<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period _______________ to ________________
COMMISSION FILE NO. 0-25842
PG&E Gas Transmission, Northwest Corporation
(Exact name of registrant as specified in its charter)
California 94-1512922
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2100 SW River Parkway, Portland, OR 97201
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (503) 833-4000
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 twelve 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 November 10, 1999.
1,000 shares of common stock no par value. (All shares are owned by PG&E Gas
Transmission Corporation.)
Registrant meets the conditions set forth in General Instruction (H) (1) (a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PART I. Financial Information
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Page
<S> <C>
Item 1. Consolidated Financial Statements
Statements of Consolidated Income 1
Consolidated Balance Sheets 2
Statements of Consolidated Common Stock Equity 4
Statements of Consolidated Cash Flows 5
Notes to Consolidated Financial Statements 6
Note 1. Basis of Presentation 6
Note 2. Contingencies 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. Other Information
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
<PAGE>
PART I: FINANCIAL INFORMATION
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ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------
- --------------------------------------------------------------------------------
Statements of Consolidated Income
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
- -----------------------------------------------------------------------------------------------------------------------
(In Thousands) 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Gas transportation $ 42,279 $ 45,471 $ 125,869 $ 138,048
Gas transportation for affiliates 13,291 12,712 38,658 37,924
Other 139 220 420 539
- -----------------------------------------------------------------------------------------------------------------------
Total operating revenues 55,709 58,403 164,947 176,511
- -----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Administrative and general 8,165 8,621 21,178 22,679
Operations and maintenance 4,403 3,881 14,139 11,527
Depreciation and amortization 10,346 9,741 30,739 29,355
Property and other taxes 2,844 2,825 8,494 8,759
- -----------------------------------------------------------------------------------------------------------------------
Total operating expenses 25,758 25,068 74,550 72,320
- -----------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 29,951 33,335 90,397 104,191
- -----------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND (INCOME DEDUCTIONS):
Allowance for equity funds used during construction 235 417 927 730
Interest income 59 43 140 180
Other - net 6,170 1,065 5,750 866
- -----------------------------------------------------------------------------------------------------------------------
Total other income and (income deductions) 6,464 1,525 6,817 1,776
- -----------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
Interest on long-term debt 10,447 10,704 30,979 31,907
Allowance for borrowed funds used during construction (240) (432) (942) (753)
Other interest charges 326 346 1,019 1,079
- -----------------------------------------------------------------------------------------------------------------------
Net interest expense 10,533 10,618 31,056 32,233
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INCOME BEFORE INCOME TAXES 25,882 24,242 66,158 73,734
INCOME TAX EXPENSE 9,940 8,511 25,337 27,805
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NET INCOME 15,942 15,731 40,821 45,929
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OTHER COMPREHENSIVE INCOME, NET OF TAX:
- -----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME $ 15,942 $ 15,731 $ 40,821 $ 45,929
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
1
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
September 30, December 31,
(In Thousands) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
PROPERTY, PLANT, and EQUIPMENT:
Property, plant and equipment in service $ 1,528,441 $ 1,500,085
Accumulated depreciation (507,065) (479,824)
- ----------------------------------------------------------------------------------
Net plant in service 1,021,376 1,020,261
Construction work in progress 27,232 37,772
- ----------------------------------------------------------------------------------
Total property, plant & equipment - net 1,048,608 1,058,033
- ----------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents 2,457 1,080
Accounts receivable - gas transportation 20,320 15,480
Accounts receivable - fuel balancing and other 9,814 10,647
Inventories (at average cost) 8,703 7,950
Prepayments and other current assets 539 3,545
- ----------------------------------------------------------------------------------
Total current assets 41,833 38,702
- ----------------------------------------------------------------------------------
DEFERRED CHARGES:
Income tax related 25,471 25,400
Deferred charge on reacquired debt 11,546 12,449
Unamortized debt expense 3,334 3,625
Other regulatory assets 5,385 5,744
Other 1,148 1,105
- ----------------------------------------------------------------------------------
Total deferred charges 46,884 48,323
- ----------------------------------------------------------------------------------
TOTAL ASSETS $ 1,137,325 $ 1,145,058
- ----------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
2
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Balance Sheets
(Unaudited)
- --------------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
(In Thousands) 1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITALIZATION:
Common stock - no par value, 1,000 shares authorized,
issued and outstanding $ 85,474 $ 85,474
Additional paid-in capital 192,717 192,717
Reinvested earnings 64,639 68,818
- ---------------------------------------------------------------------------------------------
Total common stock equity 342,830 347,009
Long-term debt 569,350 587,979
- ---------------------------------------------------------------------------------------------
Total capitalization 912,180 934,988
- ---------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
Long-term debt - current portion 486 456
Accounts payable 11,907 18,016
Accounts payable - affiliated companies 5,746 3,187
Accrued interest 10,211 4,095
Accrued liabilities 8,207 9,466
Accrued taxes 3,191 779
- ---------------------------------------------------------------------------------------------
Total current liabilities 39,748 35,999
- ---------------------------------------------------------------------------------------------
DEFERRED CREDITS:
Deferred income taxes 175,116 163,846
Other 10,281 10,225
- ---------------------------------------------------------------------------------------------
Total deferred credits 185,397 174,071
- ---------------------------------------------------------------------------------------------
CONTINGENCIES (see Note 2) - -
- ---------------------------------------------------------------------------------------------
TOTAL CAPITALIZATION AND LIABILITIES $ 1,137,325 $ 1,145,058
- ---------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
3
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Statements of Consolidated Common Stock Equity
(Unaudited)
- ---------------------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30,
- ---------------------------------------------------------------------------------------------------------------------
(In Thousands) 1999 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD $ 347,009 $ 431,727
Comprehensive income
Net income 40,821 45,929
Other comprehensive income - -
- ---------------------------------------------------------------------------------------------------------------------
Dividend paid to parent company (45,000) (130,000)
- ---------------------------------------------------------------------------------------------------------------------
BALANCE AT END OF PERIOD $ 342,830 $ 347,656
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
4
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Statements of Consolidated Cash Flows
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30,
- ------------------------------------------------------------------------------------------------------------------------
(In Thousands) 1999 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 40,821 $ 45,929
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 33,409 31,662
Deferred income taxes 11,270 12,278
Allowance for equity funds used during construction (927) (730)
Changes in operating assets and liabilities:
Accounts receivable (4,840) 1,490
Accounts receivable/payable - affiliated companies 2,559 266
Accounts receivable - fuel balancing and other 833 (2,840)
Accounts payable and other accrued liabilities (1,252) 574
Accrued taxes 2,412 2,534
Other working capital 2,253 3,756
Other - net 302 (677)
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 86,840 94,242
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (21,042) (32,870)
Allowance for borrowed funds used during construction (942) (753)
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (21,984) (33,623)
- ------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Issuance (Repayment) of long-term debt (18,479) 23,946
Dividend paid to parent (45,000) (130,000)
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (63,479) (106,054)
- ------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,377 (45,435)
CASH AND CASH EQUIVALENTS AT JANUARY 1 1,080 48,249
- ------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $ 2,457 $ 2,814
- ------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for (received from):
Interest $ 23,646 $ 24,578
Income taxes $ 9,881 $ 17,513
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
5
<PAGE>
Notes to Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------
Note 1: Basis of Presentation
- ------------------------------
PG&E Gas Transmission, Northwest Corporation (PG&E GT-NW), incorporated in
California in 1957, is affiliated with, but is not the same company as, Pacific
Gas and Electric Company, the gas and electric company serving Northern and
Central California. PG&E Corporation is the ultimate corporate parent for both
PG&E GT-NW and Pacific Gas and Electric Company.
The accompanying unaudited consolidated financial statements, which have
been prepared in accordance with interim period reporting requirements, reflect
the results for PG&E GT-NW and its wholly owned subsidiaries.
PG&E GT-NW and its subsidiaries are collectively referred to herein as the
"Company." This information should be read in conjunction with the Consolidated
Financial Statements and Notes to Consolidated Financial Statements included in
Item 8, Financial Statements and Supplementary Data, in the Company's Form 10-K
for the fiscal year ended December 31, 1998.
In the opinion of management, the accompanying statements reflect all
adjustments necessary to present a fair statement of the financial position and
results of operations for the interim periods. All material adjustments are of
a normal recurring nature unless otherwise disclosed in this Form 10-Q.
Subsidiary intercompany accounts and transactions have been eliminated. Prior
year's amounts in the consolidated financial statements have been reclassified
where necessary to conform to the 1999 presentation. Results of operations for
interim periods are not necessarily indicative of results to be expected for a
full year.
Note 2: Contingencies
- ----------------------
1994 Rate Case - In September 1996, the Federal Energy Regulatory
Commission (FERC) approved, without modification, the proposed settlement of
PG&E GT-NW's rate case. The rate case was initially filed on February 28, 1994,
while the proposed settlement was filed with the FERC on March 21, 1996. In
March and June 1998, the FERC denied requests by several shippers for rehearing
and reaffirmed its approval of the settlement. In May 1998, three shippers
petitioned for judicial review of the FERC Orders by the United States Court of
Appeals for the District of Columbia Circuit. In the event the settlement were
to be modified as a result of an appeal, PG&E GT-NW would be required to
implement the results as ordered by the court or to seek review at the United
States Supreme Court.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
GENERAL
- -------
The unaudited consolidated financial statements include PG&E Gas
Transmission, Northwest Corporation (PG&E GT-NW) and its wholly owned
subsidiaries.
PG&E GT-NW and its subsidiaries are collectively referred to herein as the
"Company." This information should be read in conjunction with the Consolidated
Financial Statements and Notes to Consolidated Financial Statements included in
Item 8, Financial Statements and Supplementary Data in the Company's Form 10-K
for the fiscal year ended December 31, 1998.
The following discussion includes forward-looking statements that involve a
number of risks, uncertainties, and assumptions. When used in Management's
Discussion and Analysis of Financial Condition and Results of Operations, words
such as "estimates," "expects," "intends," "anticipates," "plans," and similar
expressions identify those statements which are forward-looking. Actual results
may differ materially from those expressed in the forward-looking statements.
The important factors that could cause actual results to differ materially from
those expressed in the forward-looking statements include, but are not limited
to, the ongoing restructuring of the gas industry, changes in future rate-
making, and the ability of the Company to expand its core pipeline business.
PG&E GT-NW's transportation system provides access to natural gas from
producing fields in western Canada and extends from the British Columbia-Idaho
border to the Oregon-California border. PG&E GT-NW's transportation system also
provides service to various delivery points in Idaho, Washington, and Oregon.
PG&E GT-NW's natural gas transportation services are regulated by the Federal
Energy Regulatory Commission (FERC or the Commission). Various safety issues
are subject to the jurisdiction of the United States Department of
Transportation.
CHANGING REGULATORY ENVIRONMENT
- -------------------------------
During 1997 and 1998, the FERC issued several orders to standardize
communications and practices of pipelines. In April 1998, the FERC issued Order
587-G which sets standards for electronic communication, nomination, and
imbalance procedures. Pipeline companies need to develop connections using
internet tools, directory services and communication protocols to provide non-
discriminatory access to all electronic information. In September 1998, the
Commission issued an order on rehearing clarifying certain aspects of Order 587-
G and deferring the date for processing transactions over the Internet from June
1999 to June 2000.
7
<PAGE>
In July 1998, the FERC issued a Notice of Proposed Rulemaking (NOPR) to
promote competition in the short-term market and a Notice of Inquiry (NOI) on
long-term rates to mitigate pipeline market power. Features of the NOPR include
removal of the price cap for short-term services, auctions and negotiated terms
and conditions of service. The NOI maintains the cost cap on long-term services
and evaluates indexing and performance based rates. The Commission subsequently
has received numerous industry comments and has held hearings, including
regional hearings on gas demand, but has not taken further action. FERC also
issued a Statement of Policy in September 1999 addressing certification of new
interstate natural gas facilities. Among other things, this Statement of Policy
has modified on a prospective basis the Commission's guidelines for evaluating
the market need and pricing of new pipeline capacity.
These regulatory initiatives are not expected to have a material impact on
PG&E GT-NW's financial position, liquidity or results of operations in the
foreseeable future.
ACCOUNTING FOR THE EFFECTS OF REGULATION
- ----------------------------------------
PG&E GT-NW currently accounts for the economic effects of regulation in
accordance with the provisions of Statement of Financial Accounting Standards
(SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation." As
a result of applying the provisions of SFAS No. 71, PG&E GT-NW has accumulated
approximately $44.0 million of regulatory assets net of related reserves as of
September 30, 1999.
RESULTS OF OPERATIONS
- ---------------------
Selected operating results and other data are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---------- ----------- ---------- -----------
(In Millions) (In Millions)
<S> <C> <C> <C> <C>
Operating revenues $ 55.7 $ 58.4 $ 164.9 $ 176.5
Operating expenses 25.8 25.1 74.5 72.4
--------- ----------- ---------- -----------
Operating income 29.9 33.3 90.4 104.1
Other income and (income deductions) 6.5 1.5 6.8 1.8
Net interest expense 10.5 10.6 31.1 32.2
--------- ----------- ---------- -----------
Income before taxes 25.9 24.2 66.1 73.7
Income tax expense 9.9 8.5 25.3 27.8
--------- ----------- ---------- -----------
Net Income 16.0 15.7 40.8 45.9
========= =========== ========== ===========
</TABLE>
Net Income - Income for the three and nine-month periods ended September
30, 1999, increased $0.3 million and decreased $5.1 million, respectively,
compared to the same periods in 1998. The decrease in the nine-month period was
primarily the result of lower Operating Revenues and higher Operating Expenses
reflecting severance costs partially offset by higher Other Income.
Operating Revenues - Operating revenues for the three and nine-month
periods ended September 30, 1999 decreased $2.7 million and $11.6 million,
respectively, compared to the same periods in 1998. The decreases were primarily
due to lower short-term firm and interruptible service revenues, partially
offset by revenues generated from the 1998 expansion, which went into service on
November 1, 1998. Additionally, for the nine months ended
8
<PAGE>
September 30, 1999, the decrease reflected lower Gas Research Institute (GRI)
surcharges collected from transportation customers under FERC-approved tariffs
and a refund of $3.9 million of GRI surcharges to customers as ordered by the
FERC in May 1999. This decrease was offset by a corresponding decrease in
Administrative and General Expenses for GRI costs.
Operating Expenses - The components of total operating expenses are as
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
----------- ------------ ------------- -----------
(In Millions) (In Millions)
<S> <C> <C> <C> <C>
Administrative and general $ 8.2 $ 8.6 $ 21.2 $ 22.7
Operations and maintenance 4.5 3.9 14.1 11.5
Depreciation and amortization 10.3 9.8 30.7 29.4
Property and other taxes 2.8 2.8 8.5 8.8
----------- ------------ ----------- -----------
Total operating expenses $ 25.8 $ 25.1 $ 74.5 $ 72.4
=========== ============ =========== ===========
</TABLE>
For the three and nine-month periods ended September 30, 1999, compared
with the same periods in 1998, operating expenses increased $0.7 million and
$2.1 million, respectively. The increase in the three-month period reflects
increased year 2000 related costs, decreased capitalized labor costs and
increased depreciation expense. The increase in the nine-month period reflects
severance costs and higher maintenance costs of compressor units, partially
offset by a decrease in GRI costs for which there is a corresponding decrease in
transportation revenue.
Other Income and (Income Deductions) - Other income and income deductions
increased by $5.0 million for the three and nine-month periods. The increases
are primarily the result of favorable negotiations regarding a transportation
contract and other related issues completed in the third quarter.
Interest Expense - Interest expense for the three and nine-month periods
ended September 30, 1999, decreased $0.1 million and $1.1 million, respectively,
compared to the same periods in 1998. For the three months ended September 30,
1999 and 1998, the average interest rate was approximately 7.3 percent and 7.3
percent, respectively, while the average balance of long-term debt (excluding
capital lease obligations) outstanding was $570 million and $578 million,
respectively. For the nine months ended September 30, 1999 and 1998, the average
interest rate was approximately 7.2 percent and 7.3 percent, respectively, while
the average balance of long-term debt (excluding capital lease obligations)
outstanding was $574 million and $583 million, respectively.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Sources of Capital - The Company's capital requirements are funded from
cash provided by operations and, to the extent necessary, external financing and
capital contributions from its parent company. PG&E GT-NW pays dividends as part
of a balanced approach to managing its capital structure, funding its operations
and capital expenditures, and maintaining appropriate cash balances.
Net Cash Provided by Operating Activities - For the nine months ended
September 30, 1999, net cash provided by operating activities was $86.8 million,
compared with $94.2 million for the same period in 1998. The $7.4 million
decrease was primarily due to the decrease in net income.
9
<PAGE>
Net Cash Used in Investing Activities - For the nine months ended September
30, 1999 compared to the same period in 1998, net cash used in investing
activities decreased by $11.6 million. The decrease primarily reflects lower
construction expenditures in 1999.
Net Cash Used in Financing Activities - For the nine months ended September
30, 1999, cash used in financing activities was $63.5 million including $45.0
million in dividends paid, and an $18.5 million net decrease in long-term debt.
For the nine months ended September 30, 1998, cash used in financing activities
was $106.1 million including a $130 million dividend payment offset by a net
increase in debt of $23.9 million.
YEAR 2000 READINESS
- -------------------
The Year 2000 issue exists because many computer programs use only two
digits to refer to a year, and were developed without considering the impact of
the upcoming change in the century. If PG&E GT-NW's computer systems fail or
function incorrectly due to not being made Year 2000 ready, they could directly
and adversely affect the Company's ability to generate or deliver its products
and services or could otherwise affect revenues, safety, or reliability for such
a period of time as to lead to unrecoverable consequences.
PG&E GT-NW's plan to address the Year 2000 issues focuses primarily on
mission-critical systems whose components are categorized as in-house software,
vendor software, embedded systems, and computer hardware. The four primary
phases of the Company's plan to address these systems are inventory and
assessment, remediation, testing and certification. Certification occurs when
mission-critical systems are formally determined to be Year 2000 ready. Year
2000 ready means that a system is suitable for continued use into the year 2000.
As reflected in the table below, the Company's mission-critical items have
been certified as Year 2000 ready with very few exceptions. These exceptions
will be resolved in November by the replacement of non Y2K-ready systems at a
compressor station. Contingency plans are in place to address any unlikely
delays or problems.
Year 2000 Readiness of Mission-Critical Items as of November 2, 1999
<TABLE>
<CAPTION>
Remediation Testing Certification
Completed Completed Completed
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
In-house software 100% 100% 100%
Vendor software 100% 100% 100%
Embedded systems 99% 99% 99%
Computer hardware 100% 100% 100%
</TABLE>
"Clean management" practices have been implemented to prevent systems from
becoming compromised. Even after systems are certified, the Company is
continuing various types of validation and quality assurance efforts, and may do
so into the year 2000 to minimize the risk of any significant disruption.
In addition to internal systems, PG&E GT-NW also depends upon external
parties, including customers, suppliers, business partners, gas and electric
system operators, government agencies, and financial institutions to support the
functioning of its business. To the extent that any of these parties are
considered mission-critical to the Company's business, and experience Year 2000
problems in their systems, the Company's mission-critical business functions may
be adversely affected. To address this vulnerability, PG&E GT-NW has a four
phased approach for dealing with external parties: (1) inventory, (2) action
planning, (3) risk assessment, and (4)
10
<PAGE>
contingency planning. The contingency planning process also addresses exposures
that could result from failures in the Company's own essential business systems.
The Company's contingency plans have been incorporated into its emergency
plans and include measures such as emergency back-up and recovery procedures,
augmenting automated applications with manual processes, and identification of
alternate suppliers. The plans were tested in various drills throughout 1999,
and were updated as necessary.
As of September 30, 1999, PG&E GT-NW estimates total costs to address Year
2000 problems to be $16.0 million. Included are systems replaced or enhanced
for general business purposes and whose implementation schedules are critical to
the Company's Year 2000 readiness.
Through September 1999, PG&E GT-NW spent approximately $14.2 million, of
which $9.7 million was capitalized. Future costs to address Year 2000 issues are
expected to be $1.8 million, of which $1.0 million will be capitalized. The
Company does not believe that the projected cost of addressing Year 2000 issues
will have a material impact on its financial position or results of operations.
Although PG&E GT-NW expects its efforts and those of its external parties
to be successful, the Company recognizes that with the complex interaction of
today's computing and communications systems, it cannot be certain it will be
completely successful. Accordingly, the Company has considered the most
reasonably likely worst case Year 2000 scenarios that could affect the Company,
and believes that they mainly involve localized telephone problems due to
congestion, interruption of electric power supply from the smaller utilities
along the pipeline, and small isolated malfunctions in the Company's computer
systems that would be immediately repaired. None of these reasonably likely
scenarios are expected to have a material adverse impact on the Company's
financial position, results of operations or cash flow. Nevertheless, if the
Company, or third parties with whom it has significant business relationships,
fail to achieve Year 2000 readiness of mission-critical systems, there could be
a material adverse impact on the Company's financial position, results of
operations and cash flows.
11
<PAGE>
NEW ACCOUNTING STANDARD
- -----------------------
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement No. 133 "Accounting for Derivative Instruments and Hedging
Activities." In June 1999, the FASB issued Statement No. 137 "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB Statement No. 133", which postponed the implementation of Statement No.
133. Statement No. 137 is required to be adopted in years beginning after June
15, 2000 but permits early adoption as of the beginning of any fiscal quarter.
PG&E GT-NW expects to adopt the new Statement no later than January 1, 2001.
The statement will require the recognition of all derivatives, as defined in the
Statement, on the balance sheet at fair value. Derivatives, or any portion
thereof, that are not effective hedges must be adjusted to fair value through
income. If the derivative is an effective hedge, depending on the nature of the
hedge, changes in the fair value of derivatives either will be offset against
the change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or will be recognized in other comprehensive income until the
hedged item is recognized in earnings.
PG&E GT-NW is currently evaluating the potential impact of Statement 133.
12
<PAGE>
PART II: OTHER INFORMATION
---------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits:
Exhibit 10.1 - Sublease between PG&E Gas Transmission, Northwest
Corporation and Enron Communications, Inc., dated as of August 11, 1999, to
the Lease Agreement dated as of April 15, 1994, between Pacific Gas
Transmission Company (now PG&E Gas Transmission, Northwest Corporation) and
GIC Development 94-I, L.L.C.
Exhibit 10.2 - Amended and Restated Credit Agreement dated as of
May 24, 1999, among PG&E Gas Transmission, Northwest Corporation and certain
commercial institutions.
Exhibit 10.3 - 364-Day Credit Agreement dated as of May 24, 1999,
among PG&E Gas Transmission, Northwest Corporation and certain commercial
institutions.
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges.
Exhibit 27 - Financial Data Schedule for the nine months ended
September 30, 1999.
(b) No reports on Form 8-K were issued during the quarter ended September 30,
1999 and through the date hereof.
13
<PAGE>
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.
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
---------------------------------------------
(Registrant)
November 12, 1999 By: /s/ STANLEY C. KARCZEWSKI
--------------------------------
Name: Stanley C. Karczewski
Title: Vice President and Controller
14
<PAGE>
EXHIBIT INDEX
Exhibit No.: Description of Exhibit
10.1 Sublease between PG&E Gas Transmission, Northwest Corporation and Enron
Communications, Inc., dated as of August 11, 1999, to the Lease Agreement
dated as of April 15, 1994, between Pacific Gas Transmission Company (now
PG&E Gas Transmission, Northwest Corporation) and GIC Development 94-I,
L.L.C.
10.2 Amended and Restated Credit Agreement dated as of May 24, 1999, among
PG&E Gas Transmission, Northwest Corporation and certain commercial
institutions
10.3 364-Day Credit Agreement dated as of May 24, 1999, among PG&E Gas
Transmission, Northwest Corporation and certain commercial institutions
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule for the nine months ended September 30, 1999.
15
<PAGE>
Exhibit 10.1
SUBLEASE
Dated Effective: August ____, 1999
Between: PG&E GAS TRANSMISSION, NORTHWEST CORPORATION,
a California corporation ("Sublessor")
And: ENRON COMMUNICATIONS, INC.,
an Oregon corporation ("Sublessee")
RECITALS
A. GIC Development 94-I, L.L.C., an Oregon limited liability company, as
"Lessor," and Pacific Gas Transmission Company, a California corporation, as
"Lessee," entered into a written lease dated April 15, 1994, wherein Lessor
leased to Lessee the real property located at 2100 SW River Parkway in Portland,
Oregon, and legally described as Parcel 1 of Partition Plat No. 1994-55, in the
City of Portland, County of Multnomah and State of Oregon ("Master Premises").
B. In 1996, Lessor and Lessee amended the lease by that certain First
Amendment To Lease Agreement dated effective as of April 15, 1994. The lease and
amendments thereto are herein collectively referred to as the "Master Lease" and
are attached hereto as Exhibit A.
---------
C. Lessee subsequently changed its name to PG&E Gas Transmission,
Northwest Corporation ("Sublessor").
AGREEMENT
Therefore, in consideration of the Premises, the parties agree as follows:
1. Recitals. The above Recitals are true and correct and incorporated
--------
herein by this reference.
2. Premises.
--------
2.1 Demise. Sublessor hereby subleases to Sublessee on the terms and
conditions set forth in this Sublease the following portion of the Master
Premises: a portion of the first and the entire sixth, seventh, and eighth
floors (herein referred to as the "Premises") of the building ("Building")
located on the Master Premises. The Premises consist of approximately 12,041
rentable square feet (10,375 usable square feet) of floor area located on the
first floor of the Building (the "First Floor Space"), approximately 15,921
rentable square feet (14,373 usable square feet) of floor area located on the
sixth floor of the Building (the "Sixth Floor Space"), approximately 15,766
rentable square feet (14,227 usable square feet) of floor area located on the
seventh floor of the Building (the "Seventh Floor Space"), and approximately
15,681 rentable square feet (14,147 usable square feet) of floor area located on
the eighth floor of the Building (the "Eighth Floor Space"). The First Floor
Space consists of Suites A, B, C and D. Suite A consists of approximately 5,055
rentable square feet of floor area. Suite B consists of approximately 1,907
rentable square feet of floor area. Suite C consists of approximately 1,524
rentable square feet of floor area. Suite D consists of approximately 3,555
rentable square feet of floor area. The locations of the various portions of
the Premises are shown on the Exhibit B, which is incorporated in this Sublease
---------
by this reference. The total area of the Premises amounts to approximately
59,409 rentable square feet (53,122 usable square feet) of floor area in the
Building. The parties agree that the square footage amounts set forth in this
Sublease are final and binding upon them and that no recalculation or re-
measurement of the Premises or Master Premises shall affect the Rent (defined in
Section 7), Sublessee's Percentage (defined in Section 7.3.2) or any other
figure determined herein with reference to square footage.
1 - SUBLEASE
<PAGE>
2.2 AS IS. By taking possession of the Premises, Sublessee
acknowledges that it has inspected the Premises and accepts them as being in the
condition in which Sublessor is obligated to deliver them and otherwise in good
working order, condition and repair, "AS IS" and "WITH ALL FAULTS." Sublessor
shall have no obligation to alter, remove, improve, repair, decorate, or paint
the Premises or any part thereof, except that: (a) Sublessor shall clean the
Premises prior to and immediately following Sublessee's occupation of the
Premises; and (b) Sublessor shall install a temporary demising wall at a
location to be determined by Sublessor in the internal stairway which connects
the Seventh Floor Space to the Eighth Floor Space, such wall to be removed at
Sublessor's expense prior to the Sixth & Seventh Floor Commencement Date
(defined in Section 5.1). Sublessee acknowledges that the Premises will not
include the following fixtures which Sublessor intends to remove prior to the
Commencement Date applicable to the portion of the Premises where such items are
located: the supplemental HVAC unit and fire suppression system in the gas
control room on the seventh floor of the Building, as well as the security card
readers on the sixth, seventh and eighth floors of the Building.
2.3 No Warranties. Sublessee acknowledges that Sublessor has not
made and will not make any warranties to Sublessee with respect to the quality
of construction of any leasehold improvements or tenant finish within the
Premises or as to the condition of the Premises, either express or implied, and
that Sublessor expressly disclaims any implied warranty that the Premises are or
will be suitable for Sublessee's intended commercial purposes. Sublessee's
obligation to pay rentals under this Sublease is not dependent upon the
condition of the Premises or the Building or the performance by Lessor of its
obligations under the Master Lease, and Sublessee will continue to pay the
rentals due hereunder without abatement, setoff or deduction notwithstanding any
breach by Sublessor of its duties or obligations hereunder, or by Lessor of its
duties or obligations under the Master Lease, whether express or implied,
subject to the abatement of Rent provisions set forth in Section 9.10. Any
dispute between Sublessee and Sublessor as to whether the latter has breached
its obligations under this Sublease with respect to the condition of the
Premises shall be resolved by arbitration as set forth in Section 12.3, except
that one arbitrator shall determine the matter if the damages alleged are less
than $100,000, and three arbitrators shall determine the matter if the damages
alleged are greater than $100,000. Sublessor shall pay Sublessee any such
arbitration award within thirty days of the award, and if Sublessor fails to do
so then Sublessee may recoup such award against the rentals due hereunder or
exercise any of its other rights and remedies for a Sublessor default.
3. First Floor Expansion Rights.
----------------------------
3.1 First Right Space. Sublessee shall have the right of first
refusal throughout the term of this Sublease with respect to the entire balance
of usable space on the first floor of the Building (the "First Right Space").
In the event that Sublessor has received a letter of intent from a third party
to sublease all or any portion of the First Right Space, Sublessor shall give to
Sublessee written notice of the same. Sublessee shall have the right, within
five (5) business days of receipt of such notice, to elect to lease such portion
of the First Right Space on the same terms and conditions as contained in the
letter of intent, and to the extent the letter of intent is silent, the terms
and conditions of this Sublease (the "First Right Terms"). Sublessee's election
shall be exercised by written notice to Sublessor given prior to the expiration
of such five (5) day period. In the event that Sublessee gives such notice to
Sublessor, Sublessor and Sublessee shall enter into a modification of this
Sublease reflecting the inclusion of the First Right Space as part of the
Premises upon the First Right Terms, and the Term of this Sublease, whether the
original Term or an Extension Term, shall be extended (but not reduced, if
applicable) to expire three (3) years from the commencement date of the First
Right Space. Rent shall commence with respect to the First Right Space, and
Sublessee's proportional share of the Operating Expenses shall be adjusted, upon
the date specified in the notice as the commencement of the subleasing of the
First Right Space.
3.2 Lapse. In the event the Sublessee does not elect to sublease the
First Right Space within the time period required, then Sublessor shall be free
to sublease the First Right Space to the third party on terms and conditions at
least as favorable to Sublessor as the First Right Terms. In the event that
Sublessor does not subsequently sublease the First Right Space to the third
party on such
2 - SUBLEASE
<PAGE>
terms, or discontinues negotiations with such third party within 90 days, then
the First Right Space shall again become subject to the right of first refusal
set forth herein.
3.3 Default. The right of first offer set forth herein shall only
apply so long as Sublessee is not then in default under this Sublease. In the
event this Sublease is terminated for any reason, the rights granted to
Sublessee in this paragraph shall also terminate at the same time. In the event
Sublessee exercises the right of first offer provided herein and subsequently
becomes in default prior to Sublessee's occupancy of the First Right Space,
Sublessor may elect, by written notice to Sublessee, to terminate Sublessee's
prior election to exercise its right of first offer, in which event Sublessee
shall have no rights with respect to the First Right Space. The right of first
offer is personal to the Sublessee named herein (or an Affiliate, as defined in
Section 11.1), and shall only exist so long as the Sublessee named herein (or an
Affiliate) is in actual occupancy of the entire Premises.
3.4 Lessor's Consent. The parties acknowledge that any expansion of
the Premises under this Sublease shall be subject to Lessor's Consent as set
forth in the Master Lease.
4. Fourth and Fifth Floor Expansion Rights.
---------------------------------------
4.1 Expansion Space. Sublessee shall have the option to sublease the
additional space on the fourth (4/th/) and fifth (5/th/) floors of the Building,
consisting of approximately 15,777 rentable square feet (14,237 usable square
feet) on each floor for a total of approximately 31,554 rentable square feet
(28,474 usable square feet) (the "Expansion Space"), such option to be exercised
by written notice from Sublessee to Sublessor. Such notice from Sublessee to
Sublessor shall specify the date upon which Sublessee desires to commence
occupancy of the Expansion Space, which date shall be no less than twelve (12)
months nor more than eighteen (18) months following the date that the notice is
given. Upon the desired commencement date, the Expansion Space shall become a
part of the Premises for the balance of the term of this Sublease, including any
Extension Term, upon the same terms and conditions set forth herein except that:
(1) there shall be no further right to expand the Premises (except, to the
extent not previously exercised, the rights with respect to the "First Right
Space" described above); (2) there shall be no Rent-free period of occupancy;
(3) the annual Rent rate per rentable square foot for the Expansion Space shall
be ninety-five percent (95%) of the fair market rent rate; and (4) the Term of
this Sublease, whether the original Term or an Extension Term, shall be extended
(but not reduced, if applicable) to expire five (5) years from the commencement
date of the Expansion Space.
4.2 Fair Market Rent Rate. The phrase "fair market rent rate" means
the rental rate (as of the date of expansion or extension commencement, as the
case may be) that a willing tenant would pay and a willing landlord would accept
in arm's length, bona fide negotiations for a lease expansion or extension (as
the case may be) of the space for which the fair market rent rate is being
determined, to be executed at the time of determination and to commence on the
commencement of Sublessee's expansion or extension of that space under this
Sublease, based upon other lease transactions made in the Building and other
comparable class "A" office buildings in the Portland, Oregon central business
district ("Class A"), taking into consideration all relevant terms and
conditions of any comparable leasing transactions, including, without
limitation: (i) location, quality and age of the building; (ii) use and size of
the space in question; (iii) location and/or floor level within the building;
(iv) extent of leasehold improvement allowances; (v) the amount of any abatement
of rental or other charges; (vi) parking charges or inclusion of same in rental;
(vii) lease takeovers/assumptions; (viii) club memberships; (ix) relocation
allowances; (x) refurbishment and repainting allowances; (xi) any and all other
concessions or inducements; (xii) extent of services provided or to be provided;
(xiii) distinction between "gross" and "net" lease; (xiv) base year or dollar
amount for escalation purposes (both operating costs and ad valorem/real estate
taxes); (xv) any other adjustments (including by way of indexes) to base rental;
(xvi) credit standing and financial stature of the tenant; and (xvii) length of
term. If the parties cannot agree on the fair market rent rate, the matter
shall be submitted to final and binding arbitration as set forth in Section
12.3, except that one arbitrator shall determine the rate if the difference
between the parties' assertions of fair market rent is less than $1.00 per
rentable square foot per year, and three arbitrators shall determine the rate if
the difference is greater than $1.00.
3 - SUBLEASE
<PAGE>
4.3 Adjustments. Rent shall commence with respect to the Expansion
Space, and Sublessee's proportional share of the Operating Expenses shall be
adjusted, upon the date specified in the notice as the commencement of the
subleasing of the Expansion Space.
4.4 Default. The expansion rights granted herein may only be
exercised if Sublessee is not in default hereunder. In the event this Sublease
is terminated for any reason, the rights granted to Sublessee in this paragraph
shall also terminate at the same time. In the event Sublessee exercises the
right to expand as provided herein and subsequently becomes in default prior to
taking occupancy of the Expansion Space, Sublessor may elect, by written notice
to Sublessee, to terminate Sublessee's prior exercise of its right to expand, in
which event Sublessee shall have no rights with respect to the Expansion Space.
This right to expand is personal to the Sublessee named herein (or an Affiliate)
and may only be exercised in the event the Sublessee named herein (or an
Affiliate) is in actual occupancy of the Premises at the time the expansion
notice is given.
5. Term.
----
5.1 Commencement and Expiration Dates. The Term of this Sublease
with reference to the Eighth Floor Space shall commence on August 1, 1999 (the
"Eighth Floor Commencement Date"). The Term of this Sublease with reference to
the Sixth Floor Space and Seventh Floor Space shall commence upon the date that
Sublessor delivers the Sixth Floor Space and Seventh Floor Space to Sublessee,
which shall be no later than November 1, 1999 (the "Sixth & Seventh Floor
Commencement Date"). The Term of this Sublease with reference to each of Suites
A, B, C and D in the First Floor Space shall commence as soon as Sublessor makes
such Suites available to Sublessee, but in no event later than: November 1,
1999, with respect to Suite A; February 1, 2000, with respect to Suite B;
January 1, 2000, with respect to Suite C; and October 11, 1999, with respect to
Suite D (the "First Floor Commencement Dates"). The First Floor Commencement
Dates, the Eighth Floor Commencement Date and the Sixth & Seventh Floor
Commencement Date are collectively referred to herein as the "Commencement
Dates." The Term of this Sublease with respect to the entire Premises shall
expire seventy-two (72) months after the Sixth & Seventh Floor Commencement Date
("Expiration Date"), unless sooner terminated in accordance with the provisions
of this Sublease. When the Commencement Dates have been determined, Sublessor
and Sublessee shall execute an addendum to this Sublease setting forth the
actual Commencement Dates and Expiration Date.
5.2 Possession. Possession of the Premises ("Possession") shall be
delivered to Sublessee on the applicable Commencement Dates. If for any reason
Sublessor does not deliver Possession to Sublessee on the applicable
Commencement Date for a particular space, Sublessor shall not be subject to any
liability for such failure, the Expiration Date shall not be extended by the
delay, and the validity of this Sublease shall not be impaired, but the Rent for
such space shall abate until the date which is an equal number of days after the
Possession Date for such space as the number of days from the scheduled
Commencement Date for such space until the actual Possession Date for such space
in order to give Sublessee one day of rent free occupancy of such space for each
day of Sublessor's delay in the delivery of possession of such space. Such Rent
abatement shall apply, however, only if such delay is due to reasons within the
reasonable control of Sublessor. Any delay beyond the reasonable control of
Sublessor shall be deemed excused and not subject to any such Rent abatement.
If, however, Sublessor has not delivered Possession of any portion of the
Premises to Sublessee within sixty (60) days after the applicable Commencement
Date for any reason whatsoever, then at any time thereafter and before delivery
of such Possession, Sublessee may give written notice to Sublessor of
Sublessee's intention to cancel this Sublease. Said notice shall set forth an
effective date for such cancellation which shall be at least ten (10) days after
delivery of said notice to Sublessor. If Sublessor delivers Possession of such
portion to Sublessee on or before such effective date, this Sublease shall
remain in full force and effect. If Sublessor fails to deliver Possession of
such portion to Sublessee on or before such effective date, this Sublease shall
be canceled, in which case all consideration previously paid by Sublessee to
Sublessor on account of this Sublease shall be returned to Sublessee, this
Sublease shall thereafter be of no further force or effect, and Sublessor shall
have no further liability to Sublessee on account of such delay or cancellation.
4 - SUBLEASE
<PAGE>
5.3 Early Possession. If Sublessor permits Sublessee to take
Possession of any portion of the Premises prior to the commencement of the Term,
such early Possession shall not advance the Expiration Date and shall be subject
to the provisions of this Sublease, including without limitation the payment of
Rent.
5.4 Holding Over With Consent. Any holding over after the expiration
of the term of this Sublease with the written consent of Sublessor shall be a
tenancy from month to month. The terms, covenants and conditions of such tenancy
shall be the same as provided herein. Acceptance by Sublessor of Rent after such
expiration shall not result in any other tenancy or any renewal of the term of
this Sublease, and the provisions of this Section are in addition to and do not
affect Sublessor's right of re-entry or other rights provided under this
Sublease or by applicable law.
5.5 Holding Over Without Consent. If Sublessee shall retain
possession of the Premises or any part thereof without Sublessor's consent
following the expiration or sooner termination of this Sublease for any reason,
then Sublessee shall pay to Sublessor for each day of such retention one hundred
fifty percent (150%) of the amount of the daily Rent for the last period prior
to the date of such expiration or termination, subject to adjustment as provided
in Section 7. Sublessee shall also indemnify and hold Sublessor harmless from
Sublessor's actual damages resulting from delay by Sublessee in surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant founded on such delay. Alternatively, if Sublessor gives notice to
Sublessee of Sublessor's election thereof, such holding over shall constitute
renewal of this Sublease for a period from month to month. Acceptance of Rent by
Sublessor following expiration or termination shall not constitute a renewal of
this Sublease, and nothing contained in this Section shall waive Sublessor's
right of re-entry or any other right. Unless Sublessor exercises the option
hereby given to it, Sublessee shall be only a tenant at sufferance, whether or
not Sublessor accepts any Rent from Sublessee while Sublessee is holding over
without Sublessor's written consent.
6. Term Extension.
--------------
6.1 Extension Terms. Sublessee shall have the right to extend the
term of this Sublease for up to two additional consecutive periods, the first of
four (4) years (the "First Extension Term"), and the second of five (5) years
(the "Second Extension Term, and, collectively with the First Extension Term,
the "Extension Terms"), such rights to be exercised by written notice from
Sublessee to Sublessor given not more than three hundred sixty-five (365) days
nor less than one hundred eighty (180) days prior to the Expiration Date (as
extended, if applicable). These extension rights may only be exercised if
Sublessee is not then in default hereunder. In the event this Sublease is
terminated for any reason, the rights granted to Sublessee in this paragraph
shall also terminate at the same time. In the event Sublessee exercises the
right to extend the term of this Sublease as provided herein and subsequently
becomes in default prior to the commencement of the applicable Extension Term,
Sublessor may elect, by written notice to Sublessee, to terminate Sublessee's
prior election to exercise its right to extend the term hereof, in which event
Sublessee shall have no rights with respect to the Extension Term(s). These
rights to extend the term of this Sublease are personal to the Sublessee named
herein (or an Affiliate) and may only be exercised in the event the Sublessee
named herein (or an Affiliate) is in actual occupancy of the Premises at the
time the applicable extension notice is given.
6.2 Terms and Conditions. The subleasing of the Premises during the
Extension Terms shall be upon the same terms and conditions as are contained
herein with respect to the initial term, except that: (1) there shall be no
further right to extend the term hereof; (2) there shall be no Rent-free period
of occupancy; (3) the annual Base Rent rate per rentable square foot during the
First Extension Term shall be Twenty-six and 50/100 Dollars ($26.50); and (4)
the annual Base Rent rate per rentable square foot during the Second Extension
Term shall be the fair market rent rate. The phrase "fair market rent rate"
shall have the meaning set forth in Subsection 4.2.
7. Rent. Sublessee shall pay all Base Rent and Additional Rent ("Rent")
----
to Sublessor without deduction, setoff, notice, or demand, in advance on the
first day of each month, at 2100 SW River
5 - SUBLEASE
<PAGE>
Parkway, Portland, Oregon 97201, or at such other place as Sublessor shall
designate from time to time by notice to Sublessee.
7.1 Base Rent. Sublessee shall not be obligated to pay Sublessor any
Rent with respect to each portion of the Premises until the applicable "Rent
Commencement Date" as such term is defined as follows. With respect to Suites A
and B on the first floor and the sixth, seventh and eighth floors, the Rent
Commencement Date shall be the date which is ninety (90) days after the
respective Term Commencement Date. With respect to Suites C and D on the first
floor, the Rent Commencement Date shall be the date which is one hundred eighty
(180) days after the respective Term Commencement Date. From the first Rent
Commencement Date to occur Tenant shall pay Rent for the applicable portion of
the Premises at an annual Base Rent rate of $23.25 per rentable square foot.
From the date when the last Rent Commencement Date set forth herein has occurred
through the sixtieth (60th) month of the Term, Sublessee shall pay "Base Rent"
in the sum of One Hundred Fifteen Thousand, One Hundred Four and 94/100 Dollars
($115,104.94) per month, based on an annual Base Rent rate of $23.25 per
rentable square foot. During the last twelve (12) months of the Term, Sublessee
shall pay "Base Rent" in the sum of One Hundred Thirty One Thousand, One Hundred
Ninety-four and 88/100 Dollars ($131,194.88) per month, based on an annual Base
Rent rate of $26.50 per rentable square foot. Sublessee shall pay to Sublessor
upon execution of this Sublease the sum of One Hundred Fifteen Thousand, One
Hundred Four and 94/100 Dollars ($115,104.94) as an advance payment of Base
Rent. If the Term begins or ends on a day other than the first or last day of a
month, the Rent for the partial month shall be prorated on a per diem basis.
7.2 Operating Expenses and Taxes.
7.2.1 Operating Expenses. For the purposes of this Sublease, the
------------------
term "Operating Expenses" shall mean all expenses paid or incurred by Sublessor
(or on Sublessor's behalf) as reasonably determined by Sublessor to be necessary
or appropriate for the efficient operation, maintenance and repair of the Master
Premises and/or Building, including the Common Areas of the Building, including
without limitation: (i) salaries, wages, medical, surgical, union and general
welfare benefits (including, without limitation, group life insurance) and
pension payments of employees of Sublessor to the extent such employees are
engaged in the repair, operation and maintenance of the Master Premises and/or
Building; (ii) payroll taxes, workers' compensation insurance, uniforms and
related expenses for such employees to the extent such employees are engaged in
the repair, operation and maintenance of the Master Premises and/or Building;
(iii) the cost of all charges for gas, steam, electricity, heat, ventilation,
air-conditioning, water and other utilities furnished to the Building, together
with any taxes on such utilities; (iv) the cost of painting of public areas; (v)
the cost of all charges of insurance, including but not limited to all risk
property insurance with rent loss coverage, liability and fidelity insurance,
with regard to the Master Premises and/or Building and the maintenance and/or
operation thereof; (vi) the cost or rental of all supplies, including without
limitation, cleaning supplies, light bulbs, tubes and ballasts, materials and
equipment, and sales and other taxes thereon; (vii) the cost of hand tools and
other movable equipment used in the repair, maintenance or operation of the
Building amortized over the useful life of such hand tools and movable equipment
(determined in accordance with Generally Accepted Accounting Principles); (viii)
the cost of all charges for window and other cleaning and janitorial and
security services; (ix) charges of independent contractors performing repairs or
services to the Master Premises and/or Building; (x) non-capital repairs; (xi)
remodeling of the public and Common Areas of the Building including, without
limitation, repainting, replacement and repair of furnishings, fixtures,
accessories, carpeting or other floor covering, wall and window coverings in the
public and Common Areas, the cost of which shall be amortized (with interest at
the rate of nine percent [9%] on the unamortized balance) over the useful life
of the improvements determined in accordance With Generally Accepted Accounting
Principles; (xii) alterations and improvements to the Building made by reason of
the laws and requirements of any public authorities or the requirements of
insurance bodies; (xiii) management fees paid to a third party, or, if no
managing agent is employed by Sublessor, Sublessor shall be entitled to charge a
management fee which is not in excess of One Dollar ($1.00) per rentable square
foot per year during the initial term of this Sublease (which fee shall be
adjusted by the same percentage as any adjustment to the Base Rent rate during
the Extension Terms), and such fee shall be included in the Operating Expenses;
(xiv) the cost of any capital improvements or repairs to the
6 - SUBLEASE
<PAGE>
Building and/or of any machinery or equipment installed in the Building
amortized (with interest at the rate of nine percent [9%] on the unamortized
balance) over the useful life of the improvement, machinery and/or equipment as
reasonably estimated by Sublessor, which is made or becomes operational, as the
case may be, after the completion of the construction of the Building and which
have a reasonable probability of reducing the expenses which otherwise would be
included in Operating Expenses; (xv) reasonable legal, accounting and other
professional fees incurred in connection with operation, maintenance and
management of the Master Premises and/or Building; (xvi) the cost of providing
elevator service; (xvii) the cost of landscape and parking area maintenance and
repair to the Master Premises and/or Building; (xviii) Taxes as defined in
Section 7.2.3; and (xix) all other charges properly allocable to the operation,
repair and maintenance of the Building in accordance with Generally Accepted
Accounting Principles.
7.2.2 Exclusions From Operating Expenses. To the extent the
----------------------------------
operating expenses of the Master Premises include any of the items described in
Exhibit C attached hereto, such expenses shall not be included in the
- ---------
calculation of the Operating Expenses.
7.2.3 Taxes. The term "Taxes" shall include (i) all real
-----
property taxes and assessments and personal property taxes, charges, rates,
duties and assessments rated, levied or imposed by any governmental authority
with respect to the Master Premises, the Building and any improvements, fixtures
and equipment located therein or thereon, and with respect to all other property
of Sublessor, real or personal, located in or on the Master Premises or the
Building and used in connection with the operation of the Building; (ii) any tax
in lieu of a real property tax; (iii) any tax or excise levied or assessed by
any governmental authority on the rentals payable under this Sublease or rentals
accruing from the use of the Master Premises or the Building, provided that this
shall not include federal or state, corporate or personal income taxes; and (iv)
any tax or excise imposed or assessed against Sublessor which is measured or
based in whole or in part on the capital employed by Sublessor to improve the
Master Premises and construct the Building. If Sublessor receives a refund of
Taxes then Sublessor shall credit such refund, net of any professional fees and
costs incurred by Sublessor to obtain the same, against the Taxes for the
Operating Year to which the refund is applicable or the current Operating Year,
at Sublessor's option. The amount of the Taxes for the Base Year shall reflect
any refund resulting from any appeal, protest, or other action by Sublessor
contesting the amount claimed by the governmental authorities (net of any
professional fees and costs incurred by Sublessor to obtain such refund) and any
statements by Sublessor as to the amount of Base Year Taxes shall be tentative
until any such contest is completed.
7.3 Payment of Operating Expenses and Taxes.
7.3.1 Operating Year. As used in this Sublease, the term
--------------
"Operating Year" shall mean each calendar year of the Term of this Sublease and
in the event this Sublease begins or ends on any date other than the first day
of the calendar year, the calculations, costs and payments referred to herein
shall be prorated on the basis of a three hundred sixty (360) day year, with
twelve (12) months of thirty (30) days each.
