LIBOR Base Rate. 2.18 Sharing of Payments. The Banks agree among themselves that, in the event that any Bank shall directly or indirectly obtain any payment (whether voluntary, involuntary, through the exercise of any right of set- off, banker's lien or counterclaim, through the realization, collection, sale or liquidation of any collateral or otherwise) on account of or in respect of any of the Loans or any of the other Borrower's Obligations in excess of its Pro Rata Share of all such payments, such Bank shall immediately purchase from the other Banks participations in the Loans or other Borrower's Obligations owed to such other Banks in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that the Banks share such payment ratably in accordance with their respective Pro Rata Shares of the outstanding Loans and other Borrower's Obligations. The Banks further agree among themselves that if any such excess payment to a Bank shall be rescinded or must otherwise be restored, the other Banks which shall have shared the benefit of such payment shall, by repurchase of participation theretofore sold, or otherwise, return its share of that benefit to the Bank whose payment shall have been rescinded or otherwise restored. Borrower agrees that any Banks so purchasing a participation in the Loans or other Borrower's Obligations to the other Banks may exercise all rights of set-off, banker's lien and/or counterclaim as fully as if such Banks were a holder of such Loan or other Borrower's Obligations in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law any Bank receives a secured claim in lieu of a set-off to which this Section 2.18 would apply, such Banks shall, to the extent practicable, exercise their rights in respect of such secured claim in a manner consistent with the rights of the Banks entitled under this Section 2.18 to share in the benefits of any recovery of such secured claim. Page 54 2.19 Substitution of Bank. If (a) the obligation of any Bank to make LIBOR Loans has been suspended pursuant to Section 2.11 or (b) any Bank has demanded compensation under Sections 2.13 and/or 2.15 (in each case, an "Affected Bank"), Borrower shall have the right, with the assistance of the Agent, to seek a mutually satisfactory substitute bank or banks (which may be one or more of the Banks) (the "Purchasing Bank" or "Purchasing Banks") to purchase the Note and assume the Revolving Credit Commitment of such Affected Bank. The Affected Bank shall be obligated to sell its Note and assign its Revolving Credit Commitment to such Purchasing Bank or Purchasing Banks within fifteen (15) days after receiving notice from Borrower requiring it to do so, at an aggregate price equal to the outstanding principal amount thereof plus unpaid interest accrued thereon up to but excluding the date of sale. In connection with any such sale, and as a condition thereof, Borrower shall pay to the Affected Bank the sum of (a) all fees accrued for its account under this Agreement to but excluding the date of such sale, (b) the amount of any compensation which would be due to the Affected Bank under Section 2.10 if Borrower had prepaid the outstanding LIBOR Loans of the Affected Bank on the date of such sale and (c) any additional compensation accrued for its account under Sections 2.13 and/or 2.15 to but excluding said date. Upon such sale, (a) the Purchasing Bank or Purchasing Banks shall assume the Affected Bank's Revolving Credit Commitment and the Affected Bank shall be released from its obligations under this Agreement to a corresponding extent and (b) the Affected Bank, as assignor, such Purchasing Bank, as assignee, Borrower and the Agent shall enter into an Assignment and Assumption Agreement in accordance with Section 8.10(c), whereupon such Purchasing Bank shall be a Bank party to this Agreement, shall be deemed to be an Assignee under this Agreement and shall have all the rights and obligations of a Bank with a Revolving Credit Commitment equal to its ratable share of the Revolving Credit Commitment of the Affected Bank. In connection with any assignment pursuant to this Section, Borrower shall pay to the Agent the administrative fee of $3,500.00 for processing such assignment referred to in Section 8.10(c). Upon the consummation of any sale pursuant to this Section 2.19, the Affected Bank, the Agent and the Borrower shall make appropriate arrangements so that, if required, each Purchasing Bank receives a new Note. 2.20 Taxes. (a) Any and all payments by Borrower to or for the account of any Bank or the Agent under any Transaction Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Bank and the Agent, taxes imposed on or measured by its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank or the Agent (as the case may be) is organized or any political subdivision thereof (all such non-excluded taxes, duties, levies, imposts, deductions, Page 55 charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable under any Transaction Document to any Bank or the Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.20(a)) such Bank or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deduction of Taxes been made, (ii) Borrower shall make such deductions, (iii) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) Borrower shall furnish to the Agent (who shall forward the same to the applicable Bank), at its address referred to in Section 8.05, the original or a certified copy of a receipt evidencing payment thereof. (b) In addition, Borrower agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, or charges or similar levies which arise from any payment made under any of the Transaction Documents or from the execution or delivery of, or otherwise with respect to, any of the Transaction Documents (hereinafter referred to as "Other Taxes"). (c) Borrower agrees to indemnify each Bank and the Agent for the full amount of Taxes or Other Taxes, respectively (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 2.20), paid by such Bank or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within fifteen (15) days from the date such Bank or the Agent (as the case may be) makes demand therefor, accompanied by a certificate of such Bank or the Agent (as the case may be) setting forth in reasonable detail its computation of the amount or amounts to be paid to it hereunder. (d) The provisions of this Section 2.20 shall survive any expiration or termination of this Agreement and the payment of the Notes and the other Borrower's Obligations. SECTION 3. PRECONDITIONS TO LOANS. 3.01 Initial Loans. Notwithstanding any provision contained in this Agreement to the contrary, none of the Banks shall have any obligation to make the initial Loans under this Agreement unless the Agent shall have first received: (a) this Agreement and the Notes, each executed by a duly authorized officer of Borrower; Page 56 (b) a copy of resolutions of the Board of Directors of Borrower, duly adopted, which authorize the execution, delivery and performance of this Agreement, the Notes and the other Transaction Documents, certified by the Secretary of Borrower; (c) a copy of the Articles of Incorporation of Borrower, including any amendments thereto, certified by the Secretary of Borrower; (d) a copy of the By-Laws of Borrower, including any amendments thereto, certified by the Secretary of Borrower; (e) an incumbency certificate, executed by the Secretary of Borrower, which shall identify by name and title and bear the signatures of all of the officers of Borrower executing any of the Transaction Documents; (f) a certificate of corporate good standing of Borrower issued by the Secretary of State of the State of Missouri; (g) an opinion of the General Counsel of Borrower in form and substance satisfactory to the Agent and each of the Banks; (h) the Notice of Borrowing required by Section 2.02; (i) evidence satisfactory to the Agent that that certain Loan Agreement dated as of October 22, 1999, by and among Borrower, the banks party thereto and Firstar Bank, N.A., as agent for such banks, as amended by that certain First Amendment to Loan Agreement dated as of October 20, 2000 (as so amended, the "Existing Loan Agreement") has been terminated and any existing indebtedness of Borrower thereunder has been paid in full; and (j) such other agreements, documents, instruments and certificates as the Agent or any Bank may reasonably request. 3.02 All Loans. Notwithstanding any provision contained in this Agreement to the contrary, none of the Banks shall have any obligation to make any Loan under this Agreement unless: (a) the Agent shall have received a Notice of Borrowing for such Loan as required by Section 2.02; (b) both immediately before and immediately after giving effect to such Loan, no Default or Event of Default under this Agreement shall have occurred and be continuing; (c) no material adverse change in the properties, assets, liabilities, business, operations, prospects, income or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a Page 57 whole shall have occurred since the date of this Agreement and be continuing; and (d) all of the representations and warranties made by Borrower in this Agreement and/or in any of the other Transaction Documents shall be true and correct in all material respects on and as of the date of such Loan as if made on and as of the date of such Loan (and for purposes of this Section 3.02(d), the representations and warranties made by Borrower in Section 4.04 shall be deemed to refer to the most recent financial statements of Borrower delivered to the Banks pursuant to Section 5.01(a)). Each request for a Loan by Borrower under this Agreement shall be deemed to be a representation and warranty by Borrower on the date of such Loan as to the facts specified in clauses (b), (c) and (d) of this Section 3.02. SECTION 4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants to the Agent and each Bank that: 4.01 Corporate Existence and Power. Borrower: (a) is duly incorporated, validly existing and in good standing under the laws of the State of Missouri; (b) has all requisite corporate powers required to carry on its business as now conducted; (c) has all requisite governmental and regulatory licenses, authorizations, consents and approvals required to carry on its business as now conducted, except such licenses, authorizations, consents and approvals the failure to have could not reasonably be expected to have a Material Adverse Effect; and (d) is qualified to transact business as a foreign corporation in, and is in good standing under the laws of, all states in which it is required by applicable law to maintain such qualification and good standing except for those states in which the failure to qualify or maintain good standing could not reasonably be expected to have a Material Adverse Effect. 4.02 Corporate Authorization. The execution, delivery and performance by Borrower of this Agreement, the Notes and the other Transaction Documents are within the corporate powers of Borrower and have been duly authorized by all necessary corporate and other action on the part of Borrower. 4.03 Binding Effect. This Agreement, the Notes and the other Transaction Documents have been duly executed and delivered by Borrower and constitute the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Page 58 4.04 Financial Statements. Borrower has furnished the Agent and each of the Banks with the following financial statements: (a) consolidated and consolidating balance sheets and statements of income, retained earnings and cash flows of Borrower and its Subsidiaries as of and for the fiscal year of Borrower ended September 30, 1999, all certified by Borrower's independent certified public accountants, which financial statements have been prepared in accordance with GAAP consistently applied; and (b) unaudited consolidated and consolidating balance sheets and statements of income, retained earnings and cash flows of Borrower and its Subsidiaries as of and for the fiscal quarter of Borrower ended June 30, 2000, certified by the chief financial officer of Borrower as being true, correct and complete in all material respects and as being prepared in accordance with GAAP consistently applied. Borrower further represents and warrants to the Agent and each Bank that (a) said balance sheets and their accompanying notes (if any) fairly present the condition of Borrower and its Subsidiaries as of the dates thereof, (b) there has been no material adverse change in the condition or operation, financial or otherwise, of Borrower and its Subsidiaries taken as a whole since June 30, 2000, and (c) neither Borrower nor any of its Subsidiaries had any direct or contingent liabilities which were not disclosed on said financial statements or the notes thereto (to the extent such disclosure is required by GAAP). 