EXHIBIT 10.3
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$1,250,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
PG&E NATIONAL ENERGY GROUP, INC.,
as Borrower
THE CHASE MANHATTAN BANK,
as Issuing Bank
The Several Lenders
from Time to Time Parties Hereto,
BARCLAYS BANK PLC and
WESTDEUTSCHE LANDESBANK GIROZENTALE, NEW YORK BRANCH,
as Documentation Agents
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, and
THE ROYAL BANK OF SCOTLAND PLC,
as Syndication Agents
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Lead Arranger and Bookrunner
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Dated as of August 22, 2001
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Table of Contents
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ARTICLE I DEFINITIONS .......................................................... 1
SECTION 1.1 Defined Terms. ............................................... 1
SECTION 1.2 Other Definitional Provisions. ............................... 21
ARTICLE II LETTERS OF CREDIT ................................................... 22
SECTION 2.1 L/C Commitment. .............................................. 22
SECTION 2.2 Procedure for Issuance of Letter of Credit. .................. 23
SECTION 2.3 Fees and Other Charges. ...................................... 23
SECTION 2.4 L/C Participations. .......................................... 24
SECTION 2.5 Reimbursement Obligation of the Borrower ..................... 25
SECTION 2.6 Obligations Absolute ......................................... 26
SECTION 2.7 Letter of Credit Payments .................................... 26
SECTION 2.8 Applications for Issuance .................................... 26
ARTICLE III LOANS .............................................................. 26
SECTION 3.1 Loans......................................................... 26
SECTION 3.2 Procedure for Loan Borrowing ................................. 27
SECTION 3.3 Evidence of Debt. ............................................ 28
SECTION 3.4 Facility Fees, etc ........................................... 28
SECTION 3.5 Termination or Reduction of Commitments ...................... 28
SECTION 3.6 Optional Prepayments; Mandatory Prepayments .................. 29
SECTION 3.7 Conversion and Continuation Options .......................... 29
SECTION 3.8 Limitations on Eurodollar Tranches ........................... 30
SECTION 3.9 Interest Rates and Payment Dates ............................. 30
SECTION 3.10 Computation of Interest and Fees ............................. 31
SECTION 3.11 Inability to Determine Interest Rate ......................... 31
SECTION 3.12 Pro Rata Treatment and Payments .............................. 31
SECTION 3.13 Requirements of Law .......................................... 33
SECTION 3.14 Taxes ........................................................ 34
SECTION 3.15 Indemnity .................................................... 35
SECTION 3.16 Illegality ................................................... 36
SECTION 3.17 Change of Lending Office ..................................... 36
SECTION 3.18 Replacement of Lenders ....................................... 37
SECTION 3.19 Extension of Termination Dates ............................... 37
ARTICLE IV REPRESENTATIONS AND WARRANTIES ...................................... 39
SECTION 4.1 Organization; Powers; Ownership of Property .................. 39
SECTION 4.2 Authorization ................................................ 40
SECTION 4.3 Enforceability ............................................... 40
SECTION 4.4 Financial Statements ......................................... 40
SECTION 4.5 Litigation ................................................... 40
SECTION 4.6 Federal Reserve Regulations .................................. 40
SECTION 4.7 Investment Company Act; Public Utility Holding Company Act ... 41
SECTION 4.8 No Material Misstatements .................................... 41
SECTION 4.9 Taxes ........................................................ 41
SECTION 4.10 Employee Benefit Plans ....................................... 42
SECTION 4.11 Governmental Approval; Compliance with Law and Contracts ..... 42
SECTION 4.12 Environmental Matters ........................................ 42
SECTION 4.13 Ranking ...................................................... 42
SECTION 4.14 Unrestricted Subsidiaries .................................... 43
SECTION 4.15 Use of Letters of Credit ..................................... 43
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SECTION 4.16 CPUC ......................................................... 43
SECTION 4.17 Separateness from PG&E ....................................... 43
ARTICLE V CONDITIONS PRECEDENT ................................................. 43
SECTION 5.1 Conditions to Initial Extension of Credit .................... 43
SECTION 5.2 Conditions to Issuance of Each Letter of Credit under
Section 2.1 and each Loan under Section 3.1(a) and 3.1(b) .... 45
ARTICLE VI COVENANTS ........................................................... 45
SECTION 6.1 Maintenance of Ownership ..................................... 45
SECTION 6.2 Existence .................................................... 45
SECTION 6.3 Compliance with Law; Business and Properties ................. 46
SECTION 6.4 Financial Statements, Reports, Etc ........................... 46
SECTION 6.5 Insurance .................................................... 47
SECTION 6.6 Taxes, Etc ................................................... 48
SECTION 6.7 Maintaining Records; Access to Properties and Inspections .... 48
SECTION 6.8 Risk Management Procedures ................................... 48
SECTION 6.9 Merger ....................................................... 48
SECTION 6.10 Investments .................................................. 48
SECTION 6.11 Liens ........................................................ 49
SECTION 6.12 Indebtedness ................................................. 50
SECTION 6.13 Transactions with Affiliates ................................. 52
SECTION 6.14 Distributions ................................................ 52
SECTION 6.15 Financial Covenants .......................................... 53
SECTION 6.16 Separateness from PG&E Corp .................................. 53
SECTION 6.17 Asset Sales .................................................. 53
ARTICLE VII EVENTS OF DEFAULT .................................................. 53
SECTION 7.1 Events of Default ............................................ 53
ARTICLE VIII THE AGENTS......................................................... 57
SECTION 8.1 Appointment .................................................. 57
SECTION 8.2 Delegation of Duties ......................................... 57
SECTION 8.3 Exculpatory Provisions ....................................... 57
SECTION 8.4 Reliance by Administrative Agent ............................. 57
SECTION 8.5 Notice of Default ............................................ 58
SECTION 8.6 Non-Reliance on Administrative Agent and Other Lenders ....... 58
SECTION 8.7 Indemnification .............................................. 59
SECTION 8.8 Agent in Its Individual Capacity ............................. 59
SECTION 8.9 Successor Administrative Agent ............................... 59
SECTION 8.10 Documentation and Syndication Agents ......................... 60
ARTICLE IX MISCELLANEOUS ....................................................... 60
SECTION 9.1 Amendments and Waivers ....................................... 60
SECTION 9.2 Notices ...................................................... 61
SECTION 9.3 No Waiver; Cumulative Remedies ............................... 62
SECTION 9.4 Survival of Representations and Warranties ................... 62
SECTION 9.5 Payment of Expenses .......................................... 62
SECTION 9.6 Successors and Assigns; Participations and Assignments ....... 63
SECTION 9.7 Adjustments; Set-off ......................................... 66
SECTION 9.8 Counterparts ................................................. 67
SECTION 9.9 Severability ................................................. 67
SECTION 9.10 Integration .................................................. 67
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SECTION 9.11 GOVERNING LAW ................................... 67
SECTION 9.12 Submission To Jurisdiction; Waivers ............. 67
SECTION 9.13 Acknowledgments ................................. 68
SECTION 9.14 Confidentiality ................................. 68
SECTION 9.15 Accounting Changes .............................. 69
SECTION 9.16 Delivery of Lender Addenda....................... 69
SECTION 9.17 WAIVERS OF JURY TRIAL ........................... 69
SCHEDULES:
1.1 Commitments
1.1A Applicable Margins
1.1B Notices to Lenders
2.1 Existing Letters of Credit
2.3(B) Letter of Credit Customary Fees and Costs
4.5 Litigation
4.12 Environmental Matters
4.14 Unrestricted Subsidiaries
6.1 Certain Restricted Subsidiaries
6.10 Investments
6.11 Other Liens
6.12(A) Other Credit Facilities
6.12(F) Existing Indebtedness
6.12(H)-1 Terms of Subordination - Affiliates
6.12(H)-2 Terms of Subordination - Non-Affiliates
6.12(J) Permitted Sale-leaseback Transactions
6.13 Service Agreements
EXHIBITS:
A Form of Closing Certificate
B Form of Assignment and Acceptance
C-1 Form of Legal Opinion of Hunton & ▇▇▇▇▇▇▇▇
C-2 Form of Opinion of Hunton & ▇▇▇▇▇▇▇▇
C-3 Form of Legal Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
D Form of Exemption Certificate
E Form of Application for Issuance
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 22, 2001,
among PG&E NATIONAL ENERGY GROUP, INC., a Delaware corporation (the "Borrower"),
the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders"), THE CHASE MANHATTAN BANK, as the letter of
credit issuing bank (in such capacity, the "Issuing Bank"), BARCLAYS BANK PLC
and WESTDEUTSCHE LANDESBANK GIROZENTALE, NEW YORK BRANCH, each as a
documentation agent (in such capacity, collectively the "Documentation Agents"),
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES and THE ROYAL BANK OF
SCOTLAND PLC, each as a syndication agent (in such capacity, collectively the
"Syndication Agents"), and THE CHASE MANHATTAN BANK, as Administrative Agent (in
such capacity, the "Administrative Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, some of the Lenders herein made available to the Borrower a
364-day revolving loan and letter of credit facility with a total committed
amount of $550 million (the "$550M Credit Facility");
WHEREAS, the commitments to be made available under this Agreement will
replace the $550M Credit Facility and will consist of a two-tranche revolving
loan and letter of credit facility with a total committed amount of $1.25
billion as of the Closing Date; and
WHEREAS, the Issuing Bank and the Lenders are willing to make such
credit facility available to the Borrower upon and subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms.
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As used in this Agreement, the terms listed in this Section 1.1 shall
have the respective meanings set forth in this Section 1.1.
"$1.1 Billion PG&E Gen Credit Agreement" means the $1,100,000,000
Credit Agreement, dated as of September 1, 1998, among PG&E Gen and the lenders
party thereto, as the same may be amended, modified or supplemented from time to
time.
"$550M Credit Facility" has the meaning given such term in the first
recital.
"Actual Knowledge" means, with respect to any Person as to any event or
circumstance, the actual knowledge of the Responsible Officer of such Person or
receipt by such Person from the Administrative Agent of notice of such event or
circumstance.
"Administrative Agent" has the meaning given such term in the preamble
hereto.
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"Affiliate" means, when used with respect to a specified Person,
another Person that directly or indirectly controls or is controlled by or is
under common control with the Person specified. For this purpose, "control" of a
Person shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through ownership of voting shares, by contract or otherwise.
"Agents" means the Administrative Agent, the Documentation Agents and
the Syndication Agents.
"Aggregate Exposure" means with respect to any Lender at any time, an
amount equal to the amount of such Lender's Commitment at such time or, if the
Commitments have been terminated, the amount of such Lender's Extensions of
Credit then outstanding.
"Aggregate Exposure Percentage" means with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the sum of the Aggregate Exposures of all Lenders at such time.
"Agreement" means this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin" means for Base Rate Loans and for Eurodollar Loans,
as set forth in the Pricing Grid.
"Application for Issuance" means an application, in the form of Exhibit
E, requesting the Issuing Bank to open a Letter of Credit.
"Arrangers" means ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc.and Societe Generale, collectively.
"Asset Company" means any entity (a) (i) whose principal purpose is the
acquisition, improvement, installation, design, engineering, construction,
development, completion, financing, maintenance or operation of all or any part
of a project or projects, or any asset related thereto, used in the business of
generating, transmitting, transporting, distributing, producing or storing
electric power, thermal energy, natural gas or other fuel or other
energy-related businesses and (ii) substantially all its assets are limited to
those assets being financed (or to be financed), or the operation of which is
being financed (or to be financed), in whole or in part by a Project Financing
Facility entered into by such entity and/or any Investment Vehicle that owns
such entity or by contributions or intercompany loans from the Borrower, any
Restricted Subsidiary or any such Investment Vehicle or (b) which entity is a
Subsidiary of an entity described in clause (a) and the business and assets of
which are related to the business of such entity and which does not incur any
Indebtedness other than (A) intercompany loans from an Asset Company which is
the parent of such Subsidiary, the Borrower, any Restricted Subsidiary or any
Investment Vehicle that indirectly owns such Subsidiary, (B) Indebtedness of the
type described in Section 6.12(i) or (C) Indebtedness under a Project Financing
Facility.
"Assignee" has the meaning given such term in Section 9.6(c).
"Assignor" has the meaning given such term in Section 9.6(c).
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"Available Commitment" means with respect to any Lender at any time, an
amount equal to the excess, if any, of (a) such Lender's Commitment then in
effect over (b) such Lender's Extensions of Credit.
"Base Rate" means for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Base Rate Loans" means Loans for which the applicable rate of interest
is based upon the Base Rate.
"Benefited Lender" has the meaning given such term in Section 9.7.
"Board" means the Board of Governors of the Federal Reserve System (or
any successor).
"Borrower" has the meaning given such term in the preamble hereto.
"Borrowing Date" means any Business Day specified by the Borrower as a
date on which the Borrower requests the Lenders to make Loans hereunder.
"Business Day" means (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
"Cash Collateral Account" has the meaning given such term in Section
7.1.
"Cash Equivalents" means (a) any evidence of indebtedness with a
maturity of 180 days or less issued or directly and fully guaranteed or insured
by the United States, Canada or any U.S. agency or instrumentality; (b)
certificates of deposit or acceptances or Eurodollar time deposits with a
maturity of 180 days or less of, and overnight bank deposits and demand accounts
with (i) any financial institution that is not a foreign bank or a foreign bank
holding company that has a bankwatch rating of at least B/C by Fitch and a
commercial paper rating of at least A-1 by S&P, F1 by Fitch or P-1 by ▇▇▇▇▇'▇ or
(ii) any financial institution that is a foreign bank or a foreign bank holding
company that has a sovereign risk rating of at least AA by Fitch, a bankwatch
rating of at least B by Fitch, a commercial paper rating of at least A-1 by S&P,
F1 by Fitch or P-1 by ▇▇▇▇▇'▇ and a minimum of US$20 billion in assets; (c)
commercial paper with a maturity of 180 days or less issued by a U.S. or
Canadian incorporated company that is not an Affiliate of the Borrower and rated
at least A-1 by S&P, F1 by Fitch or at least P-1 by ▇▇▇▇▇'▇; (d) Repurchase
Agreements with a maturity of 90 days or less made with banks which meet the
criteria in clause (b) above and primary government security dealers (as defined
by the Federal Reserve System) which meet the criteria in clause (c) above, and
are fully collateralized
3
by investments meeting the criteria of clause (a) above; (e) tax-exempt
municipal obligations of any state of the United States, or any municipality of
any such state which mature within 180 days from the date of acquisition thereof
and which, in each case, are rated at least MIG-1 or VMIG-1 by ▇▇▇▇▇'▇, and
SP-1/A-1 or AA/A-1 by S&P;and (f) institutional money market funds that
exclusively invest in any of the foregoing.
"Cash Flow Available for Fixed Charges" for any period means, without
duplication, (i) EBITDA of the Borrower and its Consolidated Subsidiaries which
are not Unrestricted Subsidiaries for such period, minus (ii) EBITDA for such
period of such Consolidated Subsidiaries that are financed with Indebtedness of
such Subsidiary or which are direct or indirect Subsidiaries of a Financed
Subsidiary of the Borrower, plus (iii) Distributions received by the Borrower
from Subsidiaries described in the foregoing clause (ii) during such period
except to the extent the amount of such Distributions previously constituted
"Cash Flow Available for Fixed Charges" during such period as a result of clause
(viii) below, minus (iv) Distributions described in the foregoing clause (iii)
that are attributable to extraordinary gains or other non-recurring items
described in clause (iii) of the definition of "EBITDA", minus (v) any income
reported by the Borrower for such period for Persons that are not Consolidated
Subsidiaries of the Borrower, plus (vi) Distributions received by the Borrower
from Persons described in the foregoing clause (v) during such period, minus
(vii) Distributions described in the foregoing clause (vi) that are attributable
to extraordinary gains or other non-recurring items described in clause (iii) of
the definition of "EBITDA", plus, (viii) cash and Cash Equivalents of
Subsidiaries described in clause (ii) above that are legally and contractually
available to such Subsidiary for the payment of dividends to the Borrower, but
only to the extent that the source of such cash and Cash Equivalents is from
such Subsidiary's EBITDA for such period or from repayments during such period
to such Subsidiary of loans made by such Subsidiary.
"Closing Date" means the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date is August 23, 2001.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitments" means, as to any Lender, the Tranche A Commitment and the
Tranche B Commitment of such Lender.
"Conduit Lender" means any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and provided,
further, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 3.13, 3.14, 3.15 or 9.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any Commitment.
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"Consolidated Net Worth" means, as of any date of determination
thereof, the amount which would be reflected as stockholders' equity upon a
consolidated balance sheet of the Borrower (but excluding any portion thereof
attributable to Unrestricted Subsidiaries) determined in accordance with GAAP,
excluding other comprehensive income arising from the accounting treatment of
hedging and ▇▇▇▇-to-market transactions.
"Consolidated Subsidiary" means with respect to any Person at any date
any Subsidiary or other entity the accounts of which would be consolidated in
accordance with GAAP with those of such Person in its consolidated financial
statements as of such date.
