-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RqmeLziNFBd/g/T2SyacjLmD8ZqcVgmFreeF9KYljbhbwah7kvWV3AfbUoB9DeGF Bw8IY2RWaqcqKYp9igK76Q== 0000950129-01-503913.txt : 20020410 0000950129-01-503913.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950129-01-503913 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20011109 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENRON CORP/OR/ CENTRAL INDEX KEY: 0001024401 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 470255140 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13159 FILM NUMBER: 1781249 BUSINESS ADDRESS: STREET 1: 1400 SMITH ST CITY: HOUSTON STATE: TX ZIP: 77002-7369 BUSINESS PHONE: 7138536161 MAIL ADDRESS: STREET 1: 1400 SMITH ST CITY: HOUSTON STATE: TX ZIP: 77002-7369 FORMER COMPANY: FORMER CONFORMED NAME: ENRON OREGON CORP DATE OF NAME CHANGE: 19961008 8-K 1 h91831ae8-k.txt ENRON CORP. - NOVEMBER 9, 2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: November 9, 2001 Commission File Number 1-13159 ENRON CORP. (Exact name of registrant as specified in its charter) Oregon 47-0255140 - ------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) Enron Building 1400 Smith Street Houston, Texas 77002 - ------------------------------- ------------------------------- (Address of principal executive (Zip Code) Offices) (713) 853-6161 ---------------------------------------------------- (Registrant's telephone number, including area code) Item 7. Exhibits. Enron is filing as exhibits to this Form 8-K documents relating to the previously announced financing commitment letters for Transwestern Pipeline Company and Northern Natural Gas Company. (c) Exhibits. Exhibit 99.1 - Transwestern Pipeline Company: Form of $550 million 364-Day Revolving Credit Facility Commitment Letter dated October 31, 2001 Exhibit 99.2 - Summary of Terms and Conditions: $550 million Transwestern Pipeline Company Revolving Facility Exhibit 99.3 - Northern Natural Gas Company: Form of $450 million 364-Day Revolving Credit Facility Commitment Letter dated October 31, 2001 Exhibit 99.4 - Summary of Terms and Conditions: $450 million Northern Natural Gas Company Revolving Facility SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ENRON CORP. Date: November 9, 2001 By: /s/ RICHARD A. CAUSEY -------------------------------------- Richard A. Causey Executive Vice President and Chief Accounting Officer INDEX TO EXHIBITS NO. DESCRIPTION ---- ----------- Exhibit 99.1 - Transwestern Pipeline Company: Form of $550 million 364-Day Revolving Credit Facility Commitment Letter dated October 31, 2001 Exhibit 99.2 - Summary of Terms and Conditions: $550 million Transwestern Pipeline Company Revolving Facility Exhibit 99.3 - Northern Natural Gas Company: Form of $450 million 364-Day Revolving Credit Facility Commitment Letter dated October 31, 2001 Exhibit 99.4 - Summary of Terms and Conditions: $450 million Northern Natural Gas Company Revolving Facility EX-99.1 3 h91831aex99-1.txt TRANSWESTERN PIPELINE CO. FORM OF REV. CREDIT LTR. October 31, 2001 Transwestern Pipeline Company 1111 South 103rd Street Omaha, NE 68124-1000 Attention: Rod Hayslett, Managing Director and Chief Financial Officer $550 MILLION 364-DAY REVOLVING CREDIT FACILITY COMMITMENT LETTER Ladies and Gentlemen: Each of Citibank, N.A. ("Citibank") and The Chase Manhattan Bank ("Chase") is pleased to inform Transwestern Pipeline Company (the "Borrower") of its several commitment to provide the Borrower up to, in the case of Citibank, $330 million and, in the case of Chase, $220 million of a $550 million 364-day revolving credit facility (the "Facility") and to act as a Co-Administrative Agent for the Facility, in each case subject to the terms and conditions of this letter and the attached Annex I (collectively, and together with the Fee Letter referred to below, this "Commitment Letter"). Also, Citibank is pleased to inform the Borrower of its commitment to act as the Paying Agent for the Facility, subject to the terms and conditions of this Commitment Letter. In addition, Salomon Smith Barney Inc. ("SSBI") and J.P. Morgan Securities Inc. ("JP Morgan"), are pleased to inform the Borrower that they may arrange a syndicate of lenders (the "Lenders") of the Facility after the closing of the Facility, subject to the terms and conditions of this Commitment Letter. Section 1. Conditions Precedent. Each of the respective commitments and agreements above of Citibank, SSBI, Chase and JP Morgan hereunder is subject to: (i) the preparation, execution and delivery of mutually acceptable loan documentation (the "Operative Documents"); (ii) the absence of (A) any material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its subsidiaries, taken as a whole, since December 31, 2000, (B) except as publicly disclosed or disclosed in writing to Citibank, SSBI, Chase and JP Morgan before the execution of this Commitment Letter, a material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of Enron Corp. and its subsidiaries, taken as a whole, since December 31, 2000, and (C) any circumstance, change or condition (including the continuation of any existing condition) in the loan syndication, financial or capital markets generally that, in the judgment of SSBI, Citibank, JP Morgan, or Chase, would materially impair syndication of the Facility; (iii) the accuracy and completeness in all material respects, as set forth in Article 8, of all representations that the Borrower and Enron Corp. make to Citibank, SSBI, Chase or JP Morgan and all information that the Borrower and Enron Corp. furnish to Citibank, SSBI, Chase or JP Morgan and the Borrower's and Enron Corp.'s compliance with the terms of this Commitment Letter; (iv) completion of due diligence with results satisfactory to Citibank, SSBI, Chase, and JP Morgan, including, without limitation, with respect to Enron Corp. and the Borrower and their respective subsidiaries and affiliates; (v) receipt of a review report from Arthur Andersen on the Borrower's third quarter 2001 unaudited financial statements satisfactory to Citibank, SSBI, Chase and JP Morgan; (vi) receipt of documentation satisfactory to Citibank, SSBI, Chase and JP Morgan whereby the Borrower assumes approximately $135,000,000 of the obligations under the Citibank, N.A. $250,000,000 prepayment transaction with Enron Corp. or one of its subsidiaries ("Assumption Documents"); (vii) the Borrower's issuance of, or the transfer by its shareholder of, a to be determined amount of the Borrower's capital stock to a trust the beneficiary of which is the Paying Agent and the amendment of the Borrower's certificate of incorporation to provide that a voluntary bankruptcy petition for the Borrower may only be approved by a vote of all the Borrower's shareholders pursuant to documents satisfactory to Citibank, SSBI, Chase and JP Morgan ("Corporate Amendment Documents"); (viii) an opinion from Borrower's counsel with respect to the enforceability of the Assumption Documents and the Corporate Amendment Documents; (ix) satisfaction of the conditions to Closing set forth in Annex I; and (x) the payment in full of all fees, expenses and other amounts payable under this Commitment Letter. Section 2. Commitment Termination. Each of the respective commitments of Citibank, SSBI, Chase and JP Morgan hereunder will terminate on the earlier of (a) the date the Operative Documents become effective, and (b) November 16, 2001. Before such date, each of Citibank, SSBI, Chase, and JP Morgan may terminate its commitment hereunder if any event occurs or information becomes available that, in its reasonable judgment, results or is reasonably likely to result in the failure to satisfy any condition set forth in Section 1. Section 3. Syndication. Subject to the Borrower's acceptance of the Lenders, SSBI and JP Morgan will manage all aspects of the syndication of the Facility in consultation with the Borrower, including the timing of all offers to potential Lenders, the determination of the amounts offered to potential Lenders, the acceptance of commitments of the Lenders and the compensation to be provided to the Lenders. Each of the Borrower and Enron Corp. shall actively assist SSBI and JP Morgan in forming a syndicate acceptable to SSBI and JP Morgan. The Borrower's and Enron Corp.'s assistance in forming such a syndicate shall include but not be limited to (i) making senior management and representatives of the Borrower and Enron Corp. available to participate in information meetings with potential Lenders, if required, at such times and places as SSBI and JP Morgan may reasonably request; (ii) using the Borrower's and Enron Corp.'s commercially reasonable efforts to ensure that the syndication efforts benefit from the Borrower's and Enron Corp.'s existing lending relationships; and (iii) providing SSBI and JP Morgan with all information reasonably deemed necessary by SSBI or JP Morgan in connection with the syndication process. To ensure an effective syndication of the Facility, each of the Borrower and Enron Corp. agrees that, until the termination of the syndication (as determined by SSBI and JP Morgan), neither the Borrower nor Enron Corp. will or will permit any of Enron Corp.'s 90% or greater directly or indirectly owned subsidiaries to, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any debt facility or debt security (including any renewals thereof) in the commercial bank market, without the prior written consent of SSBI and JP Morgan; provided, however, that the foregoing shall not limit (i) Enron Corp. and its subsidiaries' ability to issue commercial paper, other short-term debt programs currently in place, equity or public debt securities, (ii) Northern Natural Gas Company's ability to enter into a loan facility with Citibank and Chase, or (iii)(A) the Florida Gas Transmission Company's ability to enter into a $210,000,000 bank credit facility, (B) the Wessex Water Services' ability to enter into a 40 million pounds sterling index linked private placement, (C) Azurix Europe Limited's ability to enter into a 425 million pounds sterling revolving credit facility, (D) Elektro's ability to enter into a R$180 million bond issue, and (E) increases in existing accounts receivable and working capital facilities