4.05 Compliance With Other Instruments; None Burdensome. None of the execution and delivery by Borrower of the Transaction Documents, the performance by Borrower of its obligations under the Transaction Documents or the borrowing and/or repayment of Loans by Borrower under this Agreement will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under or result in any violation of, any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Borrower, any of the provisions of the Articles of Incorporation or By-Laws of Borrower or any of the provisions of any indenture, agreement, document, instrument or undertaking to which Borrower is a party or subject, or by which Borrower or any property or assets of Borrower is bound, or result in the creation or imposition of any security interest, lien or encumbrance on any of the property or assets of Borrower pursuant to the terms of any such indenture, agreement, document, instrument or undertaking. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental, regulatory, administrative or public body, instrumentality, authority, agency or official, or any subdivision thereof, or any other Person is required to authorize, or is required in connection with, (a) the execution, delivery or performance of, or the legality, validity, binding effect or enforceability of, any of the Transaction Documents and/or (b) the borrowing and/or repayment of Loans by Borrower under this Agreement. 4.06 Regulation U. Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the Page 59 purpose of purchasing or carrying margin stock (within the meaning of Regulation U of The Board of Governors of the Federal Reserve System, as amended) and no part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately (a) to purchase or carry margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock, or to refund or repay indebtedness originally incurred for such purpose or (b) for any purpose which entails a violation of, or which is inconsistent with, the provisions of any of the Regulations of The Board of Governors of the Federal Reserve System, including, without limitation, Regulations U, T or X thereof, as amended. If requested by the Agent or any Bank, Borrower shall furnish to the Agent and each Bank a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U. 4.07 Investment Company Act of 1940; Public Utility Holding Company Act of 1935. Borrower is not an "investment company" as that term is defined in, and is not otherwise subject to regulation under, the Investment Company Act of 1940, as amended. Borrower is not a "holding company" as that term is defined in, and is not otherwise subject to regulation under, the Public Utility Holding Company Act of 1935, as amended. 4.08 No Default. No Default or Event of Default under this Agreement has occurred and is continuing. There is no existing default or event of default under or with respect to any indenture, contract, agreement, lease or other instrument to which Borrower is a party or by which any property or assets of Borrower is bound or affected, a default under which could reasonably be expected to have a Material Adverse Effect. Borrower has and is in full compliance with and in good standing with respect to all governmental permits, licenses, certificates, consents and franchises necessary to continue to conduct its business as previously conducted by it and to own or lease and operate its properties and assets as now owned or leased by it, the failure to have or noncompliance with which could reasonably be expected to have a Material Adverse Effect. Borrower is not in violation of any applicable statute, law, rule, regulation or ordinance of the United States of America, of any state, city, town, municipality, county or of any other jurisdiction, or of any agency thereof, a violation of which could reasonably be expected to have a Material Adverse Effect. SECTION 5. COVENANTS. 5.01 Covenants of Borrower. Borrower covenants and agrees that, so long as any Bank has any obligation to make any Loan under this Agreement and/or any of the Borrower's Obligations remain unpaid: (a) Information. Borrower will deliver or cause to be delivered to the Agent with sufficient copies for each Bank: Page 60 (i) within one hundred (100) days after the end of each fiscal year of Borrower: (A) a consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, retained earnings and cash flows for such fiscal year, setting forth in each case, in comparative form, the figures for the previous fiscal year, all such financial statements to be prepared in accordance with GAAP consistently applied and reported on by and accompanied by the unqualified opinion of independent certified public accountants selected by Borrower and reasonably acceptable to the Required Banks; provided, however, that delivery to the Agent of copies of the Annual Report on Form 10-K of Borrower for such fiscal year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 5.01(a)(i); (ii) within fifty (50) days after the end of the first three (3) fiscal quarters of each fiscal year of Borrower, a consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal quarter and the related consolidated statements of income, retained earnings and cash flows for such fiscal quarter and for the portion of Borrower's fiscal year ended at the end of such fiscal quarter, setting forth in each case in comparative form, the figures for the corresponding fiscal quarter and the corresponding portion of Borrower's previous fiscal year, all in reasonable detail and satisfactory in form to the Required Banks and certified (subject to normal year-end adjustments and absence of footnote disclosures) as to fairness of presentation, consistency and compliance with GAAP by the chief financial officer of Borrower; provided, however, that delivery to the Agent of copies of the Quarterly Report on Form 10-Q of Borrower for such fiscal quarter filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 5.01(a)(ii); (iii) simultaneously with the delivery of each set of financial statements referred to in Sections 5.01(a)(i) and (ii) above, a certificate of an authorized officer of Borrower in the form attached hereto as Exhibit B and incorporated herein by reference (A)stating whether there exists on the date of such certificate any Default or Event of Default and, if any Default or Event of Default then exists, setting forth the details thereof and the action which Borrower is taking or proposes to take with respect thereto and (B) certifying that all of the representations and warranties made by Borrower in this Agreement and/or in any other Transaction Document are true and correct in all material respects on and as of the date of such certificate as if made on and as of the date of such certificate; and (iv) with reasonable promptness, such further information regarding the business, affairs and financial condition of Borrower as the Agent or any Bank may from time to time reasonably request. Page 61 (b) Corporate Existence. Borrower will do all things necessary to (i) preserve and keep in full force and effect at all times its corporate existence and all permits, licenses, franchises and other rights material to its business and (ii) be duly qualified to do business and be in good standing in all jurisdictions where the nature of its business or its ownership of property or assets requires such qualification except for those jurisdictions in which the failure to qualify or be in good standing could not reasonably be expected to have a Material Adverse Effect. (c) Compliance with Laws, Regulations, Etc. Borrower will comply with any and all laws, ordinances and governmental and regulatory rules and regulations to which Borrower is subject and obtain any and all licenses, permits, franchises and other governmental and regulatory authorizations necessary to the ownership of its properties or assets or to the conduct of its business, which violation or failure to obtain could reasonably be expected to have a Material Adverse Effect. (d) Further Assurances. Borrower will execute and deliver to Agent and each Bank, at any time and from time to time, any and all further agreements, documents and instruments, and take any and all further actions which may be required under applicable law, or which the Agent or any Bank may from time to time reasonably request, in order to effectuate the transactions contemplated by this Agreement and the other Transaction Documents. (e) Consolidation or Merger. Borrower will not directly or indirectly merge or consolidate with or into any other Person. 5.02 Use of Proceeds. Borrower covenants and agrees that (a) the proceeds of the Loans will be used solely for the working capital and general corporate purposes of Borrower, (b) no part of the proceeds of any Loan will be used in violation of any applicable law, rule or regulation and (c) no part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately (i) to purchase or carry margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock, or to refund or repay indebtedness originally incurred for such purpose or (ii) for any purpose which entails a violation of, or which is inconsistent with, the provisions of any of the Regulations of The Board of Governors of the Federal Reserve System, including, without limitation, Regulations U, T or X thereof, as amended. SECTION 6. EVENTS OF DEFAULT. If any of the following (each of the following herein sometimes called an "Event of Default") shall occur and be continuing: 6.01 Borrower shall fail to pay any of the Borrower's Obligations constituting principal due under the Loans as and when the same shall become due and payable, whether by reason of demand, maturity, acceleration or otherwise; Page 62 6.02 Borrower shall fail to pay any of the Borrower's Obligations constituting interest, fees or other amounts (other than principal due under the Loans) within five (5) Domestic Business Days after the date the same shall first become due and payable, whether by reason of demand, maturity, acceleration or otherwise; 6.03 Any representation or warranty made by Borrower in this Agreement, in any other Transaction Document or in any certificate, agreement, instrument or written statement furnished or made or delivered pursuant hereto or thereto or in connection herewith or therewith, shall prove to have been untrue or incorrect in any material respect when made or effected; 6.04 Borrower shall fail to perform or observe any term, covenant or provision contained in Section 5.01(e) or Section 5.02; 6.05 Borrower shall fail to perform or observe any other term, covenant or provision contained in this Agreement (other than those specified in Sections 6.01, 6.02 or 6.03 above) and any such failure shall remain unremedied for thirty (30) days after the earlier of (i) written notice of default is given to Borrower by the Agent or any Bank or (ii) any officer of Borrower obtaining actual knowledge of such default; 6.06 This Agreement or any of the other Transaction Documents shall at any time for any reason (other than termination of this Agreement or such other Transaction Documents, as the case may be, in accordance with its terms) cease to be in full force and effect or shall be declared to be null and void by a court of competent jurisdiction, or if the validity or enforceability thereof shall be contested or denied by Borrower, or if the transactions completed hereunder or thereunder shall be contested by Borrower or if Borrower shall deny that it has any further liability or obligation hereunder or thereunder; 6.07 Borrower shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official of itself or of a substantial part of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against itself in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any corporate or other action for the purpose of effecting any of the foregoing; Page 63 6.08 An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of Borrower, or of a substantial part of the property or assets of Borrower, under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official of Borrower or of a substantial part of the property or assets of Borrower or (iii) the winding-up or liquidation of Borrower, and such proceeding or petition shall continue undismissed for sixty (60) consecutive days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for sixty (60) consecutive days; 6.09 Borrower shall be declared