7.3.2 Sublessee's Pro Rata Share. Beginning January 1, 2001,
--------------------------
Sublessee shall pay, as Additional Rent, its pro rata share of the increase in
Operating Expenses of the Building, if any, over the Operating Expenses for the
Base Year. The Base Year shall be the year 2000. Sublessee's pro rata share of
the increase in Operating Expenses of the Building for each Operating Year shall
be calculated as follows: the Operating Expenses for each Operating Year less
the Operating Expenses for the Base Year shall be multiplied by Sublessee's
Percentage (initially 64.20%, subject to adjustment as provided herein). If in
any Operating Year Sublessee occupies the Premises for less than the full
Operating Year, then the product from the foregoing multiplication shall be
multiplied by the percentage of the Operating Year in which Sublessee occupied
the Premises. "Sublessee's Percentage" shall mean a percentage, the numerator of
which is the number of rentable square feet of the leased Premises and the
denominator of which is the total number of rentable square feet of the
Building, whether or not such space is actually rented. The Sublessee's
Percentage (as specified above, and adjusted as provided herein) shall be
changed from time to time to reflect any change in the total rentable
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square footage in the Building or changes in the size of the Premises. Except
for the size of the original Premises set forth above in this Sublease which is
a final determination between the parties, all calculations of rentable area for
the balance of the building shall be on the basis set forth in the Standard
Method for Measuring Floor Area in Office Buildings (ANSI/BOMA Z65.1-1996) (the
"BOMA Standard"). During the periods when the Building is not fully occupied,
Sublessor shall reasonably adjust Operating Expenses to reflect the costs that
would normally have been incurred had the Building been fully occupied for the
entire period and the Building had been fully assessed for property tax
purposes. The Building shall be considered fully occupied when occupancy reaches
ninety-five percent (95%). If during any Operating Year the tenant of any space
in the Building performs work or services therein pursuant to a written
agreement between Sublessor and such tenant in lieu of having Sublessor perform
the same and the cost thereof would have been included in Sublessor's Operating
Expenses, then in any such event(s), at Sublessor's option, the Operating
Expenses for such Operating Year shall be adjusted to reflect the Operating
Expenses that would have been incurred if Sublessor had performed such work or
services, as the case may be. If the total rentable area of the Building
changes, Sublessor shall recalculate a revised Sublessee's Percentage reflecting
the change in the manner set forth in the BOMA Standard.
7.3.3 Written Statement of Estimate. Not more than forty-five
-----------------------------
(45) days prior to the commencement of each Operating Year during the Term of
this Sublease after the year 2000, Sublessor shall furnish Sublessee with a
written statement setting forth Sublessee's pro rata share of the estimated
increase in Operating Expenses and Taxes for the next Operating Year. Sublessee
shall pay to Sublessor as Additional Rent commencing on January 1 of the
Operating Year, and thereafter on the first day of each calendar month, an
amount equal to one-twelfth of the amount of Sublessee's pro rata share as shown
in Sublessor's written statement. In the event Sublessor delivers the written
statement late, Sublessee shall continue to pay to Sublessor an amount equal to
one-twelfth of Sublessee's pro rata share of the estimated Operating Expenses
for the immediately preceding Operating Year until Sublessor does furnish the
written statement, at which time Sublessee shall pay the amount of any excess of
the Sublessee's pro rata share for the expired portion of the current Operating
Year over the Sublessee's actual payments during such time and any excess
payments by Sublessee shall be credited to the next due payment of Rent from
Sublessee. The late delivery of any written statement by Sublessor shall not
constitute a waiver of Sublessee's obligation to pay its pro rata share of
Operating Expenses nor subject the Sublessor to any liability, but Sublessor
shall use reasonable efforts to deliver such written statements of estimated
increase in Operating Expenses as soon as reasonably possible after the
commencement of each Operating Year.
7.3.4 Final Written Statement. Within ninety (90) days after the
-----------------------
close of each Operating Year during the Term of this Sublease after the year
2000, Sublessor shall deliver to Sublessee a written statement (the "Operating
Statement") setting forth Sublessee's actual pro rata share of the increase in
Operating Expenses for the preceding Operating Year. In the event Sublessee's
pro rata share of the actual increase in Operating Expenses is in excess of the
Sublessee's pro rata estimated increase in Operating Expenses, Sublessee shall
pay the amount of such excess to Sublessor as Additional Rent within thirty (30)
days after receipt of such statement by Sublessee. In the event Sublessee's pro
rata share of the actual increase in Operating Expenses is less than the
Sublessee's pro rata share of the estimated increase in Operating Expenses
actually paid by Sublessee then the amount of the excess overpayment shall be
paid by Sublessor to Sublessee within thirty (30) days following the date of
such statement or Sublessor may elect to apply the overpayment to Sublessee's
next Rent payment, reimbursing only the excess over such next payment, if any.
The late delivery of any written statement by Sublessor shall not constitute a
waiver of Sublessee's obligation to pay its pro rata share of Operating
Expenses, but Sublessor shall use reasonable efforts to deliver such written
statements as soon as reasonably possible after the commencement of each
Operating Year.
7.3.5 Sublessee Audit. The Operating Statement referred to
---------------
herein need not be audited but shall contain sufficient detail to enable
Sublessee to verify the calculation of its pro rata share. In addition,
Sublessee, upon at least five days advance written notice to Sublessor and
during business hours, may audit the Operating Statement, provided however, that
Sublessee shall only be entitled to such an audit once in each Operating Year,
and the audit shall not be conducted by anyone
8 - SUBLEASE
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who is engaged on a contingent fee basis to represent Sublessee or who is a
competitor of Sublessor in the energy industry. Property managers shall be
deemed competitors of Sublessor. The person conducting the audit on behalf of
Sublessee shall enter into a confidentiality agreement satisfactory to
Sublessor. In the event the audit fails to discover a valid overcharge in excess
of 5% of the Operating Expense payments during the Operating Year covered by the
audit, Sublessee shall reimburse Sublessor for the costs incurred by Sublessor
due to the audit. In the event the audit reveals an overcharge in excess of 5%
of the Operating Expense payments during the Operating Year covered by the
audit, Sublessor shall reimburse Sublessee for the costs incurred by Sublessee
to perform the audit.
7.3.6 Disputes. Each such Operating Statement given by
--------
Sublessor pursuant to this Section shall be conclusive and binding upon
Sublessee unless within one hundred eighty (180) days after the receipt of such
Operating Statement Sublessee shall notify Sublessor that it disputes the
correctness of the Operating Statement, specifying the particular respects in
which the Operating Statement is claimed to be incorrect. If such disputes shall
not have been settled by agreement, either party, within thirty (30) days after
receipt of such Statement, may pursue its available legal remedies, but
Sublessee hereby agrees that a dispute over the Operating Statement or any error
by Sublessor in interpreting or applying this Section or in calculating the
amounts in the Operating Statement shall not be a breach of this Sublease by
Sublessor, and even if any legal proceeding over the Operating Statement is
resolved against Sublessor this Sublease shall remain in full force and effect
and Sublessor shall not be liable for any consequential damages, and pending the
determination of such dispute, Sublessee, within ten (10) days of receipt of
such Operating Statement, shall pay Additional Rent in accordance with the
Operating Statement, without prejudice to Sublessee's position. If the dispute
shall be determined in Sublessee's favor, Sublessor shall forthwith pay to
Sublessee the amount of Sublessee's overpayment of rents resulting from
compliance with the Operating Statement.
7.3.7 Payment. If an Operating Year ends after the expiration
-------
or termination of this Sublease, the Additional Rent in respect thereof payable
under this Section shall be paid by Sublessee within thirty (30) days of its
receipt of the Operating Statement for such Operating Year.
7.3.8 No Reduction in Amount of Base Rent. Nothing in this
-----------------------------------
Sublease shall be construed to mean the Base Rent amount specified in the Basic
Lease Information shall be reduced due to any decrease in Operating Expenses, it
being intended that the amount of the Base Rent remain fixed throughout the Term
of this Sublease.
8. Use, Maintenance and Repair of Premises. The Premises shall be used
---------------------------------------
and occupied only for general office purposes typical of Class A buildings and
telecommunications operations consistent therewith, and for no other use or
purpose. Sublessee shall not use or alter the Premises in any manner which would
jeopardize Sublessor's eligibility for the tax credits described in Section 4.2
of the Master Lease. Sublessee shall not do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Building or injure or annoy them, nor use
or allow the Premises to be used for any unlawful purpose, nor shall Sublessee
cause or maintain or permit any nuisance in, on, or about the Premises.
Sublessee shall, at all times during the term hereof at Sublessee's sole cost
and expense, keep the following items in good order, condition and repair: (i)
floor coverings, (ii) wall coverings, (iii) paint, (iv) casework, (v) ceiling
tiles, and (vi) all of Sublessee's Severable Property.
9. Building Services.
-----------------
9.1 Security. Sublessor and Sublessee agree to cooperate in
establishing reasonable security measures for the Building, the cost of which
will be included in Operating Expenses. Sublessor shall not unreasonably
withhold, condition nor delay its consent to any supplementary security systems
Sublessee desires to install in the Premises at its sole cost and expense
subject to any consent required from Lessor. Sublessor's property manager shall
at all times be provided a pass key or comparable means of access to the
Premises except for any fully secure rooms such as vault rooms containing highly
valuable or sensitive property. In the event Sublessee installs any such fully
secure areas, Sublessor shall have the right in an emergency to use any
reasonable means necessary to gain
9 - SUBLEASE
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access to such area without being considered in breach of this Lease nor subject
to any claim for damages for such entry. Sublessee shall indemnify, defend and
hold Sublessor harmless from and against any and all third party claims,
damages, expense or loss suffered by Sublessor as a result of any supplemental
security systems or fully secure areas installed by Sublessee.
9.2 Vending Room. So long as there is a reasonably sufficient demand
for vending machine food service in the Building, Sublessor will provide such
service on the first floor in a Common Area room. In the event of any breach of
this requirement, Sublessee shall be entitled to an equitable abatement of Rent
as compensation.
9.3 Parking. Throughout the Term of this Sublease, Sublessee shall
sublease from Sublessor non-reserved parking spaces in the Building's parking
garage and the surface lot, the number of spaces in each lot to equal the
Sublessee's Percentage (defined in Section 7.3.2) of the total number of parking
spaces in each lot, and shall be subject to the prevailing parking charges
charged in the downtown Portland, Oregon area. Upon execution of this Sublease
the current rates are $100.00 per month per space located in the Building's
parking garage, and $60.00 per month per space located in the surface lot.
Sublessee acknowledges that the surface lot is open to the public from 6:00 p.m.
to 6:00 a.m. Monday through Friday, and at all hours on weekends and holidays.
9.4 Maintenance. Sublessor shall maintain the Building, including
public and Common Areas of the Building, such as the lobbies, stairs, elevators,
corridors and rest rooms, the windows in the Building, the mechanical, plumbing
and electrical equipment serving the Building, and the structure itself, in
Class A condition, except for damage occasioned by the act of the Sublessee,
which damage shall be repaired by Sublessor at Sublessee's expense.
9.5 Utilities. Provided the Sublessee shall not be in default
hereunder, and subject to the provisions elsewhere herein contained and to the
rules and regulations of the Building, Sublessor agrees to furnish to the
Premises (i) heat and air-conditioning customarily furnished in comparable class
A buildings in Portland, Oregon, for the comfortable use and occupation of the
Premises from 7:00 A.M. to 6:00 P.M. on weekdays, and 8:00 A.M. to 1:00 P.M. on
Saturdays exclusive of legal holidays, (ii) continuous water and electricity
service suitable for the intended use of the Premises, (iii) janitorial services
after 6:00 P.M. on weekdays exclusive of legal holidays in the manner that such
services are customarily furnished in Class A buildings, and (iv) continuous
elevator service which shall mean service by unattended automatic elevators.
Sublessor shall provide additional or after-hours heating or air-conditioning at
Sublessee's request, and Sublessee shall pay to Sublessor a reasonable charge
for such services as determined by Sublessor, the initial rate for which shall
be $30.00 per hour per floor. Sublessee agrees to keep and cause to be kept
closed all window coverings when necessary because of the sun's position, and
Sublessee also agrees at all times to cooperate fully with Sublessor and to
abide by all the reasonable regulations and requirements which Sublessor may
prescribe for the proper functioning and protection of the heating, ventilating,
and air-conditioning system. Wherever heat-generating machines, excess lighting
or equipment are used in the Premises which affect the temperature otherwise
maintained by the air-conditioning system, Sublessor reserves the right to
install supplementary air-conditioning units in the Premises, and the cost
thereof, including the cost of installation and the cost of operation and
maintenance thereof, shall be paid by Sublessee to Sublessor upon demand by
Sublessor. Any sums payable under this Section shall be considered Additional
Rent and may be added to any installment of Base Rent thereafter becoming due,
and Sublessor shall have the same remedies for a default in payment of such sum
as for a default in the payment of Base Rent.
9.6 Excess Usage. If Sublessee uses excessive amounts of non-metered
utilities or services of any kind because of operation outside of normal
Building hours, high demands from office machinery and equipment, nonstandard
lighting, or any other cause, Sublessor may impose a reasonable charge for
supplying such extra utilities services, which charge shall be payable monthly
by Sublessee in conjunction with Rent payments. Sublessor may, at Sublessee's
expense, install in the Premises a special meter to measure the amount of water,
electric current or other resource consumed for any such other use. In case of
dispute over any extra charge under this paragraph, Sublessor and Sublessee
shall select a qualified independent engineer whose decision shall be conclusive
on both parties. If the parties
10 - SUBLEASE
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cannot agree on the engineer the same shall be appointed by the presiding judge
of the Multnomah County (Oregon) Circuit Court. The party not prevailing in such
dispute shall pay the cost of such engineer's determination.
9.7 Disclaimer. Sublessor shall not be in default hereunder or be
liable for any damages directly or indirectly resulting from, or by reason of
(i) the installation, use or interruption of use of any equipment in connection
with the furnishing of the foregoing utilities and services, (ii) failure to
furnish or delay in furnishing any such utilities or services when such failure
or delay is caused by acts of God or the elements, labor disturbances of any
character, any other accidents or other conditions beyond the reasonable control
of Sublessor, or by the making of repairs or improvements to the Premises or the
Building, or (iii) the limitation, curtailment, rationing or restriction on use
of water or electricity, gas or any other form of energy or any other service or
utility whatsoever serving the Premises or the Building. Furthermore, Sublessor
shall be entitled to cooperate voluntarily in a reasonable manner with the
efforts of national, state or local governmental agencies or utilities suppliers
in reducing energy or other resource consumption. Sublessor shall disclose to
Sublessee any prior knowledge of expected interruptions of utilities or services
as soon as reasonably practicable.
9.8 Use of Common Areas and Facilities. All common facilities and
areas furnished by Sublessor in or near the Building (the "Common Areas"),
including parking areas, lighting facilities, pedestrian sidewalks and ramps,
landscaped areas, exterior stairways, rest rooms, showers, shipping/receiving
areas, freight elevators, vending room and other areas and improvements for the
general use, in common, of tenants, their officers, agents, employees and
customers shall at all times be subject to the exclusive control and management
of Sublessor. Without limiting the scope of such discretion, Sublessor shall
have the full right and authority to employ all personnel and to establish,
modify and enforce reasonable rules and regulations necessary for the proper
operation and maintenance of Common Areas. Sublessor shall have the right to
close all or any portion of the Common Areas to such extent as, in the opinion
of Sublessor's legal counsel, may be legally sufficient to prevent a dedication
thereof or the accrual of any rights to any person (other than Sublessee or its
Affiliate) or the public therein, and to make changes therein or do and perform
such other acts in and to said areas and improvements as the Sublessor shall
reasonably determine to be advisable; provided, however, that Sublessee's use of
or access to the Premises shall not be materially impaired by such acts. Except
for Rent abatement and termination rights explicitly provided for elsewhere in
this Sublease, any diminution in the Common Areas shall not subject Sublessor to
any liability nor shall Sublessee be entitled to any compensation or diminution
or abatement of Rent, nor shall such diminution of such areas be deemed
constructive or actual eviction.
9.9 Janitorial. Sublessor shall clean the Premises each weeknight in
accordance with the specifications attached hereto as Exhibit D.
---------
9.10 Interruption of Services. In the event that any utilities or
services essential to the conduct of business in the Premises ("Essential
Services") are interrupted for a period of fifteen (15) days or more and the
interruption is due to the fault of Sublessor, Rent shall abate. In the event
that Essential Services are interrupted for a period of one hundred twenty (120)
days or more, Sublessee shall have the right to terminate this Sublease.
9.11 Generator, HVAC and Other Utility Infrastructure. Sublessor
shall not unreasonably withhold its consent to any Sublessee-requested approval
of alterations and improvements including installation of an electrical power
generator, uninterruptible electrical power supply, electrical power
conditioners or other HVAC or utility infrastructure and all associated
ancillary equipment at the Building. Any such installation shall be at
Sublessee's sole cost and expense and Sublessee shall be solely responsible for
replacement, repairs and maintenance to the equipment and the Building, if
Building damage is attributed to such installations. If any such installations
are to be in locations outside of the Premises then the Sublessor's approval of
such location may be withheld in its sole discretion, provided that if consent
is withheld then Sublessor shall provide an alternative location for the
equipment which Sublessor reasonably determines suitable. Sublessor may
condition its consent for any such
11 - SUBLEASE
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installation upon the payment of a fair market rent should the installation
involve rentable area in the Building. Sublessee shall not have access to or use
of Sublessor's generator.
10. Sublessee Improvements.
----------------------
10.1 Construction by Sublessee: Sublessee shall have the right to
install, at Sublessee's sole cost and expense, the improvements described in
this Section and such other improvements as may be approved by Sublessor, which
consent shall not be unreasonably withheld so long as Sublessee obtains Lessor's
consent. In connection therewith:
10.1.1 Sublessor's Approval: Such work shall not proceed until
--------------------
Sublessor's written approval of each of the following items, which approval
shall not be unreasonably withheld, conditioned or delayed: (a) Sublessee's
contractor; (b) public liability and property damage insurance carried by
Sublessee or its contractor; (c) schematic plans and specifications for such
work; and (d) detailed construction plans and specifications. All such work
shall be done in strict conformity with such final plans and specifications
subject to field change orders prepared and approved by Sublessor. As-built
plans shall be prepared by Sublessee after the work is fully completed and a
copy shall be delivered to Sublessor for its use.
10.1.2 Permits: All work shall be done in conformity with a
-------
valid building permit (obtained at Sublessee's expense) when required, a copy of
which shall be furnished to Sublessor before such work is commenced, and in any
case, all such work shall be performed in accordance with all applicable
governmental regulations at Sublessee's sole expense. Notwithstanding any
failure by Sublessor to object to any such work, Sublessor shall have no
responsibility for Sublessee's failure to meet all applicable regulations.
10.1.3 Coordination: All work by Sublessee or Sublessee's
------------
contractor shall be scheduled through Sublessor. Sublessee or Sublessee's
contractor shall arrange for necessary utility, hoisting and elevator service
with Sublessor.
10.1.4 Manner of Entry: Sublessee's entry to the Premises for
---------------
any purpose, including without limitation, inspection or performance of
Sublessee construction by Sublessee's agents, prior to the Commencement Dates
specified herein shall be at such times as are reasonably approved by Sublessor
and subject to all the terms and conditions of this Sublease except the payment
of Rent. Sublessee's entry shall mean entry by Sublessee, its officers,
contractors, licensees, agents, servants, employees, guests, invitees, or
visitors.
10.1.5 Faulty Work: Sublessee shall promptly reimburse
-----------
Sublessor upon demand for any extra expense incurred by the Sublessor by reason
of faulty work done by Sublessee or its contractors or by reason of any delays
caused by such work, or by reason of inadequate cleanup.
10.2 Fiber Optics. Sublessee may connect redundant fiber optics to
------------
the Building's systems, the plans and specifications for which shall be subject
to Sublessor's approval, which approval shall not be unreasonably withheld,
conditioned or delayed. Sublessee shall have the right (but not the obligation)
to market its fiber optics to Sublessor as well as any third party within the
Building. Any profits derived from Sublessee's fiber optics shall belong to
Sublessee and Sublessor shall not have any claim on such profits.
10.3 Roof Top Access.
10.3.1 License: Sublessor hereby grants Sublessee a license to
-------
use a portion of the Building roof top area to be agreed upon by Sublessor and
Sublessee (the "Equipment Area") for the installation, operation, maintenance,
repair and replacement of an antenna (the "Antenna"), satellite dish (the
"Dish") and ancillary facilities (collectively, the "Equipment"). The Antenna
shall be no greater than three (3) feet tall, and the Dish shall be no greater
than three (3) feet in diameter. The
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Equipment shall weigh no more than 200 pounds. The term of this license
shall be the same as the term of this Sublease and expire upon the
expiration or earlier termination of this Sublease.
10.3.2 Costs: Sublessee shall pay all charges for electricity
-----
and other utilities used or consumed in connection with the installation or
operation of the Equipment. Sublessee also shall reimburse Sublessor for
all costs Sublessor may incur with regard to the Equipment, including costs
for maintenance, repairs, or improvements incurred from time to time and
any expenses incurred by Sublessor in reviewing specifications or
inspecting the installation of these facilities. Sublessee also shall pay
all taxes levied by any jurisdiction with respect to the Equipment and
appurtenant facilities.
10.3.3 Access: Sublessee and its contractors, agents and
------
subcontractors shall have the right to enter or leave the Equipment Area at
reasonable times provided that Sublessee and such parties comply with the
security regulations of the Building.
10.3.4 Interference with other Equipment: Sublessor shall have
---------------------------------
the to use or allow others to use other space in, on and around the
Building for the purpose of transmitting and receiving broadcast radio,
television, cable television, one-way and two-way communications, microwave
transmissions and other communications. The Equipment shall be installed so
as not to interfere with the use or operation of communications equipment
previously installed in, on or around the Building by others. Installation
of the Equipment shall include a cable connection between the Equipment
Area and the Premises. Sublessor shall not be responsible for any
interference that may occur with respect to Sublessee's Equipment signal;
however, Sublessor agrees to use reasonable efforts to prevent subsequent
installations on the Building or property appurtenant to the Building from
interfering with Sublessee's use of the Equipment Area ("reasonable
efforts" shall not include the expenditure of any sum of money or the
institution of litigation). In the event that Sublessee shall desire to
change the frequency or frequencies utilized by the Equipment to other
frequencies, Sublessee shall request Sublessor's prior written approval of
such change on not less than sixty (60) days prior written notice,
specifying in such notice the frequency or frequencies that are desired to
be used, the date of the proposed change and whether such frequencies will
be used for transmission or receiving, provided that Sublessee shall not,
without Sublessor's consent, increase the total number of receiving and/or
transmitting frequencies above the quantity initially approved by
Sublessor. If such desired change in frequencies shall not, in the
reasonable judgment of Sublessor, create problems of interference with
respect to other communications equipment installed in the vicinity of the
Building or which Sublessor intends to install, then Sublessor agrees not
to unreasonably withhold its approval of the proposed change.
10.3.5 Repairs: Except in the event of an emergency, Sublessor
-------
must give its written approval prior to the performance of any repairs or
replacement of the Equipment, such approval not to be unreasonably withheld
or delayed. All costs of installation, including the cost of electrical
equipment, mounting fixtures and engineering studies required by Sublessee
hereunder, or which are required to comply with Sublessor's site
engineering or aesthetic standards, will be paid by Sublessee. All
equipment or other properties attached to or otherwise brought into or onto
the Equipment Area other than permanent modifications which Sublessor
elects to retain, shall be and remain the personal property of Sublessee.
10.3.6 Indemnification: Sublessee assumes full responsibility
---------------
for the installation, engineering and maintenance of all Equipment.
Sublessee shall indemnify and hold Sublessor harmless from and against all
losses, costs (including reasonable attorneys' fees at trial and on
appeal), damages, expenses and liabilities (including statutory liability,
liability under workers compensation laws and mechanics liens), in
connection with the use, installation or operation of the Equipment or
Equipment Area or arising from any acts or negligence of Sublessee,
Sublessee's agents, employees, customers, invitees, contractor, and
subcontractors, exclusive, however, of any liability arising out of
Sublessor's negligence.
10.3.7 Permits: Sublessee shall, at its expense,
-------
obtain any and all applicable municipal, state and Federal or other permits
and/or licenses required for the installation,
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operation and maintenance of the Equipment, and Sublessor shall not be
responsible for any signal interference or signal straying that may result
from Sublessee's use of the Equipment. All costs and risks associated with
the installation, operation and maintenance of the Equipment shall be the
sole obligation of Sublessee, and Sublessee's inability to secure or retain
such permits and/or licenses shall not terminate this Sublease. A copy of
each of Sublessee's permits and licenses shall be submitted to Sublessor.
10.3.8 Screening: Sublessor, at its option, may require
---------
Sublessee to screen the Equipment from public view by erecting
architectural screens around the Equipment Area.
10.3.9 Relocation: Sublessor, at its expense, may relocate the
----------
Equipment to other space near the Building at any time and from time to
time, provided that Sublessee's use of the Equipment is not materially
diminished by such relocation.
10.3.10 Plan Approval: All plans and specifications pertaining
-------------
to the installation of the Equipment must be approved by Sublessor and all
governmental authorities having jurisdiction thereof and shall comply with
all restrictive covenants pertaining to the Building.
10.3.11 Application of Other Provisions: All of the provisions
-------------------------------
of this Sublease other than this Section shall be applicable to the License
created by this Section as if the area covered by the License were a part
of the Premises, except to the extent that such provisions are in conflict
with the provisions of this Section, in which latter event the provisions
of this Section shall be deemed to be controlling.
10.4 Signage and Directory. Sublessee may install an exterior
monument sign. If at any time during the term of this Sublease, Sublessee
is in actual occupancy of seventy-five percent (75%) or more of the
Building, Sublessee shall have the right to install exterior signage on the
Building. Any sign(s) shall be located and designed in a manner reasonably
satisfactory to both parties and in compliance with all local ordinances
and regulations governing the same. Sublessor, at Sublessee's expense and
request, shall have Sublessee's name and principal employees included on
the Building's directory in the main lobby. Sublessor shall have the right
to install an exterior monument sign so long as Sublessor or its affiliate
is a tenant in the Building.
11. Assignment and Subletting.
-------------------------
11.1 Consent Required. Upon delivery of written notice to Sublessor,
Sublessee may further sublet the Premises or assign this Sublease without
Sublessor's consent, without any right of Sublessor to participate in the
profit from, any transfer to a subsidiary, affiliate, franchisee, division
or corporation controlled or under common control with Sublessee (each an
"Affiliate"). Except as set forth in the preceding sentence, Sublessee
shall not assign this Sublease or further sublet all or any part of the
Premises without the prior written consent of both Sublessor and Lessor,
which consent may be withheld for any commercially reasonable purpose.
11.2 Conditions to Consent. As conditions to Sublessor's prior
written consent as provided for in this Section 11: (a) the transferee(s)
shall agree in writing to comply with and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Sublease; (b)
Sublessee shall deliver to Sublessor, promptly after execution, an executed
copy of each transfer instrument and an agreement of said compliance by
each transferee, and (c) Sublessee shall pay to Sublessor fifty percent
(50%) of all profits from the transfer determined by deducting from the
total consideration paid directly or indirectly to or for the benefit of
Sublessee or its designee for Sublessee's interest in this Sublease: (i)
the sums payable by Sublessee under this Sublease; and (ii) the reasonable
costs of effectuating and performing the transfer incurred by the Sublessee
including but not limited to alteration costs, brokerage commissions,
attorney's fees and vacancy costs for the time between sublease execution
and Rent commencement. For purposes of determining all profits from the
transfer, substance shall control over form such that Sublessor may ignore
any attempt by Sublessee to inflate the purchase price of any other assets
transferred in an attempt to conceal the profit on the transfer of the
Sublessee's interest in this
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Sublease. Sums payable hereunder shall be paid to Sublessor as and when
paid by the transferee to Sublessee. In the event Sublessee rents or sells
furniture or equipment to the sub-sublessee at fair market value, the
proceeds shall not be included in the profit sharing with Sublessor.
11.3 Failure to Respond. If Sublessor does not respond within
fifteen (15) days to Sublessee's request for consent under this Section,
which request shall include the text of this sentence, Sublessor shall be
deemed to have granted its consent to the transfer.
12. Purchase Option.
---------------
12.1 Exercise of Option. Sublessee shall have the option to purchase
the Master Premises upon the same terms and conditions as set forth in
Section 2.5 of the Master Lease with respect to Sublessor's option to
purchase the Master Premises from the Lessor, except that the Sublessee's
purchase price for the Master Premises shall be the greater of: (i) the
fair market value of the Master Premises; or (ii) the purchase price to be
paid by Sublessor under Section 2.5 of the Master Lease, plus all of
Sublessor's costs of purchasing the Master Premises, including, but not
limited to, legal fees, real estate commissions and closing costs.
Sublessee shall give Sublessor twelve (12) months' notice of Sublessee's
intention to exercise its purchase option. Sublessor shall have no duty to
exercise its purchase option under the Master Lease unless and until
Sublessee shall have placed in escrow all items necessary to close the
purchase of the Master Premises, including but not limited to documents,
funds, and irrevocable escrow instructions. If Sublessee purchases the
Master Premises when more than five years remains on the term of the Master
Lease, then upon and by operation of the closing of such purchase, this
Sublease shall be automatically converted into a lease back to the
Sublessor of all the office space in the Building which was not a part of
the Sublessee's Premises immediately prior to its purchase of the Master
Premises and which Sublessee does not wish to occupy immediately after it's
purchase of the Master Premises. If Sublessee purchases the Master Premises
when less than five years remains on the term of the Master Lease, then
such lease back shall be optional for the Sublessor, such option to be
exercised no less than 180 days prior to the closing date of such purchase.
Such lease back to Sublessor shall be on the same terms and conditions as
this Sublease (except as stated below), including but not limited to the
same rental rate per rentable square foot, such that all the rights and
obligations of Lessor under the Master Lease and Sublessor under this
Sublease shall be combined in Sublessee as a direct lessor, and such that
Sublessor shall have all the rights and obligations of the Sublessee but as
a direct lessee and not as a sublessee. The lease back shall be subject to
the following exceptions from the rights and obligations of this Sublease:
(i) Sublessee shall have the right to terminate such lease back either
entirely or one floor at a time upon 365 days' written notice, but only for
the purpose of occupying such space for its own use and not for reletting
such space to third parties; and (ii) Sublessor shall not have any option
to purchase the Master Premises from Sublessee nor any right to expand the
premises it leases back from Sublessee. Upon the request of either party,
the other party shall execute and deliver a restated lease document for
such lease back of space after the purchase of the Master Premises provided
such restated lease is consistent with the foregoing provisions.
12.2 Fair Market Value. As used in the preceding paragraph, the term
"fair market value" means the price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale,
the buyer and seller each acting prudently and knowledgeably, and assuming
the price is not affected by undue stimulus. Implicit in this definition is
the consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby: (a) buyer and seller are
typically motivated; (b) both parties are well informed or well advised,
and acting in what they consider their best interests; (c) a reasonable
time is allowed for exposure in the open market; (d) payment is made in
terms of cash in United States dollars or in terms of financial
arrangements comparable thereto; and (e) the price represents the normal
consideration for the property sold unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.
12.3 Termination of Option. In the event Sublessor receives a
bonafide offer to purchase the Building which is acceptable to Sublessor
from a third party and gives a copy of such offer to Sublessee then
Sublessee shall have thirty (30) calendar days in which to elect whether to
exercise its
15 - SUBLEASE
<PAGE>
Option to purchase the Building, and in the event it does so, the purchase
price offered by such third party shall be Sublessee's purchase price under
this Option. For the purposes of this paragraph, a bonafide offer means an
offer from a third party who is independent of either party to this
Sublease and who is ready, able and willing to purchase the Building
pursuant to the terms of the offer presented, which purchase, in substance,
would be what is commonly referred to as an arms length transaction. If
Sublessee fails to so exercise its option by such deadline then the option
shall terminate and be of no further force nor effect provided the third
party purchase and sale is completed pursuant to the offer. If that
transaction fails to close and is terminated then the Option shall revive
and continue.
12.4 Arbitration. If the parties cannot agree on the fair market value
of the Master Premises, the matter shall be submitted to final and binding
arbitration as set forth below.
12.4.1 General. Either party may at any time request final
-------
and binding arbitration of the fair market value of the Master Premises.
The party requesting arbitration shall do so by giving notice to that
effect to the other party, and the fair market value shall be determined in
the City of Portland, Oregon, by a single arbitrator if the difference
between the parties' assertions of fair market value is less than
$100,000.00, and by three arbitrators for any dispute in excess of such
amount, in accordance with the rules then pertaining to the American
Arbitration Association. All arbitrators shall be licensed attorneys having
at least 10 years experience with similar transactions. Each party shall
submit its position to the arbitrator(s) and the arbitrator(s) shall only
have jurisdiction to choose the entire position of one (1) of the parties
as the prevailing position. The determination in such arbitration may be
enforced on the application of either party by the order of judgment of a
court of competent jurisdiction. The fees and expenses of any arbitration
including attorneys' and experts' fees shall be borne by the losing party.
12.4.2 Governing Rules; Preservation of Remedies. The
-----------------------------------------
arbitrator(s) shall determine the value in accordance with the substantive
law of the state of Oregon. The arbitrator(s) shall have no authority nor
jurisdiction to award any damages or any other remedies beyond those which
could have been awarded in a court of law if the parties had litigated the
claims instead of arbitrating them. The parties shall not assert any claim
for punitive damages except to the extent such awards are specifically
authorized by statute. If the Federal Arbitration Act, Title 9 of the
United States Code, is applicable to this transaction, it shall be
controlling in any judicial proceedings and in the arbitration itself as to
issues of arbitrability and procedure.
12.4.3 Miscellaneous Arbitration Provisions. The parties shall
------------------------------------
use their best efforts to complete any arbitration within sixty (60) days
of the filing of the dispute. The arbitrator(s) shall be empowered to
impose sanctions for any party's failure to do so. The provisions of this
arbitration provision shall survive any termination, amendment, or
expiration hereof unless the parties otherwise expressly agree in writing.
If any provision of this arbitration program is declared invalid by any
court, the remaining provisions shall not be affected thereby and shall
remain fully enforceable.
13. Insurance. Sublessor shall fulfill the insurance obligations of
---------
the Tenant under the Master Lease. Sublessee may self-insure its own risks;
provided that upon request Sublessee shall deliver to Sublessor reasonably
satisfactory evidence of its ability to self insure; and provided further
that any other provisions of this Sublease affected by the Sublessee's
insurance, such as indemnity provisions, shall be interpreted and applied
in such a manner as to avoid any adverse effect on the Sublessor by
allowing Sublessee to self insure. This right to self-insure is personal to
the Sublessee named herein (and its Affiliate), shall only exist so long as
the Sublessee named herein (or its Affiliate) is in actual occupancy of the
entire Premises, and shall only apply so long as Sublessee is not in
default under this Sublease. Anything to the contrary in this Sublease
notwithstanding, neither party, nor its officers, directors, employees nor
agents, shall be liable to the other party nor to any insurance company (by
way of subrogation or otherwise) insuring the other party for any loss or
damage to any building, structure or other tangible property normally
covered under an all risk policy of property insurance or under workers'
compensation laws and benefits even though such loss or damage might have
been occasioned by the negligence of such party, its agents or employees.
If Sublessee chooses or is required to use third-party insurance, Sublessee
shall maintain at all times during the term of this Sublease comprehensive
general liability insurance in respect of the Premises and the conduct or
operation of
16 - SUBLEASE
<PAGE>
business therein, with Sublessor, its property manager, if any, Lessor and
any mortgagee whose name and address shall previously have been furnished
to Sublessee, as additional insureds to the extent of the insurance
coverage required hereunder, with Five Million and No/100 Dollars
($5,000,000.00) minimum combined single limit coverage, or its equivalent.
Sublessee shall deliver to Sublessor ACORD Form 25-S certificates of
insurance issued by the insurance company or its authorized agent, at least
ten (10) days before the first Commencement Date hereunder. Sublessee shall
procure and pay for renewals of such insurance from time to time before the
expiration thereof, and Sublessee shall deliver to Sublessor such renewal
certificate at least thirty (30) days before the expiration of any existing
policy. All insurance policies required to be carried by Sublessee
hereunder shall be issued by responsible insurance companies authorized to
issue insurance in the State of Oregon rated B VII or higher by Best's
Insurance Rating Service.
14. Rules. Sublessee shall faithfully observe and comply with any
-----
rules and regulations from time to time established by Sublessor by written
notice to Sublessee and all reasonable modifications thereof and additions
thereto. Sublessor shall not be responsible for the nonperformance by any
other Sublessee or occupant of the Building of any said rules and
regulations but Sublessor shall use reasonable efforts to remedy any
violation of the rules and regulations applicable to any other Building
occupant upon Sublessee's request. Sublessor shall not grant variances from
the rules and regulations unless there is a reasonable basis to do so.
15. Access to Premises. Sublessor reserves, and shall at all
------------------
reasonable times have, the right to re-enter the Premises upon 24 hours'
prior notice to Sublessee (except in an emergency) to inspect the same, to
supply janitor service and any other service to be provided by Sublessor to
Sublessee, to show or to allow Lessor to show the Premises to prospective
purchasers, mortgagees or tenants, to post notices of nonresponsibility,
and to alter, improve or repair the Premises and any portion of the
Building of which the Premises are a part. Any such work shall be without
abatement of Rent provided the work is necessary to comply with
governmental requirements or is reasonably necessary to keep the Building
in the condition required by this Sublease. For such purpose, Sublessor may
erect, use and maintain scaffolding, pipes, conduits and other necessary
structures in and through the Premises where reasonably required by the
character of the work to be performed, provided that entrance to the
Premises shall not be blocked thereby, and further provided that the
business of Sublessee shall not be interfered with unreasonably. Sublessee
hereby waives any claim for damages for any injury or inconvenience to or
interference with Sublessee's business, any loss of occupancy or quiet
enjoyment of the Premises and any other loss occasioned by Sublessor's
conduct pursuant to this Section, except to the extent Sublessor fails to
use reasonable efforts to minimize any interference. For each of the
purposes stated in this Section, Sublessor shall at all times have and
retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Sublessee's vaults and safes or special security areas
(designated in advance). Sublessor shall have the right to use any and all
means which Sublessor may deem necessary or proper to open all doors in an
emergency, in order to obtain entry to any portion of the Premises, and any
entry to any portion of the Premises obtained by Sublessor by any such
means, or otherwise shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction, actual or constructive, of Sublessee from all or
part of the Premises. Sublessor shall also have the right at any time,
without the same constituting an actual or constructive eviction and
without incurring any liability to Sublessee, to change the arrangement
and/or location of entrances, lobbies, parking facilities, passageways,
doors and doorways, corridors, elevators, stairs, toilets or other public
parts of the Building and to change the name, number or designation by
which the Building is commonly known. Sublessor shall reimburse Sublessee
for any reasonable expenses incurred by Sublessee due to any change in the
Building's name, number or designation unless such change in mandated by a
governmental entity having jurisdiction over the Building.
16. Notice of Occurrences. Sublessee shall give prompt notice to
---------------------
Sublessor of: (i) any occurrence in or about the Premises for which
Sublessor might be liable; (ii) any fire or other casualty in the Premises;
(iii) any damage to or defect in the Premises including the fixtures,
equipment and appurtenances thereof, for the repair of which Sublessor
might be responsible; and (iv) damage to or defect in any part or
appurtenances of the Building's sanitary, electrical, heating, ventilating,
air-conditioning, elevator or other systems located in or passing through
the Premises or any part thereof.
17 - SUBLEASE
<PAGE>
17. Other Provisions of Sublease. All applicable terms and conditions
of the Master Lease are incorporated into and made a part of this Sublease
as if Sublessor were the lessor thereunder, Sublessee the lessee
thereunder, and the Premises the Master Premises, except as set forth
herein and except for the following: Sections 2.5, 4.2, 5.2, 7.1, 7.2 (b)
(iv), 7.2 (c) (iv), 7.2 (e), 7.3, 10.9, 10.10, 10.11 and 10.12 are not
applicable. Sublessee assumes and agrees to perform the lessee's
obligations under the Master Lease during the Term to the extent that such
obligations are applicable to the Premises, except that the obligation to
pay rent to Lessor under the Master Lease shall be considered performed by
Sublessee to the extent and in the amount Rent is paid to Sublessor in
accordance with Section 7 of this Sublease. Sublessee shall not commit or
suffer any act or omission that will violate any of the provisions of the
Master Lease. Sublessor shall use reasonable efforts in attempting to cause
Lessor to perform its obligations under the Master Lease for the benefit of
Sublessee. If the Master Lease terminates, this Sublease shall terminate
and the parties shall be relieved of any further liability or obligation
under this Sublease, provided however, that if the Master Lease terminates
as a result of a default or breach by Sublessor or Sublessee under this
Sublease and/or the Master Lease, then the defaulting party shall be liable
to the non-defaulting party for all damages suffered as a result of such
termination. Notwithstanding the foregoing, if the Master Lease gives
Sublessor any right to terminate the Master Lease in the event of the
partial or total damage, destruction, or condemnation of the Master
Premises or the building or project of which the Master Premises are a
part, the exercise of such right by Sublessor shall not constitute a
default or breach hereunder.
18. Attorneys' Fees. If Sublessor or Sublessee shall commence an
---------------
action against the other arising out of or in connection with this
Sublease, the prevailing party shall be entitled to recover its costs of
suit and reasonable attorneys' fees; on appeal or in arbitration.
19. Notices. All notices and demands which may or are to be required
-------
or permitted to be given by either party on the other hereunder shall be in
writing. All notices and demands by the Sublessor to Sublessee shall be
sent by United States Mail, postage prepaid, addressed to the Sublessee at
the Premises, and to the address hereinbelow, or to such other place as
Sublessee may from time to time designate in a notice to the Sublessor. All
notices and demands by the Sublessee to Sublessor shall be sent by United
States Mail, postage prepaid, addressed to the Sublessor at the address set
forth herein, and to such other person or place as the Sublessor may from
time to time designate in a notice to the Sublessee.
To Sublessor at: PG&E Gas Transmission, Northwest
2100 SW River Parkway
Portland, Oregon 97201
Attn.: Assistant General Counsel
With a copy to: Schwabe, Williamson & Wyatt
1211 SW Fifth Avenue, Suite 1700
Portland, Oregon 97204
Attn.: Terry C. Hauck
To Sublessee at: Enron Communications, Inc.
2100 SW River Parkway
Portland, Oregon 97201
Attn.: Ervin Gruia
With a copy to: Enron Realty Advisors, Inc.
1400 Smith Street, Suite 469
Houston, Texas 77002
Attn.: Lance McCarthy
20. Brokers. The parties hereto covenant, warrant and represent that
-------
no broker except Sanford W. Criner, Jr. of Trione & Gordon, L.L.P. and
Chris Johnson of Norris, Beggs & Simpson, on behalf of Sublessor, and Craig
R. Reinhart of Corporate Realty Advisors/CRESA and Lance McCarthy of
18 - SUBLEASE
<PAGE>
Enron Realty Advisors, Inc., on behalf of Sublessee (the "Brokers") was
instrumental in bringing about or consummating this Sublease and that
neither party had any conversations or nor negotiations with any broker
except the Brokers concerning the subleasing of the Premises. The parties
hereto agree to indemnify each other against any claims for any brokerage
commissions and all costs, expenses and liabilities in connection
therewith, including, without limitation, attorneys' fees and expenses,
arising out of any conversations or negotiations had by such party with any
broker other than the Brokers. Sublessor shall pay any brokerage
commissions due to Trione & Gordon, L.L.P., Norris, Beggs & Simpson,
Corporate Realty Advisors/CRESA and Enron Realty Advisors, Inc as per a
separate agreement between Sublessor and such Brokers.
21. Force Majeure. The obligations of the parties hereunder shall
-------------
be in no way affected, impaired or excused, nor shall a party have any
liability whatsoever to the other, because:
21.1 such party is unable to fulfill, or is delayed in
fulfilling, any of its obligations under this Sublease by reason of strike,
other labor trouble, governmental preemption of priorities or other
controls in connection with a national or other public emergency or
shortages of fuel, supplies or labor resulting therefrom, or any other
cause, whether similar or dissimilar, beyond Sublessor's reasonable
control; or
21.2 of any failure or defect in the supply, quantity or
character of electricity, water or other utilities furnished to the
Premises, by reason of any requirement, act or omission of the public
utility or others serving the Building with electric energy, steam, oil,
gas or water, or for any other reason whether similar or dissimilar, beyond
Sublessor's reasonable control.
In no event shall this provision excuse Sublessee's obligation to
pay Rent.
22. Warranty by Sublessor. Sublessor warrants and represents to
---------------------
Sublessee that- the Master Lease has not been amended or modified except as
expressly set forth herein, that Sublessor is not now, and as of the
commencement of the Term hereof will not be, in default or breach of any of
the provisions of the Master Lease, and that Sublessor has no knowledge of
any claim by Lessor that Sublessor is in default or breach of any of the
provisions of the Master Lease.
23. Consent by Lessor and State. THIS SUBLEASE SHALL BE OF NO FORCE OR
---------------------------
EFFECT UNLESS CONSENTED TO BY LESSOR WITHIN 10 DAYS AFTER EXECUTION HEREOF,
AND BY THE STATE OF OREGON (BUT ONLY AS TO THE SURFACE PARKING RIGHTS
DESCRIBED IN SECTION 9.3) WITHIN THE SAME TIME PERIOD.
SUBLESSOR: SUBLESSEE:
PG&E GAS TRANSMISSION, NORTHWEST ENRON COMMUNICATIONS, INC.
CORPORATION, a California corporation an Oregon corporation
By: _____________________ By: ___________________
Name: _____________________ Name: ___________________
Title: _____________________ Title: ___________________
LESSOR:
GIC DEVELOPMENT 94-I, L.L.C.,
an Oregon limited liability company
By: ______________________________
Name: ______________________________
Title: ______________________________
19 - SUBLEASE
<PAGE>
Exhibit A
Lease
1- SUBLEASE
<PAGE>
Exhibit B
Floor Plans for Premises
1 - EXHIBIT B
<PAGE>
Exhibit C
Exclusions from Operating Expenses
The following costs shall not be included in operating expenses or passed
on to Sublessee:
1. Costs associated with operation of the business of the ownership or
entity which constitutes "Sublessor," as distinguished from the costs
of building operations, including, but not limited to, partnership
accounting and legal matters, costs of defending any lawsuits with any
mortgagee (except as the actions of Sublessee may be in issue), costs
of selling, syndicating, financing, mortgaging or hypothecating any of
Sublessor's Interest in the Building, costs of any disputes between
Sublessor and its employees (if any) not engaged in Building operation,
disputes of Sublessor with Building management, or outside fees paid in
connection with disputes with other tenants;
2. Costs incurred in connection with the original construction of the
Building or in connection with any major change in the Building,
including but not limited to the addition or deletion of floors;
3. Costs of alterations or improvements to the Premises or the premises of
other tenants except as expressly provided in the Sublease;
4. Depreciation, interest and principal payments on mortgages, and other
debt costs, if any, except as expressly provided in the Sublease;
5. Costs of replacing any major mechanical systems serving the Building;
6. Costs of capital repairs to the roof;
7. Legal fees, space planners' fees, real estate brokers' leasing
commissions, and advertising expenses incurred in connection with the
original development or original leasing of the Building or future
leasing of the Building;
8. Costs for which Sublessor is reimbursed by its insurance carrier or any
tenant's insurance carrier;
9. Any bad debt loss, rent loss, or reserves for bad debts or rent loss;
10. The expenses of extraordinary services provided to other tenants in the
Building;
11. The wages of any employee for work not performed for the Building;
12. Fines, penalties, and interest, except as expressly provided in the
Sublease;
13. Any recalculation of or additional Operating Expenses actually incurred
more than four (4) years prior to the year in which Sublessor proposes
that such costs be included;
14. Capital expenditures required by Sublessor's failure to comply with laws
enacted on or before the date the Building's Temporary Certificate of
Occupancy is validly issued, except to the extent of savings resulting
therefrom and except for ordinary compliance matters;
15. Costs incurred by Sublessor with respect to goods and services
(including utilities sold and supplied to tenants and occupants of the
Building) to the extent that Sublessor is entitled to reimbursement from
third parties for such costs;
1 - EXHIBIT C
<PAGE>
16. Costs, including permit, license and inspection costs, incurred with
respect to the installation of tenant improvements made for new tenants
in the Building or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other
occupants of the Building;
17. Costs of a capital nature including, without limitation, capital
improvements and replacements, capital repairs, capital equipment and
capital tools, under generally acceptable accounting principles, except
as expressly provided in the Sublease;
18. Expenses in connection with services or other benefits which are not
provided to Sublessee or for which Sublessee is charged directly but
which are provided to another tenant or occupant of the Building;
19. Overhead and profit increment paid to Sublessor or to subsidiaries or
affiliates of Sublessor for services in the Building to the extent the
same exceeds the costs of such services rendered by unaffiliated third
parties on a competitive basis;
20. Any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Sublessor, in or about the Project;
21. Rentals and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment ordinarily considered to be of a
capital nature, except equipment not affixed to the Building which is
used in providing janitorial or similar services;
22. All items and services for which Sublessee or any other tenant in the
Building reimburses Sublessor or which Sublessor provides selectively to
one or more tenants (other than Sublessee) without reimbursement; and
23. Costs for services which are not typically provided to tenants in other
Class A buildings unless Sublessee has accepted the services without
objection.
It is understood that Operating Expenses shall be reduced by all cash discounts,
trade discounts, or quantity discounts received by Sublessor or Sublessor's
managing agent in the purchase of any goods, utilities, or services in
connection with the operation of the Building. Sublessor shall make payments for
goods, utilities and services in a timely manner to obtain the maximum possible
discount. If capital items which are customarily purchased by landlords of Class
A buildings are leased, rather than purchased, by Sublessor, the decision by
Sublessor to lease the item in question shall not serve to increase Sublessee's
proportionate share of Operating Expenses beyond that which would have applied
had the item in question been purchased. In the calculation of any expenses
hereunder, it is understood that no expense shall be charged more than once.