and entering into new accounts receivable and working capital facilities that are limited solely to those purposes. -2- Citibank and Chase will act as the sole Co-Administrative Agents for the Facility, Citibank will act as sole Paying Agent for the Facility, and SSBI and JP Morgan will act as sole arrangers for the Facility. No additional agents, co-agents or arrangers will be appointed, or other titles conferred, without the consent of Citibank, SSBI, Chase, JP Morgan and the Borrower. Section 4. Fees. In addition to the fees described in Annex I, the Borrower shall pay the non-refundable fees set forth in that certain letter agreement dated the date hereof (the "Fee Letter") among the Borrower, Citibank, SSBI, Chase and JP Morgan. The terms of the Fee Letter are an integral part of the respective commitments of Citibank, SSBI, Chase and JP Morgan hereunder and constitute part of this Commitment Letter for all purposes hereof. Section 5. Indemnification. Each of the Borrower and Enron Corp. shall indemnify and hold harmless SSBI, JP Morgan, Citibank, Chase, and each of their respective affiliates and each of their respective officers, directors, employees, agents, advisors and representatives (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities and reasonable out-of-pocket expenses (including, without limitation, reasonable fees and disbursements of counsel) (collectively, "Losses"), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Commitment Letter or the transactions contemplated hereby or thereby or any actual or proposed use of any proceeds or any letter of credit under the Facility, except to the extent such Losses resulted from the loss of anticipated profits or such Indemnified Party's gross negligence or willful misconduct or from a claim asserted by another Indemnified Party. In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower or Enron Corp., any of its directors, security holders or creditors, or any other person (other than an Indemnified Party) or whether or not an Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. No Indemnified Party shall have any liability (whether in contract, tort or otherwise) to the Borrower or Enron Corp. or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except for direct damages (as opposed to special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings)) resulting from such Indemnified Party's gross negligence or willful misconduct. Except as set forth in the next succeeding sentence, neither the Borrower nor Enron Corp. shall have any liability to any Indemnified Party (whether in contract, tort or otherwise) in connection with the Facility for punitive, exemplary or treble damages. If (a) an Indemnified Party is required to pay damages of the type specified in the preceding sentence to another person (that is not an Indemnified Party), and (b) such Indemnified Party would be entitled to indemnification under this Section 5 but for the limitation set forth in the preceding sentence, then the Indemnified Party shall nonetheless be entitled to indemnification for such Losses. The foregoing provisions of this Section 5 apply to Losses resulting from events occurring prior to the closing of the Facility. From and after the closing of the Facility, the indemnification provisions of the Operative Documents shall be applicable. Section 6. Costs and Expenses. Promptly following demand, the Borrower shall pay, or reimburse Citibank, SSBI, Chase and JP Morgan (as the case may be) for, all reasonable out-of-pocket costs and expenses incurred by Citibank, SSBI, Chase or JP Morgan (whether incurred on, before or after the date hereof) in connection with the Facility and the preparation, negotiation, execution and delivery of this Commitment Letter, including the reasonable fees and expenses of Bracewell & Patterson, L.L.P., Davis, Polk & Wardwell, and Shearman & Sterling and any reasonably required local counsel, in each case -3- incurred on or before the closing date of the Facility, regardless of whether any of the transactions contemplated hereby are consummated. The Borrower shall also pay all reasonable out-of-pocket costs and expenses of Citibank, SSBI, Chase and JP Morgan, as the case may be (including, without limitation, the reasonable fees and disbursements of counsel), incurred in connection with the enforcement of any of its rights and remedies hereunder. Section 7. Confidentiality. By accepting delivery of this Commitment Letter, each of the Borrower and Enron Corp. agrees that this Commitment Letter is for the Borrower's and Enron Corp.'s confidential use only and that neither its existence nor the terms hereof will be disclosed by the Borrower or Enron Corp. to any person other than the Borrower's and Enron Corp.'s officers, directors, employees, accountants, attorneys and other consultants or advisors, and then only on a confidential and "need to know" basis in connection with the transactions contemplated hereby; provided, however, that each of the Borrower and Enron Corp. may make such other public disclosures of the terms and conditions hereof as the Borrower is required by law or regulation, in the opinion of the Borrower's or Enron Corp.'s counsel, to make (including, without limitation, in response to any subpoena or court order) and each of the Borrower and Enron Corp. may make disclosure hereof in response to a request of any governmental authority having jurisdiction over the Borrower or Enron Corp., as the case may be, and Enron may make a disclosure hereof (except for the Fee Letter) in any form 8K filing with the SEC. Notwithstanding the foregoing, each of the Borrower and Enron Corp. may disclose the Commitment Letter (except for the Fee Letter) after the date that is two years from the date hereof. Section 8. Representations and Warranties. Each of the Borrower, for itself only, and Enron Corp. represents and warrants that (i) all information (other than projections) that has been or will hereafter be made available to Citibank, SSBI, Chase, JP Morgan, any other Lender or any potential Lender by the Borrower or Enron Corp. or any of its representatives and that is included in any information memo or similar document pertaining to the Facility is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statements were or are made and (ii) all projections, if any, that have been or will be prepared by the Borrower or Enron Corp. and made available to Citibank, SSBI, Chase, JP Morgan, any other Lender or any potential Lender in connection with the Facility have been or will be prepared in good faith based upon reasonable assumptions (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower's or Enron Corp.'s control, and that no assurance can be given that the projections will be realized). Each of the Borrower and Enron Corp. agrees to supplement the information and projections from time to time until the earlier of the date the Operative Documents become effective and December 31, 2001, so that the representations and warranties contained in this paragraph remain correct. In providing this Commitment Letter, each of Citibank, SSBI, Chase and JP Morgan is relying on the accuracy of the information furnished to it by or on behalf of the Borrower or Enron Corp. or any of its representatives or affiliates without independent verification thereof. Section 9. No Third Party Reliance, Etc. The agreements of each of Citibank, SSBI, Chase and JP Morgan hereunder and of any other Lender that issues a commitment to provide financing under the Facility are made solely for the benefit of the Borrower and may not be relied upon or enforced by any other person. Please note that those matters that are not covered or made clear herein are subject to mutual agreement of the parties. Except as provided in the Operative Documents, no party hereto may assign or delegate any of its rights or obligations hereunder without the prior written consent of each of the other parties hereto. This Commitment Letter may not be amended or modified except in a written agreement signed by all parties hereto. This Commitment Letter is not intended to create a fiduciary relationship among the parties hereto. -4- The Borrower and Enron Corp. should be aware that Citibank, SSBI, Chase, JP Morgan and/or one or more of their respective affiliates may be providing financing or other services to parties whose interests may conflict with the Borrower's or Enron Corp.'s interests. Consistent with the longstanding policy of Citibank, SSBI, Chase and JP Morgan to hold in confidence the affairs of its customers, neither Citibank, SSBI, Chase, JP Morgan nor any of their respective affiliates will furnish confidential information obtained from the Borrower or Enron Corp. to any of their other customers. Furthermore, neither Citibank, SSBI, Chase, JP Morgan nor any of their respective affiliates will make available to the Borrower or Enron Corp. confidential information that Citibank, SSBI, Chase, JP Morgan or any such affiliate obtained or may obtain from any other customer. Section 10. Governing Law, Etc. This Commitment Letter shall be governed by, and construed in accordance with, the law of the State of New York. This Commitment Letter sets forth the entire agreement between the parties with respect to the matters addressed herein and supersedes all prior communications, written or oral, with respect hereto. This Commitment Letter may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original and all of which, taken together, shall constitute one and the same Commitment Letter. Delivery of an executed counterpart of a signature page to this Commitment Letter by telecopier shall be as effective as delivery of an original executed counterpart of this Commitment Letter. Sections 3 through 7 and 10 hereof shall survive the termination of any commitment hereunder. Each party to this Commitment letter hereby irrevocably waive any right it may have to a jury trial and, to the fullest extent it may effectively do so under applicable law, (i) each of the parties hereto hereby irrevocably and unconditionally to the non-exclusive jurisdiction of the Supreme Court of the State of New York, Commercial Division, Civil Branch sitting in the Borough of Manhattan