EXECUTION VERSION
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CREDIT AGREEMENT
among
NORTHWESTERN CORPORATION,
as Borrower,
The Several Lenders from Time to Time Parties Hereto,
and
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch,
as Administrative Agent,
Lead Arranger and Sole Book Runner
Dated as of December 17, 2002
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS...............................................................1
1.1 Defined Terms..............................................................1
1.2 Other Definitional Provisions.............................................21
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS..........................................22
2.1 Commitments and Loans.....................................................22
2.2 Evidence of Indebtedness..................................................22
2.3 Procedure for Borrowing...................................................23
2.4 Fees......................................................................23
2.5 Repayment of Loans........................................................23
2.6 Optional and Mandatory Prepayments........................................23
2.7 Interest Rate Conversion and Continuation Options.........................25
2.8 Maximum Amounts of Eurodollar Tranches....................................26
2.9 Interest Rates; Default Rate Payment Dates................................26
2.10 Computation of Interest...................................................26
2.11 Inability to Determine Interest Rate......................................27
2.12 Pro Rata Treatment and Payments; Funding Reliance.........................27
2.13 Illegality................................................................28
2.14 Requirements of Law.......................................................28
2.15 Taxes.....................................................................29
2.16 Indemnity.................................................................32
2.17 Discretion of Lender as to Manner of Funding..............................32
2.18 Change of Lending Office; Replacement Lender..............................33
ARTICLE 3. REPRESENTATIONS AND WARRANTIES...........................................33
3.1 Financial Condition.......................................................34
3.2 No Change.................................................................34
3.3 Corporate Existence; Compliance with Law..................................34
3.4 Corporate Power; Authorization; Enforceable Obligations...................35
3.5 No Legal Bar..............................................................35
3.6 No Material Litigation....................................................36
3.7 No Default................................................................36
3.8 Ownership of Property; Liens..............................................36
3.9 [Intentionally Omitted]...................................................36
3.10 Intellectual Property.....................................................36
3.11 No Burdensome Restrictions................................................36
3.12 Taxes.....................................................................36
3.13 Margin Stock..............................................................37
3.14 ERISA.....................................................................37
3.15 Holding Company; Investment Company Act; Other Regulations................37
3.16 Purpose of Loans..........................................................38
3.17 Environmental Matters.....................................................38
3.18 Insurance.................................................................38
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3.19 Accuracy and Completeness of Information..................................39
3.20 Leaseholds, Permits, etc..................................................39
3.21 No Restrictive Covenants..................................................39
3.22 Solvency..................................................................40
3.23 Montana First Mortgage Indenture..........................................40
3.24 South Dakota First Mortgage Indenture.....................................41
3.25 Subsidiaries..............................................................42
ARTICLE 4. CONDITIONS PRECEDENT.....................................................43
4.1 Conditions to Closing Date................................................43
4.2 Conditions to the Funding Date............................................45
4.3 Conditions to Cash Collateral Release.....................................46
ARTICLE 5. AFFIRMATIVE COVENANTS....................................................48
5.1 Financial Statements......................................................48
5.2 Certificates; Other Information...........................................48
5.3 Payment and Performance of Obligations....................................49
5.4 Maintenance of Existence..................................................49
5.5 Maintenance of Property; Insurance........................................50
5.6 Inspection of Property; Books and Records; Discussions....................50
5.7 Notices...................................................................50
5.8 Environmental Laws........................................................51
5.9 ERISA.....................................................................51
5.10 Use of Proceeds...........................................................52
5.11 Margin Stock..............................................................52
5.12 Maintain Ownership of the Utility Business................................52
5.13 Post-Closing Matters......................................................52
5.14 Credit Ratings............................................................52
5.15 Excluded Subsidiaries.....................................................53
ARTICLE 6. NEGATIVE COVENANTS.......................................................53
6.1 Financial Covenants.......................................................53
6.2 Limitation on Fundamental Changes.........................................54
6.3 Limitation on Transactions with Affiliates................................55
6.4 Limitation on Liens.......................................................55
6.5 Amendments of Organizational Documents....................................55
6.6 Limitation on Guarantee Obligations.......................................55
6.7 Limitation on Sale of Assets..............................................55
6.8 Limitation on Investments, Loans and Advances.............................56
6.9 Limitation on Dividends and Stock Repurchases.............................57
6.10 Limitation on Indebtedness or Mandatory Redeemable Stock..................58
6.11 Limitation on Sales and Leasebacks........................................59
6.12 Limitation on Negative Pledge Clauses; Payment Restrictions...............60
6.13 Limitation on Businesses..................................................60
6.14 Limitation on Certain Prepayments and Amendments..........................60
6.15 Limitations on Subsidiaries' Equity Interests.............................61
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6.16 Limitation on Release of Mortgaged Property; Limitation in Respect of
Insurance.................................................................61
6.17 Limitation on Subjecting Property or Other Assets to the Lien of the Other
Indenture.................................................................61
6.18 Prohibition on Designating Class "A" Mortgages or Permitting Qualified
Lien Bonds to Exist.......................................................62
6.19 Limitation on Amendments or Supplements to the Indentures.................62
6.20 Prohibition on Second Mortgage Bonds......................................62
ARTICLE 7. EVENTS OF DEFAULT........................................................62
7.1 Events of Default.........................................................62
ARTICLE 8. THE AGENTS...............................................................65
8.1 Appointment...............................................................65
8.2 Delegation of Duties......................................................65
8.3 Exculpatory Provisions....................................................65
8.4 Reliance by Agents........................................................66
8.5 Notice of Default.........................................................66
8.6 Non-Reliance on Agents and Other Lenders..................................66
8.7 Indemnification...........................................................67
8.8 Agent in Its Individual Capacity..........................................67
8.9 Successor Administrative Agent............................................67
ARTICLE 9. MISCELLANEOUS............................................................68
9.1 Amendments and Waivers....................................................68
9.2 Notice....................................................................69
9.3 No Waiver; Cumulative Remedies............................................69
9.4 Survival of Representations and Warranties................................70
9.5 Payment of Expenses and Taxes; Indemnification............................70
9.6 Successors and Assigns; Participations and Assignments....................70
9.7 Adjustments; Setoff.......................................................74
9.8 Confidentiality...........................................................74
9.9 Effectiveness.............................................................75
9.10 Counterparts..............................................................75
9.11 Severability..............................................................75
9.12 Integration...............................................................75
9.13 GOVERNING LAW.............................................................75
9.14 Submission To Jurisdiction; Waivers.......................................75
9.15 Acknowledgments...........................................................76
9.16 Waivers of Jury Trial.....................................................76
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Term Note
Exhibit A-2 Form of QFL Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Interest Rate Conversion
Exhibit C Form of Closing Certificate
Exhibit D Form of Assignment and Assumption Agreement
Schedule I Lending Offices of Lenders
Schedule 3.4a First Mortgage Approvals
Schedule 3.4b Required Consents of Governmental Authorities
Schedule 3.8 Exceptions to Title to Borrower's Properties
Schedule 3.12 Taxes
Schedule 3.14 ERISA
Schedule 3.15 Regulations Limiting Indebtedness
Schedule 3.17 Environmental Matters
Schedule 3.25 Subsidiaries
Schedule 6.3 Transactions with Affiliates
Schedule 6.4 Liens Securing Indebtedness for Money Borrowed
Schedule 6.6 Guarantee Obligations
Schedule 6.8 Investments
Schedule 6.10 Indebtedness, Mandatory Redeemable Stock and Preferred
Stock
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CREDIT AGREEMENT, dated as of December 17, 2002, among
NORTHWESTERN CORPORATION, a Delaware corporation (the "Borrower"), the several
banks and other financial institutions from time to time party hereto (the
"Lenders"), and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, as Administrative Agent (in such capacity the "Administrative Agent"),
Lead Arranger and Sole Book Runner.
PRELIMINARY STATEMENTS
1. The Borrower has requested the Lenders extend credit to the Borrower
in the form of term loans in an aggregate principal amount not in excess of
$390,000,000. The proceeds of the Loans are to be used by the Borrower first to
repay in full, and terminate, the Existing Credit Agreement and thereafter to
provide working capital and for other general corporate purposes. The Loans
shall be secured by the issuance of certain first mortgage bonds to and
registered in the name of the Collateral Agent for the ratable benefit of the
Lenders (it being understood that payments on the Loans shall be deemed payments
on such first mortgage bonds and payments on such first mortgage bonds shall be
applied to the payment of the Loans). Prior to the issuance of such first
mortgage bonds, the Loans shall be secured by the proceeds of the Loans.
2. In consideration of the foregoing premises and the mutual covenants
herein contained and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the
following meanings:
"Administrative Agent" shall have the meaning ascribed thereto in
the heading hereto and shall include such other Lender or financial
institution as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 8.9.
"Affected Lender" shall have the meaning ascribed thereto in
Section 2.18.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, is in control of (including all directors and
officers of such Person), is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a
Person shall mean the power, directly or indirectly, to direct or cause
the direction of the management and policies of such Person, whether by
ownership of voting securities, by contract or otherwise.
"Agents" shall have the meaning ascribed thereto in Section 8.1.
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"Agreement" shall mean this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Alternate Base Rate" shall mean, on any particular date, a rate
of interest per annum equal to the highest of
(a) the rate of interest most recently announced by CSFB as
its prime rate in effect at its principal office in New
York City (which rate is not necessarily intended to be
the lowest rate of interest charged by CSFB in connection
with extensions of credit);
(b) the Federal Funds Rate for such date plus 0.50% and
(c) 4.00%.
"Alternate Base Rate Loans" shall mean Loans the rate of interest
applicable to which is based upon the Alternate Base Rate.
"Approved Fund" shall mean, with respect to any Lender that is a
fund or commingled investment vehicle that invests in commercial loans,
any other fund that invests in commercial loans and is managed or
advised by the same investment advisor as such Lender or by an Affiliate
of such investment advisor.
"Arranger" shall mean CSFB and its successors.
"Asset Disposition" shall mean (i) any sale, lease or other
disposition (including (x) any such transaction effected by way of
merger or consolidation and (y) any sale-leaseback transaction, whether
or not involving a Financing Lease) (any such transaction, a
"disposition"), by the Borrower or any of its Subsidiaries, of any asset
subject to the Lien of an Indenture (other than any disposition of any
asset released from the Lien of an Indenture as described in clause (i),
(ii) or (iv) of Section 6.16), and (ii) receipt by the Borrower or any
of its Subsidiaries of any proceeds of insurance, condemnation awards
(or payments in lieu thereof) or indemnity payments payable by reason of
theft, loss, physical destruction or damage, taking or similar event
with respect to any equipment, fixed asset, real property or other asset
subject to the Lien of an Indenture (other than as permitted in clause
(iv) of Section 6.16).
"Assignee" shall have the meaning ascribed thereto in Section
9.6(c).
"Assignment and Assumption Agreement" shall have the meaning
ascribed thereto in Section 9.6(c).
"Availability Period" shall mean the period from and including
the Closing Date to, and including, February 10, 2003.
"Benefited Lender" shall have the meaning ascribed thereto in
Section 9.7(a).
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"Blue Dot" shall mean, collectively, Blue Dot Services, Inc., a
Delaware corporation and an indirect wholly owned subsidiary of the
Borrower, and its Subsidiaries.
"Bond Collateral Agreement" shall mean a bond collateral
agreement between the Borrower and the Collateral Agent for the benefit
of the Secured Parties (as therein defined) in form and substance
reasonably satisfactory to the Borrower and the Collateral Agent.
"Borrower" shall have the meaning ascribed thereto in the heading
hereto.
"Business" shall have the meaning ascribed thereto in Section
3.17(a).
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close; provided, however, that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in Dollars in
the interbank market in London, England.
"Capital Expenditures" of any Person shall mean, for any period,
without duplication, all expenditures (whether paid in cash or other
consideration) during such period that, in accordance with GAAP, are or
should be included in additions to property, plant and equipment or
similar items reflected in the statement of cash flows for such period
for such Person.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a
Person (other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Collateral Account" shall have the meaning ascribed thereto
in the Security Agreement.
"Cash Collateral Release Date" shall mean the date on which all
of the conditions precedent set forth in Section 4.3 have been satisfied
or waived by the Required Lenders and the Collateral Agent is required
pursuant to the terms thereof to release the amounts then on deposit in
the Cash Collateral Account as provided for herein.
"Cash Equivalents" shall mean (a) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed
or insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any Lender and certificates of deposit with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any other commercial bank having capital and surplus in
excess of $500,000,000, (c) commercial paper of any issuer rated at
least A-2 by Standard & Poor's or P-2 by Moody's, (d) additional money
market investments with
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maturities of one year or less from the date of acquisition rated at
least A1 or AA by Standard & Poor's or P-1 or Aa by Moody's and (e)
tax-exempt debt obligations of any State of the United States or of any
county or other municipal government subdivision of any State of the
United States with maturities of one year or less from the date of
acquisition rated at the highest investment grade rating by Standard &
Poor's or by Moody's, or publicly traded or open-end bond funds that
invest exclusively in such tax-exempt debt obligations.
"Change of Control" shall mean the occurrence of any of the
following:
(a) any Person or "group" (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934) (i) shall have acquired
beneficial ownership of 40% or more of the aggregate outstanding classes
of Capital Stock having voting power in the election of directors of the
Borrower or (ii) shall obtain the power (whether or not exercised) to
elect a majority of the Borrower's directors;
(b) a majority of the persons who comprised the Board of
Directors of the Borrower on the date hereof shall be replaced, unless
such replacement shall have been approved by at least two-thirds of the
Board of Directors of the Borrower then still in office who either were
members of such Board of Directors on the date hereof or whose election
as a member of such Board of Directors was previously so approved; or
(c) the Borrower shall be liquidated or dissolved.
"Closing Date" shall mean the date on which the conditions
precedent set forth in Section 4.1 shall be satisfied or waived by the
Required Lenders.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" shall have the meaning ascribed thereto in the
Collateral Documents.
"Collateral Agent" shall mean CSFB as collateral agent under the
Security Agreement and the Bond Collateral Agreement.
"Collateral Documents" shall mean a collective reference to the
First Mortgage Bonds, the Bond Collateral Agreement, the Supplemental
Indentures (upon effectiveness thereof), the Security Agreement and such
other documents executed and delivered in connection with the attachment
and perfection of the Collateral Agent's security interest and liens
arising thereunder, including, without limitation, UCC financing
statements filed in connection therewith.
"Commitment" shall mean, as to any Lender, the obligation of such
Lender to make a Loan to the Borrower in a principal amount not to
exceed the
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amount set forth opposite such Lender's name on Schedule I. The
aggregate amount of the Commitments is $390,000,000.
"Commitment Percentage" shall mean, as to any Lender at any time,
the percentage which such Lender's Commitment then constitutes of the
aggregate Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's Loans
then outstanding constitutes of the aggregate principal amount of the
Loans then outstanding).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower and/or any
Subsidiary within the meaning of Section 4001(a)(14) of ERISA or is part
of a group which includes the Borrower and which is treated as a single
employer under Section 414 of the Code.
"Compliance Certificate" shall have the meaning ascribed thereto
in Section 5.2(b).
"Consolidated Group" shall mean the Borrower and its Consolidated
Subsidiaries.
"Consolidated Recourse Interest Expense" shall mean, for any
period, the aggregate amount of interest expense of the Consolidated
Group minus, to the extent included therein, (i) the aggregate amount of
interest accrued on Non-Recourse Debt, (ii) non-cash charges, determined
on a consolidated basis in accordance with GAAP and (iii) payments made
in the form of dividends under existing mandatorily redeemable
preference securities of any trust which is a Subsidiary (or under any
refinancing thereof on substantially similar terms).
"Consolidated Subsidiary" shall mean, at any time, any Subsidiary
or other Person the accounts of which are consolidated with the Borrower
in its consolidated financial statements as of such time; provided that
in any event the term "Consolidated Subsidiary" shall not include any
Excluded Subsidiary.
"Contractual Obligation" shall mean as to the Borrower or any
Subsidiary, any provision of any security issued by the Borrower or any
Subsidiary or of any agreement, instrument or other undertaking to which
the Borrower or any Subsidiary is a party or by which it or any of its
property is bound.
"Cornerstone" shall mean, collectively, Cornerstone GP, Inc., Syn
Inc. and CornerStone Propane Partners L.P. and their respective
Subsidiaries.
"CSFB" shall mean Credit Suisse First Boston.