by any Bank to be in default under or in respect of (i) any other present or future obligation to such Bank, including, without limitation, any other loan, line of credit, revolving credit, guaranty or letter of credit reimbursement obligation, or (ii) any other present or future agreement purporting to convey to such Bank a security interest in, or a lien or encumbrance upon, upon any property or assets of Borrower; 6.10 The occurrence of any default or event of default under or within the meaning of any agreement, document or instrument evidencing, securing, guaranteeing the payment of or otherwise relating to any indebtedness of Borrower for borrowed money (other than the Borrower's Obligations) having an aggregate outstanding principal balance in excess of $5,000,000.00 which is not cured or waived in writing within any applicable cure or grace period; or 6.11 Borrower shall have a judgment in an amount in excess of $5,000,000.00 entered against it by a court having jurisdiction in the premises and such judgment shall not be appealed in good faith (and execution of such judgment stayed during such appeal) or satisfied by Borrower within thirty (30) days after the entry of such judgment; THEN, and in each such event (other than an event described in Sections 6.07 or 6.08), the Agent may, and if requested in writing by the Required Banks the Agent shall, declare that the obligations of the Banks to make Loans under this Agreement have terminated, whereupon such obligations of the Banks shall be immediately and forthwith terminated, and the Agent may further, and if requested in writing by the Required Banks the Agent shall further, declare the entire outstanding principal balance of and all accrued and unpaid interest on the Notes and all of the other Borrower's Obligations to be forthwith due and payable, whereupon all of the unpaid principal balance of and all accrued and unpaid interest on the Notes and all of such other Borrower's Obligations shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower, and the Agent and the Banks may exercise any and all other rights and remedies which they may have under any of the other Page 64 Transaction Documents or under applicable law; provided, however, that upon the occurrence of any event described in Sections 6.07 or 6.08, the obligation of the Banks to make Loans under this Agreement under this Agreement shall automatically terminate and the entire outstanding principal balance of and all accrued and unpaid interest on the Notes and all of the other Borrower's Obligations shall automatically become immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower, and the Agent and the Banks may exercise any and all other rights and remedies which they may have under any of the other Transaction Documents or under applicable law. SECTION 7. AGENT 7.01 Appointment. Firstar Bank, N.A. is hereby appointed by the Banks as Agent under this Agreement, the Notes and the other Transaction Documents. The Agent agrees to act as such upon the express conditions contained in this Agreement. 7.02 Powers. The Agent shall have and may exercise such powers hereunder as are specifically delegated to the Agent by the terms of this Agreement and the other Transaction Documents, together with such powers as are reasonably incidental thereto. The Agent shall have no implied duties to the Banks, nor any obligation to the Banks to take any action under this Agreement or any of the other Transaction Documents, except any action specifically provided by this Agreement or any of the other Transaction Documents to be taken by the Agent. Without limiting the generality of the foregoing, the Agent shall not be required to take any action with respect to any Default or Event of Default, except as expressly provided in Section 6, Section 7.06 and Section 7.14. 7.03 General Immunity. Neither the Agent nor any of its directors, officers, employees, agents or advisors shall be liable to any of the Banks for any action taken or not taken by it in connection with this Agreement or any of the other Transaction Documents (a) with the consent or at the request of the Required Banks or (b) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, nonappealable order. 7.04 No Responsibility for Loans, Recitals, etc. Neither the Agent nor any of its directors, officers, employees, agents or advisors shall (a) be responsible for or have any duty to ascertain, inquire into or verify any recitals, reports, statements, representations or warranties contained in this Agreement or any of the other Transaction Documents or furnished pursuant hereto or thereto, (b) except as set forth in Sections 2.02 and 2.09, be responsible for any Loans hereunder, (c) be bound to ascertain or inquire as to the performance or observance of any of the terms of this Agreement or any of the Page 65 other Transaction Documents, (d) be responsible for the satisfaction of any condition specified in Section 3, except receipt of items required to be delivered to the Agent, (e) be responsible for the validity, effectiveness, genuineness or enforceability of this Agreement or any of the other Transaction Documents or (f) be responsible for the creation, attachment, perfection or priority of any security interests or liens purported to be granted to the Agent or any Bank pursuant to this Agreement or any of the other Transaction Documents. 7.05 Right to Indemnity. Notwithstanding any other provision contained in this Agreement to the contrary, to the extent Borrower fails to reimburse the Agent pursuant to Section 8.03 or Section 8.04, or if any Default or Event of Default shall occur under this Agreement, the Banks shall ratably in accordance with their respective Pro Rata Shares of the aggregate principal amount of outstanding Loans indemnify the Agent and hold it harmless from and against any and all liabilities, losses (except losses occasioned solely by failure of Borrower to make any payments or to perform any obligations required by this Agreement (excepting those described in Sections 8.03 and 8.04), the Notes or any of the other Transaction Documents), costs and/or expenses, including, without limitation, any liabilities, losses, costs and/or expenses arising from the failure of any Bank to perform its obligations hereunder or in respect of this Agreement, and also including, without limitation, reasonable attorneys' fees and expenses, which the Agent may incur, directly or indirectly, in connection with this Agreement, the Notes or any of the other Transaction Documents, or any action or transaction related hereto or thereto; provided only that the Agent shall not be entitled to such indemnification for any losses, liabilities, costs and/or expenses resulting from its own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, nonappealable order. This indemnity shall be a continuing indemnity, contemplates all liabilities, losses, costs and expenses related to the execution, delivery and performance of this Agreement, the Notes and the other Transaction Documents, and shall survive the satisfaction and payment of the Borrower's Obligations and the termination of this Agreement. 7.06 Action Upon Instructions of Required Banks. The Agent agrees, upon the written request of the Required Banks, to take any action of the type specified in this Agreement or any of the other Transaction Documents as being within the Agent's rights, duties, powers or discretion. Notwithstanding the foregoing, the Agent shall be fully justified in failing or refusing to take any action hereunder, unless it shall first be indemnified to its satisfaction by the Banks pro rata against any and all liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) which may be incurred by it by reason of taking or continuing to take any such action, other than any liability resulting from the Agent's gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, nonappealable order. The Agent shall Page 66 in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with written instructions signed by the Required Banks, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Banks and on all holders of the Notes. In the absence of a request by the Required Banks, the Agent shall have authority, in its good faith discretion, to take or not to take any action, unless this Agreement or any of the other Transaction Documents specifically requires the consent of the Required Banks or of all of the Banks. 7.07 Employment of Agents and Counsel. The Agent may execute any of its duties as Agent hereunder by or through employees, agents and attorneys- in-fact and shall not be answerable to the Banks, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it in good faith and with reasonable care. The Agent shall be entitled to advice and opinion of legal counsel concerning all matters pertaining to the duties of the agency hereby created. 7.08 Reliance on Documents; Counsel. The Agent shall be entitled to rely upon any note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of legal counsel selected by the Agent. 7.09 May Treat Payee as Owner. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed with the Agent. Any request, authority or consent of any Person who at the time of making such request or giving such authority or consent is the holder of any such Note shall be conclusive and binding on any subsequent holder, transferee or assignee of such Note or of any Note issued in exchange therefor. 7.10 Agent's Reimbursement. Each Bank agrees to reimburse the Agent pro rata in accordance with its Pro Rata Share of the aggregate principal amount of outstanding Loans for (a) any out-of-pocket costs and expenses not reimbursed by Borrower for which the Agent is entitled to reimbursement by the Borrower under this Agreement or any of the other Transaction Documents and (b) for any other out-of-pocket costs and expenses incurred by the Agent on behalf of the Banks in connection with the preparation, execution, delivery, amendment, modification, extension, renewal, administration and/or enforcement of this Agreement and/or any of the other Transaction Documents. 7.11 Rights as a Bank. With respect to its Revolving Credit Commitment, the Loans made by it and the Note issued to it, Firstar Page 67 Bank, N.A. shall have the same rights and powers hereunder as any Bank and may exercise the same as though it were not the Agent, and the terms "Bank" and "Banks" shall, unless the context otherwise indicates, include Firstar Bank, N.A. in its individual capacity. Firstar Bank, N.A. may accept deposits from, lend money to, issue letters of credit for the account of and generally engage in any kind of banking or trust business with the Borrower and its Subsidiaries and affiliates as if it were not the Agent. 7.12 Independent Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank and based on the financial statements referred to in Section 4.04 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Transaction Documents. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Transaction Documents. 7.13 Resignation of Agent. Subject to the appointment of a successor Agent, the Agent may resign as Agent for the Banks under this Agreement and the other Transaction Documents at any time by thirty (30) days' notice in writing to the Banks and Borrower. Such resignation shall take effect upon appointment of such successor Agent. Subject to the consent of Borrower (which consent shall not be unreasonably withheld or delayed), the Required Banks shall have the right to appoint a successor Agent who shall be a Bank and who shall be entitled to all of the rights of, and vested with the same powers as, the original Agent under this Agreement and the other Transaction Documents. In the event a successor Agent shall not have been appointed within the thirty (30) day period following the giving of notice by the Agent, subject to the consent of Borrower (which consent shall not be unreasonably withheld or delayed), the Agent may appoint its own successor. Resignation by the Agent shall not affect or impair the rights of the Agent under Sections 7.05 and 7.10 hereof with respect to all matters preceding such resignation. Any successor Agent must be a national banking association or a bank chartered in any State of the United States having a combined capital and surplus of at least $100,000,000.00. 