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Exhibit 10-F
CREDIT AGREEMENT
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By and among
WASHINGTON ENERGY COMPANY,
as Borrower,
THE FIRST NATIONAL BANK OF CHICAGO,
SEATTLE-FIRST NATIONAL BANK,
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ABN AMRO BANK N.V.,
BANK OF MONTREAL,
FIRST INTERSTATE BANK OF WASHINGTON, N.A.,
NATIONSBANK OF TEXAS, N.A.,
U.S. BANK OF WASHINGTON, N.A., and
CIBC INC.,
as Lenders, and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
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$250,000,000
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March 31, 1995
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . 1
Section 1.2 General Principles Applicable to
Definitions . . . . . . . . . . . . . . . . . . . . . . 13
Section 1.3 Accounting Terms . . . . . . . . . . . . . . . . . . . . 13
ARTICLE II THE FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.1 The Facility . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.2 Committed Advances . . . . . . . . . . . . . . . . . . . 14
Section 2.3 Competitive Bid Advances . . . . . . . . . . . . . . . . 16
Section 2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.5 General Facility Terms. . . . . . . . . . . . . . . . . . 20
Section 2.6 Lending Installations . . . . . . . . . . . . . . . . . . 25
Section 2.7 Withholding Tax Exemption . . . . . . . . . . . . . . . . 25
ARTICLE III CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . . . . 26
Section 3.1 Yield Protection . . . . . . . . . . . . . . . . . . . . 26
Section 3.2 Changes in Capital Adequacy Regulations . . . . . . . . . 27
Section 3.3 Availability of Rate Options . . . . . . . . . . . . . . 27
Section 3.4 Funding Indemnification . . . . . . . . . . . . . . . . . 28
Section 3.5 Lender Statements; Survival of Indemnity . . . . . . . . 28
ARTICLE IV CONDITIONS TO EFFECTIVENESS AND TO LENDING . . . . . . . . . . . 28
Section 4.1 Conditions to Effectiveness of Agreement . . . . . . . . 28
Section 4.2 Conditions to Initial Advance . . . . . . . . . . . . . . 29
Section 4.3 Conditions to All Advances . . . . . . . . . . . . . . . 30
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 30
Section 5.1 Corporate Existence and Power . . . . . . . . . . . . . . 30
Section 5.2 Corporate Authorization . . . . . . . . . . . . . . . . . 30
Section 5.3 Government Approvals, Etc . . . . . . . . . . . . . . . . 31
Section 5.4 Binding Obligations, Etc . . . . . . . . . . . . . . . . 31
Section 5.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.6 Financial Condition . . . . . . . . . . . . . . . . . . . 31
Section 5.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.8 Laws, Orders; Other Agreements . . . . . . . . . . . . . 32
Section 5.9 Federal Reserve Regulations . . . . . . . . . . . . . . . 32
Section 5.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.11 Subsidiaries .. . . . . . . . . . . . . . . . . . . . . . 33
Section 5.12 Investment Company; Public Utility
Holding Company . . . . . . . . . . . . . . . . . . . . . 34
Section 5.13 Environmental Compliance. . . . . . . . . . . . . . . . . 34
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Section 5.14 Representations as a Whole . . . . . . . . . . . . . . . 35
ARTICLE VI COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.1 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 36
Section 6.2 Financial Statements . . . . . . . . . . . . . . . . . . 36
Section 6.3 Inspection of Property . . . . . . . . . . . . . . . . . 37
Section 6.4 Payment of Taxes . . . . . . . . . . . . . . . . . . . . 37
Section 6.5 Preservation of Corporate Existence . . . . . . . . . . . 38
Section 6.6 Maintenance of Property . . . . . . . . . . . . . . . . . 38
Section 6.7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.8 Records and Accounts . . . . . . . . . . . . . . . . . . 38
Section 6.9 Additional Payments . . . . . . . . . . . . . . . . . . . 38
Section 6.10 Compliance With Laws, Etc. . . . . . . . . . . . . . . . 39
Section 6.11 Notification . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.12 Limit on Outstanding Commercial Paper . . . . . . . . . . 39
Section 6.13 Total Debt to Total Capitalization Ratio . . . . . . . . 40
Section 6.14 Liquidation, Merger, Sale of Assets . . . . . . . . . . . 40
Section 6.15 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.16 Indemnification . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . 41
Section 7.2 Consequences of Default . . . . . . . . . . . . . . . . . 43
ARTICLE VIII THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.3 General Immunity . . . . . . . . . . . . . . . . . . . . 44
Section 8.4 No Responsibility for Advances, Recitals,
Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.5 Action on Instructions of Lenders . . . . . . . . . . . . 45
Section 8.6 Employment of Agents and Counsel . . . . . . . . . . . . 45
Section 8.7 Reliance on Documents; Counsel . . . . . . . . . . . . . 45
Section 8.8 Agent's Reimbursement and Indemnification . . . . . . . . 45
Section 8.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . 46
Section 8.10 Lender Credit Decision . . . . . . . . . . . . . . . . . 46
Section 8.11 Successor Agent . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE IX BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS . . . . . . . . . . . . . . . . . . . . . . . 47
Section 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . 47
Section 9.2 Participations . . . . . . . . . . . . . . . . . . . . . 48
Section 9.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.4 Dissemination of Information . . . . . . . . . . . . . . 49
Section 9.5 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 50
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ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.1 No Waiver; Remedies Cumulative . . . . . . . . . . . . . 50
Section 10.2 Governing Law . . . . . . . . . . . . . . . . . . . . . 50
Section 10.3 Consent to Jurisdiction; Waiver of
Immunities . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.5 Severability . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.6 Environmental Indemnification . . . . . . . . . . . . . 51
Section 10.7 Survival . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.8 Conditions Not Fulfilled . . . . . . . . . . . . . . . . 52
Section 10.9 Entire Agreement; Amendment . . . . . . . . . . . . . . 52
Section 10.10 Headings . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.12 Termination of Prior Agreement; Waiver of
Notice . . . . . . . . . . . . . . . . . . . . . . . . . 53
EXHIBITS
Exhibit A - Committed Note
Exhibit B - Competitive Bid Note
Exhibit C - Competitive Bid Quote Request
Exhibit D - Invitation for Competitive Bid Quotes
Exhibit E - Competitive Bid Quote
Exhibit F - Legal Opinion of Counsel for Borrower
Exhibit G - Notice of Assignment
SCHEDULES
Schedule 1 - List of Subsidiaries
Schedule 2 - Parties' Addresses for Notices
Schedule 3 - Litigation
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made as of March 31, 1995, by
and among the Lenders from time to time a party hereto, THE FIRST NATIONAL BANK
OF CHICAGO as agent for the Lenders (the "Agent"), and WASHINGTON ENERGY
COMPANY, a Washington corporation (the "Borrower").
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. As used in this Agreement,
the following terms have the following meanings:
"Absolute Rate" means, with respect to an Absolute Rate
Loan made by a given Lender for the relevant Absolute Rate Interest Period, the
rate of interest per annum (rounded to the nearest 1/100 of 1%) offered by such
Lender and accepted by the Borrower.
"Absolute Rate Advance" means a borrowing hereunder
consisting of the aggregate amount of the several Absolute Rate Loans made by
some or all of the Lenders to the Borrower at the same time and for the same
Interest Period.
"Absolute Rate Auction" means a solicitation of
Competitive Bid Quotes setting forth Absolute Rates pursuant to Section 2.3.
"Absolute Rate Interest Period" means, with respect to
an Absolute Rate Advance, a period of not less than seven and not more than 270
days commencing on a Business Day selected by the Borrower pursuant to this
Agreement. If such Absolute Rate Interest Period would end on a day which is not
a Business Day, such Absolute Rate Interest Period shall end on the next
succeeding Business Day.
"Absolute Rate Loan" means a Loan which bears interest
at the Absolute Rate.
"Advance" means a borrowing hereunder (which may be
either a Competitive Bid Advance or a Committed Advance) consisting of the
aggregate amount of the several Loans made by some or all of the Lenders to the
Borrower on the same date, at the same Rate Option (or on the same interest
basis in the case of Competitive Bid Advances) and, in the case of Competitive
Bid Advances or Eurodollar Committed Advances, for the same Interest Period.
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"Agent" means The First National Bank of Chicago in its
capacity as agent for the Lenders pursuant to Article VIII, and not in its
individual capacity as a Lender, and any successor Agent appointed pursuant to
Article VIII.
"Aggregate Commitment" means the aggregate of the
Commitments of all the Lenders hereunder, as reduced from time to time pursuant
to the terms hereof.
"Agreement" means this Credit Agreement, as it may be
amended or modified and in effect from time to time.
"Alternate Base Rate" means, on any date and with
respect to all Floating Rate Advances, a fluctuating rate of interest per annum
equal to the higher of (i) the Corporate Base Rate, and (ii) the Federal Funds
Rate most recently determined by the Agent plus 1/2% per annum. Changes in the
rate of interest on that portion of any Advance maintained as a Floating Rate
Advance will take effect simultaneously with each change in the Alternate Base
Rate.
"Article" means an article of this Agreement unless
another document is specifically referenced.
"Authorized Officer" means the Chairman, the President, any
Senior Vice President, any Vice President, Treasurer or Assistant Treasurer of
Borrower.
"Borrower" means Washington Energy Company, a Washington
corporation, and any permitted Successor or assign pursuant to Section 9.1.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Business Day" means (i) with respect to any borrowing, payment
or rate selection of Eurodollar Committed Advances or Eurodollar Bid Rate
Advances, a day other than Saturday or Sunday on which banks generally are open
for business in Chicago, New York, and Seattle for the conduct of substantially
all of their commercial lending activities and on which dealings in United
States dollars are carried on in the London interbank market and (ii) for all
other purposes, a day other than Saturday or Sunday on which banks are open for
business in Chicago and Seattle.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" means, for each Lender, the obligation of the
Lender to make Committed Loans not exceeding the amount set
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forth opposite its signature below, as such amount may be modified from time to
time pursuant to the terms of this Agreement.
"Commitment Fee Percentage" means (a) during any period
when the Borrower has a Tier 1 Commercial Paper Rating, 0.10% per annum, (b)
during any period when the Borrower has a Tier 2 Commercial Paper Rating, 0.125%
per annum, (c) during any period when the Borrower has a Tier 3 Commercial Paper
Rating, 0.15% per annum, (d) during any period when the Borrower has a Tier 4
Commercial Paper Rating, 0.175% per annum, (e) during any period when the
Borrower has a Tier 5 Commercial Paper Rating, 0.25% per annum, and (f) during
any period when the Borrower has a Tier 6 Commercial Paper Rating, 0.3125% per
annum. In each case, the Commitment Fee Percentage shall change immediately upon
any change in the Tier of Borrower's commercial paper rating. Borrower may, at
its option, designate either Fitch Investors Services or Duff & ▇▇▇▇▇▇ Credit
Rating Co., to replace either S&P or ▇▇▇▇▇'▇ (but not both), provided that such
designated agency has not rated Borrower's commercial paper higher at the time
of designation than the rating agency that such designated agency replaces, and,
upon such designation, analogous ratings of such other agency shall be
substituted for the ratings of either S&P or ▇▇▇▇▇'▇ (but not both) in
determining the Tier of Borrower's commercial paper.
"Committed Advance" means a borrowing hereunder
consisting of the aggregate amount of the several Committed Loans made by the
Lenders to the Borrower at the same time, at the same Rate Option and for the
same Interest Period.
"Committed Borrowing Notice" is defined in Section 2.2.3.
"Committed Conversion/Continuation Notice" is defined in
Section 2.2.4.
"Committed Loan" means a Loan made by a Lender pursuant to
Section 2.2 hereof.
"Committed Note" means a promissory note in substantially the
form of Exhibit A hereto, duly executed and delivered to the Agent by the
Borrower for the account of each Lender and payable to the order of a Lender in
the amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Competitive Bid Advance" means a borrowing hereunder
consisting of the aggregate amount of the several Competitive Bid Loans made by
some or all of the Lenders to the Borrower at the same time and for the same
Interest Period.
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"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan
or an Absolute Rate Loan, or both, as the case may be.
"Competitive Bid Margin" means the margin above or
below the applicable Eurodollar Base Rate offered for a Eurodollar Bid Rate
Loan, expressed as a percentage (rounded to the nearest 1/100 of 1%) to be added
or subtracted from such Eurodollar Base Rate.
"Competitive Bid Note" means a promissory note in
substantially the form of Exhibit B hereto, with appropriate insertions,
duly executed and delivered to the Agent by the Borrower for the account of a
Lender and payable to the order of such Lender, including any amendment,
modification, renewal or replacement of such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote
substantially in the form of Exhibit E hereto completed and delivered by
a Lender to the Agent in accordance with Section 2.3.4.
"Competitive Bid Quote Request" means a Competitive Bid
Quote Request substantially in the form of Exhibit C hereto completed
and delivered by the Borrower to the Agent in accordance with Section 2.3.2.
"Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with Borrower, are treated as a single
employer under Sections 414(b) or 414(c) of the Code.
"Corporate Base Rate" means a rate per annum equal to
the corporate base rate of interest announced by First Chicago from time to
time, changing when and as said corporate base rate changes.
"Debt" of Borrower means at any date, without
duplication, (i) all obligations of Borrower and its Subsidiaries for borrowed
money, (ii) all obligations of Borrower and its Subsidiaries evidenced by bonds
(other than surety bonds), debentures, notes or other similar instruments, (iii)
all obligations of Borrower and its Subsidiaries to pay the deferred purchase
price of property or services, except trade accounts payable arising in the
ordinary course of business, (iv) any other obligation of Borrower and its
Subsidiaries under leases which shall have been recorded, in accordance with
generally accepted accounting principles, on Borrower's books as capital
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leases, (v) all non-contingent reimbursement, indemnity or similar obligations
of Borrower and its Subsidiaries in respect of amounts paid under a letter of
credit, surety bond or similar instrument, (vi) all Debt of others secured by a
Lien on any asset of Borrower and its Subsidiaries, whether or not such Debt is
assumed by Borrower and its Subsidiaries, and (vii) all Debt of others
Guaranteed by Borrower and its Subsidiaries, all determined on a consolidated
basis and including without limitation all Debt whether long-term or short-term.
"Default" means any event which but for the passage of time or
the giving of notice or both would be an Event of Default.
"Environmental Law" means and includes the Comprehensive
Environmental Response, Compensation, and liability Act of 1980 ("CERCLA" or the
Federal Superfund Act), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), 42 U.S.C. Sections 9601-9675; the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq.;
The Clean Water Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Section 136 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Sections 2601-2671; all as the same may be from time to time amended and any
regulations now or hereafter promulgated thereunder; and any and all other
federal, state, county, municipal, local and other statutes, laws, ordinances,
rules, regulations, judgments, orders, decrees, permits, licenses, or other
governmental restrictions or requirements and the common law which may from time
to time relate to or deal with protection of human health, pollution or the
environment, including, without limitation, all regulations promulgated by a
regulatory body pursuant to an such statute, law or ordinance.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eurodollar Auction" means a solicitation of Competitive Bid
Quotes setting forth Competitive Bid Margins pursuant to Section 2.3.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Committed Advance or a Eurodollar Bid Rate Advance for the relevant Eurodollar
Interest Period, the rate determined by the Agent to be the arithmetic average
of the rates reported to the Agent by each Reference Lender as the rate at which
deposits in U.S. dollars are offered by such Reference Lender to first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Eurodollar Interest Period, in
the approximate amount of such Reference Lender's relevant Eurodollar Committed
Loan, or,
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in the case of a Eurodollar Bid Rate Advance, the amount of the Eurodollar Bid
Rate Advance requested by the Borrower, and having a maturity approximately
equal to such Eurodollar Interest Period. If any Reference Lender fails to
provide such quotation to the Agent, then the Agent shall determine the
Eurodollar Base Rate on the basis of the quotations of the remaining Reference
Lender(s).