Sublessor shall use its best efforts to affect an equitable proration of bills
for services rendered to the Building and to any other property owned by
Sublessor. Sublessor agrees to keep books and records showing the Operating
Expenses in accordance with Generally Accepted Accounting Principles
consistently maintained on a year-to-year basis.
2 - EXHIBIT C
<PAGE>
Exhibit D
Cleaning Specifications
I. Common Areas on Tenant-Occupied Floors.
--------------------------------------
A. Nightly Specifications.
1. Vacuum all carpets.
2. Dust mop all resilient and composition floors with treated dust
mops. Damp mop to remove spills and water stains as required.
3. Remove all trash from floors to the designated trash areas and
break down cardboard for recycle bin.
4. Remove fingerprints, dirt smudges, graffiti, etc., from all doors,
frames, glass partitions, windows, light witches, walls, elevator
door jambs and elevator interiors.
5. Clean, sanitize and polish drinking fountains.
6. Clean and polish all bright work.
7. Spot clean all carpets, resilient and composition floors.
8. Check for burned out lights and report them to supervisor.
Janitorial supervisor to leave list of burned out lights for
Management in nightly book.
9. Clean and spray buff all building standard resilient and/or
composition flooring.
10. Service all walk-off mats.
11. Sweep all vinyl composition tile corridors with approved chemical
treated cloth. Spot clean as necessary.
B. Weekly Specifications.
1. Clean and polish all metal door thresholds.
2. Dust all vinyl base.
3. Edge all carpeted areas.
4. Dust inside of all doorjambs.
5. Dust all low and high reach areas - baseboards, windowsills, door
louvers, wood paneling, molding, etc.
C. Periodic Specifications.
1. Sweep and damp mop all uncarpeted service stairwells six times per
year.
2. Apply wax to and buff all resilient and/or composition flooring
monthly.
1 - EXHIBIT D
<PAGE>
3. Strip and re-wax all standard resilient and/or composition flooring
two times per year.
II. Restroom Service.
----------------
A. Nightly Specifications.
1. Stock all restrooms with supplies from the building stock,
including paper towels, toilet tissue, seat covers, and liquid
soap (sanitary napkins and tampons to be stocked by building
personnel). Building stock is not to be used for cleaning
purposes.
2. Wash and polish all mirrors, dispensers, faucet, plumbing
fixtures, flushometers, and bright work with non-scratch
disinfectant cleaners.
3. Wash and sanitize all toilets, toilet seats (both sides), urinals
and sinks with non-scratch disinfectant cleaner. Wipe dry all
sinks.
4. Remove stains, scour toilets, urinals, and sinks as required.
5. Mop all restroom floors with disinfectant germicidal solution.
6. Remove all restroom trash from building.
7. Spot clean fingerprints, marks and graffiti from walls,
partitions, glass, aluminum and light switches as required.
8. Dust all low reach and high reach areas including but not limited
to structural ledges, mirror tops, partition tops and edges, air
conditioning diffusers and return air grills.
9. Wipe down all tile walls and metal partitions. Partitions shall be
left in an un-streaked condition after this work.
10. Clean all ventilation grills.
11. Dust all doors and doorjambs.
12. Thoroughly clean all ceramic tile floors and walls.
13. Empty and clean sanitary disposal receptacles.
14. Clean and wash waste receptacles and dispensers.
15. Wash tile wall/granite surfaces subject to splashing.
16. Report all mechanical deficiencies (i.e. dripping faucets, running
toilets, etc.) to Management in nightly book.
B. Weekly Specifications.
1. Clean and wash all partitions.
C. Periodic Specifications.
1. Scrub floors as necessary but not less than once every two weeks.
2. Hand dust, clean and wash all tile walls once each month, more
often if necessary.
2 - EXHIBIT D
<PAGE>
3. High dusting to be done once each month which includes lights,
walls and grills.
III. Elevator Lobbies and Public Corridors.
-------------------------------------
A. Nightly Specifications.
1. Clean all chrome bright work including door hardware, kick plates,
base, partition tips, hand rails, waste paper receptacles,
drinking fountains, planters, elevator call button plates, hose
cabinets, and visible hardware on the corridor side of tenant
entry doors.
2. Vacuum all carpets and spot clean where necessary.
B. Weekly Specifications.
1. Spot clean all interior architectural aluminum finishes, including
the corridor side of all tenant area window and doorframes and
base.
2. Thoroughly clean all door saddles of dirt and debris.
3. Dust and clean fire extinguisher boxes, including inside ledge.
C. Periodic Specifications.
1. Thoroughly wash all tenant doors as needed, at a minimum monthly.
2. Clean all glass, including low partitions, mirrors, and the
corridor side of all windows, and glass doors to tenant premises
monthly.
IV. Entrance Lobbies and Parking Lobbies.
------------------------------------
A. Nightly Specifications. The entrance lobbies and parking lobbies are to
be kept neat and clean at all times and the following minimum nightly
cleaning operations shall be maintained to attain this effect.
1. Empty and damp wipe and dry all garbage cans and ashtrays. Wash
interior of metal ash trays with a disinfectant solution to
prevent any foreign odors and screen sand urns. This includes the
exterior cans/ashtrays on the parking levels.
2. Damp wipe and dry all metal plant containers - polish as
necessary.
3. Damp wipe and dry all elevator starter panels.
4. Clean all interior and exterior doors.
5. Vacuum all carpeting - spot clean as necessary.
6. Remove any graffiti matter.
7. Remove gum from carpeting and/or any other location.
B. Weekly Specifications.
1. Vacuum all furniture in seating areas.
3 - EXHIBIT D
<PAGE>
C. Periodic Specifications.
1. Dust walls in parking lobbies and wash monthly.
2. High dust and wash as necessary all electrical and A/C diffusers
quarterly.
3. Dust and wipe clean lobby aluminum ceilings once per year.
V. Elevators.
---------
A. Nightly Specifications.
1. Vacuum carpets of all elevators remove spots as necessary.
2. Wipe down panels of elevator cabs and remove any graffiti.
3. Wipe down all metal in cab, indicators, elevator doors, using an
approved cleaner.
4. Vacuum clean lobby elevator saddles and tracks.
5. Clean light bulbs in elevators.
B. Weekly Specifications.
1. Clean door saddles and frames on floors above lobby and vacuum
tracks as necessary.
2. Polish panels of elevator cabs.
VI. Premises.
--------
A. Nightly Specifications.
1. Damp mop all vinyl tile and other types of un-waxed floorings.
2. Sweep all vinyl composition tile, and similar types of flooring
using an approved chemically treated cloth.
3. Vacuum all rugs and carpeted areas. Sweep all private stairways and
vacuum if carpeted.
4. Hand dust and wipe clean with damp or chemically treated cloth all
furniture (detailing desks and credenzas), fixtures, windowsills,
converter enclosure tops and wash said sills and tops as necessary.
5. Dust all chair rails, trim, etc.
6. Remove all gum and foreign matter on sight. Spot clean resilient
floor and carpeting as necessary.
7. Empty and clean all waste receptacles and remove wastepaper and
waste materials to a designated area.
8. Damp dust interiors of all waste disposal receptacles.
9. Empty and wipe clean all ashtrays and screen all sand urns.
10. Wash clean all water fountains and water coolers.
4 - EXHIBIT D
<PAGE>
11. Clean all glass furniture tops and clean all partition vision
glass.
12. Remove hand marks on elevator hatchway doors.
13. Wipe clean all bright work.
14. Wash, spray buff, and dust mop all flooring in traffic and pivot
points.
15. Refreshment center areas - wipe clean all dispensing machines,
empty, clean all waste receptacles and dust underneath vending
machines.
16. Dust tenant cabinetry.
17. Move and vacuum underneath all furniture that can be moved.
B. Weekly Specifications.
1. Hand dust all door louvers and other ventilating louvers within
reach.
2. Dust all baseboards.
3. Spot clean soil and finger marks from painted or washable
surfaces.
4. Dust all lampshades.
5. Dust clothes closets, shelving, and coat racks.
C. Periodic Specifications.
1. Wash floors in public and private stairwells throughout the
building every other month.
2. Dust all picture frames, charts and similar hangings which were
not reached in nightly cleaning quarterly.
3. Dust all vertical surfaces such as walls, partitions, doors and
other surfaces not reached in nightly cleaning quarterly.
4. Dust exterior of lighting fixtures quarterly.
5. Dust all air conditioning louvers, grills, etc., and surrounding
areas not reached in nightly cleaning quarterly.
6. Clean all interior window metal and other unpainted interior metal
surfaces of the perimeter walls once per year using a metal
cleaning product.
VII. Public Areas.
------------
A. Police all public and private stairwells throughout the entire building
and keep in clean condition, sweep and mop, as necessary, but at least
six times yearly.
B. Inspect and keep clean firehoses, extinguishers, and similar equipment
as necessary, but at least once per week.
C. High dust all necessary areas quarterly.
5 - EXHIBIT D
<PAGE>
VIII. Building Service Areas.
----------------------
A. Keep janitorial and service closets in neat and clean condition at all
times. Keep wastepaper, cardboard and rubbish, etc., stored in approved
receptacles or assigned rooms. Keep floors, walls and doors clean of
grease, oil and other stains.
B. Slop sinks are to be cleaned after use. Mops, rags, and equipment are to
be cleaned and stored accordingly.
C. Electric and telephone closets and storerooms are to be kept free from
debris and material. Floors are to be swept weekly and washed at least
six times yearly. Report storage of extraneous material and equipment to
Building Management in nightly book.
6 - EXHIBIT D
<PAGE>
Lessor's Consent
The STATE OF OREGON, by and through its DEPARTMENT OF TRANSPORTATION, as
"Lessor," and GIC DEVELOPMENT 94-I, L.L.C., an Oregon limited liability company,
as "Lessee," entered into an Air Space Lease dated April 29, 1994 (the "Lease"),
pursuant to which Lessor leased to Lessee, for ground level vehicular parking
purposes, certain real property located in Portland, Multnomah County, Oregon
more particularly described in the Lease (the "Premises"). Section 18 of the
Lease provides that the Lessee shall not assign the Lease or sublet the Premises
without written consent of the Lessor. The Lessor hereby consents to the
sublease by PG&E GAS TRANSMISSION, NORTHWEST CORPORATION, a California
corporation (formerly known as Pacific Gas Transmission Company) to ENRON
COMMUNICATIONS, INC., an Oregon corporation, of the Premises for ground level
vehicular parking purposes as set forth in the Lease. This consent shall not be
construed as an amendment of the Lease and does not constitute a consent to any
other assignment or sublease of the Premises.
The STATE OF OREGON, by and through its
DEPARTMENT OF TRANSPORTATION
By: ______________________________
Name: ______________________________
Title: ______________________________
<PAGE>
EXHIBIT 10.2
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of May 24, 1999,
among
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION,
as the Company,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent for the Lenders,
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent for the Lenders,
THE FIRST NATIONAL BANK OF CHICAGO,
U.S. BANK NATIONAL ASSOCIATION, and
BARCLAYS BANK PLC,
as Co-Agents for the Lenders,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent for the Lenders
__________________
CIBC WORLD MARKETS CORP.,
as Arranger
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 DEFINITIONS AND ACCOUNTING MATTERS....................................... 2
Section 1.1 Certain Defined Terms.................................................... 2
Section 1.2 Other References......................................................... 16
Section 1.3 Other Agreements......................................................... 16
Section 1.4 Headings................................................................. 16
Section 1.5 Accounting Terms......................................................... 16
ARTICLE 2 THE FACILITY............................................................. 16
Section 2.1 Grant of Facility........................................................ 16
Section 2.2 Maximum Outstandings..................................................... 17
Section 2.3 Term; Extension of Maturity Date and Commitments......................... 17
Section 2.4 Nature of Lenders' Obligations........................................... 17
Section 2.5 Changes in Commitments................................................... 18
Section 2.6 Fees..................................................................... 18
Section 2.7 Lending Offices.......................................................... 19
Section 2.8 Prepayments.............................................................. 19
Section 2.9 Notes.................................................................... 19
Section 2.10 Repayment................................................................ 19
ARTICLE 3 LIBOR ADVANCES........................................................... 19
Section 3.1 LIBOR Advance Requests................................................... 19
Section 3.2 Making of LIBOR Advances................................................. 20
Section 3.3 Interest on LIBOR Advances............................................... 20
ARTICLE 4 REFERENCE RATE ADVANCES.................................................. 20
Section 4.1 Reference Rate Advance Requests.......................................... 20
Section 4.2 Making of Reference Rate Advances........................................ 21
Section 4.3 Interest on Reference Rate Advances...................................... 21
Section 4.4 Reference Rate Communication............................................. 21
ARTICLE 5 [INTENTIONALLY OMITTED].................................................. 22
ARTICLE 6 CURRENCY OF ACCOUNT AND PAYMENT.......................................... 22
Section 6.1 Claims in Dollars........................................................ 22
Section 6.2 Accounts for Payment..................................................... 22
Section 6.3 Application of Payment................................................... 22
Section 6.4 No Set-Off............................................................... 23
Section 6.5 Actual Receipt........................................................... 23
Section 6.6 Default Interest......................................................... 23
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE 7 PRO RATA TREATMENT, COMPUTATIONS......................................... 23
Section 7.1 Pro Rata Treatment....................................................... 23
Section 7.2 Computations............................................................. 24
ARTICLE 8 TAXES, YIELD PROTECTION AND ILLEGALITY................................... 24
Section 8.1 Withholding.............................................................. 24
Section 8.2 Tax Forms................................................................ 25
Section 8.3 Tax Receipts............................................................. 25
Section 8.4 Change in Law............................................................ 26
Section 8.5 Capital Adequacy......................................................... 26
Section 8.6 Regulation D............................................................. 27
Section 8.7 Notice of Claim.......................................................... 27
Section 8.8 Illegality............................................................... 28
Section 8.9 Reference Rate Advances pursuant to Section 8.8.......................... 28
Section 8.10 Market Disruption........................................................ 28
Section 8.11 Compensation............................................................. 29
ARTICLE 9 CONDITIONS PRECEDENT..................................................... 29
Section 9.1 Closing.................................................................. 29
Section 9.2 Initial and Subsequent Advances.......................................... 30
ARTICLE 10 REPRESENTATIONS AND WARRANTIES........................................... 31
Section 10.1 Corporate Existence...................................................... 31
Section 10.2 Financial Condition...................................................... 31
Section 10.3 Litigation............................................................... 31
Section 10.4 No Breach................................................................ 31
Section 10.5 Corporate Action......................................................... 32
Section 10.6 Approvals................................................................ 32
Section 10.7 Margin Stock............................................................. 32
Section 10.8 ERISA.................................................................... 32
Section 10.9 Pari Passu Status........................................................ 32
Section 10.10 Environmental Matters.................................................... 33
Section 10.11 Year 2000 Matters........................................................ 33
ARTICLE 11 COVENANTS OF THE COMPANY................................................. 33
Section 11.1 Financial Statements..................................................... 33
Section 11.2 Corporate Existence, Etc................................................. 36
Section 11.3 Use of Proceeds.......................................................... 36
Section 11.4 Mergers.................................................................. 37
Section 11.5 Debt to Capitalization................................................... 37
Section 11.6 Pari Passu Status........................................................ 37
Section 11.7 Asset Dispositions, etc.................................................. 37
Section 11.8 Limitation on Debt Secured by Mortgages.................................. 37
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Section 11.9 Limitation on Sale-Leaseback Transactions................................ 39
Section 11.10 Limitation on Advances................................................... 39
ARTICLE 12 EVENTS OF DEFAULT........................................................ 40
ARTICLE 13 THE AGENTS............................................................... 42
Section 13.1 Appointment, Powers and Immunities....................................... 42
Section 13.2 Reliance by the Agents................................................... 42
Section 13.3 Default.................................................................. 43
Section 13.4 Rights as a Lender....................................................... 43
Section 13.5 Indemnification by Lenders............................................... 43
Section 13.6 Non-Reliance on the Agents and other Lenders............................. 44
Section 13.7 Failure to Act........................................................... 44
Section 13.8 Resignation.............................................................. 44
Section 13.9 Funding Reliance, etc.................................................... 45
Section 13.10 Syndication Agent, Documentation Agent and Co-Agents..................... 45
ARTICLE 14 MISCELLANEOUS............................................................ 45
Section 14.1 Waiver................................................................... 45
Section 14.2 Government Regulation.................................................... 45
Section 14.3 Taxes.................................................................... 45
Section 14.4 Notices.................................................................. 45
Section 14.5 Expenses, Etc............................................................ 46
Section 14.6 Amendments, Etc.......................................................... 46
Section 14.7 Sales and Transfers, etc. of Advances and Notes; Participation in
Advances and Notes....................................................... 47
Section 14.8 Indemnification.......................................................... 49
Section 14.9 Set-off.................................................................. 49
Section 14.10 Sharing of Payments, Etc................................................. 50
Section 14.11 Other Transactions....................................................... 50
Section 14.12 Nonliability of Lenders.................................................. 50
Section 14.13 Severability............................................................. 50
Section 14.14 Survival................................................................. 50
Section 14.15 Captions and Headings.................................................... 51
Section 14.16 Counterparts............................................................. 51
Section 14.18 Governing Law............................................................ 51
Section 14.19 Forum Selection and Consent to Jurisdiction.............................. 51
Section 14.20 Waiver of Jury Trial..................................................... 52
Section 14.21 Entire Agreement......................................................... 52
Section 14.22 Renewal, Extension and Rearrangement..................................... 52
Section 14.23 No Oral Agreements....................................................... 53
</TABLE>
iii
<PAGE>
EXHIBITS
--------
EXHIBIT A - Form of Note
EXHIBIT B - LIBOR Advance Request
EXHIBIT C - Reference Rate Advance Request
EXHIBIT D - Form of Tax Certificate
EXHIBIT E - Form of Opinion of Counsel to the Company and its Subsidiaries
EXHIBIT F - Form of Transfer Certificate
SCHEDULE I - Commitments
iv
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 24, 1999 is
among PG&E GAS TRANSMISSION, NORTHWEST CORPORATION, a corporation duly organized
and validly existing under the laws of the State of California (the "Company"),
-------
the various financial institutions as are or may become parties hereto
(collectively, the "Lenders"), THE FIRST NATIONAL BANK OF CHICAGO, as
-------
documentation agent for the Lenders (the "Documentation Agent"), U.S. BANK
-------------------
NATIONAL ASSOCIATION, as syndication agent for the Lenders (the "Syndication
-----------
Agent"), THE FIRST NATIONAL BANK OF CHICAGO, U.S. BANK NATIONAL ASSOCIATION and
- -----
BARCLAYS BANK PLC, as co-agents for the Lenders (the "Co-Agents"), and CANADIAN
---------
IMPERIAL BANK OF COMMERCE ("CIBC"), acting through certain of its U.S. branches
----
or agencies, as Administrative Agent (the "Agent") for the Lenders.
-----
RECITALS:
A. Reference is here made to that certain Credit Agreement, dated as of
May 31, 1995 (the "Existing Credit Agreement"), by and among Pacific Gas
-------------------------
Transmission Company, predecessor-in-interest to the Company, the various
financial institutions as are or may become parties thereto, Barclays Bank PLC
and The First National Bank of Chicago, as co-agents for the Lenders, and
Canadian Imperial Bank of Commerce, acting through certain of its U.S. branches
or agencies, as Agent for the Lenders, and all of the indebtedness, obligations
and liabilities of Company evidenced by and outstanding under the Existing
Credit Agreement and all related instruments and documents (all such
indebtedness, obligations and liabilities under the Existing Credit Agreement
and/or such instruments and documents collectively, the "Prior Indebtedness").
------------------
B. The Company has voluntarily requested that Lenders, and Lenders have
agreed to, restructure, rearrange and renew the Prior Indebtedness and the
respective commitments of the Lenders and Agents party to the Existing Credit
Agreement into obligations and commitments hereunder.
C. As a part of the restructuring and rearranging of the Prior
Indebtedness, Lenders shall modify their respective commitments under this
Agreement such that on the Effective Date each Lender shall be obligated
hereunder, subject to the terms hereof, to the Commitments stated on Schedule I
----------
hereto for each Lender.
D. Any Advances outstanding under the Existing Credit Agreement on the
Effective Date bearing interest at a LIBOR Rate shall be deemed continued as an
Advance under this Agreement at such LIBOR Rate and for the Interest Period with
respect thereto under the Existing Credit Agreement.
E. Any "Competitive Bid Advances" outstanding under the Existing Credit
Agreement on the Effective Date shall be deemed continued as a Reference Rate
Advance under
<PAGE>
this Agreement at the rate and for the term with respect thereto under the
Existing Credit Agreement.
F. Lenders and the Company intend and have agreed to amend and restate the
Existing Credit Agreement in its entirety as and pursuant to this Agreement.
NOW, THEREFORE, in consideration of the Recitals hereof and the mutual
covenants contained herein, the parties hereby agree to amend and restate the
Existing Credit Agreement in its entirety as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.1 Certain Defined Terms. The following terms (whether or not
---------------------
underscored) when used in this Agreement, including its preamble, shall, except
where the context otherwise requires, have the following meanings (such meanings
to be equally applicable to the singular and the plural forms thereof):
"Adjusted LIBOR Rate" shall mean, for any LIBOR Advances, a rate per annum
-------------------
(rounded upwards, if necessary, to the next 1/100 of one percent) determined by
the Agent to be equal to the LIBOR Rate for such Advances for the Interest
Period for such Advances divided by the difference of 1 minus the Reserve
Requirement for such Advances for such Interest Period.
"Advance" shall mean, except as otherwise provided herein, any LIBOR
-------
Advance and/or Reference Rate Advance.
"Advance Outstandings" shall mean at any time the aggregate principal
--------------------
amount of all outstanding Advances at such time.
"Advance Request" shall mean any LIBOR Advance Request or Reference Rate
---------------
Advance Request.
"Affiliate" of any Person means any other Person which, directly or
---------
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agent" shall mean CIBC in its capacity as administrative agent for the
-----
Lenders hereunder or any successor administrative agent.
2
<PAGE>
"Agents" shall mean the Agent, the Syndication Agent, the Documentation
------
Agent and the Co-Agents, together with successors in any such capacities.
"Agreement" means, on any date, this Amended and Restated Credit Agreement
---------
as originally in effect on the Effective Date and as thereafter from time to
time amended, supplemented, amended and restated, or otherwise modified and in
effect on such date.
"Applicable Margin" shall mean, on any date and with respect to each LIBOR
-----------------
Advance (subject to clause (iii) of the definition of "Applicable Rating
Level"), the applicable margin set forth below based on the Applicable Rating
Level on such date:
----------------------------------------------
Applicable LIBOR
Rating Level Advances
------------ --------
----------------------------------------------
Level I 0.5000%
----------------------------------------------
Level II 0.6000%
----------------------------------------------
Level III 0.7000%
----------------------------------------------
Level IV 0.8000%
----------------------------------------------
Level V 0.9000%
----------------------------------------------
"Applicable Rating Level" shall mean the highest level set forth below that
-----------------------
corresponds to a rating issued from time to time by S&P or Moody's as applicable
to the Company's senior unsecured long-term debt:
------------------------------------------------
Moody's S&P
------- ---
------------------------------------------------
Level I *Baa1 *BBB+
------------------------------------------------
Level II Baa1 BBB+
------------------------------------------------
Level III Baa2 BBB
------------------------------------------------
Level IV Baa3 BBB-
------------------------------------------------
Level V **Baa3 **BBB-
------------------------------------------------
For example, if the Moody's rating is Baa1 and the S&P rating is BBB, Level II
shall apply.
For purposes of the foregoing, (i) "*" means a rating more favorable than;
"**" means a rating less favorable than; (ii) if ratings for the Company's
senior unsecured long-term debt shall not be available from S&P or Moody's,
Level V shall be deemed applicable; (iii) if determinative
* greater than
** less than
3
<PAGE>
ratings shall change (other than as a result of a change in the rating system
used by any applicable Rating Agency) such that a change in Applicable Rating
Level would result, such change shall effect a change in Applicable Rating Level
as of the day on which it is first announced by the applicable Rating Agency,
and any change in the Applicable Margin or percentage used in calculating fees
due hereunder shall apply commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change; and (iv) if the rating system of any of the Rating Agencies shall change
prior to the date all obligations hereunder have been paid and the Commitments
canceled, the Company and the Lenders shall negotiate in good faith to amend the
references to specific ratings in this definition to reflect such changed rating
system, and pending such amendment, if no Applicable Rating Level is otherwise
determinable based upon the foregoing, the last Applicable Rating Level shall
apply.
"Attributable Debt" shall mean, with respect to any Sale-Leaseback
-----------------
Transaction as of any particular time, the present value discounted at the rate
of interest implicit (in the reasonable judgment of the Company) in the terms of
the lease of the obligations of the lessee under such lease for net rental
payments (net of insurance, taxes and indemnity and other similar charges)
during the remaining term of the lease (including any period for which such
lease has been extended).
"Authorized Officer" means, relative to the Company, those of its officers
------------------
whose signatures and incumbency shall have been certified to the Agent and the
Lenders pursuant to subsection 9.1(b).
-----------------
"Authorized Signatory" shall mean, in relation to any Person and any
--------------------
communication to be made or document to be executed or certified by such Person
at any time, each other Person who is at such time duly appointed as its
authorized signatory by such Person in a manner acceptable to the Agent.
"Available Facility Amount" shall mean at any time the Total Commitments
-------------------------
less the Advance Outstandings at such time.
"Base Rate" shall mean, at any time, the rate per annum then most recently
---------
announced by the Agent at New York, New York, as its base rate for Dollar loans
in the United States, which base rate may or may not be the lowest rate charged
by the Agent on loans to any of its customers.
"Business Day" shall mean a day other than Saturday or Sunday on which
------------
commercial banks and foreign exchange markets are not required or permitted to
be closed for business in New York City, New York and (with respect to LIBOR
Advances only) London, England.
"Capital Lease Obligations" shall mean all monetary obligations of the
-------------------------
Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other
4
<PAGE>
Loan Document, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
------
Liability Act of 1980, as amended.
"CIBC" is defined in the preamble.
---- --------
"Co-Agents" is defined in the preamble.
--------- --------
"Code" shall mean the Internal Revenue Code of 1986, as amended, reformed
----
or otherwise modified from time to time.
"Commitment" shall mean, as to each Lender, the obligation of such Lender
----------
to make Advances in an aggregate amount at any one time outstanding equal to the
amount set opposite such Lender's name on Schedule I hereto under the caption
----------
"Commitment" (as the same may be reduced pursuant to Section 2.5 hereof or
-----------
increased pursuant to Section 14.7(b)(i) hereof).
------------------
"Commitment Proportion" shall mean, in relation to a Lender, at any time
---------------------
the proportion which its Commitment bears to the Total Commitments at such time.
"Company" shall mean PG&E Gas Transmission, Northwest Corporation, a
-------
corporation duly organized and validly existing under the laws of the State of
California.
"Debt" shall mean indebtedness for borrowed money.
----
"Default" shall mean an Event of Default or any condition, occurrence or
-------
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Default Rate" shall mean, in respect of any principal of any Advance or
------------
any other amount payable by the Company under this Agreement which is not paid
when due (whether at stated maturity, by acceleration or otherwise), a rate per
annum during the period commencing on the due date until such amount is paid in
full equal to one percent plus the Reference Rate as in effect from time to
time; provided that, if such amount in default is principal of a LIBOR Advance
and the due date is a day other than the last day of the Interest Period
therefor, the "Default Rate" for such principal shall be, for the period
commencing on the due date and ending on the last day of the Interest Period
therefor, one percent above the interest rate for such Advance and, thereafter,
the rate provided for above in this definition.
"Documentation Agent" is defined in the preamble.
------------------- --------
"Dollars" and "$" shall mean lawful money of the United States of America
------- -
which is legal tender for the payment of public and private debts in the United
States.
5
<PAGE>
"Drawdown Date" shall mean: (i) in relation to any LIBOR Advance, the
-------------
Business Day for the making thereof as specified in the LIBOR Advance Request
relating thereto; and (ii) in relation to any Reference Rate Advance, the
Business Day for the making thereof as specified in the Reference Rate Advance
Request relating thereto.
"Effective Date" shall mean the date on which (i) all conditions precedent
--------------
set forth in Section 9.1 hereof are satisfied or waived by all Lenders, and (ii)
-----------
this Agreement becomes effective pursuant to Section 14.16 hereof.
-------------
"Environmental Laws" shall mean any and all federal, state, local and
------------------
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case, as in effect from time to time. Reference
to Sections of ERISA also refer to any successor sections.
"Event of Default" shall have the meaning assigned to that term in Article
---------------- -------
12 hereof.
- --
"Existing Credit Agreement" has the meaning specified in Recital A hereof.
------------------------- ---------
"Facility" shall mean the committed advance facility which may be utilized
--------
subject to the other terms and provisions hereof for Advances which shall be
evidenced by the Notes.
"Facility Office" shall mean, in relation to a Lender, the office
---------------
designated on the signature page below or such other office as it may from time
to time designate by notice to the Agent.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the day for which such rate is to be
--------
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if such rate is not so
published for any day, the Federal Funds Rate for such day
6
<PAGE>
shall be the average rate charged or chargeable to the Agent on such day on such
transactions as determined by the Agent.
"GAAP" shall mean generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other pronouncements by
regulatory authorities or such entities as may be recognized by a significant
segment of the United States accounting profession to define accepted accounting
practice, which are applicable to the circumstances as of the date of
determination.
"Guarantee" by any Person shall mean any obligation, contingent or
---------
otherwise, of such Person directly guaranteeing any Indebtedness of any other
Person or providing for the payment of any Indebtedness of any other Person or
otherwise expressly protecting the holder of such Indebtedness against loss
(whether by virtue or partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise),
provided that the term "Guarantee" shall not include (i) endorsements of
negotiable instruments for collection or deposit in the ordinary course of
business, (ii) indemnities or hold-harmless agreements against personal injury
or property damage; or (iii) contractual obligations that are conditioned upon
performance.
"Hazardous Material" means
------------------
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended;
(c) any petroleum, crude oil or any fraction thereof;
(d) any hazardous, dangerous or toxic chemical, material, waste or
substance within the meaning of any Environmental Law;
(e) any radioactive material, including any naturally occurring
radioactive material, and any source, special or by-product material as
defined in 42 U.S.C. (S) 2011 et. seq., and any amendments or
reauthorizations thereof;
(f) asbestos-containing materials in any form or condition; or
(g) polychlorinated biphenyls in any form or condition.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
------ ------ ------ ---------
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may
7
<PAGE>
be, as a whole and not to any particular Section, paragraph or provision of this
Agreement or such other Loan Document.
"including" means including without limiting the generality of any
---------
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
------- -------
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication, at any date:
------------
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations relative to the face amount of all letters of
credit and banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capital Lease
Obligations;
(d) all obligations of such Person pursuant to a Sale-Leaseback
Transaction which have been or should be, in accordance with GAAP, recorded
as Capital Lease Obligations;
(e) all obligations of such Person pursuant to a Guarantee except any
such Guarantee which the Company is contesting in good faith in appropriate
proceedings; and
(f) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse.
provided, Indebtedness shall not include sales of Permitted Receivables sold
- --------
pursuant to Permitted Receivables Purchase Facilities and indemnification,
recourse or repurchase obligations thereunder. For all purposes of this
Agreement, the Indebtedness of any Person shall include all recourse
Indebtedness of any partnership or joint venture or limited liability company in
which such Person is a general partner or a joint venturer or a member.
"Indemnified Liabilities" is defined in Section 14.8.
----------------------- ------------
"Indemnified Parties" is defined in Section 14.8.
------------------- ------------
8
<PAGE>
"Interest Period" shall mean:
---------------
(a) With respect to any LIBOR Advances, the period commencing on the
date such Advances are made and ending on the numerically
corresponding day in the first, second, third or sixth calendar
month thereafter, as the Company may select as provided in
Section 3.1 hereof, except that each such Interest Period which
-----------
commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month; and
(b) With respect to any Reference Rate Advances, the period
commencing on the date such Advances are made and ending on such
date not more than 90 days thereafter, as the Company may select
as provided in Section 4.1 hereof.
-----------
Notwithstanding the foregoing, (i) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, in the case of an Interest Period for LIBOR Advances, if such
next succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day) and such extension or adjustment shall be reflected
in the computation of interest; (ii) the Company shall not be permitted to
select Interest Periods to be in effect at any one time which have expiration
dates occurring on more than ten different dates; and (iii) no Interest Period
may end later than the Maturity Date.
"Lenders" is defined in the preamble.
------- --------
"LIBOR" or the "LIBOR Rate" shall mean, on any day and in relation to the
----- ----------
Term for any LIBOR Advance, the rate per annum equal to the average of the
offered quotations appearing on Telerate Page 3750 (or if such Telerate Page
shall not be available, any successor or similar service as may be selected by
the Agent and the Company) as of 11:00 a.m., London time (or as soon thereafter
as practicable), on the second Business Day before (and for value on) the
proposed Drawdown Date for such Advance. If none of such Telerate Page 3750 nor
any successor or similar service is available, then "LIBOR" or the "LIBOR Rate"
----- ----------
shall mean, on any day and in relation to the Term for any LIBOR Advance, the
rate per annum (rounded upwards, if necessary, to the next multiple of 1/16th of
one percent per annum) determined by the Agent to be equal to the average of the
respective rates quoted to the Agent by each of the Reference Lenders as the
rate at which it would offer deposits in Dollars for a period equal to the Term
of, and in a principal amount comparable to, such proposed Advance to prime
banks in the London interbank market of Dollar deposits at or about 11:00 a.m.
London time (or as soon thereafter as practicable) on the second Business Day
before (and for value on) the proposed Drawdown Date for such Advance. If any
Reference Lender fails to (or notifies the Agent that it is or will be
9
<PAGE>
unable to) advise the Agent of any rate referred to above, or is not
participating in such LIBOR Advance to be made hereunder, then the relevant
LIBOR Rate shall be determined by the Agent on the basis of the rate or rates
quoted to it by the other Reference Lenders, provided that if the Advance is a
LIBOR Advance and only one Reference Lender provides a rate quote, the Advance
shall be governed by Section 8.10 hereof. Each determination of the LIBOR Rate
------------
shall be conclusive and binding, absent manifest error.
"LIBOR Advance Request" shall mean a request for a LIBOR Advance made in
---------------------
accordance with Article 3 and substantially in the form of Exhibit B.
--------- ---------
"LIBOR Advances" shall mean an advance in Dollars made available to the
--------------
Company pursuant to Article 3 with interest rates determined on the basis of the
---------
LIBOR Rate.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Company or any of its Subsidiaries shall
be deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan Document" means this Agreement, the Notes, each Advance Request, and
-------------
any other agreement, document or instrument from time to time executed and
delivered pursuant to and in connection with any of the foregoing.
"Majority Lenders" shall mean, at any time while Commitments are in effect,
----------------
Lenders having at least 51% of the aggregate amount of the Commitments and, at
any time while no Commitments are in effect, Lenders holding at least 51% of the
outstanding aggregate principal amount of the Advances.
"Material Adverse Effect" means with respect to any matter that such matter
-----------------------
would reasonably be expected to have a material and adverse effect on the
assets, business, properties or condition (financial or otherwise) of the
Company or the Company and its Subsidiaries, taken as a whole, or on the ability
of the Company to perform its obligations under any of the Loan Documents.
"Maturity Date" shall mean the earlier of (i) the Original Maturity Date,
-------------
or such other later date as may result from any extension requested by Company
and consented to by the Lenders pursuant to Section 2.3 and (ii) the date of
-----------
termination of the obligations and Commitments under this Agreement by
prepayment, cancellation, acceleration or otherwise.
"Moody's" shall mean Moody's Investors Service, Inc. and any successor
-------
thereto that is a nationally-recognized rating agency.
10
<PAGE>
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37) of
------------------
ERISA with respect to which the Company or a Significant Subsidiary may have
liability and which is covered by Title IV of ERISA.
"1934 Act Reports" shall mean the Company's Form 10K, dated December 31,
----------------
1998, and all subsequent documents filed with the United States Securities and
Exchange Commission (or any governmental agency substituted therefor) pursuant
to Section 13 of the Securities Exchange Act of 1934 (or any other reports
substituted therefor that contain substantially the information required to be
contained in such reports on the date hereof), copies of all of which 1934 Act
Reports through the date of this Agreement have been delivered by the Company to
the Agent.
"Net Tangible Assets" shall mean the aggregate amount of assets (less
-------------------
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (other than the current portion of funded
indebtedness) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense (to the extent included in such aggregate
amount of assets) and other like intangibles (except regulatory assets recorded
on the balance sheet in accordance with GAAP).
"Note" shall mean a promissory note in substantially the form of Exhibit A
---- ---------
hereto (as such promissory note may be amended, endorsed or otherwise modified
from time to time), duly executed and delivered to the Agent by the Company for
the account of a Lender and payable to the order of such Lender in the amount of
its Commitment, including any amendment, modification, renewal or replacement of
such promissory note.
"Obligations" means all obligations (monetary or otherwise) of the Company
-----------
arising under or in connection with this Agreement, the Notes and each other
Loan Document.
"Original Maturity Date" shall mean May 30, 2002.
----------------------
"Overnight Funds Period" shall mean a period of one or more consecutive
----------------------
days during which the Overnight Funds Rate exceeds the rates described in
clauses (a)(i) and (a)(ii) of the definition "Reference Rate." Upon the making,
- -------------- ------- --------------
continuing, or converting of any applicable Advance during any such period, the
Agent shall give prompt notice to the Company and the Lenders of the
commencement and termination of such Overnight Funds Period and the Overnight
Funds Rate for such period.
"Overnight Funds Rate" shall mean, for any Overnight Funds Period, a
--------------------
fluctuating interest rate per annum equal for each day during such period to the
rate of interest offered in the interbank market to the Agent as the overnight
Federal Funds Rate as of, at or about 10:00 a.m., New York, New York time on
such day (or if such day is not a Business Day, for the next preceding Business
Day) plus 1/2% per annum.
11
<PAGE>
"Payment Office" shall mean the office of Morgan Guaranty Trust Company of
--------------
New York located at 60 Wall Street, New York, New York 10260, or such other
office or branch of a financial institution located in New York City, New York
as the Agent may from time to time designate by notice to the Company and the
Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Receivables" shall mean all obligations of any obligor (whether
---------------------
now existing or hereafter arising) under a contract for sale or transportation
of natural gas or other goods or services by the Company or any of its
Subsidiaries, which shall include any obligation of such obligor (whether now
existing or hereafter arising) to pay demand charges based on actual or
estimated peak usage of natural gas by such obligor and any obligation of such
obligor (whether now existing or hereafter arising) to pay interest, finance
charges or amounts with respect thereto, and, with respect to any of the
foregoing receivables or obligations, (i) all of the interest of the Company or
any of its Subsidiaries in the goods (including returned goods and goods
constituting natural gas) the sale of which gave rise to such receivable or
obligation after the passage of title thereto to any obligor, (ii) all other
Liens and property subject thereto from time to time purporting to secure
payment of such receivables or obligations, and (iii) all guarantees, insurance,
letters of credit and other agreements or arrangements of whatever character
from time to time supporting or securing payment of any such receivables or
obligations.
"Permitted Receivables Purchase Facility" shall mean any agreement of the
---------------------------------------
Company or any of its Subsidiaries providing for sales, transfers or conveyances
of Permitted Receivables purporting to be sales (and considered sales under
GAAP) that do not provide, directly or indirectly, for recourse against the
seller of such Permitted Receivables (or against any of such seller's
Affiliates) by way of a guaranty or any other support arrangement, with respect
to the amount of such Permitted Receivables (based on the financial condition or
circumstances of the obligor thereunder), other than such limited recourse as is
reasonable given market standards for transactions of a similar type, taking
into account such factors as historical bad debt loss experience and obligor
concentration levels.
"Person" shall mean an individual, a corporation, a company, a voluntary
------
association, a partnership, a trust, an unincorporated organization, a
government or any agency, instrumentality or political subdivision thereof, or
other entity.
"Plan" shall mean an employee benefit or other plan established or
----
maintained by the Company or any of its Subsidiaries with respect to which the
Company or any Subsidiary may have any liability and which is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Principal Office" shall mean the office of the Agent, as set forth on the
----------------
signature pages hereof, or such substitute office of which it may from time to
time notify the Company and the Lenders.
12
<PAGE>
"Principal Property" shall mean any natural gas pipeline, natural gas
------------------
gathering system or gas storage facilities located in the United States,
including any fixed, tangible natural gas facilities directly related to the
transportation, storage or distribution of natural gas, except any such property
that in the opinion of the Board of Directors of the Company is not of material
importance to the business conducted by the Company and its consolidated
Subsidiaries taken as a whole.
"Principal Subsidiary" shall mean any Subsidiary which owns a Principal
--------------------
Property.
"Prior Indebtedness" has the meaning specified in Recital A hereof.
------------------ ---------
"Quarterly Dates" shall mean the last day of each March, June, September
---------------
and December, the first of which shall be the first such day after the date of
this Agreement, provided that, if any such date is not a Business Day, the
relevant Quarterly Date shall be the next succeeding Business Day.
"Rating Agency" shall mean either of S&P or Moody's.
-------------
"Reference Lenders" shall mean the Agents.
-----------------
"Reference Rate" shall mean (a) on any date and with respect to all
--------------
Reference Rate Advances other than those dates and Advances described in clause
------
(b) of this definition, a fluctuating rate of interest per annum equal to the
- ---
higher of (i) the Base Rate and (ii) the Federal Funds Rate most recently
determined by the Agent plus 1/2% per annum; or (b) on any date occurring during
----
any Overnight Funds Period, but with respect only to Reference Rate Advances
made, the Overnight Funds Rate. The Reference Rate is not necessarily intended
to be the lowest rate of interest determined by the Agent in connection with
extensions of credit. Changes in the rate of interest on that portion of any
Advances maintained as Reference Rate Advances shall take effect simultaneously
with each change in the Reference Rate. The Agent shall give notice promptly to
the Company and the Lenders of changes in the Reference Rate.
"Reference Rate Advance" shall mean an advance in Dollars made available to
----------------------
the Company pursuant to Article 4.
---------
"Reference Rate Advance Request" shall mean a request for a Reference Rate
------------------------------
Advance made in accordance with Article 4 and substantially in the form of
---------
Exhibit C.
- ---------
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors or any
successor Person relating to reserve requirements imposed by the Federal Reserve
System or any successor Person.
13
<PAGE>
"Regulation U" means Regulations G, U or X of the Board of Governors of the
------------
Federal Reserve System from time to time in effect and shall include any
successor or other regulations or official interpretation of said Board of
Governors or any successor Person relating to the extension of credit for the
purpose of purchasing or carrying margin stocks imposed by the Federal Reserve
System or any successor Person.
"Regulatory Change" shall mean, with respect to any Lender, any change
-----------------
after the date of this Agreement in United States federal, state or foreign laws
or regulations (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of banks
including such Lender of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law but
compliance with which is expected) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Repayment Date" shall mean, in relation to any LIBOR Advance, the last day
--------------
of the Term thereof specified in the applicable LIBOR Advance Request, and in
relation to any Reference Rate Advance, the Maturity Date.
"Reserve Requirement" shall mean, for any LIBOR Advances, on the date of
-------------------
such determination, the average maximum reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/100th of 1%) at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during the Interest Period thereof under Regulation D by member banks
of the Federal Reserve System in New York City with deposits exceeding one
billion Dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement as to any Lender shall reflect any other reserves required to be
maintained by such Lender by reason of any Regulatory Change against (i) any
category of liabilities which includes deposits by reference to which the LIBOR
Rate is to be determined or (ii) any category of extensions of credit or other
assets which include either type of LIBOR Advance.
"Resource Conservation and Recovery Act" means the Resource Conservation
--------------------------------------
and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect from time to
-- ---
time.
"S&P" shall mean Standard & Poor's Ratings Group and any successor thereto
---
that is a nationally-recognized rating agency.
"Sale-Leaseback Transaction" means an arrangement pursuant to which the
--------------------------
Company or a Principal Subsidiary now owns or hereafter acquires a Principal
Property, sells or transfers it to a Person, and rents or leases it back from
the Person.
"Stockholders' Equity" shall mean, as of the time any determination thereof
--------------------
is to be made, the sum of the Company's capital stock (which shall exclude
treasury stock and any capital stock subject to mandatory redemption by the
holder thereof) and additional paid-in capital plus
----
14
<PAGE>
retained earnings (minus accumulated deficit), all as shown on the consolidated
-----
balance sheet of the Company and its Subsidiaries and based on GAAP as in effect
on the date of such determination.
"Subsidiary" shall mean any corporation of which at least a majority of the
----------
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by the Company
and/or one or more of its Subsidiaries; "Wholly-Owned Subsidiary" shall mean any
-----------------------
such corporation of which all of such shares, other than directors' qualifying
shares, are so owned.
"Syndication Agent" is defined in the preamble.
----------------- --------
"Tax Certificate" shall mean a certificate substantially in the form set
---------------
out in Exhibit D and duly signed by a Lender.
---------
"Term" shall mean: (i) in relation to any LIBOR Advance, the period from
----
its Drawdown Date until its Repayment Date as specified in the LIBOR Advance
Request relating thereto; and (ii) in relation to any Reference Rate Advance,
the period from its Drawdown Date until its Repayment Date; provided, however,
-------- -------
that if any Term would otherwise end on a day which is not a Business Day, such
Term shall be extended to the next succeeding day which is a Business Day
unless, in the case of a LIBOR Advance, the result of such extension would be to
carry such Term over into the next calendar month, in which case such Term shall
end on the immediately preceding Business Day.
"364-Day Credit Agreement" shall mean that certain 364-Day Credit Agreement
------------------------
dated as of May 24, 1999, by and among the Company, the various financial
institutions as are or may become parties thereto, The First National Bank of
Chicago, as documentation agent for the lenders, U.S. Bank National Association,
as syndication agent for the lenders, The First National Bank of Chicago, U.S.
Bank National Association and Barclays Bank PLC, as co-agents for the lenders,
and Canadian Imperial Bank of Commerce, as administrative agent for the lenders,
as thereafter from time to time amended, supplemented, amended and restated, or
otherwise modified.
"Total Capitalization" shall mean the sum, at the time outstanding and
--------------------
without duplication, of (i) Total Debt, plus (ii) Stockholders' Equity.
"Total Commitments" shall mean the aggregate from time to time of the
-----------------
Lenders' Commitments.
"Total Debt" shall mean on a consolidated basis for the Company and its
----------
Subsidiaries at any time a determination thereof is to be made, the sum without
duplication of: (a) indebtedness
15
<PAGE>
for borrowed money, all obligations evidenced by bonds, debentures, notes or
other similar investments, and purchase money obligations which in accordance
with GAAP would be shown on the consolidated balance sheet of the Company and
its Subsidiaries as a liability, and (b) all obligations of such Person as
lessee under leases which have been or should be, in accordance with GAAP,
recorded as Capital Lease Obligations.
"Transfer Certificate" shall mean a certificate substantially in the form
--------------------
set out in Exhibit F and duly signed by a Lender and a transferee.
---------
"United States" or "U.S." means the United States of America, its fifty
------------- ----
States and the District of Columbia.
"Voting Stock" shall mean, in respect of a business entity, stock of any
------------
class or classes, or equivalent interest, if the holders of the stock of such
class or classes or equivalent interests, are ordinarily, in the absence of
contingencies, entitled to vote for the election of the directors (or persons
performing similar functions) of such business entity, even though the right so
to vote has been suspended by the happening of such contingency, but does not
include stock of any class or classes the holders of which are entitled so to
vote only upon the happening of a contingency.
Section 1.2 Other References. Any reference in this Agreement to:
----------------
(i) any of the "Company," the "Agent", the "Agents", the "Syndication
Agent", the "Documentation Agent", the "Co-Agents" or the "Lenders"
shall be construed so as to include their respective successors,
permitted assigns and, in the case of the Lenders, transferees;
(ii) a "Section" or "Exhibit" is a reference to a Section hereof or an
Exhibit hereto;
(iii) a "law" shall be construed to mean any law, including common or
customary law and any constitution, decree, judgment, legislation,
order, ordinance, regulation, rule, statute, treaty or other
legislative or regulatory measure, in each case of any jurisdiction
whatever;
(iv) a statute shall be construed as a reference to such statute as
amended or reenacted from time to time;
(v) "tax" shall be construed so as to include any tax, levy, impost,
duty or other charge of a similar nature (including, without
limitation, any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same); and
(vi) a time of day is, unless otherwise stated, a reference to New York,
New York time.
16
<PAGE>
Section 1.3 Other Agreements. Unless otherwise specified, any reference in
----------------
this Agreement to another agreement shall be construed as a
reference to that other agreement as the same may have been,
or may from time to time be, amended or supplemented.
Section 1.4 Headings. Section and Exhibit headings are for ease of
--------
reference only.
Section 1.5 Accounting Terms. All accounting terms not specifically
----------------
defined herein shall be construed in accordance with GAAP.
ARTICLE 2
THE FACILITY
Section 2.1 Grant of Facility. The Lenders hereby grant to the Company an
-----------------
advance pursuant to which, and upon the terms and subject to
the conditions herein set out.
(i) the Lenders agree to make LIBOR Advances to the Company under the
Facility in accordance with Article 3; and
---------
(ii) the Lenders agree to make Reference Rate Advances to the Company under
the Facility in accordance with Article 4.
---------
Section 2.2 Maximum Outstandings. Subject to cancellation and reduction in
--------------------
accordance with the terms hereof, the maximum aggregate principal amount of the
Facility which may be utilized at any time for Advances is $100,000,000. In no
event shall the aggregate Advance Outstandings for all Lenders at any time
exceed the principal amount of $100,000,000 or such lesser amount as from time
to time may result from any reduction pursuant to Section 2.5 hereof, or for
-----------
each Lender at any time exceed such Lender's Commitment Proportion as in effect
from time to time.