"Debt for Borrowed Money" shall mean, as to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all Financing Lease obligations of such Person,
and (d) all
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obligations of such Person under synthetic leases, tax retention
operating leases, off-balance sheet loans or other off-balance sheet
financing products that, for tax purposes, are considered indebtedness
for borrowed money of the lessee but are classified as operating leases
under GAAP.
"Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Designated Agents" shall have the meaning described thereto in
the Syndication Letter.
"Dollars" and "$" shall mean dollars in lawful currency of the
United States of America.
"Domestic Lending Office" shall mean, initially, the office of
each Lender designated as such in Schedule I (or the office of an
Assignee designated pursuant to an Assignment and Assumption Agreement),
and thereafter, such other office of such Lender, if any, which shall be
making or maintaining Alternate Base Rate Loans as may be designated
from time to time by notice from such Lender to the Borrower and the
Administrative Agent.
"Environmental Laws" shall mean any and all foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, judgments, permits, licenses, registrations
or authorizations or requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning the health and
safety of humans and other living organisms as it relates to exposures
to Materials of Environmental Concern, protection of natural resources
or the environment, including the manufacture, distribution in commerce,
and use of, or Release to the environment of, Materials of Environmental
Concern, as now or may at any time hereafter be in effect.
"Equity Issuance" shall mean the issuance of any Capital Stock by
the Borrower other than (i) Capital Stock issued in the ordinary course
of business in connection with director or employee stock purchase plans
and arrangements and other director or employee compensation
arrangements and (ii) Capital Stock issued in the ordinary course of
business under any dividend reinvestment and stock purchase plan
maintained by the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Loan for any Interest Period, the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m. (London time) on the
date which is two Business Days prior to the beginning of such Interest
Period by reference to the British Bankers' Association Interest
Settlement Rates for deposits in Dollars (as
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set forth by any service selected by the Administrative Agent which has
been nominated by the British Bankers' Association as an authorized
information vendor for the purpose of displaying such rates) for a
period equal to such Interest Period; provided that, to the extent that
an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the "Eurodollar Rate" shall be the
interest rate per annum determined by the Administrative Agent to be the
average of the rates per annum at which deposits in Dollars are offered
for such Interest Period to major banks in the London interbank market
in London, England by the Administrative Agent at approximately 11:00
a.m. (London time) on the date which is two Business Days prior to the
beginning of such Interest Period; provided, further, that if the
Eurodollar Base Rate determined as provided above with respect to any
Loan for any Interest Period would be less than 3.00% per annum, then
the "Eurodollar Base Rate" with respect to such Loan for such Interest
Period shall be deemed to be 3.00% per annum. Each determination by the
Administrative Agent pursuant to this definition shall be conclusive
absent manifest error.
"Eurodollar Loans" shall mean Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"Eurodollar Office" shall mean, initially, the office of each
Lender designated as such in Schedule I (or the office of an Assignee
designated pursuant to an Assignment and Assumption Agreement), and
thereafter, such other office of such Lender, if any, which shall be
making or maintaining Eurodollar Loans as may be designated from time to
time by notice from such Lender to the Borrower and the Administrative
Agent.
"Eurodollar Rate" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula:
Eurodollar Base Rate
--------------------------------------
1.00 - Eurodollar Reserve Requirements
"Eurodollar Reserve Requirements" shall mean, for any day as
applied to a Eurodollar Loan, the aggregate (without duplication) of the
rates (expressed as a decimal) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulations of the Board of Governors of
the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Tranche" shall mean all Loans which consist of
Eurodollar Loans incurred on the Closing Date (or which result from
continuations or
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conversions on a given date after the Closing Date) and have the same
Interest Period.
"Event of Default" shall mean any of the events specified in
Section 7.1; provided that any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been satisfied.
"Excluded Subsidiaries" shall mean, collectively, Blue Dot,
Cornerstone and Expanets.
"Existing Credit Agreement" shall mean that certain Credit
Agreement dated as of January 14, 2002 among the Borrower, the lenders
party thereto and CSFB as administrative agent, as amended to the date
hereof.
"Expanets" shall mean, collectively, Expanets, Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of the Borrower, and
its Subsidiaries.
"FDIC" shall mean the Federal Deposit Insurance Corporation or
any successor thereto.
"Federal Funds Rate" shall mean for any particular date, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Administrative Agent (in its individual capacity) on such
day on such transactions as determined by the Administrative Agent.
"FERC" shall mean the Federal Energy Regulatory Commission.
"Financing Lease" shall mean any lease of property, real or
personal, the obligations of the lessee in respect of which are required
in accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"First Mortgage Approvals" shall have the meaning ascribed
thereto in Section 3.4.
"First Mortgage Bonds" shall mean the first mortgage bonds
issued, pursuant to the Indentures, to and registered in the name of the
Collateral Agent.
"Funded Debt" shall mean, as of any date of determination, the
sum of all Indebtedness of the Borrower and each of its Consolidated
Subsidiaries (without
8
duplication) other than (i) Indebtedness of the type described in clause
(e) of the definition thereof and (ii) Non-Recourse Debt.
"Funding Date" shall mean the date on which the conditions
precedent set forth in Section 4.2 shall be satisfied or waived by the
Required Lenders or such later date as may be designated by the
Administrative Agent in its sole judgment but in any event not later
than the Cash Collateral Release Date.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time consistent with
those utilized in preparing the audited financial statements referred to
in Section 3.1; provided that in the event that any change in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants (or successor
thereto or any agency with similar functions) results in a change in the
calculation of any of the financial covenants hereunder, the Required
Lenders and the Borrower will in good faith enter into negotiations in
order to reevaluate such financial covenants in light of such change;
and provided, further, that this provision shall not operate as a waiver
of any right, remedy, power or privilege available to any Lender under
any provision of any Loan Document or pursuant to any applicable law.
"Governmental Authority" shall mean any national government
(United States or foreign), any state or other political subdivision
thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government
and any agency, authority, instrumentality, or regulatory body of any
thereof.
"Granting Lender" shall have the meaning ascribed thereto in
Section 9.6(f).
"Guarantee Obligation" shall mean as to any Person (the
"guaranteeing person"), any obligation of the guaranteeing person
(including, without limitation, any reimbursement, counter-indemnity or
similar obligation), guaranteeing or in effect guaranteeing any
Indebtedness, lease, dividend or other similar obligation (the "primary
obligation") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation,
any obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds
(x) for the purchase or payment of any such primary obligation or (y) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth, liquidity or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof;
provided that the term Guarantee Obligation shall not include
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endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person as of any date of determination shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guarantee Obligation
is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good
faith.
"Hedging Agreements" shall mean (a) any interest rate protection
agreement, interest rate future, interest rate option, interest rate
swap, interest rate cap or other interest rate hedge or arrangement
under which the Borrower is a party or a beneficiary and (b) any other
agreement or arrangement designed to limit or eliminate the risk or
exposure of the Borrower to fluctuations in currency exchange rates.
"Indebtedness" of any Person at any date shall mean, without
duplication, (a) Debt for Borrowed Money of such Person, (b) all
indebtedness of such Person for the deferred purchase price of property
or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (c) all outstanding reimbursement obligations of such Person
in respect of outstanding letters of credit, acceptances and similar
obligations issued or created for the account of such Person, (d) all
liabilities secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise become liable for
the payment thereof, (e) liabilities arising under Hedging Agreements
(other than interest rate caps) of such Person and (f) all Guarantee
Obligations of such Person.
"Indentures" shall mean collectively the Montana First Mortgage
Indenture and the South Dakota First Mortgage Indenture.
"Insolvency" shall mean with respect to any Multiemployer Plan,
the condition that such plan is insolvent within the meaning of Section
4245 of ERISA.
"insolvent" shall mean pertaining to a condition of Insolvency.
"Intellectual Property" shall have the meaning set ascribed
thereto in Section 3.10.
"Interest Payment Date" shall mean (a) as to any Alternate Base
Rate Loan, the last Business Day of each March, June, September and
December to occur while such Loan is outstanding, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, and (c)
10
as to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such
Interest Period.
"Interest Period" with respect to any Eurodollar Loan shall mean:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected by
the Borrower in its Notice of Borrowing or Notice of Interest Rate
Conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that, the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day (and, with respect to payments of principal and interest
thereon, shall be payable at the then applicable rate during such
extension) unless the result of such extension would be to carry
such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding
Business Day;
(ii) no Interest Period shall be selected which would
extend beyond the Maturity Date;
(iv) any Interest Period pertaining to a Eurodollar Loan
that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
(v) the Borrower shall select Interest Periods so as not
to require a payment or prepayment of any Eurodollar Loan during
an Interest Period for such Loan.
"Investment" shall have the meaning ascribed thereto in Section
6.8.
"ISO" shall mean any "Independent System Operator" or similar
entity approved by FERC to manage transmission systems owned by the
Borrower.
11
"Lender" shall have the meaning ascribed thereto in the heading
hereto.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement and any Financing Lease having substantially
the same economic effect as any of the foregoing and the filing of any
financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction, other than any such filing in connection with any
true lease or operating lease).
"Loan Documents" shall mean collectively, this Agreement, the
Collateral Documents, the Notes, the Syndication Letter and each other
agreement, instrument or certificate issued, executed and delivered to
the Administrative Agent, the Collateral Agent, or the Lenders hereunder
or thereunder or pursuant hereto or thereto (in each case as the same
may be amended, restated, supplemented, extended, renewed or replaced
from time to time), and "Loan Document" means any one of them.
"Loans" shall mean the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Mandatory Redeemable Stock" shall mean, with respect to any
Person, any share of such Person's Capital Stock, to the extent that it
is (a) redeemable, payable or required to be purchased or otherwise
retired or extinguished, or convertible into any Indebtedness or other
liability, obligation, covenant or duty of or binding upon, or any term
or condition to be observed by or binding upon such Person or any of its
assets, (i) at a fixed or determinable date, whether by operation of a
sinking fund or otherwise, (ii) at the option of any other Person or
(iii) upon the occurrence of a condition not solely within the control
of such Person such as a redemption required to be made utilizing future
earnings, or (b) convertible into Capital Stock which has the features
set forth in clause (a).
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, property, condition (financial or
otherwise) or prospects of the Borrower and its Consolidated
Subsidiaries (taken as a whole), (b) the validity or enforceability of
this Agreement, any of the Notes, any of the First Mortgage Bonds, any
of the other Loan Documents or either Indenture, or the rights or
remedies of the Administrative Agent, the Collateral Agent, or the
Lenders hereunder or thereunder (or the trustee under an Indenture), (c)
the property (taken as a whole) subject to the Lien of an Indenture, or
(d) the perfection, priority or enforceability of the Lien of the
Montana First Mortgage Indenture, the South Dakota Indenture or any
other Collateral Document.
"Material Subsidiary" shall mean, as at any time of
determination, each present or future Subsidiary of the Borrower other
than any one or more
12
Subsidiaries which, in the aggregate, as at the end of the fiscal
quarter immediately preceding such time of determination, shall have a
net worth (calculated as the stockholder's equity of such Subsidiary
disregarding any liabilities of such Subsidiary to an Affiliate) equal
to or less than 10% of the Net Worth of the Borrower and its
Consolidated Subsidiaries as at the end of such fiscal quarter, and net
income equal to or less than 10% of the Net Income of the Borrower and
its Consolidated Subsidiaries for the four fiscal quarter period ending
at the end of such fiscal quarter, as determined in accordance with
GAAP.
"Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any other pollutant, contaminant, hazardous substance,
hazardous waste, special waste, toxic substance, radioactive material,
or other compound, element, material or substance in any form whatsoever
(including products) regulated, restricted or addressed by or under any
Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" shall mean December 1, 2006.
"Montana First Mortgage Indenture" shall mean the Mortgage and
Deed of Trust dated October 1, 1945 from the Borrower (as successor to
Montana Power) to the trustee named therein, as supplemented and amended
to the date hereof.
"Montana Power" shall mean The Montana Power LLC, a Montana
limited liability company, acquired by the Borrower on February 15,
2002.
"Montana Utility Business" shall mean the regulated electric and
natural gas transmission and distribution assets and businesses owned
and operated by the Borrower in the State of Montana or otherwise
subject to the Lien of the Montana First Mortgage Indenture.
"Montana Utility Business EBITDA" shall mean, for any period for
the Montana Utility Business, the sum of (i) the operating income of the
Montana Utility Business for such period plus, without duplication and
to the extent reflected as a charge in the statement of operating income
of the Montana Utility Business for such period, (ii) depreciation and
amortization, in each case on a consolidated basis determined in
accordance with GAAP; provided, however, with respect to any fiscal
quarter ended on or prior to March 31, 2002, the Utility Business EBITDA
shall include the utility business and operations of Montana Power.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a plan which is a "multiemployer
plan" as defined in Section 3(37) or 4001(a)(3) of ERISA.
13
"Net Cash Proceeds" shall mean, with respect to any Reduction
Event, an amount equal to the cash proceeds received by the Borrower
from or in respect of such Reduction Event (including any cash received
by way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received), less (a) any investment
banking and underwriting fees and any other fees and expenses reasonably
incurred by such Person in respect of such Reduction Event, and (b) if
such Reduction Event is a disposition of assets, (i) the amount of any
Debt for Borrowed Money secured by a Lien on any asset disposed of in
such Reduction Event to the extent such Lien is senior to the Lien of
the applicable Indenture and discharged from the proceeds thereof and
(ii) any taxes actually paid or to be payable by such Person (as
estimated by a senior financial or accounting officer of the Borrower,
giving effect to the overall tax position of the Borrower) in respect of
such Reduction Event; provided that the term Net Cash Proceeds shall not
include any cash proceeds to the extent such cash proceeds are (and
remain) subject to the Lien of an Indenture.
"Net Income" for any period shall mean, net income (or deficit)
of the Borrower and its Consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Net Worth" shall mean, (a) as of December 31, 2002, (i) the sum
of shareholders' equity and preferred stock (including mandatorily
redeemable preferred stock of subsidiary trusts), preference stock and
preferred securities of the Borrower and its subsidiaries (including
Excluded Subsidiaries but excluding discontinued operations) on
September 30, 2002 plus any gain in (or minus any loss in) (ii) the sum
of shareholders' equity and preferred stock (including mandatorily
redeemable preferred stock of subsidiary trusts), preference stock and
preferred securities of the Borrower and the Consolidated Subsidiaries
on December 31, 2002 (but without duplication of equity issuances after
September 30, 2002 but prior to the date hereof) from the immediately
preceding fiscal quarter and (b) on the last day of each fiscal quarter
thereafter, (i) the Net Worth as calculated as of the preceding fiscal
quarter plus any gain in (or minus any loss in) (ii) the sum of
shareholders' equity and preferred stock (including mandatorily
redeemable preferred stock of subsidiary trusts), preference stock and
preferred securities of the Borrower and the Consolidated Subsidiaries
on the last day of such fiscal quarter from the immediately preceding
fiscal quarter. The sum of shareholders' equity and preferred stock
(including mandatorily redeemable preferred stock of subsidiary trusts),
preference stock and preferred securities of the Borrower and its
subsidiaries (including Excluded Subsidiaries) on September 30, 2002 was
$770,000,000. For the avoidance of doubt, calculations of Net Worth
after the date hereof shall be without giving effect to net gains or
losses in the Excluded Subsidiaries.
"1940 Mortgage" shall have the meaning ascribed thereto in the
South Dakota First Mortgage Indenture.
14
"Non-Excluded Taxes" shall have the meaning ascribed thereto in
Section 2.15(a).
"Non-Recourse Debt" shall mean any Indebtedness as to which the
Borrower has no direct or indirect liability whether as primary obligor,
guarantor, surety, provider of collateral security or through any other
right or arrangement of any nature (including any election by the holder
of such indebtedness) providing direct or indirect assurance of payment
or performance of any such obligations in whole or in part (other than
direct or indirect liability which by its terms may be payable solely in
Capital Stock (other than Mandatory Redeemable Stock) of the Borrower).
"NorthWestern Energy" shall mean the regulated electric and
natural gas transmission and distribution assets and businesses owned
and operated by the Borrower (formerly known as NorthWestern Public
Service and including, without limitation, the regulated electric and
natural gas transmission and distribution assets and business formerly
owned and operated by Montana Power), historically reported under the
headings titled "Electric" and "Natural Gas" on the SEC Reports of the
Borrower filed annually with the SEC.
"Note" shall mean, as applicable, a Term Note or a QFL Note.
"Notice of Borrowing" shall mean a notice given by the Borrower
pursuant to Section 2.3(a).