7.14 Delivery of Documents. The Agent agrees to promptly provide each Bank with copies of (a) this Agreement and the other Transaction Documents (including any amendments thereto), (b) any default notices sent by the Agent to Borrower with respect to this Agreement or any of the other Transaction Documents, (c) any waivers or consents signed by the Agent or otherwise sent by the Agent to Borrower with respect to this Agreement or any of the other Transaction Documents, (d) any notices of default sent by Borrower to the Agent with respect to this Agreement or any of the other Page 68 Transaction Documents and (e) any requests for any amendments, waivers or consents sent to the Agent by Borrower with respect to this Agreement or any of the other Transaction Documents. The Agent agrees to provide each Bank, within ten (10) Domestic Business Days after written request by such Bank and at such Bank's expense, a copy of such other information, reports, certificates and/or other materials prepared by Borrower or otherwise required by the Transaction Documents and which are in the possession of the Agent which are reasonably requested by such Bank in writing. 7.15 Duration of Agency. The agency established by Section 7.01 hereof shall continue, and Sections 7.01 through and including this Section 7.15 shall remain in full force and effect, until all of the Borrower's Obligations shall have been paid in full and this Agreement and the Banks' Revolving Credit Commitments shall have terminated or expired. SECTION 8. GENERAL. 8.01 No Waiver. No failure or delay by the Agent or any Bank in exercising any right, remedy, power or privilege under this Agreement or under any other Transaction Document shall operate as a waiver thereof; nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies provided in this Agreement and in the other Transaction Documents are cumulative and not exclusive of any remedies provided by law. Nothing herein contained shall in any way affect the right of the Agent or any Bank to exercise any statutory or common law right of banker's lien or set-off. 8.02 Right of Set-Off. Upon the occurrence and during the continuance of any Event of Default, each Bank is hereby authorized at any time and from time to time, without notice to Borrower (any such notice being expressly waived by Borrower) and 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, but specifically excluding any trust or segregated accounts) at any time held by such Bank and any and all other indebtedness at any time owing by such Bank to or for the credit or account of Borrower against any and all of the Borrower's Obligations irrespective of whether or not such Bank shall have made any demand under this Agreement or under any of the other Transaction Documents and although such obligations may be contingent or unmatured. Each Bank agrees to promptly notify Borrower after any such set-off and application made by such Bank, provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Banks under this Section 8.02 are in addition to any other rights and remedies (including, without limitation, other rights of set-off) which the Banks may have. Nothing contained in this Agreement or any other Transaction Document shall impair the right of any Bank to Page 69 exercise any right of set-off or counterclaim it may have against Borrower and to apply the amount subject to such exercise to the payment of indebtedness of Borrower unrelated to this Agreement or the other Transaction Documents. 8.03 Cost and Expenses. Borrower agrees, whether or not any Loan is made under this Agreement, to pay or reimburse the Agent and each Bank upon demand for (a) all out-of-pocket costs and expenses (including, without limitation, reasonable attorneys' fees and expenses up to a maximum amount of $3,000.00) incurred by the Agent in connection with the preparation, documentation, negotiation and/or execution of this Agreement and/or any of the other Transaction Documents, (b) all recording, filing and search fees and expenses incurred by the Agent in connection with this Agreement and/or any of the other Transaction Documents, (c) all out-of-pocket costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) incurred by the Agent in connection with the (i) the preparation, documentation, negotiation and execution of any amendment, modification, extension, renewal or restatement of this Agreement and/or any of the other Transaction Documents or (ii) the preparation of any waiver or consent under this Agreement or under any of the other Transaction Documents and (d) if an Event of Default occurs, all out-of-pocket costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) incurred by the Agent or any Bank in connection with such Event of Default and collection and other enforcement proceedings resulting therefrom. Borrower further agrees to pay or reimburse the Agent and each Bank upon demand for any stamp or other similar taxes which may be payable with respect to the execution, delivery, recording and/or filing of this Agreement and/or any of the other Transaction Documents. All of the obligations of Borrower under this Section 8.03 shall survive the satisfaction and payment of the Borrower's Obligations and the termination of this Agreement. 8.04 General Indemnity. In addition to the payment of expenses pursuant to Section 8.03, whether or not the transactions contemplated hereby shall be consummated, Borrower hereby agrees to defend, indemnify, pay and hold the Agent and each Bank and any holders of the Notes, and the officers, directors, employees, agents and affiliates of the Agent and each Bank and such holders (collectively, the "Indemnitees") harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, disbursements, costs and expenses of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitees shall be designated a party thereto), that may be imposed on, incurred by or asserted against the Indemnitees, in any manner relating to or arising out of this Agreement, any of the other Page 70 Transaction Documents or any other agreement, document or instrument executed and delivered by Borrower in connection herewith or therewith, the statements contained in any commitment letters delivered by the Agent or any Bank, the agreement of the Banks to make the Loans under this Agreement or the use or intended use of the proceeds of any Loan under this Agreement (collectively, the "indemnified liabilities"); provided that (a) Borrower shall have no obligation to an Indemnitee hereunder with respect to indemnified liabilities directly and solely resulting from the gross negligence or willful misconduct of that Indemnitee as determined by a court of competent jurisdiction in a final, nonappealable order and (b) Borrower shall have no obligation to indemnify the Agent or any Bank with respect to disputes between the Agent and any Bank or with respect to disputes among the Banks. To the extent that the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, Borrower shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all indemnified liabilities incurred by the Indemnitees or any of them. The provisions of the undertakings and indemnification set out in this Section 8.04 shall survive satisfaction and payment of the Borrower's Obligations and the termination of this Agreement. 8.05 Notices. Each notice, request, demand, consent, confirmation or other communication under this Agreement shall be in writing and delivered in person or sent by facsimile or registered or certified mail, return receipt requested and postage prepaid, to the applicable party at its address or facsimile number set forth on the signature pages hereof, or at such other address or facsimile number as any party hereto may designate as its address for communications hereunder by notice so given. Such notices shall be deemed effective on the day on which delivered or sent if delivered in person or sent by facsimile (with answerback confirmation received), or on the fourth (4th) Domestic Business Day after the day on which mailed, if sent by registered or certified mail. 8.06 Consent to Jurisdiction; Waiver of Jury Trial. BORROWER IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT SITTING IN THE CITY OR COUNTY OF ST. LOUIS, MISSOURI OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE EASTERN DISTRICT OF MISSOURI, EASTERN DISTRICT, AS THE AGENT MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN ANY OF SUCH COURTS. BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, Page 71 ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND BORROWER FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. BORROWER AUTHORIZES THE SERVICE OF PROCESS UPON BORROWER BY REGISTERED MAIL SENT TO BORROWER AT ITS ADDRESS DETERMINED PURSUANT TO SECTION 8.05. BORROWER, THE AGENT AND EACH BANK HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH BORROWER AND THE AGENT AND/OR ANY BANK ARE PARTIES RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS. 8.07 Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Missouri (without reference to conflict of law principles). 8.08 Amendments and Waivers. Any provision of this Agreement, the Notes or any of the other Transaction Documents to which Borrower is a party may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by Borrower, the Required Banks and the Agent; provided however, that notwithstanding the foregoing, (a) no such amendment shall increase the Revolving Credit Commitment of a Bank unless such amendment is signed by such Bank and (b) no such amendment or waiver shall, unless signed by each Bank, (i) decrease the Revolving Credit Commitment of any Bank (other than ratable decreases of the Revolving Credit Commitments of each Bank effected in accordance with Section 2.01(c)), (ii) extend the term of the Revolving Credit Period, (iii) reduce the principal amount of or rate of interest on any Loan or any fees hereunder, (iv) postpone the date fixed for any payment of principal of or interest on any Loan or any fees hereunder, (v) waive any Event of Default caused by the failure of Borrower to pay any principal of and/or interest on any Loan or any fees hereunder when due, (vi) change the percentage of the Revolving Credit Commitments or of the aggregate principal amount of Loans which shall be required for the Banks or any of them to take any action or obligations under this Section or any other provision of this Agreement, (vii) change the definition of "Required Banks", (viii) amend Section 2.18 or (ix) amend this Section 8.08. 8.09 References; Headings for Convenience. Unless otherwise specified herein, all references herein to Section numbers refer to Section numbers of this Agreement, all references herein to Exhibits "A", "B" and "C" refer to annexed Exhibits "A", "B" and "C" which are hereby incorporated herein by reference and all references herein to Schedule 2.02 refers to annexed Schedule 2.02 which is hereby incorporated herein by reference. The Section headings are furnished for the convenience of the parties and are not to be considered in the construction or interpretation of this Agreement. Page 72 8.10 Successors and Assigns. (a) Subject to paragraphs (b), (c), (d) and (e) of this Section 8.10, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding the foregoing, Borrower may not assign or otherwise transfer any of its rights or delegate any of its obligations or duties under this Agreement without the prior written consent of the Agent and each Bank. (b) Any Bank may at any time grant to one or more banks or other financial institutions (each, a "Participant") participating interests in its Revolving Credit Commitment, any or all of its Loans and/or any or all of its other rights and/or obligations under this Agreement. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to Borrower and the Agent, such Bank shall remain responsible for the performance of its obligations under this Agreement, and Borrower and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that the applicable Bank will not agree to any amendment, modification or waiver of this Agreement described in clauses (b)(ii), (b)(iii) or (b)(iv) of Section 8.08 without the consent of the Participant. Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Sections 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, 2.16 and 2.17 of this Agreement with respect to its participating interest, but Borrower's liability in respect thereof shall not be greater than its liability thereunder to the Bank granting the applicable participation. (c) Any Bank may at any time assign to one or more banks or other financial institutions (each, an "Assignee") all, or a proportionate part of all, of its rights and obligations under this Agreement and its Note, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit C attached hereto executed by such Assignee and such transferor Bank, with (and subject to) the subscribed consent of Borrower and the Agent, which, in each case, shall not be unreasonably withheld or delayed; provided, however, that (i) the minimum amount of any such assignment shall be $5,000,000.00, (ii) in no event may a Bank have a Revolving Credit Commitment of more than $0.00 but less than $10,000,000.00, (iii) if any Assignee is an affiliate of such transferor Bank or, immediately prior to such assignment, a Bank, no consent shall be required and (iv) if any Event of Default under this Agreement has occurred and is continuing no consent of Borrower to such assignment shall be required. Upon execution and delivery of such instrument and payment by such Page 73 Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Revolving Credit Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Agent and Borrower shall make appropriate arrangements so that, if required, new Notes are issued to the Assignor and/or the Assignee, as applicable. In connection with any such assignment, the transferor Bank shall pay to the Agent an administrative fee for processing such assignment in the amount of $3,500.00. (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and its Notes to secure its obligations to a Federal Reserve Bank. No such assignment shall release the transferor Bank from any of its obligations hereunder. (e) Any Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an "SPC"), identified as such in writing from time to time by the Granting Bank to the Agent and Borrower, the option to provide to Borrower all or any part of any Loan that such Granting Bank would otherwise be obligated to make to Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan, (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Bank shall be obligated to make such Loan pursuant to the terms of this Agreement, (iii) the SPC shall fund all of the Loans which it makes to the Granting Bank which shall forward such funds to the Agent, (iv) the Agent shall send all payments of principal, interest and other amounts due with respect to Loans made by an SPC which are received by the Agent to the applicable Granting Bank for the account of such SPC, (iii) no SPC shall be deemed to be a Bank for purposes of this Agreement, have any voting rights under this Agreement (all voting rights shall remain with the Granting Bank) or have any right to any fees payable under this Agreement (all rights to fees shall remain with the Granting Bank). The making of a Loan by an SPC under this Agreement shall utilize the Revolving Credit Commitment of the Granting Bank to the same extent, and as if, such Loan were made by such Granting Bank. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Bank). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, Page 74 arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 8.10, any SPC may (i) with notice to, but without the prior written consent of, Borrower and the Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Bank or to any financial institutions (consented to by Borrower and the Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non- public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC. This Section may not be amended without the written consent of each SPC having Loans outstanding on the date of such amendment. 8.11 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER, THE AGENT AND THE BANKS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWER, THE AGENT AND THE BANKS COVERING SUCH MATTERS ARE CONTAINED IN THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, WHICH AGREEMENT AND OTHER TRANSACTION DOCUMENTS ARE A COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS AMONG BORROWER, THE AGENT AND THE BANKS, EXCEPT AS BORROWER, THE AGENT AND THE BANKS MAY LATER AGREE IN WRITING TO MODIFY THEM. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings (oral or written) relating to the subject matter hereof. 8.12 Severability. In the event any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 8.13 Counterparts. This Agreement may be executed in any number of counterparts (including facsimile counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.14 Confidentiality. Any information received by any Bank from Borrower (or from the Agent on Borrower's behalf) and clearly marked as confidential shall be treated as confidential by such Bank in accordance with its customary practices and procedures. Notwithstanding such agreement, nothing herein contained shall limit or impair the right or obligation of any Bank to disclose such information: (a) to its auditors, attorneys, trustees, employees, Page 75 directors, officers, advisors, affiliates or agents, (b) when and as required by any law, ordinance, subpoena or governmental order, rule or regulation, (c) as may be required, requested or otherwise appropriate in any report, statement or testimony submitted to any municipal, state, provincial or federal regulatory body or any self-regulatory body having or claiming to have jurisdiction over such Bank, (d) which is publicly available or readily ascertainable from public sources, or which is received by any Bank from a third Person which or which is not known by such Bank to be bound to keep the same confidential, (e) in connection with any proceeding, case or matter pending (or on its face purported to be pending) before any court, tribunal or any governmental agency, commission, authority, board or similar entity, (f) in connection with protection of its interests under this Agreement, the Notes or any of the other Transaction Documents, including, without limitation, the enforcement of the terms and conditions of this Agreement, the Notes and the other Transaction Documents, (g) to any entity utilizing such information to rate the creditworthiness of such Bank or to rate or classify the debt or equity securities of such Bank or report to the public concerning the industry of which such Bank is a part or (h) to any actual or prospective Participant or Assignee (it being understood and agreed that prior to disclosure of any confidential information to any actual or prospective Participant or Assignee, such actual or prospective Participant or Assignee shall have agreed in writing to be bound by the terms and provisions of this Section 8.14). It is agreed and understood that no Bank shall be liable to Borrower or any other Person for failure to comply with the foregoing except in any case involving such Bank's gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, nonappealable order. Page 76 IN WITNESS WHEREOF, Borrower, the Agent and the Banks have executed this Loan Agreement as of the 30th day of November, 2000. LACLEDE GAS COMPANY By______________________________ Title:__________________________ Address: 720 Olive Street, Suite 1525 St. Louis, Missouri 63101 Attention: Treasurer Facsimile No.: (314) 421-1979 FIRSTAR BANK, N.A. By______________________________ Title:__________________________ Address: One Firstar Plaza, 12th Floor St. Louis, Missouri 63101 Attention: Large Corporate Department Facsimile No.: (314) 418-2203 BANK ONE, NA By______________________________ Title:__________________________ Address: One Bank Plaza Suite IL1-0363 Chicago, Illinois 60670 Attention:______________________ Facsimile No.: (_____)__________ Page 77 THE FUJI BANK LIMITED By_______________________________ Title:___________________________ Address: 225 West Wacker Suite 2000 Chicago, Illinois 60606 Attention:_______________________ Facsimile No.:(___)______________ COMERICA BANK By_______________________________ Title:___________________________ Address: 500 Woodward Avenue MC 3269 Detroit, Michigan 48275 Attention:_______________________ Facsimile No.:(___)______________ BANK HAPOALIM B.M. By_______________________________ Title:___________________________ Address: 225 North Michigan Avenue Suite 900 Chicago, Illinois 60601 Attention:_______________________ Facsimile No.:(___)______________ Page 78 FIRSTAR BANK, N.A., as Agent By_______________________________ Title:___________________________ Address: One Firstar Plaza, 12th Floor St. Louis, Missouri 63101 Attention: Large Corporate Department Facsimile No.: (314) 418-2203 Page 79 SCHEDULE 2.02 Authorized Individuals Douglas H. Yaeger Gerald T. McNeive Ronald L. Krutzman Page 80 EX-10.02 4 0004.txt Exhibit 10.02 REVOLVING CREDIT NOTE $20,000,000.00 St. Louis, Missouri November 30, 2000 FOR VALUE RECEIVED, on the last day of the Revolving Credit Period, the undersigned, LACLEDE GAS COMPANY, a Missouri corporation ("Borrower"), hereby promises to pay to the order of FIRSTAR BANK, N.A. ("Lender"), the principal amount of Twenty Million Dollars ($20,000,000.00), or such lesser principal amount as may then be outstanding under this Note. The aggregate principal amount which Lender shall be committed to have outstanding under this Note at any one time shall not exceed the amount of Lender's Revolving Credit Commitment, which amount may be borrowed, paid, reborrowed and repaid, in whole or in part, subject to the terms and conditions of this Note. Borrower further promises to pay to the order of Lender interest on each loan under this Note from the date such loan is made until the maturity of such loan (whether by reason of acceleration or otherwise) at a rate per annum equal to such of the following as Borrower, at its option, shall select: (a) (i) so long as no Event of Default under this Note has occurred and is continuing, the Floating Rate or (ii) so long as any Event of Default under this Note has occurred and is continuing, Two (2%) over and above the Floating Rate, which rate of interest shall fluctuate as and when the Floating Rate shall change; or (b) (i) so long as no Event of Default under this Note has occurred and is continuing, the LIBOR Rate or (ii) so long as any Event of Default under this Note has occurred and is continuing, Two Percent (2%) over and above the LIBOR Rate. Interest on Floating Rate Loans shall be payable monthly in arrears on the last day of each month commencing on the first such date after such Floating Rate Loan is made, and at the maturity of this Note, whether by reason of acceleration or otherwise. Interest on LIBOR Loans shall be payable on the last day of each Interest Period unless the duration of such Interest Period exceeds three (3) months, in which case such interest shall be payable at the end of the first three (3) months of such Interest Period and on the last day of such Interest Period, and at the maturity of this Note, whether by reason of acceleration or otherwise. From and after the maturity of this Note, whether by reason of acceleration or otherwise, interest shall accrue and be payable on demand on the outstanding principal balance of each loan under this Note at a rate per annum equal to Two Percent (2%) over and above the greater of (determined daily as of the opening of business by Lender on each Business Day and separately with respect to each loan which is accruing interest at a different interest rate) (i) the interest rate otherwise applicable to such loan or (ii) the Floating Rate. Interest on Page 81 each loan (whether based on the Floating Rate, the LIBOR Rate or otherwise) shall be computed on an actual day, 360-day year basis. All payments received by Lender under or in respect of this Note shall be allocated among the principal, interest, fees, collection costs and expenses and other amounts due under this Note in such order and manner as Lender shall elect. Borrower may request a loan under this Note by providing Lender with oral or written notice thereof no later than (a) 10:00 a.m. (St. Louis time) on the Business Day of each Floating Rate Loan and (b) 10:00 a.m. (St. Louis time) at least three (3) Eurodollar Business Days before each LIBOR Loan. Each request that Lender make a loan under this Note (a "Borrowing Notice") shall specify (a) the date of such loan, which shall be a Business Day in the case of a Floating Rate Loan and a Eurodollar Business Day in the case of a LIBOR Loan, (b) the aggregate principal amount of such loan, which must be at least (i) $50,000.00 or any larger multiple of $10,000.00 if the loan requested is a Floating Rate Loan or (ii) $2,500,000.00 or any larger multiple of $500,000.00 if the loan requested is a LIBOR Loan, (c) whether such loan is to be a Floating Rate Loan or a LIBOR Loan and (d) in the case of a LIBOR Loan, the duration of the initial Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. Subject to the terms and conditions of this Note, provided that Lender has received the Borrowing Notice, Lender shall (unless an Event of Default under this Note or an event which