Section 2.3 Term; Extension of Maturity Commitments.
(a) Subject to the terms and conditions hereof and provided that no
Event of Default has occurred and is continuing, the total Commitments shall be
available for a period commencing on the Effective Date and continuing through
the Maturity Date; provided that the Maturity Date, and concomitantly the total
--------
Commitments, may be extended for successive one year periods expiring on the
date which is one (1) year from the then scheduled Maturity Date. If the
Company shall request in a certificate of extension delivered to the Agent, in
form and substance acceptable to the Agent, at least 30 days, but no more than
45 days, prior to any anniversary of the Effective Date that the Maturity Date
be extended for one year from the then scheduled Maturity Date, then the Agent
shall promptly notify each Lender of such request and each Lender shall notify
the Agent, at least 15 days, but not more than 30 days, after Lender's
17
<PAGE>
receipt of Agent's notice, whether such Lender, in the exercise of its sole
discretion, will extend the Maturity Date for such one year period. Any Lender
which shall not timely notify the Agent whether it will extend the Maturity Date
shall be deemed to not have agreed to extend the Maturity Date. No Lender shall
have any obligation whatsoever to agree to extend the Maturity Date. Any
agreement to extend the Maturity Date by any Lender shall be irrevocable.
(b) If all Lenders notify the Agent pursuant to clause (a) of this
---------
Section of their agreement to extend the Maturity Date, then the Agent shall so
notify each Lender and the Company, and such extension shall be effective
without other or further action by any party hereto for such additional one year
period. If any Lender fails to approve the extension of the Maturity Date, the
Company acknowledges that on the then scheduled Maturity Date the Company shall
repay in full all Obligations under the Loan Documents.
Section 2.4 Nature of Lenders' Obligations. The obligations of the
------------------------------
Lenders hereunder are several and not joint and no Lender shall be responsible
for the obligation or Commitment of any other Lender hereunder. Nothing herein
constitutes a partnership, joint venture or other common purpose enterprise with
respect to the relationship between the Lenders (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
its obligations hereunder shall not relieve any other Lender from its
obligations hereunder, nor shall the Agent or any other Lender be liable for the
failure by such Lender to perform its obligations hereunder. This Agreement is
not intended to, and shall not be construed so as to, confer any right or
benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns.
Section 2.5 Changes in Commitments. The Company shall have the right in
----------------------
accordance with Section 7.1 hereof to terminate or reduce the amount of the
-----------
Commitments at any time or from time to time to an amount not less than the
Advance Outstandings, if any, at the effective date of such termination or
reduction, upon not less than three (3) Business Days' prior notice to the Agent
(which shall promptly notify the Lenders) of each such termination or reduction,
which shall specify the effective date thereof and the amount of any such
reduction (which shall not be less than $5,000,000 and, if more than $5,000,000,
in integral multiples of $1,000,000) and shall be irrevocable and effective only
upon receipt by the Agent. The Commitments once terminated or reduced may not be
reinstated.
Section 2.6 Fees. The Company agrees to pay the fees set forth in this
----
Section 2.6. All such fees shall be non-refundable.
(a) Facility Fee. The Company shall pay to the Agent, for the
------------
account of each Lender, a facility fee on such Lender's Commitment, without
regard to usage, for the period from and including the Effective Date to and
excluding the date such Commitment is terminated, at a rate per annum equal to
that set forth below opposite the Applicable Rating Level times such Lender's
Commitment.
18
<PAGE>
----------------------------------------------
Applicable
Rating Level Facility Fee
------------ ------------
----------------------------------------------
Level I 0.1000%
----------------------------------------------
Level II 0.1250%
----------------------------------------------
Level III 0.1500%
----------------------------------------------
Level IV 0.1750%
----------------------------------------------
Level V 0.2000%
----------------------------------------------
The accrued facility fee shall be payable in arrears on the Quarterly Dates and
on the Maturity Date based on the average total Commitments during such period.
(b) Administrative Agency Fees. The Company shall pay to the Agent,
--------------------------
for the Agent's own account, an administrative agency fee or such other fees as
previously agreed to by the Company and the Agent in writing (as such writing
may hereafter be amended, supplemented, restated or otherwise be modified or in
effect).
Section 2.7 Lending Offices. The Advances of each type made by each Lender
---------------
shall be made and maintained at such Lender's Facility Office for Advances of
such type.
Section 2.8 Prepayments. The Company may prepay Advances, provided that it
-----------
shall give notice to the Agent (which shall promptly notify the Lenders) of such
intended prepayment on or before 11:00 a.m. of the proposed date of prepayment
in the case of Reference Rate Advances, or upon three Business Days' prior
notice, in the case of LIBOR Advances, to the Agent (which shall promptly notify
the Lenders), which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which shall be not less than
$5,000,000 and, if more than $5,000,000, in integral multiples of $1,000,000)
and shall be irrevocable and effective only upon receipt by the Agent, provided
that interest on the principal prepaid, accrued to the prepayment date, and any
amounts payable pursuant to Section 8.11 hereof in connection therewith, shall
be paid on the prepayment date.
Section 2.9 Notes. The Advances made by a Lender hereunder shall be
-----
evidenced by Notes payable to the order of such Lender. The Company hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender's Notes (or on any continuation of
such grid), which notations, if made, shall evidence, inter alia, the date of,
the outstanding principal of, and the interest rate and Interest Period
applicable to the Advances evidenced thereby. Such notations shall be conclusive
and binding on the Company absent manifest error; provided, however, that the
-------- -------
failure of any Lender to make any such notations shall not limit or otherwise
affect any Obligations of any Company. Upon the written request of the Company,
a Lender shall provide a written summary to the Company of the notations made on
such Notes with respect to the Advances, if any, of such Lender.
19
<PAGE>
Section 2.10 Repayment. With respect to Advances, the Company shall repay
---------
the principal amount of (a) each Reference Rate Advance, on the Maturity Date
and (b) each LIBOR Advance, on the earlier of (i) the last day of the Term for
such Advance or (ii) the Maturity Date.
ARTICLE 3
LIBOR ADVANCES
Section 3.1 LIBOR Advance Requests. Except as otherwise provided herein,
----------------------
the Company may request the making of a LIBOR Advance in Dollars under the
Facility prior to the Maturity Date by the delivery to the Agent (which shall
promptly notify the Lenders) no later than 11:00 a.m. on the third Business Day
before the proposed Drawdown Date for such LIBOR Advance of a duly completed
LIBOR Advance Request. Each LIBOR Advance Request delivered to the Agent
pursuant to this Section 3.1 shall be irrevocable and shall specify:
-----------
(i) the proposed Drawdown Date;
(ii) the principal amount of the proposed LIBOR Advance, which
shall be (a) a minimum amount of $5,000,000 and, if more than
$5,000,000, in additional integral multiples of $1,000,000;
and (b) in any event not more than the Adjusted Available
Facility Amount; and
(iii) the Term of the proposed LIBOR Advance, which shall be a
period of one, two, three or six months and shall have a
Repayment Date occurring on or before the Maturity Date.
Section 3.2 Making of LIBOR Advances. If the Company requests a LIBOR
------------------------
Advance in accordance with Section 3.1 hereof, then, on the proposed Drawdown
-----------
Date for such LIBOR Advance, and subject to Sections 8.8 and 8.10 hereof, each
------------ ----
Lender shall, no later than 1:00 p.m. on such Drawdown Date, make available to
the Company in accordance with Section 6.2 hereof the amount of such Lender's
-----------
participation in such LIBOR Advance. The amount which each Lender shall be
required to contribute to a LIBOR Advance shall be an amount equal to such
Lender's Commitment Proportion of such LIBOR Advance; provided, however, that if
-------- -------
the amount of a Lender's Commitment is reduced in accordance with the terms
hereof after the Agent has received the LIBOR Advance Request for such LIBOR
Advance, then such Lender's participation in such LIBOR Advance, and the amount
of such LIBOR Advance, shall be reduced accordingly.
Section 3.3 Interest on LIBOR Advances. Each LIBOR Advance shall accrue
--------------------------
interest during its Term from and including the Drawdown Date to but not
including the Repayment Date for such LIBOR Advance at the rate per annum equal
to the sum of the Adjusted LIBOR Rate plus the Applicable Margin. The Company
shall pay interest on the principal amount of each LIBOR Advance in arrears on
the Repayment Date for such LIBOR Advance; provided,
--------
20
<PAGE>
however, that if the Term of a LIBOR Advance is more than three months or 90
- -------
days, as the case may be, the Company shall pay interest on such LIBOR Advance
quarterly in arrears, each such interest payment (except the last) payable on
the last day of each three calendar month interval during the Term thereof and
the last on the Repayment Date for such LIBOR Advance. The Agent shall notify
the Company and the Lenders of its determination of the LIBOR Rate for each
LIBOR Advance and the amount of interest due on the Repayment Date and on any
quarterly payment date, if applicable, promptly after such determination has
been made as herein set forth; provided, however, that the failure to give such
-------- -------
notices shall in no way affect the obligation of the Company to pay the amounts
specified in this Section 3.3.
-----------
ARTICLE 4
REFERENCE RATE ADVANCES
Section 4.1 Reference Rate Advance. Except as otherwise provided the
----------------------
Company may request the making of Reference Rate Advances in Dollars prior to
the Maturity Date under the Facility by the delivery to the Agent (which shall
promptly notify the Lenders) no later than 11:00 a.m. on such Business Day, of a
duly completed Reference Rate Advance Request. Each Reference Rate Advance
Request delivered to the Agent pursuant to this Section 4.1 shall be irrevocable
-----------
and shall specify:
(i) the proposed Drawdown Date; and
(ii) the principal amount of the proposed Reference Rate Advance,
which shall be: (a) a minimum amount of $5,000,000 and, if
more than $5,000,000, in additional integral multiples of
$1,000,000; and (b) in any event not more than the Adjusted
Available Facility Amount.
Any Reference Rate Advance Request received after the deadline specified in this
Section 4.1 shall be deemed to have been received by the Agent as of 11:00 a.m.
- -----------
on the following Business Day.
Section 4.2 Making of Reference Rate Advances. If the Company requests a
---------------------------------
Reference Rate Advance in accordance with Section 4.1 hereof, then, on the
-----------
proposed Drawdown Date for such Reference Rate Advance, each Lender shall, no
later than 1:00 p.m. on such Drawdown Date, make available to the Company in
accordance with Section 6.2 hereof the principal amount of such Lender's
-----------
participation in such Reference Rate Advance and advise the Agent by telephone
and telex or telefacsimile of the Federal Reserve Bank and the wire number
effecting the transfer of such amount. The amount which each Lender shall be
required to contribute to a Reference Rate Advance shall be an amount equal to
such Lender's Commitment Proportion of such Reference Rate Advance; provided,
--------
however, that if the amount of a Lender's Commitment is reduced in accordance
- -------
with the terms hereof after the Agent has received a
21
<PAGE>
Reference Rate Advance Request, then such Lender's participation in such
Reference Rate Advance, and the amount of such Reference Rate Advance, shall be
reduced accordingly.
Section 4.3 Interest on Reference Rate Advances. Each Reference Rate
-----------------------------------
Advance shall accrue interest during its Term from and including the Drawdown
Date to but not including the Repayment Date for such Reference Rate Advance at
the rate per annum equal to the Reference Rate, as determined by the Agent on a
daily basis during the Term of such Reference Rate Advance. The Company shall
pay interest on the principal amount of each Reference Rate Advance in arrears
on the Repayment Date for such Reference Rate Advance. The Agent shall notify
the Company and the Lenders of the initial determination of the Reference Rate
and of any changes thereto promptly after such determination has been made as
provided herein.
Section 4.4 Reference Rate Communication. Each communication to be made by
----------------------------
one Person to another pursuant to this Article 4 shall be made to that other
Person at the telex or telefacsimile number and, as the case may be, telephone
number identified with its signature below (or other such telephone or telex or
telefacsimile number as such other Person shall by not less than five Business
Days' notice to the Agent have specified for this purpose).
ARTICLE 5
[INTENTIONALLY OMITTED]
ARTICLE 6
CURRENCY OF ACCOUNT AND PAYMENT
Section 6.1 Claims in Dollars. Each Lender agrees that, except as
-----------------
prohibited by the laws of the applicable jurisdiction, it shall express its
claim in any action or suit against the Company or any judgment or order
resulting therefrom in Dollars.
Section 6.2 Accounts for Payment. Unless otherwise expressly provided, all
--------------------
payments by the Company or any Lender to the Agent under this Agreement, the
Notes or any other Loan Document shall be made, without setoff, deduction or
counterclaim, in immediately available funds by the Company or such Lender to
the Agent at the Payment Office.
Section 6.3 Application of Payment. Subject to Section 6.5 hereof, each
---------------------- -----------
payment received by the Agent for the account of another Person pursuant to
Section 6.2 hereof shall:
- -----------
(i) in the case of a payment received for the account of the
Company, be made available by the Agent to the Company by
application on the date of receipt:
22
<PAGE>
(a) first, in or toward payment of any amount due from the
Company hereunder (including without limitation, fees and
amounts payable under Article 8) other than the amounts
---------
referred to in clause (b) to the Person for which such
amount is due; and
(b) second, in or toward payment to the Lenders of such
amount as is required to repay the Advances, including
accrued interest thereon, which have fallen due, and if
insufficient to pay all principal and interest then due
thereon shall be applied first to payment of interest and
then to principal; and
(c) third, in payment to the Company's account number 064254
with Boston Safe Deposit and Trust Company at Boston,
Massachusetts or such other account with such bank as the
Company shall have previously notified in writing to the
Agent for this purpose; and
(ii) in the case of any other payment, promptly be made available
by the Agent to the Person for whose account such payment was
received (in the case of a Lender, for the account of its
Facility Office) by transfer in like funds as received to such
account of such Person with such bank, as such Person shall
have previously notified in writing to the Agent for this
purpose.
Section 6.4 No Set-Off. All payments made by the Company shall be made
----------
free and clear of and without any deduction for or on account of any set-off or
counterclaim or, except as otherwise provided in Section 8.1 hereof, any other
matter.
Section 6.5 Actual Receipt. Where a sum is to be paid hereunder to the
--------------
Agent for the account of another party hereto, the Agent shall not be obligated
to make the same available to that other party hereto until it has been able to
establish that it has actually received such sum, but if it does make the
payment available and it proves to be the case that it had not actually received
the sum it paid out, then, the party hereto to whom such sum was so made
available shall on request ensure that the amount so made available is refunded
to the Agent, and shall on demand indemnify the Agent against any cost or loss
it may have suffered or incurred by reason of its having paid out such sum prior
to its having received such sum at a rate per annum equal to the Federal Funds
Rate (or if the Person receiving such payment is the Company and such payment is
an Advance, at the rate of interest to be borne by such Advance), and, with
respect to any sums covered by a payment made pursuant to subsection 6.3(i)(a),
-------------------
this Section 6.5 shall apply as though the Company were the party hereto to whom
-----------
such sum was so made available. In addition, if any party hereto shall in error
receive any sum which should have been paid to any other party hereto, the
receiving party shall immediately arrange through the Agent to remit such amount
to the party entitled thereto with interest thereon at a rate per annum equal to
the Federal Funds Rate if not remitted by the receiving party on the date
received.
23
<PAGE>
Section 6.6 Default Interest. The Company will pay to the Agent for the
----------------
account of each Lender interest at the applicable Default Rate on any principal
of any Advance made by such Lender, and (to the fullest extent permitted by law)
on any other amount payable by the Company hereunder to such Lender, which shall
not be paid in full when due (whether at its stated maturity, by acceleration or
otherwise), for the period commencing on the due date thereof until the same is
paid in full. Such interest shall be payable from time to time on demand of the
Agent.
ARTICLE 7
PRO RATA TREATMENT, COMPUTATIONS
Section 7.1 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein and as set forth in Section 8.7 hereof: (a) each borrowing from the
-----------
Lenders under Article 3 or 4 hereof shall be made from the Lenders, each payment
of facility fee under Section 2.6 hereof shall be made for the account of the
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.5 hereof shall be applied to the Commitments of the Lenders, pro
-----------
rata according to the amounts of their respective Commitments; (b) each payment
or prepayment of principal of Advances by the Company shall be made for the
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Advances held by the Lenders and then due and payable
or then being partially repaid; and (c) each payment of interest on Advances by
the Company shall be made for the account of the Lenders pro rata in accordance
with the amounts of interest due and payable to the respective Lenders.
Section 7.2 Computations. Interest on LIBOR Advances shall be computed on
------------
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable and
interest on Reference Rate Advances and the facility fee shall be computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable.
ARTICLE 8
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 8.1 Withholding. Each payment to be made by the Company hereunder
-----------
or in connection herewith to any other party hereto shall be made free and clear
of and without deduction or withholding for or on account of any tax, reserve,
levy or duty of, or imposed by, any governmental or taxing authority of or in
the United States or any political subdivision thereof, excluding, in the case
of each Lender and the Agents, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender or such
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction
24
<PAGE>
of such Lender's Facility Office or any political subdivision thereof; unless
the Company is required by law to make such a payment subject to the deduction
or withholding of such tax, in which case the amount payable by the Company in
respect of which such deduction or withholding is required to be made shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, such other party receives and retains (free from any
liability in respect of any such deduction or withholding) a net amount equal to
the amount which it would have received and so retained had no such deduction or
withholding been made or required to be made; provided, however, that the
-------- -------
Company shall not be required to pay any additional amount on account of any tax
of, or imposed by, the federal government of the United States pursuant to this
Section to any Lender which (i) is not entitled, on the date this Agreement is
signed (or, in the case of a transferee, on the date on which it signed the
relevant Transfer Certificate, in the case of an assignee of a Lender, on the
date on which the assignment became effective), to submit (a) a valid United
States Internal Revenue Service Form 1001 or any successor form thereto ("Form
1001") relating to such Lender and entitling it to a complete exemption from
deduction or withholding on all amounts to be received by such Lender, including
fees, pursuant to this Agreement, or (b) a valid United States Internal Revenue
Service Form 4224 or any successor form thereto ("Form 4224") relating to such
Lender and entitling it to receive all amounts, including fees, pursuant to this
Agreement without deduction or withholding, or (c) a certification substantially
in the form of the Tax Certificate, so as to meet its obligation to submit such
form or other certification pursuant to Section 8.2 hereof, or (ii) shall have
-----------
failed to submit such form or other certification which it is required to
deliver pursuant to Section 8.2 hereof and entitled to file under applicable
-----------
law. Any such additional amounts payable by the Company shall be deemed an
obligation of the Company hereunder.
Section 8.2 Tax Forms. Each of the Lenders hereby agrees, upon
---------
request of the Company:
(i) within 30 days of the date hereof or, if later, by the date
upon which the first utilization of the Facility is made, to
deliver to the Company, the Agent and any other Person
specified by the Company as a Person making a payment of any
amount due hereunder (a "Withholding Agent"), one or more of
the following, as is applicable:
(a) two accurate and complete original signed copies of Form
4224; or
(b) two accurate and complete original signed copies of Form
1001; or
(c) a signed certificate substantially in the form of the Tax
Certificate; and
(ii) thereafter and from time to time (and, in particular, but
without limitation, not later than the date of the transfer or
assignment to it becoming effective, each transferee and each
assignee or successor of a Lender
25
<PAGE>
agrees) to the extent entitled, to submit to the Company, the
Agent and any other Withholding Agent such additional duly
completed and signed copies of one or the other of Form 4224
or Form 1001 (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities)
or, to the extent entitled, of such a certification as may be
notified by the Company to such Lender and required under then
current United States law or regulations to avoid United
States Federal withholding taxes on payments in respect of all
amounts to be paid by the Company and received by such Lender
pursuant to this Agreement.
Section 8.3 Tax Receipts. If at any time the Company is required by law to
------------
make any deduction or withholding from any amount payable by it hereunder or in
connection herewith (or if thereafter there is any change in the rates at which
or the manner in which such deductions or withholdings are calculated), the
Company shall promptly notify the Agent and each affected Lender thereof. If the
Company makes any payment hereunder or in connection herewith in respect of
which it is required by law to make any deduction or withholding, it shall pay
the full amount to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law and
shall promptly deliver to the Agent a receipt issued by such authority (or other
evidence reasonably satisfactory to the Agent) evidencing the payment to such
authority of all amounts so required to be deducted or withheld from such
payment.
Section 8.4 Change in Law. If as a result of (a) any change in law, or in
-------------
its interpretation or administration by any authority charged with the
interpretation or administration thereof, occurring after the date hereof or (b)
compliance with any request from or requirement of any governmental authority,
central bank or other fiscal, monetary or other comparable regulatory authority
(including, without limitation, any reserve or special deposit requirements
imposed by the Board of Governors of the Federal Reserve System or any other
authority referred to above), which request or requirement is first made or
imposed after the date hereof:
(i) any Lender incurs a cost or increase in cost as a result of
its having entered into or performing its obligations under
this Agreement, including its making, funding or maintaining
all or any part of its Commitment or any Advance; or
(ii) any Lender becomes liable to make any payment (other than a
tax which is a capital or franchise tax or is imposed on the
net income of such Lender) on or calculated by reference to
the amount of Advances made or to be made by it and/or any sum
receivable by it hereunder; or
(iii) there is a reduction in the amount of any sum received or
receivable by any Lender in connection with its making any
Advances hereunder,
26
<PAGE>
then the Company shall from time to time upon demand by the Agent at the request
of any Lender in accordance with Section 8.7 hereof pay to the Agent for the
-----------
account of such Lender amounts sufficient to indemnify such Lender against, as
the case may be, (i) such cost or increased cost (or such proportion of such
cost or increased cost as is in the reasonable opinion of that Lender
attributable to its making, funding or maintaining its Commitment or any
Advance), (ii) such liability or (iii) such reduction. Such amounts may be
determined by using any reasonable averaging and attribution methods.
Section 8.5 Capital Adequacy. If after the date hereof, any Lender shall
----------------
have determined that (i) the adoption or implementation of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof, by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or (ii) compliance by any Lender (or
its Facility Office) with any direction, requirement or request regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and such Lender (taking into consideration such Lender's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines (which determination, absent manifest error, shall be
binding and conclusive on all parties) that the amount of such capital is
increased, or its rate of return on capital is reduced to a level below that
which such Lender could have achieved but for such adoption, implementation or
compliance, as a consequence of such Lender's obligations under this Agreement,
then, upon demand by such Lender through the Agent and in accordance with
Section 8.7 hereof, the Company shall immediately pay to the Agent for the
- -----------
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such increase or
reduction.
Section 8.6 Regulation D. If as a result of Regulation D of the Board of
------------
Governors of the Federal Reserve System, as in effect from time to time on and
after the date of this Agreement, or in the application, interpretation or
administration thereof by such Board of Governors, there shall be any increased
cost to any Lender in connection with maintaining all or any part of its
obligations and Commitment hereunder or of making, funding or maintaining all or
part of any Advance made or to be made, then the Company shall, from time to
time, upon demand by such Lender (through the Agent) in accordance with Section
-------
8.7 hereof, pay to the Agent for the account of such Lender additional amounts
- ---
sufficient to indemnify such Lender against such cost. The amounts of any such
costs shall be determined by such Lender in good faith on a basis that allocates
the cost incurred by such Lender in connection with the making, funding or
maintaining of advances made by such Lender to any borrowers, and resulting from
such Lender's compliance with such Regulation D, ratably among such borrowers.
Section 8.7 Notice of Claim. A Lender intending to make a claim pursuant
---------------
to Sections 8.4, 8.5 or 8.6 hereof shall deliver to the Company through the
------------ --- ---
Agent, promptly after becoming aware of the circumstances giving or which shall
give rise to the claim, notice of the
27
<PAGE>
Lender's intention to make a claim, specifying the event by which it is or shall
be entitled to make such claim and setting out in reasonable detail the expected
basis and computation of such claim. In the case of a cost, increased cost,
liability or reduction in amounts received or receivable incurred as described
in Section 8.4 or 8.5 hereof, such Lender may make a claim on the Company
----------- ---
through the Agent for such cost, increased cost, liability or reduction, which
claim shall include a certificate setting forth in reasonable detail the basis
and computation of the claim and such evidence substantiating the claim as may
be reasonably available to such Lender. In the case of a cost, increased cost or
liability incurred as described in Section 8.6 hereof, such Lender may make a
-----------
claim on the Company through the Agent for such cost, increased cost or
liability, which claim shall be determined in accordance with the last sentence
of Section 8.6 hereof; and the Company shall promptly indemnify such Lender
-----------
through the Agent for the amount claimed from and as the date such cost,
increased cost or liability is incurred. If any Lender is owed increased costs
under Section 8.4, 8.5 or 8.6 above, the Company may, at its sole expense and
----------- --- ---
effort (unless such Lender withdraws its request for additional compensation),
if no Default then exists, (a) replace such Lender with another commercial bank
reasonably acceptable to the Agent provided that (i) the obligations of the
Company owing to the Lender being replaced (including such increased costs)
shall be paid in full to such Lender concurrently with such replacement, (ii)
the replacement commercial bank shall execute a document satisfactory to the
Agent pursuant to which it becomes a party hereto with a Commitment equal to
that of the Lender being replaced and shall make Advances in the aggregate
principal amount equal to the aggregate outstanding amount of the Advances of
the Lender being replaced, and (iii) upon such execution of such documents
referred to in clause (ii) and the payment of amounts referred to in clause (i),
the replacement commercial bank shall constitute a "Lender" hereunder with a
Commitment as so specified and the Lender being so replaced shall no longer
constitute a "Lender" hereunder except with respect to such provisions hereunder
which by their terms survive the termination of the Agreement, or (b) terminate
the Commitment of such Lender provided that (i) the obligations of the Company
owing to the Lender being terminated (including such increased costs) shall be
paid in full to such Lender concurrently with such termination, (ii) the Total
Commitments shall be reduced by the Commitment of the terminated Lender, (iii)
the Commitment Proportion of each Lender shall be recalculated in accordance
with the reduced Total Commitments, and (iv) the Lender being so terminated
shall no longer constitute a "Lender" hereunder except for purposes of the
provision which by their terms survive the termination of this Agreement.
Section 8.8 Illegality. Notwithstanding any other provision of this
----------
Agreement, if any Lender shall determine (which determination shall, upon notice
thereof to the Company and the other Lenders, be conclusive and binding on the
Company) that the introduction of or any change in or in the interpretation of
any law makes it unlawful or any central bank or other governmental authority
asserts that it is unlawful for such Lender or its Facility Office to honor its
obligation to make or maintain LIBOR Advances hereunder, then such Lender shall
promptly notify the Company thereof (with a copy to the Agent) and such Lender's
obligation to make LIBOR Advances shall be suspended until such time as such
Lender may again make and maintain such type of LIBOR Advances (in which case
the provisions of Section 8.9 hereof shall be applicable).
-----------
28
<PAGE>
Section 8.9 Reference Rate Advances pursuant to Section 8.8. If the
------------------------------------------------
obligation of any Lender to make LIBOR Advances shall be suspended pursuant to
Section 8.8 hereof (Advances of such type being herein called "Affected
--------
Advances"), all Advances which would otherwise be made by such Lender shall be
- --------
made instead as Reference Rate Advances (and, if an event referred to in
Section 8.8 hereof has occurred and such Lender so requests by notice to the
- -----------
Company with a copy to the Agent, all Advances of such Lender then outstanding
shall be automatically converted into Reference Rate Advances on the date
specified by such Lender in such notice) and, to the extent that Affected
Advances are so made as (or converted into) Reference Rate Advances, all
payments of principal which would otherwise be applied to such Lender's Affected
Advances shall be applied instead to its Reference Rate Advances.
Section 8.10 Market Disruption. If, in relation to any LIBOR Advance, the
-----------------
Agent is unable to make the determination of the LIBOR Rate applicable thereto
required to be made by it as provided herein because (i) none of Telerate Page
3750 or any successor or similar service is available or the failure or
inability of at least two of the Reference Lenders to supply the quotation
necessary to make such determination, or (ii) if the Majority Lenders determine
(which determination, absent manifest error, shall be binding and conclusive on
all parties) that LIBOR for any Interest Period for a requested Advance will not
adequately reflect the cost to the Lenders of making, funding or maintaining an
Advance with interest based on such rates for such Interest Period, then the
Agent shall notify the Company and the Lenders that the Agent is unable to make
such determination and the reasons therefor by telephone or in writing no later
than 11:30 a.m. on the Drawdown Date therefor. If a LIBOR Advance was requested,
the Reference Rate shall be applicable to such LIBOR Advance, commencing on the
Drawdown Date therefor, unless the Company, no later than 10:00 a.m. on such
date, shall revoke such Advance Request.
Section 8.11 Compensation. The Company shall pay to the Agent for the
-------------------------
account of each Lender, upon the written request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost or expense which such Lender
reasonably determines is attributable to:
(a) any payment or conversion of a LIBOR Advance made by such
Lender on a date other than the last day of the Interest Period for such
LIBOR Advance; or
(b) any failure by the Company to borrow a LIBOR Advance from such
Lender on the date for such borrowing specified in the relevant LIBOR
Advance Request given pursuant to Section 3.2 hereof.
-----------
Without limiting the effect of the preceding sentence, with respect to LIBOR
Advances, such compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest which otherwise would have accrued on the
principal amount so paid or converted or not borrowed for the period from the
date of such payment, conversion or failure to borrow to the last day of the
Interest Period for such Advance (or, in the case of a failure to borrow, the
Interest Period for such Advance which would have commenced on the date
specified for such borrowing) at the applicable rate of interest for such
Advance provided for herein over (ii) the
29
<PAGE>
interest component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender). Notwithstanding the foregoing, the amount
payable to any Lender under this Section shall exclude, in the case of any
prepayment or conversion pursuant to Section 8.8 or 8.9 hereof, the Applicable
----------- ---
Margin.
ARTICLE 9
CONDITIONS PRECEDENT
Section 9.1 Closing. The first Advance Request may not be given unless
-------
the Agent has received all of the following documents (with copies for the
Lenders of all items except articles of incorporation and bylaws), each of which
shall be in form and substance satisfactory to the Agent and its counsel and
shall be delivered to the Agent on or prior to the date of the execution of this
Agreement:
(a Certified copies of the articles of incorporation and bylaws of
the Company and all corporate action taken by the Company approving this
Agreement and borrowings by the Company hereunder (including, without
limitation, a certificate setting forth the resolutions of the board of
directors of the Company adopted in respect of the transactions contemplated
hereby).
(b A certificate of the Company in respect of each of the officers
(with specimen signatures) (i) who is authorized to sign this Agreement, the
Notes, the other Loan Documents, or the Advance Request on behalf of the
Company and (ii) who shall, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in connection with
this Agreement and the transactions contemplated hereby. The Agents and each
Lender may conclusively rely on such certificates until they receive notice in
writing from the Company to the contrary.
(c A certificate of a senior officer of the Company to the effect
that (i) the representations and warranties made by the Company in Article 10
----------
hereof are true on and as of the date of this Agreement, (ii) the Company is not
in default in performance of any of its covenants in Article 11 to the extent
----------
they are to have been performed as of such date, (iii) no Material Adverse
Effect has occurred since December 31, 1998 and is continuing, and (iv) no
Default has occurred and is continuing as of the date of this Agreement.
(d Written opinions of the Counsel for the Company acceptable to the
Agent, addressed to the Agents and the Lenders in substantially the form of
Exhibit E hereto, with such modifications, additions, alterations, exceptions,
- ---------
assumptions and provisions as shall be acceptable to the Agent.
30
<PAGE>
(e The Notes, duly executed by the Company, payable to the order of
each of the Lenders.
(f Certificates of good standing for the Company from California,
Oregon, Washington and Idaho.
(g A copy of the 364-Day Credit Agreement, duly executed by all
parties thereto.
(h The Agent shall have received for its own account, or for the
account of each Lender, as the case may be, all fees, costs and expenses due and
payable pursuant to Sections 2.6 and 14.5.
------------ ----
(i Such other instruments and documents as any of the Agent or its
counsel may have reasonably requested.
Section 9.2 Initial and Subsequent Advances. The obligation of each
-------------------------------
Lender to make Advances to the Company upon the occasion of each borrowing
hereunder is subject to the further conditions precedent that, as of the date of
such Advances and after giving effect thereto: (a) the principal amount of the
proposed Advances is not more than the Available Facility Amount at such time;
(b) no Default shall have occurred and be continuing; (c) the representations
and warranties contained in Sections 10.1, 10.4, 10.5, 10.6, 10.7, 10.9 and
------------- ---- ---- ---- ---- ----
10.11 are true and correct as of the date of such borrowing except for changes
- -----
reflecting transactions permitted by this Agreement; (d) no authorizations,
approvals or consents of, and no filings or renegotiations with, any
governmental or regulatory authority or agency are necessary for the incurring
of obligations in connection with such Advances, other than approvals which have
been duly obtained and are in full force and effect; and (e) the incurring of
obligations in connection with such Advances does not conflict with or result in
a breach of any applicable law or regulation, or any order, writ, injunction or
decree of any court or regulatory authority.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agents and the Lenders that:
Section 10.1 Corporate Existence. Each of the Company and its active
-------------------
Subsidiaries: (a) is a corporation duly organized and validly existing and in
good standing under the laws of the jurisdiction of its incorporation; (b) has
all requisite corporate power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted except where failure to
have such governmental licenses, authorizations, consents and approvals would
not have a Material
31
<PAGE>
Adverse Effect and; (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would have a Material Adverse Effect.
Section 10.2 Financial Condition. As of the Effective Date, the
-------------------
consolidated balance sheet and statement of consolidated capitalization of the
Company and its consolidated Subsidiaries as at December 31, 1998 and the
related statements of consolidated income, cash flows and common stock equity,
with the opinion thereon of Arthur Andersen, L.L.P., heretofore furnished to
each of the Lenders, present fairly, in all material respects, the consolidated
financial position of the Company and the consolidated Subsidiaries as at said
date and the consolidated results of their operations and cash flows for the
fiscal year ended on said date, in conformity with GAAP. Neither the Company
nor any of its Subsidiaries had on said date any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in said financial statements as at said
date. There has been no Material Adverse Effect since December 31, 1998 except
as disclosed in the 1934 Act Reports.
Section 10.3 Litigation. As of the Effective Date and except as
----------
disclosed in the 1934 Act Reports or in writing to the Agents and the Lenders,
there are no legal or arbitral proceedings or investigations, or any proceedings
by or before any governmental or regulatory authority or agency, now pending or
(to the knowledge of the Company) threatened against the Company or any of its
Subsidiaries which (i) the Company would be required to disclose in any 1934 Act
Report or (ii) would have a Material Adverse Effect.
Section 10.4 No Breach. None of the execution and delivery of this
---------
Agreement, the Notes, and the other Loan Documents, the consummation of the
transactions herein contemplated or compliance with the terms and provisions
hereof conflict with or result in a breach of, or require any consent under, the
articles of incorporation or bylaws of the Company, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which it is bound or to
which it is subject that is material to the Company and its Subsidiaries, taken
as a whole, or constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the revenues or
assets of the Company or any of its Subsidiaries pursuant to the terms of any
such agreement or instrument.
Section 10.5 Corporate Action. The Company has all necessary corporate
----------------
power and authority to execute, deliver and perform its obligations under the
Agreement, the Notes and the other Loan Documents; and the execution, delivery
and performance by the Company of this Agreement, the Notes and the other Loan
Documents have been duly authorized by all necessary corporate action on its
part; and this Agreement, the Notes and the other Loan Documents have been duly
and validly executed and delivered by the Company and constitute its legal,
valid and binding obligation, enforceable in accordance with its terms, except
(a) as may be limited by
32
<PAGE>
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights in general, and (b) as
enforceability thereof may be subject to general principles of equity,
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
Section 10.6 Approvals. No authorizations, approvals or consents of,
---------
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by the
Company of this Agreement, the Notes or the other Loan Documents or for the
validity or enforceability thereof other than any filings which may hereafter be
required to be made in the future, the failure to make which shall not render
this Agreement invalid.
Section 10.7 Margin Stock. Neither the Company nor any of its
------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock or margin securities (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System) and no part of the proceeds of
any Advance hereunder shall be used to acquire or carry any margin stock or
margin securities or extend credit to others for such purpose.
Section 10.8 ERISA. As of the Effective Date, the Company and each of
-----
its Subsidiaries have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respect with the presently applicable provisions of ERISA and
the Code, and have not incurred any liability to the PBGC or any Plan or
Multiemployer Plan.
Section 10.9 Pari Passu Status. Under applicable laws in force at the
-----------------
date hereof, the claims and rights of the Lenders against the Company under this
Agreement, the Notes or the other Loan Documents shall not be subordinate to,
and shall rank at least pari passu in all respects with, the claims and rights
---- -----
of any other holders of unsecured indebtedness of the Company.
Section 10.10 Environmental Matters. As of the Effective Date and
---------------------
except as disclosed in the 1934 Act Reports, the Company is in compliance with
applicable Environment Laws except for such non-compliance as could not have a
Material Adverse Effect.
Section 10.11 Year 2000 Matters. Any reprogramming required to permit
-----------------
the proper functioning (but only to the extent that such proper functioning
would otherwise be impaired by the occurrence of the year 2000) in and following
the year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Company or any of its
Subsidiaries or used or relied upon in the conduct of their business (including
any such systems and other equipment supplied to the Company by others), and the
testing of all such systems and other equipment as so reprogrammed, will be
completed as specified in the Company's Year 2000 Readiness Disclosure. The
costs to the Company and its Subsidiaries that
33
<PAGE>
have not been incurred as of the date hereof for such reprogramming and testing
and for the other reasonably foreseeable consequences to them of any improper
functioning of other computer systems and equipment containing embedded
microchips due to the occurrence of the year 2000 could not reasonably be
expected to result in a Default or Event of Default or to have a Material
Adverse Effect. Except for any reprogramming referred to above, the computer
systems of the Company and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient for the conduct of their business as currently conducted.
ARTICLE 11
COVENANTS OF THE COMPANY
The Company agrees with the Agents and each Lender that so long as any of
the Commitments are in effect and until payment in full of all Advances
hereunder (other than pursuant to any continuing indemnification obligations
under this Agreement), all interest thereon and all other amounts payable by the
Company hereunder, the Company will perform the obligations set forth in this
Article 11:
- ----------
Section 11.1 Financial Statements. The Company shall deliver to the
--------------------
Agent, with sufficient copies for each Lender:
(a as soon as available and in any event within 90 days after the
end of each of the first three fiscal quarterly periods of each fiscal year of
the Company, the consolidated balance sheet of the Company and its consolidated
Subsidiaries as of the end of such quarterly period and the related consolidated
statements of income and cash flows, for the respective three, six or nine
months then ended, set forth in the Company's quarterly reports on Form 10-Q (or
any other report substituted therefor that contains substantially the
information required to be contained in such reports on the date hereof): any
report other than a report filed with the Securities and Exchange Commission
shall be accompanied by a certificate of a financial or accounting officer of
the Company, which certificate shall state that said financial statements
present fairly, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company and its consolidated
Subsidiaries in conformity with GAAP, as at the end of, and for, such period
(subject to normal year-end audit adjustments and provided that certain footnote
disclosure and other details required to be included in financial statements
prepared in conformity with GAAP but not normally included in interim, unaudited
financial statements need not be included in such interim financial statements);
(b as soon as available and in any event within 120 days after the
end of each fiscal year of the Company, statements of consolidated income, cash
flows and common stock equity and preferred stock, if any, of the Company and
the consolidated Subsidiaries for such year and the related consolidated balance
sheet as at the end of such year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year, and
34
<PAGE>
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, and a certificate of such accountants stating
that, in making the examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default;
(c promptly upon their becoming available, and in any event within
fifteen (15) days after the filing thereof with any securities exchange or the
Securities and Exchange Commission or any successor agency, one copy of each
financial statement, report, notice or proxy statement sent by the Company, any
Subsidiary or any other Affiliate controlled by the Company to its public
shareholders, and of each regular or periodic report and any registration
statement (other than such reports and registration statements pertaining solely
to employee benefits, dividends, reinvestment and corporate plans), prospectus
or written communication in respect thereof filed by the Company, any Subsidiary
or any other Affiliate controlled by the Company with any such securities
exchange or the Securities and Exchange Commission or any successor agency;
(d as soon as practicable, and in any event within thirty (30) days
after any of the events or conditions specified below with respect to any Plan
or Multiemployer Plan shall have occurred or exist with respect to any Plans, a
statement signed by a senior financial officer of the Company setting forth
details respecting such event or condition and the action, if any, which the
Company or any of its Subsidiaries proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to PBGC by the
Company or any of its Subsidiaries with respect to such event or condition):
(i any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder, with respect to a
Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided
that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA shall be a
reportable event regardless of the issuance of any waivers
in accordance with Section 412(d) of the Code);
(ii a contribution failure sufficient to give rise to a lien
under Section 302(f) of ERISA;
(iii the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan;
(iv the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the
Company or any of its
35
<PAGE>
Subsidiaries of a notice from a Multiemployer Plan that such
action has been taken by PBGC with respect to such
Multiemployer Plan;
(v the complete or partial withdrawal by the Company or any of
its Subsidiaries under Section 4201 or 4204 of ERISA from a
Multiemployer Plan, or the receipt by the Company or any of
its Subsidiaries of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA; and
(vi the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any of its
Subsidiaries to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days;
(e promptly after a vice president, the President or the Chairman of
the Board of the Company knows that any Default has occurred, a notice of such
Default, describing the same in reasonable detail;
(f no later than ten (10) Business Days after the date of promulgation
thereof by such Rating Agency, notice of any change in rating by any Rating
Agency in respect of the Company's unsecured long-term debt, together with the
details thereof, and of any announcement by any Rating Agency that its rating in
respect of such unsecured long-term debt is "under review" or that any such debt
rating has been placed on a "CreditWatch List"(R) or "watch list" or that any
similar action has been taken by such Rating Agency; and
(g from time to time such other information regarding the business,
affairs or financial condition of the Company or any of its Subsidiaries
(including, without limitation, any Plan and any reports or other information
required to be filed under ERISA) as any Lender or the Agents may reasonably
request.
The Company shall furnish to the Agent, with sufficient copies for each Lender,
at the time it furnishes each set of financial statements pursuant to paragraph
(a) or (b) above, a certificate of a financial or accounting officer of the
Company (i) to the effect that no Default has occurred and is continuing (or, if
any Default has occurred and is continuing, describing the same in reasonable
detail), and (ii) setting forth in reasonable detail the computations necessary
to determine whether the Company is in compliance with Section 11.5 hereof as of
------------
the end of the respective fiscal quarter or fiscal year.
Section 11.2 Corporate Existence, Etc. (a) The Company shall, except as
------------------------
otherwise permitted under Section 11.4, preserve and maintain its corporate
------------
existence, and (b) the Company shall, and shall cause each of its active
Subsidiaries to: (i) preserve and maintain all of
36
<PAGE>
its material rights, privileges and franchises, except to the extent that in the
opinion of the Company preservation and maintenance of any such material right,
privilege or franchise are not necessary for the operation of the Company's
business; (ii) comply with the requirements of all applicable laws (including,
without limitation, Environmental Laws), rules, regulations and orders of
governmental or regulatory authorities if failure to comply with such
requirements would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, except for any failure to comply
with the requirements of any such applicable law, rule, regulation or order
which is being contested in good faith and by proper actions or proceedings and
against which adequate reserves are being maintained to the extent required
under GAAP; (iii) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper actions or proceedings and against which adequate
reserves are being maintained to the extent required under GAAP; (iv) maintain
all of its material properties used or useful in its business in good working
order and condition, ordinary wear and tear excepted, except to the extent that
in the opinion of the Company any such property is not necessary for the
operation of the Company's business; (v) permit representatives of any Lender or
the Agent, during normal business hours and on reasonable advance notice, to
examine its books and records and to make copies and extracts therefrom, to
inspect its properties (subject to reasonable safety and security procedures of
the Company), and to discuss its business and affairs with its officers (subject
to any reasonable proprietary and confidentiality agreements of or binding upon
the Company and its Subsidiaries), all to the extent reasonably requested by
such Lender or the Agent (as the case may be); and (vi) maintain, with
financially sound and reputable insurers, insurance with respect to all property
and business of a character usually insured by corporations engaged in the same
or similar business similarly situated against such liabilities, casualties,
risks and contingencies and in such types and amounts as customary in the case
of corporations engaged in the same or similar business similarly situated.
Section 11.3 Use of Proceeds. The Company shall use (i) the initial
---------------
Advance to discharge all outstanding obligations under the Existing Credit
Agreement, if any, and (ii) the proceeds of all other Advances hereunder solely
for its general corporate purposes, including liquidity support for commercial
paper of the Company, in compliance with all applicable legal and regulatory
requirements. Neither the Company nor any of its Subsidiaries shall engage
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) and no part of the proceeds of any Advance hereunder
shall be used to acquire or carry any margin stock.
Section 11.4 Mergers. The Company will not, and will not permit any of
-------
its Subsidiaries to, consolidate with or merge into or with any Person, except
that: (i) the Company or any of its Subsidiaries may consolidate or merge with
the Company or another of the Company's Subsidiaries (provided that, in any such
merger or consolidation to which the Company is a party, the Company shall be
the surviving entity) and (ii) the Company or any of its Subsidiaries may
consolidate or merge with any other Person if the Company, or one of its
37
<PAGE>
Subsidiaries is the surviving entity and such survivor shall continue to own and
operate the Company's business and, after giving effect to a consolidation or
merger pursuant to clause (i) or (ii), no Default shall have occurred and be
continuing.
Section 11.5 Debt to Capitalization. The Company shall not permit the
----------------------
ratio of Total Debt of the Company and the consolidated Subsidiaries to Total
Capitalization to exceed 70% at any time throughout the term hereof.
Section 11.6 Pari Passu Status. The Company will ensure that the claims
-----------------
and rights of the Lenders against it under this Agreement will not be
subordinate to, and will rank at all times at least pari passu with, the claims
---- -----
and rights of all other holders of its unsecured indebtedness.
Section 11.7 Asset Dispositions, etc. The Company and its Subsidiaries,
-----------------------
taken as a whole, will not sell, transfer, lease, contribute or otherwise
convey, or grant options, warrants or other rights with respect to, all or
substantially all of its assets (including accounts receivable and capital stock
of Subsidiaries) to any Person, unless such sale, transfer, lease, contribution
or conveyance is (a) in the ordinary course of its business or is permitted by
Section 11.4; or (b) a sale, transfer or conveyance of Permitted Receivables
- ------------
pursuant to a Permitted Receivables Purchase Facility.
Section 11.8 Limitation on Debt Secured by Mortgages.
---------------------------------------
(a The Company will not, nor will it permit any Subsidiary to,
issue, assume or guarantee any Debt if such Debt is secured by a mortgage,
pledge, security interest or lien (any mortgage, pledge, security interest or
lien being hereinafter in this Section 11.8 referred to as a "mortgage" or
------------ --------
"mortgages") upon any Principal Property of the Company or of any Principal
- ----------
Subsidiary or upon any shares of stock or indebtedness of any Principal
Subsidiary (whether such Principal Property, shares of stock or indebtedness are
now owned or hereinafter acquired), without in any such case effectively
providing, concurrently with the issuance, assumption or guarantee of such Debt,
that the Notes (together with, if the Company shall so determine, any other
indebtedness of or guaranteed by the Company or such Principal Subsidiary
ranking equally with the Notes then outstanding and existing or thereafter
created) shall be secured equally and ratably with (or prior to) such Debt;
provided, however, that the foregoing restriction shall not apply to Debt
- -------- -------
secured by:
(i mortgages on property acquired, constructed or improved by
the Company or any Principal Subsidiary after the Effective Date which are
created or assumed contemporaneously with, or within 270 days after such
acquisition (or, in the case of property constructed or improved, within
270 days after the completion or commencement of commercial operation of
such property, whichever is later) to secure or provide for the payment of
any part of the purchase price of such property or cost of such
construction or improvement; provided, that if a commitment to so finance
--------
such a payment is obtained prior to or within such 270-day period and the
related mortgage is
38
<PAGE>
created within 90 days after the expiration of such 270-day period, the
applicable mortgage shall be deemed to be included in this clause (i),
provided, further, that in the case of any such construction or improvement
-------- -------
the mortgage shall not apply to any property theretofore owned by the
Company or any Subsidiary, other than any theretofore unimproved real
property on which the property so constructed, or the improvement, is
located;
(ii mortgages on any property existing at the time of
acquisition thereof (including mortgages on property acquired from a person
which is consolidated with or merged with or into the Company or a
Subsidiary) and mortgages outstanding at the time any Person becomes a
Subsidiary;
(iii mortgages in favor of the Company or any Principal
Subsidiary;
(iv mortgages in favor of the United States, any State or the
District of Columbia, any foreign country or any department, agency or
instrumentality or political subdivision of any such jurisdiction, to
secure partial, progress, advance or other payments pursuant to any
contract or statute or to secure any Debt incurred for the purpose of
financing all or any part of the purchase price or the cost of constructing
or improving the property subject to such mortgages, including mortgages to
secure Debt of the pollution control or industrial revenue bond type; and
(v any extension, renewal or replacement (or successive
extensions, renewals or replacements, in whole or in part, of any mortgage
referred to in the foregoing clauses (i) to (iv), inclusive; provided,
--------
however, that the principal amount of Debt secured thereby shall not exceed
-------
the principal amount of Debt so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or replacement
shall be limited to all or a part of the property which secured the
mortgage so extended, renewed or replaced (plus improvements on such
property).
(b In addition to Debt secured by mortgages permitted under
subsection (a) of this Section 11.8, the Company or any Principal Subsidiary may
------------
issue, assume or guarantee Debt secured by mortgages which would otherwise be
subject to the foregoing restriction, without equally and ratably securing the
Notes, in an aggregate amount which, together with all other such Debt under
this subsection (b) and the Attributable Debt in respect of Sale-Leaseback
Transactions under subsection (d) of Section 11.9, but excluding Debt incurred
------------
pursuant to a sale, transfer or conveyance of Permitted Receivables pursuant to
a Permitted Receivables Purchase Facility, does not exceed 15% of Net Tangible
Assets, as shown on or derived from a consolidated balance sheet, as of a date
not more than 90 days prior to the proposed transaction, prepared by the Company
in accordance with GAAP.