"Notice of Interest Rate Conversion" shall have the meaning
ascribed thereto in Section 2.7.
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower or any Subsidiary, as
applicable, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding and whether the Administrative
Agent, for the benefit of the Lenders, is oversecured or undersecured
with respect to such Loans) the Notes and all other obligations and
liabilities of the Borrower to the Administrative Agent, the Collateral
Agent and the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement,
the Notes, the other Loan Documents or any other document made,
delivered or given in connection therewith or herewith, whether on
account of principal, interest, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to
the Administrative Agent, the Collateral Agent or the Lenders that are
required to be paid by the Borrower pursuant to the terms of this
Agreement or any other Loan Document) or otherwise.
15
"Participant" shall have the meaning ascribed thereto in Section
9.6(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor
thereto.
"Pension Plan" shall mean any single-employer plan, as defined in
Section 4001(a)(15) of ERISA, which the Borrower, any Subsidiary or any
Commonly Controlled Entity maintains, administers, contributes to or is
required to contribute to, or under which the Borrower, any Subsidiary
or any Commonly Controlled Entity has any liability.
"Permitted Liens" shall mean
(a) Liens for taxes, assessments, governmental charges or
levies not yet due or which are being contested in good
faith by appropriate proceedings; provided that adequate
reserves with respect thereto are maintained on the books
of the Borrower or its Consolidated Subsidiaries, as the
case may be, in conformity with GAAP;
(b) Landlord liens for rent not yet due and payable and
statutory Liens of carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other similar nonconsensual
Liens imposed by law arising in the ordinary course of
business securing obligations which are not overdue for a
period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(d) deposits securing liability to insurance carriers under
insurance or self- insurance arrangements, and deposits to
secure true operating leases in the ordinary course;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business
which, in the aggregate, do not in any case materially
detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the
business of the Borrower;
(f) any attachment or judgment Lien not constituting an Event
of Default under Section 7.1(h);
(g) Liens solely on assets of a Subsidiary incurring
Indebtedness, which Liens secure such Indebtedness;
(h) the Lien of each Indenture, as such Indenture may be
amended or supplemented from time to time in accordance
with the terms hereof, securing first mortgage bonds
permitted to be outstanding pursuant to Section 6.10(e) or
(f);
16
(i) Liens on accounts receivables or inventory of the Borrower
(provided such assets are not subject to the Lien of
either Indenture) securing Indebtedness permitted to be
outstanding pursuant to Section 6.10(g);
(j) Liens on assets of the Borrower not subject to the Lien of
either Indenture securing Indebtedness permitted to be
outstanding pursuant to Section 6.10(h);
(k) any Lien vested in any licensor or permitter for
obligations or acts to be performed, the performance of
which obligations or acts is required under licenses or
permits, so long as the performance of such obligations or
acts is not delinquent or is being contested in good faith
and by appropriate proceedings;
(l) any controls, restrictions, obligations, duties or other
burdens imposed by any federal, state, municipal or other
law, or by any rule, regulation or order of any
Governmental Authority, upon any property of the Borrower
or the operation or use thereof or upon the Borrower with
respect to any of its property or the operation or use
thereof or with respect to any franchise, grant, license,
permit or public purpose requirement, or any rights
reserved to or otherwise vested in any Governmental
Authority to impose any such controls, restrictions,
obligations, duties or other burdens;
(m) any right which any Governmental Authority may have by
virtue of any franchise, license, contract or statute to
purchase, or designate a purchaser of or order the sale
of, any property of the Borrower upon payment of cash or
reasonable compensation therefor or to terminate any
franchise, license or other rights or to regulate the
property and business of the Borrower;
(n) party-wall agreements and agreements, in each case
existing on the date hereof, for and obligations relating
to the joint or common use of property owned solely by the
Borrower or owned by the Borrower in common or jointly
with one or more parties;
(o) liens existing on the date hereof securing indebtedness
incurred by a Person, other than the Borrower which
indebtedness has been neither assumed nor guaranteed by
the Borrower nor on which it customarily pays interest,
existing on property which the Borrower owns jointly or in
common with such Person or such Person and others, if
there is a bar against partition of such property which
17
(p) would preclude the sale of such property by such other
Person or the holder of such lien without the consent of
the Borrower; Liens existing on the date hereof securing
Debt for Money Borrowed as set forth in Schedule 6.4
hereto; and
(q) other Liens not securing Indebtedness existing on the date
hereof.
"Person" shall mean an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority, ISO
or other entity of whatever nature.
"Plan" shall mean at a particular time, any employee benefit plan
which is defined in Section 3(2) of ERISA and in respect of which the
Borrower or any Subsidiary is, an "employer" as defined in Section 3(5)
of ERISA.
"Properties" shall have the meaning ascribed thereto in Section
3.17(a).
"QFL Note" shall have the meaning ascribed thereto in Section
2.15.
"Qualified Foreign Lender" shall have the meaning ascribed
thereto in Section 2.15.
"Reduction Event" shall mean any Asset Disposition or Equity
Issuance.
"Register" shall have the meaning ascribed thereto in Section
9.6(d).
"Regulation D, T, U or X" shall mean Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
in effect from time to time, or any successor regulation.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, migrating, dumping, seepage, spill, leak,
flow, discharge, disposal or emission.
"Reorganization" shall mean with respect to any Multiemployer
Plan, the condition that such plan is in reorganization within the
meaning of Section 4241 of ERISA.
"Replaced Note" shall have the meaning ascribed thereto in
Section 2.15.
"Replacement Lender" shall have the meaning ascribed thereto in
Section 2.18.
"Reportable Event" shall mean any of the events set forth in
Section 4043(c) of ERISA other than those events for which the notice
requirement has been waived under applicable regulations.
18
"Required Lenders" shall mean, at any time, Lenders having
Commitments (or after the Funding Date, Loans) representing 51% or more
of the aggregate of all Commitments (or after the Funding Date, Loans)
outstanding at such time.
"Requirement of Law" as to any Person shall mean the articles of
organization and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority (including,
without limitation, the Public Utility Holding Company Act of 1935, as
amended, any of the foregoing relating to employee health and safety or
public utilities and any Environmental Law), in each case, applicable to
or binding upon such Person or any of its property or to which such
Person or any of its property is subject.
"Responsible Officer" shall mean, with respect to a Person, the
chairman of the board of directors, the chief executive officer or the
president of such Person or, with respect to financial matters, the
chief financial officer of such Person, or any other officer of such
Person designated as a Responsible Officer by any of the foregoing.
"Restricted Payment" shall have the meaning ascribed thereto in
Section 6.9.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall mean the reports filed by the Borrower with
the SEC on Form 10-K, Form 10-Q or Form 8-K or any successor Form.
"Secured Parties" shall mean the Administrative Agent, the
Collateral Agent and the Lenders.
"Security Agreement" shall mean the security agreement between
the Borrower and the Collateral Agent for the benefit of the Secured
Parties in form and substance reasonably satisfactory to the Borrower
and the Collateral Agent.
"South Dakota First Mortgage Indenture" shall mean the General
Mortgage Indenture and Deed of Trust dated as of August 1, 1993 between
the Borrower and The Chase Manhattan Bank, as trustee, as supplemented
and amended to the date hereof.
"South Dakota Utility Business" shall mean the regulated electric
and natural gas transmission and distribution assets and businesses
owned and operated by the Borrower in the States of South Dakota and
Nebraska or otherwise subject to the Lien of the South Dakota First
Mortgage Indenture.
"South Dakota Utility Business EBITDA" shall mean, for any period
for the South Dakota Utility Business, the sum of (i) the operating
income of the South Dakota Utility Business for such period plus,
without duplication and to the
19
extent reflected as a charge in the statement of operating income of the
South Dakota Utility Business for such period, (ii) depreciation and
amortization, in each case on a consolidated basis determined in
accordance with GAAP.
"SPC" shall have the meaning ascribed thereto in Section 9.6(f).
"Special Purpose Subsidiary" shall mean a direct or indirect
Subsidiary of the Borrower, formed solely for the purpose of acquiring
and owning certain assets and issuing Indebtedness which is secured
solely by such assets (or the assets of one or more other Special
Purpose Subsidiaries) and as to which the Borrower and each other
Subsidiary (other than any Special Purpose Subsidiary) has no Guarantee
Obligation or other liability or obligation to contribute additional
equity or for which the Borrower or any other Subsidiary (other than a
Special Purpose Subsidiary) has general partner liability or other
derivative liability by operation of law or contract. The term "Special
Purpose Subsidiary" shall also include any Subsidiary whose assets
consist solely of equity interests in another Special Purpose Subsidiary
and, other than having general partner liability, otherwise meets the
requirements of the preceding sentence.
"Standard & Poor's" shall mean Standard & Poor's Rating Group, a
division of The McGraw-Hill Companies, Inc.
"Subsidiary" shall mean, as to any Person, a corporation,
company, partnership or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
occurrence of a contingency) to elect a majority of the board of
directors or other managers of such corporation, company, partnership or
other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise expressly
stated herein all references to any Subsidiary are to direct or indirect
subsidiaries of the Borrower; provided that in no event shall any
Excluded Subsidiary be deemed a Subsidiary of the Borrower.
"Supplemental Indentures" shall mean collectively the
supplemental indentures to the Indentures pursuant to which, among other
things, the First Mortgage Bonds are issued. The Supplemental Indentures
are sometimes called, as applicable, the Montana Supplemental Indenture
and the South Dakota Supplemental Indenture herein.
"Syndication Letter" shall mean the Senior Secured Credit
Facility Syndication Letter from CSFB to the Borrower dated the date
hereof.
"Term Note" shall have the meaning ascribed thereto in Section
9.6(h).
"Total Capital" shall mean on any date (a) Funded Debt on such
date plus (b) Net Worth as of the end of the most recent fiscal quarter.
20
"Transactions" shall mean, collectively, (a) borrowings
hereunder, (b) the authorization, issuance and delivery of the First
Mortgage Bonds to the Collateral Agent, (c) the granting of security
interests pursuant to the Collateral Documents and (d) any other
transactions related or entered into in connection with any of the
foregoing or otherwise in connection with any of the Loan Documents.
"Transferee" shall have the meaning ascribed thereto in Section
9.6(g).
"Type" shall mean as to any Loan, its nature as an Alternate Base
Rate Loan or a Eurodollar Loan, as the context may require.
"Utility Business" shall mean the utility business and operations
of the Borrower conducted through NorthWestern Energy.
"Utility Business EBITDA" shall mean, for any period for the
Utility Business, the sum of (i) the operating income of the Utility
Business for such period plus, without duplication and to the extent
reflected as a charge in the statement of operating income of the
Utility Business for such period, (ii) depreciation and amortization, in
each case on a consolidated basis determined in accordance with GAAP;
provided, however, with respect to any fiscal quarter ended on or prior
to March 31, 2002, the Utility Business EBITDA shall include the utility
business and operations of Montana Power.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary
100% of whose Capital Stock is at the time owned by such Person directly
or indirectly through other Wholly Owned Subsidiaries (other than
qualifying directors' shares).
1.2 Other Definitional Provisions(a) . (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have their respective defined
meanings when used in the Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein, in the Notes and in any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower or any Subsidiary not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Article, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "or" shall not be
exclusive. The word "will" shall be construed to have the same meaning and
effect as the word "shall".
21
(f) Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(ii) any reference herein to any Person shall be construed to include such
Person's successors and assigns, and (iii) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments and Loans Subject to the terms and conditions hereof
(including, without limitation, the conditions precedent set forth in Sections
4.1 and 4.2 hereof), each Lender severally agrees to make a term loan to the
Borrower in a principal amount not to exceed such Lender's Commitment on the
Funding Date which shall be a Business Day during the Availability Period. The
Loans (i) at the option of the Borrower may be incurred and maintained as, or
converted into, Alternate Base Rate Loans or Eurodollar Loans in accordance with
the provisions hereof and (ii) shall be repaid in accordance with the provisions
hereof, but once repaid, may not be reborrowed. For the avoidance of doubt, the
Administrative Agent may designate any Business Day during the Availability
Period (but in any event on or prior to the Cash Collateral Release Date) as the
Funding Date. In connection with such designation, the Required Lenders may, in
their sole discretion, waive conditions precedent set forth in Section 4.2 to
the extent not then satisfied.
2.2 Evidence of Indebtedness(a) . (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Lender resulting from the Loan made by such
Lender, including, without limitation, the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement. (b) The
Administrative Agent shall maintain the Register pursuant to Section 9.6(d) and
a subaccount therein for each Lender, in which shall be recorded (i) the amount
of the Loan made by each Lender through the Administrative Agent hereunder, the
type thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 9.6(d) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amount of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans
22
actually made to the Borrower by such Lender in accordance with the terms of
this Agreement.
2.3 Procedure for Borrowing. As a condition precedent to borrowing
hereunder, the Borrower shall give the Administrative Agent an irrevocable
notice substantially in the form of Exhibit B-1 on or prior to the Funding Date
(which notice must be received by the Administrative Agent prior to 10:00 a.m.,
New York City time on the Funding Date), specifying (1) that a Loan is
requested, (2) the aggregate amount to be borrowed, (3) the requested Funding
Date, (4) whether the borrowing is to be of Eurodollar Loans, Alternate Base
Rate Loans or a combination thereof, (5) if the borrowing is to be entirely or
partly of Eurodollar Loans, the amounts of such Eurodollar Loans and the lengths
of the initial Interest Periods therefor and (6) the number and the location of
the account to which the proceeds are to be disbursed (consistent with the
provisions of hereof). Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof. Each Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in Section 9.2 prior to 11:00 a.m., New York City
time, on the date requested by the Borrower in funds immediately available to
the Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent in the manner specified by the Borrower in
such Notice of Borrowing in the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent. If the Borrower fails to indicate the initial Interest
Periods in such notice, the Interest Period shall be one month.
2.4 Fees.The Borrower agrees to pay to the Administrative Agent, for the
account of CSFB or the Administrative Agent, as applicable as set forth therein,
concurrent with signing of this Agreement (or as otherwise specified therein),
the fees set forth in the Syndication Letter. All fees payable hereunder shall
be paid on the dates due, in immediately available funds, to the Administrative
Agent for the benefit of the parties entitled thereto. Fees paid shall not be
refundable under any circumstances.
2.5 Repayment of Loans(a). Commencing on March 31, 2003 and on the last
Business Day of March, June, September and December thereafter prior to the
Maturity Date, the Borrower shall make quarterly principal payments on the
Loans, each quarterly payment in an amount equal to one quarter of one percent
(0.25%) of the original aggregate principal amount of the Loans. The Borrower
shall repay the then outstanding aggregate principal amount of the Loans on the
Maturity Date, together with accrued and unpaid interest thereon as provided
herein. Any prepayments of the Loans pursuant to Section 2.6 shall be applied in
inverse chronological order to the principal amounts due pursuant to this
Section.
2.6 Optional and Mandatory Prepayments. (a) Optional Offer of
Prepayment. The Borrower may, upon written notice delivered to the
Administrative Agent at least 10 days (but not more than 30 days) prior to the
proposed date of prepayment (which notice shall state the date of such proposed
prepayment, the aggregate principal amount of the Loans to be prepaid and the
proposed prepayment price thereof),
23
offer to prepay the outstanding principal amounts of the Loans in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided, however, that no Lender shall be
obligated to accept such offer; and provided further that the Borrower shall not
be permitted to make an offer to purchase more than once during any three month
period. Any Lender may in its discretion accept such offer by written notice to
the Administrative Agent (which notice shall also state the maximum principal
amount of prepayment such Lender is willing to accept). To the extent one or
more Lenders accepts any such offer and one or more Lenders rejects such offer,
the amounts that would have been allocable to the rejecting Lenders may (if and
to the extent accepted by the accepting Lenders) be paid to accepting Lenders in
accordance with their Commitment Percentages. Any Lender that shall have failed
to respond to an offer described in this Section 2.6(a) shall be deemed to have
rejected such offer. If any Lender shall have rejected (or been deemed to have
rejected) any offer to prepay described above and the Borrower shall thereafter
vary the offer, the Borrower shall make the modified offer available to all
Lenders for a period of at least three Business Days before making the
contemplated prepayment. Except as provided in this Section 2.6(a), the Borrower
shall not have the right to prepay the Loans.