and of the United States District Court of the Southern District of New York, and any appellate court from any appeal thereof, in any action or proceeding arising out of or relating to this Commitment Letter or the Fee Letter or any other instrument or document furnished pursuant hereto or in connection herewith or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of such action or proceeding may be heard and determined in any such court; (ii) each of the parties hereto hereby irrevocably and unconditionally waives the defense of an inconvenient forum to the maintenance of such action or proceeding and any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in any such court; (iii) the Borrower hereby agrees that service of copies of the summons and complaint and any other process which may be served in any such action or proceeding may be made by mailing or delivering a copy of such process to the Borrower at its address specified above; and (iv) each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Please indicate the Borrower's and Enron Corp.'s acceptance of the provisions hereof by signing the enclosed copy of this Commitment Letter and the Fee Letter and returning them to Chris Lyons, Salomon Smith Barney Inc., 1200 Smith Street, Suite 2000, Houston, Texas 77002 (fax: 713 654-2849) and to George Serice, J.P. Morgan Securities Inc., 700 Travis Street, 20th Floor, Houston, Texas 77002 (fax: 713 216-4583) at or before 5 p.m. (Houston time) on October 31, 2001, the time at which the respective commitments hereunder of Citibank, SSBI, Chase and JP Morgan (if not so accepted prior thereto) will terminate. -5- If the Borrower and Enron Corp. elect to deliver this Commitment Letter by telecopier, please arrange for the executed original to follow by next-day courier. Very truly yours, SALOMON SMITH BARNEY INC. By: ----------------------------------------- Name: Title: CITIBANK, N.A. By: ----------------------------------------- Name: Title: THE CHASE MANHATTAN BANK By: ----------------------------------------- Name: Title: J.P. MORGAN SECURITIES INC. By: ----------------------------------------- Name: Title: -6- ACCEPTED AND AGREED on October 31, 2001: TRANSWESTERN PIPELINE COMPANY By: ----------------------------------------- Name: Title: ENRON CORP. By: ----------------------------------------- Name: Title: -7- EX-99.2 4 h91831aex99-2.txt SUMMARY OF TERMS - TPC REVOLVING FACILITY CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ $550 MM TRANSWESTERN PIPELINE COMPANY REVOLVING FACILITY BORROWER: Transwestern Pipeline Company (the "Borrower"). GUARANTOR: Enron Corp. FACILITY: Secured $550 million revolving credit facility, of which approximately $135,000,000 of Citibank, N.A.'s initial advances shall be deemed to be conversions of the obligations assumed under the Assumption Documents (as defined in the Commitment Letter) (the "Assumption Obligations") and, upon such conversion, the obligations assumed under the Assumption Documents shall be cancelled (the "Facility"). Citibank, N.A., The Chase Manhattan Bank, and the Borrower will determine the appropriate structure for the conversion of the Assumption Obligations in the Credit Agreement. ACCORDION FEATURE: Provided no default exists at such time, the Borrower may, without consent of the Lenders, increase the size of the Facility to an amount not to exceed $650 million. No Lender is in any way obligated to participate in such increase by increasing its own commitment amount, which decision shall be made in the sole discretion of each Lender at the time the Borrower elects to exercise its option to increase the Facility. PAYING AGENT: Citibank, N.A. CO-ARRANGERS: Salomon Smith Barney Inc. and J.P. Morgan Securities Inc. CO-ADMINISTRATIVE AGENTS: Citibank, N.A. and The Chase Manhattan Bank. LENDERS: Citibank, N.A. and The Chase Manhattan Bank and such other Lenders acceptable to Citibank, N.A. and The Chase Manhattan Bank. SECURITY: A first priority perfected security interest securing the obligations under the Facility in (i) all capital stock of the Borrower; (ii) an unsecured subordinated intercompany note by Enron Corp. payable to the order of the Borrower ("Intercompany Note"); and (iii) subject to agreed exceptions, all other assets of the Borrower ("Collateral"). USE OF PROCEEDS: Working capital and loans to Enron Corp., such loans to be subordinated to all other debt of Enron Corp. MATURITY DATE: 364 days after the Closing Date. -1- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ CLOSING DATE: On or before November 16, 2001 or, with the consent of Citibank, N.A. and The Chase Manhattan Bank, such other date on which Citibank, N.A. and The Chase Manhattan Bank shall be satisfied that all conditions precedent set forth in the Commitment Letter have been met. INTEREST RATES AND FEES: At the Borrower's option, Advances will be available to it at the rates and for the Interest Periods set forth below: (a) Base Rate Option: Base Rate plus 1.50%. The Base Rate is a fluctuating rate per annum equal at all times to the highest of: (i) Citibank's publicly announced "base rate", (ii) 1/2 of 1% per annum above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major U.S. money center banks, adjusted for reserve requirements and FDIC assessment rates, and (iii) 1/2 of 1% per annum above the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers. (b) Eurodollar Rate Option: LIBOR plus 2.50%. LIBOR is the rate per annum (rounded upward to the nearest 1/100 of 1% per annum) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m. (London time) two business days before the first day of the relevant Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, LIBOR shall be the rate per annum (rounded upward to the nearest 1/100 of 1% per annum) appearing on Reuters Screen LIBO page as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m. (London time) two business days before the first day of the relevant Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates. If neither the Telerate Page 3750 nor the Reuters Screen LIBO page rate is available, then LIBOR shall be the rate per annum at which dollar deposits are offered by the principal office of Citibank in London to prime banks in the London interbank market at 11:00 A.M. (London time) two business days before the first day of the relevant Interest Period and with a maturity equal to such Interest Period. The -2- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ Borrower may select Interest Periods of 1, 2 or 3 months for LIBOR Advances. The Borrower will reimburse each Lender, upon demand, for the cost of reserve requirements actually incurred. DEFAULT RATE: When an event of default exists, all unpaid amounts under the Facility will bear interest payable on demand at the Base Rate plus 3.50%. COMMITMENT FEE: A commitment fee of 0.50% per annum shall accrue on the daily average unused commitments. INTEREST AND FEE PAYMENTS: Interest on Base Rate Advances and commitment fees will be payable quarterly in arrears. Interest on LIBOR Advances will be payable at the end of the relevant Interest Period. Interest will be computed on a 365/366-day basis for Base Rate Advances and on a 360-day basis for LIBOR Advances. Commitment fees will be computed on a 360-day basis. BORROWINGS: Borrowings shall be in minimum principal amounts of $25,000,000 for LIBOR Advances and $10,000,000 for Base Rate Advances. All Advances under the Facility will be made by the Lenders ratably in proportion to their respective commitments in the Facility. Borrowings will be available on same day notice (by 11:00 a.m. New York City time) for Base Rate Advances and three business days' notice for Eurodollar Rate Advances. On the Closing Date the Borrower shall request an initial Borrowing of an amount sufficient to convert all the Assumption Obligations to advances. OPTIONAL PREPAYMENTS: Advances may be prepaid in an amount of at least $10,000,000 on same day notice for Base Rate Advances and three business days notice for LIBOR Advances. The Borrower will bear all losses and costs (but not lost profits) related to prepayment of LIBOR Advances prior to the last day of the relevant Interest Period. MANDATORY PREPAYMENTS: Subject to agreed exceptions, the Advances shall be paid and the commitments permanently reduced by an amount equal to the net cash proceeds the Borrower receives from (i) any asset sales, (ii) equity issuances, or (iii) capital markets transactions. CONDITIONS PRECEDENT TO CLOSING: Customary for financings of this nature, including: (a) the execution and delivery of the following, in form and substance satisfactory to the Co-Administrative Agents, for the Facility: (i) a credit agreement, (ii) certificates with respect to resolutions, charter, by- -3- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ laws, incumbency and signatures and certified copies of all other relevant documents evidencing any necessary corporate action and governmental approvals, (iii) all security documents necessary to obtain a first perfected security interest (subject to agreed exceptions) in the Collateral securing the Facility only (other than certain of the Borrower's real estate and pipelines and fixtures that the Co-Administrative Agents agree may be obtained after the Closing Date ("Post-Closing Collateral")), including execution and delivery of pledge agreements covering all of the Borrower's capital stock and the Intercompany Note and a security agreement covering all the Borrower's personal property, (iv) a solvency and corporate separateness certificate by the Borrower's chief financial officer, and (v) favorable legal opinions from counsel for the Borrower and Enron Corp., including an opinion as to the enforceability of all loan documents and the perfection and enforceability of the security interests and an opinion regarding governmental approvals for the Facility (such opinions to be subject to customary exceptions and qualifications including bankruptcy, preference, fraudulent transfer or conveyance, equitable principles, and customary qualifications as to the enforceability of indemnities); and (b) (i) the Paying Agent's obtaining a first perfected security interest, subject to agreed exceptions, in the