"Eurodollar Bid Rate" means, with respect to a
Eurodollar Bid Rate Loan made by a given Lender for the relevant Eurodollar
Interest Period, the sum of (i) the Eurodollar Base Rate and (ii) the
Competitive Bid Margin offered by such Lender and accepted by the Borrower.
"Eurodollar Bid Rate Advance" means a Competitive Bid
Advance which bears interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Loan which bears
interest at the Eurodollar Bid Rate.
"Eurodollar Committed Advance" means an Advance which
bears interest at a Eurodollar Rate requested by the Borrower pursuant to
Section 2.2.
"Eurodollar Committed Loan" means a Loan which bears
interest at a Eurodollar Rate requested by the Borrower pursuant to Section 2.2.
"Eurodollar Interest Period" means, with respect to a
Eurodollar Committed Advance or a Eurodollar Bid Rate Advance, a period of one,
two, three or six months commencing on a Business Day selected by the Borrower
pursuant to this Agreement. Such Eurodollar Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two, three or
six months thereafter, provided, however, that if there is no
such numerically corresponding day in such next, second, third or sixth
succeeding month, such Eurodollar Interest Period shall end on the last Business
Day of such next, second, third or sixth succeeding month. If a Eurodollar
Interest Period would otherwise end on a day which is not a Business Day, such
Eurodollar Interest Period shall end on the next succeeding Business Day,
provided, however, that if said next succeeding Business Day
falls in a new month, such Eurodollar Interest Period shall end on the
immediately preceding Business Day.
"Eurodollar Rate" means, with respect to a Eurodollar
Committed Advance for the relevant Eurodollar Interest Period, the sum of (i)
the quotient of (a) the Eurodollar Base Rate applicable to that Eurodollar
Interest Period, divided by (b) one minus the Reserve Requirement (expressed as
a decimal) applicable to that Eurodollar Interest Period, plus (ii) the
applicable
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Eurodollar Rate Margin. The Eurodollar Rate shall be rounded, if necessary, to
the next higher 1/16 of 1%.
"Eurodollar Rate Margin" means (a) during any period
when the Borrower has a Tier 1 Commercial Paper Rating, 0.30% per annum, (b)
during any period when the Borrower has a Tier 2 Commercial Paper Rating, 0.35%
per annum, (c) during any period when the Borrower has a Tier 3 Commercial Paper
Rating, 0.40% per annum, (d) during any period when the Borrower has a Tier 4
Commercial Paper Rating, 0.45% per annum, (e) during any period when the
Borrower has a Tier 5 Commercial Paper Rating, 0.65% per annum, and (f) during
any period when the Borrower has a Tier 6 Commercial Paper Rating, .85% per
annum. In each case, the Eurodollar Rate Margin shall change immediately upon
any change in the Tier of Borrower's commercial paper rating. Borrower may, at
its option, designate either Fitch Investors Services or Duff & ▇▇▇▇▇▇ Credit
Rating Co., to replace either S&P or ▇▇▇▇▇'▇ (but not both), provided that such
designated agency has not rated Borrower's commercial paper higher at the time
of designation than the rating agency that such designated agency replaces, and,
upon such designation, analogous ratings of such other agency shall be
substituted for the ratings of either S&P or ▇▇▇▇▇'▇ (but not both) in
determining the Tier of Borrower's commercial paper.
"Event of Default" has the meaning given in Section 7.1.
"Federal Funds Rate" means, for any day, an interest
rate per annum 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 for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10 a.m.
(Chicago time) on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"First Chicago" means The First National Bank of
Chicago in its individual capacity, and its successors and assigns.
"Fixed Rate" means the Eurodollar Rate, the Eurodollar
Bid Rate or the Absolute Rate.
"Fixed Rate Advance" means an Advance which bears
interest at a Fixed Rate.
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"Fixed Rate Loan" means a Loan which bears interest at
a Fixed Rate.
"Floating Rate" means, for any day, a rate per annum
equal to the Alternate Base Rate, changing when and as the Alternate Base Rate
changes.
"Floating Rate Advance" means an Advance which bears
interest at the Floating Rate.
"Floating Rate Loan" means a Loan which bears interest
at the Floating Rate.
"Government Approval" means an approval, permit,
license, authorization, certificate, or consent of any Governmental Authority.
"Governmental Authority" means the government of the
United States or any State or any foreign country or any political subdivision
of any thereof or any branch, department, agency, instrumentality, court,
tribunal or regulatory authority which constitutes a part or exercises any
sovereign power of any of the foregoing.
"Guaranteed" means any agreement by which a Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise to assure any creditor of
such other Person against loss, and shall include, without limitation, any
contingent liability under any letter of credit.
"Hazardous Material" means asbestos, urea formaldehyde,
PCBs, nuclear fuel or materials, chemical waste, radon, radioactive materials,
explosives, known carcinogens, petroleum products (including crude oil) and any
other dangerous, toxic, or hazardous pollutant, contaminant, chemical, material
or substance defined as hazardous or as a pollutant or contaminant in, or the
release or disposal of which is regulated by, any Environmental Law.
"Indebtedness" means for any Person any Debt of such
Person and all other items of indebtedness or liability (including, without
limitation, unsatisfied judgments) which would be included in determining total
liabilities as shown on the liability side of a balance sheet, prepared in
accordance with generally accepted accounting principles, as of the date as of
which indebtedness or liability is determined.
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"Interest Period" means a Eurodollar Interest Period or an
Absolute Rate Interest Period.
"Invitation for Competitive Bid Quotes" means an
Invitation for Competitive Bid Quotes substantially in the form of Exhibit
D hereto, completed and delivered by the Agent to the Lenders in accordance
with Section 2.3.3.
"Lenders" means the financial institutions listed on
the signature pages of this Agreement and their respective Successors and
permitted assigns.
"Lending Installation" means with respect to a Lender
or the Agent, any office, branch, subsidiary or affiliate of such Lender or the
Agent.
"Lien" means, for any Person, any security interest,
pledge, mortgage, charge, assignment, hypothecation, encumbrance, attachment,
garnishment, execution or other voluntary or involuntary lien upon or affecting
the revenues of such Person or any real or personal property in which such
Person has or hereafter acquires any interest, except (i) liens for
Taxes which are not delinquent or which remain payable without penalty or the
validity or amount of which is being contested in good faith by appropriate
proceedings upon stay of execution of the enforcement thereof; (ii) liens
imposed by law (such as mechanics' liens) incurred in good faith in the ordinary
course of business which are not delinquent or which remain payable without
penalty or the validity or amount of which is being contested in good faith by
appropriate proceedings upon stay of execution of the enforcement thereof; (iii)
liens arising by law from customer deposits held by such Person; and (iv)
deposits or pledges under worker's compensation, unemployment insurance, social
security or other similar laws or made to secure the performance of bids,
tenders, contracts (except for repayment of borrowed money), or leases, or to
secure statutory obligations or surety or appeal bonds or to secure indemnity,
performance or other similar bonds given in the ordinary course of business.
"Loan" means, with respect to a Lender, such Lender's
portion, if any, of any Advance.
"Loan Documents" means this Agreement and the Notes.
"Material Adverse Effect" means a material adverse
effect on or material adverse change in (a)(i) the business, operations,
property, financial condition, liabilities (absolute, accrued, contingent or
otherwise) or assets of Borrower and Subsidiaries, taken as a whole, or (ii) the
ability of Borrower to perform its obligations under this Agreement or any of
the other Loan Documents, or (b) the rights or remedies of Agent or
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any Lenders or the holders of the Notes under this Agreement or any of the other
Loan Documents upon the occurrence of an Event of Default.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., a Delaware
corporation.
"Notes" means, collectively, the Competitive Bid Notes and the
Committed Notes; and "Note" means any one of the Notes.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, all accrued and unpaid fees and all other
reimbursements, indemnities or other obligations of the Borrower to the Lenders
or to any Lender, the Agent or indemnified party hereunder arising under the
Loan Documents.
"Officer's Certificate" means a certificate signed in
the name of Borrower by its Chairman, its President, its Senior Vice President -
Finance, Planning and Development, its Vice President and Treasurer, or its Vice
President - Chief Accounting Officer.
"Payment Date" means the last day of each March, June,
September and December.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means an "employee pension benefit plan"
(as such term is defined in ERISA) from time to time maintained by Borrower or a
member of the Controlled Group.
"Person" means any corporation, natural person, firm,
joint venture, joint-stock company, partnership, limited liability company,
trust, unincorporated association or organization, enterprise, government
(including political subdivisions), Governmental Authority, any department or
agency, or any other entity.
"Plan" shall mean, at any time, an employee pension
benefit plan which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (a) maintained by
Borrower or any member of a Controlled Group for employees of Borrower or any
member of such Controlled Group or (b) maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which Borrower or any member of a Controlled Group is
then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
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"Prior Loan Agreement" means the Amended and Restated
Revolving Credit Agreement dated as of March 18, 1994 among Borrower, the
respective lenders thereto and Seattle-First National Bank, as agent for such
lenders.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Reference Lenders" means First Chicago, Seattle-First
National Bank, and ABN AMRO Bank N.V.
"Required Lenders" means Lenders in the aggregate
having at least 60% of the Aggregate Commitment or, if the Aggregate Commitment
has been terminated, Lenders in the aggregate holding at least 60% of the
aggregate unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to a
Eurodollar Interest Period, the maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed under
Regulation D of the Board of Governors of the Federal Reserve System on
Eurocurrency liabilities.
"S&P" means Standard & Poor's Rating Group, a division
of McGraw Hill.
"Section" means a numbered section of this Agreement,
unless another document is specifically referenced.
"Subsidiary" of a Person means (i) any corporation more
than 50% of the outstanding securities having ordinary voting power of which
shall at the time be owned or controlled, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Successor" means, for any corporation or banking
association, any successor by merger or consolidation, or by acquisition of
substantially all of the assets of the predecessor.
"Tax" means for any Person any tax, assessment, duty,
levy, impost or other charge imposed by any Governmental Authority on such
Person or on any property, revenue, income, or
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franchise of such Person and any interest or penalty with respect to any of the
foregoing.
"Termination Date" means March 31, 1998, unless earlier
terminated pursuant to the terms of this Agreement.
"Tier" means any of the Tier 1 Commercial Paper Rating,
the Tier 2 Commercial Paper Rating, the Tier 3 Commercial Paper Rating, the Tier
4 Commercial Paper Rating, the Tier 5 Commercial Paper Rating, or the Tier 6
Commercial Paper Rating.
"Tier 1 Commercial Paper Rating" means a rating from
S&P of A-1 or better and from Moody's of P-1 or better on Borrower's commercial
paper.
"Tier 2 Commercial Paper Rating" means a rating from
S&P of A-1 or better and from Moody's of P-2 on Borrower's commercial paper or a
rating from S&P of A-2 and from Moody's of P-1 or better on Borrower's
commercial paper.
"Tier 3 Commercial Paper Rating" means a rating from S&P of A-2
and from Moody's of P-2 on Borrower's commercial paper.
"Tier 4 Commercial Paper Rating" means a rating from
S&P of A-2 or better and from Moody's of P-3 on Borrower's commercial paper or a
rating from S&P of A-3 and from Moody's of P-2 or better on Borrower's
commercial paper.
"Tier 5 Commercial Paper Rating" means a rating from S&P of A-3
and from Moody's of P-3 on Borrower's commercial paper.
"Tier 6 Commercial Paper Rating" means a rating from S&P of
worse than A-3 or from Moody's of worse than P-3 on Borrower's commercial paper,
or Borrower's commercial paper is unrated by either S&P or Moody's.
"Tongue River" means Tongue River Holdings, Inc., a
Montana corporation, Transportation Properties, a Montana general partnership,
and Tongue River Railroad Company, a Montana limited partnership.
"Total Capitalization" of Borrower and its Subsidiaries
at any date means the sum of (i) the Debt of Borrower and its Subsidiaries, plus
(ii) the preferred stock equity of Borrower and its Subsidiaries, plus (iii) the
common stock equity of Borrower and its Subsidiaries, all as determined on a
consolidated basis. For purposes of determining Total Capitalization, clause
(ii) of this definition shall include any preferred equity security issued by
any Subsidiary to any Person
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other than Borrower or another Subsidiary and which is reflected on Borrower's
consolidated balance sheet as "minority interest in subsidiary."
"Unfunded Vested Liabilities" means, with respect to
any Plan, at any time, the amount (if any) by which (a) the present value of all
vested nonforfeitable benefits under such Plan exceeds (b) the fair market value
of all Plan assets allocable to such benefits, all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of Borrower or any member of the
Controlled Group to the PBGC or such Plan under Title IV of ERISA.
Section 1.2 General Principles Applicable to Definitions.
Definitions given in Section 1.1 and Article II shall be equally applicable to
both singular and plural forms of the terms therein defined and references
herein to he or it shall be applicable to persons whether masculine, feminine or
neuter. References herein to any document including, but without limitation,
this Agreement shall be deemed a reference to such document as it now exists,
and as, from time to time hereafter, the same may be amended.
Section 1.3 Accounting Terms. Except as otherwise provided
herein, accounting terms not specifically defined shall be construed, and all
accounting procedures shall be performed, in accordance with generally accepted
United States accounting principles consistently applied.
ARTICLE II
THE FACILITY
Section 2.1 The Facility.
2.1.1 Description of Facility. The Lenders grant to the
Borrower a revolving credit facility pursuant to which, and upon the terms and
subject to the conditions herein set out:
(i) each Lender severally agrees to make Committed
Loans to the Borrower in accordance with Section 2.2; and
(ii) each Lender may, in its sole discretion, make
bids to make Competitive Bid Loans to the Borrower in accordance with Section
2.3.
2.1.2 Facility Amount. In no event may the aggregate
principal amount of all outstanding Advances (including both the Committed
Advances and the Competitive Bid Advances) exceed the Aggregate Commitment.
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2.1.3 Availability of Facility; Maturity. Subject to
the terms hereof, the facility is available from the date hereof to the
Termination Date. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow at any time prior to the Termination Date. Each
Competitive Bid Rate Advance shall be paid in full on the last day of its
applicable Interest Period and any and all Advances and other Obligations
outstanding on the Termination Date shall be paid in full by the Borrower on the
Termination Date.
Section 2.2 Committed Advances.
2.2.1 Committed Advances. Each Committed Advance
hereunder shall consist of borrowings made from the several Lenders ratably in
proportion to the amounts of their respective Commitments. Each Lender's
Commitment shall be reduced by an amount equal to the aggregate outstanding
amount of Competitive Bid Advances multiplied by a fraction whose numerator is
such Lender's Commitment and whose denominator is the Aggregate Commitment
regardless of which Lender or Lenders make such Competitive Bid Advances.
Committed Advances shall be evidenced by the Committed Notes.
2.2.2 Committed Advance Rate Options. The Committed
Advances may be Floating Rate Advances or Eurodollar Committed Advances, or a
combination thereof, selected by the Borrower in accordance with Section 2.2.3.
No Committed Advance may mature after the Termination Date.