"Consolidated Tangible Net Assets" means at any date the total net
assets of the Borrower and its Consolidated Subsidiaries (other than
Unrestricted Subsidiaries) determined in accordance with GAAP, excluding,
however, from the determination of total net assets (i) goodwill, organizational
expenses, research and product development expenses, trade marks, trade names,
copyrights, patents, patent applications, licenses and rights in any thereof,
and other similar intangibles, (ii) all deferred charges or unamortized debt
discount and expenses, (iii) all reserves carried and not deducted from assets,
(iv) securities which are not readily marketable, (v) cash held in sinking or
other analogous funds established for the purpose of redemption, retirement or
prepayment of capital stock or other equity interests or Indebtedness, and (vi)
any items not included in clauses (i) through (v) above which are treated as
intangibles in conformity with GAAP.
"Credit Agreement" means the Amended and Restated Credit Agreement,
dated as of August 22, 2001, among the Borrower, the Lenders, the Issuing Bank,
the Documentation Agents, the Syndication Agents and the Administrative Agent.
"Credit Support Arrangements" means any Guaranty, letter of credit or
other instrument or arrangement issued as support for the payment or performance
obligations of a party under any Trading Arrangement.
"Default" means any of the events specified in Section 7.1, which with
the giving of notice, the lapse of time, or both, will become an Event of
Default.
"Distribution" means, in respect of any Person, (i) any payment of any
dividends or other distributions with respect to the capital stock or other
equity interests of such Person (except distributions in such capital stock or
other equity interests) and (ii) any purchase, redemption or other acquisition
or retirement for value of any capital stock or other equity interests of such
Person or any Affiliate of such Person unless made contemporaneously from the
net proceeds of the sale of capital stock or other equity interests.
"Documentation Agents" has the meaning given such term in the preamble
hereto.
"Dollars" and "$" means lawful currency of the United States of
America.
"Downgrade Event" means (i) the Borrower's senior unsecured long term
debt (x) ceases to be rated at least BBB- by S&P and (y) ceases to be rated at
least Baa3 by ▇▇▇▇▇'▇ (or if ratings of such debt have not been issued by such
rating agencies, such debt ceases to be
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impliedly rated by an issuer rating or indicative rating at least BBB- by S&P
and Baa3 by ▇▇▇▇▇'▇).
"EBITDA" means, with respect to any Person for any period, the (i)
income (or loss) before interest and taxes of such Person, plus (ii) to the
extent deducted in determining such income (or loss), depreciation, amortization
and other similar non-cash charges and reserves, minus (iii) to the extent
recognized in determining such income (or loss), extraordinary gains (or
losses), restructuring charges or other non-recurring items, plus (iv) to the
extent deducted in determining such income (or loss), Lease Payment Obligations
described in clause (iii) of the definition of "Lease Payment Obligations".
"Equity Funding Arrangement" means (i) an agreement to provide a
capital contribution to or other equity investment in any Asset Company or
Investment Vehicle in connection with any Project Financing Facility, (ii) a
Guaranty, letter of credit or other similar arrangement with respect to any
obligations of any Asset Company or Investment Vehicle under a Project Financing
Facility, (iii) a Guaranty of any Investment Vehicle's obligation to make a
capital contribution to or other equity investment in any Asset Company or
Investment Vehicle in connection with a Project Financing Facility or (iv) a
Guaranty, letter of credit or other similar arrangement to support any of the
obligations or arrangements described in clauses (i) through (iii) hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group of (i) organizations described in
Sections 414(b) or 414(c) of the Code and (ii) solely for purposes of the Lien
created under Section 412(n) of the Code, organizations described in Sections
414(m) or 414(o) of the Code of which the Borrower is a member.
"ERISA Event" means (i) the Borrower or any ERISA Affiliate shall fail
to pay when due an amount or amounts aggregating in excess of $15,000,000 which
it shall have become liable to pay under Title IV of ERISA; or (ii) notice of
intent to terminate a Material Plan shall be filed under Title IV of ERISA by
the Borrower or any ERISA Affiliate, any plan administrator or any combination
of the foregoing; or (iii) the PBGC shall institute proceedings under Title IV
of ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or (iv) a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating that any Material
Plan must be terminated; or (v) there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause the
Borrower or any ERISA Affiliate to incur a current payment obligation in excess
of $15,000,000; or (vi) receipt by the Borrower or any ERISA Affiliate of notice
from one or more Multiemployer Plans of intent to terminate or that it is
insolvent or in reorganization (within the meaning of Section 4241 or 4245 of
ERISA, as applicable) which termination, insolvency or reorganization,
individually or together with other such events, could cause the Borrower and/or
any ERISA Affiliate, individually or in the aggregate, to incur a current
payment obligation in excess of $15,000,000; or (vii) the Borrower or any ERISA
Affiliate shall engage in one or more non-
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exempt "prohibited transactions" (as defined in Section 406 of ERISA or Section
4975 of the Code) which could result in a current payment obligation of the
Borrower and/or any ERISA Affiliate individually or in the aggregate, in an
amount or amounts aggregating in excess of $15,000,000; or (viii) the occurrence
of any event or series of events of which the nature described in clauses (i)
through (vii) with respect to any Plan or Multiemployer Plan which, individually
or in the aggregate, could result in a liability to the Borrower and/or any
ERISA Affiliate, individually or in the aggregate, in an amount or amounts
aggregating in excess of $50,000,000.
"ET Credit Agreements" means (i) the $50,000,000 Credit Agreement,
dated as of November 13, 1998, between PG&E Energy Trading Gas Corporation, PG&E
Energy Trading, Canada Corporation, ET Holdings, PG&E Energy Trading Power, L.P.
and Bank of Montreal and (ii) the $35,000,000 Credit Agreement, dated as of
November 13, 1998, between PG&E Energy Trading -- Gas Corporation, PG&E Energy
Trading, Canada Corporation, PG&E Energy -- Trading Power Holdings Corporation,
PG&E Energy Trading Power, L.P. and The Chase Manhattan Bank, as each may be
amended, modified or supplemented from time to time.
"ET Holdings" means PG&E Energy Trading Holdings Corporation, a
California corporation.
"Eurocurrency Reserve Requirements" means for any day, the aggregate
(without duplication) of the maximum rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate" means with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans" means Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate" means with respect to each day during each Interest
Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
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"Eurodollar Tranche" means the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Event of Default" means any of the events specified in Section 7.1,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Extensions of Credit" means, as to any Lender at any time, the sum of
Tranche A Extensions of Credit and Tranche B Extensions of Credit of such
Lender.
"Existing Letters of Credit" means the letters of credit described in
Schedule 2.1.
"Facility Fee Rate" means as set forth in the Pricing Grid.
"Federal Funds Effective Rate" means for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding 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 for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Federal Reserve System" means the Federal Reserve System of the United
States of America.
"Financed Subsidiary" means any direct or indirect Subsidiary of the
Borrower that is financed with Indebtedness of such Subsidiary.
"Financial Officer" of any Person means the chief financial officer,
principal accounting officer, treasurer, associate or assistant treasurer, or
any responsible officer analogous to the foregoing or designated by the one of
the foregoing Persons, of such Person.
"Fitch" means Fitch, Inc.
"Fixed Charges" means, with respect to the Borrower for any period, the
sum, without duplication, of (i) the aggregate amount of interest expense and
commitment and other periodic fees with respect to Funded Indebtedness of the
Borrower Scheduled to be Paid for such period, including (A) the net costs under
Swaps, (B) all capitalized interest, (C) the interest portion of any deferred
payment obligation and (D) the Lease Payment Obligations of the Borrower
Scheduled to be Paid by the Borrower during such period, and (ii) the aggregate
amount of all mandatory scheduled payments (whether designated as payments or
prepayments) and scheduled sinking fund payments with respect to principal of
any Funded Indebtedness of the Borrower, including payments in the nature of
principal under Lease Obligations, provided that with respect to any Funded
Indebtedness of the Borrower consisting of Equity Funding Arrangements, "Fixed
Charges" shall not include any of the foregoing enumerated items to the extent
paid by a Subsidiary of the Borrower (so long as the funds used to make such
payments were not provided by the Borrower).
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"Funded Indebtedness" of a Person means all Indebtedness of such Person
(after intercompany eliminations) other than any Guaranty obligations that are
not reasonably quantifiable under standard accounting practices as of the date
of determination.
"Funding Office" means the office of the Administrative Agent specified
in Section 9.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"Government Authority" means any Federal, state, county, municipal or
other local governmental authority or judicial or regulatory agency, board,
body, commission or instrumentality.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and notices and
reports to all Governmental Authorities.
"GTN" means PG&E Gas Transmission, Northwest Corporation, a California
corporation.
"GTN Credit Agreements" means (i) the $750,000,000 Indenture, dated as
of May 22, 1995, between GTN and The First National Bank of Chicago, as trustee
and (ii) the $100,000,000 Amended and Restated Credit Agreement, dated May 24,
1999, between GTN, the lenders party thereto and Citicorp USA, Inc., as
administrative agent for such lenders, including any commercial paper supported
by credit facilities made available under such credit agreements, as the same
may be amended, modified or supplemented from time to time.
"Guaranty" means (a) a guaranty by a Person (other than by endorsement
of negotiable instruments for collection in the ordinary course of business),
directly or indirectly, in any manner, of any part or all of the obligations of
another Person; and (b) an agreement by a Person, direct or indirect, contingent
or otherwise, and whether or not constituting a guaranty, the practical effect
of which is to assure the payment or performance (or payment of damages in the
event of nonperformance) of any part or all of the obligations of another Person
(other than in respect of operating leases not otherwise included in the
definition of "Lease Obligations"), whether by (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease of property or the purchase or
sale of services primarily for the purpose of enabling the obligor with respect
to such obligation to make any payment or performance (or payment of damages in
the event of nonperformance) of or on account of any part or all of such
obligation, or to assure the obligee of such obligation against loss, (iii)
repayment of amounts drawn down by beneficiaries of letters of credit, (iv) the
maintenance of working capital, equity capital, available cash or other
financial statement condition so as to enable the primary obligor to pay
Indebtedness; (v) the provision of equity or other capital under or in respect
of equity or other capital subscription arrangements, (vi) the supplying of
funds to or investing in a Person on account of all or any part of such Person's
obligation or indemnifying or holding harmless, in any way, such Person against
any
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part or all of such obligation or (vii) the placing of any Lien on property
(including, without limitation, accounts and contract rights) of a Person to
secure another Person's Indebtedness.
"Indebtedness" of any Person means (i) all indebtedness of such Person
for borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services, (iv) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (v)
all Lease Obligations of such Person, (vi) all obligations, contingent or
otherwise, of such Person under any issued and outstanding acceptance, letter of
credit or similar instruments, (vii) all obligations of such Person to redeem or
purchase any capital stock of such Person which is mandatorily redeemable,
(viii) all Swaps of such Person and (ix) any Guaranty of such Person with
respect to liabilities of the type described in clauses (i) through (viii)
hereof.
"Indemnified Liabilities" has the meaning given such term in Section
9.5.
"Indemnitee" has the meaning given such term in Section 9.5.
"Interest Payment Date" means (a) as to any Base Rate Loan, the last
day of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan, the date of any repayment or prepayment made in
respect thereof.
"Interest Period" means as to any Eurodollar Loan, (a) initially, the
period commencing on borrowing date or the conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Termination Date or beyond the date final payment is due on any Loan shall end
on the Termination Date or such due date, as applicable; and
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(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period.
"Investment" means the acquisition of any interest in any Person or
property, a loan or advance to any Person or other arrangement for the purpose
of providing funds or credit to any Person, a capital contribution in or to any
Person, or any other investment in any Person or property, or any Guaranty of
any of the foregoing.
"Investment Vehicle" means each Subsidiary of the Borrower which is
organized solely to acquire, make or hold one or more Investments in an Asset
Company or Asset Companies, either directly or indirectly through one or more
other Investment Vehicles.
"Issuing Bank" has the meaning given such term in the preamble hereto.
"L/C Fee Payment Date" means the last day of each March, June,
September and December and the last day of the Tranche A Commitment Period or
Tranche B Commitment Period, whichever is applicable.
"L/C Obligations" means at any time, an amount equal to the sum of the
Tranche A L/C Obligations and the Tranche ▇ ▇/C Obligations.
"L/C Participants" means the Tranche A L/C Participants and the Tranche
▇ ▇/C Participants.
"Lease Obligations" means, without duplication, (i) any Indebtedness
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes and (ii) the present value, determined using a
discount rate equal to the incremental borrowing rate (as defined in Statement
of Financial Accounting Standards No. 13) of the Person incurring such
obligations, of rent obligations under leases of electric generating assets or
natural gas pipelines and related facilities.
"Lease Payment Obligations" means, with respect to any Person for any
period, (i) the interest component of all Lease Obligations of such Person that
are described in clause (i) of the definition of "Lease Obligations" and that
are Scheduled to be Paid during such period, plus (ii) the principal portion of
all Lease Obligations of such Person that are described in clause (i) of the
definition of "Lease Obligations" that are Scheduled to be Paid during such
period, plus (iii) all rent payment obligations relating to Lease Obligations of
such Person described in clause (ii) of the definition of "Lease Obligations"
and that are Scheduled to be Paid during such period.
"Lender Affiliate" (a) any Affiliate of any Lender, (b) any Person that
is administered or managed by any Lender and that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business and (c) with respect
to any Lender which is a fund that invests in commercial loans and similar
extensions of credit, any other fund that invests in commercial loans and
similar extensions of credit and is managed or advised by the same investment
advisor as such Lender or by an Affiliate of such Lender or investment advisor.
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"Lenders" has the meaning given such term in the preamble hereto;
provided, that unless the context otherwise requires, each reference herein to
the Lenders shall be deemed to include any Conduit Lender.
"Letter Agreement" means the Letter Agreement, dated as of August 22,
2001, from NEG LLC addressed to the Administrative Agent, for the benefit of the
Lenders.
"Letters of Credit" means the Tranche A Letters of Credit and the
Tranche B Letters of Credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset or
any interest or title of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan Documents" means this Agreement, the Applications for Issuance
and the Notes.
"Loans" means, as to any Lender, the Tranche A Loans and Tranche B
Loans made by such Lender.
"Margin Stock" has the meaning given such term under Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or prospects of
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material Plan" means any Plan or Plans having aggregate Unfunded
Liabilities in excess of $50,000,000.
"Minimum Consolidated Net Worth" means $1.8 billion.
"Minimum Non-Trading Consolidated Net Worth" means $1.4 billion.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
accruing an obligation to make, contributions, or has within any of the
preceding six years made, or accrued an obligation to make, contributions.
"NEG Guarantees" means (i) the Guarantee and Agreement (La Paloma),
dated as of April 6, 2001, made by the Borrower in favor of Citibank, N.A., for
the benefit of the creditors identified therein, (ii) the Guarantee and
Agreement (Lake Road), dated as of April 6, 2001, made by the Borrower in favor
of Citibank, N.A., for the benefit of the creditors identified therein, (iii)
the Guarantee and Agreement (Harquahala), dated as of April 30, 2001, made by
the Borrower in favor of State Street Bank and Trust Company, for the benefit of
the creditors
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identified therein and (iv) the Guarantee and Agreement (Turbine Credit
Agreement), dated as of May 29, 2001, made by the Borrower in favor of Societe
Generale, for the benefit of the lenders identified therein, as each may be
amended, modified or supplemented from time to time.
"NEG Indenture" means the Indenture, dated as of May 22, 2001, between
the Borrower and Wilmington Trust Company, as trustee.
"NEG LLC" means PG&E National Energy Group, LLC, a Delaware limited
liability company.
"Non-Excluded Taxes" has the meaning given such term in Section
3.14(a).
"Non-Trading Consolidated Net Worth" means, as of any date of
determination thereof, the amount which would be reflected as stockholders'
equity upon a consolidated balance sheet of the Borrower (but excluding any
portion thereof attributable to (i) Unrestricted Subsidiaries or (ii) ET
Holdings or any Subsidiary thereof) excluding other comprehensive income arising
from the accounting treatment of hedging and ▇▇▇▇-to-market transactions.
"Non-U.S. Lender" has the meaning given such term in Section 3.14(d).
"Note" means any promissory note evidencing any Loan.
"Obligations" means the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit or any
other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees, charges
and disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant" means as defined in Section 9.6(b).
"Payment Amount" has the meaning given such term in Section 2.4.