Collateral (other than the Post-Closing Collateral), (ii) satisfactory arrangements for repayment of the Borrower's outstanding senior notes, and (iii) receipt of all charters, bylaws, partnership agreements, or other similar documents for each of Enron Corp.'s subsidiaries that directly or indirectly has any interest in the Borrower. POST-CLOSING REQUIREMENT: Within 60 days (except as agreed) after the Closing Date, (i) the Borrower shall have executed all security documents necessary to obtain a first perfected security interest (subject to agreed exceptions) securing the Facility only in the Post-Closing Collateral and (ii) the Paying Agent shall have received satisfactory opinions of counsel with respect thereto. CONDITIONS PRECEDENT TO INITIAL ADVANCE: o Enron Corp. shall have a rating of at least BBB- and Baa3 by S&P and Moody's, respectively, and if such rating is BBB- and Baa3, such rating must be accompanied with a "stable" outlook ("Investment Grade"). o Neither Co-Administrative Agent shall have determined that, except as publicly disclosed or disclosed in writing to the Co-Administrative Agents before the execution of the Commitment Letter, since December 31, 2000 a material adverse change in the business, condition (financial or otherwise), operations, -4- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ performance, properties or prospects of Enron Corp. and its subsidiaries, taken as a whole, shall have occurred. CONDITIONS PRECEDENT TO ALL ADVANCES: Customary for financings of this nature, including the following: o All representations and warranties are correct on and as of the date of the borrowing before and after giving effect to such borrowing and to the application of the proceeds therefrom (other than those representations and warranties that expressly relate solely to a specific earlier date, which shall remain correct as of such earlier date), as though made on and as of such date. o No event or condition exists or would result from such borrowing which constitutes an event of default or would constitute an event of default but for the requirement that notice be given or time elapse or both. o The Paying Agent shall have received such other approvals, opinions or documents as any Lender through the Paying Agent may reasonably request. REPRESENTATIONS AND WARRANTIES OF THE BORROWER: Usual and customary for transactions of this nature, including but not limited to: (i) confirmation of corporate status and authority of the Borrower and its subsidiaries, (ii) documentation and performance duly authorized and do not contravene laws, corporate documents, judgments, orders or material agreements, (iii) documentation, including the Corporate Amendment Documents and the Assumption Documents, are legal, valid, binding and enforceable, (iv) financial statements, (v) since December 31, 2000, no material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its subsidiaries, taken as a whole, (vi) no litigation having a material adverse effect, (vii) ERISA, (viii) environmental condition, (ix) taxes, (x) status under Investment Company Act and Public Utility Holding Company Act, (xi) full and complete disclosure, (xii) solvency, and (xiii) corporate separateness. COVENANTS: Usual and customary for transactions of this nature including: (i) periodic financial statements, certificates of compliance with financial covenant, notice of default, certain ERISA information, and other information -5- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ reasonably requested from time to time, (ii) compliance with laws, including environmental compliance, (iii) use of proceeds, (iv) maintenance of existence, (v) insurance, (vi) visitation rights, (vii) prohibition on liens and negative pledges subject to agreed exceptions, (viii) prohibition on debt subject to agreed exceptions, (ix) no sale, lease, transfer or other disposition of the Borrower's or any of its subsidiaries' assets with a value of more than $25,000,000 in the aggregate after the closing date or the Borrower's pipeline, (x) no merger or consolidation by the Borrower unless no default exists or results and the Borrower is survivor, (xi) limitation on investments, (xii) tangible net worth in accordance with GAAP of at least $750,000,000, (xiii) no change in lines of business, (xiv) corporate separateness, (xv) limitations on transactions with affiliates, (xvi) prohibition on distributions; (xvii) subject to agreed exceptions, prohibition on intercompany advances when a default has occurred and is continuing or would result therefrom, when the sum of the Borrower's unrestricted cash and the availability under the Facility after giving effect thereto is less than $10,000,000, or when Enron Corp. is no longer Investment Grade, (xviii) completion of expansion as disclosed to the Co-Administrative Agents, and (xix) no subsidiaries. EVENTS OF DEFAULT: Customary events of default for transactions of this nature, including: (i) failure to pay principal when due or interest and commitment fees after 5-day grace period, (ii) representations and warranties untrue when made, (iii) failure to comply with affirmative covenants if not cured within 30 days after written notice, (iv) failure to comply with negative covenants, (v) cross default or acceleration of Debt of the Borrower or a subsidiary for borrowed money greater than $10,000,000 or the occurrence and continuance of an Event of Default under the $1,750,000,000 364-Day Revolving Credit Agreement dated as of May 14, 2001 among Enron Corp., the banks party thereto and Citibank, N.A. and The Chase Manhattan Bank, as Co-Administrative Agents for such banks or the $1,250,000,000 Long-Term Revolving Credit Agreement dated as of May 18, 2000 among Enron Corp., the banks party thereto and Citibank, N.A. and The Chase Manhattan Bank, as Co-Administrative Agents for such banks, (vi) bankruptcy or insolvency of Enron Corp. or the Borrower or any of its subsidiaries, (vii) any unsatisfied judgment against the Borrower or any of its subsidiaries for payment of money greater than $10,000,000 unless enforcement stayed by appeal or otherwise, (viii) occurrence of certain circumstances respecting ERISA plans, (ix) except as agreed, Enron Corp. shall cease to own directly or indirectly 100% of the Borrower's capital stock, (x) an event of default under the Guaranty shall occur, (xi) any loan document, including the Guaranty or a security document (subject to agreed exceptions), fails to remain in full force or effect or any action is taken to discontinue or to assert the invalidity or unenforceability thereof or any obligor under a loan -6- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ document, including the Guaranty or a security document, shall disclaim an obligation thereunder, (xii) subject to agreed upon matters, any collateral document fails to create a valid and perfected first priority security interest (subject to agreed exceptions) in any Collateral purported to be covered thereby, or (xiii) the Borrower shall fail to comply with the terms of the Fee Letter. GUARANTY: Unconditional guaranty of payment, not of collection. The Guaranty will include customary representations and warranties, including the following: (i) confirmation of corporate status and authority, (ii) documentation and performance duly authorized and do not contravene laws, corporate documents, judgments, orders or material agreements, (iii) documentation legal, valid, binding and enforceable, (iv) full disclosure, (v) corporate separateness between Enron Corp. and the Borrower, (vi) solvency, (vii) except as publicly disclosed or disclosed in writing to the Co-Administrative Agents before the execution of the Commitment Letter , since December 31, 2000 no material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of Enron Corp. and its subsidiaries, taken as a whole, has occurred. The Guaranty will also include customary affirmative and negative covenants, including (i) each of the covenants contained in Enron Corp.'s revolving credit agreements, as in effect from time to time, (ii) prohibition on liens and negative pledges for Enron Corp. and its subsidiaries subject to agreed exceptions, and (iii) maintenance of corporate separateness between Enron Corp. and the Borrower. TRANSFERS AND PARTICIPATIONS: Lenders permitted to assign commitments and loans under the Facility, in whole or part, to another Lender in the Facility, and, with the consent of the Paying Agents and, so long as no default exists, the Borrower (which consents shall not be unreasonably withheld), to a person that is not a Lender. Lenders may sell participations in the Facility provided that the assigning Lender retains all voting rights (except as specified in the definitive loan documentation) and all obligations under the Facility. OTHER: The documentation will include customary agency language, and Majority Lenders for the Facility will be defined as those holding at least 66-2/3% of the Commitments under the Facility. The loan documentation will contain customary provisions regarding taxes, illegality, increased costs and capital adequacy, subject to certain limitations, a waiver of jury trial, and a consent to New York jurisdiction. -7- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ EXPENSES; INDEMNITY: All reasonable expenses incurred (i) by the Lenders in connection with the preparation, execution, delivery, modification, amendment and administration of the loan documentation (including reasonable fees and expenses of counsel to the Lenders) or (ii) by either Co-Administrative Agent or any Lender in connection with the enforcement of the loan documentation (including reasonable legal expenses), are for the Borrower's account. To the fullest extent permitted by law, the Borrower will indemnify and hold harmless each Co-Administrative Agent, each Lender and each of their respective officers, directors, employees and agents (each an "Indemnified Party") from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and expenses of counsel) that may be incurred by or asserted against any Indemnified Party (other than by either Co-Administrative Agent or another Lender or any of their respective successors and assigns), in each case arising