(b) [Intentionally Omitted]
(c) Mandatory Offer of Prepayment. If the Borrower or any of its
Subsidiaries shall at any time, or from time to time, after the date hereof
receive Net Cash Proceeds in respect of any Reduction Event which, individually
or in the aggregate for all prior Reduction Events not the subject of a
mandatory offer of prepayment, exceeds $10,000,000, then, on the first Business
Day immediately succeeding the date of such receipt, such Net Cash Proceeds
shall be applied to the prepayment of any Loans then outstanding to the extent
and in the manner as provided below in this Section 2.6(c). At least 10 days
(but not more than 30 days) prior to any proposed Reduction Event, the Borrower
shall give written notice to the Administrative Agent stating the date of the
proposed Reduction Event together with a certificate signed by a Responsible
Officer of the Borrower setting forth in reasonable detail the calculation of
the Net Cash Proceeds therefrom and shall offer to prepay the outstanding
principal amounts of the Loans comprising part of the same borrowing in an
amount equal to, in the case of an Asset Disposition, 100% of the Net Cash
Proceeds therefrom or, in the case of an Equity Issuance, 50% of the Net Cash
Proceeds therefrom, as applicable, together with accrued interest to the date of
such prepayment on the principal amount prepaid; provided, however, that no
Lender shall be obligated to accept such offer. Any Lender may in its discretion
accept such offer by written notice to the Administrative Agent (which notice
shall also state the maximum principal amount of prepayment such Lender is
willing to accept). To the extent one or more Lenders accepts any such offer and
one or more Lenders rejects such offer, the amounts that would have been
allocable to the rejecting Lenders may (if and to the extent accepted by the
accepting Lenders) be paid to accepting Lenders in accordance with their
Commitment Percentages. Any Lender that shall have failed to respond to an offer
described in this Section 2.6(c) shall be deemed to have rejected such offer. If
for any reason the proposed Reduction Event is delayed by more than 15 days, the
Borrower shall resend the notice and offer provided for in this Section 2.6(b).
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(d) Mandatory Prepayment. If the Cash Collateral Release Date has not
occurred on or prior to February 10, 2003, then the Loans shall become due and
payable in full on February 11, 2003 and the Borrower shall prepay the Loans on
such date, together with a prepayment fee equal to one percent (1%) thereof (or
if no Loans are then outstanding, the Commitments (and the Lenders' obligations
hereunder to extend any credit) shall terminate in full).
(e) Additional Amounts. Each prepayment of Loans pursuant to this
Section 2.6 shall be accompanied by payment in full of all accrued interest
thereon, to and including the date of such prepayment, together with any
additional amounts owing pursuant to Section 2.16 and any outstanding fees and
expenses due and owing with respect to the amount prepaid.
2.7 Interest Rate Conversion and Continuation Options(a) . (a) The
Borrower may elect from time to time to convert Eurodollar Loans to Alternate
Base Rate Loans by giving the Administrative Agent prior irrevocable notice of
such election substantially in the form of Exhibit B-2 (a "Notice of Interest
Rate Conversion") (which notice must be received by the Administrative Agent by
at least 10:00 a.m., New York City time, two Business Days prior to such
election); provided that any such conversion of Eurodollar Loans may be made
only on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Alternate Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent prior irrevocable notice of such
election (which notice must be received by the Administrative Agent by at least
10:00 a.m., New York City time, three Business Days prior to such election). Any
such Notice of Interest Rate Conversion to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon receipt
of any such notice, the Administrative Agent shall promptly notify each Lender
thereof. All or any part of the outstanding Eurodollar Loans and Alternate Base
Rate Loans may be converted as provided herein; provided that (i) no Loan may be
converted into a Eurodollar Loan when any Default has occurred and is
continuing, (ii) no Loan may be converted into a Eurodollar Loan after the date
that is one month prior to the Maturity Date and (iii) such conversion shall be
in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof.
(b) Any Eurodollar Loans may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in Section 1.1 of the length of the next
Interest Period to be applicable to such Loans; provided that (i) no Eurodollar
Loan may be continued as such when any Default has occurred and is continuing
and (ii) no Eurodollar Loan which is a Loan may be continued as a Eurodollar
Loan after the date that is one month prior to the Maturity Date; provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph, or if such continuation is not permitted
pursuant to the preceding proviso, such Loans shall be automatically converted
to Alternate Base Rate Loans on the last day of such then expiring Interest
Period. The Administrative Agent agrees to notify the Lenders of any notice of
continuation referred to herein received by the Administrative Agent.
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2.8 Maximum Amounts of Eurodollar Tranches. All borrowings, conversions
and continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and shall be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of the
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. There shall not be more than five
Eurodollar Tranches at any one time outstanding.
2.9 Interest Rates; Default Rate Payment Dates(a) . (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for the
first day of such Interest Period (subject to daily adjustments, if any,
required by changes in the Eurodollar Reserve Requirements) plus 5.75%.
(b) Each Alternate Base Rate Loan shall bear interest at a rate per
annum equal to the Alternate Base Rate plus 4.75%.
(c) If an Event of Default has occurred and is continuing, the Loans
shall bear interest at a rate per annum equal to the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section plus
2% from the date of occurrence of such Event of Default until the date such
Event of Default is cured or waived (after as well as before judgment). In
addition, should any interest on such Loans or any fees or other amount (other
than principal) payable hereunder not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
(to the extent permitted by law in the case of interest on interest) at a rate
per annum as determined pursuant to the preceding sentence which would be
applicable to an Alternate Base Rate Loan, in each case, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date;
provided that interest accruing pursuant to Section 2.9(c) shall be payable from
time to time on demand.
2.10 Computation of Interest(a) . (a) The Alternate Base Rate interest
(when calculated based upon the prime rate) shall be calculated on the basis of
a 365/366 day year and all other interest shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Alternate Base Rate or the Eurodollar Reserve Requirements shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall, as soon as practicable,
notify the Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent, at
26
the request of the Borrower, shall deliver to the Borrower a statement showing
the quotations used by the Administrative Agent in determining any interest rate
pursuant to Section 2.10(a).
2.11 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have reasonably determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining its
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given, (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Alternate Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Alternate Base Rate Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to Alternate Base Rate Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made
or continued as such, nor shall the Borrower have the right to convert Alternate
Base Rate Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments; Funding Reliance(a) . (a) The
borrowing by the Borrower of Loans from the Lenders hereunder and any reduction
of the Commitments of the Lenders shall be made pro rata according to the
respective Commitment Percentages of the Lenders. Except as provided in Section
2.6, each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans of any one Type shall (except as may be
required as a result of Section 2.16) be made pro rata according to the
respective outstanding principal amounts of the Loans of such Type then held by
the Lenders. All payments (including prepayments) to be made by the Borrower
hereunder and under the Notes, whether on account of principal, interest, fees
or otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in Section 9.2, in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment hereunder (other
than payments on the Eurodollar Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal and interest thereon,
shall be payable at the then applicable rate during such extension.
27
(b) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make available to
the Administrative Agent the amount that would constitute its Commitment
Percentage of such borrowing, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If the Administrative Agent makes such
amount available to the Borrower and if such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Rate for the
period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any
Lender with respect to any amounts owing under this Section shall be conclusive
in the absence of manifest error. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such borrowing. If such Lender's Commitment Percentage of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to the applicable Loan, on demand, from the Borrower. The
obligations of the Lenders hereunder are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required hereunder.
2.13 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law after the date hereof or in
the interpretation or application thereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Alternate Base Rate Loans to Eurodollar
Loans shall forthwith be suspended until such condition shall cease to exist and
(b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Alternate Base Rate Loans on the respective last days
of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.16.
2.14 Requirements of Law(a) . (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, its Notes, any Eurodollar Loan, or its
obligation to make Eurodollar Loans, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.15 and changes in the rate of tax on the
overall net income of such Lender);
28
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans, or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower through the
Administrative Agent, of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender through the Administrative Agent to the Borrower shall
be in writing and accompanied by calculations in reasonable detail demonstrating
the basis for such Lender's claim and shall be considered conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Obligations hereunder.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof has or shall have the effect of
reducing the rate of return on such Lender's or the corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor accompanied by
calculations in reasonable detail demonstrating the basis for such Lender's
claims, the Borrower shall pay to such Lender the additional amount or amounts
as will compensate such Lender for such reduction. This covenant shall survive
the termination of this Agreement and the payment of the Obligations hereunder.
2.15 Taxes(a). (a) Any and all payments made by the Borrower to or for
the account of the Administrative Agent or any Lender under this Agreement, the
Notes or the other Loan Documents shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, and all liabilities with respect thereto, now or hereafter
imposed, levied, collected, withheld or assessed by any
29
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
by a jurisdiction under the Laws of which such Lender or its applicable lending
office, or the Administrative Agent, as the case may be, is organized or
maintained. If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions, withholdings or liabilities ("Non-Excluded Taxes") are
required to be deducted or withheld from or in respect of any amounts payable to
the Administrative Agent or any Lender hereunder or under the Notes, (i) the
amounts so payable to the Administrative Agent or such Lender shall be increased
to the extent necessary, so that after making all required deductions or
withholdings (including deductions or withholdings applicable to additional sums
payable under this Section 2.15), the Administrative Agent or such Lender
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made, (ii) the Borrower shall make such
deductions or withholdings, and (iii) the Borrower shall pay the full amount
deducted or withheld to the relevant Governmental Authority in accordance with
applicable law; provided that the Borrower shall not be required to increase any
such amounts payable to any Lender if such Lender fails to comply with the
applicable requirements of paragraph (b) of this Section. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter, the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. The Borrower agrees to indemnify and hold harmless each Lender and the
Administrative Agent from the full amount of Non-Excluded Taxes (including,
without limitation, any such taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 2.15) paid or incurred by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto. The
covenants in this Section shall survive the termination of this Agreement and
the payment of the Notes and payment of the Obligations hereunder.
(b) Each Lender shall:
(i) deliver to the Borrower and the Administrative Agent (A) in
the case of a Lender that is not incorporated under the laws of the
United States or any state thereof, either (x) two duly completed copies
of United States Internal Revenue Service Form W-8BEN or W-8ECI, as
applicable, or successor applicable forms, as the case may be, or, (y)
if such Lender is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and intends to claim exemption from U.S.
Federal withholding tax under Section 871(h) or Section 881(c) of the
Code with respect to payments of "portfolio interest", a Form W-8BEN, or
any subsequent versions thereof or successors thereto together with a
certificate executed by such Lender representing that (1) such Lender is
not a bank for purposes of Section 881(c) of the Code, is not a 10
percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Borrower and is not a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the
Code), and claiming complete exemption from U.S. Federal withholding tax
on payments of interest by
30
the Borrower under this Agreement, the Notes and the other Loan
Documents and (2) the Lender has received in replacement of any Note
held by or assigned to it, a QFL Note in accordance with Section
2.15(c), and (B) in the case of any other Lender, an Internal Revenue
Service Form W-9, as applicable, or successor applicable form, as the
case may be;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such form inapplicable or
which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form W-8BEN
or W-8ECI, as applicable, that it is entitled to receive payments under this
Agreement at a reduced rate of withholding, or without deduction or withholding,
as the case may be, of any United States federal income taxes and (ii) in the
case of a Form W-9, that it is entitled to an exemption from United States
backup withholding tax. Each Person that shall become a Lender or a Participant
pursuant to Section 9.6 shall, upon the effectiveness of the related transfer,
be required to provide all the applicable forms and statements required pursuant
to this Section; provided that, in the case of a Participant, such Participant
shall furnish all such required forms and statements to the Lenders from which
the related participation shall have been purchased.
(c) Any Lender that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and satisfies the requirements of Section
2.15(b)(i)(A)(y) (a "Qualified Foreign Lender") shall, upon receipt of the
written request of the Administrative Agent or the Borrower and may, upon its
own written request to the Administrative Agent, exchange any Note held by or
assigned to it for a qualified foreign lender note (a "QFL Note"). A QFL Note
shall be substantially in the form attached hereto as Exhibit A-2 and shall
contain the following legend, "This Note is a QFL Note, and as such, ownership
of the obligation represented by such QFL Note may be transferred only in
accordance with Section 2.15 of the Credit Agreement." Any QFL Note issued in
replacement of any existing Note pursuant to this Section 2.15(c) shall be (i)
dated the Closing Date, (ii) issued in the name of the entity in whose name such
existing Note was issued and (iii) issued in the same principal amount as such
existing Note. Any Note replaced pursuant to this Section is sometimes referred
to herein as a "Replaced Note".
31
(d) The Borrower agrees that, upon the request of, or delivery of a
request to, a Qualified Foreign Lender pursuant to paragraph (c) of this
Section, it shall execute and deliver a QFL Note to the Administrative Agent in
replacement of the Replaced Note surrendered in connection with such request
conforming to the requirements of this paragraph. Each Qualified Foreign Lender
shall surrender its Note in connection with any replacement pursuant to this
Section 2.15. Upon receipt by the Administrative Agent, in connection with any
replacement, of a QFL Note and the existing Note to be replaced by such QFL Note
in accordance with this paragraph, the Administrative Agent shall forward the
QFL Note to the Lender which has surrendered its Note for replacement by such
QFL Note and shall forward the surrendered Note to the Borrower marked
"canceled". Once issued, QFL Notes (i) shall be deemed to and shall be "Notes"
for all purposes under the Loan Documents, (ii) may not be exchanged for Notes
which are not QFL Notes, notwithstanding anything to the contrary in the Loan
Documents and (iii) shall at all times thereafter be QFL Notes, including,
without limitation, following any transfer or assignment thereof.
(e) Notwithstanding anything to the contrary in the Loan Documents, the
QFL Notes are registered obligations as to both principal and interest with the
Borrower and transfer of the obligations underlying such QFL Note may be
effected only by surrender of the QFL Note to the Borrower and either reissuance
by the Borrower of such QFL Note to the transferee or issuance by the Borrower
of a new QFL Note to the transferee. A QFL Note shall only evidence the Lender's
or an assignee's right, title and interest in and to the related obligation, and
in no event is a QFL Note to be considered a bearer instrument or obligation.
This Section 2.15 shall be construed so that the obligations underlying the QFL
Notes are at all times maintained in "registered form" within the meaning of
Sections 871(h)(2) and 881(c)(2) of the Code.
2.16 Indemnity. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) default by the Borrower in payment when due of the
principal amount of or interest on any Eurodollar Loan, (b) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice
thereof or (d) the making of a prepayment or conversion of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto
including, without limitation, in each case, any such loss or expense arising
from the redeployment of funds obtained by it or from fees payable to terminate
the deposits from which such funds were obtained. This covenant shall survive
the termination of this Agreement and the payment of the Obligations hereunder.
2.17 Discretion of Lender as to Manner of Funding. Notwithstanding any
other provisions of this Agreement (but subject to Section 2.18), each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Loans in any manner it sees fit, it being understood that for the purposes of
this Agreement all determinations hereunder shall be made assuming each Lender
had actually funded and maintained each Eurodollar Loan through the purchase of
deposits of Dollars in the London interbank
32
market having a maturity corresponding to each Loan's Interest Period and
bearing an interest rate equal to the Eurodollar Rate for such Interest Period.
2.18 Change of Lending Office; Replacement Lender(a) . (a) Each Lender
agrees that if it makes any demand for payment under Section 2.14 or Section
2.15 or if any adoption or change of the type described in Section 2.13 shall
occur with respect to it, such Lender will use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions and so long as
such efforts would not be disadvantageous to it as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under Section 2.14 or Section 2.15, or would eliminate or reduce the effect of
any adoption or change described in Section 2.13.
(b) In determining the amount of any claim for reimbursement or
compensation hereunder, each Lender will use reasonable methods of calculation
consistent with such methods customarily employed by such Lender in similar
situations.
(c) Each Lender will notify the Borrower and the Administrative Agent of
any event giving rise to a claim under Sections 2.13, 2.14, 2.15 or 2.16
promptly after the occurrence thereof, which notice shall be accompanied by a
certificate of such Lender setting forth in reasonable detail the circumstances
of such claim.