Section 11.9 Limitation on Sale-Leaseback Transactions. The Company
-----------------------------------------
shall not, and shall not permit any Principal Subsidiary to, enter into a Sale-
Leaseback Transaction unless:
39
<PAGE>
(a the lease has a term, calculated by including lessee renewal
rights, of three (3) years or less;
(b the lease is between the Company and a Principal Subsidiary or
between Principal Subsidiaries;
(c the Company or a Principal Subsidiary under Section 11.8(a) could
---------------
issue, assume or guarantee secured Debt;
(d the Company or a Principal Subsidiary under Section 11.8(b) could
---------------
issue, assume or guarantee secured Debt in an amount at least equal to the
amount of the Attributable Debt for the lease without equally and ratably
securing the Notes;
(e the Company or a Principal Subsidiary within 180 days of the
effective date of the Sale-Leaseback Transaction retires Debt of the Company or
a Principal Subsidiary (other than such Debt owed to any Principal Subsidiary)
at least equal in amount to the Attributable Debt for the lease or purchases
property that will constitute Principal Property for an amount at least equal to
the Attributable Debt for the lease. The Company or a Principal Subsidiary may
not receive credit for retirement of Debt that is subordinated to the Notes or
that is effected by payment at maturity; or
(f the Majority Lenders shall have consented to such Sale-Leaseback
Transaction (which consent shall not be unreasonably withheld).
Section 11.10 Limitation on Advances. Notwithstanding the amount of the
----------------------
Commitments, the Company shall not permit, at any time throughout the term
hereof, outstanding Advances plus outstanding commercial paper to exceed the
amount authorized by the Board of Directors of the Company from time to time.
ARTICLE 12
EVENTS OF DEFAULT
If one or more of the following events (herein called "Events of Default")
-----------------
shall occur and be continuing:
(a The Company shall default in the payment when due (i) of any
principal of any Advance (and such default shall continue unremedied for a
period of two (2) Business Days), or (ii) of any interest on any Advance or any
fees payable by the Company hereunder or in connection herewith, or of any other
monetary Obligation (and such default shall continue unremedied for five (5)
Business Days); or
40
<PAGE>
(b A default or event of default shall occur under the 364-Day
Credit Agreement; or
(c Indebtedness of the Company or any of its Subsidiaries shall not
be paid when due or is accelerated by the holders thereof, the total amount of
such unpaid or accelerated Indebtedness exceeds $50,000,000, and such default is
continuing; or
(d Any material representation or warranty made or deemed made
herein by the Company under this Agreement, or any certificate furnished by the
Company to any Lender or the Agent pursuant to the provisions hereof, shall
prove to have been incorrect in any material respect as of the time made or
furnished if such material representation or warranty or such certificate (i)
results in a Material Adverse Effect or (ii) could result in a Material Adverse
Effect; provided, however, that no incorrectness in any such representation or
-------- -------
warranty or certificate to the extent pertaining to litigation or ERISA matters
shall result in a Default; or
(e The Company shall default in the performance of any of its
obligations under Section 11.1(e) hereof (to the extent such default relates to
---------------
a Default arising from a breach of clause (a) or (b)(vi) of Section 11.2 or
------------
Sections 11.3 through 11.10 hereof, or from a breach of clause (b)(ii) of
- ------------- -----
Section 11.2, which breach in all cases has come to the attention of a vice
- ------------
president, the President or the Chairman of the Board of the Company), or
Sections 11.4 or 11.10 hereof; or the Company shall default in the performance
- ----------------------
of any of its obligations under Sections 11.6 through 11.9 hereof and such
------------- ----
default shall continue unremedied to the satisfaction of the Majority Lenders
for a period of ten (10) days after notice thereof to the Company by either the
Agent or any Lender (through the Agent); or the Company shall default in the
performance of any of its other obligations in this Agreement and such default
shall continue unremedied for a period of 30 days after notice thereof to the
Company by the Agent or any Lender (through the Agent); or
(f The Company shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property under any bankruptcy,
insolvency or similar laws, (ii) admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, or composition or readjustment of debts, (vi) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under such Bankruptcy Code,
or (vii) take any corporate action for the purpose of effecting any of the
foregoing; or
(g A case or other proceeding shall be commenced (including
commencement of such case or proceeding by way of service of process on the
Company or a Subsidiary), without the application or consent of the Company, in
any court of competent jurisdiction, seeking (i) its bankruptcy, insolvency,
reorganization, or the composition or
41
<PAGE>
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Company or of all or any substantial
part of its assets under any bankruptcy, insolvency or similar laws, or (iii)
similar relief in respect of the Company or one of its Subsidiaries under any
law relating to bankruptcy, insolvency, reorganization, or composition or
readjustment of debts, and such case shall continue undismissed and unstayed and
in effect for a period of 45 days, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect for a period of 45 days; or an order for relief against the Company shall
be entered in an involuntary case under such Bankruptcy Code; or
(h A judgment or judgments for the payment of money in excess of
$50,000,000 in the aggregate shall be entered by a court or courts against the
Company or any of its Subsidiaries and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution thereof
shall not be procured, within 60 days from the date of entry thereof and in any
event not later than the date of any proposed sale or levy thereunder and the
Company or the relevant Subsidiaries shall not, within such period of 60 days,
or such longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(i An event or condition specified in Section 11.1(d) hereof shall
---------------
occur or exist with respect to any Plan or Multiemployer Plan and, as a result
of such event or condition, together with all other such events or conditions,
the Company or any of its Subsidiaries shall incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing) in an aggregate
amount exceeding $30,000,000, which amount is payable while this Agreement is in
effect;
THEREUPON, (i) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Article 12, the Agent shall, upon request of the
----------
Majority Lenders, by notice in writing to the Company, cancel the Commitments
and/or declare the principal amount then outstanding of and the accrued interest
on the Advances and all other amounts payable by the Company hereunder to be
immediately due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Company; and (ii) in the case of
the occurrence of an Event of Default referred to in clause (f) or (g) of this
Article 12, the Commitments shall be automatically canceled and the principal
- ----------
amount then outstanding of, and the accrued interest on, the Advances and all
other amounts payable by the Company hereunder shall become automatically
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company. The rights of the Agents and the Lenders provided for herein are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity.
ARTICLE 13
THE AGENTS
42
<PAGE>
Section 13.1 Appointment, Powers and Immunities. Each Lender hereby
----------------------------------
irrevocably appoints and authorizes the Agent to act as its administrative
agent, the Syndication Agent to act as syndication agent, the Documentation
Agent to act as documentation agent, and the Co-Agents to act as co-agents,
under and for purposes of this Agreement, the Notes and the other Loan Documents
with such powers as are specifically delegated to the Agents by the terms of
this Agreement, the Notes and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. The Agents (which term as used in
this sentence and in Section 13.5 hereof and the first sentence of Section 13.6
------------ ------------
hereof shall include reference to its affiliates and its own and its affiliates=
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement, the Notes
and the other Loan Documents, and shall not by reason of this Agreement, the
Notes and the other Loan Documents be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, the Notes and the other Loan Documents,
or in any certificate or other document referred to or provided for in, or
received by any of them under, this Agreement, the Notes and the other Loan
Documents, or for the value, execution, validity, effectiveness, genuineness,
enforceability, collectibility, or sufficiency of this Agreement, the Notes and
the other Loan Documents or any other document referred to or provided for
herein or for any failure by the Company or any other Person to perform any of
its obligations hereunder or thereunder; (c) shall not be required to initiate
or conduct any litigation or collection proceedings pursuant to this Agreement,
the Notes and the other Loan Documents except to the extent requested by the
Majority Lenders; and (d) shall not be responsible for any action taken or
omitted to be taken by them pursuant to this Agreement, the Notes and the other
Loan Documents or under any other document or instrument referred to or provided
for herein or therein or in connection herewith or therewith, except for their
own gross negligence or willful misconduct. The Agents may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by them.
Section 13.2 Reliance by the Agents. The Agents shall be entitled to
----------------------
rely upon any certification, notice or other communication (including any
thereof by telephone, telex or telefacsimile) believed by any of them to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agents. As to any
matters not expressly provided for by this Agreement, the Notes and the other
Loan Documents, the Agents shall in all cases be fully protected in acting, or
in refraining from acting, hereunder or thereunder in accordance with
instructions signed by the Majority Lenders or such larger percentage of the
Lenders as may be required by any provision of this Agreement, and such
instructions of the Majority Lenders or such larger percentage of the Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders.
Section 13.3 Default. The Agent shall be deemed to have no knowledge of
-------
the occurrence of a Default (other than the non-payment of principal of or
interest on Advances or of
43
<PAGE>
fees hereunder) unless the Agent has received notice from a Lender or the
Company specifying such Default and stating that such notice is a "Notice of
Default." In the event that the Agent receive such a notice of the occurrence of
a Default, the Agent shall give prompt notice thereof to the Lenders (and shall
give each Lender prompt notice of each such non-payment). The Agent shall
(subject to Section 13.7 hereof) take such action with respect to such Default
------------
as shall be directed by the Majority Lenders or such larger percentage of the
Lenders as may be required by any provision of this Agreement, provided that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable in the best
interest of the Lenders.
Section 13.4 Rights as a Lender. With respect to its respective
------------------
Commitments and the Advances made by it, the Agent, the Syndication Agent, the
Documentation Agent and the Co-Agents in their capacity as Lenders hereunder
shall have the same rights and powers under this Agreement, the Notes and the
other Loan Documents as any other Lender and may exercise the same as though it
were not acting as the Agent, the Syndication Agent, the Documentation Agent and
the Co-Agents, respectively, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include each of the Agents in its individual
capacity. The Agents and their Affiliates may (without having to account
therefor to any Lender), accept deposits from, lend money to and generally
engage in any kind of banking, trust, financial advisory or other business with
the Company (and any of its affiliates) as if it were not acting as an Agent,
and without notice to or consent of the Lenders, the Agents may accept fees and
other consideration from the Company for services in connection with this
Agreement, the Notes, the other Loan Documents or otherwise without having to
account for the same to the Lenders.
Section 13.5 Indemnification by Lenders. The Lenders agree to indemnify
--------------------------
the Agent and its officers, directors, employees and agents (to the extent not
reimbursed under Section 14.5 hereof, but without limiting the obligations of
------------
the Company under said Section 14.5), ratably in accordance with the aggregate
------------
principal amount of the outstanding Advances made by the Lenders (or, if no
Advances are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement, the Notes, the other Loan Documents or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
(including, without limitation, the costs and expenses which the Company is
obligated to pay under Section 14.3 hereof) or the enforcement of any of the
------------
terms of this Agreement, the Notes, the other Loan Documents or of any such
other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified. The obligation of the Lenders in
this Section shall survive the payment of the Advances and of any other sums due
from Company hereunder and the termination of the Commitments.
44
<PAGE>
Section 13.6 Non-Reliance on the Agents and other Lenders. Each Lender
--------------------------------------------
agrees that it has, independently and without reliance on the Agents or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and the Subsidiaries
and decision to enter into this Agreement and that it shall, independently and
without reliance upon the Agents or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement. The Agents shall not be required to keep itself informed as to the
performance or observance by the Company of this Agreement or any other document
referred to or provided for herein or to inspect the properties or books of the
Company or any Subsidiary. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agents shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of the Company or any Subsidiary (or any of their
affiliates) which may come into the possession of the Agents or any of their
Affiliates. Each Lender further acknowledges that (i) the Agents have responded
satisfactorily to any request by such Lender for information regarding such
credit facilities; and (ii) the Agents and their Affiliates may manage their
relationships with the Company under such facilities as it sees fit as though it
were not an Agent hereunder.
Section 13.7 Failure to Act. Except for action expressly required of
--------------
the Agent hereunder, the Agents shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Section 13.8 Resignation. Any of the Agents may resign as such at any
-----------
time upon at least 30 days prior notice to the Company and the Lenders. In the
event of any such resignation of the Agent, the Company shall as promptly as
practicable appoint a successor Agent who must be or immediately become a
Lender. In the event no such successor is appointed, the Majority Lenders shall
as promptly as practicable appoint a successor agent to such resigning Agent.
In the event no such successor is so appointed within 30 days of any such
notice, any Lender may apply to a court of competent jurisdiction for the
appointment of a successor agent hereunder to such resigning Agent. After any
retiring Agent's resignation hereunder as an Agent, the provisions of (i) this
Article 13 shall inure to its benefit as to any actions taken or omitted to be
- ----------
taken by it while it was an Agent, as the case may be, under this Agreement and
(ii) Section 14.8 shall continue to inure to its benefit.
------------
Section 13.9 Funding Reliance, etc. Unless the Agent shall have been
---------------------
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., New
York, New York time, on the day of any Reference Rate Advance or the day prior
to any other Advance, that such Lender will not make available the amount which
would constitute its percentage of such Advance on the date specified therefor,
the Agent may assume that such Lender has made such amount available to the
Agent and, in reliance upon such assumption, make available to the Company a
corresponding amount. If and to the extent that such Lender shall not have made
such amount
45
<PAGE>
available to the Agent, such Lender and the Company severally agree to repay
such Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date the Agent made such amount available to the
Company to the date such amount is repaid to the Agent, at the Federal Funds
Rate.
Section 13.10 Syndication Agent, Documentation Agent and Co-Agents.
----------------------------------------------------
None of the Lenders identified on the facing page or signature pages of this
Agreement as either Syndication Agent, Documentation Agent or Co-Agents shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 14
MISCELLANEOUS
Section 14.1 Waiver. No failure on the part of the Agents or any Lender
------
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
Section 14.2 Government Regulation. Anything contained in this
---------------------
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Company in violation of any limitation or prohibition
provided by any applicable statute or regulation.
Section 14.3 Taxes. Any taxes (excluding income taxes payable by the
-----
Agents or the Lenders, other than as provided in Article 8) or other similar
---------
assessments or charges payable or ruled payable by any government authority in
respect of this Agreement or any other Loan Documents shall be paid by the
Company, together with interest and penalties, if any.
Section 14.4 Notices. All notices and other communications provided for
-------
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, legible
telefacsimile transmission or in writing and telexed, telecopied, mailed or
delivered to the intended recipient at the "Address for Notices@ specified below
its name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telex (answerback confirmed
in the case of Telexes) or telecopier, or personally delivered or, in the case
of a mailed notice, upon receipt, in each case given or addressed as aforesaid,
except that notices to the Agent pursuant to Articles 2, 3, 4, 5, 12 or 13 shall
---------- - - - -- --
not be effective until actually received by the Agent. The Agents and the
Lenders shall not have any
46
<PAGE>
liability on account of any action taken or not taken by the Agents or the
Lenders in reliance upon telephonic notice (where expressly authorized by this
Agreement) or telex or telefacsimile notice.
Section 14.5 Expenses, Etc. The Company agrees to pay or reimburse each
--------------
of the Lenders and the Agents for paying: (a) the fees and out-of-pocket
expenses in connection with (i) the negotiation, preparation, execution and
delivery of this Agreement, the Notes and every other Loan Document, including
schedules and exhibits, and (ii) any amendment, modification or waiver of any of
the terms of this Agreement, the Notes or any other Loan Document as from time
to time hereafter may be required; (b) all reasonable costs and expenses of the
Lenders and the Agents (including reasonable attorneys= fees and expenses,
including the allocated cost of internal counsel) in connection with the
enforcement of this Agreement, the Notes and any other Loan Documents; and (c)
all transfer, stamp, documentary or other similar taxes, assessments or charges,
including the allocated cost of internal counsel, levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein.
Section 14.6 Amendments, Etc. No amendment or waiver of any provision
----------------
of this Agreement or consent to any departure by any party therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Company and the Majority Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
--------
writing and signed by all the Lenders, do any of the following: (a) waive any
of the conditions specified in Article 9, (b) increase the Commitments of the
---------
Lenders or of any Lender or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Advances or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Lenders, which shall
be required for the Lenders or any of them to take any action hereunder, or (f)
amend this Section 14.6; and provided, further, that no amendment, waiver or
------------ -------- -------
consent shall, unless in writing and signed by the Agent affected in addition to
the Lenders required above to take such action, affect the rights or duties of
the Agents under this Agreement. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 14.6 shall be binding
------------
upon each holder of any indebtedness resulting from the making of Advances
hereunder at the time outstanding, each future holder of any such indebtedness,
and if signed by the Company, on the Company.
Section 14.7 Sales and Transfers, etc. of Advances and Notes;
------------------------------------------------
Participation in Advances and Notes.
- -----------------------------------
(a) Any Lender may at any time sell to one or more banks or other
entities ("Participants") participating interests in any Advance owing to such
------------
Lender, any Note held by such Lender, the Commitment of such Lender or any other
interest of such Lender hereunder,
47
<PAGE>
provided that no Lender may sell any participating interests in any such
- --------
Advance, Note, Commitment or other interest hereunder without also selling to
such Participant the appropriate share of its Advances, Note, Commitments and
other interests hereunder related thereto, and provided further that no Lender
-------- -------
shall transfer, grant or assign any participation under which the Participant
shall have rights to approve any amendment to or waiver of this Agreement except
to the extent such amendment or waiver would (i) increase the amount of such
Lender's Commitment, (ii) reduce the principal of, or interest on, any of such
Lender's Advances, or any fees or other amounts payable to such Lender
hereunder, (iii) postpone any date fixed for any scheduled payment of principal
of, or interest on, any of such Lender's Advances, or any fees or other amounts
payable to such Lender hereunder or (iv) release all or substantially all
collateral security, if any, for any Obligation, except as otherwise
specifically provided in any Loan Document. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Note for all purposes
under this Agreement and the Company and the Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. The Company agrees that if amounts outstanding
under this Agreement and the Notes are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agreement and any Note
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement or any Note; provided that such
--------
right of setoff shall be subject to the obligation of such Participant to share
with the Lenders, and the Lenders agree to share with such Participant, as
provided in Section 14.10. The Company also agrees that each Participant shall
-------------
be entitled to the benefits of Article 8 with respect to its participation in
---------
the Commitments and the Advances outstanding from time to time; provided that no
--------
Participant shall be entitled to receive any greater amount pursuant to such
provisions than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred; and provided, further, that
-------- -------
each Participant shall have complied with the provisions of Section 14.7(e).
---------------
(b) (i) Any Lender may at any time sell to any Lender or any
affiliate thereof, and, with the consent of the Agent and the Company (which
shall not be unreasonably withheld or delayed), to one or more banks or
financial institutions ("Purchasing Lenders") all or any part of its rights and
------------------
obligations under this Agreement and the Notes, pursuant to a Transfer
Certificate in the form attached as Exhibit I hereto, executed by such
---------
Purchasing Lender and such transferor Lender (and, in the case of a Purchasing
Lender which is not then a Lender or an affiliate thereof, by the Company) and
the Agent and delivered to the Agent; provided that each such sale to a
--------
Purchasing Lender shall be in an amount of $5,000,000 or more; and provided,
--------
further, that no Lender may sell any Commitment to a Purchasing Lender without
- -------
also selling to such Purchasing Lender the appropriate pro rata share of its
--- ----
Notes and Advances thereunder.
48
<PAGE>
(ii) Upon such execution, delivery and acceptance as set forth
above, from and after the Transfer Effective Date determined pursuant to such
Transfer Certificate (x) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Transfer Certificate, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein and
(y) the transferor Lender thereunder shall, to the extent provided in such
Transfer Certificate be released from its obligations under this Agreement (and,
in the case of an Transfer Certificate covering all or the remaining portion of
a transferor Lender's rights and obligations under this Agreement, such
transferor Lender shall cease to be a party hereto). Such Transfer Certificate
shall be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitments arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Notes. On or prior to the Transfer Effective Date
determined pursuant to such Transfer Certificate, the Company, at its own
expense, shall execute and deliver to the Agent in exchange for any surrendered
Notes, a new Note payable to the order of such Purchasing Lender in an amount
equal to the Commitments assumed by it pursuant to such Transfer Certificate,
and, if the transferor Lender has retained a Commitment or Advance hereunder, a
new Note to the order of the transferor Lender in an amount equal to the
Commitment retained by it hereunder. The new Notes to be held by the Purchasing
Lender shall be dated the Effective Date and the new Notes to be held by the
transferor Lender shall be dated the date of the Notes being surrendered and all
such Notes shall otherwise be in the form of the Notes replaced thereby. The
Notes surrendered by the transferor Lender shall be returned by the Agent to the
Company marked "replaced."
(c) Upon its receipt of a Transfer Certificate executed by a
transferor Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, by the Company (if the
consent of the Company is required)) and the Agent together with payment to the
Agent hereunder of a registration and processing fee of $2,500, the Agent shall
(i) promptly accept such Transfer Certificate and (ii) on the Transfer Effective
Date determined pursuant thereto give notice of such acceptance and recordation
to the Lenders and the Company.
(d) The provisions of the foregoing clauses (b) and (c) shall not
----------- ---
apply to or restrict, or require the consent of or any notice to any Person to
effectuate, the pledge or assignment by any Lender of its rights under this
Agreement and its Notes to any Federal Reserve Lender.
(e) If, pursuant to this Section 14.7 any interest in this Agreement
------------
or any Note is transferred to any transferee (a "Transferee") which is organized
----------
under the laws of any jurisdiction other than the United States, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Lender (for the benefit of the
transferor Lender, Agents and the Company) that under applicable law and
treaties no taxes will be required to be withheld by the Agent, the Company or
the transferor Lender with respect to any payments to be made to such Transferee
in respect of the Advances,
49
<PAGE>
(ii) to furnish to the transferor Lender (and, in the case of any Purchasing
Lender, the Agents and the Company) either U.S. Internal Revenue Service Form
4224 or U.S. Internal Revenue Service Form 1001 (wherein such Transferee claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) to agree (for the benefit of the
transferor Lender, the Agents and the Company) to provide the transferor Lender
(and, in the case of any Purchasing Lender, the Agents and the Company) a new
Form 4224 or Form 1001 upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S. laws
and regulations and amendments duly executed and completed by such Transferee,
and to comply from time to time with all applicable U.S. laws and regulations
with regard to such withholding tax exemption.
Section 14.8 Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Commitments,
the Company hereby agrees to indemnify and hold the Agents and each Lender and
each of their respective directors, officers, employees, affiliates and agents
(collectively, the "Indemnified Parties") harmless from and against any and all
-------------------
losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable fees and disbursements of counsel amounts paid in
settlement and court costs) (collectively, the "Indemnified Liabilities"), which
-----------------------
may be incurred by or asserted against the Indemnified Parties or any of them,
in connection with or arising out of or resulting from the action or inaction of
the Company or any of its Subsidiaries in connection with: (a) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of any Advance; and (b) the entering into and performance of this
Agreement and any other Loan Document by any of the Indemnified Parties.
Notwithstanding anything herein to the contrary, the Company shall not be liable
or responsible for Indemnified Liabilities to the extent a court of competent
jurisdiction has found such Indemnified Liabilities resulted from such
Indemnified Person's own negligence or willful misconduct.
Section 14.9 Set-off. Upon (i) the occurrence and during the
-------
continuance of any Default, (ii) the making of the request by the Majority
Lenders (or any greater percentage of the Lenders) specified in Article 12 to
----------
the Agent to declare the Advances and other amounts due hereunder to be
immediately due and payable, or (iii) obtaining the consent of the Majority
Lenders, each Lender hereby is authorized at any time and from time to time,
without prior notice to the Company (any such notice being expressly waived by
the Company), to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender (or any bank controlling such Lender) to or for
the credit or the account of the Company against any and all obligations of the
Company now or hereafter existing under this Agreement, irrespective of whether
or not such Lenders shall have made any demand under this Agreement and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
Company (through the Agent) after any such set-off and application made by such
Lender, provided, however, that the failure to give such notice shall not affect
-------- -------
the validity of such set-off and application. The rights of each Lender under
this Section 14.9 are in addition to other rights and remedies (including other
------------
rights of set-off) which such Lender may have.
50
<PAGE>
Section 14.10 Sharing of Payments, Etc. If any Lender shall obtain any
-------------------------
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances made by it in excess of its
ratable share of payments on account of the Advances obtained by all of the
Lenders, such Lender shall forthwith advise the Agent of the receipt of such
payment, and within one Business Day of such receipt shall purchase from the
other Lenders (through the Agent) such participation in the Advances made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
-------- -------
of such excess payment is thereafter recovered by or on behalf of the Company
from such purchasing Lender, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. The
Company agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 14.10 may exercise all of its rights of payment
-------------
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Company in the amount of such
participation. No documentation other than notices and the like referred to in
this Section 14.10 shall be required to implement the terms of this Article.
------------- -------
The Agent shall keep records (which shall be conclusive absent manifest error)
of participation pursuant to this Section 14.10 and shall in each case notify
-------------
the Lenders following any such purchases.
Section 14.11 Other Transactions. Nothing contained herein shall
------------------
preclude the Agents or any Lender from engaging in any transaction, in addition
to those contemplated by this Agreement or any other Loan Document, with the
Company or any of its Affiliates in which the Company or such Affiliate is not
restricted hereby from engaging with any other Person.
Section 14.12 Nonliability of Lenders. The relationship between the
-----------------------
Company on the one hand and the Lenders and the Agents on the other hand shall
be solely that of borrower and lender. None of the Agents nor any Lenders shall
have any fiduciary responsibilities to the Company or any of its Subsidiaries or
Affiliates. None of the Agents nor any of the Lenders undertakes any
responsibility to the Company or any of its Subsidiaries or Affiliates to review
or inform the Company of any matter in connection with any phase of the
Company's or such Subsidiary's or Affiliate's business or operations.
Section 14.13 Severability. In case any provision in or obligation
------------
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 14.14 Survival. All agreements, representations and warranties
--------
made herein are made as of the respective dates stated herein and shall survive
the execution and delivery of this Agreement and the making of the Advances
hereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the obligations of the Company under Sections 8.1 through 8.4, 8.11,
------------ --- ----
14.3, 14.5 and 14.8 hereof shall survive any termination of this Agreement, the
- ---- ---- ----
other Loan Documents, the repayment of the Advances and the termination of the
Commitments.
51
<PAGE>
Section 14.15 Captions and Headings. Captions and section headings
---------------------
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
Section 14.16 Counterparts. This Agreement may be executed in any
------------
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement shall become effective when
counterparts hereof executed on behalf of the Company and each Lender (or notice
thereof satisfactory to the Agent) shall have been received by the Agent and
notice thereof shall have been given by the Agent to the Company and each
Lender.
Section 14.17 Numbers of Documents. All statements, notices, closing
--------------------
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the Lenders
and each of the Agents.
Section 14.18 Governing Law. THIS AGREEMENT, THE NOTES, AND EACH OTHER
-------------
LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Section 14.19 Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
AGENTS, THE LENDERS OR THE COMPANY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY
IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE
52
<PAGE>
EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS.
Section 14.20 Waiver of Jury Trial. THE COMPANY, THE AGENTS AND THE
--------------------
LENDERS HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE NOTES, THE
OTHER LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS CREDIT TRANSACTION AND THE LENDER/COMPANY RELATIONSHIP THAT IS
BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including, without limitation, contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. The Agents, the Lenders and the Company each acknowledge that
this waiver is a material inducement to enter into a business relationship, that
each has already relied on the waiver in entering into this Agreement, the Notes
and the other Loan Documents and that each will continue to rely on the waiver
in their related future dealings. The Agents, the Lenders and the Company
further warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT, THE NOTES, THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE ADVANCES. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
Section 14.21 Entire Agreement. This Agreement, the Notes and the other
----------------
Loan Documents embody the entire agreement and understanding among the Company,
the Lenders and the Agents, and supersede all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for the fee letter referenced in
Section 2.6(b) hereof, and any prior arrangements made with respect to the
- --------------
payment by the Company of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the
Agents or the Lenders.
Section 14.22 Renewal, Extension and Rearrangement. All provisions of
------------------------------------
this Agreement and any other Loan Document relating to the Notes or the other
Obligations shall apply with equal force and effect to each and all promissory
notes or other agreements or instruments hereafter
53
<PAGE>
executed which in whole or in part represent a renewal, extension, increase or
rearrangement of any part of the original Notes or Obligations.
Section 14.23 No Oral Agreements. THIS WRITTEN AGREEMENT, THE NOTES,
------------------
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
54
<PAGE>
The parties hereto have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first above
written.
PG&E GAS TRANSMISSION,
NORTHWEST CORPORATION
By________________________________________
Name: Jeffrey J. McParland
Title: Senior Vice President, Chief
Financial Officer and Treasurer
Address:
2100 Southwest River Parkway
Portland, OR 97201
Telephone No.: (503) 833-4142
Telefacsimile No.: (503) 833-4907
Attention: Deanne M. Franks
Assistant Treasurer
[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]
S-1
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE, as Agent
for the Lenders
By____________________________________
Name:
Title:
Address for Notices:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3691
Telefacsimile No.: (212) 856-3763
Telex No.: 6716450 (Answerback: CIBC
SYN)
Attention: MaryBeth Ross
with copies to:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3758
Telefacsimile No.: (212) 885-4911
Attention: Denis P. O'Meara
Address for payments:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
60 Wall Street
New York, New York 10260
ABA No.: 021000238
For Account of: Canadian Imperial
Bank of Commerce,
New York Agency
Account No.: 63000480
For further credit to Agented Loans
Account No.: 0709611
Reference: PG&E Gas Transmission,
Northwest Corporation
S-2
<PAGE>
CIBC INC., as a Lender
By___________________________________
Name:
Title:
Lending Office for Advances:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telex No.: 6716450 (Answerback:
CIBC SYN)
Telephone No.: (212) 856-3691
Telefacsimile No.: (212) 856-3763
Attention: MaryBeth Ross
Address for Notices:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3691
Telefacsimile No.: (212) 856-3763
Telex No.: 6716450 (Answerback: CIBC
SYN)
Attention: MaryBeth Ross
with copies to:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3758
Telefacsimile No.: (212) 885-4911
Attention: Denis P. O'Meara
S-3
<PAGE>
BARCLAYS BANK PLC, as a Co-Agent
for the Lenders and as a Lender
By______________________________________
Name:
Title:
Lending Office for Advances:
Barclays Group Inc.
222 Broadway, 12th Floor
New York, New York 10038
Attention: Client Services Unit
Telephone No.: (212) 412-1352
Telefacsimile No.: (212) 412-4090
Telex No.: 12-6195
Address for Notices:
222 Broadway, 11th Floor
New York, New York 10038
Attention: Jonathan Berman
Telephone No.: (212) 412-7525
Telefacsimile No.: (212) 412-6709
S-4
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO, as
Documentation Agent for the Lenders, as a
Co-Agent for the Lenders, and as a Lender
By_______________________________________
Name:
Title:
Lending Office for Advances:
One First National Plaza
Chicago, Illinois 60670
Telephone No.: (312) 732-8105
Telefacsimile No.: (312) 732-4840
Address for Notices:
One First National Plaza, Suite 0363
Chicago, Illinois 60670
Attention: Jane Bek
Telephone No.: (312) 732-3422
Telefacsimile No.: (312) 732-3055
With a copy to:
One First National Plaza, Suite 0634
Chicago, Illinois 60670
Attention: Lynn Pozsgay
Telephone No.: (312) 732-8705
Telefacsimile No.: (312) 732-4840
S-5
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Lender
By_______________________________________
Name:
Title:
Lending Office for Advances:
1850 Gateway Blvd.
Concord, California 94521
Telephone No.: (510) 675-7148
Telefacsimile No.: (510) 675-7531
Telex No.: 34346 (Answerback:
BANKAMER SFO)
Address for Notices:
555 California Street, 41st Floor
San Francisco, California 94104
Attention: Gary Tsuyuki
Telephone No.: (415) 622-8322
Telefacsimile No.: (415) 622-0632
Telex No.: 34346 (Answerback:
BANKAMER SFO)
With a copy to:
1050 Gateway Blvd., 4th Floor
Concord, California 94521
Attention: Sandy Schwartzkopf
Telephone No.: (510) 675-7342
Telefacsimile No.: (510) 675-7531
Telex No.: 34346 (Answerback:
BANKAMER SFO)
S-6
<PAGE>
CITICORP USA, INC., as a Lender
By_______________________________________
Name:
Title:
Lending Office for Advances:
2 Penns Way, Suite 200
New Castle, DE 19720
Attention: Mark Waldron
Telephone No.: (302) 894-6084
Telefacsimile No.: (302) 894-6120
Address for Notices:
399 Park Avenue, 4th Floor
New York, New York 10043
Attention: Sandip Sen
Telephone No.: (212) 559-1275
Telefacsimile No.: (212) 793-6130
With a copy to:
2 Penns Way, Suite 200
New Castle, DE 19720
Attention: Mark Waldron
Telephone No.: (302) 894-6084
Telefacsimile No.: (302) 894-6120
S-7
<PAGE>
THE FUJI BANK, LIMITED, Los Angeles
Agency, as a Lender
By______________________________________
Name:
Title:
Lending Office for Advances:
Los Angeles Agency
333 South Hope Street, 39th Floor
Los Angeles, California 90071
Attention: Jonathan Bigelow
Telephone No.: (213) 253-4144
Telefacsimile No.: (213) 253-4178
Address for Notices:
Los Angeles Agency
333 South Hope Street, 39th Floor
Los Angeles, California 90071
Attention: Jonathan Bigelow
Telephone No.: (213) 253-4144
Telefacsimile No.: (213) 253-4178
S-8
<PAGE>
UBS, AG, Stamford Branch, as a Lender
By______________________________________
Name:
Title:
By_____________________________________
Name:
Title:
Lending Office for Advances:
10 East 50th Street
New York, New York 10022
Telephone No.: (212) 574-3000
Telefacsimile No.: (212) 574-3180
Telex No.: 420520
Address for Notices:
222 Broadway
New York, New York 10038
Attention: Darryl Monasebian
Telephone No.: (212) 574-3103
Telefacsimile No.: (212) 574-4395
With a copy to:
222 Broadway
New York, New York 10038
Attention: Laura M. Paradiso
Telephone No.: (212) 574-4119
Telefacsimile No.: (212) 574-3180
Telex No.: 420520
S-9
<PAGE>
U.S. BANK NATIONAL ASSOCIATION, as
Syndication Agent for the Lenders, as a
Co-Agent for the Lenders and as a Lender
By_______________________________________
Name:
Title:
Lending Office for Advances:
National Corporate Banking
555 S.W. Oak Street, Suite 400
Portland, Oregon 97204
Telephone No.: (503) 275-6738
Telefacsimile No.: (503) 275-5428
Address for Notices:
National Corporate Banking
555 S.W. Oak Street, Suite 400
Portland, Oregon 97204
Attention: Aaron Gordon
Telephone No.: (503) 275-6738
Telefacsimile No.: (503) 275-5428
With a copy to:
Corporate Loan Servicing
555 S.W. Oak Street, PL-7
Portland, Oregon 97204
Attention: Jan Knox
Telephone No.: (503) 275-6561
Telefacsimile No.: (503) 275-4600
S-10
<PAGE>
EXHIBIT A
[Form of]
NOTE
$ ____________________ MAY 24, 1999
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION, a California Company (the
"Company"), FOR VALUE RECEIVED, promises to pay to the order of ______________
--------
_____ (the "Lender") on each Repayment Date and on or before the Maturity Date
------
the lesser of the principal sum of _____________ DOLLARS ($________) and the
aggregate unpaid principal amount of all Advances made by the Lender to the
Company pursuant to Sections 3.1 and 4.1 of the Agreement (as hereinafter
------------ ---
defined) in immediately available funds at the main office of Canadian Imperial
Bank of Commerce, as Agent, together with interest (whether by acceleration or
otherwise) on the unpaid principal amount hereof at the rates and on the dates
set forth in the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Amended and Restated Credit Agreement, dated as of May 24, 1999
(the "Agreement"), among the Company, Canadian Imperial Bank of Commerce, as
---------
Agent for the Lenders, The First National Bank of Chicago, as Documentation
Agent for the Lenders, U.S. Bank National Association, as Syndication Agent for
the Lenders, The First National Bank of Chicago, U.S. Bank National Association
and Barclays Bank PLC, as Co-Agents for the Lenders, and the Lenders named
therein, to which Agreement, as it may be amended from time to time, reference
is hereby made for a statement of the terms and conditions under which this Note
may be prepaid or its maturity date accelerated. Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to them
in the Agreement.
Notwithstanding all other provisions of the Agreement and this Note, none
of the terms and provisions of the Agreement or this Note shall ever be
construed to create a contract to pay the Lender for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by the Lender to the Company under applicable state or
federal law from time to time in effect, and the Company shall never be required
to pay interest in excess of such maximum amount. If for any reason interest is
paid in excess of such maximum amount (whether as a result of the payment of
this Note prior to its maturity or otherwise), then promptly upon any
determination that such excess has been paid, the Lender will, at its option,
either refund
Exhibit A - Page 1
<PAGE>
such excess to the Company or apply such excess to the principal owing under the
Agreement or this Note.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT
THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO APPLICABLE
FEDERAL LAWS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
PG&E GAS TRANSMISSION,
NORTHWEST CORPORATION
By ___________________________________
Name: Jeffery J. McParland
Title: Senior Vice President, Chief
Financial Officer and Treasurer
By ___________________________________
Name: Deanne M. Franks
Title: Assistant Treasurer
Exhibit A - Page 2
<PAGE>
SCHEDULE OF ADVANCES AND PAYMENTS OF PRINCIPAL
TO
NOTE OF PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
DATED MAY 24, 1999
<TABLE>
<CAPTION>
Amount of Amount of Unpaid Principal
Advance Made Principal Repaid Balance
------------- ---------------- ----------------
Interest Notation
Reference LIBOR Period (if Reference LIBOR Reference LIBOR Made
----
Date Rate Rate Applicable) Rate Rate Rate Rate Total By
- ------- ------------ ------ ------------ --------- ----- --------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
_______
_______
_______
_______
_______
_______
_______
_______
_______
_______
_______
_______
_______
</TABLE>
Exhibit A - Page 3
<PAGE>
EXHIBIT B
LIBOR Advance Request
---------------------
To: Canadian Imperial Bank of Commerce, as Agent
425 Lexington Avenue, 7th Floor
New York, New York 10017
Attention: MaryBeth Ross
Date: __________, _______
Re: LIBOR Advance Request - Amended and Restated Credit Agreement, dated
as of May 24, 1999 (together with all amendments, if any, from time to
time made thereto, the "Credit Agreement") among PG&E Gas
----------------
Transmission, Northwest Corporation, the various financial
institutions as are and may become parties thereto, The First National
Bank of Chicago, as Documentation Agent for the Lenders, U.S. Bank
National Association, as Syndication Agent for the Lenders, The First
National Bank of Chicago, U.S. Bank National Association and Barclays
Bank PLC, as Co-Agents for the Lenders, and Canadian Imperial Bank of
Commerce, as Agent for the Lenders
Ladies and Gentlemen:
1. This LIBOR Advance Request is delivered to you pursuant to Section 3.1 of
-----------
the Credit Agreement. Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.
2. We request LIBOR Advances pursuant to the Credit Agreement as follows:
(i) Drawdown Date: __________, ________
(ii) Principal amount: $______________
(iii) Length of Interest Period and/or Repayment Date:
3. The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed LIBOR
Advance, before and after giving effect thereto and to the application of
the proceeds therefrom:
(i) the principal amount of the proposed Advance is not more than the
Available Facility Amount;
Exhibit B - Page 1
<PAGE>
(ii) no Default has occurred and is continuing;
(iii) the representations and warranties contained in Sections 10.1,
-------------
10.4, 10.5, 10.6, 10.7 and 10.9 of the Credit Agreement are true
---- ---- ---- ---- ----
and correct as of the date of such Advance except for changes
reflecting transactions permitted by the Credit Agreement;
(iv) no authorizations, approvals or consents of, and no filings or
renegotiations with, any governmental or regulatory authority or
agency are necessary for the incurring of obligations in connection
with such Advance, other than approvals which have been duly
obtained and are in full force and effect; and
(v) the incurring of obligations in connection with such Advance does
not conflict with or result in a breach of any applicable law or
regulation, or any other, writ, injunction or decree of any court or
regulatory authority.
4. The Company agrees that if prior to the time of the Advance requested
hereby any matter certified to herein by it will not be true and correct at
such time as if then made, it will immediately so notify the Agent. Except
to the extent, if any, that prior to the time of the Advance requested
hereby the Agent shall receive written notice to the contrary from the
Company, each matter certified to herein shall be deemed once again to be
certified as true and correct at the date of such Advance as if then made.
5. Please wire transfer the proceeds of the Advance to the accounts of the
following persons at the final institutions indicated respectively:
<TABLE>
<CAPTION>
Amount to be Person to be Paid
--------------------- Name, Address, etc. of
Transferred Name Account No. Transferee Lender
- ------------------- ---- ----------- ----------------------
<S> <C> <C> <C>
$ _________________ _____________________ ___________________ ______________________
______________________
Attention: ___________
$ _________________ _____________________ ___________________ _______________________
_______________________
Attention: ____________
$ _________________ _____________________ ___________________ _______________________
_______________________
Attention: ____________
Balance of such The Company ___________________ _______________________
proceeds _______________________
Attention: ____________
</TABLE>
Exhibit B - Page 2
<PAGE>
The Company has caused this LIBOR Advance Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly Authorized Officer this ______ day of ___________________, _______.
Very truly yours,
PG&E GAS TRANSMISSION,
NORTHWEST CORPORATION
By______________________________
Name:
Title:
By______________________________
Name:
Title:
Exhibit B - Page 3
<PAGE>
EXHIBIT C
Reference Rate Advance Request
------------------------------
To: Canadian Imperial Bank of Commerce, as Agent
425 Lexington Avenue, 7th Floor
New York, New York 10017
Attention: MaryBeth Ross
Date: ______________, _________
Re: Reference Rate Advance Request - Amended and Restated Credit
Agreement, dated as of May 24, 1999 (together with all
amendments, if any, from time to time made thereto, the "Credit
------
Agreement") among PG&E Gas Transmission, Northwest Corporation,
---------
the various financial institutions as are and may become parties
thereto, The First National Bank of Chicago, as Documentation
Agent for the Lenders, U.S. Bank National Association, as
Syndication Agent for the Lenders, The First National Bank of
Chicago, U.S. Bank National Association and Barclays Bank PLC, as
Co-Agents for the Lenders, and Canadian Imperial Bank of
Commerce, as Agent for the Lenders
Ladies and Gentlemen:
1. This Reference Rate Advance Request is delivered to you pursuant to
Section 4.1 of the Credit Agreement. Unless otherwise defined herein
-----------
or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
2. We request Reference Rate Advances pursuant to the Credit Agreement as
follows:
(i) Drawdown Date: _________________,________
(ii) Principal amount: $__________
3. The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed
Reference Rate Advance, before and after giving effect thereto and to
the application of the proceeds therefrom:
(i) the principal amount of the proposed Advance is not more than
the Available Facility Amount;
<PAGE>
(ii) no Default has occurred and is continuing;
(iii) the representations and warranties contained in Sections 10.1,
-------------
10.4, 10.5, 10.6, 10.7 and 10.9 of the Credit Agreement are
---- ---- ---- ---- ----
true and correct as of the date of such Advance except for
changes reflecting transactions permitted by the Credit
Agreement;
(iv) no authorizations, approvals or consents of, and no filings or
renegotiations with, any governmental or regulatory authority
or agency are necessary for the incurring of obligations in
connection with such Advance, other than approvals which have
been duly obtained and are of full force and effect; and
(v) the incurring of obligations in connection with such Advance
does not conflict with or result in a breach of any applicable
law or regulation, or any other, writ, injunction or decree of
any court or regulatory authority.
4. The Company agrees that if prior to the time of the Advance requested
hereby any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify
the Agent. Except to the extent, if any, that prior to the time of the
Advance requested hereby the Agent shall receive written notice to the
contrary from the Company, each matter certified to herein shall be
deemed once again to be certified as true and correct at the date of
such Advance as if then made.
5. Please wire transfer the proceeds of the Advance to the accounts of
the following persons at the final institutions indicated
respectively:
<TABLE>
<CAPTION>
Amount to be Person to be Paid
--------------------- Name, Address, etc. of
Transferred Name Account No. Transferee Lender
- ------------------- ---- ----------- ----------------------
<S> <C> <C> <C>
$ _________________ _____________________ ___________________ ______________________
______________________
Attention: ___________
$ _________________ _____________________ ___________________ _______________________
_______________________
Attention: ____________
$ _________________ _____________________ ___________________ _______________________
_______________________
Attention: ____________
Balance of such The Company ___________________ _______________________
proceeds _______________________
Attention: ____________
</TABLE>
<PAGE>
The Company has caused this Reference Rate Advance Request to be executed
and delivered, and the certification and warranties contained herein to be made,
by its duly Authorized Officer this ______ day of ___________________, _______.
Very truly yours,
PG&E GAS TRANSMISSION,
NORTHWEST CORPORATION
By_________________________
Name:
Title:
By__________________________
Name:
Title:
<PAGE>
EXHIBIT D
Form of Tax Certificate
-----------------------
To: PG&E Gas Transmission, Northwest Corporation
From: [Name of Lender and Facility Office]
Date: ________________, _____
Re: Amended and Restated Credit Agreement, dated as of May 24, 1999
(together with all amendments, if any, from time to time made
thereto, the "Credit Agreement") among PG&E Gas Transmission,
----------------
Northwest Corporation, the various financial institutions as are
and may become parties thereto, The First National Bank of
Chicago, as Documentation Agent for the Lenders, U.S. Bank
National Association, as Syndication Agent for the Lenders, The
First National Bank of Chicago, U.S. Bank National Association
and Barclays Bank PLC, as Co-Agents for the Lenders, and Canadian
Imperial Bank of Commerce, as Agent for the Lenders
Ladies and Gentlemen:
In connection with the Credit Agreement, we hereby certify, under penalty
of perjury, that the undersigned is a ____________________ duly organized in
or under the laws of the United States of America or a jurisdiction thereof.
Our Internal Revenue Service taxpayer identification number is __________.
Unless otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Credit Agreement.
Very truly yours,
[NAME OF Lender]
By_____________________________
Name:
Title:
<PAGE>
EXHIBIT E
[Form of Opinion of Counsel to the Company]
<PAGE>
EXHIBIT F
Form of Transfer Certificate
----------------------------
To: [Name and address of Transferee]
and
Canadian Imperial Bank of Commerce, as Agent
From: [Name of Transferor Lender and Facility Office]
Date: _______________, ____
Re: Transfer Certificate - Amended and Restated Credit Agreement,
dated as of May 24, 1999 (together with all amendments, if any,
from time to time made thereto, the "Credit Agreement") among
----------------
PG&E Gas Transmission, Northwest Corporation, the various
financial institutions as are and may become parties thereto, The
First National Bank of Chicago, as Documentation Agent for the
Lenders, U.S. Bank National Association, as Syndication Agent for
the Lenders, The First National Bank of Chicago, U.S. Bank
National Association and Barclays Bank PLC, as Co-Agents for the
Lenders, and Canadian Imperial Bank of Commerce, as Agent for the
Lenders
Ladies and Gentlemen:
1. [Name of Transferor Lender] (the "Transferor") confirms the accuracy of the
-------------------------
summary of its participation in the Credit Agreement set out in the
schedule attached hereto (the "Schedule") before and after giving effect to
the assignment and transfer herein made. Transferor hereby assigns and
transfers, without recourse, to [Name of Transferee Lender] (the
-------------------------
"Transferee") the rights and obligations of Transferor under the Credit
Agreement specified in the Schedule. Transferee accepts such assignment
and transfer by countersigning and delivering this Transfer Certificate to
Transferor. This assignment is effective as of the date set forth in the
Schedule (the "Transfer Effective Date"). The principal amount of any
outstanding Advances under the Credit Agreement as of the Transfer
Effective Date shall be apportioned between Transferor and Transferee in
accordance with the Schedule and Transferee shall pay Transferor in
immediately available funds on the Transfer Effective Date or such other
date as is agreed to between the Transferor and the Transferee an amount
equal to the principal amount of any outstanding Advance being assigned and
transferred hereunder. All interest and fees payable under the Credit
Agreement shall be apportioned between Transferor and Transferee
proportionately to the periods before and after the Transfer Effective Date
as to which payable.
<PAGE>
2. Transferee is also delivering signed counterpart copies hereof to the Agent
at its address for the service of notices specified in the Credit
Agreement. The Agent is requested to make appropriate entries on its
records to reflect the assignment and transfer effected hereby.
3. The Transferee hereby undertakes with the Transferor and each of the other
parties to the Credit Agreement that it will perform in accordance with
their terms all those obligations which by the terms of the Credit
Agreement it will assume upon delivery of this Transfer Certificate by it.
Transferee agrees promptly to deliver to the Company, the Agent and any
other withholding agent specified by the Company, two copies of a valid
Form 1001, a valid Form 4224 or a certificate substantially in the form of
Exhibit F to the Credit Agreement (in accordance with Sections 8.2 and
--------- ------------
14.7(e) of the Credit Agreement). Transferee agrees promptly to pay to the
-------
Agent a transfer registration fee in the amount of $2,500. By its consent
hereto the Company consents to the transfer herein provided, agrees that
Transferee shall be a Lender under the Credit Agreement and releases the
Transferor pro tanto as to the obligations of Transferor transferred to
Transferee hereunder.