out of or in connection with any environmental claim or by reason of any investigation, litigation or proceeding arising out of, related to or in connection with the loan documentation or any transaction in which any proceeds of the Facility are applied, excluding any claim, damage, loss, liability or expense attributable to such Indemnified Party's gross negligence or willful misconduct. No Indemnified Party shall have any liability (whether in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except for direct damages (as opposed to special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings)) resulting from such Indemnified Party's gross negligence or willful misconduct. Except as set forth in the next succeeding sentence, Borrower shall not have any liability to any Indemnified Party (whether in contract, tort or otherwise) in connection with the Facility for punitive, exemplary or treble damages. If (a) an Indemnified Party is required to pay damages of the type specified in the preceding sentence to another person (that is not an Indemnified Party), and (b) such Indemnified Party would be entitled to indemnification under this provision but for the limitation set forth in the preceding sentence, then the Indemnified Party shall nonetheless be entitled to indemnification for such Losses. GOVERNING LAW: New York. COUNSEL TO THE CO-ADMINISTRATIVE AGENTS: Bracewell & Patterson, L.L.P. -8- EX-99.3 5 h91831aex99-3.txt NORTHERN NATURAL GAS CO. FORM OF REVOLVING CREDIT October 31, 2001 Northern Natural Gas Company 1111 South 103rd Street Omaha, NE 68124-1000 Attention: Rod Hayslett, Managing Director and Chief Financial Officer $450 MILLION 364-DAY REVOLVING CREDIT FACILITY COMMITMENT LETTER Ladies and Gentlemen: Each of The Chase Manhattan Bank ("Chase") and Citibank, N.A. ("Citibank") is pleased to inform Northern Natural Gas Company (the "Borrower") of its several commitment to provide the Borrower up to, in the case of Chase, $180 million and in the case of Citibank, $270 million of a $450 million 364-day revolving credit facility (the "Facility") and to act as a Co-Administrative Agent for the Facility, in each case subject to the terms and conditions of this letter and the attached Annex I (collectively, and together with the Fee Letter referred to below, this "Commitment Letter"). Also, Citibank is pleased to inform the Borrower of its commitment to act as the Paying Agent for the Facility, subject to the terms and conditions of this Commitment Letter. In addition, J.P. Morgan Securities Inc. ("JP Morgan") and Salomon Smith Barney Inc. ("SSBI"), are pleased to inform the Borrower that they may arrange a syndicate of lenders (the "Lenders") of the Facility after the closing of the Facility, subject to the terms and conditions of this Commitment Letter. Section 1. Conditions Precedent. Each of the respective commitments and agreements above of Citibank, SSBI, Chase and JP Morgan hereunder is subject to: (i) the preparation, execution and delivery of mutually acceptable loan documentation (the "Operative Documents"); (ii) the absence of (A) any material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its subsidiaries, taken as a whole, since December 31, 2000, (B) except as publicly disclosed or disclosed in writing to Citibank, SSBI, Chase and JP Morgan before the execution of this Commitment Letter, a material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of Enron Corp. and its subsidiaries, taken as a whole, since December 31, 2000, and (C) any circumstance, change or condition (including the continuation of any existing condition) in the loan syndication, financial or capital markets generally that, in the judgment of SSBI, Citibank, JP Morgan, or Chase, would materially impair syndication of the Facility; (iii) the accuracy and completeness in all material respects, as set forth in Article 8, of all representations that the Borrower and Enron Corp. make to Citibank, SSBI, Chase or JP Morgan and all information that the Borrower and Enron Corp. furnish to Citibank, SSBI, Chase or JP Morgan and the Borrower's and Enron Corp.'s compliance with the terms of this Commitment Letter; (iv) completion of due diligence with results satisfactory to Citibank, SSBI, Chase, and JP Morgan, including, without limitation, with respect to Enron Corp. and the Borrower and their respective subsidiaries and affiliates; (v) receipt of a review report from Arthur Andersen on the Borrower's third quarter 2001 unaudited financial statements satisfactory to Citibank, SSBI, Chase and JP Morgan; (vi) receipt of documentation satisfactory to Citibank, SSBI, Chase and JP Morgan whereby the Borrower assumes approximately $115,000,000 of the obligations under the Citibank, N.A. $250,000,000 prepayment transaction with Enron Corp. or one of its subsidiaries ("Assumption Documents"); (vii) the Borrower's issuance of, or the transfer by its shareholder of, a to be determined amount of the Borrower's capital stock to a trust the beneficiary of which is the Paying Agent and the amendment of the Borrower's certificate of incorporation to provide that a voluntary bankruptcy petition for the Borrower may only be approved by a vote of all the Borrower's shareholders pursuant to documents satisfactory to Citibank, SSBI, Chase and JP Morgan ("Corporate Amendment Documents"); (viii) an opinion from Borrower's counsel with respect to the enforceability of the Assumption Documents and the Corporate Amendment Documents; (ix) satisfaction of the conditions to Closing set forth in Annex I; and (x) the payment in full of all fees, expenses and other amounts payable under this Commitment Letter. Section 2. Commitment Termination. Each of the respective commitments of Citibank, SSBI, Chase and JP Morgan hereunder will terminate on the earlier of (a) the date the Operative Documents become effective, and (b) November 16, 2001. Before such date, each of Citibank, SSBI, Chase, and JP Morgan may terminate its commitment hereunder if any event occurs or information becomes available that, in its reasonable judgment, results or is reasonably likely to result in the failure to satisfy any condition set forth in Section1. Section 3. Syndication. Subject to the Borrower's acceptance of the Lenders, SSBI and JP Morgan will manage all aspects of the syndication of the Facility in consultation with the Borrower, including the timing of all offers to potential Lenders, the determination of the amounts offered to potential Lenders, the acceptance of commitments of the Lenders and the compensation to be provided to the Lenders. Each of the Borrower and Enron Corp. shall actively assist SSBI and JP Morgan in forming a syndicate acceptable to SSBI and JP Morgan. The Borrower's and Enron Corp.'s assistance in forming such a syndicate shall include but not be limited to (i) making senior management and representatives of the Borrower and Enron Corp. available to participate in information meetings with potential Lenders, if required, at such times and places as SSBI and JP Morgan may reasonably request; (ii) using the Borrower's and Enron Corp.'s commercially reasonable efforts to ensure that the syndication efforts benefit from the Borrower's and Enron Corp.'s existing lending relationships; and (iii) providing SSBI and JP Morgan with all information reasonably deemed necessary by SSBI or JP Morgan in connection with the syndication process. To ensure an effective syndication of the Facility, each of the Borrower and Enron Corp. agrees that, until the termination of the syndication (as determined by SSBI and JP Morgan), neither the Borrower nor Enron Corp. will or will permit any of Enron Corp.'s 90% or greater directly or indirectly owned subsidiaries) to, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any debt facility or debt security (including any renewals thereof) in the commercial bank market, without the prior written consent of SSBI and JP Morgan; provided, however, that the foregoing shall not limit (i) Enron Corp. and its subsidiaries' ability to issue commercial paper, other short-term debt programs currently in place, equity or public debt securities, (ii) Transwestern Pipeline Company's ability to enter into a loan facility with Citibank and Chase, or (iii)(A) the Florida Gas Transmission Company's ability to enter into a $210,000,000 bank credit facility, (B) the Wessex Water Services' ability to enter into a 40 million pounds sterling index linked private placement, (C) Azurix Europe Limited's ability to enter into a 425 million pounds sterling revolving credit facility, (D) Elektro's ability to enter into a R$180 million bond issue, and (E) increases in existing accounts receivable and working capital facilities and entering into new accounts receivable and working capital facilities that are limited solely to those purposes. -2- Citibank and Chase will act as the sole Co-Administrative Agents for the Facility, Citibank will act as sole Paying Agent for the Facility, and SSBI and JP Morgan will act as sole arrangers for the Facility. No additional agents, co-agents or arrangers will be appointed, or other titles conferred, without the consent of Citibank, SSBI, Chase, JP Morgan and the Borrower. Section 4. Fees. In addition to the fees described in Annex I, the Borrower shall pay the non-refundable fees set forth in that certain letter agreement dated the date hereof (the "Fee Letter") among the Borrower, Citibank, SSBI, Chase and JP Morgan. The terms of the Fee Letter are an integral part of the respective commitments of Citibank, SSBI, Chase and JP Morgan hereunder and constitute part of this Commitment Letter for all purposes hereof. Section 5. Indemnification. Each of the Borrower and Enron Corp. shall indemnify and hold harmless SSBI, JP Morgan, Citibank, Chase, and each of their respective affiliates and each of their respective officers, directors, employees, agents, advisors and representatives (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities and reasonable out-of-pocket expenses (including, without limitation, reasonable fees and disbursements of counsel) (collectively, "Losses"), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Commitment Letter or the transactions contemplated hereby