Exhibit 10.1
FIFTH AMENDMENT TO
CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) made as of the 30th day of November, 2005, amongENSERCO ENERGY INC., a South Dakota corporation (the “Borrower”),FORTIS CAPITAL CORP. (“Fortis”), a Connecticut corporation, as a Bank, an Issuing Bank and as Administrative Agent, Documentation Agent and Collateral Agent for the Banks,BNP PARIBAS(“BNP Paribas”), a bank organized under the laws of France, as an Issuing Bank and a Bank,U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”), a national banking association, as a Bank andSOCIETE GENERALE (“SocGen”), a bank organized under the laws of France, as a Bank, andUFJ BANK LIMITED, NEW YORK BRANCH (“UFJ”), a bank organized under the laws of Japan, as a Bank, (collectively, the “Banks”).
WHEREAS, the Borrower and the Banks have entered into an Amended and Restated Credit Agreement effective as of May 14, 2004 (as amended, the “Credit Agreement”);
WHEREAS, the Borrower has requested that the Banks extend the Expiration Date and make certain additional changes to the Credit Agreement, and the Banks have agreed to make such changes; and
WHEREAS, UFJ is prepared to join the Credit Agreement as a Bank;
NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
1. Defined Terms. All capitalized terms used but not otherwise defined in this Amendment shall have the meaning ascribed to them in the Credit Agreement. Unless otherwise specified, all section references herein refer to sections of the Credit Agreement.
2. Amendments to Credit Agreement. The Credit Agreement is amended as follows:
(a) The Definition of Advance Line Limit. The definition of “Advance Line Limit” is amended to read as follows: |
| “‘Advance Line Limit’ means $50,000,000.00.” |
(b) The Definition of Borrowing Base Sub-Cap. The definition of “Borrowing Base Sub-Cap” is amended and restated to read as follows: |
“‘Borrowing Base Sub-Cap’ means, on the Closing Date, an amount equal to $200,000,000.00;provided,however, Borrower may elect to change such Borrowing Base Sub-Cap five (5) times during any twelve (12) month period to be any of $100,000,000.00, $125,000,000.00, $150,000,000.00, $175,000,000.00 or $200,000,000.00 (provided that, regardless of any Elected Performance L/C Cap, the Borrowing Base Sub-Cap shall never exceed $200,000,000.00), which modified Borrowing Base Sub-Cap shall continue in effect until again changed by Borrower in accordance with this Agreement, or until automatically reduced as hereinafter set forth. Notwithstanding the foregoing, Borrower may not elect a Borrowing Base Sub-Cap unless Borrower’s Net Working Capital and Tangible Net Worth at the time of election are greater than, or equal to, the amounts specified below: |
(a) If Borrower elects $200,000,000.00, Borrower’s Net Working Capital and Tangible Net Worth must each be at least $37,375,000.00 plus an amount equal to 30% of the Elected Performance L/C Cap; |
(b) If Borrower elects $175,000,000.00, Borrower’s Net Working Capital and Tangible Net Worth must each be at least $32,375,000.00 plus an amount equal to 30% of the Elected Performance L/C Cap; |
(c) If Borrower elects $150,000,000.00, Borrower’s Net Working Capital and Tangible Net Worth must each be at least $27,750,000 plus an amount equal to 30% of the Elected Performance L/C Cap; or |
(d) If Borrower elects $125,000,000.00, Borrower’s Net Working Capital and Tangible Net Worth must each be at least $23,125,000 plus an amount equal to 30% of the Elected Performance L/C Cap; or |
(e) If Borrower elects $100,000,000.00, Borrower’s Net Working Capital and Tangible Net Worth must each be at least |
2
$18,500,000 plus an amount equal to 30% of the Elected Performance L/C Cap. |
Borrower shall elect which Borrowing Base Sub-Cap is in effect from time to time by delivering to Agent and Banks a written notice of such election in the form ofExhibit I which is attached hereto. In the event that after Borrower makes a Borrowing Base Sub-Cap election Borrower’s Net Working Capital or Tangible Net Worth as reflected on a Compliance Certificate delivered to Agent are not in compliance with the requirements set forth above, the Borrowing Base Sub-Cap shall be automatically reduced to the appropriate level set forth above to cause compliance with the requirements set forth above, provided that if Borrower fails to qualify for (a), (b), (c), (d) or (e) or fails to elect a Borrowing Base Sub-Cap, then the Borrowing Base Sub-Cap shall be $100,000,000.00. Such reduction shall take place upon Agent’s receipt of such Compliance Certificate or notice of election.NOTWITHSTANDING THE FOREGOING, BORROWER MAY NOT ELECTA BORROWING BASE SUB-CAP IN AN AMOUNT IN EXCESS OF THE THEN TOTAL UNCOMMITTED LINE AMOUNT SUBSCRIBED AS SETFORTH ONSCHEDULE 2.01 FROM TIME TO TIME.” |
(c) The Definition of Economic Basis. The following definition of “Economic Basis” is added toSection 1.01 (Definitions) of the Credit Agreement: |
“‘Economic Basis’ means the calculation of financial accounting terms using mark to market of certain assets and liabilities as if the accounting standards of the Emerging Issues Task Force (EITF) under EITF-98-10 (accounting for contracts involved in energy trading and risk management activities) applied.” |