with the passage of time, the giving of notice or both would constitute an Event of Default under this Note has occurred and is continuing) make available to Borrower the loan proceeds in immediately available funds not later than 2:00 p.m., St. Louis time, on the Business Day specified in the Borrowing Notice by depositing the amount of such loan into Borrower's Account No. 1000300663 at Lender. Each request by Borrower for a loan under this Note shall constitute a representation and warranty by Borrower that (a) after giving effect to such loan, the aggregate principal amount of all loans outstanding under this Note shall not exceed the amount of Lender's Revolving Credit Commitment, (b) no Event of Default and no event which with the passage of time or the giving of notice or both would constitute an Event of Default under this Note has occurred and is continuing or will result from the making of the requested loan and (c) all of the representations and warranties made by Borrower in this Note are true and correct in all material respects on and as of the date of such loan as if made on and as of the date of such loan. Borrower hereby authorizes Lender to rely on telephonic, telegraphic, telecopy, telex or written instructions of any person identifying himself or herself as one of the individuals listed on Schedule A attached hereto and incorporated herein by reference (or any other individual from time to time authorized to act on behalf of Borrower pursuant to a resolution adopted by the Board of Directors of Borrower and delivered to Lender), and on any signature which Lender in good faith believes to be genuine, and Borrower shall be bound thereby in the same manner Page 82 as if such person were actually authorized or such signature were genuine. Borrower also hereby agrees to indemnify Lender and hold Lender harmless from and against any and all claims, demands, damages, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) relating to or arising out of or in connection with the acceptance of instructions for making loans or repayments under this Note. Borrower may not revoke or rescind any request for a LIBOR Loan. In no event may Borrower have more than five (5) different Interest Periods outstanding at any one time. The duration of the initial Interest Period for each LIBOR Loan shall be as specified in the applicable Borrowing Notice. Borrower shall elect the duration of each subsequent Interest Period applicable to such LIBOR Loan and the interest rate to be applicable during such subsequent Interest Period (and Borrower shall have the option (a) in the case of any Floating Rate Loan, to elect that such loan become a LIBOR Loan and the Interest Period to be applicable thereto and (b) in the case of any LIBOR Loan, to elect that such loan become a Floating Rate Loan), by giving notice of such election to Lender by 10:00 a.m. (St. Louis time) on the Business Day of, in the case of the election of the Floating Rate, or by 10:00 a.m. (St. Louis time) at least three (3) Eurodollar Business Days before, in the case of the election of the LIBOR Rate, the end of the immediately preceding Interest Period applicable to such loan, if any; provided, however, that notwithstanding the foregoing, in addition to and without limiting the rights and remedies of Lender under this Note or at law or in equity, so long as any Event of Default or any event which with the passage of time or the giving of notice or both would constitute an Event of Default under this Note has occurred and is continuing, Borrower shall not be permitted to renew any LIBOR Loan as a LIBOR Loan or to convert any Floating Rate Loan into a LIBOR Loan. If Lender does not receive a notice of election for a LIBOR Loan pursuant to this paragraph within the applicable time limits specified therein, Borrower shall be deemed to have elected to pay such LIBOR Loan in whole on the last day of the current Interest Period with respect thereto and to reborrow the principal amount of such loan on such date as a Floating Rate Loan. Lender shall record in its books and records the date, amount, type and maturity of each loan made by it to Borrower under this Note and the date and amount of each payment of principal and/or interest made by Borrower with respect thereto; provided, however, that the obligation of Borrower to repay each loan made by Lender to Borrower under this Note shall be absolute and unconditional, notwithstanding any failure of Lender to make any such recordation or any mistake by Lender in connection with any such recordation. The books and records of Lender showing the account between Lender and Borrower shall be admissible in evidence in any action or proceeding and shall constitute prima facie proof of the items therein set forth. Page 83 Borrower may prepay all or any portion of any Floating Rate Loan under this Note at any time prior to maturity without penalty or premium by paying the principal amount to be prepaid. Borrower may, upon at least three (3) Eurodollar Business Day's notice to Lender, prepay any LIBOR Loan under this Note to which a given Interest Period applies, in whole, or in part in amounts aggregating $2,500,000.00 or any larger multiple of $500,000.00, by paying the principal amount to be paid together with all accrued and unpaid interest thereon to and including the date of payment and any funding losses and other amounts payable under the immediately following paragraph of this Note; provided, however, that in no event may Borrower make a partial prepayment of a LIBOR Loan which results in the total outstanding LIBOR Loans with respect to which a given Interest Period applies being greater than $0.00 but less than $2,500,000.00. Notwithstanding any provision contained in this Note to the contrary, if (a) Borrower shall make any payment of principal with respect to any LIBOR Loan on any day other than the last day of the Interest Period applicable thereto, whether as a result of a voluntary prepayment, a mandatory prepayment, maturity, acceleration or otherwise, (b) Borrower fails to borrow or pay any LIBOR Loan after notice has been given by Borrower to Lender in accordance with this Note or (c) any LIBOR Loan is converted to a Floating Rate Loan pursuant to the requirements of this Note on any day other than the last day of the Interest Period applicable thereto, Borrower shall reimburse Lender on demand for any resulting losses and expenses incurred by Lender, including, without limitation, any losses incurred in obtaining, liquidating or employing deposits from third parties, but excluding any loss of margin for the period after any such payment, provided that Lender shall have delivered to Borrower a certificate as to the amount of such losses and expenses, which certificate shall be conclusive in the absence of manifest error. If with respect to any Interest Period (a) deposits in U.S. Dollars (in the applicable amounts) are not being offered to Lender in the relevant market for such Interest Period or (b) Lender determines in good faith that the LIBOR Rate as determined pursuant to the definition thereof will not adequately and fairly reflect the cost to Lender of maintaining or funding the LIBOR Loans for such Interest Period, Lender shall forthwith give notice thereof to Borrower, whereupon until Lender notifies Borrower that the circumstances giving rise to such suspension no longer exist, (a) the LIBOR Rate shall not be available to Borrower as an interest rate option on any loans under this Note and (b) all of the then outstanding LIBOR Loans shall automatically convert to Floating Rate Loans on the last day of the then current Interest Period applicable to each such LIBOR Loan. Interest accrued on each such LIBOR Loan prior to any such conversion shall be due and payable on the date of such conversion. Page 84 If, after the date of this Note, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental or regulatory authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any request or directive (whether or not having the force of law) of any such governmental or regulatory authority, central bank or comparable agency (each, a "Regulatory Change") shall make it unlawful or impossible for Lender to make, maintain or fund its LIBOR Loans to Borrower, Lender shall forthwith give notice thereof to Borrower. Upon receipt of such notice, Borrower shall convert all of the then outstanding LIBOR Loans on either (a) the last day of the then current Interest Period applicable to such LIBOR Loan if Lender may lawfully continue to maintain and fund such LIBOR Loan to such day or (b) immediately if Lender may not lawfully continue to fund and maintain such LIBOR Loan to such day, to a Floating Rate Loan in an equal principal amount. Interest accrued on each such LIBOR Loan prior to any such conversion shall be due and payable on the date of such conversion together with any funding losses and other amounts due under this Note. If (i) Regulation D or (ii) a Regulatory Change: (a) shall subject Lender to any tax, duty or other charge with respect to any LIBOR Loan or its obligation make, maintain or fund any LIBOR Loan, or shall change the basis of taxation of payments to Lender of the principal of or interest on any LIBOR Loan or any other amounts due under this Note in respect of any LIBOR Loan or its obligation to make, maintain or fund any LIBOR Loan (except for taxes on or changes in the rate of tax on the overall net income of Lender); or (b) shall impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by The Board of Governors of the Federal Reserve System), special deposit, capital or similar requirement against assets of, deposits with or for the account of, or credit extended or committed to be extended by, Lender or shall impose, modify or deem applicable any other condition affecting any LIBOR Loan or Lender's obligation to make, maintain or fund any LIBOR Loan; and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D, to impose a cost on or increase the cost to) Lender of making, maintaining or funding any LIBOR Loan, or to reduce the amount of any sum received or receivable by Lender under this Note with respect thereto, by an amount deemed by Lender to be material, and if Lender is not otherwise fully compensated for such increase in cost or reduction in amount received or receivable by virtue of the inclusion of the reference to "LIBOR Reserve Percentage" in the calculation of the LIBOR Rate, then, within fifteen (15) days after notice by Lender to Borrower together with a copy of Page 85 the official notice of the applicable change in law (if applicable) and a work sheet showing how the change in cost or reduction or increase in amount received or receivable was calculated, Borrower shall pay Lender as additional interest, such additional amount or amounts as will compensate Lender for such increased cost or reduction. Lender will promptly notify Borrower of any event of which it has knowledge, occurring after the date hereof, which will entitle Lender to compensation pursuant to this paragraph. The determination by Lender under this paragraph of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount or amounts, Lender may use any reasonable averaging and attribution methods. If notice has been given by Lender or Borrower pursuant to this Note requiring LIBOR Loans to be repaid, then, unless and until Lender notifies Borrower that the circumstances giving rise to such repayment no longer apply, all loans which would otherwise be made by Lender to Borrower as LIBOR Loans shall be made instead as Floating Rate Loans. Lender shall promptly notify Borrower if and when the circumstances giving rise to such repayment no longer apply. If, after the date of this Note, Lender shall have determined in good faith that a Regulatory Change has occurred which has or will have the effect of reducing the rate of return on Lender's capital in respect of its obligations under this Note to a level below that which Lender could have achieved but for such Regulatory Change (taking into consideration Lender's policies with respect to capital adequacy), then from time to time Borrower shall pay to Lender upon demand such additional amount or amounts as will compensate Lender for such reduction. All determinations made in good faith by Lender of the additional amount or amounts required to compensate Lender in respect of the foregoing shall be conclusive in the absence of manifest error. In determining such amount or amounts, Lender may use any reasonable averaging and attribution methods. All indemnities set forth in this Note and all provisions set