(d) If any Lender, other than (in its capacity as a Lender) the
Administrative Agent (an "Affected Lender"), seeks payment or indemnification
from the Borrower pursuant to Section 2.14 or Section 2.15(a) (without prejudice
to any amounts then due to such Lender under such Sections) that are not
applicable to all Lenders, then the Borrower may designate another Lender or
another bank or financial institution acceptable to the Administrative Agent to
assume, in accordance with Section 9.6, all (but not less than all) the
Commitments, Loans and other rights and obligations of such Affected Lender
hereunder (a "Replacement Lender"), in each case, on a date mutually acceptable
to the Replacement Lender, the Affected Lender, the Borrower and the
Administrative Agent, without recourse upon, warranty by, or expense to, such
Affected Lender or the Administrative Agent, for a purchase price equal to the
outstanding principal amount of the Loans of such Affected Lender plus all
interest accrued thereon and all other amounts owing to such Affected Lender
hereunder, or such other purchase price as may be mutually agreed upon between
the Affected Lender and the Replacement Lender, upon such assumption and
purchase by the Replacement Lender, such Replacement Lender shall be deemed a
"Lender" for purposes of this Agreement and the other Loan Documents and such
Affected Lender shall cease to be a "Lender" for such purposes and shall no
longer have any obligations hereunder.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make or participate in extensions of credit hereunder, the
Borrower hereby represents and warrants to the Administrative Agent and each
Lender:
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3.1 Financial Condition(a) . (a) The consolidated balance sheets of the
Borrower as of December 31, 1999, December 31, 2000 and December 31, 2001 and
the related consolidated statements of income, retained earnings and cash flows
for the fiscal year ended on such date, and the unaudited consolidated balance
sheets of the Borrower and its Consolidated Subsidiaries as of September 30,
2002; and the related consolidated statements of income, retained earnings and
cash flows for the period ending as of such date, reported on, in the case of
the 1999 and 2000 annual audited financial statements, by Arthur Andersen LLP,
or in the case of the 2001 annual audited financial statements, by Deloitte &
Touche LLP, copies of which have heretofore been furnished to the Lenders,
present fairly the consolidated financial condition of the Borrower and its
Consolidated Subsidiaries as at such date, and the results of their operations
and their retained earnings and cash flows for each of the fiscal periods then
ended. All such financial statements, including the related schedules and notes
thereto relating to the audited financials, have been prepared in accordance
with GAAP applied consistently throughout the periods involved.
(b) All balance sheets, all statements of income and shareholders equity
and of cash flows and all other financial information which shall hereafter be
furnished by or on behalf of or the Borrower to the Administrative Agent for the
purposes of, or in connection with, this Agreement or any transaction
contemplated hereby have been or will be prepared in accordance with GAAP
consistently applied throughout the periods involved (except as disclosed
therein) and do or will present fairly (subject to normal year-end adjustment
and the absence of footnotes in the case of financial statements for any fiscal
quarter) the financial condition of the Borrower and its Consolidated
Subsidiaries, as the case may be, as at the dates thereof and the results of
their operations and their shareholders equity and cash flows for the periods
then ended.
(c) The sum of shareholders' equity and preferred stock (including
mandatorily redeemable preferred stock of subsidiary trusts), preference stock
and preferred securities of the Borrower and its subsidiaries (including
Excluded Subsidiaries but excluding discontinued operations) on September 30,
2002 was $770,000,000.
3.2 No Change. Since December 31, 2001, there has been no development or
event which has had, or could reasonably be expected to have, a Material Adverse
Effect.
3.3 Corporate Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate or
limited liability company power and authority, and the legal right to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign corporation or limited liability company and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification except to the extent
that the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law,
34
except to the extent that the failure to comply therewith could not reasonably
be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. The
Borrower has (or with respect to the First Mortgage Bonds, the Supplemental
Indentures and the Bond Collateral Agreement, when executed, the Borrower shall
have) the corporate power and authority, and the legal right, to make, deliver
and perform the Indentures and the Loan Documents and to authorize the
execution, delivery and performance of the Loan Documents, and to borrow
hereunder. The Borrower has (or with respect to the First Mortgage Bonds, the
Supplemental Indentures and the Bond Collateral Agreement, when executed, the
Borrower shall have) taken all necessary corporate action to authorize the
borrowings on the terms and conditions set forth in this Agreement and in the
Notes and to execute, deliver and perform its obligations under the Indentures
and the Loan Documents. Set forth on Schedule 3.4a are all consents or
authorizations of, filings with, notices to or other acts by or in respect of,
any Governmental Authority or any other Person required in connection with the
authorization, execution, or issuance of any First Mortgage Bond, the
authorization, delivery, performance or validity of any Supplemental Indenture,
or the execution, delivery, performance, validity or enforceability of the Bond
Collateral Agreement or any Collateral Document related thereto, and in each
case any application therefor (collectively, the "First Mortgage Approvals"). No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder, or with the execution, delivery,
performance, validity or enforceability of the Loan Documents other than (x)
First Mortgage Approvals, (y) as set forth on Schedule 3.4b, or (z) any
consents, authorizations and filings in connection with the foregoing that, if
not obtained, could not reasonably be expected to have a Material Adverse
Effect. On the Closing Date, the Administrative Agent and each Lender shall have
received complete and current copies of all consents, authorizations and filings
listed on Schedule 3.4b. On the Cash Collateral Release Date, the Administrative
Agent and each Lender shall have received complete and current copies of all
First Mortgage Approvals. No such consent, authorization or filing is or shall
be conditioned upon or otherwise imposes any materially burdensome or adverse
condition. This Agreement and the Indentures have been, and each other Loan
Document when executed and delivered will be, duly executed and delivered on
behalf of the Borrower. This Agreement and the Indentures constitute, and each
other Loan Document when executed and delivered will constitute, a legal, valid
and binding obligation of the Borrower enforceable against the Borrower, in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
3.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents, the borrowings hereunder and the use of the proceeds thereof, will
not violate any Requirement of Law or Contractual Obligation of the Borrower or
any Subsidiary which violation could reasonably be expected to have a Material
Adverse Effect, will not accelerate or result in the acceleration of any payment
obligations of the
35
Borrower or such Subsidiary and will not result in, or require, the creation or
imposition of any Lien on any of the respective properties or revenues of the
Borrower or any such Subsidiary pursuant to any such Requirement of Law or
Contractual Obligation (other than Liens pursuant to the Indentures or the
Collateral Documents).
3.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower, any Subsidiary
or any Excluded Subsidiary or against any of the respective properties or
revenues of the Borrower, any Subsidiary or any Excluded Subsidiary which could
reasonably be expected to have a Material Adverse Effect.
3.7 No Default. No Default or Event of Default has occurred and is
continuing.
3.8 Ownership of Property; Liens. Except as set forth in Schedule 3.8,
each of the Borrower and its Material Subsidiaries has good record and
marketable title in fee simple to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold interest in, all
its other material property. None of such property is subject to any Lien other
than Permitted Liens.
3.9 [Intentionally Omitted].
3.10 Intellectual Property. Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all patents, trademarks, trade names, copyrights,
technology, know-how, processes, logos and insignia necessary for the conduct of
its business as currently conducted except for those which the failure to own or
license could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property which could
reasonably be expected to have a Material Adverse Effect, nor does the Borrower
or any Consolidated Subsidiary know of any valid basis for any such claim. The
use of such Intellectual Property by the Borrower or any Subsidiary does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
3.11 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower, any Subsidiary or any Excluded Subsidiary could
reasonably be expected to have a Material Adverse Effect.
3.12 Taxes. Except as set forth in Schedule 3.12, each of the Borrower
and the Subsidiaries has filed or caused to be filed all federal, state and
other material tax returns which are required to be filed and has paid all taxes
(including interest and penalties) shown to be due and payable on said returns
or on any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any tax, fee or other
36
charge the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower or such
Subsidiary, as the case may be); and no tax Lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
3.13 Margin Stock(a) . (a) The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U), and no proceeds of any extension of credit
hereunder will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock, except in
compliance with applicable law and regulations.
(b) Following application of the proceeds of each extension of credit
hereunder, not more than 25% of the value of the consolidated assets of the
Borrower and its Consolidated Subsidiaries that are subject to the provisions of
Section 6.3 will be comprised of margin stock.
3.14 ERISA. Neither the Borrower nor any Subsidiary maintains,
contributes to or has material obligations with respect to, any welfare plan (as
defined in Section(3)(1) of ERISA) which provides benefits to employees after
termination of employment other than as required by Part 6 of Title I of ERISA
or similar state laws regarding continuation of benefits. Each Plan has complied
and is in compliance in all respects with the applicable provisions of ERISA and
the Code except where failure to do so could not reasonably be expected to have
a Material Adverse Effect. The Borrower and each Subsidiary have not breached
any of the responsibilities, obligations or duties imposed on it by ERISA, the
Code, or regulations promulgated thereunder with respect to any Plan, which
breach could reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor any Subsidiary nor any fiduciary of any Plan who is an officer
or an employee of the Borrower or any Subsidiary has engaged in a nonexempt
prohibited transaction described in Section 406 of ERISA or 4975 of the Code
with respect to a Plan which could reasonably be expected to have a Material
Adverse Effect. With respect to any employee benefit plan (as defined in Section
3(3) of ERISA) currently or formerly maintained or contributed to by any
Commonly Controlled Entity, no liability exists and no event has occurred which
could subject the Borrower or any Subsidiary to any liability which could
reasonably be expected to have a Material Adverse Effect. Except as disclosed in
Schedule 3.14, none of the Borrower or any Subsidiary has any liability, direct
or indirect, contingent (including, without limitation, any such liability in
connection with a Multiemployer Plan) or otherwise, under Title IV of ERISA or
under Section 412 of the Code which could reasonably be expected to have a
Material Adverse Effect.
3.15 Holding Company; Investment Company Act; Other Regulations. The
Borrower is not (a) an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended, or (b) except as described on Schedule 3.15, subject to regulation
under any Federal or state statute, regulation, decree or order which limits its
ability to incur
37
Indebtedness or conditions such ability upon any act, approval or consent of any
Governmental Authority or an ISO. The Borrower is either (i) not a "holding
company", a "subsidiary company" of a "holding company", or an "affiliate" of a
"holding company", as each such term is defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) exempt from registration as a holding
company under The Public Utility Holding Company Act of 1935 by reason of filing
an application on Form U-1 in good faith seeking an order of exemption pursuant
to Section 3(a)(3) of that Act, and the Borrower has not received notice from
the SEC challenging or otherwise calling into question such exemption.
3.16 Purpose of Loans. The proceeds of Loans will be used solely (i)
first to repay in full and terminate the Existing Credit Facility and (ii)
thereafter for general corporate purposes of the Borrower, its Subsidiaries and
its Excluded Subsidiaries as permitted hereunder (in compliance with all
applicable legal and regulatory requirements).
3.17 Environmental Matters. Except as set forth on Schedule 3.17,
(a) The facilities and properties owned, leased or operated by the
Borrower, its Subsidiaries or any Excluded Subsidiary (the "Properties") and all
operations at the Properties are in, and have been in, compliance in all
material respects with all applicable Environmental Laws, and there is no
contamination in, at, under, from or about the Properties or violation of any
Environmental Law or other circumstance or condition, with respect to the
Properties or the business operated by the Borrower, its Subsidiaries or any
Excluded Subsidiary, or any predecessor of any of them (the "Business") which in
either case could reasonably be expected to result in any claims, liability,
investigation or cost pursuant to any Environmental Law and to have a Material
Adverse Effect.
(b) None of the Borrower, any Subsidiary or any Excluded Subsidiary, or
any predecessor of any of them, has received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the Business, nor do the Borrower or any Subsidiary have
knowledge or reason to believe that any such notice will be received or is being
threatened, in each case which could reasonably be expected to have a Material
Adverse Effect.
(c) There has been no Release or threat of Release of Materials of
Environmental Concern at or from any of the Properties, or arising from or
related to the operations of the Borrower, any Subsidiary or any Excluded
Subsidiary, or any predecessor of any of them, in connection with any of the
Properties or otherwise in connection with the Business that could reasonably be
expected to have a Material Adverse Effect.
3.18 Insurance. All policies of insurance of any kind or nature
maintained by or issued to the Borrower or any Subsidiary, including, without
limitation, policies of life, fire, theft, product liability, public liability,
property damage, other
38
casualty, employee fidelity, worker's compensation, employee health and welfare,
title, property and liability insurance, are in full force and effect in all
material respects and are of a nature and provide such coverage as is sufficient
and as is customarily carried by companies of similar size and character.
3.19 Accuracy and Completeness of Information. All information, reports
and other papers and data (other than projections) with respect to the Borrower,
any Subsidiary or any Excluded Subsidiary furnished to the Lenders by the
Borrower, or on behalf of the Borrower, and all SEC Reports were, at the time
furnished, complete and correct in all material respects, or have been
subsequently supplemented by other information, reports or other papers or data,
to the extent necessary to give the Lenders a true and accurate knowledge of the
subject matter in all material respects. All projections with respect to the
Borrower or any Subsidiary furnished by the Borrower, were prepared and
presented in good faith by the Borrower based upon facts and assumptions that
the Borrower believed to be reasonable in light of current and foreseeable
conditions, it being understood that projections are subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Borrower and that no assurance can be given that the financial results set forth
in such projections will actually be realized and the Borrower shall be under no
obligation to update such projections. No document furnished or statement made
in writing to the Lenders by or on behalf of the Borrower in connection with the
negotiation, preparation or execution of this Agreement and no SEC Report
contains any untrue statement of a material fact, or omits to state any such
material fact necessary in order to make the statements contained therein not
misleading, in either case which has not been corrected, supplemented or
remedied by subsequent documents furnished or statements made in writing to the
Lenders.
3.20 Leaseholds, Permits, etc. The Borrower possesses or has the right
to use, all leaseholds, easements, franchises and permits and all authorizations
and other rights which are material to and necessary for the conduct of the
Business and its business. All the foregoing are in full force and effect, and
each of the Borrower and the Subsidiaries is in substantial compliance with the
foregoing without any known conflict with the valid rights of others, except for
such noncompliance with the foregoing which could not reasonably be expected to
have a Material Adverse Effect. No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such leasehold, easement, franchise, license or other right, which
termination or revocation, considered as a whole, could reasonably be expected
to have a Material Adverse Effect.
3.21 No Restrictive Covenants. No Subsidiary of the Borrower is party
to, or otherwise bound by, any agreement or other arrangement that prohibits
such Subsidiary from making any payments, directly or indirectly, to the
Borrower, by way of dividends, advances, repayment of loans or advances,
reimbursements of management or other intercompany charges, expenses and
accruals or other returns on investment, or any other agreement or arrangement
that restricts the ability of such Subsidiary to make any payment, directly or
indirectly, to the Borrower, other than prohibitions and restrictions permitted
to exist under Section 6.12.
39
3.22 Solvency. The Borrower is solvent, is able to pay its debts as they
mature, owns property with fair saleable value greater than the amount required
to pay its debts and has capital sufficient to carry on its business as then
constituted.
3.23 Montana First Mortgage Indenture.
(a) The First Mortgage Bonds to be issued under the Montana First
Mortgage Indenture, as heretofore supplemented and to be supplemented by the
Twenty-Third Supplemental Indenture (the "Montana Supplemental Indenture"), when
delivered to the Collateral Agent, will be duly executed, authenticated, issued
and delivered, and will constitute valid and legally binding obligations of the
Borrower, entitled to the security and benefits provided by the lien of such
Indenture (except to the extent that enforceability of such lien may be limited
by the effect of certain laws of the jurisdictions in which the physical
properties covered thereby are located upon the remedies provided in such
Indenture, which limitations, however, do not make the remedies afforded
inadequate for the realization of the security and benefits provided by such
Indenture, and except as enforceability of such lien may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights).
(b) The Montana First Mortgage Indenture as heretofore supplemented now
constitutes, and such Indenture, when the Montana Supplemental Indenture shall
have been duly filed for recording and recorded, will constitute, a legally
valid and directly enforceable first mortgage lien for the equal and
proportionate security of the first mortgage bonds issued or to be issued
thereunder, upon substantially all of the physical properties and franchises of
the Borrower which are specifically described therein as subject to the lien
thereof and which are used or useful in the conduct of the Montana Utility
Business, free from all prior liens, charges or encumbrances (except to the
extent that enforceability of such lien may be limited by the effect of certain
laws of the jurisdictions in which the physical properties covered thereby are
located upon the remedies provided in such Indenture as heretofore supplemented
and to be supplemented by the Montana Supplemental Indenture, which limitations,
however, do not make the remedies afforded inadequate for the realization of the
security and benefits provided by such Indenture, and except as enforceability
of such lien may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights)
and the after-acquired property clause in such Indenture subjects to the lien
thereof all after-acquired utility property of the Montana Utility Business as
provided therein (except such thereof as is expressly excepted from the lien of
such Indenture).
(c) The Montana First Mortgage Indenture as heretofore supplemented,
(including any necessary related financing statements), has been filed and
recorded wherever and to the extent necessary to perfect the lien thereof upon
the properties now owned by the Borrower and intended to be subject thereto; all
fees or taxes in connection therewith have been paid and no other filing or
recordation is presently necessary in order to perfect the lien of such
Indenture on such properties.