"Payment Office" means the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
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"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Encumbrances" means, as to any Person at any date, any of
the following:
(i) Liens for taxes, assessments or governmental charges not
then delinquent, and Liens for taxes, assessments or governmental
charges then delinquent but the validity of which is being contested at
the time by such Person in good faith and for which adequate reserves
have been established in accordance with GAAP, and (ii) Liens incurred
or created in connection with or to secure the performance of bids,
tenders, contracts (other than for the payment of money), leases,
statutory obligations, surety bonds or appeal bonds, and carriers',
warehousemen's, mechanics' or materialmen's Liens, assessments or
similar encumbrances incurred in the ordinary course of business;
(ii) easements, restrictions, exceptions or reservations in
any property and/or rights of way of such Person for the purpose of
roads, pipe lines, substations, transmission lines, transportation
lines, distribution lines, removal of oil, gas, lignite, coal or other
minerals or timber, and other like purposes, or for the joint or common
use of real property, rights of way, facilities and/or equipment, and
defects, irregularities and deficiencies in titles of any property
and/or rights of way, which do not individually or in the aggregate
materially impair the use or value of such property and/or rights of
way for the purposes for which such property and/or rights of way are
held by such Person;
(iii) rights reserved to or vested in any municipality or
public authority to use, control or regulate any property of such
Person;
(iv) any obligations or duties, affecting the property of
such Person, to any municipality or public authority with respect to
any franchise, grant, license or permit;
(v) any judgment Lien against such Person securing a
judgment for an amount not exceeding $50,000,000, so long as the
finality of such judgment is being contested by appropriate proceedings
conducted in good faith and execution thereon is stayed;
(vi) any Lien arising by reason of deposits with or giving of
any form of security to any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, for any purpose at any time as
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or
license, or to enable such Person to maintain self-insurance or to
participate in any fund for liability on any insurance risks or in
connection with workers' compensation, unemployment insurance, old age
pensions or other social security or to share in the privileges or
benefits required for companies participating in such arrangements; or
(vii) any landlords' Lien on fixtures or movable property
located on premises leased by such Person in the ordinary course of
business so long as the rent secured thereby is not in default.
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"Permitted Sale-Leaseback Transactions" means (i) Sale-Leaseback
transactions by any Restricted Subsidiary or Asset Company, entered into on or
prior to the date of this Credit Agreement and identified on Schedule 6.12(j)
and (ii) one or more Sale/Leaseback transactions entered into by any Asset
Company in connection with or as part of a Project Financing Facility entered
into after the date of execution of this Agreement.
"Permitted Subordinated Indebtedness" means all unsecured Indebtedness
of the Borrower that shall have been subordinated to all Indebtedness of the
Borrower under this Agreement and otherwise containing terms and conditions set
forth in Schedule 6.12(h)-1 with respect to Indebtedness of the Borrower to
Affiliates of the Borrower or in Schedule 6.12(h)-2 with respect to Indebtedness
of the Borrower to non-Affiliates of the Borrower.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PG&E" means Pacific Gas & Electric Company, a California corporation.
"PG&E Corp." means PG&E Corporation, a California corporation.
"PG&E Gen" means PG&E Generating Company, LLC, a Delaware limited
liability company, formerly known as U.S. Generating Company, LLC.
"PG&E Gen Credit Agreement" means the $10,000,000 Credit Agreement,
dated as of December 14, 1999, between PG&E Gen and ABN AMRO Bank N.V., as each
may be amended, modified or supplemented from time to time.
"Plan" means any employee pension benefit plan described under Section
3(2) of ERISA (other than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA that is maintained by the Borrower or any ERISA Affiliate or
with respect to which the Borrower or any ERISA Affiliate could have liability
under Section 4069 of ERISA.
"Pricing Grid" means as set forth in Schedule 1.1A.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by the Reference Lender as its prime or base rate in effect at
its principal office in New York City.
"Project Financing Facility" means any loan, note purchase agreement,
indenture, lease, credit agreement, reimbursement agreement, letter of credit or
other facility pursuant to which an Asset Company or Investment Vehicle which
directly or indirectly owns an Asset Company incurs Indebtedness, provided that
any such Indebtedness is recourse only to (a) the assets of such Asset Company
or any Asset Company which is a Subsidiary of such Asset Company, (b) the equity
or ownership interests of such Asset Company or any Investment Vehicle which
owns such Asset Company or (c) any Equity Funding Arrangements provided with
respect to such Asset Company or Investment Vehicle or a Lien on any such Equity
Funding Arrangements.
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"Projections" means the projections dated July 10, 2001 provided to the
Administrative Agent by the Borrower.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"Ratio of Cash Flow to Fixed Charges" means, as of the end of each
fiscal quarter of the Borrower, the ratio of (a) Cash Flow Available for Fixed
Charges of the Borrower for the period of four consecutive fiscal quarters
ending on, or most recently ended prior to, such date to (b) Fixed Charges of
the Borrower for such period, excluding from the calculation of Fixed Charges
all Trading Arrangements and Credit Support Arrangements.
"Ratio of Debt to Capitalization" means, as of any date, the ratio of
the aggregate principal amount of Funded Indebtedness of the Borrower to the
Total Capitalization of the Borrower (excluding from the calculation of Funded
Indebtedness all Trading Arrangements, Credit Support Arrangements and Swaps);
provided that any Equity Funding Arrangements shall only be included in Funded
Indebtedness in an amount equal to the lesser of (x) the maximum amount that
would be payable under such Equity Funding Arrangements (assuming a drawing is
permissible as of the date of determination) and (y) the amount outstanding
under any underlying Indebtedness to which any payment under such Equity Funding
Arrangements would be applied (assuming such Indebtedness were due and payable
as of the date of determination).
"Reference Lender" means The Chase Manhattan Bank.
"Refinanceable Facilities" has the meaning ascribed thereto in Section
6.12(a).
"Register" has the meaning given such term in Section 9.6(d).
"Regulation U" means Regulation U of the Board as in effect from time
to time.
"Reimbursement Date" has the meaning given such term in Section 2.4.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Bank pursuant to Section 2.5 for amounts drawn under
Letters of Credit issued by the Issuing Bank.
"Repurchase Agreement" means any written agreement:
(i) that provides for (i) the transfer of one or more United
States or Canadian Governmental Securities or any security issued
by a U.S. agency or instrumentality in an aggregate principal
amount at least equal to the amount of the Transfer Price
(defined below) to the Borrower or any Restricted Subsidiary from
a financial institution that is (1) a member of the Federal
Reserve System having a minimum of US$20 billion in assets, and
(2) has commercial paper rated at least A-1 by S&P, at least F1
by Fitch or at least P-1 by Moody's, against a transfer of funds
(the "Transfer Price") by the Borrower or such Restricted
Subsidiary to such financial institution and (ii) a simultaneous
agreement by the Borrower or such Restricted Subsidiary, in
connection with such transfer of funds, to transfer to such
financial institution the same or substantially similar United
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States or Canadian Governmental Securities or any security issued
by a U.S. agency or instrumentality for a price not less than the
Transfer Price plus a reasonable return thereon at a date certain
not later than 180 days after such transfer of funds,
(ii) in respect of which the Borrower or such Restricted
Subsidiary shall have the right, whether by contract or pursuant
to applicable law, to liquidate such agreement upon the
occurrence of any default thereunder, and
(iii) in connection with which the Borrower or such
Restricted Subsidiary, or an agent thereof, shall have taken all
action required by applicable law or regulations to perfect a
Lien in such United States or Canadian Governmental Securities or
any security issued by a U.S. agency or instrumentality.
"Required Lenders" means at any time, (i) with respect to Tranche A
Loans or Tranche A Letters of Credit, Tranche A Lenders whose Tranche A
Aggregate Exposure Percentages are, in the aggregate, greater than 50%, (ii)
with respect to Tranche B Loans or Tranche B Letters of Credit, Tranche B
Lenders whose Tranche B Aggregate Exposure Percentages are, in the aggregate,
greater than 50% and (iii) in all other cases, Lenders whose Aggregate Exposure
Percentages are, in the aggregate, greater than 50%.
"Requirement of Law" means as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" of the Borrower, shall mean any president or
senior vice president of the Borrower.
"Restricted Subsidiary" means any Subsidiary of the Borrower that is
not (x) an Asset Company, (y) an Investment Vehicle or (z) an Unrestricted
Subsidiary.
"S&P" means Standard & Poor's Ratings Service, a division of McGraw
Hill Companies, Inc.
"Sale/Leaseback" means any lease whereby any Person becomes or remains
liable as lessee or as Borrower or other surety of any property, whether now
owned or hereafter acquired, that such Person has sold or transferred or is to
sell or transfer to any other Person (other than any Subsidiary of such Person),
as part of a financing transaction to which such Person is a party, in
contemplation of leasing such property to such Person.
"Scheduled to be Paid" means, with respect to any liability or expense
for any period, the amount of such liability or expense scheduled to be paid
during such period or the amount of such liability or expense that would have
been scheduled to be paid during such period had the payment schedule with
respect to such liability or expense been divided equally into successive
periods having a duration equal to the duration of such period.
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"SEC" means the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Subsidiary" means, with respect to any Person (the "Parent"), any
corporation or other entity of which sufficient securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other Persons performing similar functions are at the time directly
or indirectly owned by such Parent.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. The amount of the obligation under any Swap shall be
the amount determined in respect thereof as of the end of the then most recently
ended fiscal quarter of such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such determination,
if any agreement relating to such Swap provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount so determined.
"Syndication Agents" has the meaning given such term in the preamble
hereto.
"Termination Date" means either the Tranche A Termination Date or the
Tranche B Termination Date, whichever is applicable.
"Total Capitalization" means, with respect to the Borrower, the sum,
without duplication, of (i) total common stock equity or analogous ownership
interests of the Borrower, (ii) preferred stock and preferred securities of the
Borrower, (iii) additional paid in capital or analogous interests of the
Borrower, (iv) retained earnings of the Borrower, excluding other comprehensive
income arising from accounting treatment of hedging and ▇▇▇▇-to-market
transactions and (v) the aggregate principal amount of Funded Indebtedness of
the Borrower.
"Total Commitments" means at any time, the aggregate amount of Tranche
A Commitments and Tranche B Commitments of all Lenders then in effect. The
original amount of Total Commitments is One Billion and Two Hundred Fifty
Million Dollars ($1,250,000,000).
"Total Extensions of Credit" means at any time, the aggregate amount of
Extensions of Credit of all Lenders outstanding at such time.
"Trading Arrangement" means any transaction entered into by PG&E Energy
Trading - Power, L.P., a Delaware limited partnership, PG&E Energy Trading Gas
Corporation, a California corporation, or PG&E Energy Trading, Canada
Corporation, an Alberta corporation, any other Restricted Subsidiary, Asset
Company or Investment Vehicle, whether pursuant to master trading agreements or
otherwise, for (1) the purchase and sale of energy, capacity, ancillary services
and other energy or energy-related products, including transmission rights,
environmental allowances and offsets and storage; (2) the purchase and sale of
natural gas, coal, oil and other fuel, including transportation and storage
rights; (3) the purchase and sale of fuel conversion services, including tolling
arrangements; (4) the purchase and sale of any energy or energy-related
derivatives, including weather derivatives; (5) hedging arrangements with
respect
18
to any of the foregoing and interest rate, foreign currency or credit exposure;
or (6) any similar arrangements entered into in the ordinary course of business
as conducted by such Persons or by other Persons in the energy trading, energy
services, power generating, electric transmission or gas transmission and
storage businesses (including technologies related to such businesses).
"Tranche A Aggregate Exposure" means with respect to any Lender at any
time, an amount equal to the amount of such Lender's Tranche A Commitment at
such time or, if the Tranche A Commitments have been terminated, the amount of
such Lender's Tranche A Loans then outstanding.
"Tranche A Aggregate Exposure Percentage" means with respect to any
Lender at any time, the ratio (expressed as a percentage) of such Lender's
Tranche A Aggregate Exposure at such time to the sum of the Tranche A Aggregate
Exposures of all Lenders at such time.
"Tranche A Commitment" means as to any Lender, the obligation of such
Lender to make Tranche A Loans and participate in Tranche A Letters of Credit
pursuant to the terms hereof, in an aggregate principal and/or stated amount not
to exceed the amount set forth under the heading "Tranche A Commitment" opposite
such Lender's name (i) on Schedule 1.1 or (ii) in the Assignment and Acceptance
pursuant to which such Lender became a party hereto, as applicable, as the same
may be changed from time to time pursuant to the terms hereof.
"Tranche A Commitment Period" means the period from and including the
Closing Date to the Tranche A Termination Date.
"Tranche A Extensions of Credit" means as to any Tranche A Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Tranche A Loans made by such Lender then outstanding and (b) such Tranche A
Lender's Aggregate Exposure Percentage of the Tranche A L/C Obligations then
outstanding.
"Tranche A L/C Obligations" means at any time, an amount equal to the
sum of (a) the aggregate of the stated amounts of the then outstanding Tranche A
Letters of Credit and (b) the aggregate amount of drawings under Tranche A
Letters of Credit that have not been reimbursed pursuant to Section 2.4(a)(i).
"Tranche A L/C Participants" means all the Tranche A Lenders other than
the Issuing Bank.
"Tranche A Lender" means each Lender that has a Tranche A Commitment or
that holds a Tranche A Loan.
"Tranche A Letters of Credit" has the meaning given to such term in
Section 2.1(a).
"Tranche A Loans" has the meaning given to such term in Section
3.1(a)(i).
"Tranche A Termination Date" means the date which is two years from the
Closing Date, subject to extension in accordance with Section 3.19.
19
"Tranche B Aggregate Exposure" means with respect to any Lender at any
time, an amount equal to the amount of such Lender's Tranche B Commitment at
such time or, if the Tranche B Commitments have been terminated, the amount of
such Lender's Tranche B Loans then outstanding.
"Tranche B Aggregate Exposure Percentage" means with respect to any
Lender at any time, the ratio (expressed as a percentage) of such Lender's
Tranche B Aggregate Exposure at such time to the sum of the Tranche B Aggregate
Exposures of all Lenders at such time.
"Tranche B Commitment" means as to any Lender, the obligation of such
Lender to make Tranche B Loans and participate in Tranche B Letters of Credit
pursuant to the terms hereof, in an aggregate principal and/or stated amount not
to exceed the amount set forth under the heading "Tranche B Commitment" opposite
such Lender's name (i) on Schedule 1.1 or (ii) in the Assignment and Acceptance
pursuant to which such Lender became a party hereto, as applicable, as the same
may be changed from time to time pursuant to the terms hereof.
"Tranche B Commitment Period" means the period from and including the
Closing Date to the Tranche B Termination Date.
"Tranche B Extensions of Credit" means as to any Tranche B Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Tranche B Loans made by such Lender then outstanding and (b) such Tranche B
Lender's Aggregate Exposure Percentage of the Tranche ▇ ▇/C Obligations then
outstanding.
"Tranche ▇ ▇/C Limit" means $150 million.
"Tranche ▇ ▇/C Obligations" means at any time, an amount equal to the
sum of (a) the aggregate of the stated amounts of the then outstanding Tranche B
Letters of Credit and (b) the aggregate amount of drawings under Tranche B
Letters of Credit that have not been reimbursed pursuant to Section 2.4(a)(ii).
"Tranche ▇ ▇/C Participants" means all the Tranche B Lenders other than
the Issuing Bank.
"Tranche B Lender" means each Lender that has a Tranche B Commitment or
that holds a Tranche B Loan.
"Tranche B Letters of Credit" has the meaning given to such term in
Section 2.1(b).
"Tranche B Loans" has the meaning given to such term in Section
3.1(b)(i).
"Tranche B Termination Date" means the date which is 364 days from the
Closing Date, subject to extension in accordance with Section 3.19.
"Transferee" has the meaning given such term in Section 9.15.
"Type" means as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
20
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), 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 the Borrower or any ERISA Affiliate
to the PBGC or any other Person under Title IV of ERISA.
"United States" or "U.S." or "US" means the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower
designated as such on the Closing Date, or, after the Closing Date, designated
as such at the time of formation thereof or, if acquired by the Borrower, at the
time of acquisition thereof, but, in any such case, only if at such time (i) no
Event of Default, Incipient Event of Default or Downgrade Event has occurred and
is continuing or would occur as a result thereof and (ii) such Subsidiary or any
of its Subsidiaries does not own any capital stock or Indebtedness of or have
any Investment in, or own or hold any Lien on any property of, any other
Subsidiary of the Borrower which is not a Subsidiary of the Subsidiary to be so
designated or otherwise an Unrestricted Subsidiary.
"USGenNE" means USGen New England, Inc., a Delaware corporation and an
indirect, wholly-owned Subsidiary of the Borrower.
"USGenNE Credit Agreement" means the $575,000,000 Credit Agreement,
dated as of September 1, 1998, among USGenNE, the lenders party thereto, The
Chase Manhattan Bank, as competitive advance facility agent and as
administrative agent for the lenders thereunder, and The Chase Manhattan Bank,
as the issuer of letters of credit thereunder, as the same may be amended,
modified or supplemented from time to time.
Other Definitional Provisions.
-----------------------------
The following rules of usage shall apply unless otherwise required by
the context or unless otherwise specified herein:
(b) Definitions set forth herein shall be equally applicable to the
singular and plural forms of the terms defined.
(c) References in this Agreement to articles, sections, paragraphs,
clauses, annexes, appendices, schedules or exhibits are references to articles,
sections, paragraphs, clauses, annexes, appendices, schedules or exhibits in
such document.
(d) The headings, subheadings and table of contents used herein are
solely for convenience of reference and shall not constitute a part hereof nor
shall they affect the meaning, construction or effect of any provision hereof.
(e) References to any Person shall include such Person, its successors
and permitted assigns and transferees.
21
(f) Reference to any agreement means such agreement as amended,
supplemented or otherwise modified from time to time in accordance with the
applicable provisions thereof.
(g) References to any law includes any amendment or modification to such
law and any rules or regulations issued thereunder or any law enacted in
substitution or replacement thereof.