forth in this Note relating to reimbursement to Lender of amounts sufficient to protect the yield to Lender with respect to the loans shall survive the payment of the loans and the termination of this Note. Notwithstanding any provision contained in this Note to the contrary, Lender shall be entitled to fund and maintain its funding of the LIBOR Loans in any manner it elects, it being understood, however, that for purposes of this Note all determinations hereunder (including, without limitation, the determination of Lender's funding losses and expenses) shall be made as if Lender had actually funded and maintained each LIBOR Loan through the purchase of deposits having a maturity corresponding to the maturity of the applicable Interest Period relating to the applicable LIBOR Loan and bearing an interest rate equal to the applicable LIBOR Base Rate. Page 86 From and including the first day of the Revolving Credit Period to but excluding the last day of the Revolving Credit Period, Borrower shall pay Lender a nonrefundable commitment fee on the unused portion of Lender's Revolving Credit Commitment (determined by subtracting the aggregate principal amount of outstanding loans made by Lender to Borrower under this Note from the amount of Lender's Revolving Credit Commitment) at the rate of One-Eighth of One Percent (1/8%) per annum. Said commitment fee shall be (a) calculated on a daily basis, (b) payable in arrears on the last day of the Revolving Credit Period and (c) calculated on an actual day, 360-day year basis. Borrower may, upon five (5) Business Days' prior written notice to Lender, terminate entirely at any time, or reduce from time to time by an amount of $5,000,000.00 or any larger multiple of $1,000,000.00, the unused portion of Lender's Revolving Credit Commitment; provided, however, that (a) at no time shall the amount of Lender's Revolving Credit Commitment be reduced to a figure less than the aggregate principal amount of loans then outstanding under this Note and (b) any such termination or reduction shall be permanent and Borrower shall have no right to thereafter reinstate or increase, as the case may be, the amount of Lender's Revolving Credit Commitment. Borrower shall make each payment of principal of, and interest on, this Note and all other amounts payable under this Note not later than 12:00 noon (St. Louis time) on the date when due, in Federal or other immediately available funds to Lender at One Firstar Plaza, 12th Floor, St. Louis, Missouri 63101 or such other address as Lender may from time to time specify in writing. Any such payment received by Lender after 12:00 noon (St. Louis time) shall be deemed to have been paid on the next succeeding Business Day. Whenever any payment of principal of, or interest on, this Note shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon, at the then applicable rate, shall be payable for such extended time. The acceptance by Lender of any payment of principal or interest due under this Note after the date it is due shall not be held to establish a custom or waive any rights of Lender to enforce prompt payment of any further payments or otherwise. Borrower hereby represents and warrants to Lender that (a) all of the proceeds of each loan evidenced by this Note will be used by Borrower solely for the working capital and general corporate purposes of Borrower, (b) Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Missouri, (c) the execution, delivery and performance by Borrower of this Note (i) are within the corporate powers of Borrower, (ii) have been duly authorized by all necessary corporate action on the part of Borrower, (iii) require no consent, approval or authorization of, action by or in Page 87 respect of or filing or recording with any governmental or regulatory body, instrumentality, authority, agency or official or any other person or entity and (iv) do not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under or result in any violation of, the terms of the Articles of Incorporation or By-Laws of Borrower, any applicable law, rule, regulation, order, writ, judgment or decree of any court or governmental or regulatory body, instrumentality, authority, agency or official or any agreement, document or instrument to which Borrower is a party or by which Borrower or any of its property or assets is bound or to which Borrower or any of its property or assets is subject, (d) Borrower is not an "investment company" as that term is defined in, and is not otherwise subject to regulation under, the Investment Company Act of 1940, as amended, (e) Borrower is not a "holding company" as that term is defined in, and is not otherwise subject to regulation under, the Public Utility Holding Company Act of 1935, as amended, (f) this Note has been duly executed and delivered by Borrower, constitutes the legal, valid and binding obligation of Borrower and is enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (g) Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of The Board of Governors of the Federal Reserve System, as amended) and no part of the proceeds of any loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately (i) to purchase or carry margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock, or to refund or repay indebtedness originally incurred for such purpose or (ii) for any purpose which entails a violation of, or which is inconsistent with, the provisions of any of the Regulations of The Board of Governors of the Federal Reserve System, including, without limitation, Regulations U, T or X thereof, as amended. Borrower hereby covenants and agrees to deliver to Lender: (a) within one hundred (100) days after the end of each fiscal year of Borrower: (A) a consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, retained earnings and cash flows for such fiscal year, setting forth in each case, in comparative form, the figures for the previous fiscal year, all such financial statements to be prepared in accordance with GAAP consistently applied and reported on by and accompanied by the unqualified opinion of independent certified public accountants selected by Borrower and reasonably acceptable to Lender; provided, however, that delivery to Lender of copies of the Annual Page 88 Report on Form 10-K of Borrower for such fiscal year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (a); (b) within fifty (50) days after the end of the first three (3) fiscal quarters of each fiscal year of Borrower, a consolidated balance sheet of Borrower and its Subsidiaries as of the end of such fiscal quarter and the related consolidated statements of income, retained earnings and cash flows for such fiscal quarter and for the portion of Borrower's fiscal year ended at the end of such fiscal quarter, setting forth in each case in comparative form, the figures for the corresponding fiscal quarter and the corresponding portion of Borrower's previous fiscal year, all in reasonable detail and satisfactory in form to Lender and certified (subject to normal year-end adjustments and absence of footnote disclosures) as to fairness of presentation, consistency and compliance with GAAP by the chief financial officer of Borrower; provided, however, that delivery to Lender of copies of the Quarterly Report on Form 10-Q of Borrower for such fiscal quarter filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (b); (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of an authorized officer of Borrower in the form attached hereto as Exhibit A and incorporated herein by reference (i) stating whether there exists on the date of such certificate any Event of Default or any event which with the passage of time or the giving of notice or both would constitute an Event of Default under this Note and, if any Event of Default or any event which with the passage of time or the giving of notice or both would constitute an Event of Default under this Note then exists, setting forth the details thereof and the action which Borrower is taking or proposes to take with respect thereto and (B) certifying that all of the representations and warranties made by Borrower in this Note are true and correct in all material respects on and as of the date of such certificate as if made on and as of the date of such certificate; and (d) with reasonable promptness, such further information regarding the business, affairs and financial condition of Borrower as Lender may from time to time reasonably request. If any of the following events ("Events of Default") shall occur: (a) Borrower shall fail to pay any principal of any loan under this Note as and when the same shall become due and payable, whether by reason of demand, maturity, acceleration or otherwise; (b) Borrower shall fail to pay any interest, fees or other amounts (other than the principal of any loan under this Note) due under this Note within five (5) Business Days after the date the same shall first become due and payable, whether by reason of demand, maturity, acceleration or otherwise; (c) any representation or warranty made by Borrower in this Note or in any certificate, agreement, instrument Page 89 or written statement furnished or made or delivered pursuant hereto or in connection herewith, shall prove to have been untrue or incorrect in any material respect when made or effected; (d) Borrower shall fail to perform or observe any term, covenant or provision contained in this Note; (e) Borrower shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official of itself or of a substantial part of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against itself in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any corporate or other action for the purpose of effecting any of the foregoing; (f) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of Borrower, or of a substantial part of the property or assets of Borrower, under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official of Borrower or of a substantial part of the property or assets of Borrower or (iii) the winding-up or liquidation of Borrower, and such proceeding or petition shall continue undismissed for sixty (60) consecutive days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for sixty (60) consecutive days; (g) Borrower shall be declared by Lender to be in default under or in respect of (i) any other present or future obligation to Lender, including, without limitation, any other loan, line of credit, revolving credit, guaranty or letter of credit reimbursement obligation, or (ii) any other present or future agreement purporting to convey to Lender a security interest in, or a lien or encumbrance upon, upon any property or assets of Borrower; (h) the occurrence of any default or event of default under or within the meaning of any agreement, document or instrument evidencing, securing, guaranteeing the payment of or otherwise relating to any indebtedness of Borrower for borrowed money (other than this Note) having an aggregate outstanding principal balance in excess of $5,000,000.00 which is not cured or waived in writing within any applicable cure or grace period; (i) Borrower shall have a judgment in an amount in excess of $5,000,000.00 entered against it by a court having jurisdiction in the premises and such judgment shall not be appealed in good faith (and execution of such judgment stayed during such appeal) or satisfied by Borrower within thirty (30) days after the entry of such judgment; or (j) any "Event of Default" (as defined therein) shall occur under or within the meaning of that certain Loan Agreement dated as of November 30, 2000, by and among Borrower, the banks from time to time party thereto and Firstar Bank, N.A., as agent for such banks, as the Page 90 same may from time to time be amended, modified, extended, renewed or restated; then, and in each such event (other than an event described in clauses (e) or (f) above), Lender may, at its option, declare that its obligation to make any additional loans under this Note has terminated, whereupon such obligation of Lender shall be immediately and forthwith terminated, and Lender may further declare the entire outstanding principal balance of this Note, all accrued and unpaid interest thereon and all fees and other amounts owed under this Note to be immediately due and payable, whereupon all of such outstanding principal balance, accrued and unpaid interest, fees and other amounts shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower, and Lender may exercise any and all other rights and remedies which it may have at law or in equity; provided, however, that upon the occurrence of any