40
(d) No filing or recording of the Montana Supplemental Indenture is
necessary to perfect the lien of the Montana First Mortgage Indenture upon the
properties now owned by the Borrower and intended to be subject thereto or to
extend such lien for the benefit of the First Mortgage Bonds to be issued
thereunder; no re-recording or refiling of such Indenture or any other
instruments or documents (except for periodic filings which extend the
effectiveness of financing statements) is required to preserve and protect the
lien of such Indenture; and under the present laws of the States in which the
property intended to be subject to the lien of such Indenture is located, no
further supplemental indentures or other instruments or documents are required
to be executed, filed and/or recorded to extend the lien of such Indenture to
after-acquired property; however, the Borrower is required by the terms of the
Montana First Mortgage Indenture to promptly record and file the Montana
Supplemental Indenture.
(e) The Borrower has good and marketable title to all properties owned
by it which are subject to the Montana First Mortgage Indenture, subject only
(a) to the lien of such Indenture, (b) to Excepted Encumbrances (as defined in
such Indenture) which are Permitted Liens hereunder and (c) to minor exceptions
and defects which do not, in the aggregate, materially interfere with the use by
the Borrower of such properties for the purposes for which they are held,
materially detract from the value of said properties or in any material way
impair the security afforded by such Indenture.
3.24 South Dakota First Mortgage Indenture.
(a) The First Mortgage Bonds to be issued under the South Dakota First
Mortgage Indenture, as heretofore supplemented and to be supplemented by a
Supplemental Indenture creating the South Dakota First Mortgage Bonds (the
"South Dakota Supplemental Indenture"), when delivered to the Collateral Agent,
will be duly executed, authenticated, issued and delivered, and will constitute
valid and legally binding obligations of the Borrower, entitled to the security
and benefits provided by the lien of such Indenture (except to the extent that
enforceability of such lien may be limited by the effect of certain laws of the
jurisdictions in which the physical properties covered thereby are located upon
the remedies provided in such Indenture, which limitations, however, do not make
the remedies afforded inadequate for the realization of the security and
benefits provided by such Indenture, and except as enforceability of such lien
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights).
(b) The South Dakota First Mortgage Indenture as heretofore supplemented
now constitutes, and such Indenture, when the South Dakota Supplemental
Indenture shall have been duly filed for recording and recorded, will
constitute, a legally valid and directly enforceable first mortgage lien for the
equal and proportionate security of the first mortgage bonds issued or to be
issued thereunder, upon substantially all of the physical properties and
franchises of the Borrower which are specifically described therein as subject
to the lien thereof and which are used or useful in the conduct of the South
Dakota Utility Business, free from all prior liens, charges or encumbrances
(except to the extent that enforceability of such lien may be limited by the
effect of certain laws of the jurisdictions in which the physical properties
covered thereby are located upon the
41
remedies provided in such Indenture as heretofore supplemented and to be
supplemented by the South Dakota Supplemental Indenture, which limitations,
however, do not make the remedies afforded inadequate for the realization of the
security and benefits provided by such Indenture, and except as enforceability
of such lien may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights)
and the after-acquired property clause in such Indenture subjects to the lien
thereof all after-acquired property of the South Dakota Utility Business as
provided therein (except such thereof as is expressly excepted from the lien of
such Indenture).
(c) The South Dakota First Mortgage Indenture as heretofore supplemented
(including any necessary related financing statements), has been filed and
recorded wherever and to the extent necessary to perfect the lien thereof upon
the properties now owned by the Borrower and intended to be subject thereto; all
fees or taxes in connection therewith have been paid and no other filing or
recordation is presently necessary in order to perfect the lien of such
Indenture on such properties.
(d) No filing or recording of the South Dakota Supplemental Indenture is
necessary to perfect the lien of the South Dakota First Mortgage Indenture upon
the properties now owned by the Borrower and intended to be subject thereto or
to extend such lien for the benefit of the First Mortgage Bonds to be issued
thereunder; no re-recording or refiling of such Indenture or any other
instruments or documents (except for periodic filings which extend the
effectiveness of financing statements) is required to preserve and protect the
lien of such Indenture; and under the present laws of the States in which the
property intended to be subject to the lien of such Indenture is located, no
further supplemental indentures or other instruments or documents are required
to be executed, filed and/or recorded to extend the lien of such Indenture to
after-acquired property; however, the Borrower is required by the terms of the
South Dakota First Mortgage Indenture to promptly record and file the South
Dakota Supplemental Indenture.
(e) The Borrower has good and marketable title to all properties owned
by it which are subject to the South Dakota First Mortgage Indenture, subject
only (a) to the lien of such Indenture, (b) to Permitted Liens (as defined in
such Indenture) which are Permitted Liens hereunder and (c) to minor exceptions
and defects which do not, in the aggregate, materially interfere with the use by
the Borrower of such properties for the purposes for which they are held,
materially detract from the value of said properties or in any material way
impair the security afforded by such Indenture.
3.25 Subsidiaries. Set forth on Schedule 3.25 are all of the Material
Subsidiaries of the Borrower, which schedule correctly sets forth, as of the
date hereof, the percentage ownership (direct and indirect) of the Borrower in
each class of capital stock or other equity interests of each of its Material
Subsidiaries and also identifies the direct owner thereof. All outstanding
shares of capital stock of each Subsidiary of the Borrower has been duly and
validly issued, are fully paid and non-assessable and have been issued free of
any preemptive rights. No Material Subsidiary of the Borrower has outstanding
any securities convertible into or exchangeable for its Capital Stock or
42
outstanding any right to subscribe for or to purchase, or any options or
warrants for the purchase or, or any agreement providing for the issuance
(contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its Capital Stock or any stock appreciation or similar
rights.
ARTICLE 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing Date. The commencement of the Availability
Period is subject to the satisfaction of the following conditions precedent:
(a) Documents. The Administrative Agent shall have received each of the
following documents, each of which shall be satisfactory to the Administrative
Agent (and to the extent specified below, to each Lender) in form and substance:
(i) Executed Counterparts. From each party hereto and thereto
either (i) multiple counterparts of this Agreement and the Syndication
Letter, signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page to this Agreement and the
Syndication Letter) that such party has signed a counterpart of this
Agreement and the Syndication Letter);
(ii) Corporate Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request, certified as
of the Closing Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of the Borrower, relating to (i) the
organization, existence and good standing of the Borrower, (ii) the
authorization of the execution, delivery and performance by the Borrower
of this Agreement, and of the borrowings hereunder by the Borrower, and
(iii) certificates as to the incumbency and signature of each individual
signing this Agreement and any other agreement or document contemplated
hereby on behalf of the Borrower;
(iii) Financial Statements. Copies of (i) the audited
consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as of December 31, 2001, and the related audited statement
of earnings and cash flows for the period ending as of such date, and
(ii) the unaudited consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of September 30, 2002, and the related
unaudited statement of earnings and cash flows for the period ending as
of such date, and the related unaudited statement of earnings and cash
flows for the period ending as of such date, respectively;
(iv) Indentures. A certified copy of each of the Indentures
(including any amendments and supplements thereto); and
43
(v) Other Documents. Such other documents as the Administrative
Agent or any Lender or counsel to CSFB may reasonably request.
(b) Consents, Licenses and Approvals. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower (i) attaching copies of all consents,
authorizations and filings referred to in Schedule 3.4b, including without
limitation, the orders of the FERC referred to in item 1 thereof and the
Borrower's applications to the FERC for each such order, and (ii) stating that,
except as shown in Schedule 3.4b, such consents, licenses and filings are in
full force and effect; and each such consent, authorization and filing shall be
in form and substance satisfactory to the Administrative Agent. Without limiting
the foregoing, any consents, filings, approvals or notices set forth on Schedule
3.15 (or which are necessary or advisable as a result of the facts or
circumstances set forth on such schedule) shall have been obtained or made, as
applicable, shall be in full force and effect and shall be in form and substance
satisfactory to the Administrative Agent.
(c) Closing Fees and Expenses. The Administrative Agent shall have
received the fees to be received on the Closing Date referred to in the
Syndication Letter and shall have received reimbursement of all costs and
expenses (including the fees and expenses of counsel to the Administrative Agent
to the extent invoiced).
(d) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for each Lender, the executed legal opinions of counsel to the
Borrower, which opinions shall be satisfactory in form and substance to the
Administrative Agent.
(e) Closing Certificate. The Administrative Agent shall have received,
with a counterpart for each Lender, a closing certificate of the Borrower
substantially in the form of Exhibit C, dated as of the Closing Date and
satisfactory in form and substance to the Administrative Agent.
(f) Insurance. The Administrative Agent shall have received evidence
satisfactory to it of the existence of the insurance required hereunder.
(g) Compliance Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a Compliance Certificate executed
by a Chief Financial Officer or Treasurer of the Borrower, dated as of the
Closing Date and satisfactory in form and substance to the Administrative Agent.
(h) No Material Adverse Effect. Since December 31, 2001, there shall
have been no development or event which, singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(i) Pro Forma Financials. The Administrative Agent shall have received,
with a copy for each Lender, pro forma balance sheets as of the end of the
fiscal quarter immediately preceding the Closing Date and pro forma statements
of operations and cash flows for the immediately preceding fiscal year of the
Borrower and its Consolidated Subsidiaries and for the period from the end of
such fiscal year to the end of the fiscal
44
quarter immediately preceding the Closing Date, (i) giving effect to the
Transactions and (ii) demonstrating that each of the financial covenants set
forth in Section 6.1 would have been satisfied as at the end of such fiscal year
and at the end of each succeeding fiscal quarter ending on or before the Closing
Date, certified by the chief financial officer or treasurer of the Borrower.
(j) Outside Closing Date. The Closing Date shall have occurred and each
of conditions precedent set forth in this Section 4.1 shall have been satisfied
on or prior to February 10, 2003.
(k) Representations and Warranties. Each of the representations and
warranties made by the Borrower in or pursuant to the Loan Documents (except to
the extent applicable to an earlier date) shall be true and correct in all
material respects on and as of such date as if made on and as of such date (both
before and after giving effect to such Transactions as shall be required to
occur on or prior to the Closing Date).
(l) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Transactions to be
consummated on such date.
(m) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
Transactions and the other transactions contemplated by this Agreement, and the
other Loan Documents shall be reasonably satisfactory in form and substance to
the Administrative Agent, and the Administrative Agent shall have received such
other documents, instruments and legal opinions in respect of any aspect or
consequence of the Transactions and the other transactions contemplated hereby
or thereby as it shall reasonably request.
4.2 Conditions to the Funding Date. The agreement of each Lender to make
any Loan is subject to the satisfaction of the following conditions precedent:
(a) Conditions to Closing Date. Each of the conditions precedent set
forth in Section 4.1 shall have been satisfied or waived.
(b) Notice of Borrowing. The Administrative Agent shall have received a
Notice of Borrowing in compliance with the terms hereof.
(c) Representations and Warranties. Each of the representations and
warranties made by the Borrower in or pursuant to the Loan Documents (except to
the extent applicable to an earlier date) shall be true and correct in all
material respects on and as of such date as if made on and as of such date (both
before and after giving effect to the making of the Loans).
(d) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the making of the Loans.
(e) Funding Fees and Expenses. The Administrative Agent shall have
received the fees to be received on the Funding Date referred to in the
Syndication Letter
45
and shall have received reimbursement of all costs and expenses (including the
fees and expenses of counsel to the Administrative Agent to the extent
invoiced).
(f) Northwestern Material Adverse Event. There shall not have occurred,
exist or become known to CSFB any event, condition or change in or affecting
NorthWestern, or the Utility Business, that, singly or in the aggregate, in the
reasonable judgment of CSFB, could reasonably be expected to result in a
material adverse change in (a) the business, assets, operations, condition
(financial or otherwise) or prospects of the Utility Business, or of
NorthWestern and its Consolidated Subsidiaries taken as a whole, or (b) the
validity or enforceability of any of the Loan Documents or the rights, remedies
and benefits available to the parties thereunder.
(g) Security Agreement. The Administrative Agent shall have received the
Security Agreement together with all documentation necessary and appropriate to
convey (and confirm) a valid and perfected first-priority security interest in
the Collateral, as more specifically enumerated in the Security Agreement,
executed by a duly authorized officer of the Borrower.
(h) Early Funding Date. If the Closing Date occurs on or before December
31, 2002, then the foregoing conditions precedent shall have been met on or
before January 3, 2003 (or such later date as the Administrative Agent may
designate in its sole discretion) and if the Closing Date occurs after December
31, 2002, then the foregoing conditions precedent shall have been met on the
Closing Date (but in any event on or before February 10, 2003).
(i) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
Transactions (other than the with respect to the First Mortgage Bonds) and the
other transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received such other documents,
instruments and legal opinions in respect of any aspect or consequence of the
Transactions and the other transactions contemplated hereby or thereby as it
shall reasonably request.
It being understood that unless the conditions precedent set forth in Section
4.3 have been met at such time, all proceeds of the Loans shall be deposited on
the Funding Date into the Cash Collateral Account.
4.3 Conditions to Cash Collateral Release. The release to the Borrower
of the proceeds of the Loans or, if applicable, of cash on deposit in the Cash
Collateral Account shall be subject to the following conditions precedent:
(a) Conditions to Funding Date. Each of the conditions precedent set
forth in Section 4.2 shall have been satisfied or waived.
(b) Termination of Existing Credit Agreement. The Existing Credit
Agreement shall have been terminated and all amounts outstanding thereunder
shall have
46
been repaid in full and the liens granted thereunder shall have been released,
in each case pursuant to documentation satisfactory to the Administrative Agent
and the Lenders).
(c) Issuance of First Mortgage Bonds. (i) All First Mortgage Approvals
shall have been obtained and shall be in full force and effect; (ii) the
Supplemental Indentures shall have been validly authorized, executed and
delivered and the First Mortgage Bonds comprising (x) an aggregate principal
amount of $280 million in the case of the Montana First Mortgage Bonds, and (y)
an aggregate principal amount of $110 million in the case of the South Dakota
First Mortgage Bonds (or, if the aggregate principal amount of the Loans is less
than $390,000,000, the respective pro rata portions thereof), shall have been
validly authorized, executed and authenticated and validly issued and delivered
to the Collateral Agent (and copies thereof shall have been delivered to each
Lender); and (iii) the Administrative Agent and each Lender shall have received
(I) copies of all opinions, certificates, orders, consents and other documents
that are delivered to the trustees under the Indentures as conditions precedent
to (or otherwise in connection with) the issuance of the First Mortgage Bonds
under the Indentures (together with, in the case of each such opinion that is
not addressed to the Collateral Agent, a letter from the counsel rendering such
opinion to the effect that the Collateral Agent is entitled to rely on such
opinion as if such opinion were addressed to the Collateral Agent), (II) copies
of all First Mortgage Approvals and (III) such other opinions, certificates and
documents reasonably related to the First Mortgage Bonds, the Indentures
(including the Supplemental Indentures) and the liens and security interests of
the Indentures as the Administrative Agent shall have reasonably requested, and
all of the foregoing documents (including without limitation the First Mortgage
Approvals, the Supplemental Indentures and the First Mortgage Bonds) shall be in
form and substance reasonably satisfactory to the Administrative Agent (and
consistent with the Syndication Letter).
(d) Appraisals. The delivery to the Administrative Agent at least five
days prior to the Cash Collateral Release Date of a written appraisal, by an
appraiser and in form reasonably satisfactory to the Administrative Agent, (a)
in the case of the Montana First Mortgage Indenture, dated within six months of
the Closing Date and covering the assets of the Borrower subject to the lien of
the Montana First Mortgage Indenture and (b) in the case of the South Dakota
First Mortgage Indenture, dated within thirty days of the Closing Date and
covering the assets of the Borrower subject to the lien of the South Dakota
First Mortgage Indenture, in each case upon which appraisals Administrative
Agent and the Lenders may expressly rely.
(e) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the making of the Loans.
(f) Outside Cash Collateral Release Date. The Cash Collateral Release
Date shall have occurred and each of conditions set forth in this Section 4.2
shall have been satisfied on or prior to February 10, 2003.
Upon the satisfaction of the foregoing conditions precedent, the Collateral
Agent shall release all of the Collateral then on deposit in the Cash Collateral
Account and, on behalf
47
of the Borrower, shall apply the proceeds thereof first, to the repayment of any
obligations of the Borrower then outstanding under the Existing Credit Agreement
and second, thereafter shall disburse the remaining proceeds to or at the
direction of the Borrower (and the Borrower and each Lender hereby consents to
the taking of such actions).