2.2.3 Method of Selecting Rate Options and Interest Periods
for Committed Advances. The Borrower shall select the Rate Option and, in
the case of each Eurodollar Committed Advance, the Eurodollar Interest Period,
applicable to each Committed Advance from time to time. The Borrower shall give
the Agent irrevocable written notice of a request for a Committed Advance,
signed by an Authorized Officer (a "Committed Borrowing Notice"), not later than
11:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance
and on the date three Business Days before the Borrowing Date for each
Eurodollar Committed Advance. Notwithstanding the foregoing, a Committed
Borrowing Notice for a Floating Rate Advance may be given not later than 15
minutes after the time which the Borrower is required to reject one or more bids
offered in connection with an Absolute Rate Auction pursuant to Section 2.3.6
and a Committed Borrowing Notice for a Eurodollar Committed Advance may be given
not later than 15 minutes after the time the Borrower is required to reject one
or more bids offered in connection with a Eurodollar Auction pursuant to Section
2.3.6. Requests for Advances received after the designated time will be deemed
received on the next succeeding Business Day. A Committed Borrowing Notice shall
specify:
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(i) the Borrowing Date, which shall be a Business Day, of
such Committed Advance,
(ii) the aggregate amount of such Committed Advance,
(iii) the Rate Option selected for such Committed Advance,
and
(iv) in the case of each Eurodollar Committed Advance, the
Eurodollar Interest Period applicable thereto (which may not end after the
Termination Date).
A Committed Borrowing Notice that does not conform substantially to these
requirements shall be rejected, and the Agent shall promptly notify the Borrower
of such rejection by telex, telecopy or telephone.
2.2.4 Conversion and Continuation of Outstanding Committed
Advances. Floating Rate Advances shall continue as Floating Rate Advances
unless and until such Floating Rate Advances are repaid or converted into
Eurodollar Committed Advances pursuant to this Section. Each Eurodollar
Committed Advance shall continue as a Eurodollar Committed Advance until the end
of the applicable Eurodollar Interest Period, at which time such Eurodollar
Committed Advance shall be automatically converted into a Floating Rate Advance
unless the Borrower shall have given the Agent a Committed
Conversion/Continuation Notice requesting that, at the end of such Eurodollar
Interest Period, such Eurodollar Committed Advance continue as a Eurodollar
Committed Advance for a new Eurodollar Interest Period. Subject to the terms of
Section 2.5.2, the Borrower may elect from time to time to convert all or any
part of any Committed Advance into another Committed Advance with a different
Rate Option; provided that any conversion of any Eurodollar Committed Advance
shall be made on, and only on, the last day of the Eurodollar Interest Period
applicable thereto. The Borrower shall give the Agent irrevocable notice (a
"Committed Conversion/Continuation Notice") of each conversion of a Committed
Advance or continuation of a Eurodollar Committed Advance not later than 11:00
a.m. (Chicago time) on the date of the requested conversion or continuation, in
the case of a conversion into a Floating Rate Advance, or on the date three
Business Days prior to the requested conversion or continuation, in the case of
a conversion into or continuation of a Eurodollar Committed Advance, specifying:
(i) the requested date, which shall be a Business Day, of
such conversion or continuation;
(ii) the aggregate amount and Rate Option of the Committed
Advance which is to be converted or continued; and
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(iii) the amount and Rate Option(s) of the Committed
Advance(s) into which such Committed Advance is to be converted or continued
and, in the case of a conversion into or continuation of a Eurodollar Committed
Advance, the duration of the Eurodollar Interest Period applicable thereto.
A Committed Conversion/Continuation Notice that does not conform substantially
to these requirements shall be rejected, and the Agent shall promptly notify the
Borrower of such rejection by telex or telecopy.
Section 2.3 Competitive Bid Advances.
2.3.1 Competitive Bid Option. In addition to Committed
Advances pursuant to Section 2.2, but subject to the terms and conditions of
this Agreement (including, without limitation, the limitation set forth in
Section 2.1.2 as to the maximum aggregate principal amount of all outstanding
Advances hereunder), the Borrower may, as set forth in this Section 2.3, request
the Lenders, prior to the Termination Date, to make offers to make Competitive
Bid Advances to the Borrower. Each Lender may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section 2.3. Competitive Bid
Advances shall be evidenced by the Competitive Bid Notes.
2.3.2 Competitive Bid Quote Request. When the Borrower
wishes to request offers to make Competitive Bid Loans under this Section 2.3,
it shall transmit to the Agent by a Competitive Bid Quote Request, signed by an
Authorized Officer, substantially in the form of Exhibit C hereto so as
to be received no later than (i) 1:00 p.m. (Chicago time) at least four Business
Days prior to the Borrowing Date proposed therein, in the case of a Eurodollar
Auction or (ii) 1:00 p.m. (Chicago time) at least one Business Day prior to the
Borrowing Date proposed therein, in the case of an Absolute Rate Auction
specifying:
(a) the proposed Borrowing Date, which shall be a
Business Day, for the proposed Competitive Bid Advance,
(b) the aggregate principal amount of such
Competitive Bid Advance,
(c) whether the Competitive Bid Quotes requested
are to set forth a Eurodollar Bid Rate or an Absolute Rate, or both, and
(d) the Interest Period applicable thereto (which
may not end after the Termination Date).
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Each Competitive Bid Quote Request shall be in a minimum amount of
$5,000,000 or in an integral multiple of $1,000,000 in excess thereof.
The Borrower may request offers to make Competitive Bid Loans for more
than one Interest Period in a single Competitive Bid Quote Request. No
Competitive Bid Quote Request shall be given within five Business Days (or such
other number of days as the Borrower and the Agent may agree) of any other
Competitive Bid Quote Request. Requests for Advances received after the
designated time will be deemed received on the next succeeding Business Day. A
Competitive Bid Quote Request that does not conform substantially to the format
of Exhibit C hereto shall be rejected, and the Agent shall promptly
notify the Borrower of such rejection by telex, telecopy or telephone.
2.3.3 Invitation for Competitive Bid Quotes. Promptly
and in any event before the close of business on the same Business Day of
receipt of a Competitive Bid Quote Request that is not rejected pursuant to
Section 2.3.2, the Agent shall send to each of the Lenders an Invitation for
Competitive Bid Quotes substantially in the form of Exhibit D hereto,
which shall constitute an invitation by the Borrower to each Lender to submit
Competitive Bid Quotes offering to make the Competitive Bid Loans to which such
Competitive Bid Quote Request relates in accordance with this Section 2.3.
2.3.4 Submission and Contents of Competitive Bid
Quotes. (i) Each Lender may, in its sole discretion, submit a Competitive
Bid Quote containing an offer or offers to make Competitive Bid Loans in
response to any Invitation for Competitive Bid Quotes. Each Competitive Bid
Quote must comply with the requirements of this Section 2.3.4 and must be
submitted to the Agent at its offices specified in or pursuant to Section 10.4
not later than (a) 10:00 a.m. (Chicago time) at least three Business Days prior
to the proposed Borrowing Date, in the case of a Eurodollar Auction or (b) 10:00
a.m. (Chicago time) on the proposed Borrowing Date, in the case of an Absolute
Rate Auction (or, in either case upon reasonable prior notice to the Lenders,
such other time and date as the Borrower and the Agent may agree);
provided that Competitive Bid Quotes submitted by First Chicago may only
be submitted if the Agent or First Chicago notifies the Borrower of the terms of
the offer or offers contained therein not later than 15 minutes prior to the
latest time at which the relevant Competitive Bid Quotes must be submitted by
the other Lenders. Subject to Articles IV and VII, any Competitive Bid Quote so
made shall be irrevocable except with the written consent of the Agent given on
the instructions of the Borrower.
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(ii) Each Competitive Bid Quote shall be in substantially the form of
Exhibit E hereto and shall in any case specify:
(a) the proposed Borrowing Date, which shall be the
same as that set forth in the applicable Invitation for Competitive Bid Quotes,
(b) the principal amount of the Competitive Bid Loan
for which each such offer is being made, which principal amount (1) may be
greater than, less than or equal to the Commitment of the quoting Lender, (2)
must be at least $5,000,000 and an integral multiple of $1,000,000, and (3) may
not exceed the principal amount of Competitive Bid Loans for which offers were
requested,
(c) in the case of a Eurodollar Auction, the
Competitive Bid Margin offered for each such Competitive Bid Loan,
(d) the minimum amount, if any, of the Competitive
Bid Loan which may be accepted by the Borrower,
(e) in the case of an Absolute Rate Auction, the
Absolute Rate offered for each such Competitive Bid Loan, and
(f) the identity of the quoting Lender.
(iii) The Agent shall reject any Competitive Bid Quote that:
(a) is not substantially in the form of Exhibit E
hereto or does not specify all of the information required by Section 2.3.4(ii);
(b) contains qualifying, conditional or similar
language, other than any such language contained in Exhibit E hereto;
(c) proposes terms other than or in addition to those
set forth in the applicable Invitation for Competitive Bid Quotes; or
(d) arrives after the time set forth in Section
2.3.4(i).
If any Competitive Bid Quote shall be rejected pursuant to this Section
2.3.4(iii), then the Agent shall notify the relevant Lender of such rejection as
soon as practical.
2.3.5 Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (i) of any Competitive Bid Quote
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submitted by a Lender that is in accordance with Section 2.3.4 and (ii) of any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote submitted by such Lender with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Agent unless such subsequent Competitive Bid Quote
specifically states that it is submitted solely to correct a manifest error in
such former Competitive Bid Quote. The Agent's notice to the Borrower shall
specify the aggregate principal amount of Competitive Bid Loans for which offers
have been received for each Interest Period specified in the related Competitive
Bid Quote Request and the respective principal amounts and Eurodollar Bid Rates
or Absolute Rates, as the case may be, so offered.
2.3.6 Acceptance and Notice by Borrower. Not later than (i)
11:00 a.m. (Chicago time) at least three Business Days prior to the proposed
Borrowing Date, in the case of a Eurodollar Auction or (ii) 11:00 a.m. (Chicago
time) on the proposed Borrowing Date, in the case of an Absolute Rate Auction
(or, in either case upon reasonable prior notice to the Lenders, such other time
and date as the Borrower and the Agent may agree), the Borrower shall notify the
Agent of its acceptance or rejection of the offers so notified to it pursuant to
Section 2.3.5; provided, however, that the failure by the Borrower to give such
notice to the Agent shall be deemed to be a rejection of all such offers. In the
case of acceptance, such notice (a "Competitive Bid Borrowing Notice") shall
specify the aggregate principal amount of offers for each Interest Period that
are accepted. The Borrower may accept any Competitive Bid Quote in whole or in
part (subject to the terms of Section 2.3.4(ii)(d)); provided that:
(a) the aggregate principal amount of each
Competitive Bid Advance may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request,
(b) acceptance of offers may only be made on the
basis of ascending Eurodollar Bid Rates or Absolute Rates, as the case may be,
and
(c) the Borrower may not accept any offer that is
described in Section 2.3.4(iii) or that otherwise fails to comply with the
requirements of this Agreement.
2.3.7 Allocation by Agent. If offers are made by two or
more Lenders with the same Eurodollar Bid Rates or Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which offers are accepted for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Lenders as
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nearly as possible (in such multiples, not greater than $1,000,000, as the Agent
may deem appropriate) in proportion to the aggregate principal amount of such
offers; provided, however, that no Lender shall be allocated a portion of any
Competitive Bid Advance which is less than the minimum amount which such Lender
has indicated that it is willing to accept. Allocations by the Agent of the
amounts of Competitive Bid Loans shall be conclusive in the absence of manifest
error. The Agent shall promptly, but in any event on the same Business Day,
notify each Lender of its receipt of a Competitive Bid Borrowing Notice and the
aggregate principal amount of such Competitive Bid Loan allocated to each
participating Lender.
2.3.8 Administration Fee. The Borrower hereby agrees to
pay to the Agent an administration fee of $200 per Lender per each Competitive
Bid Quote Request transmitted by the Borrower to the Agent pursuant to Section
2.3.2. Such administration fee shall be payable in arrears on each Payment Date
hereafter and on the Termination Date (or such earlier date on which the
Aggregate Commitment shall terminate or be cancelled) for any period then ending
for which such fee, if any, shall not have been theretofore paid.
Section 2.4 Fees.
2.4.1 Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a commitment fee equal to the Commitment
Fee Percentage (calculated as a percentage rate per annum) on the average daily
unborrowed portion of such Lender's Commitment from the date hereof to and
including the Termination Date, payable in arrears on each Payment Date
hereafter and on the Termination Date. For the purposes of calculating the
commitment fee under this Section 2.4.1, outstanding Competitive Bid Advances
shall not be deemed usage of the Lenders' Commitments. All accrued
commitment fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder. Computations of Commitment
Fees shall be made on the basis of a year of 360 days for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such fees are payable.
2.4.2 Agent's Fees. The Borrower agrees to pay to the
Agent, for its own account, the fees agreed to by the Borrower and the Agent
pursuant to that certain letter agreement dated February 9, 1995, or as
otherwise agreed from time to time.
Section 2.5 General Facility Terms.
2.5.1 Method of Borrowing. Not later than 1:00 p.m. (Chicago
time) on each Borrowing Date, each Lender shall make
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available its Loan or Loans in funds immediately available in Chicago, to the
Agent at its address specified pursuant to Section 10.4. The Agent shall deposit
the funds so received from the Lenders in the Borrower's account at the Agent's
main office in Chicago or into such other account as the Borrower may reasonably
designate in writing to the Agent from time to time. Notwithstanding the
foregoing provisions of this Section 2.5.1, to the extent that a Loan made by a
Lender matures on the Borrowing Date of a requested Loan, such Lender shall
apply the proceeds of the Loan it is then making to the repayment of principal
of the maturing Loan.
2.5.2 Minimum Amount of Each Advance. Each Advance
shall be in the minimum amount of $5,000,000 (and in integral multiples of
$1,000,000 if in excess thereof); provided, however, that any
Floating Rate Advance may be in the aggregate amount of the unused Aggregate
Commitment.
2.5.3 Cancellation of Commitments. The Borrower may at
any time after the date hereof cancel the Aggregate Commitment in whole, or in a
minimum aggregate amount of $10,000,000 (and in integral multiples of $1,000,000
if in excess thereof) ratably among the Lenders in proportion to the amounts of
their respective Commitments upon at least ten Business Days' prior written
notice to the Agent, which notice shall specify the amount of such reduction;
provided, however, no such notice of cancellation shall be
effective to the extent that it would reduce the Aggregate Commitment to an
amount which would be less than the outstanding principal amount of Advances at
the time such cancellation is to take effect. Any notice of cancellation given
pursuant to this Section shall be irrevocable and shall specify the date upon
which such cancellation is to take effect.
2.5.4 Optional Principal Payments. The Borrower may
from time to time pay all outstanding Floating Rate Advances, or, in a minimum
aggregate amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), any portion of the outstanding Floating Rate Advances upon two
Business Days' prior notice to the Agent. A Fixed Rate Advance may not be paid
prior to the last day of the applicable Interest Period.
2.5.5 Interest Periods. Subject to the provisions of
Section 2.5.6, each Advance shall bear interest from and including the first day
of the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Advance. The Borrower shall not request a Fixed Rate Advance if, after giving
effect to the requested Fixed Rate Advance, more than eight separate Fixed Rate
Advances would be outstanding.
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2.5.6 Rate after Maturity. Except as provided in the
next sentence, any Advance not paid at maturity, whether by acceleration or
otherwise, shall bear interest until paid in full at a rate per annum equal to
the Corporate Base Rate plus 2% per annum. In the case of a Fixed Rate Advance
the maturity of which is accelerated, such Fixed Rate Advance shall bear
interest for the remainder of the applicable Interest Period, at the higher of
the rate otherwise applicable to such Interest Period plus 2% per annum or the
Corporate Base Rate plus 2% per annum.