or thereby or any actual or proposed use of any proceeds or any letter of credit under the Facility, except to the extent such Losses resulted from the loss of anticipated profits or such Indemnified Party's gross negligence or willful misconduct or from a claim asserted by another Indemnified Party. In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower or Enron Corp., any of its directors, security holders or creditors, or any other person (other than an Indemnified Party) or whether or not an Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. No Indemnified Party shall have any liability (whether in contract, tort or otherwise) to the Borrower or Enron Corp. or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except for direct damages (as opposed to special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings)) resulting from such Indemnified Party's gross negligence or willful misconduct. Except as set forth in the next succeeding sentence, neither the Borrower nor Enron Corp. shall have any liability to any Indemnified Party (whether in contract, tort or otherwise) in connection with the Facility for punitive, exemplary or treble damages. If (a) an Indemnified Party is required to pay damages of the type specified in the preceding sentence to another person (that is not an Indemnified Party), and (b) such Indemnified Party would be entitled to indemnification under this Section 5 but for the limitation set forth in the preceding sentence, then the Indemnified Party shall nonetheless be entitled to indemnification for such Losses. The foregoing provisions of this Section 5 apply to Losses resulting from events occurring prior to the closing of the Facility. From and after the closing of the Facility, the indemnification provisions of the Operative Documents shall be applicable. Section 6. Costs and Expenses. Promptly following demand, the Borrower shall pay, or reimburse Citibank, SSBI, Chase and JP Morgan (as the case may be) for, all reasonable out-of-pocket costs and expenses incurred by Citibank, SSBI, Chase or JP Morgan (whether incurred on, before or after the date hereof) in connection with the Facility and the preparation, negotiation, execution and delivery of this Commitment Letter, including the reasonable fees and expenses of Bracewell & Patterson, L.L.P., Davis, Polk & Wardwell, and Shearman & Sterling and any reasonably required local counsel, in each case -3- incurred on or before the closing date of the Facility, regardless of whether any of the transactions contemplated hereby are consummated. The Borrower shall also pay all reasonable out-of-pocket costs and expenses of Citibank, SSBI, Chase and JP Morgan, as the case may be (including, without limitation, the reasonable fees and disbursements of counsel), incurred in connection with the enforcement of any of its rights and remedies hereunder. Section 7. Confidentiality. By accepting delivery of this Commitment Letter, each of the Borrower and Enron Corp. agrees that this Commitment Letter is for the Borrower's and Enron Corp.'s confidential use only and that neither its existence nor the terms hereof will be disclosed by the Borrower or Enron Corp. to any person other than the Borrower's and Enron Corp.'s officers, directors, employees, accountants, attorneys and other consultants or advisors, and then only on a confidential and "need to know" basis in connection with the transactions contemplated hereby; provided, however, that each of the Borrower and Enron Corp. may make such other public disclosures of the terms and conditions hereof as the Borrower is required by law or regulation, in the opinion of the Borrower's or Enron Corp.'s counsel, to make (including, without limitation, in response to any subpoena or court order) and each of the Borrower and Enron Corp. may make disclosure hereof in response to a request of any governmental authority having jurisdiction over the Borrower or Enron Corp., as the case may be, and Enron may make a disclosure hereof (except for the Fee Letter) in any form 8K filing with the SEC. Notwithstanding the foregoing, each of the Borrower and Enron Corp. may disclose the Commitment Letter (except for the Fee Letter) after the date that is two years from the date hereof. Section 8. Representations and Warranties. Each of the Borrower, for itself only, and Enron Corp. represents and warrants that (i) all information (other than projections) that has been or will hereafter be made available to Citibank, SSBI, Chase, JP Morgan, any other Lender or any potential Lender by the Borrower or Enron Corp. or any of its representatives and that is included in any information memo or similar document pertaining to the Facility is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statements were or are made and (ii) all projections, if any, that have been or will be prepared by the Borrower or Enron Corp. and made available to Citibank, SSBI, Chase, JP Morgan, any other Lender or any potential Lender in connection with the Facility have been or will be prepared in good faith based upon reasonable assumptions (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower's or Enron Corp.'s control, and that no assurance can be given that the projections will be realized). Each of the Borrower and Enron Corp. agrees to supplement the information and projections from time to time until the earlier of the date the Operative Documents become effective and December 31, 2001, so that the representations and warranties contained in this paragraph remain correct. In providing this Commitment Letter, each of Citibank, SSBI, Chase and JP Morgan is relying on the accuracy of the information furnished to it by or on behalf of the Borrower or Enron Corp. or any of its representatives or affiliates without independent verification thereof. Section 9. No Third Party Reliance, Etc. The agreements of each of Citibank, SSBI, Chase and JP Morgan hereunder and of any other Lender that issues a commitment to provide financing under the Facility are made solely for the benefit of the Borrower and may not be relied upon or enforced by any other person. Please note that those matters that are not covered or made clear herein are subject to mutual agreement of the parties. Except as provided in the Operative Documents, no party hereto may assign or delegate any of its rights or obligations hereunder without the prior written consent of each of the other parties hereto. This Commitment Letter may not be amended or modified except in a written agreement signed by all parties hereto. This Commitment Letter is not intended to create a fiduciary relationship among the parties hereto. -4- The Borrower and Enron Corp. should be aware that Citibank, SSBI, Chase, JP Morgan and/or one or more of their respective affiliates may be providing financing or other services to parties whose interests may conflict with the Borrower's or Enron Corp.'s interests. Consistent with the longstanding policy of Citibank, SSBI, Chase and JP Morgan to hold in confidence the affairs of its customers, neither Citibank, SSBI, Chase, JP Morgan nor any of their respective affiliates will furnish confidential information obtained from the Borrower or Enron Corp. to any of their other customers. Furthermore, neither Citibank, SSBI, Chase, JP Morgan nor any of their respective affiliates will make available to the Borrower or Enron Corp. confidential information that Citibank, SSBI, Chase, JP Morgan or any such affiliate obtained or may obtain from any other customer. Section 10. Governing Law, Etc. This Commitment Letter shall be governed by, and construed in accordance with, the law of the State of New York. This Commitment Letter sets forth the entire agreement between the parties with respect to the matters addressed herein and supersedes all prior communications, written or oral, with respect hereto. This Commitment Letter may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original and all of which, taken together, shall constitute one and the same Commitment Letter. Delivery of an executed counterpart of a signature page to this Commitment Letter by telecopier shall be as effective as delivery of an original executed counterpart of this Commitment Letter. Sections 3 through 7 and 10 hereof shall survive the termination of any commitment hereunder. Each party to this Commitment letter hereby irrevocably waive any right it may have to a jury trial and, to the fullest extent it may effectively do so under applicable law, (i) each of the parties hereto hereby irrevocably and unconditionally to the non-exclusive jurisdiction of the Supreme Court of the State of New York, Commercial Division, Civil Branch sitting in the Borough of Manhattan and of the United States District Court of the Southern District of New York, and any appellate court from any appeal thereof, in any action or proceeding arising out of or relating to this Commitment Letter or the Fee Letter or any other instrument or document furnished pursuant hereto or in connection herewith or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of such action or proceeding may be heard and determined in any such court; (ii) each of the parties hereto hereby irrevocably and unconditionally waives the defense of an inconvenient forum to the maintenance of such action or proceeding and any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in any such court; (iii) the Borrower hereby agrees that service of copies of the summons and complaint and any other process which may be served in any such action or proceeding may be made by mailing or delivering a copy of such process to the Borrower at its address specified above; and (iv) each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Please indicate the Borrower's and Enron Corp.'s acceptance of the provisions hereof by signing the enclosed copy of this Commitment Letter and the Fee Letter and returning them to Chris Lyons, Salomon Smith Barney Inc., 1200 Smith Street, Suite 2000, Houston, Texas 77002 (fax: 713 654-2849) and to George Serice, J.P. Morgan Securities Inc., 700 Travis Street, 20th Floor, Houston, Texas 77002 (fax: 713 216-4583) at or before 5 p.m. (Houston time) on October 31, 2001, the time at which the respective