4. The Transferee confirms that it has received a copy of the Credit Agreement
together with such other documents and information as it has required in
connection with this transaction. Transferee hereby confirms that it has
entered into this assignment and transfer on the basis of its own
independent commercial relationship with the Company and its own
independent investigation and that it has not relied and will not hereafter
rely on the Transferor, the other Lenders, the Agent or the Co-Agents with
respect to the due execution, legality, validity, effectiveness, adequacy,
accuracy or enforceability of the Credit Agreement or any other documents
and information or with respect to the collectibility of any Advance or
other amount due under the Credit Agreement. Transferee further agrees
that it has not relied and will not rely on the Transferor, the other
Lenders, the Agent or the Co-Agents to assess or keep under review on its
behalf or provide Transferee, except as expressly required under the terms
of the Credit Agreement, with any information as to the financial
condition, creditworthiness, condition, affairs, status or nature of the
Company or the Subsidiaries or of any other party to the Credit Agreement
or the observance by the Company of any of its obligations under the Credit
Agreement or any document relating thereto.
5. The Transferor makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Credit Agreement or any document relating
thereto or the collectibility of any Advance or other amount due under the
Credit Agreement and assumes no responsibility for the financial condition
of the Company or any other party to the Credit Agreement or for the
performance and observance by the Company or any other party of any of its
obligations under the Credit Agreement or any document relating thereto and
any and all such conditions and warranties, whether express or implied by
law or otherwise, are hereby excluded.
6. The Transferee confirms the appointment of the Agent in accordance with the
terms of Article 13 of the Credit Agreement.
----------
<PAGE>
7. This Transfer Certificate shall be governed by and construed in accordance
with the laws of the State of New York. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Transfer
Certificate to be duly executed and delivered as of the date first above
written.
[TRANSFEROR]
By______________________________
Name:
Title:
"Transferor"
[TRANSFEREE]
By______________________________
Name:
Title:
"Transferee"
Consented to as of the above date by:
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
By___________________________
Name:
Title:
Receipt acknowledged and Consented to as of the above date:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Agent
By___________________________
Name:
Title:
<PAGE>
THE SCHEDULE TO THE TRANSFER CERTIFICATE
----------------------------------------
Details of Transfer
-------------------
1. Details of Commitments
----------------------
(a) Transferor's Commitment before this Transfer:
(b) Amount of Commitment Transferred:
(c) Transferor's remaining Commitment:
(d) Transferee's Commitment:
(e) Transfer Effective Date:
2. Details of Advances
-------------------
(a) Outstanding Advance(s) of Transferor to Company prior to Transfer
Effective Date:
<TABLE>
<CAPTION>
Type of Principal Drawdown Repayment Interest
Advance Amount Date Date Rate
------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
</TABLE>
(b) Principal Amount of Outstanding Advance(s) Transferred to Transferee:
<TABLE>
<CAPTION>
Type of Principal Drawdown Repayment Interest
Advance Amount Date Date Rate
------- ------ ------ ----- ------
<S> <C> <C> <C> <C>
</TABLE>
3. Administrative Details Respecting Transferee
--------------------------------------------
Facility Office for Advances:
Attn:
Address for Notices:
<PAGE>
Attn:
Account for Payments:
Telephone:
Telefacsimile:
Telex:
<PAGE>
SCHEDULE I
Commitments of Lenders
----------------------
Name of Lender Commitments
-------------- -----------
CIBC Inc. $ 17,218,543.05
Barclays Bank PLC $ 14,569,536.42
The First National Bank of Chicago $ 17,218,543.05
Bank of America National Trust and Savings $ 8,940,397.35
Association
Citicorp USA, Inc. $ 11,920,529.80
The Fuji Bank, Limited, Los Angeles Agency $ 6,622,516.56
UBS, AG, Stamford Branch $ 8,940,397.35
U.S. Bank National Association $ 14,569,536.42
Totals: $ 100,000,000.00
<PAGE>
Exhibit 10.3
================================================================================
364-DAY CREDIT AGREEMENT
dated as of May 24, 1999,
among
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION,
as the Company,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent for the Lenders,
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent for the Lenders,
THE FIRST NATIONAL BANK OF CHICAGO,
U.S. BANK NATIONAL ASSOCIATION, and
BARCLAYS BANK PLC,
as Co-Agents for the Lenders,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent for the Lenders
__________________
CIBC WORLD MARKETS CORP.,
as Arranger
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 DEFINITIONS AND ACCOUNTING MATTERS.................. 1
Section 1.1 Certain Defined Terms............................... 1
Section 1.2 Other References.................................... 15
Section 1.3 Other Agreements.................................... 16
Section 1.4 Headings............................................ 16
Section 1.5 Accounting Terms.................................... 16
ARTICLE 2 THE FACILITY........................................ 16
Section 2.1 Grant of Facility................................... 16
Section 2.2 Maximum Outstandings................................ 16
Section 2.3 Term; Extension of Commitment Termination Date and
Commitments......................................... 17
Section 2.4 Nature of Lenders' Obligations...................... 17
Section 2.5 Changes in Commitments.............................. 17
Section 2.6 Fees................................................ 18
Section 2.7 Lending Offices..................................... 18
Section 2.8 Prepayments......................................... 18
Section 2.9 Notes............................................... 19
Section 2.10 Repayment........................................... 19
ARTICLE 3 LIBOR ADVANCES...................................... 19
Section 3.1 LIBOR Advance Requests.............................. 19
Section 3.2 Making of LIBOR Advances............................ 19
Section 3.3 Interest on LIBOR Advances.......................... 20
ARTICLE 4 REFERENCE RATE ADVANCES............................. 20
Section 4.1 Reference Rate Advance Requests..................... 20
Section 4.2 Making of Reference Rate Advances................... 21
Section 4.3 Interest on Reference Rate Advances................. 21
Section 4.4 Reference Rate Communication........................ 21
ARTICLE 5 TERM ADVANCES....................................... 21
Section 5.1 The Term Advances................................... 21
Section 5.2 Continuation of Term Advances....................... 22
ARTICLE 6 CURRENCY OF ACCOUNT AND PAYMENT..................... 22
Section 6.1 Claims in Dollars................................... 22
Section 6.2 Accounts for Payment................................ 22
Section 6.3 Application of Payment.............................. 22
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 6.4 No Set-Off.......................................... 23
Section 6.5 Actual Receipt...................................... 23
Section 6.6 Default Interest.................................... 23
ARTICLE 7 PRO RATA TREATMENT, COMPUTATIONS.................... 24
Section 7.1 Pro Rata Treatment.................................. 24
Section 7.2 Computations........................................ 24
ARTICLE 8 TAXES, YIELD PROTECTION AND ILLEGALITY.............. 24
Section 8.1 Withholding......................................... 24
Section 8.2 Tax Forms........................................... 25
Section 8.3 Tax Receipts........................................ 26
Section 8.4 Change in Law....................................... 26
Section 8.5 Capital Adequacy.................................... 27
Section 8.6 Regulation D........................................ 27
Section 8.7 Notice of Claim..................................... 27
Section 8.8 Illegality.......................................... 28
Section 8.9 Reference Rate Advances pursuant to Section 8.8..... 28
Section 8.10 Market Disruption................................... 29
Section 8.11 Compensation........................................ 29
ARTICLE 9 CONDITIONS PRECEDENT................................ 30
Section 9.1 Closing............................................. 30
Section 9.2 Initial and Subsequent Advances..................... 31
ARTICLE 10 REPRESENTATIONS AND WARRANTIES...................... 31
Section 10.1 Corporate Existence................................. 31
Section 10.2 Financial Condition................................. 31
Section 10.3 Litigation.......................................... 32
Section 10.4 No Breach........................................... 32
Section 10.5 Corporate Action.................................... 32
Section 10.6 Approvals........................................... 32
Section 10.7 Margin Stock........................................ 33
Section 10.8 ERISA............................................... 33
Section 10.9 Pari Passu Status................................... 33
Section 10.10 Environmental Matters............................... 33
Section 10.11 Year 2000 Matters................................... 33
ARTICLE 11 COVENANTS OF THE COMPANY............................ 34
Section 11.1 Financial Statements................................ 34
Section 11.2 Corporate Existence, Etc............................ 36
Section 11.3 Use of Proceeds..................................... 37
Section 11.4 Mergers............................................. 37
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Section 11.5 Debt to Capitalization.............................. 37
Section 11.6 Pari Passu Status................................... 37
Section 11.7 Asset Dispositions, etc............................. 37
Section 11.8 Limitation on Debt Secured by Mortgages............. 38
Section 11.9 Limitation on Sale-Leaseback Transactions........... 39
Section 11.10 Limitation on Advances.............................. 40
ARTICLE 12 EVENTS OF DEFAULT................................... 40
ARTICLE 13 THE AGENTS.......................................... 42
Section 13.1 Appointment, Powers and Immunities.................. 42
Section 13.2 Reliance by the Agents.............................. 43
Section 13.3 Default............................................. 43
Section 13.4 Rights as a Lender.................................. 43
Section 13.5 Indemnification by Lenders.......................... 44
Section 13.6 Non-Reliance on the Agents and other Lenders........ 44
Section 13.7 Failure to Act...................................... 45
Section 13.8 Resignation......................................... 45
Section 13.9 Funding Reliance, etc............................... 45
Section 13.10 Syndication Agent, Documentation Agent and Co-Agents 45
ARTICLE 14 MISCELLANEOUS....................................... 45
Section 14.1 Waiver.............................................. 45
Section 14.2 Government Regulation............................... 46
Section 14.3 Taxes............................................... 46
Section 14.4 Notices............................................. 46
Section 14.5 Expenses, Etc....................................... 46
Section 14.6 Amendments, Etc..................................... 46
Section 14.7 Sales and Transfers, etc. of Advances and Notes;
Participation in Advances and Notes................. 47
Section 14.8 Indemnification..................................... 49
Section 14.9 Set-off............................................. 50
Section 14.10 Sharing of Payments, Etc............................ 50
Section 14.11 Other Transactions.................................. 50
Section 14.12 Nonliability of Lenders............................. 51
Section 14.13 Severability........................................ 51
Section 14.14 Survival............................................ 51
Section 14.15 Captions and Headings............................... 51
Section 14.16 Counterparts........................................ 51
Section 14.18 Governing Law....................................... 51
Section 14.19 Forum Selection and Consent to Jurisdiction......... 52
Section 14.20 Waiver of Jury Trial................................ 52
Section 14.21 Entire Agreement.................................... 53
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
Section 14.22 Renewal, Extension and Rearrangement................ 53
Section 14.23 No Oral Agreements.................................. 53
</TABLE>
iv
<PAGE>
EXHIBITS
--------
EXHIBIT A - form of Note
EXHIBIT B - LIBOR Advance Request
EXHIBIT C - Reference Rate Advance Request
EXHIBIT D - Form of Tax Certificate
EXHIBIT E - Form of Opinion of Counsel to the Company and its Subsidiaries
EXHIBIT F - Form of Transfer Certificate
SCHEDULE I - Commitments
v
<PAGE>
364-DAY CREDIT AGREEMENT
THIS 364-DAY CREDIT AGREEMENT dated as of May 24, 1999 is among PG&E GAS
TRANSMISSION, NORTHWEST CORPORATION, a corporation duly organized and validly
existing under the laws of the State of California (the "Company"), the various
-------
financial institutions as are or may become parties hereto (collectively, the
"Lenders"), THE FIRST NATIONAL BANK OF CHICAGO, as documentation agent for the
-------
Lenders (the "Documentation Agent"), U.S. BANK NATIONAL ASSOCIATION, as
-------------------
syndication agent for the Lenders (the "Syndication Agent"), THE FIRST NATIONAL
-----------------
BANK OF CHICAGO, U.S. BANK NATIONAL ASSOCIATION and BARCLAYS BANK PLC, as
co-agents for the Lenders (the "Co-Agents"), and CANADIAN IMPERIAL BANK OF
---------
COMMERCE ("CIBC"), acting through certain of its U.S. branches or agencies, as
----
Administrative Agent (the "Agent") for the Lenders.
-----
The Company has requested that the Lenders establish a 364-day credit
facility for its general corporate purposes in the maximum aggregate principal
amount of $50,000,000, and the Lenders are prepared to establish such facility
upon the terms hereof. Accordingly, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.1 Certain Defined Terms. The following terms (whether or not
---------------------
underscored) when used in this Agreement, including its preamble, shall, except
where the context otherwise requires, have the following meanings (such meanings
to be equally applicable to the singular and the plural forms thereof):
"Adjusted LIBOR Rate" shall mean, for any LIBOR Advances, a rate per annum
-------------------
(rounded upwards, if necessary, to the next 1/100 of one percent) determined by
the Agent to be equal to the LIBOR Rate for such Advances for the Interest
Period for such Advances divided by the difference of 1 minus the Reserve
Requirement for such Advances for such Interest Period.
"Advance" shall mean, except as otherwise provided herein, any Revolving
-------
Advance or Term Advance, as the case may be.
"Advance Outstandings" shall mean at any time the aggregate principal
--------------------
amount of all outstanding Advances at such time.
"Advance Request" shall mean any LIBOR Advance Request or Reference Rate
---------------
Advance Request.
<PAGE>
"Affiliate" of any Person means any other Person which, directly or
---------
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agent" shall mean CIBC in its capacity as administrative agent for the
-----
Lenders hereunder or any successor administrative agent.
"Agents" shall mean the Agent, the Syndication Agent, the Documentation
------
Agent and the Co-Agents, together with successors in any such capacities.
"Agreement" means, on any date, this 364-Day Credit Agreement as originally
---------
in effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Amended and Restated Credit Agreement" shall mean that certain Amended and
-------------------------------------
Restated Credit Agreement dated as of May 24, 1999, by and among the Company,
the various financial institutions as are or may become parties thereto, The
First National Bank of Chicago, as documentation agent for the lenders, U.S.
Bank National Association, as syndication agent for the lenders, The First
National Bank of Chicago, U.S. Bank National Association and Barclays Bank PLC,
as co-agents for the lenders, and Canadian Imperial Bank of Commerce, as
administrative agent for the lenders, as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified.
"Applicable Margin" shall mean, on any date and with respect to each LIBOR
-----------------
Advance (subject to clause (iii) of the definition of "Applicable Rating
Level"), the applicable margin set forth below based on the Applicable Rating
Level on such date:
<TABLE>
<CAPTION>
Applicable LIBOR
Rating Level Advances
------------ --------
- ----------------------------------------------
<S> <C>
Level I 0.5000%
- ----------------------------------------------
Level II 0.6000%
- ----------------------------------------------
Level III 0.7000%
- ----------------------------------------------
Level IV 0.8000%
- ----------------------------------------------
Level V 0.9000%
- ----------------------------------------------
</TABLE>
2
<PAGE>
"Applicable Rating Level" shall mean the highest level set forth below that
-----------------------
corresponds to a rating issued from time to time by S&P or Moody's as applicable
to the Company's senior unsecured long-term debt:
<TABLE>
<CAPTION>
Moody's S&P
------- ---
-------------------------------------------
<S> <C> <C>
Level I *Baa1 *BBB+
-------------------------------------------
Level II Baa1 BBB+
-------------------------------------------
Level III Baa2 BBB
-------------------------------------------
Level IV Baa3 BBB-
-------------------------------------------
Level V **Baa3 **BBB-
-------------------------------------------
</TABLE>
______
For example, if the Moody's rating is Baa1 and the S&P rating is BBB, Level II
shall apply.
For purposes of the foregoing, (i) "*" means a rating more favorable than;
"**" means a rating less favorable than; (ii) if ratings for the Company's
senior unsecured long-term debt shall not be available from S&P or Moody's,
Level V shall be deemed applicable; (iii) if determinative ratings shall change
(other than as a result of a change in the rating system used by any applicable
Rating Agency) such that a change in Applicable Rating Level would result, such
change shall effect a change in Applicable Rating Level as of the day on which
it is first announced by the applicable Rating Agency, and any change in the
Applicable Margin or percentage used in calculating fees due hereunder shall
apply commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change; and (iv) if
the rating system of any of the Rating Agencies shall change prior to the date
all obligations hereunder have been paid and the Commitments canceled, the
Company and the Lenders shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed rating system, and
pending such amendment, if no Applicable Rating Level is otherwise determinable
based upon the foregoing, the last Applicable Rating Level shall apply.
"Attributable Debt" shall mean, with respect to any Sale-Leaseback
-----------------
Transaction as of any particular time, the present value discounted at the rate
of interest implicit (in the reasonable judgment of the Company) in the terms of
the lease of the obligations of the lessee under such lease for net rental
payments (net of insurance, taxes and indemnity and other similar charges)
during the remaining term of the lease (including any period for which such
lease has been extended).
"Authorized Officer" means, relative to the Company, those of its officers
------------------
whose signatures and incumbency shall have been certified to the Agent and the
Lenders pursuant to subsection 9.1(b).
-----------------
* Greater than sign
** Less than sign
3
<PAGE>
"Authorized Signatory" shall mean, in relation to any Person and any
--------------------
communication to be made or document to be executed or certified by such Person
at any time, each other Person who is at such time duly appointed as its
authorized signatory by such Person in a manner acceptable to the Agent.
"Available Facility Amount" shall mean at any time the Total Commitments
-------------------------
less the Advance Outstandings at such time.
"Base Rate" shall mean, at any time, the rate per annum then most recently
---------
announced by the Agent at New York, New York, as its base rate for Dollar loans
in the United States, which base rate may or may not be the lowest rate charged
by the Agent on loans to any of its customers.
"Business Day" shall mean a day other than Saturday or Sunday on which
------------
commercial banks and foreign exchange markets are not required or permitted to
be closed for business in New York City, New York and (with respect to LIBOR
Advances only) London, England.
"Capital Lease Obligations" shall mean all monetary obligations of the
-------------------------
Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
------
Liability Act of 1980, as amended.
"CIBC" is defined in the preamble.
---- --------
"Co-Agents" is defined in the preamble.
--------- --------
"Code" shall mean the Internal Revenue Code of 1986, as amended, reformed
----
or otherwise modified from time to time.
"Commitment" shall mean, as to each Lender, the obligation of such Lender
----------
to make Advances in an aggregate amount at any one time outstanding equal to the
amount set opposite such Lender's name on Schedule I hereto under the caption
----------
"Commitment" (as the same may be reduced pursuant to Section 2.5 hereof or
-----------
increased pursuant to Section 14.7(b)(i) hereof).
------------------
"Commitment Proportion" shall mean, in relation to a Lender, at any time
---------------------
the proportion which its Commitment bears to the Total Commitments at such time.
4
<PAGE>
"Commitment Termination Date" shall mean the Original Commitment
---------------------------
Termination Date, or such other later date as may result from any extension
requested by Company and consented to by the Lenders pursuant to Section 2.3,
-----------
after which the Lenders shall have no further obligation to make Revolving
Advances hereunder.
"Company" shall mean PG&E Gas Transmission, Northwest Corporation, a
-------
corporation duly organized and validly existing under the laws of the State of
California.
"Continue", "Continuation" and "Continued" each refers to a continuation of
-------- ------------ ---------
Term Advances pursuant to Section 5.2.
-----------
"Debt" shall mean indebtedness for borrowed money.
----
"Default" shall mean an Event of Default or any condition, occurrence or
-------
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Default Rate" shall mean, in respect of any principal of any Advance or
------------
any other amount payable by the Company under this Agreement which is not paid
when due (whether at stated maturity, by acceleration or otherwise), a rate per
annum during the period commencing on the due date until such amount is paid in
full equal to one percent plus the Reference Rate as in effect from time to
time; provided that, if such amount in default is principal of a LIBOR Advance
and the due date is a day other than the last day of the Interest Period
therefor, the "Default Rate" for such principal shall be, for the period
commencing on the due date and ending on the last day of the Interest Period
therefor, one percent above the interest rate for such Advance and, thereafter,
the rate provided for above in this definition.
"Documentation Agent" is defined in the preamble.
------------------- --------
"Dollars" and "$" shall mean lawful money of the United States of America
------- -
which is legal tender for the payment of public and private debts in the United
States.
"Drawdown Date" shall mean: (i) in relation to any LIBOR Advance, the
-------------
Business Day for the making thereof as specified in the LIBOR Advance Request
relating thereto; and (ii) in relation to any Reference Rate Advance, the
Business Day for the making thereof as specified in the Reference Rate Advance
Request relating thereto; provided that, in all cases, such Drawdown Date shall
be no later than the Commitment Termination Date.
"Effective Date" shall mean the date on which (i) all conditions precedent
--------------
set forth in Section 9.1 hereof are satisfied or waived by all Lenders, and (ii)
-----------
this Agreement becomes effective pursuant to Section 14.16 hereof.
-------------
5
<PAGE>
"Environmental Laws" shall mean any and all federal, state, local and
------------------
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case, as in effect from time to time. Reference
to Sections of ERISA also refer to any successor sections.
"Event of Default" shall have the meaning assigned to that term in Article
---------------- -------
12 hereof.
- --
"Facility" shall mean this 364-day committed advance facility which may be
--------
utilized subject to the other terms and provisions hereof for Revolving Advances
and Term Advances which shall be evidenced by the Notes.
"Facility Office" shall mean, in relation to a Lender, the office
---------------
designated on the signature page below or such other office as it may from time
to time designate by notice to the Agent.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the day for which such rate is to be
--------
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged or chargeable to the Agent on such day on such transactions as
determined by the Agent.
"GAAP" shall mean generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other pronouncements by
regulatory authorities or such entities as may be recognized by a significant
segment of the United States accounting profession to define accepted accounting
practice, which are applicable to the circumstances as of the date of
determination.
6
<PAGE>
"Guarantee" by any Person shall mean any obligation, contingent or
---------
otherwise, of such Person directly guaranteeing any Indebtedness of any other
Person or providing for the payment of any Indebtedness of any other Person or
otherwise expressly protecting the holder of such Indebtedness against loss
(whether by virtue or partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise),
provided that the term "Guarantee" shall not include (i) endorsements of
negotiable instruments for collection or deposit in the ordinary course of
business, (ii) indemnities or hold-harmless agreements against personal injury
or property damage; or (iii) contractual obligations that are conditioned upon
performance.
"Hazardous Material" means
------------------
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended;
(c) any petroleum, crude oil or any fraction thereof;
(d) any hazardous, dangerous or toxic chemical, material, waste or
substance within the meaning of any Environmental Law;
(e) any radioactive material, including any naturally occurring
radioactive material, and any source, special or by-product material as
defined in 42 U.S.C. ' 2011 et. seq., and any amendments or
reauthorizations thereof;
(f) asbestos-containing materials in any form or condition; or
(g) polychlorinated biphenyls in any form or condition.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
------ ------ ------ ---------
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"including" means including without limiting the generality of any
---------
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
------- -------
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
7
<PAGE>
"Indebtedness" of any Person means, without duplication, at any date:
------------
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations relative to the face amount of all letters of
credit and banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capital Lease
Obligations;
(d) all obligations of such Person pursuant to a Sale-Leaseback
Transaction which have been or should be, in accordance with GAAP, recorded
as Capital Lease Obligations;
(e) all obligations of such Person pursuant to a Guarantee except any
such Guarantee which the Company is contesting in good faith in appropriate
proceedings; and
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse.
provided, Indebtedness shall not include sales of Permitted Receivables sold
- --------
pursuant to Permitted Receivables Purchase Facilities and indemnification,
recourse or repurchase obligations thereunder. For all purposes of this
Agreement, the Indebtedness of any Person shall include all recourse
Indebtedness of any partnership or joint venture or limited liability company in
which such Person is a general partner or a joint venturer or a member.
"Indemnified Liabilities" is defined in Section 14.8.
----------------------- ------------
"Indemnified Parties" is defined in Section 14.8.
------------------- ------------
"Interest Period" shall mean:
---------------
(a) With respect to any LIBOR Advances, the period commencing on the
date such Advances are made and ending on the numerically
corresponding day in the first, second, third or sixth calendar
month thereafter, as the Company may select as provided in
Section 3.1 hereof, except that each such Interest Period which
-----------
commences on the last Business Day of a calendar month (or on any
day for which there is no numerically
8
<PAGE>
corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent
calendar month; and
(b) With respect to any Reference Rate Advances, the period
commencing on the date such Advances are made and ending on such
date not more than 90 days thereafter, as the Company may select
as provided in Section 4.1 hereof.
-----------
Notwithstanding the foregoing, (i) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, in the case of an Interest Period for LIBOR Advances, if such
next succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day) and such extension or adjustment shall be reflected
in the computation of interest; (ii) the Company shall not be permitted to
select Interest Periods to be in effect at any one time which have expiration
dates occurring on more than ten different dates; and (iii) no Interest Period
may end later than the Maturity Date.
"Lenders" is defined in the preamble.
------- --------
"LIBOR" or the "LIBOR Rate" shall mean, on any day and in relation to the
----- ----------
Term for any LIBOR Advance, the rate per annum equal to the average of the
offered quotations appearing on Telerate Page 3750 (or if such Telerate Page
shall not be available, any successor or similar service as may be selected by
the Agent and the Company) as of 11:00 a.m., London time (or as soon thereafter
as practicable), on the second Business Day before (and for value on) the
proposed Drawdown Date for such Advance. If none of such Telerate Page 3750 nor
any successor or similar service is available, then "LIBOR" or the "LIBOR Rate"
----- ----------
shall mean, on any day and in relation to the Term for any LIBOR Advance, the
rate per annum (rounded upwards, if necessary, to the next multiple of 1/16th of
one percent per annum) determined by the Agent to be equal to the average of the
respective rates quoted to the Agent by each of the Reference Lenders as the
rate at which it would offer deposits in Dollars for a period equal to the Term
of, and in a principal amount comparable to, such proposed Advance to prime
banks in the London interbank market of Dollar deposits at or about 11:00 a.m.
London time (or as soon thereafter as practicable) on the second Business Day
before (and for value on) the proposed Drawdown Date for such Advance. If any
Reference Lender fails to (or notifies the Agent that it is or will be unable
to) advise the Agent of any rate referred to above, or is not participating in
such LIBOR Advance to be made hereunder, then the relevant LIBOR Rate shall be
determined by the Agent on the basis of the rate or rates quoted to it by the
other Reference Lenders, provided that if the Advance is a LIBOR Advance and
only one Reference Lender provides a rate quote, the Advance shall be governed
by Section 8.10 hereof. Each determination of the LIBOR Rate shall be
------------
conclusive and binding, absent manifest error.
9
<PAGE>
"LIBOR Advance Request" shall mean a request for a LIBOR Advance made in
---------------------
accordance with Article 3 and substantially in the form of Exhibit B.
--------- ---------
"LIBOR Advances" shall mean an advance in Dollars made available to the
--------------
Company pursuant to Article 3 with interest rates determined on the basis of the
---------
LIBOR Rate.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Company or any of its Subsidiaries shall
be deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan Document" means this Agreement, the Notes, each Advance Request, and
-------------
any other agreement, document or instrument from time to time executed and
delivered pursuant to and in connection with any of the foregoing.
"Majority Lenders" shall mean, at any time while Commitments are in effect,
----------------
Lenders having at least 51% of the aggregate amount of the Commitments and, at
any time while no Commitments are in effect, Lenders holding at least 51% of the
outstanding aggregate principal amount of the Advances.
"Material Adverse Effect" means with respect to any matter that such matter
-----------------------
would reasonably be expected to have a material and adverse effect on the
assets, business, properties or condition (financial or otherwise) of the
Company or the Company and its Subsidiaries, taken as a whole, or on the ability
of the Company to perform its obligations under any of the Loan Documents.
"Maturity Date" shall mean the earlier of (i) the Commitment Termination
-------------
Date and (ii) the date of termination of the obligations and Commitments under
this Agreement by prepayment, cancellation, acceleration or otherwise; provided,
that if the Revolving Advances are converted into Term Advances as provided in
Section 5.1, then the Maturity Date shall be the date which is the second
- -----------
anniversary of the Commitment Termination Date.
"Moody's" shall mean Moody's Investors Service, Inc. and any successor
-------
thereto that is a nationally-recognized rating agency.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37) of
------------------
ERISA with respect to which the Company or a Significant Subsidiary may have
liability and which is covered by Title IV of ERISA.
"1934 Act Reports" shall mean the Company's Form 10K, dated December 31,
----------------
1998, and all subsequent documents filed with the United States Securities and
Exchange Commission (or
10
<PAGE>
any governmental agency substituted therefor) pursuant to Section 13 of the
Securities Exchange Act of 1934 (or any other reports substituted therefor that
contain substantially the information required to be contained in such reports
on the date hereof), copies of all of which 1934 Act Reports through the date of
this Agreement have been delivered by the Company to the Agent.
"Net Tangible Assets" shall mean the aggregate amount of assets (less
-------------------
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (other than the current portion of funded
indebtedness) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense (to the extent included in such aggregate
amount of assets) and other like intangibles (except regulatory assets recorded
on the balance sheet in accordance with GAAP).
"Note" shall mean a promissory note in substantially the form of Exhibit A
---- ---------
hereto (as such promissory note may be amended, endorsed or otherwise modified
from time to time), duly executed and delivered to the Agent by the Company for
the account of a Lender and payable to the order of such Lender in the amount of
its Commitment, including any amendment, modification, renewal or replacement of
such promissory note, evidencing Revolving Advances and Term Advances, if any.
"Notice of Continuation" has the meaning specified in Section 5.2.
---------------------- -----------
"Obligations" means all obligations (monetary or otherwise) of the Company
-----------
arising under or in connection with this Agreement, the Notes and each other
Loan Document.
"Original Commitment Termination Date" shall mean May 21, 2000
------------------------------------
"Overnight Funds Period" shall mean a period of one or more consecutive
----------------------
days during which the Overnight Funds Rate exceeds the rates described in
clauses (a)(i) and (a)(ii) of the definition "Reference Rate." Upon the making,
- -------------- ------- --------------
continuing, or converting of any applicable Advance during any such period, the
Agent shall give prompt notice to the Company and the Lenders of the
commencement and termination of such Overnight Funds Period and the Overnight
Funds Rate for such period.
"Overnight Funds Rate" shall mean, for any Overnight Funds Period, a
--------------------
fluctuating interest rate per annum equal for each day during such period to the
rate of interest offered in the interbank market to the Agent as the overnight
Federal Funds Rate as of, at or about 10:00 a.m., New York, New York time on
such day (or if such day is not a Business Day, for the next preceding Business
Day) plus 1/2% per annum.
"Payment Office" shall mean the office of Morgan Guaranty Trust Company of
--------------
New York located at 60 Wall Street, New York, New York 10260, or such other
office or branch of a
11
<PAGE>
financial institution located in New York City, New York as the Agent may from
time to time designate by notice to the Company and the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Receivables" shall mean all obligations of any obligor (whether
---------------------
now existing or hereafter arising) under a contract for sale or transportation
of natural gas or other goods or services by the Company or any of its
Subsidiaries, which shall include any obligation of such obligor (whether now
existing or hereafter arising) to pay demand charges based on actual or
estimated peak usage of natural gas by such obligor and any obligation of such
obligor (whether now existing or hereafter arising) to pay interest, finance
charges or amounts with respect thereto, and, with respect to any of the
foregoing receivables or obligations, (i) all of the interest of the Company or
any of its Subsidiaries in the goods (including returned goods and goods
constituting natural gas) the sale of which gave rise to such receivable or
obligation after the passage of title thereto to any obligor, (ii) all other
Liens and property subject thereto from time to time purporting to secure
payment of such receivables or obligations, and (iii) all guarantees, insurance,
letters of credit and other agreements or arrangements of whatever character
from time to time supporting or securing payment of any such receivables or
obligations.
"Permitted Receivables Purchase Facility" shall mean any agreement of the
---------------------------------------
Company or any of its Subsidiaries providing for sales, transfers or conveyances
of Permitted Receivables purporting to be sales (and considered sales under
GAAP) that do not provide, directly or indirectly, for recourse against the
seller of such Permitted Receivables (or against any of such seller's
Affiliates) by way of a guaranty or any other support arrangement, with respect
to the amount of such Permitted Receivables (based on the financial condition or
circumstances of the obligor thereunder), other than such limited recourse as is
reasonable given market standards for transactions of a similar type, taking
into account such factors as historical bad debt loss experience and obligor
concentration levels.
"Person" shall mean an individual, a corporation, a company, a voluntary
------
association, a partnership, a trust, an unincorporated organization, a
government or any agency, instrumentality or political subdivision thereof, or
other entity.
"Plan" shall mean an employee benefit or other plan established or
----
maintained by the Company or any of its Subsidiaries with respect to which the
Company or any Subsidiary may have any liability and which is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Principal Office" shall mean the office of the Agent, as set forth on the
----------------
signature pages hereof, or such substitute office of which it may from time to
time notify the Company and the Lenders.
12
<PAGE>
"Principal Property" shall mean any natural gas pipeline, natural gas
------------------
gathering system or gas storage facilities located in the United States,
including any fixed, tangible natural gas facilities directly related to the
transportation, storage or distribution of natural gas, except any such property
that in the opinion of the Board of Directors of the Company is not of material
importance to the business conducted by the Company and its consolidated
Subsidiaries taken as a whole.
"Principal Subsidiary" shall mean any Subsidiary which owns a Principal
--------------------
Property.
"Quarterly Dates" shall mean the last day of each March, June, September
---------------
and December, the first of which shall be the first such day after the date of
this Agreement, provided that, if any such date is not a Business Day, the
relevant Quarterly Date shall be the next succeeding Business Day.
"Rating Agency" shall mean either of S&P or Moody's.
-------------
"Reference Lenders" shall mean the Agents.
-----------------
"Reference Rate" shall mean (a) on any date and with respect to all
--------------
Reference Rate Advances other than those dates and Advances described in clause
------
(b) of this definition, a fluctuating rate of interest per annum equal to the
- ---
higher of (i) the Base Rate and (ii) the Federal Funds Rate most recently
determined by the Agent plus 2% per annum; or (b) on any date occurring during
----
any Overnight Funds Period, but with respect only to Reference Rate Advances
made, the Overnight Funds Rate. The Reference Rate is not necessarily intended
to be the lowest rate of interest determined by the Agent in connection with
extensions of credit. Changes in the rate of interest on that portion of any
Advances maintained as Reference Rate Advances shall take effect simultaneously
with each change in the Reference Rate. The Agent shall give notice promptly to
the Company and the Lenders of changes in the Reference Rate.
"Reference Rate Advance" shall mean an advance in Dollars made available to
----------------------
the Company pursuant to Article 4.
---------
"Reference Rate Advance Request" shall mean a request for a Reference Rate
------------------------------
Advance made in accordance with Article 4 and substantially in the form of
---------
Exhibit C.
- ---------
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors or any
successor Person relating to reserve requirements imposed by the Federal Reserve
System or any successor Person.
"Regulation U" means Regulations G, U or X of the Board of Governors of the
------------
Federal Reserve System from time to time in effect and shall include any
successor or other regulations
13
<PAGE>
or official interpretation of said Board of Governors or any successor Person
relating to the extension of credit for the purpose of purchasing or carrying
margin stocks imposed by the Federal Reserve System or any successor Person.
"Regulatory Change" shall mean, with respect to any Lender, any change
-----------------
after the date of this Agreement in United States federal, state or foreign laws
or regulations (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of banks
including such Lender of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law but
compliance with which is expected) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Repayment Date" shall mean, in relation to any LIBOR Advance, the last day
--------------
of the Term thereof specified in the applicable LIBOR Advance Request, and in
relation to any Reference Rate Advance, the Commitment Termination Date.
"Reserve Requirement" shall mean, for any LIBOR Advances, on the date of
-------------------
such determination, the average maximum reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/100th of 1%) at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during the Interest Period thereof under Regulation D by member banks
of the Federal Reserve System in New York City with deposits exceeding one
billion Dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement as to any Lender shall reflect any other reserves required to be
maintained by such Lender by reason of any Regulatory Change against (i) any
category of liabilities which includes deposits by reference to which the LIBOR
Rate is to be determined or (ii) any category of extensions of credit or other
assets which include either type of LIBOR Advance.
"Resource Conservation and Recovery Act" means the Resource Conservation
--------------------------------------
and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect from time to
-- ---
time.
"Revolving Advance" shall mean an advance by a Lender to the Company
-----------------
pursuant to Articles 3 and 4 hereof, and refers to either a Reference Rate
---------- -
Advance or a LIBOR Advance.
"Revolving Advance Request" shall mean any LIBOR Advance Request or
-------------------------
Reference Rate Advance Request.
"S&P" shall mean Standard & Poor's Ratings Group and any successor thereto
---
that is a nationally-recognized rating agency.
14
<PAGE>
"Sale-Leaseback Transaction" means an arrangement pursuant to which the
--------------------------
Company or a Principal Subsidiary now owns or hereafter acquires a Principal
Property, sells or transfers it to a Person, and rents or leases it back from
the Person.
"Stockholders' Equity" shall mean, as of the time any determination thereof
--------------------
is to be made, the sum of the Company=s capital stock (which shall exclude
treasury stock and any capital stock subject to mandatory redemption by the
holder thereof) and additional paid-in capital plus retained earnings (minus
---- -----
accumulated deficit), all as shown on the consolidated balance sheet of the
Company and its Subsidiaries and based on GAAP as in effect on the date of such
determination.
"Subsidiary" shall mean any corporation of which at least a majority of the
----------
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by the Company
and/or one or more of its Subsidiaries; "Wholly-Owned Subsidiary" shall mean any
-----------------------
such corporation of which all of such shares, other than directors' qualifying
shares, are so owned.
"Syndication Agent" is defined in the preamble.
----------------- --------
"Tax Certificate" shall mean a certificate substantially in the form set
---------------
out in Exhibit D and duly signed by a Lender.
---------
"Term Advance" shall mean an advance by a Lender to the Company pursuant to
------------
Article 5, and refers to either a Reference Rate Advance or a LIBOR Advance.
- ---------
"Term" shall mean: (i) in relation to any LIBOR Advance, the period from
----
its Drawdown Date until its Repayment Date as specified in the LIBOR Advance
Request relating thereto; and (ii) in relation to any Reference Rate Advance,
the period from its Drawdown Date until its Repayment Date; provided, however,
-------- -------
that if any Term would otherwise end on a day which is not a Business Day, such
Term shall be extended to the next succeeding day which is a Business Day
unless, in the case of a LIBOR Advance, the result of such extension would be to
carry such Term over into the next calendar month, in which case such Term shall
end on the immediately preceding Business Day.
"Total Capitalization" shall mean the sum, at the time outstanding and
--------------------
without duplication, of (i) Total Debt, plus (ii) Stockholders' Equity.
"Total Commitments" shall mean the aggregate from time to time of the
-----------------
Lenders' Commitments.
15
<PAGE>
"Total Debt" shall mean on a consolidated basis for the Company and its
----------
Subsidiaries at any time a determination thereof is to be made, the sum without
duplication of: (a) indebtedness for borrowed money, all obligations evidenced
by bonds, debentures, notes or other similar investments, and purchase money
obligations which in accordance with GAAP would be shown on the consolidated
balance sheet of the Company and its Subsidiaries as a liability, and (b) all
obligations of such Person as lessee under leases which have been or should be,
in accordance with GAAP, recorded as Capital Lease Obligations.
"Transfer Certificate" shall mean a certificate substantially in the form
--------------------
set out in Exhibit F and duly signed by a Lender and a transferee.
---------
"United States" or "U.S." means the United States of America, its fifty
------------- ----
States and the District of Columbia.
"Voting Stock" shall mean, in respect of a business entity, stock of any
------------
class or classes, or equivalent interest, if the holders of the stock of such
class or classes or equivalent interests, are ordinarily, in the absence of
contingencies, entitled to vote for the election of the directors (or persons
performing similar functions) of such business entity, even though the right so
to vote has been suspended by the happening of such contingency, but does not
include stock of any class or classes the holders of which are entitled so to
vote only upon the happening of a contingency.
Section 1.2 Other References. Any reference in this Agreement to:
----------------
(i) any of the "Company," the "Agent", the "Agents", the "Syndication
Agent", the "Documentation Agent", the "Co-Agents" or the "Lenders"
shall be construed so as to include their respective successors,
permitted assigns and, in the case of the Lenders, transferees;
(ii) a "Section" or "Exhibit" is a reference to a Section hereof or an
Exhibit hereto;
(iii) a "law" shall be construed to mean any law, including common or
customary law and any constitution, decree, judgment, legislation,
order, ordinance, regulation, rule, statute, treaty or other
legislative or regulatory measure, in each case of any jurisdiction
whatever;
(iv) a statute shall be construed as a reference to such statute as
amended or reenacted from time to time;
(v) "tax" shall be construed so as to include any tax, levy, impost,
duty or other charge of a similar nature (including, without
limitation, any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same); and
16
<PAGE>
(vi) a time of day is, unless otherwise stated, a reference to New York,
New York time.
Section 1.3 Other Agreements. Unless otherwise specified, any reference
----------------
in this Agreement to another agreement shall be construed as a reference to that
other agreement as the same may have been, or may from time to time be, amended
or supplemented.
Section 1.4 Headings. Section and Exhibit headings are for ease of
--------
reference only.
Section 1.5 Accounting Terms. All accounting terms not specifically
----------------
defined herein shall be construed in accordance with GAAP.
ARTICLE 2
THE FACILITY
Section 2.1 Grant of Facility. The Lenders hereby grant to the Company
-----------------
an advance facility, pursuant to which, and upon the terms and subject to the
conditions herein set out, the Lenders agree from and including the Effective
Date to but excluding the Commitment Termination Date, to make Revolving
Advances to the Company. Within the limits of the Commitments and subject to
the terms of this Agreement, the Company may borrow, prepay and reborrow
pursuant to Article 2.
---------
Section 2.2 Maximum Outstandings. Subject to cancellation and reduction
--------------------
in accordance with the terms hereof, the maximum aggregate principal amount of
the Facility which may be utilized at any time for Advances is $50,000,000. In
no event shall the aggregate Advance Outstandings for all Lenders at any time
exceed the principal amount of $50,000,000 or such lesser amount as from time to
time may result from any reduction pursuant to Section 2.5 hereof, or for each
-----------
Lender at any time exceed such Lender=s Commitment Proportion as in effect from
time to time.
Section 2.3 Term; Extension of Commitment Termination Date and
--------------------------------------------------
Commitments.
- -----------
(a) Subject to the terms and conditions hereof and provided that
no Event of Default has occurred and is continuing, the total Commitments shall
be available for a period commencing on the Effective Date and continuing
through the Commitment Termination Date; provided that the Commitment
--------
Termination Date, and concomitantly the total Commitments, may be extended for
successive 364-day periods expiring on the date which is 364-days from the then
scheduled Commitment Termination Date. If the Company shall request in a
certificate of extension delivered to the Agent in form and substance acceptable
to the Agent, at least 30 days, but no more than 45 days, prior to the then
scheduled Commitment Termination Date that the
17
<PAGE>
Commitment Termination Date be extended for 364-days from the then scheduled
Commitment Termination Date, then the Agent shall promptly notify each Lender of
such request and each Lender shall notify the Agent, at least 15 days, but not
more than 30 days, after Lender's receipt of Agent's notice, whether such
Lender, in the exercise of its sole discretion, will extend the Commitment
Termination Date for such 364-day period. Any Lender which shall not timely
notify the Agent whether it will extend the Commitment Termination Date shall be
deemed to not have agreed to extend the Commitment Termination Date. No Lender
shall have any obligation whatsoever to agree to extend the Commitment
Termination Date. Any agreement to extend the Commitment Termination Date by any
Lender shall be irrevocable
(b) If all Lenders notify the Agent pursuant to clause (a) of this
----------
Section of their agreement to extend the Commitment Termination Date, then the
Agent shall so notify each Lender and the Company, and such extension shall be
effective without other or further action by any party hereto for such
additional 364-day period. If any Lender fails to approve the extension of the
Commitment Termination Date, the Company acknowledges that on the then scheduled
Commitment Termination Date, the Commitments will terminate and, unless the
Revolving Advances are converted to Term Advances pursuant to Article 5, the
---------
Company shall repay in full all Obligations under the Loan Documents.
Section 2.4 Nature of Lenders' Obligations. The obligations of the
------------------------------
Lenders hereunder are several and not joint and no Lender shall be responsible
for the obligation or Commitment of any other Lender hereunder. Nothing herein
constitutes a partnership, joint venture or other common purpose enterprise with
respect to the relationship between the Lenders (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
its obligations hereunder shall not relieve any other Lender from its
obligations hereunder, nor shall the Agent or any other Lender be liable for the
failure by such Lender to perform its obligations hereunder. This Agreement is
not intended to, and shall not be construed so as to, confer any right or
benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns.
Section 2.5 Changes in Commitments. The Company shall have the right in
----------------------
accordance with Section 7.1 hereof to terminate or reduce the amount of the
-----------
Commitments at any time or from time to time to an amount not less than the
Advance Outstandings, if any, at the effective date of such termination or
reduction, upon not less than three (3) Business Days' prior notice to the Agent
(which shall promptly notify the Lenders) of each such termination or reduction,
which shall specify the effective date thereof and the amount of any such
reduction (which shall not be less than $5,000,000 and, if more than $5,000,000,
in integral multiples of $1,000,000) and shall be irrevocable and effective only
upon receipt by the Agent. The Commitments once terminated or reduced may not
be reinstated.
Section 2.6 Fees. The Company agrees to pay the fees set forth in this
----
Section 2.6. All such fees shall be non-refundable.
- -----------
18
<PAGE>
(a) Facility Fee. The Company shall pay to the Agent, for the
------------
account of each Lender, a facility fee on such Lender's Commitment, without
regard to usage, for the period from and including the Effective Date to and
excluding the date such Commitment is terminated, at a rate per annum equal to
that set forth below opposite the Applicable Rating Level times such Lender's
Commitment.
<TABLE>
<CAPTION>
Applicable
Rating Level Facility Fee
------------ ------------
----------------------------------------------
<S> <C>
Level I 0.1000%
----------------------------------------------
Level II 0.1250%
----------------------------------------------
Level III 0.1500%
----------------------------------------------
Level IV 0.1750%
----------------------------------------------
Level V 0.2000%
----------------------------------------------
</TABLE>
The accrued facility fee shall be payable in arrears on the Quarterly Dates and
on the Maturity Date based on the average total Commitments during such period.
(b) Administrative Agency Fees. The Company shall pay to the
--------------------------
Agent, for the Agent's own account, an administrative agency fee or such other
fees as previously agreed to by the Company and the Agent in writing (as such
writing may hereafter be amended, supplemented, restated or otherwise be
modified or in effect).
Section 2.7 Lending Offices. The Advances of each type made by each
---------------
Lender shall be made and maintained at such Lender's Facility Office for
Advances of such type.
Section 2.8 Prepayments. The Company may prepay Advances, provided that
-----------
it shall give notice to the Agent (which shall promptly notify the Lenders) of
such intended prepayment on or before 11:00 a.m. of the proposed date of
prepayment in the case of Reference Rate Advances, or upon three Business Days'
prior notice, in the case of LIBOR Advances, to the Agent (which shall promptly
notify the Lenders), which notice shall specify the prepayment date (which shall
be a Business Day) and the amount of the prepayment (which shall be not less
than $5,000,000 and, if more than $5,000,000, in integral multiples of
$1,000,000) and shall be irrevocable and effective only upon receipt by the
Agent, provided that interest on the principal prepaid, accrued to the
prepayment date, and any amounts payable pursuant to Section 8.11 hereof in
------------
connection therewith, shall be paid on the prepayment date.
Section 2.9 Notes. The Advances made by a Lender hereunder shall be
-----
evidenced by Notes payable to the order of such Lender. The Company hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender's
19
<PAGE>
Notes (or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
----- ----
interest rate and Interest Period applicable to the Advances evidenced thereby.
Such notations shall be conclusive and binding on the Company absent manifest
error; provided, however, that the failure of any Lender to make any such
-------- -------
notations shall not limit or otherwise affect any Obligations of any Company.
Upon the written request of the Company, a Lender shall provide a written
summary to the Company of the notations made on such Notes with respect to the
Advances, if any, of such Lender.
Section 2.10 Repayment. With respect to Advances, the Company shall
---------
repay the principal amount of (a) each Reference Rate Advance, on the Maturity
Date and (b) each LIBOR Advance, on the earlier of (i) the last day of the Term
for such Advance or (ii) the Maturity Date.
ARTICLE 3
LIBOR ADVANCES
Section 3.1 LIBOR Advance Requests. Except as otherwise provided
----------------------
herein, the Company may request the making of a LIBOR Advance in Dollars under
the Facility prior to the Commitment Termination Date by the delivery to the
Agent (which shall promptly notify the Lenders) no later than 11:00 a.m. on the
third Business Day before the proposed Drawdown Date for such LIBOR Advance of a
duly completed LIBOR Advance Request. Each LIBOR Advance Request delivered to
the Agent pursuant to this Section 3.1 shall be irrevocable and shall specify:
-----------
(i) the proposed Drawdown Date;
(ii) the principal amount of the proposed LIBOR Advance, which
shall be (a) a minimum amount of $5,000,000 and, if more than
$5,000,000, in additional integral multiples of $1,000,000;
and (b) in any event not more than the Adjusted Available
Facility Amount; and
(iii) the Term of the proposed LIBOR Advance, which shall be a
period of one, two, three or six months and shall have a
Repayment Date occurring on or before the Maturity Date.
Section 3.2 Making of LIBOR Advances. If the Company requests a LIBOR
------------------------
Advance in accordance with Section 3.1 hereof, then, on the proposed Drawdown
-----------
Date for such LIBOR Advance, and subject to Sections 8.8 and 8.10 hereof, each
------------ ----
Lender shall, no later than 1:00 p.m. on such Drawdown Date, make available to
the Company in accordance with Section 6.2 hereof the amount of such Lender's
-----------
participation in such LIBOR Advance. The amount which each Lender shall be
required to contribute to a LIBOR Advance shall be an amount equal to such
Lender's Commitment Proportion of such LIBOR Advance; provided, however, that if
-------- -------
the amount of a Lender's Commitment is reduced in accordance with the terms
hereof after the
20
<PAGE>
Agent has received the LIBOR Advance Request for such LIBOR Advance, then such
Lender's participation in such LIBOR Advance, and the amount of such LIBOR
Advance, shall be reduced accordingly.