event described in clauses (e) or (f) above, Lender's obligation to make any additional loans under this Note shall automatically terminate and the entire outstanding principal balance of this Note, all accrued and unpaid interest thereon and all fees and other amounts owed under this Note shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by Borrower, and Lender may exercise any and all other rights and remedies which it may have under at law or in equity. In the event that any payment of any principal, interest or other amount due under this Note is not paid when due, whether by reason of demand, maturity, acceleration or otherwise, and this Note is placed in the hands of an attorney or attorneys for collection, or if this Note is placed in the hands of an attorney or attorneys for representation of Lender in connection with bankruptcy or insolvency proceedings relating to or affecting this Note, Borrower hereby promises to pay to the order of Lender, in addition to all other amounts otherwise due on, under or in respect of this Note, the costs and expenses of such collection, foreclosure and representation, including, without limitation, reasonable attorneys' fees and expenses (whether or not litigation shall be commenced in aid thereof). Borrower hereby agrees to pay or reimburse Lender upon demand for (a) all out-of-pocket costs and expenses including, without limitation, reasonable attorneys' fees and expenses, incurred by Lender in connection with the preparation, negotiation, execution, administration and/or enforcement of this Note and any and all other agreements, documents and instruments securing, guaranteeing the payment of and/or otherwise relating to this Note (collectively, the "Loan Documents"), (b) all recording, filing and search fees, costs and expenses incurred by Lender in connection with this Note and the other Loan Documents and (c) all out-of-pocket costs and expenses, including, without limitation, reasonable attorneys' fees and expenses, incurred by Lender in connection with (i) the preparation of any waiver or consent under this Note or any of the other Loan Documents, (ii) Page 91 any amendment, modification, extension, renewal or restatement of this Note or any of the other Loan Documents or (iii) any default or event of default under this Note or any of the other Loan Documents. Borrower further agrees to pay or reimburse Lender for any stamp or other taxes which may be payable with respect to the execution, delivery, recording and/or filing of this Note or any of the other Loan Documents. All of the obligations of Borrower under this paragraph shall survive the payment and termination of this Note. This Note may not be changed, nor may any term, condition or Event of Default be waived, modified or discharged orally but only by an agreement in writing, signed by Lender. No failure or delay by Lender in exercising any right, remedy, power or privilege under this Note shall operate as a waiver thereof; nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Except as otherwise specified in this Note, each notice, request, demand, consent and/or other communication under this Note shall be in writing and delivered in person or sent by facsimile, recognized overnight courier or registered or certified mail, return receipt requested and postage prepaid, if to Borrower to 720 Olive Street, Suite 1525, St. Louis, Missouri 63101, Attention: Treasurer, Facsimile No. (314) 421-1979, or if to Lender at One Firstar Plaza, 12th Floor, St. Louis, Missouri 63101, Attention: Large Corporate Department, Facsimile No.: (314) 418-2203, or at such other address or facsimile number as either party may from time to time designate as its address or facsimile number for communications hereunder by notice so given. Such notices shall be deemed effective on the day on which delivered or sent if delivered in person or sent by facsimile (with answerback confirmation received), on the first (1st) Business Day after the day on which sent if sent by recognized overnight courier or on the third (3rd) Business Day after the day on which mailed, if sent by registered or certified mail. All parties hereto expressly waive presentment, demand for payment, notice of dishonor, protest and notice of protest. For purposes of this Note, the following terms shall have the following meanings: Business Day shall mean any day except a Saturday, Sunday or legal holiday observed by Lender or by commercial banks in St. Louis, Missouri. Fed Funds Base Rate shall mean, as of the date of any determination thereof, the rate per annum (rounded upwards, if necessary, to the next higher 1/100 of 1%) for overnight Federal Funds transactions which appears on the Telerate Page 5 as of 9:00 a.m. (St. Louis time) on such date. Page 92 Fed Funds Rate shall mean a rate per annum equal to One- Quarter of One Percent (1/4%) over and above the Fed Funds Base Rate, which Fed Funds Rate shall fluctuate as and when said Fed Funds Base Rate changes. Eurodollar Business Day shall mean any Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London. Floating Rate shall mean a rate per annum equal to (a) the Fed Funds Rate if such rate is available or (b) if the Fed Funds Rate is not available, the Prime Rate. The Floating Rate shall fluctuate as and when the Fed Funds Rate or the Prime Rate, as applicable, changes. Floating Rate Loan shall mean any loan under this Note bearing interest based on the Floating Rate. GAAP shall mean, at any time, generally accepted accounting principles at such time in the United States. Interest Period shall mean with respect to each LIBOR Loan: (a) initially, the period commencing on the date of such loan and ending 1, 2, 3 or 6 months thereafter (or such other period agreed upon in writing by Borrower and Lender), as Borrower may elect in the applicable Borrowing Notice; and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such loan and ending 1, 2, 3 or 6 months thereafter (or such other period agreed upon in writing by Borrower and Lender), as Borrower may elect pursuant to the terms of this Note; provided that: (c) subject to clauses (d) and (e) below, any Interest Period which would otherwise end on a day which is not a Eurodollar Business Day shall be extended to the next succeeding Eurodollar Business Day unless such Eurodollar Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Eurodollar Business Day; (d) subject to clause (e) below, any Interest Period which begins on the last Eurodollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Eurodollar Business Day of a calendar month; and (e) no Interest Period may extend beyond the last day of the Revolving Credit Period. Page 93 LIBOR Base Rate shall mean, with respect to the applicable Interest Period, (a) the LIBOR Index Rate for such Interest Period, if such rate is available or (b) if the LIBOR Index Rate is not available, the average (rounded upward, if necessary, to the next higher 1/10,000 of 1%) of the respective rates per annum of interest at which deposits in U.S. Dollars are offered to Lender in the London interbank market by two (2) Eurodollar dealers of recognized standing, selected by Lender in its sole discretion, at or about 11:00 a.m. (London time) on the date two (2) Eurodollar Business Days before the first day of such Interest Period, for delivery on the first day of the applicable Interest Period for a number of days comparable to the number of days in such Interest Period and in an amount approximately equal to the principal amount of the LIBOR Loan to which such Interest Period is to apply. LIBOR Index Rate shall mean, with respect to the applicable Interest Period, a rate per annum (rounded upwards, if necessary, to the next higher 1/10,000 of 1%) equal to the British Bankers' Association interest settlement rates for U.S. Dollar deposits for such Interest Period as of 11:00 a.m. (London time) on the day two (2) Eurodollar Business Days before the first day of such Interest Period as published by Bloomberg Financial Services, Dow Jones Market Service, Telerate, Reuters or any other service from time to time used by Lender. LIBOR Loan shall mean any loan under this Note bearing interest based on the LIBOR Rate. LIBOR Rate shall mean (a) the quotient of the (i) LIBOR Base Rate divided by (ii) one minus the applicable LIBOR Reserve Percentage plus (b) One-Quarter of One Percent (1/4%) per annum. The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the LIBOR Reserve Percentage. LIBOR Reserve Percentage shall mean for any day 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), for determining the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special or marginal reserves) with respect to "Eurocurrency liabilities" as defined in Regulation D or with respect to any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined, whether or not Lender has any Eurocurrency liabilities subject to such reserve requirement at such time. LIBOR Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without the benefit of any credits for proration, exceptions or offsets which may be available from time to time to Lender. The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the LIBOR Reserve Percentage. Page 94 Prime Rate shall mean the interest rate announced from time to time by Lender as its "prime rate" (which rate shall fluctuate as and when said prime rate shall change). Borrower acknowledges that such "prime rate" is a reference rate and does not necessarily represent the lowest or best rate offered by Lender to its customers. Regulation D shall mean Regulation D of The Board of Governors of the Federal Reserve System, as amended. Revolving Credit Commitment shall mean, subject to any reduction of the Revolving Credit Commitment by Borrower pursuant to the terms of this Note, $20,000,000.00. Revolving Credit Period shall mean the period commencing December 20, 2000, and ending March 31, 2001. Subsidiary shall mean any corporation or other entity of which more than Fifty Percent (50%) of the issued and outstanding capital stock or other equity interests entitled to vote for the election of directors or persons performing similar functions (other than by reason of default in the payment of dividends or other distributions) is at the time owned directly or indirectly by Borrower or any Subsidiary. Telerate Page 5 shall mean the display designated as "Page 5" on the Telerate Service (or such other page as may replace Page 5 on that service or such other service as may be used by Lender for the purpose of determining the rate per annum for overnight Federal Funds transactions). BORROWER HEREBY IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE EASTERN DISTRICT OF MISSOURI, EASTERN DIVISION, AS LENDER MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, (B) AGREES THAT ALL CLAIMS IN RESPECT TO ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN ANY OF SUCH COURTS, (C) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, (D) WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND (E) WAIVES ALL RIGHTS OF ANY OTHER JURISDICTION WHICH BORROWER MAY NOW OR HEREAFTER HAVE BY REASON OF ITS PRESENT OR SUBSEQUENT DOMICILES. BORROWER (AND BY ITS ACCEPTANCE HEREOF, LENDER) IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH BORROWER AND LENDER ARE PARTIES RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS NOTE. Page 95 ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER AND LENDER FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS BORROWER AND LENDER REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS NOTE, WHICH NOTE IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS BETWEEN BORROWER AND LENDER, EXCEPT AS BORROWER AND LENDER MAY LATER AGREE IN WRITING TO MODIFY THEM. This Note shall be governed by and construed in accordance with the substantive laws of the State of Missouri (without reference to conflict of law principles). LACLEDE GAS COMPANY By_______________________________ Title: Treasurer & Assistant Secretary Accepted and Agreed to: Firstar Bank, N.A. By:_________________________________ Title: _____________________________ Page 96 SCHEDULE A Authorized Individuals Douglas H. Yaeger Gerald T. McNeive Ronald L. Krutzman Page 97 EX-27 5 0005.txt
UT 1,000 3-MOS SEP-30-2001 DEC-31-2000 PER-BOOK 554,533 27,912 348,897 170,250 0 1,101,592 20,744 61,820 212,595 295,159 1,763 0 234,394 0 0 198,800 0 21 0 0 371,455 1,101,592 345,025 10,630 309,278 319,908 25,117 992 26,109 7,592 18,517 22 18,495 6,324 4,377 (48,989) .98 .98 Capital-surplus-paid-in is net of $24,017 of treasury stock. Page 98
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