(h) The words "hereof," "herein", "hereto" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
(i) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific matters, to matters
similar to those specifically mentioned.
(j) Each of the parties to this Agreement and their counsel have reviewed
and revised, or requested revisions to this Agreement, and the usual rule of
construction that any ambiguities are to be resolved against the drafting party
shall be inapplicable in the construing and interpretation of this Agreement and
any amendments hereto and the other Loan Documents.
(k) Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that for purposes of determining compliance
with any covenant set forth herein, such terms shall be construed in accordance
with GAAP as in effect on the date hereof applied on a basis consistent with the
application used in preparing the Borrower's audited financial statements.
ARTICLE II
LETTERS OF CREDIT
SECTION 2.1 L/C Commitment.
--------------
(a) Prior to the Closing Date, the Issuing Bank has issued the Existing
Letters of Credit which, from and after the Closing Date, shall constitute
Tranche A Letters of Credit hereunder. Subject to the terms and conditions
hereof, the Issuing Bank, in reliance on the agreements of the Tranche A L/C
Participants set forth in Section 2.4(a)(i), agrees to issue, from time to time,
letters of credit (each letter of credit issued on and after the Closing Date
pursuant to this Section 2.1(a) and each Existing Letter of Credit, a "Tranche A
Letter of Credit", and collectively, the "Tranche A Letters of Credit") for the
account of the Borrower on any Business Day during the Tranche A Commitment
Period pursuant to the procedures set forth in Section 2.2; provided, that the
Issuing Bank shall not issue any Tranche A Letter of Credit if, after giving
effect to such issuance, the aggregate Tranche A Extensions of Credit of all
Tranche A Lenders would exceed the aggregate Tranche A Commitments of all
Tranche A Lenders. Each Tranche A Letter of Credit shall (i) be denominated in
Dollars, (ii) be in a minimum stated
22
amount of $500,000 and (iii) expire no later than five Business Days prior to
the Tranche A Termination Date.
(b) Subject to the terms and conditions hereof, the Issuing Bank, in
reliance on the agreements of the Tranche ▇ ▇/C Participants set forth in
Section 2.4(a)(ii), agrees to issue, from time to time, letters of credit (each
a "Tranche B Letter of Credit" and collectively, the "Tranche B Letters of
Credit") for the account of the Borrower on any Business Day during the Tranche
B Commitment Period pursuant to the procedures set forth in Section 2.2;
provided, that the Issuing Bank shall not issue any Tranche B Letter of Credit
if, after giving effect to such issuance, (i) the aggregate Tranche B Extensions
of Credit of all Tranche B Lenders would exceed the aggregate Tranche B
Commitments of all Tranche B Lenders or (ii) the aggregate of the stated amounts
of all outstanding Tranche B Letters of Credit would exceed the Tranche ▇ ▇/C
Limit. Each Tranche B Letter of Credit shall (i) be denominated in Dollars, (ii)
be in a minimum stated amount of $500,000 and (iii) expire no later than five
Business Days prior to the Tranche B Termination Date.
(c) The Issuing Bank shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
SECTION 2.2 Procedure for Issuance of Letter of Credit.
------------------------------------------
(a) Subject to the terms and conditions hereof, each Letter of Credit
shall be issued (or the stated maturity thereof extended or terms thereof
modified or amended) on not less than two Business Days' prior notice thereof
waivable by the Administrative Agent by delivery to the address set forth in
Section 9.2 of an Application for Issuance to the Administrative Agent (which
shall promptly distribute copies thereof to the Tranche A Lenders or Tranche B
Lenders, whichever is applicable) and the Issuing Bank. Each Application for
Issuance shall specify (i) the date (which shall be a Business Day) of issuance
of such Letter of Credit (or the date of effectiveness of such extension,
modification or amendment) and the stated expiry date thereof, (ii) the proposed
stated amount of such Letter of Credit, (iii) the name and address of the
beneficiary of such Letter of Credit and (iv) a statement of drawing conditions
applicable to such Letter of Credit, and if such Application for Issuance
relates to an amendment or modification of a Letter of Credit, it shall be
accompanied by the consent of the beneficiary of the Letter of Credit thereto.
Each Application for Issuance shall be irrevocable unless modified or rescinded
by the Borrower not less than one day prior to the proposed date of issuance (or
effectiveness) specified therein. Not later than 12:00 noon (New York City time)
on the proposed date of issuance (or effectiveness) specified in such
Application for Issuance, and upon fulfillment of the applicable conditions
precedent and the other requirements set forth herein, the Issuing Bank shall
issue (or extend, amend or modify) such Letter of Credit and provide notice and
a copy thereof to the Borrower and the Administrative Agent, which shall
promptly furnish copies thereof to the Tranche A Lenders or Tranche B Lenders,
whichever is applicable.
SECTION 2.3 Fees and Other Charges.
----------------------
(a) (i) The Borrower will pay to the Administrative Agent, for the
account of the Tranche A Lenders, a fee on the stated amount of each outstanding
Tranche A Letter of Credit at
23
a per annum rate equal to the Applicable Margin in effect from time to time
with respect to Eurodollar Loans, shared ratably among the Tranche A Lenders in
accordance with their respective Tranche A Aggregate Exposure Percentages and
payable in arrears on each L/C Fee Payment Date after the issuance date of such
Tranche A Letter of Credit.
(ii) The Borrower will pay to the Administrative Agent, for the
account of the Tranche B Lenders, a fee on the stated amount of each
outstanding Tranche B Letter of Credit at a per annum rate equal to the
Applicable Margin in effect from time to time with respect to Eurodollar
Loans, shared ratably among the Tranche B Lenders in accordance with their
respective Tranche B Aggregate Exposure Percentages and payable in arrears
on each L/C Fee Payment Date after the issuance date of such Tranche B
Letter of Credit.
(b) The Borrower shall pay to the Issuing Bank, for its own account, a
fronting fee at the rate of 0.10% per annum on the undrawn and unexpired amount
of each Letter of Credit issued by it, payable in arrears on each L/C Fee
Payment Date after the issuance date. In addition, the Borrower shall pay or
reimburse the Issuing Bank on demand for such normal and customary fees and
costs as are incurred or charged by the Issuing Bank in issuing, negotiating,
effecting payment under, amending, cancelling or otherwise administering any
Letter of Credit. A schedule of such normal and customary fees and costs is
attached as Schedule 2.3(b).
SECTION 2.4 L/C Participations.
------------------
(a) (i) The Issuing Bank irrevocably agrees to grant and hereby grants to
each Tranche A L/C Participant, and, to induce the Issuing Bank to issue Tranche
A Letters of Credit, each Tranche A L/C Participant irrevocably agrees to accept
and purchase and hereby accepts and purchases from the Issuing Bank, on the
terms and conditions set forth below, for such Tranche A L/C Participant's own
account and risk an undivided interest equal to such Tranche A L/C Participant's
Tranche A Aggregate Exposure Percentage in the Issuing Bank's obligations and
rights under and in respect of each Tranche A Letter of Credit and the amount of
each draft paid by the Issuing Bank thereunder. Each Tranche A L/C Participant
unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is
paid under any Tranche A Letter of Credit for which the Issuing Bank is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such Tranche A L/C Participant shall pay to the Issuing Bank upon
demand at the Issuing Bank's address for notices specified herein an amount
equal to such Tranche A L/C Participant's Tranche A Aggregate Exposure
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(ii) The Issuing Bank irrevocably agrees to grant and hereby grants to
each Tranche ▇ ▇/C Participant, and, to induce the Issuing Bank to issue
Tranche B Letters of Credit, each Tranche ▇ ▇/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the
Issuing Bank, on the terms and conditions set forth below, for such Tranche
▇ ▇/C Participant's own account and risk an undivided interest equal to
such Tranche ▇ ▇/C Participant's Tranche B Aggregate Exposure Percentage in
the Issuing Bank's obligations and rights under and in respect of each
Tranche B Letter of Credit and the amount of each draft paid by the Issuing
Bank thereunder. Each Tranche ▇ ▇/C Participant unconditionally and
irrevocably agrees with
24
the Issuing Bank that, if a draft is paid under any Tranche B Letter of
Credit for which the Issuing Bank is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such Tranche ▇ ▇/C
Participant shall pay to the Issuing Bank upon demand at the Issuing Bank's
address for notices specified herein an amount equal to such Tranche ▇ ▇/C
Participant's Tranche B Aggregate Exposure Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Bank pursuant to Section 2.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Bank under any Letter of Credit is paid to
the Issuing Bank within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Bank on demand an amount equal to
the product of (i) such amount, (ii) the daily average Federal Funds Effective
Rate during the period from and including the date such payment is required to
the date on which such payment is immediately available to the Issuing Bank, and
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required to
be paid by any L/C Participant pursuant to Section 2.4(a) is not made available
to the Issuing Bank by such L/C Participant within three Business Days after the
date such payment is due, the Issuing Bank shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Base Rate Loans. A
certificate of the Issuing Bank submitted to any L/C Participant with respect to
any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment under
any Letter of Credit and has received from any L/C Participant its pro rata
share of such payment in accordance with Section 2.4(a), the Issuing Bank
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise), or any payment of interest on account thereof, the
Issuing Bank will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Issuing Bank shall be required to be returned by the Issuing Bank, such L/C
Participant shall return to the Issuing Bank the portion thereof previously
distributed by the Issuing Bank to it.
SECTION 2.5 Reimbursement Obligation of the Borrower. The Borrower agrees
----------------------------------------
to reimburse the Issuing Bank on the second Business Day next succeeding the
Business Day on which the Issuing Bank notifies the Borrower of the date and
amount of a draft presented under any Letter of Credit and paid by the Issuing
Bank in the amount of (a) such draft so paid and (b) any taxes, fees, charges or
other costs or expenses incurred by the Issuing Bank in connection with such
payment. Each such payment shall be made to the Administrative Agent for
disbursement to the Issuing Bank in Dollars and in immediately available funds.
Interest shall be payable on any such amounts from the date on which the
relevant draft is paid by the Issuing Bank until payment in full by the Borrower
at the rate set forth in (i) until the second Business Day next succeeding the
date of the relevant notice, Section 3.9(b) and (ii) thereafter, Section 3.9(c).
25
SECTION 2.6 Obligations Absolute. The Borrower's obligations under this
--------------------
Section 2 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Bank, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Bank that the Issuing Bank shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 2.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Bank
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and non-appealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Bank. The Borrower agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Bank to the Borrower.
SECTION 2.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Bank shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing Bank
to the Borrower in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation expressly provided
for in such Letter of Credit, be limited to determining that the documents
(including each draft) delivered under such Letter of Credit in connection with
such presentment appear on their face to be in conformity with such Letter of
Credit.
SECTION 2.8 Applications for Issuance. To the extent that any provision of
-------------------------
any Application for Issuance is inconsistent with the provisions of this Section
2, the provisions of this Section 2 shall apply.
ARTICLE III
LOANS
SECTION 3.1 Loans.
-----
(a) (i) Subject to the terms and conditions of this Agreement, each Tranche
A Lender severally agrees to make revolving credit loans (the "Tranche A Loans")
to the Borrower from time to time during the Tranche A Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to such
Tranche A Lender's Tranche A Aggregate Exposure Percentage of the Tranche A L/C
Obligations then outstanding does not exceed the amount of such Tranche A
Lender's Tranche A Commitment. During the Tranche A Commitment Period, the
Borrower may use the Tranche A Commitments by borrowing,
26
prepaying the Tranche A Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(ii) The Borrower shall pay all outstanding Tranche A Loans on the
Tranche A Termination Date.
(b) (i) Subject to the terms and conditions of this Agreement, each
Tranche B Lender severally agrees to make revolving credit loans (the "Tranche B
Loans") to the Borrower from time to time during the Tranche B Commitment Period
in an aggregate principal amount at any one time outstanding which, when added
to such Tranche B Lender's Tranche B Aggregate Exposure Percentage of the
Tranche ▇ ▇/C Obligations then outstanding does not exceed the amount of such
Lender's Tranche B Commitment. During the Tranche B Commitment Period, the
Borrower may use the Tranche B Commitments by borrowing, prepaying the Tranche B
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(ii) The Borrower shall pay all outstanding Tranche B Loans on the
Tranche B Termination Date.
(c) The Loans may from time to time be Eurodollar Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with this Section, Section 3.2 and Section 3.7.
SECTION 3.2 Procedure for Loan Borrowing. The Borrower may borrow under the
----------------------------
Commitments during the Tranche A Commitment Period or Tranche B Commitment
Period, whichever is applicable, on any Business Day, provided that the Borrower
shall give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City time,
(a) three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date,
in the case of Base Rate Loans), specifying (i) the amount and Type of Loans to
be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective lengths of the initial Interest Period
therefore (each, a "Notice of Borrowing"). Any Loans made on the Closing Date
shall initially be Base Rate Loans. Each borrowing under the Commitments shall
be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a
whole multiple thereof (or, if the then aggregate Available Commitments are less
than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Tranche A Lender and/or Tranche B Lender (as applicable) thereof.
Each Tranche A Lender and/or Tranche B Lender, as applicable, will make the
amount of its pro rata share of each borrowing available to the Administrative
Agent for the account of the Borrower at the Funding Office prior to 12:00 Noon,
New York City time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. The proceeds of each such
Loan shall be disbursed by the Administrative Agent in accordance with
instructions provided by the Borrower in each Notice of Borrowing, which, if so
specified in the applicable Notice of Borrowing, may be used to repay (1) with
respect to Tranche A Loans, the Borrower's Reimbursement Obligations in respect
of a drawing
27
under a Tranche A Letter of Credit and (2) with respect to Tranche B Loans, the
Borrower's Reimbursement Obligations in respect of a drawing under a Tranche B
Letter of Credit.
SECTION 3.3 Evidence of Debt.
-----------------
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) The Administrative Agent, on behalf of the Borrower, shall maintain the
Register pursuant to Section 9.6(d), and a subaccount therein for each Lender,
in which shall be recorded (i) the amount of each Loan made hereunder and any
Note evidencing such Loan, the Type of such Loan and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 3.3(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(d) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of the Borrower evidencing any Loans of such Lender, with
appropriate insertions as to date and principal amount.
SECTION 3.4 Facility Fees, etc.
------------------
(a) The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a facility fee for the period from and including the Closing Date
to the last day of the Tranche A Commitment Period or Tranche B Commitment
Period, whichever is applicable, computed at the Facility Fee Rate on such
Lender's Commitment during the period for which payment is made, payable
quarterly in arrears on the last day of each March, June, September and December
and on the Tranche A Termination Date or Tranche B Termination Date, whichever
is applicable, commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to each Agent the fees in the amounts and on
the dates previously agreed to in writing by the Borrower and such Agent.
SECTION 3.5 Termination or Reduction of Commitments. (a) The Borrower shall
---------------------------------------
have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Tranche A Commitments or, from time to
time, to reduce the aggregate amount of the Tranche A Commitments; provided,
that no such termination or reduction of Tranche A
28
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Tranche A Loans made on the effective date thereof, the
aggregate Tranche A Extensions of Credit of all Tranche A Lenders would exceed
the aggregate Tranche A Commitments of all Tranche A Lenders. Any such reduction
shall be in an amount equal to $10,000,000, or a whole multiple thereof, and
shall reduce permanently the Tranche A Commitments then in effect.
(b) The Borrower shall have the right, upon not less than three Business
Days' notice to the Administrative Agent, to terminate the Tranche B Commitments
or, from time to time, to reduce the aggregate amount of the Tranche B
Commitments; provided, that no such termination or reduction of Tranche B
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Tranche B Loans made on the effective date thereof, the
aggregate Tranche B Extensions of Credit of all Tranche B Lenders would exceed
the aggregate Tranche B Commitments of all Tranche B Lenders. Any such reduction
shall be in an amount equal to $10,000,000, or a whole multiple thereof, and
shall reduce permanently the Tranche B Commitments then in effect.
SECTION 3.6 Optional Prepayments; Mandatory Prepayments. The Borrower may
-------------------------------------------
at any time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon irrevocable notice delivered to the Administrative
Agent at least three Business Days prior thereto in the case of Eurodollar Loans
and at least one Business Day prior thereto in the case of Base Rate Loans,
which notice shall specify the date and amount of such prepayment, and whether
such prepayment is of Eurodollar Loans or Base Rate Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 3.15. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount
prepaid. The principal amount of any prepayment received by the Administrative
Agent shall be delivered to the relevant Lenders ratably in accordance with
their Tranche A Aggregate Exposure Percentages or Tranche B Aggregate Exposure
Percentages, whichever is applicable. Partial prepayments of Loans shall be in a
minimum aggregate principal amount of the lesser of (i) $5,000,000 or (ii) the
outstanding principal amount of the Loans being prepaid.
SECTION 3.7 Conversion and Continuation Options.