2.5.7 Interest Payment Dates; Interest Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Fixed Rate Advance shall be payable on the
last day of its applicable Interest Period and on any date on which such Advance
is prepaid, whether due to acceleration or otherwise. Interest accrued on each
Fixed Rate Advance having an Interest Period longer than three months shall also
be payable on the last day of each three-month interval during such Interest
Period. Interest on Fixed Rate Advances shall be calculated for the actual
number of days elapsed on the basis of a year consisting of 360 days. Interest
on Floating Rate Advances shall be calculated for the actual number of days
elapsed on the basis of a year consisting of 365, or, when appropriate, 366
days. Interest shall be payable for the day an Advance is made but not for the
day of any payment on the amount paid if payment is received prior to 1:00 p.m.
(local time) at the place of payment. If any payment of principal of or interest
on an Advance shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.5.8 Method and Application of Payments. Subject to
the last sentence of Section 2.5.1, all payments of principal, interest, and
fees hereunder shall be made in immediately available funds to the Agent at the
Agent's address specified pursuant to Section 10.4 or at any other Lending
Installation of the Agent within the United States specified in writing by the
Agent to the Borrower (at least one Business Day prior to the applicable due
date) by 1:00 p.m. (Chicago time) on the date when due. If Agent receives a
payment on the Obligations at a time when no Event of Default has occurred and
is continuing and when no payment on the Obligations is due (or the payment
received by the Agent is in excess of the amount then due), then such payment
(or the portion of such payment that exceeds the amount then due) shall be
applied to the Obligations outstanding in such manner as may be specified by the
Borrower. To the extent the application of any payment received by Agent in
respect of the Obligations is
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not governed by the immediately preceding sentence, such payment shall be
applied in the following manner:
(i) first, to any fees, expenses, indemnities and other
Obligations (other than the principal of and interest on the Advances) then due
and, if such payment is insufficient to pay all such Obligations, then such
payment shall be applied to such Obligations due to each Lender pro rata based
on the respective amounts thereof;
(ii) second, to any accrued and unpaid interest then due on
the Advances and, if such payment is insufficient to pay all such interest, then
such payment shall be applied to the interest due to each Lender pro rata based
on the respective amounts thereof;
(iii) third, to any unpaid principal amount of the Advances
then due and, if such payment is insufficient to pay all such principal, then
such payment shall be applied to the principal due to each Lender pro rata based
on the respective amounts thereof; and
(iv) fourth, to any other Obligations then due and, if such
payment is insufficient to pay all such Obligations, then such payment shall be
applied to such Obligations owing to each Lender pro rata based on the
respective amounts thereof.
Each payment delivered to the Agent for the account of any Lender shall
be delivered by the Agent to such Lender in the same type of funds which the
Agent received at such Lender's address specified pursuant to Article 10.4 or at
any Lending Installation specified in a notice received by the Agent from such
Lender. If such payment is received by the Agent by 1:00 p.m. (Chicago time)
such delivery to the Lenders shall be made on the same day and if received
thereafter shall be made on the next succeeding Business Day. Borrower hereby
authorizes the Agent and each Lender, if and to the extent any payment is not
promptly made to the Agent when due pursuant to this Agreement or any other Loan
Document, to set off or otherwise charge from time to time against any or all of
the accounts of Borrower with the Agent or such Lender or any affiliate of the
Agent or any Lender any amount due hereunder or under such other Loan Document.
If any Lender shall obtain any payment in respect of the Obligations (whether
voluntary or involuntary, through the exercise of any right of set-off or
otherwise) in excess of the amount such Lender would have been entitled to
receive under this Section 2.5.8 if such payment had been made to the Agent,
such Lender shall hold such excess payment in trust for the Agent and the
Lenders and shall forthwith remit the same to the Agent for the Agent's and
Lenders' accounts as herein provided. If any Lender is subsequently required to
refund to Borrower any sum shared with
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the other Lenders pursuant to this Section 2.5.8, such Lender shall be entitled
to recoup from the other Lenders the amount refunded in excess of the amount it
would have been entitled to receive under this Section 2.5.8 together with
interest thereon for each day from the date such amount was received by such
other Lenders to the date such amount is made available to the Borrower at the
same rate of interest that the refunding Lender is required to pay to the
Borrower on the refunded amount and, thereafter, until repaid to such refunding
Lender, at the Federal Funds Rate. For the purpose of calculating the amount
owing by Borrower to each Lender, any payments made by Borrower directly to any
Lender that are subject to the sharing provisions of this Section 2.5.8 shall be
deemed to have been made to the Agent and distributed to the Lenders in
accordance with this Section 2.5.8.
2.5.9 Notes; Telephonic Notices. Each Lender is hereby
authorized to record on the schedule attached to each of its Notes, or otherwise
record in accordance with its usual practice, the date and amount of each of its
Loans of the type evidenced by such Note; provided, however, that any failure to
so record shall not affect the Borrower's obligations under any Note. The
Borrower hereby authorizes the Lenders and the Agent to extend Advances, effect
Rate Option selections and submit Competitive Bid Quotes based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be an Authorized Officer or an officer, employee or agent of the
Borrower designated by an Authorized Officer. The Borrower agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice signed by
an Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Agent and the Lenders, the records of the
Agent and the Lenders shall govern absent manifest error.
2.5.10 Notification of Advances, Interest Rates and
Prepayments. Promptly after receipt thereof, the Agent will notify each
Lender of the contents of each Aggregate Commitment reduction notice, Committed
Borrowing Notice, Committed Conversion/Continuation Notice, and repayment notice
received by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Committed Advance promptly upon determination of
such interest rate and will give Borrower and each Lender prompt notice of each
change in the Alternate Base Rate. Each Reference Lender agrees to furnish
timely information for the purpose of determining the Eurodollar Base Rate.
2.5.11 Non-Receipt of Funds by the Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Agent prior to the date
on which it is scheduled to make payment to the Agent of (i) in the case of a
Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a payment of
principal,
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interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Rate for such day or (y) in the case of payment by the Borrower,
the interest rate applicable to the relevant Loan.
Section 2.6 Lending Installations. Each Lender may book its
Loans at any Lending Installation selected by such Lender and may change its
Lending Installation from time to time. Each Lender will notify the Agent and
the Borrower on or prior to the date of this Agreement of the Lending
Installation which it intends to utilize for each type of Loan hereunder. Each
Lender may, by written notice to the Agent and the Borrower, change the Lending
Installation through which Loans will be made by it and for whose account Loan
payments are to be made.
Section 2.7 Withholding Tax Exemption. At least five Business
Days prior to the first date on which interest or fees are payable hereunder for
the account of any Lender, each Lender that is not incorporated under the laws
of the United States of America, or a state thereof, agrees that it will deliver
to each of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes. Each
Lender which so delivers a Form 1001 or 4224 further undertakes to deliver to
each of the Borrower and the Agent two additional copies of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the Agent,
in each case certifying that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
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inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the Borrower
and the Agent that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax.
ARTICLE III
CHANGE IN CIRCUMSTANCES
Section 3.1 Yield Protection. If, after the date hereof, the
introduction of or change in any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof, or compliance of any Lender with
such,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from payments due
from the Borrower, or changes the basis of taxation of payments to any Lender in
respect of its Loans or other amounts due it hereunder (in either case,
excluding taxation of the overall net income of any Lender or applicable Lending
Installation) or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender or any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate applicable to
Fixed Rate Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount receivable by any
Lender or any applicable Lending Installation in connection with loans, or
requires any Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of loans held or interest received by it,
by an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans and its Commitment; provided, however, if
any such Lender fails to provide the Borrower with notice of such increased
expense or reduction in amount received within 30 days after such Lender becomes
aware of the occurrence of the events giving rise to such increased expense or
reduction, then such Lender shall not be entitled to recover any payment from
the Borrower under this Section 3.1 for any such increase in expense incurred or
such
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reduction in amount occurring prior to the time such Lender delivers such notice
to the Borrower; provided, further, that nothing in this Section
3.1 precludes a Lender, after providing initial notice of an occurence of an
event described in this Section 3.1, from making successive demands for payment
for further compensation with respect to such event, nor does this Section 3.1
limit the ability of such Lender, with respect to subsequent demands, to recover
the full amount incurred since the immediately preceding demand for payment.
Section 3.2 Changes in Capital Adequacy Regulations. If a
Lender determines the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation
controlling such Lender is increased as a result of a Change, then, within 15
days of demand by such Lender, the Borrower shall pay such Lender the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender determines is attributable to this
Agreement, its Loans or its obligation to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy); provided,
however, that nothing in this Section 3.2 precludes a Lender from making
successive demands for payment for further compensation with respect to such
event, nor does this Section 3.2 limit the ability of such Lender, with respect
to subsequent demands, to recover the full amount incurred since the immediately
preceding demand for payment. "Change" means (i) any change after the date of
this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
Section 3.3 Availability of Rate Options. If (i) any Lender
determines that maintenance of its Eurodollar Committed Loans or Eurodollar Bid
Rate Loans, as the case may be, at a suitable Lending Installation would violate
any applicable law, rule, regulation, or directive, whether or not having the
force of law, (ii) the Required Lenders determine that deposits of a
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type and maturity appropriate to match fund Eurodollar Committed Advances are
not available or (iii) the Required Lenders determine that a Rate Option does
not accurately reflect the cost of making or maintaining a Committed Advance at
such Rate Option, then the Agent shall suspend the availability of the affected
Rate Option and, in the case of clause (i) only, require any affected Loans to
be repaid.
Section 3.4 Funding Indemnification. If any payment of a Fixed
Rate Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or otherwise, or a
Fixed Rate Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, the Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Fixed Rate Advance.
Section 3.5 Lender Statements; Survival of Indemnity. To the
extent reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Fixed Rate Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a Rate Option under Section 3.3, so long as such designation
is not disadvantageous to such Lender. Each Lender shall deliver a written
statement of such Lender as to the amount due, if any, under Sections 3.1, 3.2
or 3.4. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a Fixed
Rate Loan shall be calculated as though each Lender funded its Fixed Rate Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Fixed Rate applicable to such
Loan, whether in fact that is the case or not. Unless otherwise provided herein,
the amount specified in the written statement shall be payable on demand after
receipt by the Borrower of the written statement. The obligations of the
Borrower under Sections 3.1, 3.2 and 3.4 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS AND TO LENDING
Section 4.1 Conditions to Effectiveness of Agreement. This
Agreement and the other Loan Documents shall become effective upon, and only
upon, the execution and delivery thereof as
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required by Section 4.2(a) and the termination of, and payment of all amounts
owing in respect of, the Prior Loan Agreement.
Section 4.2 Conditions to Initial Advance. In addition to the
conditions set forth in Section 4.3 (to be fulfilled at the time any Advance is
made), the obligation of each Lender to make its initial Loan available is
subject to fulfillment of the following conditions.
(a) Loan Documents. Ten duplicate originals of this
Agreement shall have been duly executed and delivered to the Agent by each of
the parties hereto and one original of each of the Notes shall have been duly
executed and delivered to the Agent by the Borrower, in each case in form and
substance satisfactory to the Agent and each Lender.
(b) Corporate Certificates. The Agent shall have
received ten duplicate originals of each of the following, in each case in form
and substance satisfactory to the Agent and each Lender:
(i) Copies of the articles of incorporation of
Borrower certified by the Secretary of State of Washington not more than five
days prior to the date hereof;
(ii) Bylaws of Borrower certified by Borrower, as of
the date hereof;
(iii) Certificate of Existence/Authorization issued by
the Secretary of State of Washington with respect to Borrower, dated not more
than five days prior to the date hereof;
(iv) Certified copies of resolutions adopted by the
board of directors of Borrower authorizing the execution, delivery and
performance by Borrower of the Loan Documents, dated as of the date hereof; and
(v) Incumbency certificates describing the office and
identifying the specimen signatures of the individuals signing the Loan
Documents on behalf of Borrower, dated as of the date hereof.
(c) Legal Opinion. The Agent shall have received ten
duplicate originals of an opinion of the law firm of Riddell, Williams, Bullitt
& Walkinshaw, counsel to Borrower, in substantially the form of Exhibit
F hereto and dated as of the date hereof.
(d) Other Information. The Agent and each Lender shall have
received such other statements, opinions, certificates, documents and
information with respect to the
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matters contemplated by this agreement as it may reasonably request.
Section 4.3 Conditions to All Advances. The obligation of the
Lenders to fund any Advances hereunder, including the initial Advance, is
subject to the condition that, on the date of such Advance, no Default or Event
of Default shall have occurred and be continuing or will occur as a result of
the making of the Advances; and the representations of Borrower in Article V
shall be true on and as of such date with the same force and effect as if made
on and as of such date. Each Advance shall be deemed to constitute a
representation and warranty by Borrower that, as of the date of such Advance,
the statements set forth in Article V are true and correct and no Default or
Event of Default has occurred and is continuing or will occur as a result of
disbursement of the requested Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Lenders as follows:
Section 5.1 Corporate Existence and Power. Borrower and each
Subsidiary are each corporations duly incorporated, validly existing and in good
standing under the laws of their respective jurisdictions of incorporation.
Borrower and each Subsidiary are each duly qualified to do business in each
other jurisdiction where the nature of their respective activities or the
ownership of their respective properties requires such qualification, except to
the extent that failure to be so qualified does not have a material adverse
effect on the business, operations or financial condition of the enterprise
comprised of Borrower and its Subsidiaries taken as a whole. Borrower and each
Subsidiary have full corporate power, authority and legal right to carry on
their business as presently conducted, and to own and operate their properties
and assets. Borrower has full corporate power to execute, deliver and perform
this Agreement and the other Loan Documents and to borrow hereunder. The term
"Subsidiary" as used in this Section 5.1 shall not include Tongue River.
Section 5.2 Corporate Authorization. The execution, delivery
and performance by Borrower of this Agreement and the other Loan Documents, and
any borrowing hereunder or thereunder, have been duly authorized by all
necessary corporate action of Borrower, do not require any shareholder approval
or the approval or consent of any trustee or the holders of any Indebtedness of
Borrower, except such as have been obtained (certified copies thereof having
been delivered to the Agent), do not contravene any law, regulation, rule,
judgment or order binding on it or its Articles of Incorporation or Bylaws, do
not contravene the
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provisions of or constitute a default under any indenture, mortgage, contract or
other agreement or instrument to which Borrower or any Subsidiary is a party or
by which Borrower or any of its properties may be bound or affected, and do not
result in the creation or imposition of any Lien on any assets of Borrower or
any Subsidiary.
Section 5.3 Government Approvals, Etc. No Government Approval
or filing or registration with any Governmental Authority is required for the
making and performance by Borrower of this Agreement or the other Loan Documents
or in connection with any of the transactions contemplated hereby or thereby,
except such as have been heretofore obtained and are in full force and effect
(certified copies thereof having been delivered to the Agent).
Section 5.4 Binding Obligations, Etc. This Agreement has been
duly executed and delivered by Borrower and constitutes, and the other Loan
Documents when duly executed and delivered will constitute, the legal, valid and
binding obligations of Borrower enforceable against Borrower in accordance with
their respective terms, except as such enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws of general application affecting the enforcement
of creditors' rights, and (b) by general equitable principles, regardless of
whether enforcement is sought in equity or at law.
Section 5.5 Litigation. Except as disclosed in Schedule 3 there
are no actions, proceedings, investigations, or claims against or affecting
Borrower or any Subsidiary now pending before any court, arbitrator or
Governmental Authority (nor to the knowledge of Borrower has any thereof been
threatened) which if determined adversely to Borrower or any Subsidiary would be
likely to have a material adverse effect on the business, operations or
financial condition of the enterprise comprised of Borrower and its Subsidiaries
taken as a whole or on the ability of Borrower to perform its obligations under
this Agreement and the other Loan Documents except as disclosed in Borrower's
Form 10-K filed with the Securities and Exchange Commission for its fiscal year
ended September 30, 1994, or its Form 10-Q filed with the Securities and
Exchange Commission for the fiscal quarter ended December 31, 1994. The term
"Subsidiary" as used in this Section 5.5 shall not include Tongue River.