(d) The Definition of Expiration Date. Clause (a) in the definition of “Expiration Date” is amended to read as follows: |
“(a) November 30, 2006.” |
(e) The Definition of L/C Sub-Limit Cap. Clause (c) and (e) of the definition of “L/C Sub-Limit Cap” is amended to read as follows: |
3
“(a) Performance L/Cs — $15,000,000.00 but not to exceed the Elected Performance L/C Cap then in effect; |
(b) Natural Gas/Transportation L/Cs — $40,000,000.00; |
(c) Ninety (90) Day Swap L/Cs — $50,000,000.00; |
(d) Three Hundred Sixty-Five (365) Day Swap L/Cs — $25,000,000.00; |
(e) Natural Gas/Supply L/Cs — $200,000,000.00 less any amounts outstanding under (a), (b), (c) or (d) above.” |
(f) The Definition of Maturity Date. The definition of “Maturity Date” is amended to read as follows: |
| “‘Maturity Date’ means November 30, 2007.” |
(g) Section 1.03 (Accounting Principles). Section 1.03(a) is amended by changing the period following the word “applied” on line three to a comma, and adding the following: |
| “except for the financial computations relating to the terms ‘Net Working Capital’ and ‘Tangible Net Worth’ which are to be made on an Economic Basis.” |
(h) Schedule 2.01 (Uncommitted Line and Uncommitted Line Portions). Schedule 2.01 is deleted and replaced with Schedule 2.01 attached to this Amendment. |
(i) Section 7.01 (Financial Statements). Subsection (b) is deleted, and the following Subsections are added to Section 7.01: |
“(b) as soon as available, but not later than 120 days after the end of each fiscal year, a copy of the financial statements of Borrower to include a balance sheet as at the end of such year and the related statements of income or operations, members’ equity and cash flows for such year, in each case prepared on an Economic Basis and accompanied by a special purpose report acceptable to the Banks issued by a nationally-recognized independent accounting firm; and |
(c) as soon as available, but not later than forty-five (45) days after the end of each month, Borrower-prepared financial |
4
statements prepared in accordance with GAAP and on an Economic Basis and accompanied by an explanation of any discrepancy between such statements resulting from the differing methods of preparation.” |
3. Joinder Agreement. As of the Effective Date (defined below), UFJ shall become a party to the Credit Agreement as a Bank, shall acquire all of the rights, powers and obligations of a Bank under the Credit Agreement, and shall have an Uncommitted Line Portion equal to $10,000,000. From and after the Effective Date, all references to “Banks” in the Credit Agreement and the other Loan Documents shall be deemed to include, in any event, UFJ.
4. Effectiveness of Amendment.This Amendment shall be effective on November 30, 2005 (the “Effective Date”) upon receipt by the Agent of the following:
(a) An executed copy of this Amendment; |
(b) Amended and restated promissory notes in favor of Fortis and SocGen and a new promissory note in favor of UFJ in the amount of their respective revised Uncommitted Line Portions; |
(c) Payment of all fees and expenses owing to the Banks; and |
(d) Such other documents and instruments as any Bank may reasonably request to reflect the changes set forth in this Amendment. |
5. Ratifications, Borrower Representations and Warranties.
(a) The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement are ratified and confirmed and shall continue in full force and effect. The Borrowers and the Banks agree that the Credit Agreement and the Loan Documents, as amended hereby, shall continue to be legal, valid, binding and enforceable in accordance with their respective terms. |
(b) To induce the Banks to enter into this Amendment, the Borrower ratifies and confirms each representation and warranty set forth in the Credit Agreement as if such representations and warranties were made on the even date herewith, and further represents and warrants (i) that there has occurred since the date of the last financial statements delivered to the Banks no event |
5
| or circumstance that has resulted or could reasonably be expected to result in a Material Adverse Effect, (ii) that no Event of Default exists on the date hereof, and (iii) that the Borrower is fully authorized to enter into this Amendment. THE BORROWER ACKNOWLEDGES THAT THE CREDIT AGREEMENT PROVIDES FOR A CREDIT FACILITY THAT IS COMPLETELY DISCRETIONARY ON THE PART OF THE BANKS AND THAT THE BANKS HAVE ABSOLUTELY NO DUTY OR OBLIGATION TO ADVANCE ANY REVOLVING LOAN OR TO ISSUE ANY LETTER OF CREDIT. THE BORROWER REPRESENTS AND WARRANTS TO THE BANKS THAT THE BORROWER IS AWARE OF THE RISKS ASSOCIATED WITH CONDUCTING BUSINESS UTILIZING AN UNCOMMITTED FACILITY. |
6. Benefits. This Amendment shall be binding upon and inure to the benefit of the Banks and Borrower, and their respective successors and assigns; provided, however, that Borrowers may not, without the prior written consent of the Banks, assign any rights, powers, duties or obligations under this Amendment, the Credit Agreement or any of the other Loan Documents.