-----------------------------------
(a) The Borrower may elect from time to time to convert Eurodollar Loans to
Base Rate Loans by giving the Administrative Agent at least two Business Days'
prior irrevocable notice of such election, provided that any such conversion of
Eurodollar Loans may be made only on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert Base Rate
Loans to Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), provided that no
Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event of
Default has occurred and is continuing and the Administrative Agent has, or the
Required Lenders have, determined in its or their sole discretion not to permit
such conversions or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Loan. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
29
(b) The Borrower may elect to continue any Eurodollar Loan as such upon the
expiration of the then current Interest Period with respect thereto by giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has, or the Required
Lenders have, determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Loan, and provided, further, that
if the Borrower shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the
preceding proviso, such Loans shall be converted automatically to Base Rate
Loans on the last day of such then expiring Interest Period. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
SECTION 3.8 Limitations on Eurodollar Tranches. Notwithstanding anything to
----------------------------------
the contrary in this Agreement, all borrowings, conversions, continuations and
optional prepayments of Eurodollar Loans and all selections of Interest Periods
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
SECTION 3.9 Interest Rates and Payment Dates.
---------------------------------
(a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such day plus the Applicable Margin for Eurodollar Loans in
effect for such day.
(b) Each Base Rate Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin for Base Rate Loans.
(c) (i) If all or a portion of the principal amount of any Reimbursement
Obligation or Loan shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), all outstanding Loans (whether or not overdue)
(to the extent legally permitted) shall bear interest at a rate per annum that
is equal to in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the provisions of Section 2 or Section 3, as
applicable, plus 2%, and (ii) if all or a portion of any interest payable on any
Loan or any facility fee or other amount or fee payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.
30
SECTION 3.10 Computation of Interest and Fees.
--------------------------------
(a) Interest, fees and commissions payable pursuant hereto shall be
calculated on the basis of a 360-day year for the actual days elapsed, except
that, with respect to Base Rate Loans on which interest is calculated on the
basis of the Prime Rate, the interest thereon shall be calculated on the basis
of a 365- (or 366-, as the case may be) day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 3.9(a).
SECTION 3.11 Inability to Determine Interest Rate. If prior to the first
------------------------------------
day of any Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the relevant Lenders
as soon as practicable thereafter. If such notice is given (x) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (y) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
continued as such, nor shall the Borrower have the right to convert Loans to
Eurodollar Loans.
SECTION 3.12 Pro Rata Treatment and Payments.
-------------------------------
(a) Each borrowing by the Borrower from the Lenders hereunder, each payment
by the Borrower on account of any facility fee, and any reduction of the
Commitments of the Lenders, shall be made pro rata according to the respective
Aggregate Exposure Percentages of the Lenders. Each payment in respect of
principal or interest in respect of the Loans shall be
31
applied to the amounts of such obligations owing to the Lenders pro rata
according to the respective Aggregate Exposure Percentages of the Lenders.
(b) Each payment to the Administrative Agent of amounts owing to the
Issuing Bank pursuant to Section 2.3 shall be promptly transferred by the
Administrative Agent to the Issuing Bank.
(c) Each payment (including each prepayment) by the Borrower on account of
principal of the Loans shall be accompanied by accrued interest to the date of
such payment on the amount paid.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders or the Issuing Bank, as the case may be, at the Payment
Office, in Dollars and in immediately available funds. Any payment made by the
Borrower after 12:00 Noon, New York City time, on any Business Day shall be
deemed to have been on the next following Business Day. The Administrative Agent
shall distribute such payments to the Lenders or the Issuing Bank, as the case
may be, promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its share of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this paragraph shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate
Loans, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in writing by
the Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the
32
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days after such due date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
SECTION 3.13 Requirements of Law.
-------------------
(a) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by the Issuing Bank or any
Lender (the term "Lender" as used below in this Section to include the Issuing
Bank) with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application for Issuance or
any Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered by Section
3.14 and changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender that
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the
33
rate of return on such Lender's or such corporation's capital as a consequence
of its obligations hereunder or under or in respect of any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such corporation for such
reduction.
(c) A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
SECTION 3.14 Taxes.
-----
(a) All payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on the Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from such Administrative Agent's or such Lender's having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or any Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph (a).
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the
34
account of the Administrative Agent or the relevant Lender, as the case may be,
a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or
Other Taxes when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit D and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 3.15 Indemnity. The Borrower agrees to indemnify each Lender
---------
for, and to hold each Lender harmless from, any loss or expense that such Lender
may sustain or
35
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment or conversion of Eurodollar Loans on a day that is not the last day
of an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
SECTION 3.16 Illegality. Notwithstanding any other provision herein, if
----------
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 3.15.
SECTION 3.17 Change of Lending Office. Each of the Issuing Bank and the
------------------------
Lenders (the term "Lender" as used below in this Section to include the Issuing
Bank) agrees that, upon the occurrence of any event giving rise to the operation
of Section 3.13, 3.14(a) or 3.16 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letters of Credit affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section
3.13, 3.14(a) or 3.16.
36
SECTION 3.18 Replacement of Lenders. The Borrower shall be permitted to
----------------------
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 3.13 or 3.14(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) except in the
case of a replacement as a result of a default described in clause (b) above, no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have taken
no action under Section 3.17 so as to eliminate the continued need for payment
of amounts owing pursuant to Section 3.13 or 3.14(a), (iv) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (v) the
replacement financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vi) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
9.6 (provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such replacement
shall be consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section 3.13 or 3.14(a), as the case may be, and (ix) any
such replacement shall not be deemed to be a waiver of any rights that the
Borrower, the Administrative Agent or any other Lender shall have against the
replaced Lender.
SECTION 3.19 Extension of Termination Dates
------------------------------
(a) So long as no Default or Event of Default shall have occurred and
is continuing, any Termination Date, and concomitantly the Commitments of the
relevant Lenders, may be extended for successive 364-day periods expiring on the
date which is 364 days from the then scheduled Termination Date. In order to
request such extension, the Borrower will deliver to the Administrative Agent
not more than sixty (60) days nor less than forty-five (45) days prior to the
then scheduled Termination Date a written request that such Termination Date be
extended for 364 days from the then scheduled Termination Date. The
Administrative Agent shall then promptly notify each relevant Lender of such
request, and each relevant Lender shall notify the Administrative Agent in
writing no later than ten Business Days after receipt by such Lenders of the
relevant request for an extension from the Borrower, pursuant to this Section
3.19, whether such Lender, in the exercise of its sole discretion, will extend
the Termination Date for such 364-day period. Any relevant Lender which shall
not timely notify the Administrative Agent whether it will extend such
Termination Date shall be deemed not to have agreed to the extension. No Lender
shall have any obligation whatsoever to agree to extend any Termination Date.
Any agreement to extend any Termination Date by any Lender shall be irrevocable,
except to the extent revocable by the Borrower as provided in Section
3.19(c)(C)(iii).
(b) If all the relevant Lenders notify the Administrative Agent
pursuant to the foregoing provisions of this Section 3.19 of their agreement to
extend the relevant Termination Date (such Lenders agreeing to extend such
Termination Date, the "Accepting Lenders"), then the Administrative Agent shall
so notify each relevant Lender and the Borrower, and such extension shall become
effective without further action by any party hereto.
(c) If Lenders constituting at least the Required Lenders approve the
extension of the relevant Termination Date and if one or more of the relevant
Lenders shall notify, or be deemed to have notified, the Administrative Agent
that they will not extend the then scheduled
37
Termination Date (such Lenders, the "Declining Lenders"), then (A) the
Administrative Agent shall promptly so notify the Borrower and the Accepting
Lenders, (B) the Accepting Lenders shall, upon the Borrower's election to extend
the then scheduled Termination Date in accordance with clause (C)(i) or (C)(ii)
below, extend the then scheduled Termination Date and (C) the Borrower shall,
pursuant to a notice delivered to the Administrative Agent, the Accepting
Lenders and the Declining Lenders, no later than the tenth day following the
date by which each Lender is required, pursuant to this Section 3.19, to approve
or disapprove the requested extension, either:
(i) elect to extend such Termination Date with respect to the
Accepting Lenders and direct the Declining Lenders to terminate their
Commitments, which termination shall become effective on the date which would
have been the Termination Date except for the operation of this Section 3.19. On
such date, (x) the Borrower shall deliver a notice of the effectiveness of such
termination to the Declining Lenders with a copy to the Administrative Agent,
(y) the Borrower shall pay in full in immediately available funds all
Obligations owing to the Declining Lenders and (z) upon the occurrence of the
events set forth in clauses (x) and (y), the Declining Lenders shall each cease
to be a Lender hereunder for all purposes and the Declining Lenders shall no
longer have any obligations hereunder; provided, however, such Person shall be
obligated to make or entitled to receive payments pursuant to Sections 3.13,
3.15, 8.7 and 9.5 (but only to the extent the event giving rise to such payment
occurred prior to the time at which the events set forth in clauses (x) and (y)
shall have occurred) as if it were a Lender, and the Administrative Agent shall
promptly notify the Accepting Lenders and the Borrower of any new Commitments
and any new Termination Date; or
(ii) elect to extend such Termination Date with respect to the
Accepting Lenders and, prior to or no later than the then scheduled Termination
Date, (a) the Borrower shall replace the Declining Lenders with one or more
lenders reasonably acceptable to the Administrative Agent (such lenders, the
"Replacement Lenders") or with any one or more of the Accepting Lenders, if any,
which have agreed with the Borrower to increase their respective Commitments
(the "Increasing Accepting Lenders") or to the extent the Borrower is not able
to replace all Commitments of any Declining Lender, direct such Declining
Lenders to terminate any such Commitments not being replaced as provided in
clause (i) above and (b) the Borrower shall pay in full in immediately available
funds all Obligations owed by the Borrower to the Declining Lenders which are
not being replaced; provided that (x) the Replacement Lenders and Increasing
Accepting Lenders shall purchase, and the Declining Lenders being replaced shall
sell, the interest of the Declining Lenders being replaced and their rights
hereunder without recourse or expense to, or warranty (except warranty of
ownership which is free and clear of any adverse claims) by, such Declining
Lenders being replaced for a purchase price equal to the aggregate outstanding
principal amount of Obligations payable to such Declining Lenders plus any
accrued but unpaid interest on such Obligations and accrued but unpaid fees in
respect of such Declining Lenders' Loans and Commitments hereunder, and (y) all
Obligations of the Borrower owing under or in connection with this Agreement
with respect to the Declining Lenders being replaced (including, without
limitation, such increased costs, breakage fees payable under Sections 3.13 and
3.14 and all other costs and expenses payable to each such Declining Lender)
shall be paid in full in immediately available funds to such Declining Lenders
concurrently with such replacement, and (z) upon the payment of such amounts
referred to in clauses (x) and (y), the Replacement Lenders shall each
constitute a Lender hereunder and the Declining Lenders being
38
so replaced shall no longer constitute a Lender or Issuing Bank (if applicable)
and shall no longer have any obligations hereunder. However, such Person shall
be obligated to make or entitled to receive payments pursuant to Sections 3.13,
3.15, 8.7 and 9.5 (but only to the extent the event giving rise to such payment
occurred prior to the time at which the events set forth in clauses (x) and (y)
shall have occurred) as if it were a Lender; or
(iii) elect to revoke and cancel such extension request by giving
notice of such revocation and cancellation to the Administrative Agent (which
shall promptly notify the relevant Lenders thereof) no later than the tenth day
following the date by which each relevant Lender is required, pursuant to this
Section 3.19, to approve or disapprove the requested extension of such
Termination Date, and concomitantly the Commitments of the relevant Lenders. If
the Borrower fails to timely provide the election notice referred to in this
clause (C), the Borrower shall be deemed to have revoked and canceled such
extension request and to have elected not to extend the relevant Termination
Date and the Commitments of the relevant Lenders, and, on the then scheduled
Termination Date, the Borrower shall repay in full all Obligations under the
Loan Documents.
(d) Notwithstanding any of the foregoing, in the event that the
Issuing Bank is a Declining Lender, the Borrower shall implement arrangements
satisfactory in all respects to the Issuing Bank with respect to all Letters of
Credit that would remain outstanding after the Issuing Bank ceases to be a
Lender and Issuing Bank under this Agreement.
(e) On and after the effectiveness of any extension under this
Section 3.19, in no event shall (i) the aggregate stated amount of all
outstanding Tranche A Letters of Credit exceed the aggregate Tranche A
Commitments and (ii) the aggregate stated amount of all outstanding Tranche B
Letters of Credit exceed the aggregate Tranche ▇ ▇/C Limit.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Issuing Bank and the Lenders to
enter into this Agreement, to issue the Letters of Credit and to make the Loans,
the Borrower hereby represents and warrants to the Administrative Agent, the
Issuing Bank and each Lender that:
SECTION 4.1 Organization; Powers; Ownership of Property. The Borrower
-------------------------------------------
and each of its Subsidiaries (other than Unrestricted Subsidiaries) (a) is duly
formed, validly existing and in good standing under the laws of the jurisdiction
of its formation, except, with respect to such Subsidiaries, where the failure
to be validly existing or in good standing is not reasonably likely to result in
a Material Adverse Effect, (b) has all requisite power and authority to own its
property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business in every jurisdiction
where such qualification is required, except where the failure so to qualify is
not reasonably likely to result in a Material Adverse Effect, (d) as to the
Borrower only, has the power and authority to execute, deliver and perform its
obligations under this Agreement and the other Loan Documents, and (e) owns and
has good and marketable title to all of its properties and assets, subject to no
Liens other than those permitted by Section 6.11 hereof, except where the
failure to own or to have good and
marketable title to such property or asset is not reasonably likely to result in
a Material Adverse Effect.
SECTION 4.2 Authorization. The execution, delivery and performance by
-------------
the Borrower of this Agreement and the other Loan Documents each (a) have been
duly authorized by all requisite corporate action on the part of the Borrower,
and (b) will not (i) violate (A) any provision of any law, statute, rule or
regulation to which the Borrower is subject, (B) the articles of incorporation
or by-laws of the Borrower, (C) any order of any Governmental Authority to which
the Borrower is subject, or (D) any material provision of any indenture,
agreement or other instrument to which the Borrower is a party or by which it or
any of its property is or may be bound, which such violation is reasonably
likely to result in a Material Adverse Effect, (ii) constitute (alone or with
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument, which such default is reasonably likely to result in a
Material Adverse Effect or (iii) result in the creation or imposition of any
Lien upon any property or assets of the Borrower, which such Lien is reasonably
likely to result in a Material Adverse Effect.
SECTION 4.3 Enforceability. This Agreement and the other Loan Documents
--------------
each constitutes a legal, valid and binding obligation of the Borrower
enforceable in accordance with its terms except to the extent that enforcement
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
SECTION 4.4 Financial Statements.
--------------------
(a) The consolidated balance sheet of the Borrower and its Subsidiaries
as of December 31, 1999 and December 31, 2000, reported on by an independent
public accountant of nationally recognized standing, and the related
consolidated statements of income, retained earnings and cash flows for the
fiscal periods then ended, copies of which have been delivered to the
Administrative Agent, fairly presented in conformity with GAAP, the consolidated
financial position of the Borrower and its Subsidiaries as of such dates and
their consolidated results of operations and cash flows for such periods ending
on such dates.
(b) The assumptions used in preparing the Projections were made in good
faith and are reasonable as of the date of such Projections and as of the date
hereof.
(c) Since December 31, 2000, there has been no development or condition
that has had, or could reasonably be expected to result in, a Material Adverse
Effect.
SECTION 4.5 Litigation. Except as set forth on Schedule 4.5, there is
----------
no investigation, action, suit or proceeding pending against, or to the Actual
Knowledge of the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries (other than Unrestricted Subsidiaries) before any court or
arbitrator or any governmental body, agency or official in which an adverse
decision is reasonably likely to result in a Material Adverse Effect or call
into question the enforceability of this Agreement or the other Loan Documents.
SECTION 4.6 Federal Reserve Regulations.
---------------------------
40
(a) Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of "buying" or "carrying" Margin Stock (within the
respective meanings of each of the quoted terms under Regulation U). No part of
the proceeds of any Loans, and no other extensions of credit hereunder, will be
used for "buying" or "carrying" Margin Stock (within the respective meanings of
such quoted terms under Regulation U) or for any purpose that violates the
provisions of the regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
(b) Not more than 25 % of the value of the assets of the Borrower is
represented by Margin Stock.
SECTION 4.7 Investment Company Act; Public Utility Holding Company Act.
----------------------------------------------------------
(a) Neither the Borrower nor any of its Subsidiaries is an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940.
(b) The Borrower is not a "holding company" but is a "subsidiary company"
and an "affiliate" of a "holding company", PG&E Corp., that is exempt from all
provisions, except Section 9(a)(2), of the Public Utility Holding Company Act of
1935, as amended, and the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents and its obligations hereunder and
thereunder do not violate any provision of such Act or any rule or regulation
thereunder.
SECTION 4.8 No Material Misstatements. The reports, financial statements
-------------------------
and other written information furnished by or on behalf of the Borrower to the
Administrative Agent, the Issuing Bank or any Lender pursuant to or in
connection with this Agreement and the other Loan Documents do not contain, when
taken as a whole, any untrue statement of a material fact and do not omit, when
taken as a whole, to state any fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading in any
material respect.