Section 5.6 Financial Condition. The consolidated balance sheet
of Borrower and its Subsidiaries as of September 30, 1994, and the related
statements of income and shareholders' earnings reinvested in the business for
the fiscal year then ended, and the consolidated balance sheet of Borrower and
its Subsidiaries as of December 31, 1994, and the related statements of income
and
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shareholders' earnings reinvested in the business for the fiscal quarter then
ended, copies of which have been furnished to the Agent and each Lender, fairly
present the consolidated financial condition of Borrower and its Subsidiaries as
at such dates and the results of operations of Borrower and its Subsidiaries for
the periods then ended, all in accordance with generally accepted accounting
principles consistently applied. Borrower and its Subsidiaries did not have on
such dates any material contingent liabilities for Taxes, material unusual
forward or long-term commitments or material unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or provided
for in the balance sheets for such dates and in the notes to those financial
statements. Since December 31, 1994, there has been no material adverse change
in the financial conditions, operations, or business of the enterprise comprised
of Borrower or its Subsidiaries taken as a whole.
Section 5.7 Taxes. Borrower and its Subsidiaries have filed all
tax returns and reports required of them, have paid all Taxes which are due and
payable, and have provided adequate reserves for payment of any Tax whose
payment is being contested. The charges, accruals and reserves on the books of
Borrower and its Subsidiaries in respect of Taxes for all fiscal periods to date
are accurate. There are no questions or disputes between Borrower or any
Subsidiary and any Governmental Authority with respect to any Taxes except as
disclosed in the balance sheets referred to in Section 5.6 or otherwise
disclosed to the Agent and to each Lender in writing prior to the date of this
Agreement and except disputes which if resolved adversely to the positions being
asserted by Borrower or any Subsidiary would not have a material adverse effect
on the business, operations or financial condition of the enterprise comprised
of Borrower and its Subsidiaries taken as a whole.
Section 5.8 Laws, Orders; Other Agreements. Except as described
in the financial statements delivered to the Lenders pursuant to Section 5.6,
neither Borrower nor any Subsidiary is in material violation of or subject to
any material contingent liability on account of any material laws, statutes,
rules, regulations and orders of any Governmental Authority, except any thereof
whose validity is being contested in good faith by appropriate proceedings upon
stay of execution of the enforcement thereof. Neither Borrower nor any
Subsidiary is in material breach of or default under any material agreement to
which it is a party or which is binding on it or any of its assets. The term
"Subsidiary" as used in this Section 5.8 shall not include Tongue River.
Section 5.9 Federal Reserve Regulations. Borrower is not engaged
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or
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carrying any margin stock (within the meaning of Federal Reserve Regulation U),
and no part of the proceeds of any Advance will be used to purchase or carry any
such margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or for any other purpose that violates the
applicable provisions of any Federal Reserve Regulation. Borrower will furnish
to the Agent on request by the Agent or any Lender a statement conforming with
the requirements of said Regulation U.
Section 5.10 ERISA.
(a) The present value of all benefits vested under all Pension
Plans did not, as of the most recent valuation date of such Pension Plans,
exceed the value of the assets of such Pension Plans allocable to such vested
benefits by an amount which would represent a potential material liability of
Borrower and its Subsidiaries or affect materially the ability of Borrower to
perform its obligations under this Agreement.
(b) No Plan or trust created thereunder, or any trustee or
administrator thereof, has engaged in a "prohibited transaction" (as such term
is defined in Section 406 or Section 2003(a) of ERISA) which could subject such
Plan or any other Plan, any trust created thereunder, or any trustee or
administrator thereof, or any party dealing with any Plan or any such trust to
the tax or penalty on prohibited transactions imposed by Section 502 or Section
2003(a) of ERISA.
(c) No Pension Plan or trust has been terminated, except in
accordance with the Code, ERISA, and the regulations of the Internal Revenue
Service and the PBGC as applicable to solvent plans in which benefits of
participants are fully protected. No "reportable event" as defined in Section
4043 of ERISA has occurred for which notice has not been waived or for which
alternative notice procedures are permitted.
(d) No Pension Plan or trust created thereunder has incurred
any "accumulated funding deficiency" (as such term is defined in Section 302 of
ERISA) whether or not waived, since the effective date of ERISA.
(e) The required allocations and contributions to Pension
Plans will not violate Section 415 of the Code.
(f) Neither Borrower nor any number of the Controlled Group is
a party to any multi-employer plan as defined in Section 4001(a)(3) of ERISA.
Section 5.11 Subsidiaries. In respect of Subsidiaries, Schedule 1 to
this Agreement sets forth as of the date of this
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Agreement the authorized capitalization of each Subsidiary, the number of shares
of each class of capital stock issued and outstanding of each Subsidiary, and
the number and percentage of outstanding shares of each such class of capital
stock owned by Borrower or by any Subsidiary. The outstanding shares of each
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable. As of the date of this Agreement, Borrower and each Subsidiary
owns beneficially and of record and has good title to all the shares it is
listed as owning on Schedule 1, free and clear of any Lien. The term
"Subsidiary" as used in this Section 5.11 shall not include Tongue River.
Section 5.12 Investment Company; Public Utility Holding Company. (a)
Borrower is not an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act of 1940, as
amended; (b) Borrower does not own any shares of capital stock of a "holding
company" as such term is defined in the Public Utility Holding Company Act of
1935, as amended, and is not a "subsidiary company" of a "registered holding
company" within the meaning of said Act. Borrower is a "holding company" as
defined in said Act by reason of its ownership of all of the outstanding shares
of common stock of Washington Natural Gas Company, but is exempt from said Act,
except the provisions of Section 9(a)(2) thereof, by virtue of Section 3(a)(1)
thereof and Rule 2 thereunder.
Section 5.13 Environmental Compliance. (a) (i) Borrower and each
Subsidiary is in compliance with the provisions of all Environmental Laws
relating to its business, operations, properties or assets, and the ownership,
use, control, management, operation or occupancy thereof, where the failure to
be in such compliance would have, singly or in the aggregate, a Material Adverse
Effect; (ii) neither Borrower nor any Subsidiary nor any of the business,
operations, properties or assets of any of them has violated or has been alleged
by any Governmental Authority to be in violation of or has been subject to any
administrative or judicial proceeding pursuant to, any applicable Environmental
Law, which would have, singly or in the aggregate, a Material Adverse Effect;
(iii) neither Borrower nor any Subsidiary is subject to any liability under any
Environmental Law, which liability could have, singly or in the aggregate, a
Material Adverse Effect; (iv) there are no facts or circumstances which could
form the basis for the assertion of any claim against Borrower or any Subsidiary
relating to any Environmental Law including, but not limited to, any claim
arising from past or present practices on, at or from Borrower's or any
Subsidiary's business, operations, property or assets and the ownership, use,
control, management, operation or occupancy thereof, asserted under any
Environmental Law, which would have, singly or in the aggregate, a Material
Adverse Effect; (v) there is no asbestos contained in or forming part of any
building component, structure
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or office space at any of the property or assets of Borrower or any Subsidiary,
where the presence of such asbestos would have, singly or in the aggregate, a
Material Adverse Effect; and (vi) no polychlorinated biphenyls ("PCBs") are
used, stored or released at any of the property or assets of Borrower or any
Subsidiary where the presence of such PCBs would have, singly or in the
aggregate, a Material Adverse Effect.
(b) There have been no discharges, emissions or releases of Hazardous
Material at, on, upon, under, into or from Borrower's or any Subsidiary's
business, operations, properties or assets or the ownership, use, control,
management, operation or occupancy thereof, which would have, singly or in the
aggregate, a Material Adverse Effect.
(c) If any storage tanks exist on or under any property of Borrower or
any Subsidiary, such storage tanks have been duly registered with all
appropriate regulatory and governmental bodies and otherwise are in compliance
with applicable Federal, state and local statutes, regulations, ordinances and
other regulatory requirements except any non-compliance which would not have,
singly or in the aggregate, a Material Adverse Effect.
(d) None of the property of Borrower or any Subsidiary is listed or
proposed for listing on the National Priorities List or the Comprehensive
Environmental Response, Compensation, and Liability Information System, both as
promulgated under CERCLA, or on any comparable state or local list which would
have, singly or in the aggregate, a Material Adverse Effect, and neither
Borrower nor any Subsidiary has received any notification of potential or actual
liability or any request for information pursuant to any Environmental Law,
including, without limitation, CERCLA or RCRA, or any comparable state or local
Environmental Law which would have, singly or in the aggregate, a Material
Adverse Effect.
Section 5.14 Representations as a Whole. This Agreement, the other
Loan Documents, the financial statements referred to in Section 5.6, and all
other instruments, documents, certificates and statements furnished to the Agent
or any Lender by Borrower, taken as a whole, do not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements contained herein or therein not misleading.
ARTICLE VI
COVENANTS
So long as any Lender shall have any Commitment hereunder and until
payment in full of each Advance and the Notes and performance of all other
obligations of Borrower under this
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Agreement, Borrower agrees to abide by all of the following unless the Agent,
with the approval of the Required Lenders, shall otherwise consent in writing.
Section 6.1 Use of Proceeds. Borrower will use the proceeds of
the Advances exclusively for general corporate purposes.
Section 6.2 Financial Statements. Borrower covenants and agrees
that it will deliver to Agent and each Lender:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last quarterly period) in
each fiscal year, a consolidated statement of income and shareholders' earnings
reinvested in the business and consolidated statements of cash flows of Borrower
and its Subsidiaries for such quarterly period and for the period from the
beginning of the current fiscal year to the end of such quarterly period, and a
consolidated balance sheet of Borrower and its Subsidiaries as at the end of
such quarterly period, setting forth in each case in comparative form figures
for the corresponding period or date in the preceding fiscal year, all in
reasonable detail and accompanied by a certificate by an authorized financial
officer of Borrower stating that the financial statements were prepared in
accordance with generally accepted accounting principles and fairly reflect the
financial condition and results of operations of Borrower and its Subsidiaries,
subject to changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 105 days
after the end of each fiscal year, a consolidated statement of income and
shareholders' earnings reinvested in the business and consolidated statement of
cash flows of Borrower and its Subsidiaries for such year, and a consolidated
balance sheet of Borrower and its Subsidiaries as of the end of such year,
setting forth in each case in comparative form corresponding consolidated
figures from the preceding annual audit, all in reasonable detail and
accompanied by an audit report by independent public accountants of recognized
standing selected by Borrower;
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as Borrower shall
send to its stockholders and copies of all registration statements (without
exhibits) and all reports (without exhibits), if any, which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission); and
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(iv) such other financial data, including copies of exhibits
referred to in Section 6.2(iii), in the form and at the intervals as Agent or
any Lender may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, Borrower will deliver to Agent and each Lender an Officer's
Certificate setting out the Total Debt to Total Capitalization Ratio described
in Section 6.13 as of the end of the most recent applicable fiscal period and,
further, stating that there has not existed during such fiscal period, and there
does not then exist, any Event of Default or Default, or, if any such Event of
Default or Default has existed or does then exist, specifying the nature
thereof, the period of existence thereof and what action Borrower has taken or
proposes to take with respect thereto. Together with each delivery of financial
statements required by clause (ii) above, Borrower will deliver to Agent and
each Lender a certificate of said accountants stating that, in making the audit
necessary to the certification of such financial statements, they have obtained
no knowledge of any Event of Default or Default, or, if any such Event of
Default or Default exists, specifying the nature and period of existence thereof
and further certifying that any sale or disposition of assets during such fiscal
year did not exceed the limitation set out in the second sentence of Section
6.14.
Section 6.3 Inspection of Property. Borrower covenants and
agrees that it will permit any Lender, at such Lender's expense (unless a
Default or Event of Default shall have occurred, in which event the expense of
such visit and inspection shall be for Borrower's account), to visit and inspect
any of the properties of Borrower and its Subsidiaries, to examine the corporate
books and financial records of Borrower and its Subsidiaries, and to make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of any of such persons with the principal officers of Borrower and its
independent public accountants, all at such reasonable times and as often as any
Lender may reasonably request.
Section 6.4 Payment of Taxes. Borrower shall cause to be paid
and discharged all Taxes imposed upon Borrower or any Subsidiary or upon the
income or profits of Borrower or any Subsidiary or upon property belonging to
Borrower or any Subsidiary before the same shall be in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid, might become a
lien or charge upon such property or any part thereof; provided,
however, that Borrower shall not be required to cause to be paid or
discharged any such Tax or claim so long as the validity thereof is being
contested in good faith by appropriate proceedings, and Borrower and its
Subsidiaries shall set aside on their books adequate reserves with respect
thereto.
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Section 6.5 Preservation of Corporate Existence. Borrower shall
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate existence of each of its
Subsidiaries (except where the failure to maintain such corporate existence is
permitted by Section 6.14).
Section 6.6 Maintenance of Property. Borrower shall, and shall
cause its Subsidiaries to, at all times keep, maintain, preserve and protect all
its and their property in good repair, working order and condition and from time
to time to make all needful and proper repairs, renewals, replacements,
betterments and improvements thereto, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
Section 6.7 Insurance. Borrower shall, and shall cause its
Subsidiaries to, at all times, maintain adequate insurance with financially
sound and reputable insurers, on all property of Borrower and its Subsidiaries,
of the character usually insured by corporations engaged in the same or similar
business against loss or damage of the kinds customarily insured against by such
corporations, and carry such other insurance as is usually carried by
corporations engaged in the same or similar business.
Section 6.8 Records and Accounts. Borrower shall at all times
keep and cause each Subsidiary to keep true and complete books of record and
accounts in accordance with generally accepted accounting principles. The term
"Subsidiary" as used in this Section 6.8 does not include Tongue River.
Section 6.9 Additional Payments. From time to time, Borrower
will (a) pay or reimburse the Agent for all reasonable costs and expenses
(including reasonable attorneys' fees, which may include the internal charges of
in-house counsel to the Agent) actually incurred by the Agent in connection with
the preparation or amendment of this Agreement or the other Loan Documents, or
the making of any Advance or the administration of the transactions contemplated
hereby; (b) pay or reimburse the Agent and each Lender for all reasonable costs
and expenses, including reasonable legal fees (which may include the internal
charges of in-house counsel to the Agent and any Lender), actually incurred by
the Agent and Lenders in connection with the enforcement by judicial proceedings
or otherwise of any of the rights of the Agent and/or Lenders under this
Agreement and/or the other Loan Documents (including, without limitation,
enforcement or protection of any such rights in any bankruptcy or other
insolvency proceeding); (c) upon Agent's request, obtain and promptly furnish to
Agent evidence of all such Government Approvals as may be required to enable
Borrower to comply with its obligations under this Agreement and the other Loan
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Documents; and (d) execute and deliver all such instruments and perform all such
other acts as the Agent or any Lender may reasonably request to carry out the
transactions contemplated by this Agreement.
Section 6.10 Compliance With Laws, Etc. Borrower will, and will cause
its Subsidiaries to, comply in all material respects with all material laws,
regulations, rules, and orders of Governmental Authorities applicable to
Borrower or to its Subsidiaries or to their operations or property, except any
thereof whose validity is being contested in good faith by appropriate
proceedings upon stay of execution of the enforcement thereof. The term
"Subsidiary" as used in this Section 6.10 does not include Tongue River.