Section 3.3 Interest on LIBOR Advances. Each LIBOR Advance shall accrue
--------------------------
interest during its Term from and including the Drawdown Date to but not
including the Repayment Date for such LIBOR Advance at the rate per annum equal
to the sum of the Adjusted LIBOR Rate plus the Applicable Margin. The Company
shall pay interest on the principal amount of each LIBOR Advance in arrears on
the Repayment Date for such LIBOR Advance; provided, however, that if the Term
-------- -------
of a LIBOR Advance is more than three months or 90 days, as the case may be, the
Company shall pay interest on such LIBOR Advance quarterly in arrears, each such
interest payment (except the last) payable on the last day of each three
calendar month interval during the Term thereof and the last on the Repayment
Date for such LIBOR Advance. The Agent shall notify the Company and the Lenders
of its determination of the LIBOR Rate for each LIBOR Advance and the amount of
interest due on the Repayment Date and on any quarterly payment date, if
applicable, promptly after such determination has been made as herein set forth;
provided, however, that the failure to give such notices shall in no way affect
- -------- -------
the obligation of the Company to pay the amounts specified in this Section 3.3.
-----------
ARTICLE 4
REFERENCE RATE ADVANCES
Section 4.1 Reference Rate Advance Requests. Except as otherwise
-------------------------------
provided herein, the Company may request the making of Reference Rate Advances
in Dollars prior to the Commitment Termination Date under the Facility by the
delivery to the Agent (which shall promptly notify the Lenders) no later than
11:00 a.m. on such Business Day, of a duly completed Reference Rate Advance
Request. Each Reference Rate Advance Request delivered to the Agent pursuant to
this Section 4.1 shall be irrevocable and shall specify:
-----------
(i) the proposed Drawdown Date; and
(ii) the principal amount of the proposed Reference Rate Advance,
which shall be: (a) a minimum amount of $5,000,000 and, if
more than $5,000,000, in additional integral multiples of
$1,000,000; and (b) in any event not more than the Adjusted
Available Facility Amount.
Any Reference Rate Advance Request received after the deadline specified in this
Section 4.1 shall be deemed to have been received by the Agent as of 11:00 a.m.
- -----------
on the following Business Day.
21
<PAGE>
Section 4.2 Making of Reference Rate Advances. If the Company requests
---------------------------------
a Reference Rate Advance in accordance with Section 4.1 hereof, then, on the
-----------
proposed Drawdown Date for such Reference Rate Advance, each Lender shall, no
later than 1:00 p.m. on such Drawdown Date, make available to the Company in
accordance with Section 6.2 hereof the principal amount of such Lender's
-----------
participation in such Reference Rate Advance and advise the Agent by telephone
and telex or telefacsimile of the Federal Reserve Bank and the wire number
effecting the transfer of such amount. The amount which each Lender shall be
required to contribute to a Reference Rate Advance shall be an amount equal to
such Lender's Commitment Proportion of such Reference Rate Advance; provided,
--------
however, that if the amount of a Lender's Commitment is reduced in accordance
- -------
with the terms hereof after the Agent has received a Reference Rate Advance
Request, then such Lender's participation in such Reference Rate Advance, and
the amount of such Reference Rate Advance, shall be reduced accordingly.
Section 4.3 Interest on Reference Rate Advances. Each Reference Rate
-----------------------------------
Advance shall accrue interest during its Term from and including the Drawdown
Date to but not including the Repayment Date for such Reference Rate Advance at
the rate per annum equal to the Reference Rate, as determined by the Agent on a
daily basis during the Term of such Reference Rate Advance. The Company shall
pay interest on the principal amount of each Reference Rate Advance in arrears
on the Repayment Date for such Reference Rate Advance. The Agent shall notify
the Company and the Lenders of the initial determination of the Reference Rate
and of any changes thereto promptly after such determination has been made as
provided herein.
Section 4.4 Reference Rate Communication. Each communication to be made
----------------------------
by one Person to another pursuant to this Article 4 shall be made to that other
---------
Person at the telex or telefacsimile number and, as the case may be, telephone
number identified with its signature below (or other such telephone or telex or
telefacsimile number as such other Person shall by not less than five Business
Days= notice to the Agent have specified for this purpose).
ARTICLE 5
TERM ADVANCES
Section 5.1 The Term Advances. On the Commitment Termination Date, all
-----------------
outstanding Revolving Advances shall, on and as of such date, be converted into
a Term Advance by the Lenders to the Company in an unpaid principal amount equal
to the amount of the outstanding Revolving Advances as of the Commitment
Termination Date; provided that such conversion shall not occur if an Event of
-------------
Default or a Default shall have occurred and be continuing on the Commitment
Termination Date. Upon the terms and subject to the conditions of this
Agreement, the Company may elect on and after the Commitment Termination Date to
designate Term Advances as Reference Rate Advances or LIBOR Advances. The
Company shall repay the principal amount of each Term Advance consisting of a
Reference Rate Advance or LIBOR Advance on the Maturity Date and, once repaid,
may not be reborrowed (it being
22
<PAGE>
understood that Continuations of all or any part of the Term Advances pursuant
to Section 5.2 shall not constitute repayment of such Term Advances).
-----------
Section 5.2 Continuation of Term Advances. (a) So long as not otherwise
-----------------------------
prohibited hereunder, the Company may, by notice delivered in accordance with
Subsection 5.2(b), Continue Term Advances consisting of LIBOR Advances in an
- -----------------
aggregate principal amount of at least $5,000,000 as LIBOR Advances on the
expiration date of the Interest Period with respect thereto; provided, that no
--------
Term Advances may be Continued as LIBOR Advances if a Default or Event of
Default has occurred and is continuing.
(b) In the event that the Company elects to Continue Term Advances under
Subsection 5.2(a), the Company shall deliver written notice (each a "Notice of
- ----------------- ---------
Continuation") to the Agent not later than 11:00 A.M. (New York time) at least
- ------------
three Business Days in advance of a Continuation as LIBOR Advances. Each Notice
of Continuation shall be by telecopier or other form of teletransmission,
confirmed promptly in writing, in substantially the form of Exhibit B hereto,
---------
specifying (i) the requested date of such Continuation (which shall be a
Business Day), (ii) the aggregate principal amount of the Term Advances to be
Continued, and (iii) the duration of the Interest Period to be applied thereto.
Each notice of continuation shall be irrevocable and, once delivered, the
Company shall be bound to Continue Term Advances in accordance therewith.
ARTICLE 6
CURRENCY OF ACCOUNT AND PAYMENT
Section 6.1 Claims in Dollars. Each Lender agrees that, except as
-----------------
prohibited by the laws of the applicable jurisdiction, it shall express its
claim in any action or suit against the Company or any judgment or order
resulting therefrom in Dollars.
Section 6.2 Accounts for Payment. Unless otherwise expressly provided,
--------------------
all payments by the Company or any Lender to the Agent under this Agreement, the
Notes or any other Loan Document shall be made, without setoff, deduction or
counterclaim, in immediately available funds by the Company or such Lender to
the Agent at the Payment Office.
Section 6.3 Application of Payment. Subject to Section 6.5 hereof, each
---------------------- -----------
payment received by the Agent for the account of another Person pursuant to
Section 6.2 hereof shall:
- -----------
(i) in the case of a payment received for the account of the
Company, be made available by the Agent to the Company by
application on the date of receipt:
23
<PAGE>
(a) first, in or toward payment of any amount due from the
Company hereunder (including without limitation, fees and
amounts payable under Article 8) other than the amounts
---------
referred to in clause (b) to the Person for which such
amount is due; and
(b) second, in or toward payment to the Lenders of such amount
as is required to repay the Advances, including accrued
interest thereon, which have fallen due, and if insufficient
to pay all principal and interest then due thereon shall be
applied first to payment of interest and then to principal;
and
(c) third, in payment to the Company's account number 064254
with Boston Safe Deposit and Trust Company at Boston,
Massachusetts or such other account with such bank as the
Company shall have previously notified in writing to the
Agent for this purpose; and
(ii) in the case of any other payment, promptly be made available
by the Agent to the Person for whose account such payment was
received (in the case of a Lender, for the account of its
Facility Office) by transfer in like funds as received to such
account of such Person with such bank, as such Person shall
have previously notified in writing to the Agent for this
purpose.
Section 6.4 No Set-Off. All payments made by the Company shall be made
----------
free and clear of and without any deduction for or on account of any set-off or
counterclaim or, except as otherwise provided in Section 8.1 hereof, any other
-----------
matter.
Section 6.5 Actual Receipt. Where a sum is to be paid hereunder to the
--------------
Agent for the account of another party hereto, the Agent shall not be obligated
to make the same available to that other party hereto until it has been able to
establish that it has actually received such sum, but if it does make the
payment available and it proves to be the case that it had not actually received
the sum it paid out, then, the party hereto to whom such sum was so made
available shall on request ensure that the amount so made available is refunded
to the Agent, and shall on demand indemnify the Agent against any cost or loss
it may have suffered or incurred by reason of its having paid out such sum prior
to its having received such sum at a rate per annum equal to the Federal Funds
Rate (or if the Person receiving such payment is the Company and such payment is
an Advance, at the rate of interest to be borne by such Advance), and, with
respect to any sums covered by a payment made pursuant to subsection 6.3(i)(a),
--------------------
this Section 6.5 shall apply as though the Company were the party hereto to whom
-----------
such sum was so made available. In addition, if any party hereto shall in error
receive any sum which should have been paid to any other party hereto, the
receiving party shall immediately arrange through the Agent to remit such amount
to the party entitled thereto with interest thereon at a rate per annum equal to
the Federal Funds Rate if not remitted by the receiving party on the date
received.
24
<PAGE>
Section 6.6 Default Interest. The Company will pay to the Agent for the
----------------
account of each Lender interest at the applicable Default Rate on any principal
of any Advance made by such Lender, and (to the fullest extent permitted by law)
on any other amount payable by the Company hereunder to such Lender, which shall
not be paid in full when due (whether at its stated maturity, by acceleration or
otherwise), for the period commencing on the due date thereof until the same is
paid in full. Such interest shall be payable from time to time on demand of the
Agent.
ARTICLE 7
PRO RATA TREATMENT, COMPUTATIONS
Section 7.1 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein and as set forth in Section 8.7 hereof: (a) each borrowing from the
-----------
Lenders under Article 3 or 4 hereof shall be made from the Lenders, each payment
--------- -
of facility fee under Section 2.6 hereof shall be made for the account of the
-----------
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.5 hereof shall be applied to the Commitments of the Lenders, pro
-----------
rata according to the amounts of their respective Commitments; (b) each payment
or prepayment of principal of Advances by the Company shall be made for the
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Advances held by the Lenders and then due and payable
or then being partially repaid; and (c) each payment of interest on Advances by
the Company shall be made for the account of the Lenders pro rata in accordance
with the amounts of interest due and payable to the respective Lenders.
Section 7.2 Computations. Interest on LIBOR Advances shall be computed
------------
on the basis of a year of 360 days and actual days elapsed (including the first
day but excluding the last day) occurring in the period for which payable and
interest on Reference Rate Advances and the facility fee shall be computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable.
ARTICLE 8
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 8.1 Withholding. Each payment to be made by the Company
-----------
hereunder or in connection herewith to any other party hereto shall be made free
and clear of and without deduction or withholding for or on account of any tax,
reserve, levy or duty of, or imposed by, any governmental or taxing authority of
or in the United States or any political subdivision thereof, excluding, in the
case of each Lender and the Agents, taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such Lender or
such Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of
25
<PAGE>
each Lender, taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction of such Lender's Facility Office or any political subdivision
thereof; unless the Company is required by law to make such a payment subject to
the deduction or withholding of such tax, in which case the amount payable by
the Company in respect of which such deduction or withholding is required to be
made shall be increased to the extent necessary to ensure that, after the making
of such deduction or withholding, such other party receives and retains (free
from any liability in respect of any such deduction or withholding) a net amount
equal to the amount which it would have received and so retained had no such
deduction or withholding been made or required to be made; provided, however,
-------- -------
that the Company shall not be required to pay any additional amount on account
of any tax of, or imposed by, the federal government of the United States
pursuant to this Section to any Lender which (i) is not entitled, on the date
this Agreement is signed (or, in the case of a transferee, on the date on which
it signed the relevant Transfer Certificate, in the case of an assignee of a
Lender, on the date on which the assignment became effective), to submit (a) a
valid United States Internal Revenue Service Form 1001 or any successor form
thereto ("Form 1001") relating to such Lender and entitling it to a complete
exemption from deduction or withholding on all amounts to be received by such
Lender, including fees, pursuant to this Agreement, or (b) a valid United States
Internal Revenue Service Form 4224 or any successor form thereto ("Form 4224")
relating to such Lender and entitling it to receive all amounts, including fees,
pursuant to this Agreement without deduction or withholding, or (c) a
certification substantially in the form of the Tax Certificate, so as to meet
its obligation to submit such form or other certification pursuant to
Section 8.2 hereof, or (ii) shall have failed to submit such form or other
- -----------
certification which it is required to deliver pursuant to Section 8.2 hereof and
-----------
entitled to file under applicable law. Any such additional amounts payable by
the Company shall be deemed an obligation of the Company hereunder.
Section 8.2 Tax Forms. Each of the Lenders hereby agrees, upon request
---------
of the Company:
(i within 30 days of the date hereof or, if later, by the date
upon which the first utilization of the Facility is made, to
deliver to the Company, the Agent and any other Person
specified by the Company as a Person making a payment of any
amount due hereunder (a "Withholding Agent"), one or more of
the following, as is applicable:
(a two accurate and complete original signed copies of Form
4224; or
(b two accurate and complete original signed copies of Form
1001; or
(c a signed certificate substantially in the form of the Tax
Certificate; and
26
<PAGE>
(ii thereafter and from time to time (and, in particular, but
without limitation, not later than the date of the transfer or
assignment to it becoming effective, each transferee and each
assignee or successor of a Lender agrees) to the extent
entitled, to submit to the Company, the Agent and any other
Withholding Agent such additional duly completed and signed
copies of one or the other of Form 4224 or Form 1001 (or such
successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) or, to the extent
entitled, of such a certification as may be notified by the
Company to such Lender and required under then current United
States law or regulations to avoid United States Federal
withholding taxes on payments in respect of all amounts to be
paid by the Company and received by such Lender pursuant to
this Agreement.
Section 8.3 Tax Receipts. If at any time the Company is required by law
------------
to make any deduction or withholding from any amount payable by it hereunder or
in connection herewith (or if thereafter there is any change in the rates at
which or the manner in which such deductions or withholdings are calculated),
the Company shall promptly notify the Agent and each affected Lender thereof.
If the Company makes any payment hereunder or in connection herewith in respect
of which it is required by law to make any deduction or withholding, it shall
pay the full amount to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law and
shall promptly deliver to the Agent a receipt issued by such authority (or other
evidence reasonably satisfactory to the Agent) evidencing the payment to such
authority of all amounts so required to be deducted or withheld from such
payment.
Section 8.4 Change in Law. If as a result of (a) any change in law, or
-------------
in its interpretation or administration by any authority charged with the
interpretation or administration thereof, occurring after the date hereof or (b)
compliance with any request from or requirement of any governmental authority,
central bank or other fiscal, monetary or other comparable regulatory authority
(including, without limitation, any reserve or special deposit requirements
imposed by the Board of Governors of the Federal Reserve System or any other
authority referred to above), which request or requirement is first made or
imposed after the date hereof:
(i any Lender incurs a cost or increase in cost as a result of
its having entered into or performing its obligations under
this Agreement, including its making, funding or maintaining
all or any part of its Commitment or any Advance; or
(ii any Lender becomes liable to make any payment (other than a
tax which is a capital or franchise tax or is imposed on the
net income of such Lender) on or calculated by reference to
the amount of Advances made or to be made by it and/or any sum
receivable by it hereunder; or
27
<PAGE>
(iii there is a reduction in the amount of any sum received or
receivable by any Lender in connection with its making any
Advances hereunder,
then the Company shall from time to time upon demand by the Agent at the request
of any Lender in accordance with Section 8.7 hereof pay to the Agent for the
-----------
account of such Lender amounts sufficient to indemnify such Lender against, as
the case may be, (i) such cost or increased cost (or such proportion of such
cost or increased cost as is in the reasonable opinion of that Lender
attributable to its making, funding or maintaining its Commitment or any
Advance), (ii) such liability or (iii) such reduction. Such amounts may be
determined by using any reasonable averaging and attribution methods.
Section 8.5 Capital Adequacy. If after the date hereof, any Lender
----------------
shall have determined that (i) the adoption or implementation of any applicable
law, rule, regulation or guideline regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof, by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or (ii) compliance by any Lender (or
its Facility Office) with any direction, requirement or request regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and such Lender (taking into consideration such Lender's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines (which determination, absent manifest error, shall be
binding and conclusive on all parties) that the amount of such capital is
increased, or its rate of return on capital is reduced to a level below that
which such Lender could have achieved but for such adoption, implementation or
compliance, as a consequence of such Lender's obligations under this Agreement,
then, upon demand by such Lender through the Agent and in accordance with
Section 8.7 hereof, the Company shall immediately pay to the Agent for the
- -----------
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such increase or
reduction.
Section 8.6 Regulation D. If as a result of Regulation D of the Board
------------
of Governors of the Federal Reserve System, as in effect from time to time on
and after the date of this Agreement, or in the application, interpretation or
administration thereof by such Board of Governors, there shall be any increased
cost to any Lender in connection with maintaining all or any part of its
obligations and Commitment hereunder or of making, funding or maintaining all or
part of any Advance made or to be made, then the Company shall, from time to
time, upon demand by such Lender (through the Agent) in accordance with Section
-------
8.7 hereof, pay to the Agent for the account of such Lender additional amounts
- ---
sufficient to indemnify such Lender against such cost. The amounts of any such
costs shall be determined by such Lender in good faith on a basis that allocates
the cost incurred by such Lender in connection with the making,
28
<PAGE>
funding or maintaining of advances made by such Lender to any borrowers, and
resulting from such Lender's compliance with such Regulation D, ratably among
such borrowers.
Section 8.7 Notice of Claim. A Lender intending to make a claim
---------------
pursuant to Sections 8.4, 8.5 or 8.6 hereof shall deliver to the Company through
------------ --- ---
the Agent, promptly after becoming aware of the circumstances giving or which
shall give rise to the claim, notice of the Lender's intention to make a claim,
specifying the event by which it is or shall be entitled to make such claim and
setting out in reasonable detail the expected basis and computation of such
claim. In the case of a cost, increased cost, liability or reduction in amounts
received or receivable incurred as described in Section 8.4 or 8.5 hereof, such
----------- ---
Lender may make a claim on the Company through the Agent for such cost,
increased cost, liability or reduction, which claim shall include a certificate
setting forth in reasonable detail the basis and computation of the claim and
such evidence substantiating the claim as may be reasonably available to such
Lender. In the case of a cost, increased cost or liability incurred as
described in Section 8.6 hereof, such Lender may make a claim on the Company
-----------
through the Agent for such cost, increased cost or liability, which claim shall
be determined in accordance with the last sentence of Section 8.6 hereof; and
-----------
the Company shall promptly indemnify such Lender through the Agent for the
amount claimed from and as the date such cost, increased cost or liability is
incurred. If any Lender is owed increased costs under Section 8.4, 8.5 or 8.6
----------- --- ---
above, the Company may, at its sole expense and effort (unless such Lender
withdraws its request for additional compensation), if no Default then exists,
(a) replace such Lender with another commercial bank reasonably acceptable to
the Agent provided that (i) the obligations of the Company owing to the Lender
being replaced (including such increased costs) shall be paid in full to such
Lender concurrently with such replacement, (ii) the replacement commercial bank
shall execute a document satisfactory to the Agent pursuant to which it becomes
a party hereto with a Commitment equal to that of the Lender being replaced and
shall make Advances in the aggregate principal amount equal to the aggregate
outstanding amount of the Advances of the Lender being replaced, and (iii) upon
such execution of such documents referred to in clause (ii) and the payment of
amounts referred to in clause (i), the replacement commercial bank shall
constitute a "Lender" hereunder with a Commitment as so specified and the Lender
being so replaced shall no longer constitute a "Lender" hereunder except with
respect to such provisions hereunder which by their terms survive the
termination of the Agreement, or (b) terminate the Commitment of such Lender
provided that (i) the obligations of the Company owing to the Lender being
terminated (including such increased costs) shall be paid in full to such Lender
concurrently with such termination, (ii) the Total Commitments shall be reduced
by the Commitment of the terminated Lender, (iii) the Commitment Proportion of
each Lender shall be recalculated in accordance with the reduced Total
Commitments, and (iv) the Lender being so terminated shall no longer constitute
a "Lender" hereunder except for purposes of the provision which by their terms
survive the termination of this Agreement.
Section 8.8 Illegality. Notwithstanding any other provision of this
----------
Agreement, if any Lender shall determine (which determination shall, upon notice
thereof to the Company and the other Lenders, be conclusive and binding on the
Company) that the introduction of or any change
29
<PAGE>
in or in the interpretation of any law makes it unlawful or any central bank or
other governmental authority asserts that it is unlawful for such Lender or its
Facility Office to honor its obligation to make or maintain LIBOR Advances
hereunder, then such Lender shall promptly notify the Company thereof (with a
copy to the Agent) and such Lender=s obligation to make LIBOR Advances shall be
suspended until such time as such Lender may again make and maintain such type
of LIBOR Advances (in which case the provisions of Section 8.9 hereof shall be
-----------
applicable).
Section 8.9 Reference Rate Advances pursuant to Section 8.8. If the
-----------------------------------------------
obligation of any Lender to make LIBOR Advances shall be suspended pursuant to
Section 8.8 hereof (Advances of such type being herein called "Affected
- ----------- --------
Advances"), all Advances which would otherwise be made by such Lender shall be
made instead as Reference Rate Advances (and, if an event referred to in Section
-------
8.8 hereof has occurred and such Lender so requests by notice to the Company
- ---
with a copy to the Agent, all Advances of such Lender then outstanding shall be
automatically converted into Reference Rate Advances on the date specified by
such Lender in such notice) and, to the extent that Affected Advances are so
made as (or converted into) Reference Rate Advances, all payments of principal
which would otherwise be applied to such Lender's Affected Advances shall be
applied instead to its Reference Rate Advances.
Section 8.10 Market Disruption. If, in relation to any LIBOR Advance,
-----------------
the Agent is unable to make the determination of the LIBOR Rate applicable
thereto required to be made by it as provided herein because (i) none of
Telerate Page 3750 or any successor or similar service is available or the
failure or inability of at least two of the Reference Lenders to supply the
quotation necessary to make such determination, or (ii) if the Majority Lenders
determine (which determination, absent manifest error, shall be binding and
conclusive on all parties) that LIBOR for any Interest Period for a requested
Advance will not adequately reflect the cost to the Lenders of making, funding
or maintaining an Advance with interest based on such rates for such Interest
Period, then the Agent shall notify the Company and the Lenders that the Agent
is unable to make such determination and the reasons therefor by telephone or in
writing no later than 11:30 a.m. on the Drawdown Date therefor. If a LIBOR
Advance was requested, the Reference Rate shall be applicable to such LIBOR
Advance, commencing on the Drawdown Date therefor, unless the Company, no later
than 10:00 a.m. on such date, shall revoke such Advance Request.
Section 8.11 Compensation. The Company shall pay to the Agent for the
------------
account of each Lender, upon the written request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost or expense which such Lender
reasonably determines is attributable to:
(a any payment or conversion of a LIBOR Advance made by such
Lender on a date other than the last day of the Interest Period for such
LIBOR Advance; or
30
<PAGE>
(b any failure by the Company to borrow a LIBOR Advance from such
Lender on the date for such borrowing specified in the relevant LIBOR
Advance Request given pursuant to Section 3.2 hereof.
-----------
Without limiting the effect of the preceding sentence, with respect to LIBOR
Advances, such compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest which otherwise would have accrued on the
principal amount so paid or converted or not borrowed for the period from the
date of such payment, conversion or failure to borrow to the last day of the
Interest Period for such Advance (or, in the case of a failure to borrow, the
Interest Period for such Advance which would have commenced on the date
specified for such borrowing) at the applicable rate of interest for such
Advance provided for herein over (ii) the interest component of the amount such
Lender would have bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such Lender).
Notwithstanding the foregoing, the amount payable to any Lender under this
Section shall exclude, in the case of any prepayment or conversion pursuant to
Section 8.8 or 8.9 hereof, the Applicable Margin.
- ----------- ---
ARTICLE 9
CONDITIONS PRECEDENT
Section 9.1 Closing. The first Advance Request may not be given unless
-------
the Agent has received all of the following documents (with copies for the
Lenders of all items except articles of incorporation and bylaws), each of which
shall be in form and substance satisfactory to the Agent and its counsel and
shall be delivered to the Agent on or prior to the date of the execution of this
Agreement:
(a Certified copies of the articles of incorporation and bylaws
of the Company and all corporate action taken by the Company approving this
Agreement and borrowings by the Company hereunder (including, without
limitation, a certificate setting forth the resolutions of the board of
directors of the Company adopted in respect of the transactions contemplated
hereby).
(b A certificate of the Company in respect of each of the
officers (with specimen signatures) (i) who is authorized to sign this
Agreement, the Notes, the other Loan Documents, or the Advance Request on behalf
of the Company and (ii) who shall, until replaced by another officer or officers
duly authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in connection with
this Agreement and the transactions contemplated hereby. The Agents and each
Lender may conclusively rely on such certificates until they receive notice in
writing from the Company to the contrary.
31
<PAGE>
(c A certificate of a senior officer of the Company to the effect
that (i) the representations and warranties made by the Company in Article 10
----------
hereof are true on and as of the date of this Agreement, (ii) the Company is not
in default in performance of any of its covenants in Article 11 to the extent
----------
they are to have been performed as of such date, (iii) no Material Adverse
Effect has occurred since December 31, 1998 and is continuing, and (iv) no
Default has occurred and is continuing as of the date of this Agreement.
(d Written opinions of the Counsel for the Company acceptable to
the Agent, addressed to the Agents and the Lenders in substantially the form of
Exhibit E hereto, with such modifications, additions, alterations, exceptions,
- ---------
assumptions and provisions as shall be acceptable to the Agent.
(e The Notes, duly executed by the Company, payable to the order
of each of the Lenders.
(f Certificates of good standing for the Company from California,
Oregon, Washington and Idaho.
(g A copy of the Amended and Restated Credit Agreement, duly
executed by all parties thereto.
(h The Agent shall have received for its own account, or for the
account of each Lender, as the case may be, all fees, costs and expenses due and
payable pursuant to Sections 2.6 and 14.5.
------------ ----
(i Such other instruments and documents as any of the Agent or
its counsel may have reasonably requested.
Section 9.2 Initial and Subsequent Advances. The obligation of each
-------------------------------
Lender to make Advances to the Company upon the occasion of each borrowing
hereunder is subject to the further conditions precedent that, as of the date of
such Advances and after giving effect thereto: (a) the principal amount of the
proposed Advances is not more than the Available Facility Amount at such time;
(b) no Default shall have occurred and be continuing; (c) the representations
and warranties contained in Sections 10.1, 10.4, 10.5, 10.6, 10.7, 10.9 and
------------- ---- ---- ---- ---- ----
10.11 are true and correct as of the date of such borrowing except for changes
- -----
reflecting transactions permitted by this Agreement; (d) no authorizations,
approvals or consents of, and no filings or renegotiations with, any
governmental or regulatory authority or agency are necessary for the incurring
of obligations in connection with such Advances, other than approvals which have
been duly obtained and are in full force and effect; and (e) the incurring of
obligations in connection with such Advances does not conflict with or result in
a breach of any applicable law or regulation, or any order, writ, injunction or
decree of any court or regulatory authority.
32
<PAGE>
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agents and the Lenders that:
Section 10.1 Corporate Existence. Each of the Company and its active
-------------------
Subsidiaries: (a) is a corporation duly organized and validly existing and in
good standing under the laws of the jurisdiction of its incorporation; (b) has
all requisite corporate power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted except where failure to
have such governmental licenses, authorizations, consents and approvals would
not have a Material Adverse Effect and; (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a Material
Adverse Effect.
Section 10.2 Financial Condition. As of the Effective Date, the
-------------------
consolidated balance sheet and statement of consolidated capitalization of the
Company and its consolidated Subsidiaries as at December 31, 1998 and the
related statements of consolidated income, cash flows and common stock equity,
with the opinion thereon of Arthur Andersen, L.L.P., heretofore furnished to
each of the Lenders, present fairly, in all material respects, the consolidated
financial position of the Company and the consolidated Subsidiaries as at said
date and the consolidated results of their operations and cash flows for the
fiscal year ended on said date, in conformity with GAAP. Neither the Company nor
any of its Subsidiaries had on said date any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in said financial statements as at said date. There
has been no Material Adverse Effect since December 31, 1998 except as disclosed
in the 1934 Act Reports.
Section 10.3 Litigation. As of the Effective Date and except as
----------
disclosed in the 1934 Act Reports or in writing to the Agents and the Lenders,
there are no legal or arbitral proceedings or investigations, or any proceedings
by or before any governmental or regulatory authority or agency, now pending or
(to the knowledge of the Company) threatened against the Company or any of its
Subsidiaries which (i) the Company would be required to disclose in any 1934 Act
Report or (ii) would have a Material Adverse Effect.
Section 10.4 No Breach. None of the execution and delivery of this
---------
Agreement, the Notes, and the other Loan Documents, the consummation of the
transactions herein contemplated or compliance with the terms and provisions
hereof conflict with or result in a breach of, or require any consent under, the
articles of incorporation or bylaws of the Company, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental
33
<PAGE>
authority or agency, or any agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which it is bound or to which it is subject
that is material to the Company and its Subsidiaries, taken as a whole, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of the
Company or any of its Subsidiaries pursuant to the terms of any such agreement
or instrument.
Section 10.5 Corporate Action. The Company has all necessary corporate
----------------
power and authority to execute, deliver and perform its obligations under the
Agreement, the Notes and the other Loan Documents; and the execution, delivery
and performance by the Company of this Agreement, the Notes and the other Loan
Documents have been duly authorized by all necessary corporate action on its
part; and this Agreement, the Notes and the other Loan Documents have been duly
and validly executed and delivered by the Company and constitute its legal,
valid and binding obligation, enforceable in accordance with its terms, except
(a) as may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights in general,
and (b) as enforceability thereof may be subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
at law or in equity.
Section 10.6 Approvals. No authorizations, approvals or consents of,
---------
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by the
Company of this Agreement, the Notes or the other Loan Documents or for the
validity or enforceability thereof other than any filings which may hereafter be
required to be made in the future, the failure to make which shall not render
this Agreement invalid.
Section 10.7 Margin Stock. Neither the Company nor any of its
------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock or margin securities (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System) and no part of the proceeds of
any Advance hereunder shall be used to acquire or carry any margin stock or
margin securities or extend credit to others for such purpose.
Section 10.8 ERISA. As of the Effective Date, the Company and each of
-----
its Subsidiaries have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respect with the presently applicable provisions of ERISA and
the Code, and have not incurred any liability to the PBGC or any Plan or
Multiemployer Plan.
Section 10.9 Pari Passu Status. Under applicable laws in force at the
-----------------
date hereof, the claims and rights of the Lenders against the Company under this
Agreement, the Notes or the other Loan Documents shall not be subordinate to,
and shall rank at least pari passu in all
---- -----
34
<PAGE>
respects with, the claims and rights of any other holders of unsecured
indebtedness of the Company.
Section 10.10 Environmental Matters. As of the Effective Date and
---------------------
except as disclosed in the 1934 Act Reports, the Company is in compliance with
applicable Environment Laws except for such non-compliance as could not have a
Material Adverse Effect.
Section 10.11 Year 2000 Matters. Any reprogramming required to permit
-----------------
the proper functioning (but only to the extent that such proper functioning
would otherwise be impaired by the occurrence of the year 2000) in and following
the year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Company or any of its
Subsidiaries or used or relied upon in the conduct of their business (including
any such systems and other equipment supplied to the Company by others), and the
testing of all such systems and other equipment as so reprogrammed, will be
completed as specified in the Company's Year 2000 Readiness Disclosure. The
costs to the Company and its Subsidiaries that have not been incurred as of the
date hereof for such reprogramming and testing and for the other reasonably
foreseeable consequences to them of any improper functioning of other computer
systems and equipment containing embedded microchips due to the occurrence of
the year 2000 could not reasonably be expected to result in a Default or Event
of Default or to have a Material Adverse Effect. Except for any reprogramming
referred to above, the computer systems of the Company and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, sufficient for the conduct of their business as
currently conducted.
ARTICLE 11
COVENANTS OF THE COMPANY
The Company agrees with the Agents and each Lender that so long as any of
the Commitments are in effect and until payment in full of all Advances
hereunder (other than pursuant to any continuing indemnification obligations
under this Agreement), all interest thereon and all other amounts payable by the
Company hereunder, the Company will perform the obligations set forth in this
Article 11:
- ----------
Section 11.1 Financial Statements. The Company shall deliver to the
--------------------
Agent, with sufficient copies for each Lender:
(a as soon as available and in any event within 90 days after
the end of each of the first three fiscal quarterly periods of each fiscal year
of the Company, the consolidated balance sheet of the Company and its
consolidated Subsidiaries as of the end of such quarterly period and the related
consolidated statements of income and cash flows, for the respective three, six
or nine months then ended, set forth in the Company's quarterly reports on Form
10-Q (or any
35
<PAGE>
other report substituted therefor that contains substantially the information
required to be contained in such reports on the date hereof): any report other
than a report filed with the Securities and Exchange Commission shall be
accompanied by a certificate of a financial or accounting officer of the
Company, which certificate shall state that said financial statements present
fairly, in all material respects, the consolidated financial position, results
of operations and cash flows of the Company and its consolidated Subsidiaries in
conformity with GAAP, as at the end of, and for, such period (subject to normal
year-end audit adjustments and provided that certain footnote disclosure and
other details required to be included in financial statements prepared in
conformity with GAAP but not normally included in interim, unaudited financial
statements need not be included in such interim financial statements);
(b as soon as available and in any event within 120 days after the
end of each fiscal year of the Company, statements of consolidated income, cash
flows and common stock equity and preferred stock, if any, of the Company and
the consolidated Subsidiaries for such year and the related consolidated balance
sheet as at the end of such year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year, and accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, and a certificate of such accountants stating that, in making
the examination necessary for their opinion, they obtained no knowledge, except
as specifically stated, of any Default;
(c promptly upon their becoming available, and in any event within
fifteen (15) days after the filing thereof with any securities exchange or the
Securities and Exchange Commission or any successor agency, one copy of each
financial statement, report, notice or proxy statement sent by the Company, any
Subsidiary or any other Affiliate controlled by the Company to its public
shareholders, and of each regular or periodic report and any registration
statement (other than such reports and registration statements pertaining solely
to employee benefits, dividends, reinvestment and corporate plans), prospectus
or written communication in respect thereof filed by the Company, any Subsidiary
or any other Affiliate controlled by the Company with any such securities
exchange or the Securities and Exchange Commission or any successor agency;
(d as soon as practicable, and in any event within thirty (30) days
after any of the events or conditions specified below with respect to any Plan
or Multiemployer Plan shall have occurred or exist with respect to any Plans, a
statement signed by a senior financial officer of the Company setting forth
details respecting such event or condition and the action, if any, which the
Company or any of its Subsidiaries proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to PBGC by the
Company or any of its Subsidiaries with respect to such event or condition):
(i any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder, with respect to a
Plan, as to
36
<PAGE>
which PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event (provided that a failure to
meet the minimum funding standard of Section 412 of the Code
or Section 302 of ERISA shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code);
(ii a contribution failure sufficient to give rise to a lien
under Section 302(f) of ERISA;
(iii the filing under Section 4041 of ERISA of a notice of intent
to terminate any Plan or the termination of any Plan;
(iv the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the
Company or any of its Subsidiaries of a notice from a
Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(v the complete or partial withdrawal by the Company or any of
its Subsidiaries under Section 4201 or 4204 of ERISA from a
Multiemployer Plan, or the receipt by the Company or any of
its Subsidiaries of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA; and
(vi the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any of its
Subsidiaries to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days;
(e promptly after a vice president, the President or the Chairman of
the Board of the Company knows that any Default has occurred, a notice of such
Default, describing the same in reasonable detail;
(f no later than ten (10) Business Days after the date of
promulgation thereof by such Rating Agency, notice of any change in rating by
any Rating Agency in respect of the Company's unsecured long-term debt, together
with the details thereof, and of any announcement by any Rating Agency that its
rating in respect of such unsecured long-term debt is "under review" or that any
such debt rating has been placed on a "CreditWatch List"(R) or "watch list" or
that any similar action has been taken by such Rating Agency; and
37
<PAGE>
(g from time to time such other information regarding the business,
affairs or financial condition of the Company or any of its Subsidiaries
(including, without limitation, any Plan and any reports or other information
required to be filed under ERISA) as any Lender or the Agent may reasonably
request.
The Company shall furnish to the Agent, with sufficient copies for each Lender,
at the time it furnishes each set of financial statements pursuant to paragraph
(a) or (b) above, a certificate of a financial or accounting officer of the
Company (i) to the effect that no Default has occurred and is continuing (or, if
any Default has occurred and is continuing, describing the same in reasonable
detail), and (ii) setting forth in reasonable detail the computations necessary
to determine whether the Company is in compliance with Section 11.5 hereof as of
------------
the end of the respective fiscal quarter or fiscal year.
Section 11.2 Corporate Existence, Etc. (a) The Company shall, except as
------------------------
otherwise permitted under Section 11.4, preserve and maintain its corporate
------------
existence, and (b) the Company shall, and shall cause each of its active
Subsidiaries to: (i) preserve and maintain all of its material rights,
privileges and franchises, except to the extent that in the opinion of the
Company preservation and maintenance of any such material right, privilege or
franchise are not necessary for the operation of the Company's business; (ii)
comply with the requirements of all applicable laws (including, without
limitation, Environmental Laws), rules, regulations and orders of governmental
or regulatory authorities if failure to comply with such requirements would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement, except for any failure to comply with the
requirements of any such applicable law, rule, regulation or order which is
being contested in good faith and by proper actions or proceedings and against
which adequate reserves are being maintained to the extent required under GAAP;
(iii) pay and discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its property prior
to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper actions or proceedings and against which adequate reserves are
being maintained to the extent required under GAAP; (iv) maintain all of its
material properties used or useful in its business in good working order and
condition, ordinary wear and tear excepted, except to the extent that in the
opinion of the Company any such property is not necessary for the operation of
the Company's business; (v) permit representatives of any Lender or the Agent,
during normal business hours and on reasonable advance notice, to examine its
books and records and to make copies and extracts therefrom, to inspect its
properties (subject to reasonable safety and security procedures of the
Company), and to discuss its business and affairs with its officers (subject to
any reasonable proprietary and confidentiality agreements of or binding upon the
Company and its Subsidiaries), all to the extent reasonably requested by such
Lender or the Agent (as the case may be); and (vi) maintain, with financially
sound and reputable insurers, insurance with respect to all property and
business of a character usually insured by corporations engaged in the same or
similar business similarly situated against such liabilities,
38
<PAGE>
casualties, risks and contingencies and in such types and amounts as customary
in the case of corporations engaged in the same or similar business similarly
situated.
Section 11.3 Use of Proceeds. The Company shall use the proceeds of the
---------------
Advances hereunder solely for its general corporate purposes, including
liquidity support for commercial paper of the Company, in compliance with all
applicable legal and regulatory requirements. Neither the Company nor any of its
Subsidiaries shall engage 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) and no part of the proceeds of
any Advance hereunder shall be used to acquire or carry any margin stock.
Section 11.4 Mergers. The Company will not, and will not permit any of
-------
its Subsidiaries to, consolidate with or merge into or with any Person, except
that: (i) the Company or any of its Subsidiaries may consolidate or merge with
the Company or another of the Company's Subsidiaries (provided that, in any such
merger or consolidation to which the Company is a party, the Company shall be
the surviving entity) and (ii) the Company or any of its Subsidiaries may
consolidate or merge with any other Person if the Company, or one of its
Subsidiaries is the surviving entity and such survivor shall continue to own and
operate the Company's business and, after giving effect to a consolidation or
merger pursuant to clause (i) or (ii), no Default shall have occurred and be
continuing.
Section 11.5 Debt to Capitalization. The Company shall not permit the
----------------------
ratio of Total Debt of the Company and the consolidated Subsidiaries to Total
Capitalization to exceed 70% at any time throughout the term hereof.
Section 11.6 Pari Passu Status. The Company will ensure that the claims
-----------------
and rights of the Lenders against it under this Agreement will not be
subordinate to, and will rank at all times at least pari passu with, the claims
---- -----
and rights of all other holders of its unsecured indebtedness.
Section 11.7 Asset Dispositions, etc. The Company and its Subsidiaries,
-----------------------
taken as a whole, will not sell, transfer, lease, contribute or otherwise
convey, or grant options, warrants or other rights with respect to, all or
substantially all of its assets (including accounts receivable and capital stock
of Subsidiaries) to any Person, unless such sale, transfer, lease, contribution
or conveyance is (a) in the ordinary course of its business or is permitted by
Section 11.4; or (b) a sale, transfer or conveyance of Permitted Receivables
- ------------
pursuant to a Permitted Receivables Purchase Facility.
Section 11.8 Limitation on Debt Secured by Mortgages.
---------------------------------------
(a The Company will not, nor will it permit any Subsidiary to,
issue, assume or guarantee any Debt if such Debt is secured by a mortgage,
pledge, security interest or lien (any mortgage, pledge, security interest or
lien being hereinafter in this Section 11.8 referred to as a
------------
39
<PAGE>
"mortgage" or "mortgages") upon any Principal Property of the Company or of any
-------- ---------
Principal Subsidiary or upon any shares of stock or indebtedness of any
Principal Subsidiary (whether such Principal Property, shares of stock or
indebtedness are now owned or hereinafter acquired), without in any such case
effectively providing, concurrently with the issuance, assumption or guarantee
of such Debt, that the Notes (together with, if the Company shall so determine,
any other indebtedness of or guaranteed by the Company or such Principal
Subsidiary ranking equally with the Notes then outstanding and existing or
thereafter created) shall be secured equally and ratably with (or prior to) such
Debt; provided, however, that the foregoing restriction shall not apply to Debt
-------- -------
secured by:
(i mortgages on property acquired, constructed or improved by
the Company or any Principal Subsidiary after the Effective Date which are
created or assumed contemporaneously with, or within 270 days after such
acquisition (or, in the case of property constructed or improved, within
270 days after the completion or commencement of commercial operation of
such property, whichever is later) to secure or provide for the payment of
any part of the purchase price of such property or cost of such
construction or improvement; provided, that if a commitment to so finance
--------
such a payment is obtained prior to or within such 270-day period and the
related mortgage is created within 90 days after the expiration of such
270-day period, the applicable mortgage shall be deemed to be included in
this clause (i), provided, further, that in the case of any such
-------- -------
construction or improvement the mortgage shall not apply to any property
theretofore owned by the Company or any Subsidiary, other than any
theretofore unimproved real property on which the property so constructed,
or the improvement, is located;
(ii mortgages on any property existing at the time of
acquisition thereof (including mortgages on property acquired from a person
which is consolidated with or merged with or into the Company or a
Subsidiary) and mortgages outstanding at the time any Person becomes a
Subsidiary;
(iii mortgages in favor of the Company or any Principal
Subsidiary;
(iv mortgages in favor of the United States, any State or the
District of Columbia, any foreign country or any department, agency or
instrumentality or political subdivision of any such jurisdiction, to
secure partial, progress, advance or other payments pursuant to any
contract or statute or to secure any Debt incurred for the purpose of
financing all or any part of the purchase price or the cost of constructing
or improving the property subject to such mortgages, including mortgages to
secure Debt of the pollution control or industrial revenue bond type; and
(v any extension, renewal or replacement (or successive
extensions, renewals or replacements, in whole or in part, of any mortgage
referred to in the
40
<PAGE>
foregoing clauses (i) to (iv), inclusive; provided, however, that the
-------- -------
principal amount of Debt secured thereby shall not exceed the principal
amount of Debt so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement shall be
limited to all or a part of the property which secured the mortgage so
extended, renewed or replaced (plus improvements on such property).
(b In addition to Debt secured by mortgages permitted under
subsection (a) of this Section 11.8, the Company or any Principal Subsidiary may
------------
issue, assume or guarantee Debt secured by mortgages which would otherwise be
subject to the foregoing restriction, without equally and ratably securing the
Notes, in an aggregate amount which, together with all other such Debt under
this subsection (b) and the Attributable Debt in respect of Sale-Leaseback
Transactions under subsection (d) of Section 11.9, but excluding Debt incurred
------------
pursuant to a sale, transfer or conveyance of Permitted Receivables pursuant to
a Permitted Receivables Purchase Facility, does not exceed 15% of Net Tangible
Assets, as shown on or derived from a consolidated balance sheet, as of a date
not more than 90 days prior to the proposed transaction, prepared by the Company
in accordance with GAAP.
Section 11.9 Limitation on Sale-Leaseback Transactions. The Company
-----------------------------------------
shall not, and shall not permit any Principal Subsidiary to, enter into a Sale-
Leaseback Transaction unless:
(a the lease has a term, calculated by including lessee renewal
rights, of three (3) years or less;
(b the lease is between the Company and a Principal Subsidiary or
between Principal Subsidiaries;
(c the Company or a Principal Subsidiary under Section 11.8(a) could
---------------
issue, assume or guarantee secured Debt;
(d the Company or a Principal Subsidiary under Section 11.8(b) could
---------------
issue, assume or guarantee secured Debt in an amount at least equal to the
amount of the Attributable Debt for the lease without equally and ratably
securing the Notes;
(e the Company or a Principal Subsidiary within 180 days of the
effective date of the Sale-Leaseback Transaction retires Debt of the Company or
a Principal Subsidiary (other than such Debt owed to any Principal Subsidiary)
at least equal in amount to the Attributable Debt for the lease or purchases
property that will constitute Principal Property for an amount at least equal to
the Attributable Debt for the lease. The Company or a Principal Subsidiary may
not receive credit for retirement of Debt that is subordinated to the Notes or
that is effected by payment at maturity; or
41
<PAGE>
(f the Majority Lenders shall have consented to such Sale-Leaseback
Transaction (which consent shall not be unreasonably withheld).
Section 11.10 Limitation on Advances. Notwithstanding the amount of the
----------------------
Commitments, the Company shall not permit, at any time throughout the term
hereof, outstanding Advances plus outstanding commercial paper to exceed the
amount authorized by the Board of Directors of the Company from time to time.
ARTICLE 12
EVENTS OF DEFAULT
If one or more of the following events (herein called "Events of Default")
-----------------
shall occur and be continuing:
(a The Company shall default in the payment when due (i) of any
principal of any Advance (and such default shall continue unremedied for a
period of two (2) Business Days), or (ii) of any interest on any Advance or any
fees payable by the Company hereunder or in connection herewith, or of any other
monetary Obligation (and such default shall continue unremedied for five (5)
Business Days); or
(b A default or event of default shall occur under the Amended and
Restated Credit Agreement; or
(c Indebtedness of the Company or any of its Subsidiaries shall not
be paid when due or is accelerated by the holders thereof, the total amount of
such unpaid or accelerated Indebtedness exceeds $50,000,000, and such default is
continuing; or
(d Any material representation or warranty made or deemed made
herein by the Company under this Agreement, or any certificate furnished by the
Company to any Lender or the Agents pursuant to the provisions hereof, shall
prove to have been incorrect in any material respect as of the time made or
furnished if such material representation or warranty or such certificate (i)
results in a Material Adverse Effect or (ii) could result in a Material Adverse
Effect; provided, however, that no incorrectness in any such representation or
-------- -------
warranty or certificate to the extent pertaining to litigation or ERISA matters
shall result in a Default; or
(e The Company shall default in the performance of any of its
obligations under Section 11.1(e) hereof (to the extent such default relates to
---------------
a Default arising from a breach of clause (a) or (b)(vi) of Section 11.2 or
------------
Sections 11.3 through 11.10 hereof, or from a breach of clause (b)(ii) of
- ------------- -----
Section 11.2, which breach in all cases has come to the attention of a vice
- ------------
president, the President or the Chairman of the Board of the Company), or
Sections 11.4 or 11.10 hereof; or the Company shall default in the performance
- ----------------------
of any of its obligations under Sections
--------
42
<PAGE>
11.6 through 11.9 hereof and such default shall continue unremedied to the
- ---- ----
satisfaction of the Majority Lenders for a period of ten (10) days after notice
thereof to the Company by either the Agent or any Lender (through the Agent); or
the Company shall default in the performance of any of its other obligations in
this Agreement and such default shall continue unremedied for a period of 30
days after notice thereof to the Company by the Agent or any Lender (through the
Agent); or
(f The Company shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property under any bankruptcy,
insolvency or similar laws, (ii) admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, or composition or readjustment of debts, (vi) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under such Bankruptcy Code,
or (vii) take any corporate action for the purpose of effecting any of the
foregoing; or
(g A case or other proceeding shall be commenced (including
commencement of such case or proceeding by way of service of process on the
Company or a Subsidiary), without the application or consent of the Company, in
any court of competent jurisdiction, seeking (i) its bankruptcy, insolvency,
reorganization, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Company or of all or any substantial part of its assets under any bankruptcy,
insolvency or similar laws, or (iii) similar relief in respect of the Company or
one of its Subsidiaries under any law relating to bankruptcy, insolvency,
reorganization, or composition or readjustment of debts, and such case shall
continue undismissed and unstayed and in effect for a period of 45 days, or an
order, judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect for a period of 45 days; or an order
for relief against the Company shall be entered in an involuntary case under
such Bankruptcy Code; or
(h A judgment or judgments for the payment of money in excess of
$50,000,000 in the aggregate shall be entered by a court or courts against the
Company or any of its Subsidiaries and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution thereof
shall not be procured, within 60 days from the date of entry thereof and in any
event not later than the date of any proposed sale or levy thereunder and the
Company or the relevant Subsidiaries shall not, within such period of 60 days,
or such longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(i) An event or condition specified in Section 11.1(d) hereof shall
---------------
occur or exist with respect to any Plan or Multiemployer Plan and, as a result
of such event or condition,
43
<PAGE>
together with all other such events or conditions, the Company or any of its
Subsidiaries shall incur a liability to a Plan, a Multiemployer Plan or PBGC (or
any combination of the foregoing) in an aggregate amount exceeding $30,000,000,
which amount is payable while this Agreement is in effect;
THEREUPON, (i) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Article 12, the Agent shall, upon request of the
----------
Majority Lenders, by notice in writing to the Company, cancel the Commitments
and/or declare the principal amount then outstanding of and the accrued interest
on the Advances and all other amounts payable by the Company hereunder to be
immediately due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Company; and (ii) in the case of
the occurrence of an Event of Default referred to in clause (f) or (g) of this
Article 12, the Commitments shall be automatically canceled and the principal
- ----------
amount then outstanding of, and the accrued interest on, the Advances and all
other amounts payable by the Company hereunder shall become automatically
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company. The rights of the Agents and the Lenders provided for herein are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity.