SECTION 4.9 Taxes. The Borrower has filed or caused to be filed all Federal
-----
and material state and local tax returns which to its Actual Knowledge are
required to be filed by it, and has paid or caused to be paid all material taxes
shown to be due and payable on such returns or on any assessments received by
it, other than any taxes or assessments the validity of which is being contested
in good faith by appropriate proceedings and with respect to which appropriate
accounting reserves have to the extent required by GAAP been set aside. Each
Subsidiary of the Borrower (other than any Unrestricted Subsidiary) has filed or
caused to be filed all Federal and material state and local tax returns which to
the Actual Knowledge of the Borrower or such Subsidiary are required to be filed
by such Subsidiary, and has paid or caused to be paid all material taxes shown
to be due and payable on such returns or on any assessments received by it,
other than the taxes the failure of which to pay or file a return with respect
thereto is not reasonably likely to result in a Material Adverse Effect.
41
SECTION 4.10 Employee Benefit Plans. With respect to each Plan, the
----------------------
Borrower and its ERISA Affiliates are in compliance in all material respects
with the applicable provisions of ERISA and the Code and the final regulations
and published interpretations thereunder. No ERISA Event has occurred that alone
or together with any other ERISA Event has resulted or is reasonably likely to
result in a Material Adverse Effect.
SECTION 4.11 Governmental Approval; Compliance with Law and Contracts. The
--------------------------------------------------------
Borrower and each of its Subsidiaries (other than Unrestricted Subsidiaries) is
in compliance with (a) and has obtained each Governmental Approval applicable to
it in respect of this Agreement and the other Loan Documents, the conduct of its
business and the ownership of its property, each of which (i) is in full force
and effect, (ii) is sufficient for its purpose without any material restraint or
adverse condition and (iii) is not subject to any waiting period, further action
on the part of any Governmental Authority or other Person, or stay or
injunction, (b) all applicable laws relating to its business and (c) each
indenture, agreement or other instrument to which it is a party or by which it
or any of its property is or may be bound that is material to the conduct of its
business, except in each such case for noncompliances which, and Governmental
Approvals the failure to possess which, are not, singly or in the aggregate,
reasonably likely to result in a Material Adverse Effect.
SECTION 4.12 Environmental Matters. Except as set forth in Schedule 4.12 or
---------------------
as set forth in or contemplated by the financial statements or other reports of
the type referred to in Section 4.4 hereof and which have been delivered to the
Administrative Agent on or prior to the date hereof, the Borrower and each of
its Subsidiaries (other than Unrestricted Subsidiaries) have complied in all
material respects with all Federal, state, local and other statutes, ordinances,
orders, judgments, rulings and regulations relating to environmental pollution
or to environmental or nuclear regulation or control, except to the extent that
failure to so comply is not reasonably likely to result in a Material Adverse
Effect. Except as set forth in or contemplated by such financial statements or
other reports, neither the Borrower nor any of its Subsidiaries (other than
Unrestricted Subsidiaries) has received notice of any material failure so to
comply, except where such failure is not reasonably likely to result in a
Material Adverse Effect. Except as set forth in or contemplated by such
financial statements or other reports, no facilities of the Borrower or any of
its Subsidiaries (other than Unrestricted Subsidiaries) are used to manage any
hazardous wastes, hazardous substances, hazardous materials, toxic substances,
toxic pollutants or substances similarly denominated, as those terms or similar
terms are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to environmental pollution,
or any nuclear fuel or other radioactive materials, in violation of any law or
any regulations promulgated pursuant thereto, except to the extent that such
violations, individually or in the aggregate, are not reasonably likely to
result in a Material Adverse Effect. Except as set forth in or contemplated by
such financial statements or other reports, the Borrower is aware of no events,
conditions or circumstances involving environmental pollution or contamination
that are reasonably likely to result in a Material Adverse Effect.
SECTION 4.13 Ranking. Under applicable laws in force on the date hereof,
-------
the claims and rights of the Lenders under this Agreement and the other Loan
Documents in respect
42
of the Obligations shall not be subordinate to, and shall rank at least pari
passu in all respects with, the claims and rights of any other holders of
unsecured Indebtedness of the Borrower.
SECTION 4.14 Unrestricted Subsidiaries. All Unrestricted Subsidiaries
-------------------------
designated as such on the date hereof are identified on Schedule 4.14.
SECTION 4.15 Use of Letters of Credit. The Letters of Credit shall not be
------------------------
used as payment assurance in connection with any Equity Funding Arrangement of
the Borrower or any of its Subsidiaries.
SECTION 4.16 CPUC. Neither the Borrower nor any of its Subsidiaries are
----
regulated by the California Public Utilities Commission.
SECTION 4.17 Separateness from PG&E.
----------------------
(a) The Borrower has operated as a business entity separate and distinct in
all relevant respects from PG&E Corp. and PG&E such that the Borrower believes
there exists no reasonable basis for a substantive consolidation of NEG LLC or
any of its Subsidiaries with either PG&E Corp. or PG&E in the event of a
bankruptcy proceeding with respect to either of such Persons.
(b) Any transfer of assets or funds from PG&E Corp. or PG&E (either
directly or through PG&E Corp.) to the Borrower during the period from the date
of the Borrower's incorporation on December 18, 1998 until the date hereof (i)
to the Borrower's knowledge, after due inquiry, was made at a time when the
transferor was solvent and was able to pay its reasonably anticipated
liabilities as they became due, (ii) was received by the Borrower in good faith
and (iii) to the Borrower's knowledge, was made without intent to hinder, delay
or defraud creditors of the transferor.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1 Conditions to Initial Extension of Credit. The obligations of
-----------------------------------------
the Issuing Bank to issue the initial Letter of Credit requested by Borrower
pursuant to Section 2.1 of this Agreement and of the Lenders to make the initial
Loans requested by Borrower to be made pursuant to Section 3.1(a) and/or 3.1(b)
of this Agreement are subject to the satisfaction of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have received (i) this
--------------
Agreement, executed and delivered by the Agents, the Borrower and each Person
listed on Schedule 1.1, (ii) an Application for Issuance, if applicable,
executed by the Borrower and (iii) the Letter Agreement, executed by NEG LLC.
(b) Financial Statements. The Administrative Agent shall have received (i)
--------------------
audited consolidated financial statements of the Borrower for the 1999 and 2000
fiscal years, (ii) unaudited unconsolidated financial statements of the Borrower
for the 2000 fiscal year and (iii) unaudited interim consolidated and
unconsolidated financial statements of the Borrower, in each
43
case, for each quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clauses (i) and (ii) of
this paragraph as to which such financial statements are available; and such
financial statements shall not, in the reasonable judgment of the Administrative
Agent, reflect any material adverse change in the consolidated financial
condition of the Borrower, as reflected in the financial statements or
Projections previously disclosed to the Administrative Agent.
(c) Approvals. All Governmental Approvals and third party approvals
---------
necessary in connection with the financing contemplated hereby shall have been
obtained and be in full force and effect.
(d) Related Agreements. The Administrative Agent shall have received (in
------------------
a form reasonably satisfactory to the Administrative Agent), true and correct
copies, certified as to authenticity by the Borrower, of such other documents or
instruments as may be reasonably requested by the Administrative Agent,
including, without limitation, a copy of any debt instrument, security agreement
or other material contract to which Borrower may be a party. The Administrative
Agent shall be reasonably satisfied that no such instrument, agreement or
contract shall be in default immediately prior to or after giving effect to this
Agreement and the other Loan Documents, and the Borrower shall so certify in
writing.
(e) Fees. The Lenders and the Administrative Agent shall have received
----
all fees required to be paid, and all expenses for which invoices have been
presented (including reasonable fees, disbursements and other charges of counsel
to the Administrative Agents), on or before the Closing Date. All such amounts
may be paid with proceeds of Loans made on the Closing Date and may be reflected
in the funding instructions given by the Borrower to the Administrative Agent on
or before the Closing Date.
(f) Closing Certificate. The Administrative Agent shall have received a
-------------------
certificate of the Borrower, dated the Closing Date, substantially in the form
of Exhibit A, with appropriate insertions and attachments.
(g) Legal Opinions. The Administrative Agent shall have received the
--------------
following executed legal opinions:
(i) the legal opinion of Hunton & ▇▇▇▇▇▇▇▇, counsel to Borrower,
substantially in the form of Exhibit C-1;
(ii) the legal opinion of Hunton & ▇▇▇▇▇▇▇▇, substantially in the form of
Exhibit C-2;
(iii) the legal opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, general counsel of the
Borrower, substantially in the form of Exhibit C-3.
(h) $1.1 Billion PG&E Gen Credit Agreement. The Administrative Agent
--------------------------------------
shall have received confirmation from the Borrower that the $1.1 Billion PG&E
Gen Credit Agreement has been terminated and all loans, borrowings and other
amounts due thereunder have been paid.
(i) $550M Credit Facility. The $550M Credit Facility shall have been
---------------------
replaced by the Agreement (it being understood and agreed that all
letters of credit outstanding under the
44
$550M Credit Facility on the Closing Date shall constitute Tranche A Letters of
Credit hereunder).
SECTION 5.2 Conditions to Issuance of Each Letter of Credit under Section
-------------------------------------------------------------
2.1 and each Loan under Section 3.1(a) and 3.1(b). The obligations of the
------------------------------------------------
Issuing Bank to issue any Letter of Credit requested to be issued by it
hereunder on any date, and the Lenders to make a Loan under Section 3.1(a)
and/or 3.1(b) hereof on any date is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Borrower in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and be
----------
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.
Each request by the Borrower for issuance of a Letter of Credit under Section
2.1 hereof or a Loan under Section 3.1(a) and/or 3.1(b) shall constitute a
representation and warranty by the Borrower as of the date of such issuance that
the conditions contained in this Section 5.2 have been satisfied.
ARTICLE VI
COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to the Issuing Bank, any Lender or the Administrative Agent hereunder, the
Borrower shall and shall cause each of its Subsidiaries to comply with each of
the following covenants:
SECTION 6.1 Maintenance of Ownership. The Borrower shall continue (x) to
------------------------
own at least 50% of the equity ownership interests of, and (y) control the
management and operations of, each of its Restricted Subsidiaries (except for
certain Restricted Subsidiaries listed on Schedule 6.1); provided that (I) the
Borrower will in any event continue to own at least 80% of the equity ownership
interests of PG&E Gen, ET Holdings and GTN; provided, further, that the Borrower
may wind up, dissolve or liquidate any Restricted Subsidiary (other than PG&E
Gen, ET Holdings and GTN) without complying with the foregoing, so long as
assets thereof are transferred or otherwise conveyed to another Restricted
Subsidiary or the Borrower.
SECTION 6.2 Existence. The Borrower will, and will cause each of its
---------
Subsidiaries (other than Unrestricted Subsidiaries) to, do or cause to be done
all things necessary to preserve and keep in full force and effect its legal
existence and all rights, licenses, permits, franchises and authorizations
necessary or desirable in the normal conduct of its business, except as
otherwise permitted pursuant to Sections 6.1 (including Schedule 6.1) and 6.9,
and in the case of any such Subsidiaries, except as such failure to so preserve
or to keep its legal existence and
45
such rights, licenses, permits, franchises or authorizations in full force and
effect is not reasonably likely to result in a Material Adverse Effect.
SECTION 6.3 Compliance with Law; Business and Properties. The Borrower
--------------------------------------------
will, and will cause each of its Restricted Subsidiaries to, comply with all
applicable material laws, rules, regulations and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the validity
or applicability of such laws, rules, regulations or orders is being contested
by appropriate proceedings in good faith or where such non-compliance is not
reasonably likely to result in a Material Adverse Effect; comply with the terms
of each indenture, agreement or other instrument to which it is a party and
enforce all of its rights thereunder, except to the extent that noncompliance or
failure to enforce is not reasonably likely to cause a Material Adverse Effect;
and at all times maintain and preserve all property material to the conduct of
its business and keep such property in good repair, working order and condition
and from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times, except where the failure to take any such actions is not
reasonably likely to result in a Material Adverse Effect.
SECTION 6.4 Financial Statements, Reports, Etc. The Borrower will furnish
----------------------------------
to the Administrative Agent, which will promptly forward the same to each
Lender:
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, an audited consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year and the related
audited consolidated statements of income, retained earnings and cash flows for
such fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, to the extent available, all reported on by an
independent public accountant of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Borrower a
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such quarter and the related consolidated statements of income for such quarter
and for the portion of the Borrower's fiscal year ended at the end of such
quarter, and the related consolidated statement of cash flows for such quarter
and for the portion of the Borrower's fiscal year ended at the end of such
quarter, in each case setting forth comparative figures for the previous dates
and periods, to the extent available, all certified (subject to normal year-end
adjustments) as to fairness of presentation, GAAP and consistency by a Financial
Officer of the Borrower;
(c) simultaneously with any delivery of each set of financial statements
referred to in paragraphs (a) and (b) above, (i) an unconsolidated balance sheet
of the Borrower and the related unconsolidated statements of income, retained
earnings and cash flows as of the same date and for the same periods applicable
to the statements delivered pursuant to paragraph (a) or (b) above, as
applicable, all certified (subject to normal year-end adjustments in the case of
quarterly statements) as to fairness of presentation by a Financial Officer of
the Borrower and (ii) a certificate of a Financial Officer of the Borrower (A)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Section 6.15 on
the date of such financial statements, and schedules setting forth all
46
Indebtedness described in Section 6.12(o) that was incurred during the
applicable period and (B) stating whether any Default or Event of Default exists
on the date of such certificate and, if any Default or Event of Default then
exists, setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in paragraph (a) above, a statement of the firm of independent
public accountants which reported on such statements confirming the calculations
set forth in the Financial Officer's certificate delivered simultaneously
therewith pursuant to subsection (c) above;
(e) promptly upon a Responsible Officer of the Borrower obtaining Actual
Knowledge of the occurrence of any Default or Event of Default, a certificate of
a Financial Officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(f) on or prior to the date of incurrence of any Indebtedness pursuant to
Section 6.12(c) or (l) or the date of any Distribution pursuant to Section 6.14,
(i) a certificate of a Financial Officer of the Borrower setting forth in
reasonable detail the calculations demonstrating compliance by the Borrower with
the applicable financial tests, together with the pro forma calculations
referred to in the applicable Section, and copies of all financial statements
and other supporting documents and reports, if any, upon which the Borrower
relied in making such calculations, and (ii) with respect to Section 6.12(c) and
(l) only, written evidence of the confirmation of the rating agency ratings, to
the extent such confirmation is required under Section 6.12 (c) or (l), as the
case may be;
(g) (i) on or prior to the date hereof, copies of the PG&E Gen Credit
Agreement, ET Credit Agreements, GTN Credit Agreements, USGenNE Credit
Agreements, NEG Guarantees and NEG Indenture in each case accompanied by a
certificate of a Responsible Officer of the Borrower stating that such copies
are true and complete, and (ii) promptly upon any refinancing of the loans under
any such facility, copies of the refinancing documents, accompanied by a
certificate of a Responsible Officer of the Borrower stating that such copies
are true and complete;
(h) promptly upon a Responsible Officer of the Borrower obtaining Actual
Knowledge of any change in the credit rating of the Borrower by S&P or ▇▇▇▇▇'▇,
a notice thereof.
SECTION 6.5 Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries (other than Unrestricted Subsidiaries) to, maintain such insurance
or self insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as is customary with companies
similarly situated and in the same or similar businesses except, in the case of
any such Subsidiaries, where such failure to so maintain is not reasonably
likely to result in a Material Adverse Effect.
47
SECTION 6.6 Taxes, Etc. The Borrower will, and will cause each of its
----------
Subsidiaries (other than Unrestricted Subsidiaries) to, pay and discharge
promptly when due all material taxes, assessments and governmental charges
imposed upon it or upon its income or profits or in respect of its property, in
each case before the same shall become delinquent or in default and before
penalties accrue thereon, unless and to the extent that the same are being
contested in good faith by appropriate proceedings and adequate reserves with
respect thereto shall, to the extent required by GAAP, have been set aside
except, in the case of any such Subsidiaries, where such failure to so pay or
discharge is not reasonably likely to result in a Material Adverse Effect.
SECTION 6.7 Maintaining Records; Access to Properties and Inspections. The
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Borrower will, and will cause each of its Restricted Subsidiaries to, maintain
financial records in accordance with GAAP and, upon reasonable notice and at
reasonable times, permit authorized representatives designated by the
Administrative Agent to visit and inspect its properties, books and records and
to discuss its affairs, finances and condition with its officers.
SECTION 6.8 Risk Management Procedures. The Borrower will, and will cause
--------------------------
each of its Restricted Subsidiaries to, maintain in effect prudent risk
management procedures with respect to Trading Arrangements and Swaps.
SECTION 6.9 Merger. The Borrower will not consolidate or merge with or into
------
any Person, or sell, lease or otherwise transfer, in a single transaction or in
a series of transactions, all or substantially all of its assets to any Person
or Persons, unless (i) the surviving Person or transferee is formed under the
laws of a State of the United States of America and assumes or is responsible by
operation of law for all the Obligations and (ii) no Default, Event of Default
or Downgrade Event shall have occurred or be continuing at the time of or after
giving effect to such consolidation or merger or transfer.