Section 6.11 Notification. Promptly after learning thereof, Borrower
will notify the Agent of (a) the details of any action, proceeding,
investigation or claim against or affecting Borrower or any Subsidiary
instituted before any court, arbitrator or Governmental Authority or, to
Borrower's knowledge, threatened to be instituted, which, if determined
adversely to Borrower or a Subsidiary would be likely to have a material adverse
effect on the financial condition or operations of Borrower and its Subsidiaries
taken as a whole; (b) any labor controversy which has resulted in or, to
Borrower's knowledge, threatens to result in a strike which would materially
affect the business operations of Borrower and its Subsidiaries taken as a
whole; (c) if Borrower or any member of the Controlled Group gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
subsection (b)(1), (2), (5) or (6) of Section 4043 of ERISA) with respect to any
Plan (or the Internal Revenue Service gives notice to the PBGC of any
"reportable event" as defined in subsection (c)(2) of Section 4043 of ERISA and
Borrower obtains knowledge thereof) which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (d) if any Event of Default or Default exists,
the nature and period of existence thereof and any action Borrower has taken or
proposes to take with respect thereto and (e) any change in the rating on
Borrower's commercial paper from S&P or from ▇▇▇▇▇'▇ or from any other rating
agency designated by Borrower pursuant to the definitions of "Commitment Fee
Percentage" and "Eurodollar Rate Margin."
Section 6.12 Limit on Outstanding Commercial Paper. Borrower shall
not permit the aggregate outstanding principal amount of all commercial paper
issued by it to at any time exceed the amount by which the Aggregate Commitment
exceeds the aggregate outstanding principal balance of the Advances.
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Section 6.13 Total Debt to Total Capitalization Ratio. Borrower and
its consolidated Subsidiaries shall have, at the end of each calendar quarter, a
ratio of Total Debt to Total Capitalization that does not exceed 0.65 to 1, as
determined on a consolidated basis.
Section 6.14 Liquidation, Merger, Sale of Assets. Borrower shall not,
and shall cause its Subsidiaries not to, liquidate, dissolve or enter into any
merger, consolidation, or other combination except that any Subsidiary may merge
or consolidate into any other Subsidiary (other than Tongue River) or into the
Borrower, and either Borrower or any Subsidiary may merge with a corporation
that is not a Subsidiary if the Borrower or such Subsidiary is the surviving
entity, provided however that such merger or consolidation shall not cause an
Event of Default under this Agreement and, after such merger or consolidation,
that the Borrower shall have a commercial paper rating equal to or better than a
Tier 5 Commercial Paper Rating. Borrower will not, and will cause its
Subsidiaries not to, sell, lease or otherwise dispose of any portion of their
business or assets (including the stock of any Subsidiary) if, after taking such
disposition into account, at the end of any fiscal quarter in a year, the
consolidated total assets of Borrower and its Subsidiaries are not equal to at
least 90% of the consolidated total assets of Borrower and its Subsidiaries at
the end of the preceding fiscal year, as determined from the financial
statements referred to in Section 5.6 or subsequently delivered pursuant to
Section 6.2.
Section 6.15 Liens. Borrower shall not, and shall cause its
Subsidiaries not to, create, assume or suffer to exist any Lien except liens
arising under the Indenture of First Mortgage dated April 1, 1957, between
Washington Natural Gas Company and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee, as
amended, and any Supplemental Indentures thereto issued, or which may be issued,
from time to time to secure first mortgage bonds, on all property of Washington
Natural Gas Company (other than "Excepted Property" as defined in said
Indenture).
Section 6.16 Indemnification. Borrower shall indemnify the Agent and
each Lender, and the directors, officers and employees of Agent and each Lender,
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent or any Lender is a party thereto)
which any of them may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Advance
hereunder; provided, that Borrower shall have no obligation hereunder for any
amount arising from a claim or determination that any Lender's entry into this
Agreement was not
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a duly authorized and legal act of such Lender. The obligations of the Borrower
under this Section 6.16 shall survive the termination of this Agreement.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder.
(a) Payment Default. Borrower shall fail to pay (i) any
amount of principal on any Advance when due, or (ii) for a period of five days
after the date when due any amount of interest on any Advance or any other
amount payable by it hereunder; or
(b) Breach of Warranty. Any representation or warranty
made or deemed made by Borrower under or in connection with this Agreement or
the other Loan Documents shall prove to have been incorrect in any material
respect when made or deemed made; or
(c) Breach of Certain Covenants. Borrower shall fail to
perform or observe any of the covenants set forth in Section 6.5, clause (d) of
Section 6.11, Section 6.13, or Section 6.14; or
(d) Breach of Other Covenant. Borrower shall fail to
perform or observe the covenant set forth in Section 6.12 and such failure shall
remain unremedied for five days after the occurrence thereof, or Borrower shall
fail to perform or observe any other covenant, obligation or term of this
Agreement or any other Loan Document and such failure shall remain unremedied
for fifteen (15) days after written notice thereof shall have been given to
Borrower by the Agent (acting at the request of any Lender); or
(e) Cross-default. Borrower or any Subsidiary shall
fail (i) to pay when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) any Indebtedness having an outstanding
principal balance in the aggregate in excess of Five Million Dollars
($5,000,000) (except any Advance) or any interest or premium thereon and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or (ii) to perform
any term or covenant on its part to be performed under any agreement or
instrument relating to any such Indebtedness and required to be performed and
such failure shall continue after the applicable grace period, if any, specified
in
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such agreement or instrument, if the effect of such failure to perform is to
accelerate or to permit the acceleration of the maturity of such Indebtedness;
or
(f) Voluntary Bankruptcy, Etc. Borrower or any
Subsidiary shall: (1) file a petition seeking relief for itself under Title 11
of the United States Code, as now constituted or hereafter amended, or file an
answer consenting to, admitting the material allegations of or otherwise not
controverting, or fail timely to controvert, a petition filed against it seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended; or (2) file such petition or answer with respect to relief under the
provisions of any other now existing or future applicable bankruptcy,
insolvency, or other similar law of the United States of America or any state
thereof or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with creditors; or
(g) Involuntary Bankruptcy, Etc. An order for relief
shall be entered against Borrower or any Subsidiary under Title 11 of the United
States Code, as now constituted or hereafter amended, which order is not stayed;
or upon the entry of an order, judgment or decree by operation of law or by a
court having jurisdiction in the premises which is not stayed adjudging it a
bankrupt or insolvent under, or ordering relief against it under, or approving
as properly filed, a petition seeking relief against it under the provisions of
any other now existing or future applicable bankruptcy, insolvency or other
similar law of the United States of America or any state thereof or of any other
country or jurisdiction providing for the reorganization, winding-up or
liquidation of corporations or any arrangement, composition, extension or
adjustment with creditors, or appointing a receiver, liquidator, assignee,
sequestrator, trustee or custodian of Borrower or any Subsidiary or of any
substantial part of its property, or ordering the reorganization, winding-up or
liquidation of its affairs, or upon the expiration of 60 days after the filing
of any involuntary petition against it seeking any of the relief specified in
Section 7.1(f) or this Section 7.1(g) without the petition being dismissed prior
to that time; or
(h) Insolvency, Etc. Borrower or any Subsidiary shall
(i) make a general assignment for the benefit of its creditors or (ii) consent
to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, or custodian of all or a substantial part of the property of Borrower
or any Subsidiary, or (iii) admit its insolvency or inability to pay its debts
generally as they become due, or (iv) fail generally to pay its debts as they
become due, or (v) take any action (or suffer any action to be taken by its
directors or shareholders) the purpose
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of which is to dissolve or liquidate Borrower or any Subsidiary (except as
permitted by Section 6.5 or 6.14) or to seek protection or relief under Title 11
of the United States Code or under any other federal or state bankruptcy,
insolvency or receivership law; or
(i) ERISA. Borrower or any member of the Controlled
Group shall fail to pay when due an amount or amounts aggregating in excess of
Five Million Dollars ($5,000,000) which it shall have become liable to pay to
the PBGC or to a Plan under Section 515 of ERISA or Title IV of ERISA; or notice
of intent to terminate a Plan or Plans (other than a multiemployer plan, as
defined in Section 4001(3) of ERISA), having aggregate Unfunded Vested
Liabilities in excess of Five Million Dollars ($5,000,000) shall be filed under
Title IV of ERISA by Borrower, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate any such Plan or Plans; or
(j) Ownership of Washington Natural Gas Company. Borrower
shall cease for any reason to own 100% of the then outstanding voting stock of
Washington Natural Gas Company free and clear of any Liens; or
(k) Governmental Approvals. Any Government Approval or
registration or filing with any Governmental Authority now or hereafter required
in connection with the performance by Borrower of its obligations set forth in
the Loan Documents shall be revoked, withdrawn or withheld or shall fail to
remain in full force and effect; or
(l) Other Government Action. Any act of any
Governmental Authority shall deprive Borrower or any Subsidiary of any right,
privilege or franchise that is material to the conduct of a material part of the
business of Borrower or such Subsidiary or shall substantially restrict the
exercise of such right, privilege or franchise, and such act shall not be
revoked or rescinded within 60 days after it shall have become effective or
within 30 days after notice from the Agent to Borrower requesting revocation or
rescission, whichever first occurs.
Section 7.2 Consequences of Default. If any of the Events of
Default described in Section 7.1(f), Section 7.1(g), Section 7.1(h) or Section
7.1(j) shall occur, the Aggregate Commitment and Commitments shall immediately
terminate, and the principal of and the interest on Advances and all other sums
payable by Borrower hereunder and under the Notes shall become immediately due
and payable, all without protest, presentment, notice or demand, all of which
Borrower expressly waives. If any other Event of Default shall occur and be
continuing, then in any such case and at any time thereafter so long as any such
Event of
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Default shall be continuing, the Agent shall at the request, or may with the
consent, of the Required Lenders immediately terminate the Aggregate Commitment
and the Commitments and, if Advances shall have been made, the Agent shall at
the request, or may with the consent, of the Required Lenders declare the
principal of and the interest on the Advances and the Notes and all other sums
payable by Borrower hereunder or thereunder to be immediately due and payable,
whereupon the same shall become immediately due and payable all without protest,
presentment, notice, or demand, all of which Borrower expressly waives.
ARTICLE VIII
THE AGENT
Section 8.1 Appointment. First Chicago is hereby appointed
Agent hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the agent of such Lender. The Agent
agrees to act as such upon the express conditions contained in this Article
VIII. The Agent shall not have a fiduciary relationship in respect of the
Borrower or any Lender by reason of this Agreement.
Section 8.2 Powers. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Lenders, or
any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
Section 8.3 General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
Section 8.4 No Responsibility for Advances, Recitals, Etc.
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (i)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered to the
Agent; or (iv) the validity, effectiveness or genuineness of any Loan
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Document or any other instrument or writing furnished in connection therewith.
The Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
Section 8.5 Action on Instructions of Lenders. The Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and on all holders of Notes. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
Section 8.6 Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent hereunder and under any other Loan Document
by or through employees, agents, and attorneys-in-fact and shall not be
answerable to the Lenders, except as to money or securities received by it or
its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder and under any other Loan Document.
Section 8.7 Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
Section 8.8 Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Agent ratably in proportion to
their respective Commitments (i) for any amounts not reimbursed by the Borrower
for which the Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents and (iii) for any 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
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relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof 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 Agent. The obligations of
the Lenders under this Section 8.8 shall survive payment of the Obligations and
termination of this Agreement.
Section 8.9 Rights as a Lender. In the event the Agent is a
Lender, the Agent shall have the same rights and powers hereunder and under any
other Loan Document as any Lender and may exercise the same as though it were
not the Agent, and the term "Lender" or "Lenders" shall, at any time when the
Agent is a Lender, unless the context otherwise indicates, include the Agent in
its individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.
Section 8.10 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other Loan
Documents.
Section 8.11 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, such resignation
to be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives notice
of its intention to resign. The Agent may be removed at any time with or without
cause by written notice received by the Agent from the Required Lenders, such
removal to be effective on the date specified by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders within
thirty days after the
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resigning Agent's giving notice of its intention to resign, then the resigning
Agent may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
If the Agent has resigned or been removed and no successor Agent has been
appointed, the Lenders may perform all the duties of the Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders. No
successor Agent shall be deemed to be appointed hereunder until such successor
Agent has accepted the appointment. Any such successor Agent shall be a
commercial bank having capital and retained earnings of at least $500,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article VIII shall continue in effect for
the benefit of such Agent in respect of any actions taken or omitted to be taken
by it while it was acting as the Agent hereunder and under the other Loan
Documents.
ARTICLE IX
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 9.1 Successors and Assigns. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit of the
Borrower and the Lenders and their respective successors and assigns, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by any Lender must
be made in compliance with Section 9.3. Notwithstanding clause (ii) of this
Section, any Lender may at any time, without the consent of the Borrower or the
Agent, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank; provided, however, that no such
assignment shall release the transferor Lender from its obligations hereunder.
The Agent may treat the payee of any Note as the owner thereof for all purposes
hereof unless and until such payee complies with Section 9.3 in the case of an
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with the Agent. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
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52
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section 9.2 Participations.
9.2.1 Permitted Participants; Effect. Any Lender may,
in the ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender under
the Loan Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests and, except as otherwise
provided in Section 9.2.3, such sale shall not entitle the Participant to any
direct rights against Borrower under the terms of this Agreement or any other
Loan Document. Borrower and the Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents.
9.2.2 Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than any
amendment, modification or waiver with respect to any Loan or Commitment in
which such Participant has an interest which requires the consent of all Lenders
pursuant to Section 10.9.
9.2.3 Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section
2.5.8 in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 2.5.8 with respect
to the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 2.5.8, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 2.5.8 as if each Participant were a Lender.
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53
Section 9.3 Assignments.
9.3.1 Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents; provided, that each
such assignment shall be in a minimum amount of $10,000,000 or, if less, all of
such Lender's rights and obligations under the Loan Documents. Such assignment
shall be in a form acceptable to Agent and the other parties thereto. The
consent of the Borrower and the Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof; provided, however, that if a Default has
occurred and is continuing, the consent of the Borrower shall not be required.
Such consent shall not be unreasonably withheld.
9.3.2 Effect; Effective Date. Upon (i) delivery to the
Agent of a notice of assignment in substantially the form of Exhibit G
hereto (a "Notice of Assignment"), together with any consents required by
Section 9.3.1, and (ii) payment of a $4,000 fee to the Agent by the assignor or
the assignee for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of Assignment. The
Notice of Assignment shall contain a representation by the Purchaser to the
effect that none of the consideration used to make the purchase of the
Commitment and Loans under the applicable assignment agreement are "plan assets"
as defined under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all purposes be a
Lender party to this Agreement and any other Loan Document executed by the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Commitment and Loans assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 9.3.2, the transferor
Lender, the Agent and the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Commitment, as adjusted pursuant to such
assignment.
Section 9.4 Dissemination of Information. The Borrower
authorizes each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any
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54
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries;
provided, however, that such disclosing Lender shall cause each
such actual or potential Transferee to enter into or otherwise be bound by a
confidentiality agreement in form and substance similar to the agreement signed
by such disclosing Lender in connection with this Agreement.
Section 9.5 Tax Treatment. If any interest in any Loan Document
is transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.7.
ARTICLE X
MISCELLANEOUS
Section 10.1 No Waiver; Remedies Cumulative. No failure by the Agent
or any Lender to exercise, and no delay in exercising, any right, power or
remedy under this Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or remedy
under this Agreement or any other Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power, or remedy. The
exercise of any right, power, or remedy shall in no event constitute a cure or
waiver of any Event of Default under this Agreement or any other Loan Document
nor prejudice the rights of the Agent or any Lender in the exercise of any right
hereunder or thereunder. The rights and remedies provided herein and therein are
cumulative and not exclusive of any right or remedy provided by law.
Section 10.2 Governing Law. This Agreement and the other Loan
Documents shall be governed by and construed in accordance with the laws of the
State of Washington, U.S.A.