commitments hereunder of Citibank, SSBI, Chase and JP Morgan (if not so accepted prior thereto) will terminate. -5- If the Borrower and Enron Corp. elect to deliver this Commitment Letter by telecopier, please arrange for the executed original to follow by next-day courier. Very truly yours, SALOMON SMITH BARNEY INC. By: ----------------------------------------- Name: Title: CITIBANK, N.A. By: ----------------------------------------- Name: Title: THE CHASE MANHATTAN BANK By: ----------------------------------------- Name: Title: J.P. MORGAN SECURITIES INC. By: ----------------------------------------- Name: Title: -6- ACCEPTED AND AGREED on October 31, 2001: NORTHERN NATURAL GAS COMPANY By: ----------------------------------------- Name: Title: ENRON CORP. By: ----------------------------------------- Name: Title: -7- EX-99.4 6 h91831aex99-4.txt SUMMARY OF TERMS - NNGC REVOLVING FACILITY CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ $450 MM NORTHERN NATURAL GAS COMPANY REVOLVING FACILITY BORROWER: Northern Natural Gas Company (the "Borrower"). GUARANTOR: Enron Corp. FACILITY: Secured $450 million revolving credit facility, of which approximately $115,000,000 of Citibank, N.A.'s initial advances shall be deemed to be conversions of the obligations assumed under the Assumption Documents (as defined in the Commitment Letter) (the "Assumption Obligations") and, upon such conversion, the obligations assumed under the Assumption Documents shall be cancelled (the "Facility"). Citibank, N.A., The Chase Manhattan Bank and the Borrower will determine the appropriate structure for the conversion of the Assumption Obligations in the Credit Agreement. ACCORDION FEATURE: Provided no default exists at such time, the Borrower may, without consent of the Lenders, increase the size of the Facility to an amount not to exceed $550 million. No Lender is in any way obligated to participate in such increase by increasing its own commitment amount, which decision shall be made in the sole discretion of each Lender at the time the Borrower elects to exercise its option to increase the Facility. PAYING AGENT: Citibank, N.A. CO-ARRANGERS: Salomon Smith Barney Inc. and J.P. Morgan Securities Inc. CO-ADMINISTRATIVE AGENTS: The Chase Manhattan Bank and Citibank, N.A.. LENDERS: Citibank, N.A. and The Chase Manhattan Bank and such other Lenders acceptable to Citibank, N.A. and The Chase Manhattan Bank. SECURITY: A first priority perfected security interest securing the obligations under the Facility in (i) all capital stock of the Borrower; (ii) an unsecured subordinated intercompany note by Enron Corp. payable to the order of the Borrower ("Intercompany Note"); and (iii) subject to agreed exceptions, all other assets of the Borrower ("Collateral"). USE OF PROCEEDS: Working capital and loans to Enron Corp., such loans to be subordinated to all other debt of Enron Corp. MATURITY DATE: 364 days after the Closing Date. -1- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ CLOSING DATE: On or before November 16, 2001 or, with the consent of Citibank, N.A. and The Chase Manhattan Bank, such other date on which Citibank, N.A. and The Chase Manhattan Bank shall be satisfied that all conditions precedent set forth in the Commitment Letter have been met. INTEREST RATES AND FEES: At the Borrower's option, Advances will be available to it at the rates and for the Interest Periods set forth below: (a) Base Rate Option: Base Rate plus 1.50%. The Base Rate is a fluctuating rate per annum equal at all times to the highest of: (i) Citibank's publicly announced "base rate", (ii) 1/2 of 1% per annum above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major U.S. money center banks, adjusted for reserve requirements and FDIC assessment rates, and (iii) 1/2 of 1% per annum above the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers. (b) Eurodollar Rate Option: LIBOR plus 2.50%. LIBOR is the rate per annum (rounded upward to the nearest 1/100 of 1% per annum) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m. (London time) two business days before the first day of the relevant Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, LIBOR shall be the rate per annum (rounded upward to the nearest 1/100 of 1% per annum) appearing on Reuters Screen LIBO page as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m. (London time) two business days before the first day of the relevant Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates. If neither the Telerate Page 3750 nor the Reuters Screen LIBO page rate is available, then LIBOR shall be the rate per annum at which dollar deposits are offered by the principal office of Citibank in London to prime banks in the London interbank market at 11:00 A.M. (London -2- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ time) two business days before the first day of the relevant Interest Period and with a maturity equal to such Interest Period. The Borrower may select Interest Periods of 1, 2 or 3 months for LIBOR Advances. The Borrower will reimburse each Lender, upon demand, for the cost of reserve requirements actually incurred. DEFAULT RATE: When an event of default exists, all unpaid amounts under the Facility will bear interest payable on demand at the Base Rate plus 3.50%. COMMITMENT FEE: A commitment fee of 0.50% per annum shall accrue on the daily average unused commitments. INTEREST AND FEE PAYMENTS: Interest on Base Rate Advances and commitment fees will be payable quarterly in arrears. Interest on LIBOR Advances will be payable at the end of the relevant Interest Period. Interest will be computed on a 365/366-day basis for Base Rate Advances and on a 360-day basis for LIBOR Advances. Commitment fees will be computed on a 360-day basis. BORROWINGS: Borrowings shall be in minimum principal amounts of $25,000,000 for LIBOR Advances and $10,000,000 for Base Rate Advances. All Advances under the Facility will be made by the Lenders ratably in proportion to their respective commitments in the Facility. Borrowings will be available on same day notice (by 11:00 a.m. New York City time) for Base Rate Advances and three business days' notice for Eurodollar Rate Advances. On the Closing Date the Borrower shall request an initial Borrowing of an amount sufficient to convert all the Assumption Obligations to advances. OPTIONAL PREPAYMENTS: Advances may be prepaid in an amount of at least $10,000,000 on same day notice for Base Rate Advances and three business days notice for LIBOR Advances. The Borrower will bear all losses and costs (but not lost profits) related to prepayment of LIBOR Advances prior to the last day of the relevant Interest Period. MANDATORY PREPAYMENTS: Subject to agreed exceptions, the Advances shall be paid and the commitments permanently reduced by an amount equal to the net cash proceeds the Borrower receives from (i) any asset sales, (ii) equity issuances, or (iii) capital markets transactions. -3- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ CONDITIONS PRECEDENT TO CLOSING: Customary for financings of this nature, including: (a) the execution and delivery of the following, in form and substance satisfactory to the Co-Administrative Agents, for the Facility: (i) a credit agreement, (ii) certificates with respect to resolutions, charter, by-laws, incumbency and signatures and certified copies of all other relevant documents evidencing any necessary corporate action and governmental approvals, (iii) all security documents necessary to obtain a first perfected security interest (subject to agreed exceptions) in the Collateral securing the Facility only (other than certain of the Borrower's real estate and pipelines and fixtures that the Co-Administrative Agents agree may be obtained after the Closing Date ("Post-Closing Collateral")), including execution and delivery of pledge agreements covering all of the Borrower's capital stock and the Intercompany Note and a security agreement covering all the Borrower's personal property, (iv) a solvency and corporate separateness certificate by the Borrower's chief financial officer, and (v) favorable legal opinions from counsel for the Borrower and Enron Corp., including an opinion as to the enforceability of all loan documents and the perfection and enforceability of the security interests and an opinion regarding governmental approvals for the Facility (such opinions to be subject to customary exceptions and qualifications including bankruptcy, preference, fraudulent transfer or conveyance, equitable principles, and customary qualifications as to the enforceability of indemnities); and (b) (i) the Paying Agent's obtaining a first perfected security interest, subject to agreed exceptions, in the Collateral (other than the Post-Closing Collateral), and (ii) receipt of all charters, bylaws, partnership agreements, or other similar documents for each of Enron Corp.'s subsidiaries that directly or indirectly has any interest in the Borrower. POST-CLOSING REQUIREMENT: Within 60 days (except as agreed) after the Closing Date, (i) the Borrower shall have executed all security documents necessary to obtain a first perfected security interest (subject to agreed exceptions) securing the Facility only in the Post-Closing Collateral and (ii) the Paying Agent shall have received satisfactory opinions of counsel with respect thereto. CONDITIONS PRECEDENT TO INITIAL ADVANCE: o Enron Corp. shall have a rating of at least BBB- and Baa3 by S&P and Moody's, respectively, and if such rating is BBB- and Baa3, such rating must be accompanied with a "stable" outlook ("Investment Grade"). o Neither Co-Administrative Agent shall have determined that, except as publicly disclosed or disclosed in writing to the Co-Administrative Agents before the execution of the Commitment -4- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ Letter, since December 31, 2000 a material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of Enron Corp. and its subsidiaries, taken as a whole, shall have occurred. CONDITIONS PRECEDENT TO ALL ADVANCES: Customary for financings of this nature, including the following: o All representations and warranties are correct on and as of the date of the borrowing before and after giving effect to such