SECTION 6.10 Investments. The Borrower will not make any Investment, or
-----------
permit any of its Restricted Subsidiaries to make any Investment, except:
(a) Investments in any Restricted Subsidiary, Investment Vehicle or Asset
Company (or any Person that will become a Restricted Subsidiary, Investment
Vehicle or Asset Company, as the case may be, upon the making of such
Investment); or
(b) Investments (not otherwise permitted under this Section 6.10) existing
on the date of execution of this Agreement which are identified on Schedule 6.10
or Schedule 6.13; or
(c) Investments permitted to be incurred as Indebtedness under Section
6.12; or
(d) (i) Investments made by any Restricted Subsidiary in the Borrower or
any Restricted Subsidiary in connection with the Borrower's cash management
program or (ii) Investments in Cash Equivalents; or
(e) Investments constituting "Equity Funding Arrangements" permitted
hereunder; or
(f) Investments otherwise made by the Borrower and its Restricted
Subsidiaries in the ordinary course of business as conducted by the Borrower or
its Restricted Subsidiaries or by
48
other Persons in the energy trading, energy services, power generation, electric
transmission or gas transmission and storage businesses (including technologies
related to such businesses); or
(g) Investments in connection with obligations in support of Trading
Arrangements; or
(h) Investments in any Unrestricted Subsidiary with amounts which would
otherwise be available for distribution in accordance with Section 6.14.
SECTION 6.11 Liens. The Borrower will not create or assume or permit to
-----
exist any Lien, or permit any Restricted Subsidiary, Investment Vehicle or Asset
Company to, create or assume or permit to exist any Lien, in respect of any of
its property or assets of any kind (real or personal, tangible or intangible),
except:
(a) Liens granted pursuant to Lease Obligations described in clause (i) of
the definition of "Lease Obligations" and permitted by Section 6.12; or
(b) Liens on cash collateral securing Equity Funding Arrangements, Credit
Support Arrangements, Investments or Indebtedness permitted hereunder; or
(c) Liens existing on the assets of any Person at the time such Person
becomes a Subsidiary of the Borrower; or
(d) Liens on the equity or ownership interests of any Asset Company or any
Investment Vehicle which owns such Asset Company and Liens on any Equity Funding
Arrangements securing the applicable Project Financing Facility; or
(e) Liens on any of the assets of any Asset Company or Investment Vehicle
securing or in connection with the applicable Project Financing Facility; or
(f) Liens on any asset of the Borrower or any Restricted Subsidiary
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring, constructing or improving such asset, provided that such Lien
attaches contemporaneously with, or within 12 months of, the purchase,
construction or improvement of such asset; or
(g) Other Liens (not otherwise permitted under this Section 6.11) existing
as of the date of this Credit Agreement and identified on Schedule 6.11; or
(h) Permitted Encumbrances; or
(i) without limiting the ability to incur Liens under the other subsections
of this Section 6.11, extensions or renewals of any Lien otherwise permitted to
be incurred under this Section 6.11 securing Indebtedness in an amount not
exceeding the principal amount of, and accrued interest on, the Indebtedness
secured by such Lien as so extended or renewed at the time of such extension or
renewal; provided that such Lien shall apply only to the same property
theretofore subject to the same and fixed improvements constructed thereon.
49
SECTION 6.12 Indebtedness. The Borrower will not incur, create, assume or
------------
permit to exist Indebtedness, or permit any Restricted Subsidiary, Investment
Vehicle or Asset Company to, incur, create, assume or permit to exist
Indebtedness, except:
(a) Indebtedness under (i) this Agreement, the PG&E Gen Credit Agreement,
the USGenNE Credit Agreement, the GTN Credit Agreements and the ET Credit
Agreements (the "Refinanceable Facilities"), (ii) the NEG Indenture and the NEG
Guarantees, and (iii) other credit facilities entered into by the Borrower or
any Restricted Subsidiary prior to the date of this Agreement and identified on
Schedule 6.12(a); provided, that this subsection (a) shall not be deemed to
permit an amendment to the facilities referred to in this subsection (a) which
has the effect of increasing the available commitments thereunder; or
(b) Lease Obligations (1) under leases for any office buildings in which
the Borrower or any of its Subsidiaries has or will have offices; (2) under
leases for any equipment not to exceed $10,000,000 in the aggregate outstanding
at any time; or (3) described in clause (i) of the definition thereof of the
Borrower and its Restricted Subsidiaries if, immediately after the incurrence of
any such Lease Obligation, the outstanding aggregate principal amount of all
such Lease Obligations (other than those Lease Obligations incurred under
subsections (c), (j), (l) and (q) below) would not exceed 2% of Consolidated
Tangible Net Assets; or
(c) Indebtedness of (i) any Asset Company under any Project Financing
Facility or (ii) any Investment Vehicle under any Project Financing Facility;
provided, that if any Asset Company owned (directly or indirectly) by such
Investment Vehicle has incurred any Indebtedness under a Project Financing
Facility, then such Investment Vehicle may only incur Indebtedness under a
Project Financing Facility if (I)(x) after giving effect to such Indebtedness,
the Ratio of Cash Flow to Fixed Charges of the Borrower would not be less than
2.0:1.0, calculated on a pro forma basis to include such Indebtedness and
related cash flows, (y) the Borrower's senior unsecured long-term debt is, at
the time of such incurrence, rated at least BBB by S&P and Baa2 by ▇▇▇▇▇'▇ (or
if ratings of such debt have not been issued by such rating agencies, such debt
is impliedly rated by an issuer rating or indicative rating of at least BBB by
S&P and Baa2 by ▇▇▇▇▇'▇), and (z) the Borrower obtains a reaffirmation of such
ratings from S&P and ▇▇▇▇▇'▇ (taking into account the Indebtedness to be
incurred by such Investment Vehicle under this Section 6.12(c)) or (II) such
Investment Vehicle owns only one Asset Company and such Indebtedness is incurred
in connection with a Project Financing Facility and the proceeds thereof are
promptly invested in such Asset Company; or
(d) Trading Arrangements and Credit Support Arrangements, to the extent
such arrangements constitute Indebtedness; or
(e) Indebtedness with respect to any securitization, receivables financing
or similar transaction entered into by ET Holdings, GTN, USGenNE or any of their
respective Subsidiaries; or
(f) Indebtedness not otherwise permitted under this Section 6.12, existing
on the date of this Agreement and set forth on Schedule 6.12(f) or Schedule
6.13; or
(g) Indebtedness under any Swap; or
50
(h) Permitted Subordinated Indebtedness; or
(i) Indebtedness between any of the Borrower, any Restricted Subsidiary,
Investment Vehicle, any Asset Company or any Indebtedness under any short-term
overdraft lines of credit or similar arrangements entered into in the ordinary
course of business, in each case associated with the Borrower's cash management
program; or
(j) Indebtedness attributable to any Permitted Sale-Leaseback Transactions;
or
(k) Any Guaranty constituting Indebtedness of the Borrower or any
Restricted Subsidiary, Investment Vehicle or Asset Company under clause (ix) of
the definition of "Indebtedness" to the extent that the obligations covered by
such Guaranty are not reasonably quantifiable under GAAP; or
(l) other Indebtedness of the Borrower or any Restricted Subsidiary (other
than PG&E Gen) incurred after the date of this Agreement, provided that (i)
after giving effect to any such Indebtedness, the Ratio of Cash Flow to Fixed
Charges of the Borrower would not be less than 2.0:1.0 (calculated on a pro
forma basis as of the end of the most recent fiscal quarter with respect to
which financial statements of the Borrower are available and assuming for such
purpose that such Indebtedness was incurred one year prior to the end of such
fiscal quarter and taking into account any related cash flows) and (ii) if such
Indebtedness would constitute Indebtedness of a Restricted Subsidiary, no Asset
Company, Investment Vehicle or Restricted Subsidiary owned directly or
indirectly by such Restricted Subsidiary has Indebtedness outstanding which
would otherwise be permitted under Section 6.12(a), (b)(3), (c), (h), (j), (l),
(o) or (p); provided, further, that clause (ii) of this Section 6.12(l) will not
be applicable if the Borrower obtains a reaffirmation of the rating of its
senior unsecured long-term debt of at least BBB by S&P and Baa2 by ▇▇▇▇▇'▇ (or
if ratings of such debt have not been issued by such rating agencies, such debt
is impliedly rated by an issuer rating or indicative rating of at least BBB by
S&P and Baa2 by ▇▇▇▇▇'▇) after taking into account the Indebtedness to be
incurred by such Restricted Subsidiary and related cash flows; or
(m) Indebtedness of the Borrower or any Restricted Subsidiary in respect of
letters of credit or surety, performance or bid bonds used in the ordinary
course of business not in excess of $25,000,000 in the aggregate outstanding at
any time; or
(n) Indebtedness constituting intercompany loans (1) between the Borrower
and its Restricted Subsidiaries or between such Restricted Subsidiaries or (2)
made by the Borrower, any Restricted Subsidiary, any Investment Vehicle or any
Asset Company to any Investment Vehicle or any Asset Company or (3) made by any
Investment Vehicle to the Borrower, any Restricted Subsidiary, or any other
Investment Vehicle; or
(o) Equity Funding Arrangements; or
(p) without limiting the ability to incur Indebtedness under the other
subsections of this Section 6.12, any refinancing of any Indebtedness permitted
under Section 6.12(f) and under the Refinanceable Facilities, provided that
either (i) (x) the average life of any refinanced Indebtedness shall not be less
than the average life of the Indebtedness so refinanced (plus fees and expenses,
including any premium or defeasance costs, of such refinancing), taking into
51
account the prepayment or repayment of a portion of any such Indebtedness, and
(y) the principal amount of the refinanced Indebtedness shall not exceed the
principal amount plus accrued interest thereon of the Indebtedness so
refinanced, or (ii) the Borrower shall demonstrate pro forma compliance with the
financial ratio described in Section 6.12(l) above; or
(q) Indebtedness of any Subsidiary of the Borrower existing at the time
such Person becomes a Subsidiary of the Borrower (except for any such
Indebtedness of such Subsidiary incurred in contemplation of or to finance the
acquisition of such Subsidiary).
SECTION 6.13 Transactions with Affiliates. The Borrower will not enter
----------------------------
into, or permit any Restricted Subsidiary, Investment Vehicle or Asset Company
to enter into, any transaction with any Affiliate of the Borrower (other than
the Borrower, any Subsidiary of the Borrower, any Investment Vehicle and any
Asset Company), except:
(a) transactions with such Affiliates upon fair and reasonable terms which
are no less favorable to the Borrower than would be obtained in a comparable
arm's length transaction with a Person not an Affiliate of the Borrower;
(b) management, operating, sharing or other similar services arrangements
or promissory notes between and among the Borrower, its Subsidiaries and its
other Affiliates either existing on the date hereof and described on Schedule
6.13 or, other than in the case of promissory notes, entered into after the date
hereof on commercially reasonable terms;
(c) tax sharing arrangements between the Borrower and PG&E Corp.
approximating the tax position that the Borrower would be in if it were not part
of PG&E Corp.'s consolidated group, as determined by the management of the
Borrower in its reasonable business judgment or such other arrangements as may
be approved by the Lenders prior to the date hereof; or
(d) paying or declaring any Distribution to the extent permitted under
Section 6.14.
The provisions of this Section 6.13 shall not apply to (i) transactions
between the Borrower or any of its Subsidiaries, on the one hand, and any
employee of the Borrower or any of its Subsidiaries, on the other hand, that are
approved by the Board of Directors of the Borrower or any committee of the Board
of Directors and (ii) the payment of reasonable and customary regular fees to
directors of the Borrower or any Subsidiary of the Borrower.
SECTION 6.14 Distributions. The Borrower will not declare or make any
-------------
Distribution if (a) a Default, Event of Default or Downgrade Event has occurred
and is continuing or shall occur after giving effect to such Distribution, (b)
the Ratio of Cash Flow to Fixed Charges of the Borrower determined as of the end
of the immediately preceding fiscal quarter was not at least 2.0:1.0 or (c) the
Borrower fails to satisfy the requirements of the test set forth in Section
6.15(b), or the Borrower fails to have a Consolidated Net Worth of at least
$2.15 billion, in each case calculated on a pro forma basis as of the end of the
most recent fiscal period with respect to which financial statements of the
Borrower are available (assuming such Distribution and all material events with
respect to the Borrower and its Subsidiaries which occurred after the end of
such fiscal period had occurred on the last day of such fiscal period); provided
that the Borrower may declare and make Distributions of assets of or equity
ownership interests in any Unrestricted Subsidiary at any time without complying
with the foregoing.
52
SECTION 6.15 Financial Covenants.
-------------------
(a) The Borrower shall not, as of the end of each fiscal quarter, permit
the Ratio of Cash Flow to Fixed Charges to be less than 1.5:1.0.
(b) The Borrower shall not, as of the end of each fiscal quarter, permit
the Ratio of Debt to Capitalization to be greater than 0.6:1.0.
(c) The Borrower shall not, at the end of each fiscal quarter, permit (i)
Consolidated Net Worth to be less than the Minimum Consolidated Net Worth and
(ii) Non-Trading Consolidated Net Worth to be less than the Minimum Non-Trading
Consolidated Net Worth.
SECTION 6.16 Separateness from PG&E Corp. The Borrower shall (i) maintain
---------------------------
adequate capital in light of the business in which it is engaged; (ii) maintain
books and corporate records separate from PG&E Corp. and PG&E; (iii) not
commingle assets with PG&E Corp. or PG&E; and (iv) conduct business in its own
name and hold itself out as separate from PG&E Corp. and PG&E. The Borrower
shall promptly notify the Administrative Agent upon a Responsible Officer of the
Borrower obtaining Actual Knowledge that a creditor of PG&E Corp. or of PG&E has
made a claim or filing in writing seeking the substantive consolidation of NEG
LLC in any bankruptcy proceeding of PG&E Corp. or of PG&E.
SECTION 6.17 Asset Sales. Except for the sale of all or substantially all
-----------
of the assets of the Borrower pursuant to Section 6.9, and other than assets
required to be sold to conform with governmental regulations, the Borrower shall
not, and shall cause its Subsidiaries not to, sell or otherwise dispose of any
assets (other than short-term, readily marketable investments purchased for cash
management purposes with funds not representing the proceeds of other asset
sales) if, on a pro forma basis, the aggregate net book value of all such sales
during the most recent 12-month period would exceed 10% of Consolidated Tangible
Net Assets computed as of the end of the most recent quarter preceding such
sale; provided, however, that any such sales shall be disregarded for purposes
of this 10% limitation if the proceeds are invested in assets in the Borrower's
business in the energy trading, energy services, power generation, electric
transmission or gas transmission and storage businesses or in similar or related
lines of business, and, provided further, that the Borrower may sell or
otherwise dispose of assets in excess of such 10% limitation if the proceeds
from such sales or dispositions, which are not reinvested as provided above, are
retained by the Borrower as cash or Cash Equivalents or are used by the Borrower
to prepay the Loans hereunder or to purchase and retire notes or Indebtedness
ranking pari passu in right of payment to the Loans or Indebtedness of the
Borrower's Subsidiaries. (For the avoidance of doubt, any sale of assets
otherwise permitted by this Section 6.17 shall not be permitted if such sale
would result in a violation of any other provision of this Agreement.)
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 Events of Default. If any of the following events shall
-----------------
occur and be continuing:
53
(a) The Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes due
in accordance with the terms hereof or thereof; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or in any other Loan Document or that is contained in any certificate,
document or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made or furnished; or
(c) the Borrower shall default in any material respect in the due
observance or performance of any agreement contained in Sections 6.1, 6.2, 6.9,
6.11, 6.12, 6.13, 6.14, 6.15 or 6.16; or
(d) the Borrower shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent, which may be at the request of any Lender, to the
Borrower; or
(e) the Borrower or any Restricted Subsidiary shall default in respect of
any Indebtedness or default in its obligations to make payments when due under
any Equity Funding Arrangements which at the time have an aggregate principal
amount outstanding or, in the case of Equity Funding Arrangements, due and
unpaid, in excess of $50,000,000, and such Indebtedness is then due and payable
in full at maturity or as a result thereof such Indebtedness shall have been
accelerated or otherwise become due or subject to prepayment in full prior to
its stated maturity; or
(f) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any Restricted Subsidiary or of a substantial part of
the property or assets of the Borrower or any Restricted Subsidiary under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or similar law, (ii)
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Restricted Subsidiary or (other than in
connection with any proceeding relating solely to one or more Unrestricted
Subsidiaries, Investment Vehicles or Project Companies of the Borrower) for a
substantial part of the property or assets of the Borrower or any Restricted
Subsidiary or (iii) the winding up or liquidation of the Borrower or any
Restricted Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or
(g) the Borrower or any Restricted Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, receivership or similar law, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in Section 7.1(f)
54
above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Restricted Subsidiary (other than in connection with any proceeding relating
solely to one or more Unrestricted Subsidiaries, Investment Vehicles or Project
Companies of the Borrower) for a substantial part of the property or assets of
the Borrower or any Restricted Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, or (vi) take any
corporate action for the purpose of effecting any of the foregoing, become
unable, admit in writing its inability, or fail generally, to pay its debts as
they become due; or
(h) one or more final judgments for the payment of money in an aggregate
amount in excess of $50,000,000 (exclusive of amounts covered by insurance)
shall be rendered against the Borrower or any Restricted Subsidiary and such
judgment or order shall remain undischarged, unbonded or unstayed for a period
of 60 days; or
(i) an ERISA Event shall have occurred that, either alone or in combination
with other ERISA Events that shall have occurred, is reasonably likely to result
in a Material Adverse Effect; or
(j) a court of competent jurisdiction shall issue an order, decree or
judgment requiring the substantive consolidation of the Borrower with PG&E Corp.
or PG&E or a court of competent jurisdiction with administrative oversight over
the assets and liabilities of PG&E Corp. or PG&E shall issue an order, decree or
judgment otherwise subjecting the any material assets and liabilities of the
Borrower to administration by such court; then, and in any such event, (A) if
such event is an Event of Default specified in paragraphs (f) or (g) above with
respect to the Borrower, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
L/C Obligations, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required for drawings
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including all L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required for
drawings thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. In the case of all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent (the "Cash
Collateral Account") an amount equal to the then aggregate undrawn and unexpired
amount of such Letters of Credit. The Borrower shall grant a security interest
on the Cash Collateral Account to the Administrative Agent, for the benefit of
the
55
Lenders, on such terms as are reasonably satisfactory to the Administrative
Agent. Amounts held in the Cash Collateral Account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in the Cash Collateral Account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.