ARTICLE 13
THE AGENTS
Section 13.1 Appointment, Powers and Immunities. Each Lender hereby
----------------------------------
irrevocably appoints and authorizes the Agent to act as its administrative
agent, the Syndication Agent to act as syndication agent, the Documentation
Agent to act as documentation agent, and the Co-Agents to act as co-agents,
under and for purposes of this Agreement, the Notes and the other Loan Documents
with such powers as are specifically delegated to the Agents by the terms of
this Agreement, the Notes and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. The Agents (which term as used in
this sentence and in Section 13.5 hereof and the first sentence of Section 13.6
------------ ------------
hereof shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement, the Notes
and the other Loan Documents, and shall not by reason of this Agreement, the
Notes and the other Loan Documents be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, the Notes and the other Loan Documents,
or in any certificate or other document referred to or provided for in, or
received by any of them under, this Agreement, the Notes and the other Loan
Documents, or for the value, execution, validity, effectiveness, genuineness,
enforceability, collectibility, or sufficiency of this Agreement, the Notes and
the other Loan Documents or any other document referred to or provided for
herein or for any failure by the Company or any other Person to
44
<PAGE>
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
pursuant to this Agreement, the Notes and the other Loan Documents except to the
extent requested by the Majority Lenders; and (d) shall not be responsible for
any action taken or omitted to be taken by them pursuant to this Agreement, the
Notes and the other Loan Documents or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for their own gross negligence or willful misconduct. The
Agents may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
them.
Section 13.2 Reliance by the Agents. The Agents shall be entitled to
----------------------
rely upon any certification, notice or other communication (including any
thereof by telephone, telex or telefacsimile) believed by any of them to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agents. As to any
matters not expressly provided for by this Agreement, the Notes and the other
Loan Documents, the Agents shall in all cases be fully protected in acting, or
in refraining from acting, hereunder or thereunder in accordance with
instructions signed by the Majority Lenders or such larger percentage of the
Lenders as may be required by any provision of this Agreement, and such
instructions of the Majority Lenders or such larger percentage of the Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders.
Section 13.3 Default. The Agent shall be deemed to have no knowledge of
-------
the occurrence of a Default (other than the non-payment of principal of or
interest on Advances or of fees hereunder) unless the Agent has received notice
from a Lender or the Company specifying such Default and stating that such
notice is a "Notice of Default." In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt notice
thereof to the Lenders (and shall give each Lender prompt notice of each such
non-payment). The Agent shall (subject to Section 13.7 hereof) take such action
------------
with respect to such Default as shall be directed by the Majority Lenders or
such larger percentage of the Lenders as may be required by any provision of
this Agreement, provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable in the best interest of the Lenders.
Section 13.4 Rights as a Lender. With respect to its respective
------------------
Commitments and the Advances made by it, the Agent, the Syndication Agent, the
Documentation Agent and the Co-Agents in their capacity as Lenders hereunder
shall have the same rights and powers under this Agreement, the Notes and the
other Loan Documents as any other Lender and may exercise the same as though it
were not acting as the Agent, the Syndication Agent, the Documentation Agent and
the Co-Agents, respectively, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include each of the Agents in its individual
capacity. The Agents and their Affiliates may (without having to account
therefor to any Lender), accept deposits from, lend
45
<PAGE>
money to and generally engage in any kind of banking, trust, financial advisory
or other business with the Company (and any of its affiliates) as if it were not
acting as an Agent, and without notice to or consent of the Lenders, the Agents
may accept fees and other consideration from the Company for services in
connection with this Agreement, the Notes, the other Loan Documents or otherwise
without having to account for the same to the Lenders.
Section 13.5 Indemnification by Lenders. The Lenders agree to indemnify
--------------------------
the Agent and its officers, directors, employees and agents (to the extent not
reimbursed under Section 14.5 hereof, but without limiting the obligations of
------------
the Company under said Section 14.5), ratably in accordance with the aggregate
------------
principal amount of the outstanding Advances made by the Lenders (or, if no
Advances are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement, the Notes, the other Loan Documents or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
(including, without limitation, the costs and expenses which the Company is
obligated to pay under Section 14.3 hereof) or the enforcement of any of the
------------
terms of this Agreement, the Notes, the other Loan Documents or of any such
other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified. The obligation of the Lenders in
this Section shall survive the payment of the Advances and of any other sums due
from Company hereunder and the termination of the Commitments.
Section 13.6 Non-Reliance on the Agents and other Lenders. Each Lender
--------------------------------------------
agrees that it has, independently and without reliance on the Agents or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and the Subsidiaries
and decision to enter into this Agreement and that it shall, independently and
without reliance upon the Agents or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement. The Agents shall not be required to keep itself informed as to the
performance or observance by the Company of this Agreement or any other document
referred to or provided for herein or to inspect the properties or books of the
Company or any Subsidiary. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agents shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of the Company or any Subsidiary (or any of their
affiliates) which may come into the possession of any Agent or any of its
Affiliates. Each Lender further acknowledges that (i) the Agents have responded
satisfactorily to any request by such Lender for information regarding such
credit facilities; and (ii) the Agents and their Affiliates may manage their
relationships with the Company under such facilities as it sees fit as though it
were not an Agent hereunder.
46
<PAGE>
Section 13.7 Failure to Act. Except for action expressly required of
--------------
the Agent hereunder, the Agents shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Section 13.8 Resignation. Any of the Agents may resign as such at any
-----------
time upon at least 30 days prior notice to the Company and the Lenders. In the
event of any such resignation of the Agent, the Company shall as promptly as
practicable appoint a successor Agent who must be or immediately become a
Lender. In the event no such successor is appointed, the Majority Lenders shall
as promptly as practicable appoint a successor agent to such resigning Agent. In
the event no such successor is so appointed within 30 days of any such notice,
any Lender may apply to a court of competent jurisdiction for the appointment of
a successor agent hereunder to such resigning Agent. After any retiring Agent's
resignation hereunder as an Agent, the provisions of (i) this
Article 13 shall inure to its benefit as to any actions taken or omitted to be
- ----------
taken by it while it was an Agent, as the case may be, under this Agreement and
(ii) Section 14.8 shall continue to inure to its benefit.
------------
Section 13.9 Funding Reliance, etc. Unless the Agent shall have been
---------------------
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., New
York, New York time, on the day of any Reference Rate Advance or the day prior
to any other Advance, that such Lender will not make available the amount which
would constitute its percentage of such Advance on the date specified therefor,
the Agent may assume that such Lender has made such amount available to the
Agent and, in reliance upon such assumption, make available to the Company a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Agent, such Lender and the Company severally agree
to repay such Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Agent made such amount
available to the Company to the date such amount is repaid to the Agent, at the
Federal Funds Rate.
Section 13.10 Syndication Agent, Documentation Agent and Co-Agents.
----------------------------------------------------
None of the Lenders identified on the facing page or signature pages of this
Agreement as either Syndication Agent, Documentation Agent or Co-Agents shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 14
MISCELLANEOUS
47
<PAGE>
Section 14.1 Waiver. No failure on the part of any Agent or any Lender
------
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
Section 14.2 Government Regulation. Anything contained in this
---------------------
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Company in violation of any limitation or prohibition
provided by any applicable statute or regulation.
Section 14.3 Taxes. Any taxes (excluding income taxes payable by the
-----
Agents or the Lenders, other than as provided in Article 8) or other similar
---------
assessments or charges payable or ruled payable by any government authority in
respect of this Agreement or any other Loan Documents shall be paid by the
Company, together with interest and penalties, if any.
Section 14.4 Notices. All notices and other communications provided for
-------
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, legible
telefacsimile transmission or in writing and telexed, telecopied, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telex (answerback confirmed
in the case of Telexes) or telecopier, or personally delivered or, in the case
of a mailed notice, upon receipt, in each case given or addressed as aforesaid,
except that notices to the Agent pursuant to Articles 2, 3, 4, 5, 12 or 13 shall
---------- - - - -- --
not be effective until actually received by the Agent. The Agents and the
Lenders shall not have any liability on account of any action taken or not taken
by the Agents or the Lenders in reliance upon telephonic notice (where expressly
authorized by this Agreement) or telex or telefacsimile notice.
Section 14.5 Expenses, Etc. The Company agrees to pay or reimburse each
--------------
of the Lenders and the Agents for paying: (a) the fees and out-of-pocket
expenses in connection with (i) the negotiation, preparation, execution and
delivery of this Agreement, the Notes and every other Loan Document, including
schedules and exhibits, and (ii) any amendment, modification or waiver of any of
the terms of this Agreement, the Notes or any other Loan Document as from time
to time hereafter may be required; (b) all reasonable costs and expenses of the
Lenders and the Agents (including reasonable attorneys' fees and expenses,
including the allocated cost of internal counsel) in connection with the
enforcement of this Agreement, the Notes and any other Loan Documents; and (c)
all transfer, stamp, documentary or other similar taxes, assessments or charges,
including the allocated cost of internal counsel, levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein.
48
<PAGE>
Section 14.6 Amendments, Etc. No amendment or waiver of any provision
----------------
of this Agreement or consent to any departure by any party therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Company and the Majority Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
--------
writing and signed by all the Lenders, do any of the following: (a) waive any
of the conditions specified in Article 9, (b) increase the Commitments of the
---------
Lenders or of any Lender or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Advances or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Lenders, which shall
be required for the Lenders or any of them to take any action hereunder, or (f)
amend this Section 14.6; and provided, further, that no amendment, waiver or
------------ -------- -------
consent shall, unless in writing and signed by the Agent affected in addition to
the Lenders required above to take such action, affect the rights or duties of
the Agent under this Agreement. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 14.6 shall be binding
------------
upon each holder of any indebtedness resulting from the making of Advances
hereunder at the time outstanding, each future holder of any such indebtedness,
and if signed by the Company, on the Company.
Section 14.7 Sales and Transfers, etc. of Advances and Notes;
------------------------------------------------
Participation in Advances and Notes.
- -----------------------------------
(a) Any Lender may at any time sell to one or more banks or other
entities ("Participants") participating interests in any Advance owing to such
------------
Lender, any Note held by such Lender, the Commitment of such Lender or any other
interest of such Lender hereunder, provided that no Lender may sell any
--------
participating interests in any such Advance, Note, Commitment or other interest
hereunder without also selling to such Participant the appropriate share of its
Advances, Note, Commitments and other interests hereunder related thereto, and
provided further that no Lender shall transfer, grant or assign any
- -------- -------
participation under which the Participant shall have rights to approve any
amendment to or waiver of this Agreement except to the extent such amendment or
waiver would (i) increase the amount of such Lender's Commitment, (ii) reduce
the principal of, or interest on, any of such Lender's Advances, or any fees or
other amounts payable to such Lender hereunder, (iii) postpone any date fixed
for any scheduled payment of principal of, or interest on, any of such Lender's
Advances, or any fees or other amounts payable to such Lender hereunder or (iv)
release all or substantially all collateral security, if any, for any
Obligation, except as otherwise specifically provided in any Loan Document. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such
49
<PAGE>
Lender shall remain the holder of any such Note for all purposes under this
Agreement and the Company and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. The Company agrees that if amounts outstanding
under this Agreement and the Notes are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agreement and any Note
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement or any Note; provided that such
--------
right of setoff shall be subject to the obligation of such Participant to share
with the Lenders, and the Lenders agree to share with such Participant, as
provided in Section 14.10. The Company also agrees that each Participant shall
-------------
be entitled to the benefits of Article 8 with respect to its participation in
---------
the Commitments and the Advances outstanding from time to time; provided that no
--------
Participant shall be entitled to receive any greater amount pursuant to such
provisions than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred; and provided, further, that
--------
each Participant shall have complied with the provisions of Section 14.7(e).
---------------
(b) (i) Any Lender may at any time sell to any Lender or any
affiliate thereof, and, with the consent of the Agent and the Company (which
shall not be unreasonably withheld or delayed), to one or more banks or
financial institutions ("Purchasing Lenders") all or any part of its rights and
------------------
obligations under this Agreement and the Notes, pursuant to a Transfer
Certificate in the form attached as Exhibit F hereto, executed by such
---------
Purchasing Lender and such transferor Lender (and, in the case of a Purchasing
Lender which is not then a Lender or an affiliate thereof, by the Company) and
the Agent and delivered to the Agent; provided that each such sale to a
--------
Purchasing Lender shall be in an amount of $5,000,000 or more; and provided,
--------
further, that no Lender may sell any Commitment to a Purchasing Lender without
- -------
also selling to such Purchasing Lender the appropriate pro rata share of its
--- ----
Notes and Advances thereunder.
(ii) Upon such execution, delivery and acceptance as set forth above,
from and after the Transfer Effective Date determined pursuant to such Transfer
Certificate (x) the Purchasing Lender thereunder shall be a party hereto and, to
the extent provided in such Transfer Certificate, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein and (y)
the transferor Lender thereunder shall, to the extent provided in such Transfer
Certificate be released from its obligations under this Agreement (and, in the
case of an Transfer Certificate covering all or the remaining portion of a
transferor Lender's rights and obligations under this Agreement, such transferor
Lender shall cease to be a party hereto). Such Transfer Certificate shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Purchasing Lender and the resulting adjustment
of Commitments arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Notes. On or prior to the Transfer Effective Date determined
pursuant to such Transfer Certificate, the Company, at
50
<PAGE>
its own expense, shall execute and deliver to the Agent in exchange for any
surrendered Notes, a new Note payable to the order of such Purchasing Lender in
an amount equal to the Commitments assumed by it pursuant to such Transfer
Certificate, and, if the transferor Lender has retained a Commitment or Advance
hereunder, a new Note to the order of the transferor Lender in an amount equal
to the Commitment retained by it hereunder. The new Notes to be held by the
Purchasing Lender shall be dated the Effective Date and the new Notes to be held
by the transferor Lender shall be dated the date of the Notes being surrendered
and all such Notes shall otherwise be in the form of the Notes replaced thereby.
The Notes surrendered by the transferor Lender shall be returned by the Agent to
the Company marked "replaced."
(c) Upon its receipt of a Transfer Certificate executed by a
transferor Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an affiliate thereof, by the Company (if the
consent of the Company is required)) and the Agent together with payment to the
Agent hereunder of a registration and processing fee of $2,500, the Agent shall
(i) promptly accept such Transfer Certificate and (ii) on the Transfer Effective
Date determined pursuant thereto give notice of such acceptance and recordation
to the Lenders and the Company.
(d) The provisions of the foregoing clauses (b) and (c) shall not
----------- ---
apply to or restrict, or require the consent of or any notice to any Person to
effectuate, the pledge or assignment by any Lender of its rights under this
Agreement and its Notes to any Federal Reserve Lender.
(e) If, pursuant to this Section 14.7 any interest in this Agreement
------------
or any Note is transferred to any transferee (a "Transferee") which is organized
----------
under the laws of any jurisdiction other than the United States, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Lender (for the benefit of the
transferor Lender, the Agents and the Company) that under applicable law and
treaties no taxes will be required to be withheld by the Agent, the Company or
the transferor Lender with respect to any payments to be made to such Transferee
in respect of the Advances, (ii) to furnish to the transferor Lender (and, in
the case of any Purchasing Lender, the Agents, and the Company) either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein such Transferee claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments hereunder) and (iii) to agree
(for the benefit of the transferor Lender, the Agents and the Company) to
provide the transferor Lender (and, in the case of any Purchasing Lender, the
Agents and the Company) a new Form 4224 or Form 1001 upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
51
<PAGE>
Section 14.8 Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Commitments,
the Company hereby agrees to indemnify and hold the Agents and each Lender and
each of their respective directors, officers, employees, affiliates and agents
(collectively, the "Indemnified Parties") harmless from and against any and all
-------------------
losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable fees and disbursements of counsel amounts paid in
settlement and court costs) (collectively, the "Indemnified Liabilities"), which
-----------------------
may be incurred by or asserted against the Indemnified Parties or any of them,
in connection with or arising out of or resulting from the action or inaction of
the Company or any of its Subsidiaries in connection with: (a) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of any Advance; and (b) the entering into and performance of this
Agreement and any other Loan Document by any of the Indemnified Parties.
Notwithstanding anything herein to the contrary, the Company shall not be liable
or responsible for Indemnified Liabilities to the extent a court of competent
jurisdiction has found such Indemnified Liabilities resulted from such
Indemnified Person's own negligence or willful misconduct.
Section 14.9 Set-off. Upon (i) the occurrence and during the
-------
continuance of any Default, (ii) the making of the request by the Majority
Lenders (or any greater percentage of the Lenders) specified in Article 12 to
----------
the Agent to declare the Advances and other amounts due hereunder to be
immediately due and payable, or (iii) obtaining the consent of the Majority
Lenders, each Lender hereby is authorized at any time and from time to time,
without prior notice to the Company (any such notice being expressly waived by
the Company), to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender (or any bank controlling such Lender) to or for
the credit or the account of the Company against any and all obligations of the
Company now or hereafter existing under this Agreement, irrespective of whether
or not such Lenders shall have made any demand under this Agreement and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
Company (through the Agent) after any such set-off and application made by such
Lender, provided, however, that the failure to give such notice shall not affect
-------- -------
the validity of such set-off and application. The rights of each Lender under
this Section 14.9 are in addition to other rights and remedies (including other
------------
rights of set-off) which such Lender may have.
Section 14.10 Sharing of Payments, Etc. If any Lender shall obtain any
-------------------------
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances made by it in excess of its
ratable share of payments on account of the Advances obtained by all of the
Lenders, such Lender shall forthwith advise the Agent of the receipt of such
payment, and within one Business Day of such receipt shall purchase from the
other Lenders (through the Agent) such participation in the Advances made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
-------- -------
of such excess payment is thereafter recovered by or on behalf of the Company
from such purchasing Lender, the purchase shall be rescinded
52
<PAGE>
and the purchase price restored to the extent of such recovery, but without
interest. The Company agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 14.10 may exercise all of its rights of
-------------
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Company in the amount of
such participation. No documentation other than notices and the like referred to
in this Section 14.10 shall be required to implement the terms of this Article.
------------- -------
The Agent shall keep records (which shall be conclusive absent manifest error)
of participation pursuant to this Section 14.10 and shall in each case notify
-------------
the Lenders following any such purchases.
Section 14.11 Other Transactions. Nothing contained herein shall
------------------
preclude the Agents or any Lender from engaging in any transaction, in addition
to those contemplated by this Agreement or any other Loan Document, with the
Company or any of its Affiliates in which the Company or such Affiliate is not
restricted hereby from engaging with any other Person.
Section 14.12 Nonliability of Lenders. The relationship between the
-----------------------
Company on the one hand and the Lenders and the Agents on the other hand shall
be solely that of borrower and lender. None of the Agents nor any Lenders shall
have any fiduciary responsibilities to the Company or any of its Subsidiaries or
Affiliates. None of the Agents nor any of the Lenders undertakes any
responsibility to the Company or any of its Subsidiaries or Affiliates to review
or inform the Company of any matter in connection with any phase of the
Company's or such Subsidiary's or Affiliate's business or operations.
Section 14.13 Severability. In case any provision in or obligation
------------
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 14.14 Survival. All agreements, representations and warranties
--------
made herein are made as of the respective dates stated herein and shall survive
the execution and delivery of this Agreement and the making of the Advances
hereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the obligations of the Company under Sections 8.1 through 8.4, 8.11,
------------ --- ----
14.3, 14.5 and 14.8 hereof shall survive any termination of this Agreement, the
- ---- ---- ----
other Loan Documents, the repayment of the Advances and the termination of the
Commitments.
Section 14.15 Captions and Headings. Captions and section headings
---------------------
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
Section 14.16 Counterparts. This Agreement may be executed in any
------------
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement shall become effective when
counterparts hereof executed on behalf of the Company and each
53
<PAGE>
Lender (or notice thereof satisfactory to the Agent) shall have been received by
the Agent and notice thereof shall have been given by the Agent to the Company
and each Lender.
Section 14.17 Numbers of Documents. All statements, notices, closing
--------------------
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the Lenders
and each of the Agents.
Section 14.18 Governing Law. THIS AGREEMENT, THE NOTES, AND EACH OTHER
-------------
LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Section 14.19 Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
AGENTS, THE LENDERS OR THE COMPANY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY
IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS.
54
<PAGE>
Section 14.20 Waiver of Jury Trial. THE COMPANY, THE AGENTS AND THE
--------------------
LENDERS HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE NOTES, THE
OTHER LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS CREDIT TRANSACTION AND THE LENDER/COMPANY RELATIONSHIP THAT IS
BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including, without limitation, contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. The Agents, the Lenders and the Company each acknowledge that
this waiver is a material inducement to enter into a business relationship, that
each has already relied on the waiver in entering into this Agreement, the Notes
and the other Loan Documents and that each will continue to rely on the waiver
in their related future dealings. The Agents, the Lenders and the Company
further warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT, THE NOTES, THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE ADVANCES. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
Section 14.21 Entire Agreement. This Agreement, the Notes and the other
----------------
Loan Documents embody the entire agreement and understanding among the Company,
the Lenders and the Agents, and supersede all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for the fee letter referenced in
Section 2.6(b) hereof, and any prior arrangements made with respect to the
- --------------
payment by the Company of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the
Agents or the Lenders.
Section 14.22 Renewal, Extension and Rearrangement. All provisions of
------------------------------------
this Agreement and any other Loan Document relating to the Notes or the other
Obligations shall apply with equal force and effect to each and all promissory
notes or other agreements or instruments hereafter executed which in whole or in
part represent a renewal, extension, increase or rearrangement of any part of
the original Notes or Obligations.
Section 14.23 No Oral Agreements. THIS WRITTEN AGREEMENT, THE NOTES,
------------------
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
55
<PAGE>
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
56
<PAGE>
The parties hereto have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first above
written.
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
By_________________________________________
Name: Jeffrey J. McParland
Title: Senior Vice President, Chief
Financial Officer and Treasurer
Address:
2100 Southwest River Parkway
Portland, OR 97201
Telephone No.: (503) 833-4142
Telefacsimile No.: (503) 833-4907
Attention: Deanne M. Franks
Assistant Treasurer
[SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT]
S-1
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE, as Agent
for the Lenders
By__________________________________________
Name:
Title:
Address for Notices:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3691
Telefacsimile No.: (212) 856-3763
Telex No.: 6716450 (Answerback: CIBC SYN)
Attention: MaryBeth Ross
with copies to:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3758
Telefacsimile No.: (212) 885-4911
Attention: Denis P. O'Meara
Address for payments:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
60 Wall Street
New York, New York 10260
ABA No.: 021000238
For Account of: Canadian Imperial
Bank of Commerce,
New York Agency
Account No.: 63000480
For further credit to Agented Loans
Account No.: 0709611
S-2
<PAGE>
Reference: PG&E Gas Transmission,
Northwest Corporation
CIBC INC., as a Lender
By___________________________________
Name:
Title:
Lending Office for Advances:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telex No.: 6716450 (Answerback:
CIBC SYN)
Telephone No.: (212) 856-3691
Telefacsimile No.: (212) 856-3763
Attention: MaryBeth Ross
Address for Notices:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3691
Telefacsimile No.: (212) 856-3763
Telex No.: 6716450 (Answerback: CIBC
SYN)
Attention: MaryBeth Ross
with copies to:
425 Lexington Avenue, 7th Floor
New York, New York 10017
Telephone No.: (212) 856-3758
Telefacsimile No.: (212) 885-4911
Attention: Denis P. O'Meara
S-3
<PAGE>
BARCLAYS BANK PLC, as a Co-Agent for the
Lenders and as a Lender
By________________________________________
Name:
Title:
Lending Office for Advances:
Barclays Group Inc.
222 Broadway, 12th Floor
New York, New York 10038
Attention: Client Services Unit
Telephone No.: (212) 412-1352
Telefacsimile No.: (212) 412-4090
Telex No.: 12-6195
Address for Notices:
222 Broadway, 11th Floor
New York, New York 10038
Attention: Jonathan Berman
Telephone No.: (212) 412-7525
Telefacsimile No.: (212) 412-6709
S-4
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO, as
Documentation Agent for the Lenders, as a
Co-Agent for the Lenders, and as a Lender
By_________________________________________
Name:
Title:
Lending Office for Advances:
One First National Plaza
Chicago, Illinois 60670
Telephone No.: (312) 732-8105
Telefacsimile No.: (312) 732-4840
Address for Notices:
One First National Plaza, Suite 0363
Chicago, Illinois 60670
Attention: Jane Bek
Telephone No.: (312) 732-3422
Telefacsimile No.: (312) 732-3055
With a copy to:
One First National Plaza, Suite 0634
Chicago, Illinois 60670
Attention: Lynn Pozsgay
Telephone No.: (312) 732-8705
Telefacsimile No.: (312) 732-4840
[SIGNATURE PAGE TO 364-DAY AGREEMENT]
S-5
<PAGE>
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Lender
By____________________________________
Name:
Title:
Lending Office for Advances:
1850 Gateway Blvd.
Concord, California 94521
Telephone No.: (510) 675-7148
Telefacsimile No.: (510) 675-7531
Telex No.: 34346 (Answerback:
BANKAMER SFO)
Address for Notices:
555 California Street, 41st Floor
San Francisco, California 94104
Attention: Gary Tsuyuki
Telephone No.: (415) 622-8322
Telefacsimile No.: (415) 622-0632
Telex No.: 34346 (Answerback:
BANKAMER SFO)
With a copy to:
1050 Gateway Blvd., 4th Floor
Concord, California 94521
Attention: Sandy Schwartzkopf
Telephone No.: (510) 675-7342
Telefacsimile No.: (510) 675-7531
Telex No.: 34346 (Answerback:
BANKAMER SFO)
S-6
<PAGE>
CITICORP USA, INC., as a Lender
By______________________________________
Name:
Title:
Lending Office for Advances:
2 Penns Way, Suite 200
New Castle, DE 19720
Attention: Mark Waldron
Telephone No.: (302) 894-6084
Telefacsimile No.: (302) 894-6120
Address for Notices:
399 Park Avenue, 4th Floor
New York, New York 10043
Attention: Sandip Sen
Telephone No.: (212) 559-1275
Telefacsimile No.: (212) 793-6130
With a copy to:
2 Penns Way, Suite 200
New Castle, DE 19720
Attention: Mark Waldron
Telephone No.: (302) 894-6084
Telefacsimile No.: (302) 894-6120
S-7
<PAGE>
THE FUJI BANK, LIMITED, Los Angeles
Agency, as a Lender
By_____________________________________
Name:
Title:
Lending Office for Advances:
Los Angeles Agency
333 South Hope Street, 39th Floor
Los Angeles, California 90071
Attention: Jonathan Bigelow
Telephone No.: (213) 253-4144
Telefacsimile No.: (213) 253-4178
Address for Notices:
Los Angeles Agency
333 South Hope Street, 39th Floor
Los Angeles, California 90071
Attention: Jonathan Bigelow
Telephone No.: (213) 253-4144
Telefacsimile No.: (213) 253-4178
S-8
<PAGE>
UBS, AG, Stamford Branch, as a Lender
By____________________________________
Name:
Title:
By____________________________________
Name:
Title:
Lending Office for Advances:
10 East 50th Street
New York, New York 10022
Telephone No.: (212) 574-3000
Telefacsimile No.: (212) 574-3180
Telex No.: 420520
Address for Notices:
222 Broadway
New York, New York 10038
Attention: Darryl Monasebian
Telephone No.: (212) 574-3103
Telefacsimile No.: (212) 574-4395
With a copy to:
222 Broadway
New York, New York 10038
Attention: Laura M. Paradiso
Telephone No.: (212) 574-4119
Telefacsimile No.: (212) 574-3180
Telex No.: 420520
S-9
<PAGE>
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent for the Lenders, as a
Co-Agent for the Lenders and as a Lender
By_________________________________________
Name:
Title:
Lending Office for Advances:
National Corporate Banking
555 S.W. Oak Street, Suite 400
Portland, Oregon 97204
Telephone No.: (503) 275-6738
Telefacsimile No.: (503) 275-5428
Address for Notices:
National Corporate Banking
555 S.W. Oak Street, Suite 400
Portland, Oregon 97204
Attention: Aaron Gordon
Telephone No.: (503) 275-6738
Telefacsimile No.: (503) 275-5428
With a copy to:
Corporate Loan Servicing
555 S.W. Oak Street, PL-7
Portland, Oregon 97204
Attention: Jan Knox
Telephone No.: (503) 275-6561
Telefacsimile No.: (503) 275-4600
S-10
<PAGE>
EXHIBIT A
[Form of]
NOTE
$_________ May 24, 1999
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION, a California Company (the
"Company"), FOR VALUE RECEIVED, promises to pay to the order of________________
-------
(the "Lender") on each Repayment Date and on or before the Maturity Date the
lesser of the principal sum of ___________________________ DOLLARS ($__________)
and the aggregate unpaid principal amount of all Advances made by the Lender to
the Company pursuant to the Agreement (as hereinafter defined) in immediately
available funds at the main office of Canadian Imperial Bank of Commerce, as
Agent, together with interest (whether by acceleration or otherwise) on the
unpaid principal amount hereof at the rates and on the dates set forth in the
Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the 364-Day Credit Agreement, dated as of May 24, 1999 (the
"Agreement"), among the Company, Canadian Imperial Bank of Commerce, as Agent
---------
for the Lenders, The First National Bank of Chicago, as Documentation Agent for
the Lenders, U.S. Bank National Association, as Syndication Agent for the
Lenders, The First National Bank of Chicago, U.S. Bank National Association and
Barclays Bank PLC, as Co-Agents for the Lenders, and the Lenders named therein,
to which Agreement, as it may be amended from time to time, reference is hereby
made for a statement of the terms and conditions under which this Note may be
prepaid or its maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Agreement.
Notwithstanding all other provisions of the Agreement and this Note, none
of the terms and provisions of the Agreement or this Note shall ever be
construed to create a contract to pay the Lender for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by the Lender to the Company under applicable state or
federal law from time to time in effect, and the Company shall never be required
to pay interest in excess of such maximum amount. If for any reason interest is
paid in excess of such maximum amount (whether as a result of the payment of
this Note prior to its maturity or otherwise), then promptly upon any
determination that such excess has been paid, the Lender will, at its option,
either refund such excess to the Company or apply such excess to the principal
owing under the Agreement or this Note.
Exhibit A - Page 1
<PAGE>
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT
THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO APPLICABLE
FEDERAL LAWS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
By _________________________________________
Name: Jeffrey J. McParland
Title: Senior Vice President, Chief
Financial Officer and Treasurer
By _________________________________________
Name: Deanne M. Franks
Title: Assistant Treasurer
Exhibit A - Page 2
<PAGE>
SCHEDULE OF ADVANCES AND PAYMENTS OF PRINCIPAL
TO
NOTE OF PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
DATED MAY 24, 1999
<TABLE>
<CAPTION>
Amount of Amount of Unpaid Principal
Advance Made Principal Repaid Balance
------------ ----------------- ----------------
Interest Notation
Reference LIBOR Period (if Reference LIBOR Reference LIBOR Made
----
Date Rate Rate Applicable) Rate Rate Rate Rate Total By
- ----- ----- ---- ---------- ---- ---- ---- ---- ----- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
</TABLE>
Exhibit A - Page 3
<PAGE>
EXHIBIT B
LIBOR Advance Request
---------------------
To: Canadian Imperial Bank of Commerce, as Agent
425 Lexington Avenue, 7th Floor
New York, New York 10017
Attention: MaryBeth Ross
Date: _______________, ____
Re: LIBOR Advance Request - 364-Day Credit Agreement, dated as of May
24, 1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement") among PG&E Gas
----------------
Transmission, Northwest Corporation, the various financial
institutions as are and may become parties thereto, The First
National Bank of Chicago, as Documentation Agent for the Lenders,
U.S. Bank National Association, as Syndication Agent for the
Lenders, The First National Bank of Chicago, U.S. Bank National
Association and Barclays Bank PLC, as Co-Agents for the Lenders,
and Canadian Imperial Bank of Commerce, as Agent for the Lenders
Ladies and Gentlemen:
1. This LIBOR Advance Request is delivered to you pursuant to Section 3.1 of
-----------
the Credit Agreement. Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.
2. We request LIBOR Advances pursuant to the Credit Agreement as follows:
(i) Drawdown Date: _________________, ____
(ii) Principal amount: $______
(iii) Length of Interest Period and/or Repayment Date:
3. The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed LIBOR
Advance, before and after giving effect thereto and to the application of
the proceeds therefrom:
Exhibit B - Page 1
<PAGE>
(i) the principal amount of the proposed Advance is not more than the
Available Facility Amount;
(ii) no Default has occurred and is continuing;
(iii) the representations and warranties contained in Sections 10.1, 10.4,
------------- ----
10.5, 10.6, 10.7 and 10.9 of the Credit Agreement are true and
---- ---- ---- ----
correct as of the date of such Advance except for changes reflecting
transactions permitted by the Credit Agreement;
(iv) no authorizations, approvals or consents of, and no filings or
renegotiations with, any governmental or regulatory authority or
agency are necessary for the incurring of obligations in connection
with such Advance, other than approvals which have been duly
obtained and are in full force and effect; and
(v) the incurring of obligations in connection with such Advance does
not conflict with or result in a breach of any applicable law or
regulation, or any other, writ, injunction or decree of any court or
regulatory authority.
4. The Company agrees that if prior to the time of the Advance requested
hereby any matter certified to herein by it will not be true and correct at
such time as if then made, it will immediately so notify the Agent. Except
to the extent, if any, that prior to the time of the Advance requested
hereby the Agent shall receive written notice to the contrary from the
Company, each matter certified to herein shall be deemed once again to be
certified as true and correct at the date of such Advance as if then made.
5. Please wire transfer the proceeds of the Advance to the accounts of the
following persons at the final institutions indicated respectively:
<TABLE>
<CAPTION>
Amount to be Person to be Paid Name, Address, etc. of
-----------------
Transferred Name Account No. Transferee Lender
----------- ---- ---------- ----------------------
<S> <C> <C> <C>
$_______________ ______________________ ____________________ ______________________
______________________
Attention:____________
$_______________ ______________________ ____________________ ______________________
______________________
Attention:____________
$_______________ ______________________ ____________________ ______________________
______________________
Attention:____________
Balance of such The Company ____________________ ______________________
proceeds ______________________
</TABLE>
Exhibit B - Page 2
<PAGE>
Attention:____________
The Company has caused this LIBOR Advance Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly Authorized Officer this ______ day of ___________________, __________.
Very truly yours,
PG&E GAS TRANSMISSION,
NORTHWEST CORPORATION
By______________________________
Name:
Title:
By______________________________
Name:
Title:
Exhibit B - Page 3
<PAGE>
EXHIBIT C
Reference Rate Advance Request
------------------------------
To: Canadian Imperial Bank of Commerce, as Agent
425 Lexington Avenue, 7th Floor
New York, New York 10017
Attention: MaryBeth Ross
Date: _______________, _____
Re: Reference Rate Advance Request - 364-Day Credit Agreement, dated
as of May 24, 1999 (together with all amendments, if any, from
time to time made thereto, the "Credit Agreement") among PG&E Gas
----------------
Transmission, Northwest Corporation, the various financial
institutions as are and may become parties thereto, The First
National Bank of Chicago, as Documentation Agent for the Lenders,
U.S. Bank National Association, as Syndication Agent for the
Lenders, The First National Bank of Chicago, U.S. Bank National
Association and Barclays Bank PLC, as Co-Agents for the Lenders,
and Canadian Imperial Bank of Commerce, as Agent for the Lenders
Ladies and Gentlemen:
1. This Reference Rate Advance Request is delivered to you pursuant to Section
-------
4.1 of the Credit Agreement. Unless otherwise defined herein or the
---
context otherwise requires, terms used herein have the meanings provided in
the Credit Agreement.
2. We request Reference Rate Advances pursuant to the Credit Agreement as
follows:
(i) Drawdown Date: ________________, ____
(ii) Principal amount: $_________
3. The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Reference
Rate Advance, before and after giving effect thereto and to the application
of the proceeds therefrom:
<PAGE>
(i) the principal amount of the proposed Advance is not more than the
Available Facility Amount;
(ii) no Default has occurred and is continuing;
(iii) the representations and warranties contained in Sections 10.1, 10.4,
------------- ----
10.5, 10.6, 10.7 and 10.9 of the Credit Agreement are true and
---- ---- ---- ----
correct as of the date of such Advance except for changes reflecting
transactions permitted by the Credit Agreement;
(iv) no authorizations, approvals or consents of, and no filings or
renegotiations with, any governmental or regulatory authority or
agency are necessary for the incurring of obligations in connection
with such Advance, other than approvals which have been duly
obtained and are of full force and effect; and
(v) the incurring of obligations in connection with such Advance does
not conflict with or result in a breach of any applicable law or
regulation, or any other, writ, injunction or decree of any court or
regulatory authority.
4. The Company agrees that if prior to the time of the Advance requested
hereby any matter certified to herein by it will not be true and correct at
such time as if then made, it will immediately so notify the Agent. Except
to the extent, if any, that prior to the time of the Advance requested
hereby the Agent shall receive written notice to the contrary from the
Company, each matter certified to herein shall be deemed once again to be
certified as true and correct at the date of such Advance as if then made.
5. Please wire transfer the proceeds of the Advance to the accounts of the
following persons at the final institutions indicated respectively:
<TABLE>
<CAPTION>
Amount to be Person to be Paid Name, Address, etc. of
-----------------
Transferred Name Account No. Transferee Lender
----------- ---- ----------- _____________________
<S> <C> <C> <C>
$_____________ ______________________ ________________ _____________________
_____________________
Attention:___________
$_____________ ______________________ ________________ _____________________
_____________________
Attention:___________
$_____________ ______________________ ________________ _____________________
_____________________
Attention:___________
Balance of such The Company ________________ _____________________
</TABLE>
<PAGE>
proceeds _____________________
Attention:___________
The Company has caused this Reference Rate Advance Request to be executed
and delivered, and the certification and warranties contained herein to be made,
by its duly Authorized Officer this ______ day of ___________________, ______.
Very truly yours,
PG&E GAS TRANSMISSION,
NORTHWEST CORPORATION
By___________________________
Name:
Title:
By___________________________
Name:
Title:
<PAGE>
EXHIBIT D
Form of Tax Certificate
-----------------------
To: PG&E Gas Transmission, Northwest Corporation
From: [Name of Lender and Facility Office]
Date: ___________________, _____
Re: 364-Day Credit Agreement, dated as of May 24, 1999 (together with
all amendments, if any, from time to time made thereto, the
"Credit Agreement") among PG&E Gas Transmission, Northwest
----------------
Corporation, the various financial institutions as are and may
become parties thereto, The First National Bank of Chicago, as
Documentation Agent for the Lenders, U.S. Bank National
Association, as Syndication Agent for the Lenders, The First
National Bank of Chicago, U.S. Bank National Association and
Barclays Bank PLC, as Co-Agents for the Lenders, and Canadian
Imperial Bank of Commerce, as Agent for the Lenders
Ladies and Gentlemen:
In connection with the Credit Agreement, we hereby certify, under penalty
of perjury, that the undersigned is a ____________________ duly organized in or
under the laws of the United States of America or a jurisdiction thereof.
Our Internal Revenue Service taxpayer identification number is __________.
Unless otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Credit Agreement.
Very truly yours,
[NAME OF Lender]
By________________________
Name:
Title:
<PAGE>
EXHIBIT E
[Form of Opinion of Counsel to the Company]
<PAGE>
EXHIBIT F
Form of Transfer Certificate
----------------------------
To: [Name and address of Transferee]
and
Canadian Imperial Bank of Commerce, as Agent
From: [Name of Transferor Lender and Facility Office]
Date: ___________________, ____
Re: Transfer Certificate - 364-Day Credit Agreement, dated as of May
24, 1999 (together with all amendments, if any, from time to time
made thereto, the "Credit Agreement") among PG&E Gas
----------------
Transmission, Northwest Corporation, the various financial
institutions as are and may become parties thereto, The First
National Bank of Chicago, as Documentation Agent for the Lenders,
U.S. Bank National Association, as Syndication Agent for the
Lenders, The First National Bank of Chicago, U.S. Bank National
Association and Barclays Bank PLC, as Co-Agents for the Lenders,
and Canadian Imperial Bank of Commerce, as Agent for the Lenders
Ladies and Gentlemen:
1. [Name of Transferor Lender] (the "Transferor") confirms the accuracy of the
-------------------------
summary of its participation in the Credit Agreement set out in the
schedule attached hereto (the "Schedule") before and after giving effect to
the assignment and transfer herein made. Transferor hereby assigns and
transfers, without recourse, to [Name of Transferee Lender] (the
-------------------------
"Transferee") the rights and obligations of Transferor under the Credit
Agreement specified in the Schedule. Transferee accepts such assignment
and transfer by countersigning and delivering this Transfer Certificate to
Transferor. This assignment is effective as of the date set forth in the
Schedule (the "Transfer Effective Date"). The principal amount of any
outstanding Advances under the Credit Agreement as of the Transfer
Effective Date shall be apportioned between Transferor and Transferee in
accordance with the Schedule and Transferee shall pay Transferor in
immediately available funds on the Transfer Effective Date or such other
date as is agreed to between the Transferor and the Transferee an amount
equal to the principal amount of any outstanding Advance being assigned and
transferred hereunder. All interest and fees payable under the Credit
Agreement shall be apportioned between Transferor and Transferee
proportionately to the periods before and after the Transfer Effective Date
as to which payable.
<PAGE>
2. Transferee is also delivering signed counterpart copies hereof to the Agent
at its address for the service of notices specified in the Credit
Agreement. The Agent is requested to make appropriate entries on its
records to reflect the assignment and transfer effected hereby.
3. The Transferee hereby undertakes with the Transferor and each of the other
parties to the Credit Agreement that it will perform in accordance with
their terms all those obligations which by the terms of the Credit
Agreement it will assume upon delivery of this Transfer Certificate by it.
Transferee agrees promptly to deliver to the Company, the Agent and any
other withholding agent specified by the Company, two copies of a valid
Form 1001, a valid Form 4224 or a certificate substantially in the form of
Exhibit F to the Credit Agreement (in accordance with Sections 8.2 and
--------- ------------
14.7(e) of the Credit Agreement). Transferee agrees promptly to pay to the
-------
Agent a transfer registration fee in the amount of $2,500. By its consent
hereto the Company consents to the transfer herein provided, agrees that
Transferee shall be a Lender under the Credit Agreement and releases the
Transferor pro tanto as to the obligations of Transferor transferred to
Transferee hereunder.
4. The Transferee confirms that it has received a copy of the Credit Agreement
together with such other documents and information as it has required in
connection with this transaction. Transferee hereby confirms that it has
entered into this assignment and transfer on the basis of its own
independent commercial relationship with the Company and its own
independent investigation and that it has not relied and will not hereafter
rely on the Transferor, the other Lenders, the Agent or the Co-Agents with
respect to the due execution, legality, validity, effectiveness, adequacy,
accuracy or enforceability of the Credit Agreement or any other documents
and information or with respect to the collectibility of any Advance or
other amount due under the Credit Agreement. Transferee further agrees
that it has not relied and will not rely on the Transferor, the other
Lenders, the Agent or the Co-Agents to assess or keep under review on its
behalf or provide Transferee, except as expressly required under the terms
of the Credit Agreement, with any information as to the financial
condition, creditworthiness, condition, affairs, status or nature of the
Company or the Subsidiaries or of any other party to the Credit Agreement
or the observance by the Company of any of its obligations under the Credit
Agreement or any document relating thereto.
5. The Transferor makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Credit Agreement or any document relating
thereto or the collectibility of any Advance or other amount due under the
Credit Agreement and assumes no responsibility for the financial condition
of the Company or any other party to the Credit Agreement or for the
performance and observance by the Company or any other party of any of its
obligations under the Credit Agreement or any document relating thereto and
any and all such conditions and warranties, whether express or implied by
law or otherwise, are hereby excluded.
6. The Transferee confirms the appointment of the Agent in accordance with the
terms of Article 13 of the Credit Agreement.
----------
<PAGE>
7. This Transfer Certificate shall be governed by and construed in accordance
with the laws of the State of New York. Unless otherwise defined herein or
the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Transfer
Certificate to be duly executed and delivered as of the date first above
written.
[TRANSFEROR]
By__________________________
Name:
Title:
"Transferor"
[TRANSFEREE]
By__________________________
Name:
Title:
"Transferee"
Consented to as of the above date by:
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
By________________________
Name:
Title:
Receipt acknowledged and Consented to as of the above date:
CANADIAN IMPERIAL BANK OF COMMERCE, as
Agent
By________________________
Name:
Title:
<PAGE>
THE SCHEDULE TO THE TRANSFER CERTIFICATE
----------------------------------------
Details of Transfer
-------------------
1. Details of Commitments
----------------------
(a) Transferor's Commitment before this Transfer:
(b) Amount of Commitment Transferred:
(c) Transferor's remaining Commitment:
(d) Transferee's Commitment:
(e) Transfer Effective Date:
2. Details of Advances
-------------------
(a) Outstanding Advance(s) of Transferor to Company prior to Transfer
Effective Date:
<TABLE>
<CAPTION>
Type of Principal Drawdown Repayment Interest
Advance Amount Date Date Rate
------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
</TABLE>
(b) Principal Amount of Outstanding Advance(s) Transferred to Transferee:
<TABLE>
<CAPTION>
Type of Principal Drawdown Repayment Interest
Advance Amount Date Date Rate
------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
</TABLE>
3. Administrative Details Respecting Transferee
--------------------------------------------
Facility Office for Advances:
Attn:
Address for Notices:
<PAGE>
Attn:
Account for Payments:
Telephone:
Telefacsimile:
Telex:
<PAGE>
SCHEDULE I
Commitments of Lenders
----------------------
Name of Lender Commitments
-------------- -----------
CIBC Inc. $ 8,609,271.52
Barclays Bank PLC $ 7,284,768.21
The First National Bank of Chicago $ 8,609,271.52
Bank of America National Trust and Savings Association $ 4,470,198.68
Citicorp USA, Inc. $ 5,960,264.90
The Fuji Bank, Limited, Los Angeles Agency $ 3,311,258.28
UBS, AG, Stamford Branch $ 4,470,198.68
U.S. Bank National Association $ 7,284,768.21
Totals: $ 50,000,000.00
<PAGE>
EXHIBIT 12
PG&E GAS TRANSMISSION, NORTHWEST CORPORATION
SEC FILING - FORM 10-Q - 3RD QTR 1999
EXHIBIT 12 - RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
----------------------------------- ----------------------------------
Ratio of earnings to Fixed Charges 1999 1998 1999 1998
- ---------------------------------- --------- --------- -------- ---------
<S> <C> <C> <C> <C>
Earnings
Net income 15.9 15.7 40.8 45.9
Adjustments:
Income taxes 9.9 8.5 25.3 27.8
Fixed charges (as below) 10.7 11.0 32.0 33.0
--------- --------- -------- ---------
Total adjusted earnings 36.5 35.2 98.1 106.7
========= ========= ======== =========
Fixed charges: (a)
Net interest expense 10.5 10.6 31.1 32.2
Adjustments:
Interest component of rents 0.0 0.0 0.0 0.0
AFUDC debt 0.2 0.4 0.9 0.8
--------- --------- -------- ---------
Total fixed charges 10.7 11.0 32.0 33.0
========= ========= ======== =========
Ratio of earnings to fixed charges 3.4 3.2 3.1 3.2
========= ========= ======== =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SECTION OF THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,048,608
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 41,833
<TOTAL-DEFERRED-CHARGES> 46,884
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,137,325
<COMMON> 85,474
<CAPITAL-SURPLUS-PAID-IN> 192,717
<RETAINED-EARNINGS> 64,639
<TOTAL-COMMON-STOCKHOLDERS-EQ> 342,830
0
0
<LONG-TERM-DEBT-NET> 467,642
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 86,180
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 15,528
<LEASES-CURRENT> 486
<OTHER-ITEMS-CAPITAL-AND-LIAB> 224,659
<TOT-CAPITALIZATION-AND-LIAB> 1,137,325
<GROSS-OPERATING-REVENUE> 164,947
<INCOME-TAX-EXPENSE> 25,337
<OTHER-OPERATING-EXPENSES> 74,550
<TOTAL-OPERATING-EXPENSES> 99,887
<OPERATING-INCOME-LOSS> 65,060
<OTHER-INCOME-NET> 6,817
<INCOME-BEFORE-INTEREST-EXPEN> 71,877
<TOTAL-INTEREST-EXPENSE> 31,056
<NET-INCOME> 40,821
0
<EARNINGS-AVAILABLE-FOR-COMM> 40,821
<COMMON-STOCK-DIVIDENDS> 45,000
<TOTAL-INTEREST-ON-BONDS> 22,034
<CASH-FLOW-OPERATIONS> 86,840
<EPS-BASIC> 40,821
<EPS-DILUTED> 40,821
</TABLE>