7. Construction. This Amendment shall be governed by and construed in accordance with the laws of the State of New York.
8. Invalid Provisions. If any provision of this Amendment is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable and the remaining provisions of this Amendment shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance.
9. Entire Agreement. The Credit Agreement, as amended by this Amendment, contains the entire agreement among the parties regarding the subject matter hereof and supersedes all prior written and oral agreements and understandings among the parties hereto regarding same.
10. Reference to Credit Agreement. The Credit Agreement and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement, as amended hereby, are hereby amended so that any reference in the Credit Agreement to the Credit Agreement shall mean a reference to the Credit Agreement as amended hereby.
6
11. Counterparts. This Amendment may be separately executed in any number of counterparts, each of which shall be an original, but all of which, taken together, shall be deemed to constitute one and the same agreement.
[The Remainder of this Page Intentionally Left Blank]
7
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.
| ENSERCO ENERGY INC., a South Dakota corporation |
| By: /s/ Thomas M. Ohlmacher Name: Thomas M. Ohlmacher Title: President & Chief Operating Officer 350 Indiana Street, Suite 400 Golden, Colorado 80401 Attention: Thomas M. Ohlmacher Telephone: (303) 568-3261 Facsimile: (303) 568-3250 |
| FORTIS CAPITAL CORP., as Agent |
| By: /s/ Irene C. Rummel Name: Irene C. Rummel Title: Senior Vice President By: /s/ Leonard Russo Name: Leonard Russo Title: Director 15455 North Dallas Parkway Suite 1400 Addison, TX 75001 Attention: Irene C. Rummel Telephone: (214) 953-9313 Facsimile: (214) 969-9332 |
8
| FORTIS CAPITAL CORP., as a Bank and an Issuing Bank |
| By: /s/ Irene C. Rummel Name: Irene C. Rummel Title: Senior Vice President By: /s/ Leonard Russo Name: Leonard Russo Title: Director 15455 North Dallas Parkway Addison, TX 75001 Attention: Irene C. Rummel Telephone: (214) 953-9313 Facsimile: (214) 969-9332 |
| BNP PARIBAS, as an Issuing Bank and a Bank |
| By: /s/ Keith Cox Name: Keith Cox Title: Managing Director By: /s/ Jordan Nenoff Name: Jordan Nenoff Title: Vice President 787 Seventh Avenue New York, NY 10019 Attention: Keith Cox Phone: (212) 841-2575 Fax: (212) 841-2536 |
9
| U.S. BANK NATIONAL ASSOCIATION, as a Bank |
| By: /s/ Monte Deckerd Name: Monte Deckerd Title: Vice President 918 17th Street DNCOBB3E Denver, CO 80202 Attn: Monte Deckerd Phone: (303) 585-4212 Fax: (303) 585-4362 |
| SOCIETE GENERALE, as a Bank |
| By: /s/ Barbara Paulsen Name: Barbara Paulsen Title: Director By: ___________________________________________________________ Name: _________________________________________________________ Title: _________________________________________________________ 1221 Avenue of the Americas New York, NY 10020 Attn: Barbara Paulsen Phone: (212) 278-6496 Fax: (212) 278-7953 |
10
| UFJ BANK LIMITED, NEW YORK BRANCH, as a Bank |
| By: /s/ Chan K. Park Name: Chan K. Park Title: Senior Vice President 55 East 52ndStreet New York, NY 10055 Attention: Chan Park Phone: (212) 339-6261 Fax: (212) 754-2360 |
11
SCHEDULE 2.01
UNCOMMITTED LINE AND
UNCOMMITTED LINE PORTIONS
(EXCLUDING SWAP CONTRACTS)
I. Uncommitted Line:
A. Maximum Line: $200,000,000.00
B. Total Line Amount Subscribed: $200,000,000.00
C. Subscribed Percentage: 100%
II. Uncommitted Line Portions:
A. Subscribed Amounts:
| Bank | Dollar Amount | Pro Rata Share | ||||||
|---|---|---|---|---|---|---|---|---|
| Fortis Capital Corp. | $ | 75,000,000 | .00 | 37 | .500000% | |||
| BNP Paribas | $ | 55,000,000 | .00 | 27 | .500000% | |||
| Societe Generale | $ | 45,000,000 | .00 | 22 | .500000% | |||
| U.S. Bank | $ | 15,000,000 | .00 | 7 | .500000% | |||
| UFJ Bank Limited | $ | 10,000,000 | .00 | 5 | .000000% | |||
| Total Subscribed Line Portions | $ | 200,000,000 | .00 | 100% | ||||
III. Advance Line Limit: $ 50,000,000.00
IV. L/C Line Limit(Subscribed Percentage, times $200,000,000.00) $200,000,000.00
Effective Date: November 30, 2005