ARTICLE 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that for so long as any of the
Commitments remains in effect, any Note remains outstanding and unpaid or any
Obligation is owing to any Lender, the Collateral Agent or the Administrative
Agent hereunder or under any other Loan Document, the Borrower shall and shall
cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the consolidated balance sheet of
the Borrower and the Consolidated Subsidiaries as at the end of such year and
the related consolidated and consolidating statements of income, retained
earnings and cash flows for such year, setting forth in each case in comparative
form the figures as of the end of and for the previous year, reported on without
a "going concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing; provided that
the submission of the Borrower's report on Form 10-K shall satisfy the foregoing
requirements; and
(b) as soon as available, but in any event not later than 45 days after
the end of each quarterly period for each of the fiscal quarters of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the Borrower
and the Consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income, retained earnings and cash flows of
the Borrower and the Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter and setting forth the actual figures for
the corresponding date or period in the previous year, certified by the chief
financial officer or treasurer of the Borrower as being fairly stated in all
material respects (subject to normal year-end audit adjustments); provided that
the submission of the Borrower's report on Form 10-Q shall satisfy the foregoing
requirements,
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred
to in Section 5.1(a), a certificate of the independent certified public
accountants reporting on
48
such financial statements stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements referred
to in Section 5.1(a) or (b), a compliance certificate of the chief financial
officer or treasurer of the Borrower, in form and substance satisfactory to the
Administrative Agent (the "Compliance Certificate"), (i) showing compliance by
the Borrower and the Subsidiaries with the covenants contained in Section 6.1
and (ii) setting forth the description of any Reduction Event occurring during
such period and the aggregate amount of Net Cash Proceeds received during such
period with respect to any Reduction Event;
(c) within 5 Business Days after the filing thereof, copies of all
reports which the Borrower sends to any of its stockholders, and copies of all
registration statements, reports on Form 10-K, Form 10-Q or Form 8-K (or, in
each case, any successor form) and other material reports which the Borrower or
any Subsidiary files with the SEC or any successor or analogous Governmental
Authority (other than public offerings of securities under employee benefit
plans or dividend reinvestment plans);
(d) within five days after either of Moody's or Standard & Poor's has
raised or lowered its credit rating of any of the First Mortgage Bonds or the
credit facility evidenced by the Loan Documents a notice to the Administrative
Agent as to such effect;
(e) concurrently with the delivery thereof or promptly after receipt
thereof, a copy of all notices to the trustee or the Borrower under either
Indenture; and
(f) promptly, such additional financial and other information as the
Administrative Agent or any Lender may from time to time reasonably request.
5.3 Payment and Performance of Obligations. Perform in all respects,
material to the Borrower and its Subsidiaries taken as a whole, all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements and other debt instruments to which it is party or bound,
including, without limitation, pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all taxes, fees
or other charges imposed on it or on any of its properties by any Governmental
Authority and all its other obligations of whatever nature, material to the
Borrower and its Subsidiaries taken as a whole, except, in each case, where the
amount or validity thereof is currently being diligently contested in good faith
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or any of its Subsidiaries, as the case may be.
5.4 Maintenance of Existence. Renew and keep in full force and effect
its corporate existence, take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except to the extent such failure to maintain could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and comply
with all Contractual Obligations and
49
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition (ordinary wear and
tear, and casualties, excepted), maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business, and furnish to each
Lender, upon request, full information as to the insurance carried including
certified copies of policies and certificates of insurance from a recognized
insurance broker reasonably acceptable to the Required Lenders.
5.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and accounts, in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit after
reasonable notice representatives of the Administrative Agent or any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired, and to discuss the business, operations, properties and financial
and other condition of the Borrower and each Subsidiary with officers and
employees of the Borrower and such Subsidiary and with their independent
certified public accountants.
5.7 Notices(a). (a) Within 5 days after the Borrower knows with respect
to any notice under clause (i) or within 10 days with respect to any other
notice under this Section 5.7(a), give notice to the Administrative Agent and
each Lender of:
(i) the occurrence of any Default or Event of Default;
(ii) any (i) default or event of default under any Contractual
Obligation of the Borrower or any Subsidiary, or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any such Subsidiary and any Governmental Authority, which in
either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(iii) any material labor dispute to which the Borrower or any
Subsidiary may become a party and which involves any group of employees,
any strikes or walkouts relating to any of its plants or facilities and
the expiration or termination of any labor contract to which the
Borrower or such Subsidiary is a party or by which the Borrower or such
Subsidiary is bound and which dispute could reasonably be expected to
have a Material Adverse Effect on the operations of the Borrower or such
Subsidiary.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating
50
what action the Borrower proposes to take with respect thereto. For the purposes
of this Section 5.7(a), the Borrower shall be deemed to have knowledge when any
officer of the Borrower charged with responsibility for any matter that is the
subject of such notice requirement knows or should have known that such notice
was required.
(b) At least ten (10) days prior to such event, give notice to the
Administrative Agent and each Lender of the occurrence of any Reduction Event
(i) the Net Cash Proceeds of which are (or are scheduled to be) in excess of
$5,000,000 or (ii) together with any other concurrent or prior Reduction Event
for which notice has not been given hereunder the aggregate Net Cash Proceeds of
which are (or are scheduled to be) in excess of $10,000,000.
5.8 Environmental Laws(a). (a) Comply and cause its Subsidiaries to
comply in all material respects with all applicable Environmental Laws and
obtain and comply and cause its Subsidiaries to obtain and comply in all
material respects with and maintain and cause its Subsidiaries to maintain any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that failure to do so could
not be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not
reasonably be expected to have a Material Adverse Effect.
(c) Defend, indemnify and hold harmless the Administrative Agent, the
Collateral Agent and the Lenders, and their respective parents, subsidiaries,
affiliates, employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature (whether arising under theories of
negligence, strict or absolute liability, or otherwise) known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under any Environmental Laws in each
instance occurring at, or involving the operation of any facility by the
Borrower or its Subsidiaries, or arising out of, or relating to the operations
of the Borrower or any Subsidiary, or the Business or the Properties, applicable
to the operations of the Borrower or any Subsidiary or the Business or the
Properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. This indemnity shall continue in full force and effect
regardless of the termination of this Agreement.
5.9 ERISA. Establish, maintain and operate and cause each of its
Subsidiaries to establish, maintain and operate all Plans to comply in all
material respects with the applicable provisions of ERISA, the Code, and all
other applicable laws, and the
51
regulations and interpretations thereunder and the respective requirements of
the governing documents for such Plans except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.10 Use of Proceeds. Use the proceeds of each extension of credit
hereunder solely for the purposes set forth in Section 3.16.
5.11 Margin Stock. Not permit the aggregate value of margin stock (as
defined in Regulation U) at any time owned or held by the Borrower or any of its
Subsidiaries to exceed an amount equal to 25% of the value of all consolidated
assets subject at such time to any "arrangement" (as such term is used in the
definition of "indirectly secured" in Section 221.2 of Regulation U).
5.12 Maintain Ownership of the Utility Business. (a) Maintain ownership,
directly (and not through any Subsidiary), of all or substantially all of the
assets of the Utility Business, (b) maintain the Lien of the Montana First
Mortgage Indenture on all or substantially all of the assets of the Montana
Utility Business and (c) maintain the Lien of the South Dakota First Mortgage
Indenture on all or substantially all of the assets of the South Dakota Utility
Business.
5.13 Post-Closing Matters(a) . (a) Amend this Agreement and the other
Loan Documents, and execute such additional documents, as may be reasonably
requested by the Arranger, after consultation with the Borrower and prior to
completion of the successful syndication (as determined by the Arranger) of the
credit facility provided hereby, to make such changes as may be required
pursuant to the Syndication Letter if the Arranger determines that such changes
are advisable to ensure the successful syndication thereof;
(b) Use its commercially best efforts to comply with all of the
conditions precedent set forth in Section 4.2 on or before the date then
designated by the Administrative Agent as the Funding Date;
(c) Use its commercially best efforts to (i) obtain all governmental and
regulatory approvals necessary for the Borrower to issue (and perform its
obligations under and in respect of) the First Mortgage Bonds, and (ii) issue
the First Mortgage Bonds to the Collateral Agent, in each case, by the Cash
Collateral Release Date; and
(d) Comply with the provisions of, and take such action required by the
terms of, the Syndication Letter relating to the syndication of the credit
facility evidenced hereby.
5.14 Credit Ratings. Use commercially reasonable efforts to obtain as
soon as practicable (and in any event obtain no later than January 3, 2003), and
thereafter to maintain, ratings by both Moody's and Standard & Poor's with
respect to the credit facility provided hereby (in each case, on a pro forma
basis if prior to the issuance of the First Mortgage Bonds).
52
5.15 Excluded Subsidiaries. (i) Maintain, and cause to be maintained,
the books and records and bank accounts of the Consolidated Group separate from
the books and records and bank accounts of the Excluded Subsidiaries, and at all
times present the Excluded Subsidiaries to the public as separate and distinct
legal entities; (ii) maintain, and cause to be maintained, financial statements
of the Excluded Subsidiaries separate from those of the Consolidated Group;
(iii) cause the Excluded Subsidiaries to hold title to any assets they own in
their own respective name, and deposit all of their respective funds in checking
accounts, saving accounts, time deposits or certificates of deposit in their
respective names or invest such funds in their respective names; (iv) cause the
Excluded Subsidiaries to observe all corporate formalities under Requirements of
Law necessary to maintain their identity as entities separate and distinct from
the Consolidated Group; and (v) not commingle the assets of Borrower or any
Consolidated Subsidiary with assets of any Excluded Subsidiary.
ARTICLE 6. NEGATIVE COVENANTS
The Borrower hereby agrees that for so long as the Commitments
remain in effect, any Note remains outstanding and unpaid or any Obligation is
owing to any Lender, the Collateral Agent or the Administrative Agent hereunder
or under any other Loan Document, the Borrower shall not:
6.1 Financial Covenants(a) . (a) Minimum Net Worth. Permit Net Worth on
the last day of any fiscal quarter to be less than $616,000,000 plus fifty
percent (50%) of Net Income, if positive, for each fiscal quarter ending after
the Closing Date.
(b) Total Capitalization. Permit the ratio (expressed as a percentage)
of Funded Debt to Total Capital on the last day of any fiscal quarter to exceed
72.5%.
(c) Utility Business EBITDA to Interest Expense.
(i) Permit the ratio of (y) Utility Business EBITDA to (z)
Consolidated Recourse Interest Expense, in each case on the last
day of any fiscal quarter of the Borrower for the period of four
fiscal quarters then ending to be less than 1.40 to 1.00.
(ii) Permit the ratio of (y) Montana Utility Business EBITDA to (z)
the aggregate amount of interest expense accrued on first
mortgage bonds under the Montana First Mortgage Indenture, in
each case on the last day of any fiscal quarter of the Borrower
for the period of four fiscal quarters then ending to be less
than 3.00 to 1.00.
(iii) Permit the ratio of (y) South Dakota Utility Business EBITDA to
(z) the aggregate amount of interest expense accrued on first
mortgage bonds under the South Dakota First Mortgage Indenture,
in each case on the last day of any fiscal quarter of the
Borrower for the period of four fiscal quarters then ending to be
less than 2.50 to 1.00.
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(d) Funded Debt to Utility Business EBITDA.
(i) Permit the ratio of (y) Funded Debt outstanding on the last
day of any fiscal quarter to (z) Utility Business EBITDA for the period
of four fiscal quarters then ending, to be more than (1) prior to
January 1, 2004, 8.75 to 1.00, (2) for the period commencing on January
1, 2004 to and including December 31, 2004, 8.25 to 1.00, and (iii) on
and after January 1, 2005, 7.50 to 1.00.
(ii) Permit the ratio of (y) the aggregate principal amount of
first mortgage bonds outstanding under the Montana First Mortgage Bond
Indenture on the last day of any fiscal quarter to (z) Montana Utility
Business EBITDA for the period of four fiscal quarters then ending, to
be more than (1) prior to January 1, 2005, 4.25 to 1.00 and (2) on and
after such date, 3.75 to 1.00.
(iii) Permit the ratio of (y) the aggregate principal amount of
first mortgage bonds outstanding under the South Dakota First Mortgage
Bond Indenture on the last day of any fiscal quarter to (z) South Dakota
Utility Business EBITDA for the period of four fiscal quarters then
ending, to be more than (1) prior to January 1, 2005, 4.75 to 1.00 and
(2) on and after such date, 4.25 to 1.00.
6.2 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all its property, business or
assets or all or substantially all of the mortgaged property under an Indenture,
acquire any Capital Stock of another Person, or acquire assets of another Person
(other than any Subsidiary having Non-Recourse Debt or any Excluded Subsidiary)
constituting all or a material part of a business (or all or substantially all
of the assets of such Person), except any Person (other than any Excluded
Subsidiary) may be merged or consolidated with or into the Borrower, or the
Borrower may acquire assets or Capital Stock of another Person (other than any
Excluded Subsidiary) constituting all or a material part of a business (or all
or substantially all the assets of such Person), in each case provided that (a)
the Borrower shall be the continuing or surviving corporation, (b) as of the
consummation of, and after giving effect to, such transaction, no Default or
Event of Default shall then exist, (c) the Borrower shall not acquire, directly
or indirectly, any Capital Stock or assets of an Excluded Subsidiary (except as
expressly permitted pursuant to Section 6.8) nor any assets of a Subsidiary
subject to a Lien securing Non-Recourse Debt, (d) such transaction relates
solely to the acquisition of domestic regulated utility businesses and assets,
(e) if the Borrower shall acquire Capital Stock of another Person, such Person
shall thereupon be a Subsidiary, and (f) the aggregate principal amount of
Indebtedness incurred or assumed by the Borrower and the Subsidiaries in
connection with such transaction (together with the aggregate principal amount
of Indebtedness of such acquired Person) shall not exceed sixty percent (60%) of
the lesser of the fair value or cost of such acquired assets (and, to the extent
such Indebtedness is incurred in connection with such transaction or in
contemplation of
54
such transaction, such Indebtedness shall not have a scheduled maturity, or
require any principal payment, prior to six months after the Maturity Date).
6.3 Limitation on Transactions with Affiliates. Except as described on
Schedule 6.3 and except for transactions providing services (including, without
limitation, group purchases of equipment or energy) at cost to any Subsidiary,
enter into any transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is upon fair and reasonable terms no less
favorable to the Borrower than it would have obtained in a comparable
arm's-length transaction with a Person which is not an Affiliate.
6.4 Limitation on Liens. Create, incur, assume or suffer to exist, and
shall not permit any Subsidiary to create, incur, assume or suffer to exist, any
Lien upon any of its properties, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
6.5 Amendments of Organizational Documents. Amend, modify or change its
articles of incorporation or bylaws that could reasonably be expected to result
in a Material Adverse Effect.
6.6 Limitation on Guarantee Obligations. Create, incur, assume or suffer
to exist, and shall not permit any Subsidiary to create, incur, assume or suffer
to exist, any Guarantee Obligation except:
(a) guarantees of obligations to third parties made in the ordinary
course of business in connection with relocation of employees of the Borrower or
any of its Subsidiaries;
(b) Guarantee Obligations existing on the date hereof and described in
Schedule 6.6;
(c) Guarantee Obligations which by their terms (either mandatorily or at
the unfettered option of the Borrower) are payable solely in Capital Stock
(other than Mandatory Redeemable Stock) of the Borrower provided that the
Borrower agrees to cause any payment under any such outstanding obligation to be
made only in such Capital Stock; and
(d) Guaranteed Obligations permitted pursuant to Section 6.10(j), 6.8(y)
or 6.8(z).