Section 10.3 Consent to Jurisdiction; Waiver of Immunities. Borrower
hereby irrevocably submits to the nonexclusive jurisdiction of any state or
federal court sitting in Seattle, King County, Washington, in any action or
proceeding brought to enforce or otherwise arising out of or relating to this
Agreement or any other Loan Document and irrevocably waives to the fullest
extent permitted by law any objection which it may now or hereafter have to the
laying of venue in any such action or proceeding in any such forum, and hereby
further irrevocably waives any claim that any such forum is an inconvenient
forum. Borrower agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in any other
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55
jurisdiction by suit on the judgment or in any other manner provided by law.
Section 10.4 Notices. Except as specified in Section 2.5.9 all
notices and other communications provided for in this Agreement shall be in
writing or (unless otherwise specified) by telex or facsimile transmission and
shall be mailed (with first class postage prepaid) or sent or delivered to each
party at the address set forth under its name on Schedule 2 hereto, or at such
other address as shall be designated by such party in a written notice to each
other party. Except as otherwise specified all notices sent by mail, if duly
given, shall be effective three Business Days after deposit into the mails, all
notices sent by a nationally recognized overnight courier service, if duly
given, shall be effective one Business Day after delivery to such courier
service, and all other notices and communications if duly given or made shall be
effective upon receipt.
Section 10.5 Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall as to such jurisdiction be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
thereof or affecting the validity or enforceability of such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties waive
any provision of law which renders any provision hereof or thereof prohibited or
unenforceable in any respect.
Section 10.6 Environmental Indemnification. The Borrower agrees to
indemnify and hold harmless the Agent and each Lender and each of their
respective directors, officers, employees and agents from and against any and
all claims, damages, liabilities and expenses (including, without limitation,
fees and disbursements of counsel) which may be incurred by or asserted against
the Agent or such Lender or any such director, officer, employee or agent which
would not have been incurred by or asserted against such person but for the
Agent or such Lender being a party to this Agreement, in connection with or
arising out of any investigation, litigation, or proceeding related to any claim
that Borrower's property or operations do not comply with, or require remedial
activity pursuant to, any applicable law, rule, regulation, ordinance or
directive issued by any Governmental Authority, including but not limited to
environmental laws and regulations.
Section 10.7 Survival. The representations, warranties and
indemnities of Borrower in favor of the Agent and the Lenders and the
representations, warranties and indemnities of the Lenders in favor of the Agent
shall survive indefinitely and, without limiting the foregoing, shall survive
the execution and delivery
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56
of this Agreement and the other Loan Documents, the making of any Advance, the
Termination Date, and the repayment of all Advances and other amounts due
hereunder.
Section 10.8 Conditions Not Fulfilled. If the Commitments are not
borrowed, owing to nonfulfillment of any condition precedent specified in
Article IV, no party hereto shall be responsible to any other party for any
damage or loss by reason thereof, except that Borrower shall in any event be
liable to pay the amounts for which it is obligated under Section 3.4. If for
any other reason the Commitment of any Lender is not borrowed or a Advance is
not made, neither the Agent nor any other Lender shall be responsible to
Borrower for any damage or loss by reason thereof, nor shall any other Lender or
Borrower be excused from its performance hereunder.
Section 10.9 Entire Agreement; Amendment. The Loan Documents comprise
the entire agreement of the parties and may not be amended or modified except by
written agreement of Borrower and the Agent. No provision of any of the Loan
Documents may be waived except in writing and then only in the specific instance
and for the specific purpose for which given. Without the consent of the
Required Lenders, the Agent shall not change or modify any of the Loan Documents
or waive any of the terms thereof and, without the consent of all Lenders, the
Agent shall not change, modify or waive (a) any of the conditions precedent to
all loans set out in Section 4.3, (b) the timing or rates of interest payments,
(c) the timing or amounts of commitment fees, (d) the timing or amounts of
principal payments due in respect of Advances, (e) the definition of Required
Lenders or the acts which must be approved by the Required Lenders or by all
Lenders, (f) the Termination Date, including any extension thereof, or (g) the
Aggregate Commitment or any Lender's Commitment. The terms of Articles II and
VIII shall not be amended without the prior written consent of the Agent (acting
for its own account).
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT, OR FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
Section 10.10 Headings. The headings of the various provisions
of this Agreement are for convenience of reference only, do not constitute a
part hereof, and shall not affect the meaning or construction of any provision
hereof.
Section 10.11 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be
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deemed to be an original, and all of which taken together shall constitute one
and the same Agreement.
Section 10.12 Termination of Prior Agreement; Waiver of Notice..
Borrower, each of the Lenders that is a party to the Prior Loan Agreement and
Seattle-First National Bank, in its capacity as Agent thereunder, agree that the
Prior Loan Agreement shall automatically terminate immediately upon the
execution and delivery of this Agreement by all parties hereto and the payment
in full of all amounts under the Prior Loan Agreement and the other Loan
Documents (as defined therein). The Lenders that are parties to the Prior Loan
Agreement and Seattle-First National Bank, in such agency capacity, hereby waive
any prior notice of such termination.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or agents thereunto duly authorized as of
the date first above written.
BORROWER:
WASHINGTON ENERGY COMPANY
By
--------------------------------
Its
----------------------
LENDERS:
Amount: $50,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By
--------------------------------
Its
----------------------
Amount: $50,000,000 SEATTLE-FIRST NATIONAL BANK
By
--------------------------------
Its
----------------------
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58
Amount: $30,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, acting through its
Los Angeles Agency
By
--------------------------------
Its
----------------------
Amount: $25,000,000 ABN AMRO BANK N.V.
By
--------------------------------
Its
----------------------
By
--------------------------------
Its
----------------------
Amount: $20,000,000 BANK OF MONTREAL
By
--------------------------------
Its
----------------------
Amount: $20,000,000 FIRST INTERSTATE BANK OF
WASHINGTON, N.A.
By
--------------------------------
Its
----------------------
Amount: $20,000,000 NATIONSBANK OF TEXAS, N.A.
By
--------------------------------
Its
----------------------
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Amount: $20,000,000 U.S. BANK OF WASHINGTON, N.A.
By
--------------------------------
Its
----------------------
Amount: $15,000,000 CIBC INC.
By
--------------------------------
Its
----------------------
AGENT:
THE FIRST NATIONAL BANK OF CHICAGO
By
--------------------------------
Its
----------------------
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SCHEDULE 1
List of Subsidiaries
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61
SCHEDULE 2
List of Parties' Addresses for Notices
LENDERS:
FIRST NATIONAL BANK OF CHICAGO
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
Mail Suite 0363 - 10th Fl.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Client Services Professional
Mail Suite 0364 - 10th Fl.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SEATTLE-FIRST NATIONAL BANK
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
acting through its Los Angeles Agency
attn: Washington Energy Relationship Manager
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO BANK N.V.
attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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62
FIRST INTERSTATE BANK OF WASHINGTON, N.A.
attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF MONTREAL
attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Director, Natural Resources
U.S. Corporate Banking
▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇., #▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
U.S. BANK OF WASHINGTON, N.A.
attn: ▇▇. ▇▇▇▇ Black
Asst. Vice President
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC INC.
attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Utilities Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK OF TEXAS, N.A.
attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President,
Utility Finance Division
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
58
63
AGENT:
FIRST NATIONAL BANK OF CHICAGO
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
Mail Suite 0363 - 10th Fl.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Client Services Professional
Mail Suite 0364 - 10th Fl.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BORROWER:
WASHINGTON ENERGY COMPANY
attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President & Treasurer
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
59
64
SCHEDULE 3
Litigation
1. Claim made by the City of Seattle in a letter dated February
24, 1995, a copy of which has been provided to the Agent.
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65
EXHIBIT A
NOTE
(Committed Loans)
$[Lender's Commitment] March 31, 1995
Washington Energy Company, a Washington corporation (the "Borrower"),
promises to pay, on or before the Termination Date (as defined in the Agreement
referred to below), to the order of ______________________ (the "Lender") the
lesser of the principal sum of _________________ Dollars or the aggregate unpaid
principal amount of all Committed Loans made by the Lender to the Borrower
pursuant to Sections 2.1 and 2.2 of the Credit Agreement (as the same may be
amended or modified, the "Agreement") hereinafter referred to, in lawful money
of the United States of America in immediately available funds at the main
office of The First National Bank of Chicago in Chicago, Illinois, as Agent,
together with interest in like money and funds 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 Committed Loan and the date and amount of each
principal payment hereunder; provided, however, that any failure
to so record shall not affect the Borrower's obligations hereunder.
This Note (Committed Loans) is one of the Notes issued pursuant to, and
is entitled to the benefits of, the Credit Agreement, dated as of March 31,
1995, among the Borrower, The First National Bank of Chicago, individually and
as Agent, and the banks named therein, including the Lender, 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.
WASHINGTON ENERGY COMPANY
By:
--------------------------------
Title:
----------------------
61
66
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (COMMITTED LOANS) OF WASHINGTON ENERGY COMPANY,
DATED MARCH 31, 1995
Principal Maturity of Principal
Amount of Rate Interest Amount Unpaid
Date Advance Option Period Paid Balance
---- --------- ------ ----------- --------- -------
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67
EXHIBIT B
NOTE
(Competitive Bid Loans)
__________, 19___
Washington Energy Company, a Washington corporation (the "Borrower"),
promises to pay to the order of ____________ (the "Lender"), on or before the
Termination Date (as defined in the Agreement referred to below) the aggregate
unpaid principal amount of all Competitive Bid Loans made by the Lender to the
Borrower pursuant to Sections 2.1 and 2.3 of the Credit Agreement hereinafter
referred to (as the same may be amended or modified, the "Agreement"), in lawful
money of the United States in immediately available funds at the main office of
The First National Bank of Chicago, as Agent, in Chicago, Illinois, together
with interest, in like money and funds, on the unpaid principal amount hereof at
the rates and on the dates determined in accordance with the Agreement. The
Borrower shall pay each Competitive Bid Loan in full on the last day of such
Competitive Bid Loan's applicable Interest Period.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual practice, the
date and amount of each Competitive Bid Loan and the date and amount of each
principal payment hereunder; provided, however, that any failure to so record
shall not affect the Borrower's obligations hereunder.
This Note (Competitive Bid Loans) is one of the Notes issued pursuant
to, and is entitled to the benefits of, the Credit Agreement dated as of March
31, 1995, among the Borrower, The First National Bank of Chicago, individually
and as Agent, and the banks named therein, including the Lender, 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.
WASHINGTON ENERGY COMPANY
By:
--------------------------
Title:
--------------
63
68
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (COMPETITIVE BID LOANS) OF WASHINGTON ENERGY COMPANY,
DATED MARCH 31, 1995
Principal Maturity of Principal
Amount of Rate Interest Amount Unpaid
Date Advance Option Period Paid Balance
---- --------- ------ ----------- --------- -------
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69
EXHIBIT C
COMPETITIVE BID QUOTE REQUEST
(Section 2.3.2)
__________, 19___
To: The First National Bank of Chicago,
as agent (the "Agent")
From: Washington Energy Company ("Borrower")
Re: Credit Agreement (the "Agreement") dated as of March 31, 1995, among
the Borrower, The First National Bank of Chicago, individually and as
Agent, and the Lenders listed on the signature pages thereof.
We hereby give notice pursuant to Section 2.3.2 of the Agreement that
we request Competitive Bid Quotes for the following proposed Competitive Bid
Advance(s):
Borrowing Date: __________, 19___
Principal Amount(1) Interest Period(2)
$
Such Competitive Bid Quotes should offer a [Competitive Bid Margin]
[Absolute Rate].
Upon acceptance by the undersigned of any or all of the Competitive Bid
Advances offered by Lenders in response to this request, the undersigned shall
be deemed to affirm as of such date the representations and warranties made in
the Agreement to the extent specified in Article IV thereof. Capitalized terms
used herein have the meanings assigned to them in the Agreement.
WASHINGTON ENERGY COMPANY
By:
--------------------------
Title:
--------------
--------------------
(1) Amount must be at least $5,000,000 and an integral multiple of
$1,000,000.
(2) One, two, three or six months (Eurodollar Auction) or at least
seven and up to 270 days (Absolute Rate Auction), subject to the provisions of
the definitions of Eurodollar Interest Period and Absolute Rate Interest
Period.
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70
EXHIBIT D
INVITATION FOR COMPETITIVE BID QUOTES
(Section 2.3.3)
__________, 19___
To: [Name of Lender]
Re: Invitation for Competitive Bid Quotes to
Washington Energy Company (the "Borrower")
Pursuant to Section 2.3.3 of the Credit Agreement dated as of March 31,
1995 (the "Agreement") among the Borrower, the Lenders parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you to
submit Competitive Bid Quotes to the Borrower for the following proposed
Competitive Bid Advance(s):
Borrowing Date: __________, 19___
Principal Amount Interest Period
$
Such Competitive Bid Quotes should offer a [Competitive Bid Margin]
[Absolute Rate]. Your Competitive Bid Quote must comply with Section 2.3.4 of
the Agreement and the foregoing terms in which the Competitive Bid Quote Request
was made. Capitalized terms used herein have the meanings assigned to them in
the Agreement.
Please respond to this invitation by no later than 10:00 a.m. Chicago
time on __________ , 19___.
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By:
----------------------------------
Authorized Officer
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71
EXHIBIT E
COMPETITIVE BID QUOTE
(Section 2.3.4)
__________, 19___
To: The First National Bank of Chicago, as Agent
Attn:__________________
Re: Competitive Bid Quote to Washington Energy Company (the "Borrower")
In response to your invitation on behalf of the Borrower dated_________,
19___, we hereby make the following Competitive Bid Quote pursuant to Section
2.3.4 of the Credit Agreement hereinafter referred to and on the following
terms:
1. Quoting Lender:_______________________________________
2. Person to contact at Quoting Lender:__________________
3. Borrowing Date: ___________, 19___.(1)
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
---------------------
(1) As specified in the related Invitation.
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Principal Interest [Competitive [Absolute Minimum
Amount(2) Period(3) Bid Margin(4)] Rate(5)] Amount(6)
--------- --------- -------------- --------- ---------
$
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Credit Agreement
dated as of March 31, 1995 among the Borrower, the Lenders listed on the
signature pages thereof and yourselves, as Agent, irrevocably obligates us to
make the Competitive Bid Loan(s) for which any offer(s) are accepted, in whole
or in part.
Very truly yours,
[NAME OF LENDER]
Dated: __________, 19___ By:_______________________________
Authorized Officer
--------------------------
(2) Principal amount bid for each Interest Period may not exceed
principal amount requested. Bids must be made for at least $5,000,000 and an
integral multiple of $1,000,000.
(3) One, two, three or six months (Eurodollar Auction) or at
least seven and up to 270 days (Absolute Rate Auction), as specified in the
related Invitation.
(4) Competitive Bid Margin over or under the Eurodollar Base Rate
determined for the applicable Interest Period. Specify percentage (rounded to
the nearest 1/100 of 1%) and specify whether "PLUS" or "MINUS".
(5) Specify rate of interest per annum (rounded to the nearest
1/100 of 1%).
(6) Specify minimum amount which the Borrower may accept (see
Section 2.3.4(ii)(d)).
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73
EXHIBIT F
LEGAL OPINION OF COUNSEL FOR BORROWER
March __, 1995
The First National Bank of Chicago
Seattle-First National Bank
The Industrial Bank of Japan, Limited
ABN AMRO Bank N.V.
Bank of Montreal
First Interstate Bank of Washington, N.A.
NationsBank of Texas, ▇.▇.
▇.▇. Bank of Washington, N.A.
CIBC Inc.