borrowing and to the application of the proceeds therefrom (other than those representations and warranties that expressly relate solely to a specific earlier date, which shall remain correct as of such earlier date), as though made on and as of such date. o No event or condition exists or would result from such borrowing which constitutes an event of default or would constitute an event of default but for the requirement that notice be given or time elapse or both. o The Paying Agent shall have received such other approvals, opinions or documents as any Lender through the Paying Agent may reasonably request. REPRESENTATIONS AND WARRANTIES OF THE BORROWER: Usual and customary for transactions of this nature, including but not limited to: (i) confirmation of corporate status and authority of the Borrower and its subsidiaries, (ii) documentation and performance duly authorized and do not contravene laws, corporate documents, judgments, orders or material agreements, (iii) documentation, including the Corporate Amendment Documents and the Assumption Documents, are legal, valid, binding and enforceable, (iv) financial statements, (v) since December 31, 2000, no material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its subsidiaries, taken as a whole, (vi) no litigation having a material adverse effect, (vii) ERISA, (viii) environmental condition, (ix) taxes, (x) status under Investment Company Act and Public Utility Holding Company Act, (xi) full and complete disclosure, (xii) solvency, and (xiii) corporate separateness. -5- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ COVENANTS: Usual and customary for transactions of this nature including: (i) periodic financial statements, certificates of compliance with financial covenant, notice of default, certain ERISA information, and other information reasonably requested from time to time, (ii) compliance with laws, including environmental compliance, (iii) use of proceeds, (iv) maintenance of existence, (v) insurance, (vi) visitation rights, (vii) prohibition on liens and negative pledges subject to agreed exceptions, (viii) prohibition on debt subject to agreed exceptions, (ix) no sale, lease, transfer or other disposition of the Borrower's or any of its subsidiaries' assets with a value of more than $25,000,000 in the aggregate after the closing date or the Borrower's pipeline, (x) no merger or consolidation by the Borrower unless no default exists or results and the Borrower is survivor, (xi) limitation on investments, (xii) tangible net worth in accordance with GAAP of at least $750,000,000, (xiii) no change in lines of business, (xiv) corporate separateness, (xv) limitations on transactions with affiliates, (xvi) prohibition on distributions; (xvii) subject to agreed exceptions, prohibition on intercompany advances when a default has occurred and is continuing or would result therefrom, when the sum of the Borrower's unrestricted cash and the availability under the Facility after giving effect thereto is less than $30,000,000, or when Enron Corp. is no longer Investment Grade, (xviii) completion of expansion as disclosed to the Co-Administrative Agents, and (xix) no subsidiaries. EVENTS OF DEFAULT: Customary events of default for transactions of this nature, including: (i) failure to pay principal when due or interest and commitment fees after 5-day grace period, (ii) representations and warranties untrue when made, (iii) failure to comply with affirmative covenants if not cured within 30 days after written notice, (iv) failure to comply with negative covenants, (v) cross default or acceleration of Debt of the Borrower or a subsidiary for borrowed money greater than $10,000,000 or the occurrence and continuance of an Event of Default under the $1,750,000,000 364-Day Revolving Credit Agreement dated as of May 14, 2001 among Enron Corp., the banks party thereto and Citibank, N.A. and The Chase Manhattan Bank, as Co-Administrative Agents for such banks or the $1,250,000,000 Long-Term Revolving Credit Agreement dated as of May 18, 2000 among Enron Corp., the banks party thereto and Citibank, N.A. and The Chase Manhattan Bank, as Co-Administrative Agents for such banks, (vi) bankruptcy or insolvency of Enron Corp. or the Borrower or any of its subsidiaries, (vii) any unsatisfied judgment against the Borrower or any of its subsidiaries for payment of money greater than $10,000,000 unless enforcement stayed by appeal or otherwise, (viii) occurrence of certain circumstances respecting ERISA plans, (ix) except as agreed, Enron Corp. shall cease to own directly or indirectly 100% of the Borrower's capital stock, (x) an event of default under the Guaranty shall occur, (xi) any loan document, including the -6- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ Guaranty or a security document (subject to agreed exceptions), fails to remain in full force or effect or any action is taken to discontinue or to assert the invalidity or unenforceability thereof or any obligor under a loan document, including the Guaranty or a security document, shall disclaim an obligation thereunder, (xii) subject to agreed upon matters, any collateral document fails to create a valid and perfected first priority security interest (subject to agreed exceptions) in any Collateral purported to be covered thereby, or (xiii) the Borrower shall fail to comply with the terms of the Fee Letter. GUARANTY: Unconditional guaranty of payment, not of collection. The Guaranty will include customary representations and warranties, including the following: (i) confirmation of corporate status and authority, (ii) documentation and performance duly authorized and do not contravene laws, corporate documents, judgments, orders or material agreements, (iii) documentation legal, valid, binding and enforceable, (iv) full disclosure, (v) corporate separateness between Enron Corp. and the Borrower, (vi) solvency, (vii) except as publicly disclosed or disclosed in writing to the Co-Administrative Agents before the execution of the Commitment Letter , since December 31, 2000 no material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of Enron Corp. and its subsidiaries, taken as a whole, has occurred. The Guaranty will also include customary affirmative and negative covenants, including (i) each of the covenants contained in Enron Corp.'s revolving credit agreements, as in effect from time to time, (ii) prohibition on liens and negative pledges for Enron Corp. and its subsidiaries subject to agreed exceptions, and (iii) maintenance of corporate separateness between Enron Corp. and the Borrower. TRANSFERS AND PARTICIPATIONS: Lenders permitted to assign commitments and loans under the Facility, in whole or part, to another Lender in the Facility, and, with the consent of the Paying Agents and, so long as no default exists, the Borrower (which consents shall not be unreasonably withheld), to a person that is not a Lender. Lenders may sell participations in the Facility provided that the assigning Lender retains all voting rights (except as specified in the definitive loan documentation) and all obligations under the Facility. OTHER: The documentation will include customary agency language, and Majority Lenders for the Facility will be defined as those holding at least 66-2/3% of the Commitments under the Facility. The loan documentation will contain customary provisions regarding taxes, illegality, increased costs and capital -7- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ adequacy, subject to certain limitations, a waiver of jury trial, and a consent to New York jurisdiction. EXPENSES; INDEMNITY: All reasonable expenses incurred (i) by the Lenders in connection with the preparation, execution, delivery, modification, amendment and administration of the loan documentation (including reasonable fees and expenses of counsel to the Lenders) or (ii) by either Co-Administrative Agent or any Lender in connection with the enforcement of the loan documentation (including reasonable legal expenses), are for the Borrower's account. To the fullest extent permitted by law, the Borrower will indemnify and hold harmless each Co-Administrative Agent, each Lender and each of their respective officers, directors, employees and agents (each an "Indemnified Party") from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and expenses of counsel) that may be incurred by or asserted against any Indemnified Party (other than by either Co-Administrative Agent or another Lender or any of their respective successors and assigns), in each case arising out of or in connection with any environmental claim or by reason of any investigation, litigation or proceeding arising out of, related to or in connection with the loan documentation or any transaction in which any proceeds of the Facility are applied, excluding any claim, damage, loss, liability or expense attributable to such Indemnified Party's gross negligence or willful misconduct. No Indemnified Party shall have any liability (whether in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except for direct damages (as opposed to special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings)) resulting from such Indemnified Party's gross negligence or willful misconduct. Except as set forth in the next succeeding sentence, Borrower shall not have any liability to any Indemnified Party (whether in contract, tort or otherwise) in connection with the Facility for punitive, exemplary or treble damages. If (a) an Indemnified Party is required to pay damages of the type specified in the preceding sentence to another person (that is not an Indemnified Party), and (b) such Indemnified Party would be entitled to indemnification under this provision but for the limitation set forth in the preceding sentence, then the Indemnified Party shall nonetheless be entitled to indemnification for such Losses. GOVERNING LAW: New York. COUNSEL TO THE CO-ADMINISTRATIVE AGENTS: Bracewell & Patterson, L.L.P. -8- CONFIDENTIAL - -------------------------------------------------------------------------------- ANNEX I SUMMARY OF TERMS AND CONDITIONS ================================================================================ -9- -----END PRIVACY-ENHANCED MESSAGE-----