56
ARTICLE VIII
THE AGENTS
SECTION 8.1 Appointment. Each Lender (the term "Lender" as used in this
-----------
Section 9 to include the Issuing Bank, except as specified below) hereby
irrevocably designates and appoints the Administrative Agent as the
Administrative Agent of such Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes the Administrative Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
SECTION 8.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in fact selected by it with reasonable care.
SECTION 8.3 Exculpatory Provisions. None of the Agents or any of their
----------------------
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and non-appealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
SECTION 8.4 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and
57
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 9.6 and all actions required by such
Section in connection with such transfer shall have been taken. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders or any other instructing group of Lenders
specified by this Agreement) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
SECTION 8.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent shall have received notice from a
Lender, or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent shall receive such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, if
so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
SECTION 8.6 Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender expressly acknowledges that none of the Agents or any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of the Borrower or any
affiliate of the Borrower, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any 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 analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the
58
business, operations, property, financial and other condition and
creditworthiness of the Borrower and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower or any affiliate of
the Borrower that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION 8.7 Indemnification. The Lenders (other than the Issuing Bank)
---------------
agree to indemnify each Agent in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Aggregate Exposure Percentages
in effect on the date on which indemnification is sought under this Section (or,
if indemnification is sought after the date upon which the Commitments shall
have terminated and the Loans shall have been paid in full, ratably in
accordance with such Aggregate Exposure Percentages immediately prior to such
date), for, and to save each Agent harmless from and against, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and non-appealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section 8.7 shall
survive the payment of the Loans and all other amounts payable hereunder.
SECTION 8.8 Agent in Its Individual Capacity. Each Agent, in its individual
--------------------------------
capacity, and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though such Agent
were not the Agent. With respect to its Loans made or renewed by it and with
respect to any Letter of Credit issued or participated in by it, each Agent, in
its individual capacity, shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include the Agent, in its individual capacity.
SECTION 8.9 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon (i) 10 Business Day's notice to the Lenders
and the Borrower and (ii) the appointment of a successor Administrative Agent in
accordance with this Section 8.9. If the Administrative Agent shall give notice
of its intent to resign as Administrative Agent under this Agreement and the
other Loan Documents, then the Required Lenders shall appoint from among the
Lenders a successor Administrative Agent for the Lenders, which successor
Administrative Agent shall (unless an Event of Default under Section 7.1(a) or
Section 7.1(f) or Section 7.1(g) with respect to the Borrower shall have
occurred and be continuing) be
59
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor Administrative Agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" shall mean such successor Administrative Agent
effective upon such appointment and approval, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans. If no successor agent has accepted appointment as Administrative
Agent by the date that is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.
After any retiring Administrative Agent's resignation as Administrative Agent,
the provisions of this Section 8 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.
SECTION 8.10 Documentation and Syndication Agents. Neither the
------------------------------------
Documentation Agents nor the Syndication Agents shall have any duties or
responsibilities hereunder in their capacities as such.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Amendments and Waivers. Neither this Agreement or any other
----------------------
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. The
Required Lenders and the Borrower may, or (with the written consent of the
Required Lenders) the Administrative Agent and the Borrower may, from time to
time, (a) enter into written amendments, supplements or modifications hereto and
to the other Loan Documents (including amendments and restatements hereof or
thereof) for the purpose of adding any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights of the Lenders or of the
Borrower hereunder or thereunder or (b) waive, on such terms and conditions as
may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(i) forgive any part of the principal amount or extend the final scheduled
date of maturity of any Loan or Reimbursement Obligation or extend the expiry
date of any Letter of Credit (beyond the dates provided in Section 2.1(a) and
2.1(b)), reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Commitment of any Lender, in each case without
the written consent of each Lender or Issuing Bank, as the case may be, directly
affected thereby;
(ii) amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders, or consent to the
assignment or transfer by the
60
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents;
(iii) eliminate or reduce the voting rights of any Lender under this
Section 9.1 without the written consent of such Lender;
(iv) amend, modify or waive any provision of Section 3.12 or the
definition of Aggregate Exposure Percentages without the written consent of each
Lender directly affected thereby; or
(v) amend, modify or waive any provision of Section 2 without the written
consent of the Issuing Bank.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Issuing Bank and the Lenders and shall be binding upon
the Borrower, the Issuing Bank, the Lenders and the Administrative Agent. In the
case of any waiver, the Borrower, the Issuing Bank, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
SECTION 9.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower, the Issuing Bank and the
Administrative Agent, as follows and (b) in the case of the Lenders, as set
forth on Schedule 1.1B hereto, or, in the case of a Lender which becomes a party
to this Agreement pursuant to an Assignment and Acceptance, in such Assignment
and Acceptance or (c) in the case of any party, to such other address as such
party may hereafter notify to the other parties hereto:
The Borrower:
PG&E National Energy Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President and General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent:
▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuing Bank:
The Chase Manhattan Bank
4 Chase MetroTech Center, 8/th/ Floor
Brooklyn, New York 11245-0001
Attention: Standby Letter of Credit Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided, that any notice, request or demand to or upon the Administrative
Agent, the Issuing Bank or any Lender shall not be effective until received. All
Applications for Issuance shall be delivered to the Issuing Bank as follows:
Deliver Application for Issuance to:
The Chase Manhattan Bank
4 Chase MetroTech Center, 8/th/ Floor
Brooklyn, New York 11245-0001
Attention: Standby Letter of Credit Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
---------
delay in exercising, on the part of the Administrative Agent, the Issuing Bank
or any Lender, any right, remedy, power or privilege hereunder or under the
other Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 9.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made herein, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
SECTION 9.5 Payment of Expenses. The Borrower agrees (a) to pay or
-------------------
reimburse the Issuing Bank and the Administrative Agent for all their reasonable
out-of-pocket costs and expenses incurred in connection with the syndication of
the facilities herein (other than fees payable to syndicate members) and the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and
65
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements
and other charges of single counsel to both the Issuing Bank and the
Administrative Agent, (b) to pay or reimburse the Issuing Bank, each Lender and
the Administrative Agent for all their costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
other Loan Documents and any other documents prepared in connection herewith or
therewith, including, without limitation, the fees and disbursements of counsel
to the Lenders, the Issuing Bank and the Administrative Agent, (c) to pay,
indemnify, or reimburse the Issuing Bank, each Lender and the Administrative
Agent for, and hold the Issuing Bank, each Lender and the Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify or
reimburse the Issuing Bank, each Lender, the Administrative Agent, their
respective affiliates, and their respective officers, directors, trustees,
employees, advisors, Administrative Agents and controlling persons (each, an
"Indemnitee") for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of, and the syndication of commitments under, this Agreement, the
other Loan Documents and any such other documents or any investigation,
litigation or proceeding relating to or arising out of any of the foregoing
(whether or not any Indemnitee is a party thereto), including, without
limitation, any of the foregoing relating to the use of proceeds of the Loans
and the fees and disbursements and other charges of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against the Borrower
hereunder (all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and non-appealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. All amounts due under this Section shall
be payable not later than 30 days after written demand therefor. Statements
payable by the Borrower pursuant to this Section shall be submitted to PG&E
National Energy Group, Inc. Attention: Accounts Payable (Telephone No.
▇▇▇-▇▇▇-▇▇▇▇) (Fax No. ▇▇▇-▇▇▇-▇▇▇▇), at the address of the Borrower set forth
in Section 9.2, or to such other Person or address as may be hereafter
designated by the Borrower in a notice to the Administrative Agent. The
agreements in this Section shall survive repayment of the Loans and all other
amounts payable hereunder.
Section 9.6 Successors and Assigns; Participations and Assignments.
-------------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Issuing Bank, the Lenders, the Administrative Agent, all future
holders of the Loans and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent,
the Issuing Bank and each Lender.
63
(b) Any Lender other than any Conduit Lender may, without the consent of
the Borrower, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower, the Issuing Bank and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by the Borrower therefrom, except to
the extent that such amendment, waiver or consent would require the consent of
all Lenders pursuant to Section 9.1. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 9.7(a) as fully as if such
Participant were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 3.13, 3.14 and 3.15
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if such Participant were a Lender; provided that, in the
case of Section 3.14, such Participant shall have complied with the requirements
of said Section, and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender other than any Conduit Lender (an "Assignor") may, in
accordance with applicable law and upon written notice to the Administrative
Agent, at any time and from time to time assign to any Lender or any Lender
Affiliate or, with the consent of the Borrower, the Issuing Bank and the
Administrative Agent (which, in each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
B, executed by such Assignee and such Assignor (and, where the consent of the
Borrower, the Issuing Bank or the Administrative Agent is required pursuant to
the foregoing provisions, by the Borrower and such other Persons) and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided that no such assignment to an Assignee (other than any Lender or any
affiliate thereof) shall be in an aggregate principal amount of less than
$10,000,000 or result in the assigning Lender holding an aggregate principal
amount of less than $10,000,000 (other than in the case of an assignment of all
of a Lender's interests under this Agreement), unless otherwise agreed by the
Borrower and the Administrative Agent. For purposes of the proviso contained in
the preceding
64
sentence, the amount described therein shall be aggregated in respect of each
Lender and its Lender Affiliates, if any. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with Commitments and/or Loans as
set forth therein, and (y) the Assignor thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of an
Assignor's rights and obligations under this Agreement, such Assignor shall
cease to be a party hereto, except as to Section 3.13, 3.14 and 9.5 in respect
of the period prior to such effective date). Notwithstanding any provision of
this Section, the consent of the Borrower shall not be required for any
assignment that occurs at any time when any Event of Default shall have occurred
and be continuing. Notwithstanding the foregoing, any Conduit Lender may assign
at any time to its designating Lender hereunder without the consent of the
Borrower or the Administrative Agent any or all of the Loans it may have funded
hereunder and pursuant to its designation agreement and without regard to the
limitations set forth in the first sentence of this Section 9.6(c).
(d) The Administrative Agent shall, on behalf of the Borrower, maintain at
its address referred to in Section 9.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, the Issuing
Bank, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Loans and any Notes
evidencing such Loans recorded therein for all purposes of this Agreement. Any
assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
Loan, accompanied by a duly executed Assignment and Acceptance; thereupon one or
more new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled". The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender's Loans) at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor, an Assignee and any other Person whose consent is required by Section
9.6(c), together with payment by either the Assignor or the Assignee, as they
may agree upon between themselves, to the Administrative Agent of a registration
and processing fee of $4,000 (provided, that such registration and processing
fee shall not be required to be paid if the assignment is between a Lender and
such Lender's Lender Affiliate), the Administrative Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Borrower. On or prior to
such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Note of the
assigning Lender) new Note to the order of such Assignee in an amount equal to
the
65
applicable Loans assumed or acquired by it pursuant to such Assignment and
Acceptance and, if the Assignor has retained Commitments, upon request, a new
Note to the order of the Assignor in an amount equal to the applicable Loans
retained by it hereunder. Such new Note or Notes shall be dated the Closing Date
and shall otherwise be in the form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this Section concerning assignments of Loans and Notes relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests in Loans and Notes, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
(g) Each of the Borrower, each Lender and the Administrative Agent hereby
confirms that it will not institute against a Conduit Lender or join any other
Person in instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.
SECTION 9.7 Adjustments; Set-off.
--------------------
(a) Except to the extent that this Agreement provides for payments to be
allocated to a particular Lender or to the Lenders, if any Lender (a "Benefited
Lender") shall at any time receive any payment of all or part of the Obligations
owing to it, or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7.1(f), Section 7.1(g) or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of the Obligations owing to Lender, such Benefited Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits
of such collateral ratably with each of the Lenders; provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such Benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest unless the Benefited Lender is required by law to pay interest thereon,
in which case, each Lender returning funds to the Benefited Lender shall pay its
pro rata share of such interest.
(b) In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly
66
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch, agency or affiliate thereof (other than any such affiliate engaged
in the energy trading business) to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
SECTION 9.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
SECTION 9.9 Severability. Any provision of this Agreement that 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9.10 Integration. This Agreement and the other Loan Documents
-----------
represent the entire agreement of the Borrower, the Administrative Agent, the
Issuing Bank and the Lenders with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent, the Issuing Bank or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
SECTION 9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
-------------
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 9.12 Submission To Jurisdiction; Waivers. Borrower hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits in any legal action or proceeding relating to this Agreement
and the other Loan Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;
67
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower, as the
case may be, at its address set forth in Section 9.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to ▇▇▇ in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding related to the Loan
Documents any special, exemplary, punitive or consequential damages.
SECTION 9.13 Acknowledgments. Borrower hereby acknowledges that:
---------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent, the Issuing Bank nor any Lender has
any fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Administrative Agent, the Issuing Bank and the Lenders,
on one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Administrative Agent, the Issuing Bank and the Lenders or among the Borrower,
the Issuing Bank and the Lenders.
SECTION 9.14 Confidentiality. Each of the Administrative Agent, the Issuing
---------------
Bank and the Lenders agrees to keep confidential all non-public information
provided to it by Borrower pursuant to this Agreement that is designated by
Borrower as confidential; provided that nothing herein shall prevent the
Administrative Agent, the Issuing Bank or any Lender from disclosing any such
information (a) to the Administrative Agent, the Issuing Bank, any other Lender
or any affiliate of any thereof, (b) to any Participant or Assignee (each, a
"Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon the
request or demand of any Governmental Authority having jurisdiction over it, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any requirement of law, (g) in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally
68
recognized rating agency that requires access to information about a Lender's
investment portfolio in connection with ratings issued with respect to such
Lender or (j) in connection with the exercise of any remedy hereunder or under
any other Loan Document.
SECTION 9.15 Accounting Changes. In the event that any "Accounting Change"
------------------
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then the Borrower and the Administrative Agent agree to enter into negotiations
in order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Change with the desired result that the criteria for evaluating
the financial condition of the Borrower shall be the same after such Accounting
Change as if such Accounting Change had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
SECTION 9.16 Delivery of Lender Addenda. Each initial Lender shall become a
--------------------------
party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Borrower, the Issuing Bank and the
Administrative Agent.
SECTION 9.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT,
---------------------
THE ISSUING BANK AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
69
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
PG&E NATIONAL ENERGY GROUP, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Amended and Restated Credit Agreement
THE CHASE MANHATTAN BANK,
as Issuing Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement
THE CHASE MANHATTAN BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
as a Syndication Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement
THE ROYAL BANK OF SCOTLAND PLC,
as a Syndication Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Amended and Restated Credit Agreement
BARCLAYS BANK PLC,
as a Documentation Agent and as a Lender
By: /s/ Sydney ▇. ▇▇▇▇▇▇
--------------------------------
Name: Sydney ▇. ▇▇▇▇▇▇
Title: Director
Amended and Restated Credit Agreement
WESTDEUTSCHE LANDESBANK
GIROZENTALE, NEW YORK BRANCH,
as a Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director and
Head of Energy Group
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Amended and Restated Credit Agreement
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Group Vice President
By: /s/ ▇▇▇▇ ▇. Qais
--------------------------------
Name: ▇▇▇▇ ▇. Qais
Title: Assistant Vice President
Amended and Restated Credit Agreement
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
Title: Managing Director
Amended and Restated Credit Agreement
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement
SOCIETE GENERALE
By: /s/ ▇▇▇▇▇ Bid
---------------------------
Name: ▇▇▇▇▇ Bid
Title: Vice President
Amended and Restated Credit Agreement
BANK OF MONTREAL
By: /s/ Cahal ▇. ▇▇▇▇▇▇▇
---------------------------
Name: Cahal ▇. ▇▇▇▇▇▇▇
Title: Director
Amended and Restated Credit Agreement
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Amended and Restated Credit Agreement
UBS AG, STAMFORD BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director
Banking Products Services, US
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Associate Director
Banking Products Services, US
Amended and Restated Credit Agreement
FORTIS CAPITAL CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
Amended and Restated Credit Agreement
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Amended and Restated Credit Agreement