Re: Washington Energy Company 1995 Credit Agreement
Ladies and Gentlemen:
We have acted as counsel for Washington Energy Company, a Washington
corporation (the "Borrower"), in connection with the execution and delivery by
the Borrower of that certain Credit Agreement (the "Agreement"), dated as of
March 31, 1995, by and among the Borrower and The First National Bank of
Chicago, Seattle-First National Bank, The Industrial Bank of Japan, Limited, ABN
AMRO Bank N.V., Bank of Montreal, First Interstate Bank of Washington, N.A.,
NationsBank of Texas, N.A., U.S. Bank of Washington, N.A., and CIBC Inc. (the
"Lenders"), and The First National Bank of Chicago, as Agent for the Lenders.
Capitalized terms used herein and not otherwise defined are used as defined in
the Agreement. The term "First-Tier Subsidiary" as used herein shall mean those
Subsidiaries that are identified as First Tier Subsidiaries on Schedule 1 to the
Agreement.
In connection with this opinion we have examined only the following
documents, certificates and records (the "Documents").
(1) The Agreement, together with all exhibits and schedules
thereto.
(2) The Notes.
(3) The documents furnished by the Borrower pursuant to Section
4.2(b) of the Agreement.
(4) The Articles of Incorporation of each of the First-Tier
Subsidiaries and all amendments thereto.
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(5) The Bylaws of each of the First-Tier Subsidiaries and all
amendments thereto.
(6) The stock records of each of the First-Tier Subsidiaries and
resolutions of the respective Boards of Directors of the
First-Tier Subsidiaries relating to issuance of their
respective shares.
(7) The Borrower's Annual Report on Form 10-K filed with the
Securities and Exchange Commission ("SEC") for the Borrower's
fiscal year ended September 30, 1994.
(8) The Borrower's Quarterly Report on Form 10-Q filed with the SEC
for the Borrower's fiscal quarter ended December 31, 1994.
(9) Certificates from the Secretary of State of Washington, dated
March __, 1995, certifying that each of the Borrower and the
First-Tier Subsidiaries is duly authorized to transact business
or conduct affairs as a corporation in the State of Washington.
(10) Certificates, dated as of the date of this opinion, of officers
of the Borrower and the First-Tier Subsidiaries with respect to
certain matters, copies of which are attached hereto.
(11) The Indenture of First Mortgage dated April 1, 1957, between
Washington Natural Gas Company and ▇▇▇▇▇▇ Trust and Savings
Bank, as trustee, as amended.
(12) Such other documents and matters as we have deemed necessary as
a basis for our opinion.
We have based our opinion expressed in paragraph 1 below as to the good
standing of the Borrower and the First-Tier Subsidiaries under the laws of the
State of Washington solely upon the certificates identified in items (9) and
(10) above.
ASSUMPTIONS
In connection with this opinion, we have assumed:
(i) The authenticity of each Document submitted to us as an
original, the conformity to the original of each Document submitted to us as a
copy, the genuineness of all signatures that are on such originals or copies
(other than the signature of
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Borrower on the Agreement and the Notes), the legal capacity of all natural
persons executing Documents, and the completeness and accuracy as of the date of
this opinion of the information contained in the Documents.
(ii) The Agreement constitutes the valid and binding obligation of
all parties thereto other than the Borrower and is enforceable against such
parties in accordance with its terms.
(iii) If the Lenders seek to enforce their rights under the Agreement
and the Notes, they will do so in a commercially reasonable manner and in
accordance with applicable procedural law and requirements.
As used in this opinion, the term "current actual knowledge" means (a)
such knowledge as we have obtained from our examination of the Documents and
from inquiries of officers of each of Borrower and the First-Tier Subsidiaries
(as to, among other matters, those indentures, mortgages, contracts or other
agreements or instruments to which the Borrower or any First-Tier Subsidiary is
a party), and (b) the actual knowledge of attorneys who are currently members of
this firm and who are currently involved in substantive legal representation of
the Borrower or the First-Tier Subsidiaries. We have not undertaken any
independent investigation to determine the accuracy of any statements qualified
by this term, and any limited inquiry undertaken by us during the preparation of
this opinion should not be regarded as such an investigation. In addition, no
inference as to our knowledge of any matters bearing on the accuracy of any
statements qualified by this term should be drawn from the fact of our
representation of the Borrower and the First-Tier Subsidiaries.
Based solely on the foregoing and on our examination of such questions
of law as we have deemed necessary or appropriate for the purpose of this
opinion, and subject to the assumptions, qualifications and limitations set
forth herein, it is our opinion that:
1. Each of the Borrower and the First-Tier Subsidiaries is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Washington. The Borrower is not required to qualify to do
business as a foreign corporation in any jurisdiction. To our current actual
knowledge, each First-Tier Subsidiary is duly qualified to do business in each
jurisdiction where the nature of its activities or the ownership of its
properties requires such qualification,
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except to the extent that failure to be so qualified does not have a material
adverse effect on the business, operations or financial condition of the
Borrower and the First-Tier Subsidiaries taken as a whole. The Borrower and the
First-Tier Subsidiaries have full corporate power to carry on their respective
businesses as presently conducted and to own and operate the respective
properties and assets that each of them now owns and operates. The Borrower has
full corporate power to execute, deliver and perform the Agreement and the
Notes.
2. The execution, delivery and performance by the Borrower of the
Agreement and the Notes, and borrowing by the Borrower under and in accordance
with the terms and conditions of the Agreement, have been duly authorized by all
necessary corporate action of the Borrower; do not require any approval by the
shareholders of the Borrower; do not require the approval or consent of any
trustee or holder of any Indebtedness of the Borrower of which we have current
actual knowledge; do not contravene any law or regulation or the Borrower's
Articles of Incorporation or Bylaws; to our current actual knowledge, do not
contravene any order which is binding on the Borrower; and do not contravene the
provisions of or constitute a default under any indenture, mortgage, contract or
other agreement or instrument of which we have current actual knowledge and to
which the Borrower or any First-Tier Subsidiary is a party or by which the
Borrower or any First-Tier Subsidiary or any of the properties of the Borrower
or any First-Tier Subsidiary may be bound or affected; and do not result in the
creation or imposition of any Lien on any of the assets of the Borrower or any
First-Tier Subsidiary pursuant to any indenture, mortgage, contract or other
agreement or instrument of which we have current actual knowledge and to which
the Borrower or any First-Tier Subsidiary is a party.
3. Except for reports required to be filed by the Borrower with the
United States Securities and Exchange Commission (the "SEC") under the
Securities Exchange Act of 1934, no federal or state Government Approval or
filing or registration with any federal or state Governmental Authority is
required for the execution, delivery and performance by the Borrower of the
Agreement or the Notes or in connection with borrowings under the Agreement.
4. The Agreement and the Notes have been duly executed and delivered by
the Borrower and are valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization,
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moratorium, fraudulent transfer and other similar laws of general application
affecting the enforcement of creditors' rights, (b) implied obligations of good
faith and fair dealing and considerations of commercial reasonableness, or (c)
other applicable laws and equitable principles which may affect certain of the
remedies provided therein which applicable laws and equitable principles do not
make the remedies provided in the Loan Documents in connection with a material
breach of a material covenant inadequate for the practical realization of the
principal benefits intended to be provided thereby.
5. Except as disclosed in the Borrower's Form 10-K filed with the SEC
for the Borrower's fiscal year ended September 30, 1994, in the Borrower's Form
10-Q filed with the SEC for the Borrower's fiscal quarter ended December 31,
1994, or on Schedule 3 to the Agreement, to our current actual knowledge, there
are no actions, proceedings, investigations or claims against the Borrower or
any of the First-Tier Subsidiaries now pending before any court, arbitrator or
Governmental Authority (nor, to our current actual knowledge, has any thereof
been threatened), which if determined adversely to the Borrower or any of the
First-Tier Subsidiaries would be likely to have a material adverse effect on the
business, operations or financial condition of the Borrower and the First-Tier
Subsidiaries taken as a whole or on the ability of the Borrower to perform its
obligations under the Agreement and the Notes.
6. To our current actual knowledge, except as described in the
financial statements furnished by the Borrower to the Lenders pursuant to
Section 5.6 of the Agreement (a) neither the Borrower nor any First-Tier
Subsidiary is in violation of or subject to any contingent liability on account
of any laws, rules, regulations and orders of any Governmental Authority, except
for violations which in the aggregate do not have a material adverse effect on
the business, operations or financial condition of the Borrower and the
First-Tier Subsidiaries taken as a whole, and (b) neither the Borrower nor any
First-Tier Subsidiary is in material breach of or material default under any
agreement to which it is a party or which is binding on it or any of its assets.
7. To our current actual knowledge, the Borrower is not engaged
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or carrying any margin stock (within the
meaning of Federal Reserve Regulation U).
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8. Schedule 1 to the Agreement correctly sets forth, as of the date
hereof, the authorized capitalization of each First-Tier Subsidiary and, to our
current actual knowledge, the number of shares of each class of capital stock
issued and outstanding of each First-Tier Subsidiary. The outstanding shares of
each First-Tier Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable. To our current actual knowledge, each of the
Borrower and the First-Tier Subsidiaries owns beneficially and of record the
respective shares it is listed as owning on Schedule 1.
9. The Borrower is not an "investment company" or a company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended. To our current actual knowledge, the Borrower
does not own any shares of capital stock of a "holding company" as such term is
defined in the Public Utility Holding Company Act of 1935, as amended, and is
not a "subsidiary company" of a "registered holding company" within the meaning
of said Act. Borrower is a "holding company" as defined in said Act by reason of
its ownership of all of the outstanding shares of common stock of Washington
Natural Gas Company, but is exempt from said Act, except the provisions of
Section 9(a)(2) thereof, by virtue of Section 3(a)(1) thereof and Rule 2
thereunder.
We do not purport to be experts on, or to express any opinion herein
concerning, any law other than the law of the State of Washington and the
federal laws of the United States.
This opinion is rendered to you in connection with the above
transaction and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose and may not be relied upon by any other person,
firm or corporation (other than your successors and permitted assigns) for any
purpose without our prior written consent except in connection with the
enforcement of the Agreement and the Notes or the inspection of your files by
governmental examiners or auditors or as required by law. We disclaim any
responsibility to advise you, your successors and permitted assigns, or the
Borrower of any changes in facts or applicable law that occur after the date
hereof and that might affect this opinion.
Very truly yours,
Enclosures
-- Copies of Officer Certificates
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EXHIBIT G
NOTICE OF ASSIGNMENT
________________, 19__
To: WASHINGTON ENERGY COMPANY
=========================
THE FIRST NATIONAL BANK OF CHICAGO
==================================
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to the Credit Agreement dated as of March ___, 1995 among
Washington Energy Company (the "Borrower"), the Lenders party thereto and The
First National Bank of Chicago, as Agent for the Lenders (the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
***[the Borrower and]***(1) the Agent pursuant to Section 9.3.2 of the Credit
Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of _______, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor an undivided ___% interest in all outstandings, rights and obligations
of the Assignor ***[other than Competitive Bid Loans made by the Assignor]***
under the Credit Agreement. The Effective Date of the Assignment shall be the
later of ____________, 19__ or two Business Days (or such shorter period as
agreed to by the Agent) after this Notice of Assignment and any consents and
fees required by Sections 9.3.1 and 9.3.2 of the Credit Agreement have been
delivered to the Agent, provided that the Effective Date shall not occur if any
condition precedent
----------------------
(1) To be included only if consent must be obtained from the Borrower
pursuant to Section 9.3.1 of the Credit Agreement.
80
agreed to by the Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the Agent before __________, 19__ to determine if the
Assignment Agreement will become effective on such date pursuant to Section 3
hereof, and will confer with the Agent to determine the Effective Date pursuant
to Section 3 hereof if it occurs thereafter. The Assignor shall notify the Agent
if the Assignment Agreement does not become effective on any proposed Effective
Date as a result of the failure to satisfy the conditions precedent agreed to by
the Assignor and the Assignee. At the request of the Agent, the Assignor will
give the Agent written confirmation of the satisfaction of the conditions
precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $4,000 required by Section 9.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new Notes or, as appropriate, replacement notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it form the Borrower
upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions
are set forth in the attachment of this Notice of Assignment.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to the Borrower or the
Loan Documents to the Assignee until the Assignee becomes a party to the Credit
Agreement.***(2).
----------------------
(2) May be eliminated if Assignee is a party to the Credit Agreement
prior to the Effective Date.
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NAME OF ASSIGNOR NAME OF ASSIGNEE
By: _____________________ By: __________________________
Title: __________________ Title: _______________________
ACKNOWLEDGED ACKNOWLEDGED
[AND CONSENTED TO] BY: [AND CONSENTED TO] BY:
THE FIRST NATIONAL BANK WASHINGTON ENERGY COMPANY
OF CHICAGO
By: _____________________ By: __________________________
Title: __________________ Title: _______________________
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WASHINGTON ENERGY COMPANY (WECO)
CREDIT AGREEMENT
SCHEDULE 1
LIST OF SUBSIDIARIES
A. FIRST-TIER SUBSIDIARIES
1. WASHINGTON NATURAL GAS COMPANY, a Washington corporation
Common Stock:
common stock has $5 par value
shares authorized total 25,000,000
shares outstanding total 10,842,131
shares owned by WECO total 10,842,131, representing 100%
ownership
Preferred Stock:
authorized: 1,000,000 shares of
$100 par value and 4,000,000 shares
of $25 par value -
Shares Outstanding
7.45%, Series II, $25 par value 2,400,000
8.50%, Series III, $25 par value 1,200,000
2. THERMAL ENERGY, INC., a Washington corporation
common stock has $10 par value
shares authorized total 1,000,000
shares outstanding total 600,000
shares owned by WECO total 600,000, representing 100%
ownership
3. THERMRAIL, INC., a Washington corporation
common stock has $10 par value
shares authorized total 300,000
shares outstanding total 100,000
shares owned by WECO total 100,000, representing 100%
ownership
1
83
4. WECO FINANCE COMPANY, a Washington corporation
common stock has no par value
shares authorized total 500,000
shares outstanding total 110,000
shares owned by WECO total 110,000, representing 100%
ownership
5. WASHINGTON ENERGY SERVICES COMPANY, a Washington corporation
common stock has $10 par value
shares authorized total 100,000
shares outstanding total 100,000
shares owned by WECO total 100,000, representing 100%
ownership
6. WASHINGTON ENERGY GAS MARKETING COMPANY, a Washington
corporation
common stock has $10 par value shares authorized total
1,000,000 shares outstanding total 1,000 shares owned by WECO
total 1,000, representing 100% ownership
B. OTHER SUBSIDIARIES
1. THERMAL RESOURCES, INC., a Montana corporation
common stock has no par value
shares authorized total 50,000
shares issued total 50,000
shares owned by Thermal Energy, Inc. total 50,000,
representing 100% ownership
2. ▇▇▇▇▇▇ INSURANCE COMPANY LIMITED, a Bermuda corporation
common stock has $10 par value
shares authorized total 40,000
shares outstanding total 40,000
shares owned by WECO Finance Company total 39,993,
representing 99.9% ownership
3. WNG CAP I, INC., a Washington corporation
common stock has $10 par value
shares authorized total 50,000
shares outstanding total 100
shares owned by WNG total 100, representing 100% ownership
2
84
4. WNG CAP II, INC., a Washington corporation
common stock has $10 par value
shares authorized total 50,000
shares outstanding total 100
shares owned by WNG total 100, representing 100% ownership
5. TONGUE RIVER HOLDINGS, INC., a Montana corporation
common stock has $1 par value
shares authorized total 200
shares outstanding total 170
shares owned by Transportation Properties, a partnership,
total 170, representing 100% ownership
6. TRANSPORTATION PROPERTIES, a Montana General Partnership
owned 90% by ThermRail, Inc.
7. TONGUE RIVER RAILROAD COMPANY, a Montana Limited Partnership
owned 99.22% by Transportation Properties and .78% by
Tongue River Holdings, Inc.
3