6.7 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer
or otherwise dispose of, and shall not permit any Subsidiary (other than any
Special Purpose Subsidiary) to convey, sell, lease, assign, transfer or
otherwise dispose of any of, its property, business or assets (including,
without limitation, tax benefits, receivables and leasehold interests but
excluding the Capital Stock of any Special Purpose Subsidiary), whether now
owned or hereafter acquired except (a) for the sale or other disposition of any
property that, in the reasonable judgment of the Borrower, has become
uneconomic, obsolete or worn out, and which is disposed of in the ordinary
course of business
55
(provided that, to the extent applicable, the Borrower shall have complied with
Section 6.16); (b) for sales of inventory and receivables made in the ordinary
course of business; (c) that any Subsidiary of the Borrower may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or, subject to Section 5.12, a
Wholly-Owned Subsidiary of the Borrower and any Subsidiary of the Borrower may
sell or otherwise dispose of, or part with control of any or all of, the stock
of any Subsidiary to a Wholly-Owned Subsidiary of the Borrower or a Subsidiary
of the Borrower may merge with the Borrower (so long as the Borrower is the
surviving corporation) or, subject to Section 5.12, another Subsidiary; (d) for
fair market arm's- length sales or other dispositions of the Colstrip
transmission system (consisting of two 500kv transmission lines extending from
the Colstrip generating stations to an interconnection with Bonneville Power
Administration near Townsend, Montana, together with switchyard facilities in
Colstrip and Broadview, Montana, and substation facilities in Colstrip, Montana,
and certain related real property interests, easements and rights of way,
permits and appurtenances that permit the construction, operation and
maintenance of the Colstrip transmission lines) or the assets of, or Capital
Stock in, Montana Megawatts I, LLC and other entities formed for the Montana
First Megawatts Project; (e) for the sale or other disposition by the Borrower
or any of its Subsidiaries of other assets consummated after the date hereof;
provided that (i) such sale or other disposition shall be made for fair value on
an arm's-length basis, (ii) the aggregate fair market value of all such assets
sold or disposed of under this clause (e) together with assets sold or disposed
of under Section 6.11 shall not exceed 10% of the consolidated tangible assets
of the Borrower and its Subsidiaries as of the Closing Date and (iii) the
Borrower shall comply with Section 2.6.
6.8 Limitation on Investments, Loans and Advances. Make, and shall not
permit any Subsidiary to make, any advance, loan, extension of credit (excluding
Guarantee Obligations but including any payment by a guarantor thereunder) or
capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of, or make any other investment in, any Person (any of the
foregoing, an "Investment"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments of the Borrower or any Subsidiary existing on the date
hereof in any Subsidiary;
(c) Investments of the Borrower after the date hereof that are
acquisitions permitted pursuant to and made in accordance with Section 6.2;
(d) the Borrower and its Subsidiaries may invest in, acquire and hold
Cash Equivalents;
(e) the Borrower or any of its Subsidiaries may make travel and
entertainment advances, relocation loans and payroll advances in the ordinary
course of business to officers and employees of the Borrower or any such
Subsidiary;
56
(f) Investments of the Borrower or any Subsidiary existing on the date
hereof and described in Schedule 6.8 including, without limitation, any
investment in an Excluded Subsidiary and the receipt of any additional
securities constituting payments in kind on such existing Investments;
(g) Investments in obligations arising out of bankruptcy of customers
and suppliers;
(h) Investments arising out of non-cash consideration received in
connection with sales of assets as permitted by Section 6.7;
(i) Investments of the Borrower or any Subsidiary after the date hereof
of not more than $10,000,000 in the aggregate in Subsidiaries; and
(j) Investments permitted pursuant to clause (y) or (z) below;
provided that, notwithstanding the foregoing, the Borrower shall not, and shall
not permit any Subsidiary to, make any Investment in any Excluded Subsidiary nor
create, incur, assume or suffer to exist any Guarantee Obligation with respect
to any Excluded Subsidiary, except:
(x) Investments or Guarantee Obligations of the Borrower or any
Subsidiary existing on the date hereof in or with respect to any Excluded
Subsidiary described in Schedule 6.8 and the receipt of any additional
securities constituting payments in kind on such existing investments;
(y) any advance, loan, extension of credit or Guarantee
Obligations of the Borrower or any Subsidiary to or for the benefit of Blue Dot
in an aggregate principal amount (whether outstanding, written down or written
off but net of any actual cash returns on capital) of not more than $25 million;
provided that such advance, loan, extension of credit or Guarantee Obligation
shall be used to honor Guarantee Obligations, for working capital, or to
refinance on a secured basis the existing secured working capital credit
facility of Blue Dot; and
(z) Investments or Guarantee Obligations of the Borrower or any
Subsidiary in or for the benefit of Expanets in an aggregate principal amount
(whether outstanding, written or written off but net of any actual cash returns
on capital) of not more than $75 million; provided that such advance, loan,
extension of credit or Guarantee Obligation shall be used to honor Guarantee
Obligations, for working capital, or to refinance on a secured basis the
existing secured working capital credit facility of Expanets.
6.9 Limitation on Dividends and Stock Repurchases. Declare, and shall
not permit any Subsidiary to declare, any dividends on any shares of any class
of Capital Stock, or make, and shall not permit any Subsidiary to make, any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, retirement or other acquisition of any shares of
any class of Capital Stock (including the outstanding Capital Stock of the
Borrower), whether now or hereafter outstanding, or
57
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any of its
Subsidiaries (all of the foregoing being referred to herein as "Restricted
Payments"); except that:
(a) Subsidiaries may pay dividends directly or indirectly to the
Borrower or the other Subsidiaries which are directly or indirectly Wholly-Owned
by the Borrower;
(b) any Subsidiary may redeem or repurchase shares of its Capital Stock
to the extent required to do so pursuant to, and upon the terms provided in, any
put agreement existing on the date hereof between such Subsidiary and any holder
of such Capital Stock; provided that if permitted pursuant to the terms of such
agreement, the sole consideration for such Capital Stock shall be Capital Stock
(other than Mandatory Redeemable Stock) of the Borrower; and
(c) the Borrower or any Subsidiary may make Restricted Payments (other
than redemption or repurchase of Capital Stock with respect to such agreements
existing as of the date hereof as set forth in clause (b) above) on or with
respect to its Capital Stock so long as, after giving effect to such Restricted
Payments, no Default or Event of Default shall have occurred and be continuing
or shall result therefrom.
6.10 Limitation on Indebtedness or Mandatory Redeemable Stock. Create,
incur, issue, assume or suffer to exist, and shall not permit any Subsidiary to
create, incur, issue, assume or suffer to exist, any Indebtedness or Mandatory
Redeemable Stock (including any Indebtedness or Mandatory Redeemable Stock of
any of its Subsidiaries), except:
(a) Indebtedness of the Borrower under this Agreement and the Existing
Credit Agreement;
(b) Indebtedness consisting of reimbursement obligations under surety,
indemnity, performance, release and appeal bonds and guarantees thereof and
letters of credit required in the ordinary course of business or in connection
with the enforcement of rights or claims of the Borrower or its Subsidiaries;
(c) Indebtedness of Montana Megawatts I, LLC (or any related Special
Purpose Subsidiary) in an aggregate amount not to exceed $200,000,000, which
proceeds of such Indebtedness are used to finance construction and related costs
of the Montana First Megawatts project, so long as such Indebtedness constitutes
Non-Recourse Debt (except to the extent included in the amounts permitted
pursuant to clause (j) below);
(d) Non-Recourse Debt of any Subsidiary;
(e) Indebtedness and Mandatory Redeemable Stock outstanding on the date
hereof as set forth on Schedule 6.10 hereto;
(f) Debt for Borrowed Money of the Borrower evidenced by first mortgage
bonds under either Indenture incurred after the date hereof; provided that (i)
such Indebtedness refinances or replaces then outstanding first mortgage bonds
issued
58
under such Indenture and so long as the principal amount of the Indebtedness so
refinanced or replaced is not increased as a result thereof or (ii) the proceeds
of such Indebtedness are used solely to finance Capital Expenditures of the
Borrower with respect to assets subject to the lien of such Indenture (which
Capital Expenditures are made or incurred after the date hereof) in accordance
with the terms of such Indenture and so long as such first mortgage bonds are
issued on the basis of Property Additions (as such term is defined in such
Indenture) in compliance with such Indenture;
(g) Debt for Borrowed Money of the Borrower secured by accounts
receivable or inventory of the Borrower in an aggregate outstanding principal
amount not to exceed $75 million at any one time;
(h) Debt of Money Borrowed incurred or assumed in connection with a
transaction expressly permitted pursuant to Section 6.2; provided such
Indebtedness complies with the terms of clause (f) of Section 6.2;
(i) refinancings, replacements and extensions by the obligor thereof of
any Debt for Borrowed Money under clause (c), (d), (e), (f) or (h) above so long
as (i) the principal of the Debt for Borrowed Money so refinanced, replaced or
extended is not increased as a result thereof, (ii) in the case of any
refinancing or replacement of Non-Recourse Debt, after giving effect thereto,
such Indebtedness constitutes Non-Recourse Debt, (iii) in the case of any
refinancing or replacement of secured Indebtedness, after giving effect thereto,
the Lien (other than the Lien of an Indenture) with respect thereto is not
extended to any other assets, and (iv) in the case of any refinancing or
replacement of unsecured Indebtedness, after giving effect thereto, such
Indebtedness remains unsecured; and
(j) Indebtedness not otherwise permitted by the preceding clauses of
this Section 6.10 not exceeding $50 million in aggregate principal amount at any
one time outstanding which Indebtedness shall not be secured by a Lien on any
assets of the Borrower (and which may include Guaranteed Obligations of the
Borrower with respect to Indebtedness of a Subsidiary);
provided that, notwithstanding the foregoing, (y) the Borrower shall not incur,
issue or assume any Debt for Borrowed Money or Mandatory Redeemable Stock after
the date hereof pursuant to clauses (f), (h) (to the extent required pursuant to
Section 6.2), or (i) above which has a scheduled maturity, or requires any
principal payment, prior to six months after the Maturity Date and (z) until the
earlier of April 11, 2003 and completion of the successful syndication (as
determined by the Arranger) of the credit facility provided hereby, the Borrower
shall not enter into or seek to arrange any commercial bank facilities or issue
any debt securities in a manner inconsistent with the provisions of the
Syndication Letter.
6.11 Limitation on Sales and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by the Borrower of real or personal
property, in an aggregate amount for all such property together with assets sold
or disposed of under Section 6.7(e) exceeding 10% of the consolidated tangible
assets of the Borrower and its
59
Subsidiaries as of the Closing Date, which has been or is to be sold or
transferred by the Borrower to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower.
6.12 Limitation on Negative Pledge Clauses; Payment Restrictions. Enter
into or suffer to exist, and shall not permit any Subsidiary to enter into or
suffer to exist, any agreement or other consensual encumbrance or restriction
which prohibits or limits the ability of the Borrower or any of its Subsidiaries
to create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, or prohibits or
limits the ability of the Borrower or any of its Subsidiaries to make loans,
payments or dividends to or investments in, or to transfer assets to, the
Borrower or any of its Subsidiaries, other than (a) any such agreement,
encumbrance or restriction contained in this Agreement, the Security Agreement,
the Indentures or the Bond Collateral Agreement, (b) any such agreement,
encumbrance or restriction (including any negative pledge) contained in any
industrial revenue bonds, purchase money mortgages, development financing,
operating leases entered into in the ordinary course of business, acquisition
agreements or Financing Leases, in each case permitted by this Agreement (in
which cases, any prohibition or limitation shall only be effective against the
assets financed, acquired or leased thereby), (c) any such agreement,
encumbrance or restriction contained in any loan agreement or other financing
document entered into with respect to Debt for Borrowed Money of Subsidiaries
(other than industrial revenue bonds, purchase money mortgages, development
financing or Financing Leases) permitted to be incurred pursuant to Section
6.10, or (d) customary provisions in any contract entered into in the ordinary
course of business (including any licensing agreement, management agreement or
franchise agreement) restricting assignments of such contract.
6.13 Limitation on Businesses. Enter into or engage in any business,
either directly or through any Subsidiary, except for businesses of the same
general type as those in which the Borrower and its Subsidiaries are engaged on
the date hereof or other business activities reasonably incidental or related to
any of the foregoing.
6.14 Limitation on Certain Prepayments and Amendments. (a) Make any
optional payment or prepayment on or redemption, defeasance or purchase of such
Person's Debt for Borrowed Money (other than with respect to (i) Indebtedness
hereunder or under the First Mortgage Bonds, (ii) any Indebtedness to the extent
such Indebtedness by the terms thereof would otherwise have become due and
payable within three months of such payment, redemption, defeasance or purchase,
(iii) any refinancing or replacement of such Indebtedness in accordance with
Section 6.10, or (iv) prepayments of Debt for Borrowed Money in an aggregate
principal amount not to exceed the aggregate principal amount of Net Cash
Proceeds of Reduction Events offered to the Lenders but not accepted as
prepayments of the Loans pursuant to Section 2.6), or (b) amend, modify or
change, or consent to any amendment, modification or change to any of the terms
relating to the payment or prepayment of principal of or interest on, any such
Indebtedness, other than any amendment, modification or change which would
extend the maturity or reduce the amount of any payment or prepayment of
principal
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thereof or which would reduce the rate or extend the date for payment of
interest thereon or which would not be adverse to the Lenders.
6.15 Limitations on Subsidiaries' Equity Interests. Permit any
Subsidiary to issue any preferred Capital Stock or any redeemable common stock
other than (a) issuances of preferred Capital Stock in payment of regularly
accruing dividends on theretofore outstanding shares of such preferred Capital
Stock, (b) issuances of preferred Capital Stock issued to and, so long as
thereafter outstanding, held by the Borrower and (c) issuances in consideration
of acquisitions permitted under Section 6.8 of preferred Capital Stock which
ranks junior, as to the payment of dividends and as to the distribution of
assets upon any liquidation, dissolution or winding up of such Subsidiary, to
all preferred Capital Stock held by the Borrower in such Subsidiary.
6.16 Limitation on Release of Mortgaged Property; Limitation in Respect
of Insurance. Release Mortgaged and Pledged Property (as defined in the Montana
First Mortgage Indenture) from the lien of the Montana First Mortgage Indenture
or Mortgaged Property (as defined in the South Dakota First Mortgage Indenture)
from the lien of the South Dakota First Mortgage Indenture, other than (i)
releases of such Mortgaged and Pledged Property pursuant to and in accordance
with Sections 58 and 60 of the Montana First Mortgage Indenture; (ii) releases
of such Mortgaged Property pursuant to and in accordance with Section 8.02 of
the South Dakota First Mortgage Indenture other than clause (f) thereof; (iii)
releases of property or other assets that are disposed of in accordance with
Section 6.7(d) or (e) and, if in connection with any such disposition and the
related release, the Borrower deposits with the trustee under an Indenture cash
that would otherwise constitute Net Cash Proceeds, releases of such cash
pursuant to and in accordance with such Indenture; and (iv) releases of proceeds
of insurance (and/or moneys of the Borrower in lieu thereof or in addition
thereto and for the purposes thereof) held under either Indenture in accordance
with such Indenture which reimburse the Borrower for amounts spent in the
rebuilding or renewal of property destroyed or damaged (including, without
limitation, for property rebuilt, restored or replaced) and, if following the
completion of any such rebuilding or renewal, any of such insurance proceeds
(and/or such moneys of the Borrower) remain unspent, releases of such unspent
proceeds (and/or such unspent money of the Borrower) pursuant to and in
accordance with such Indenture; provided, however, that the Borrower shall not
request or receive any proceeds of any insurance or of any alternative method or
plan of protection of the Borrower relating to such Mortgaged Property otherwise
payable to it pursuant to Section 6.07(b) of the South Dakota First Mortgage
Indenture, and so long as any First Mortgage Bonds are outstanding, no effect
shall be given to (x) Section 6.07(b) of the South Dakota First Mortgage
Indenture, (y) the language in Section 6.07(c) of the South Dakota First
Mortgage Indenture which precedes clause (i) of such Section, or (z) the
reference to Section 6.07(b) of the South Dakota First Mortgage Indenture which
appears in Section 6.07(d) of the South Dakota First Mortgage Indenture.
6.17 Limitation on Subjecting Property or Other Assets to the Lien of
the Other Indenture. Subject any property or other assets to the lien of the
Montana First Mortgage Indenture or the lien of the South Dakota First Mortgage
Indenture if such property or other assets are subject to the lien of the other
Indenture.
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6.18 Prohibition on Designating Class "A" Mortgages or Permitting
Qualified Lien Bonds to Exist. Designate any Class "A" Mortgage under the South
Dakota First Mortgage Indenture or permit any Qualified Lien Bonds to exist
under the Montana First Mortgage Indenture.
6.19 Limitation on Amendments or Supplements to the Indentures. Amend,
modify or supplement the Montana First Mortgage Indenture or the South Dakota
First Mortgage Indenture, except to (a) supplement such Indenture to establish
the terms of any series of first mortgage bonds to be issued thereunder that are
permitted to be issued under Section 6.10(f), (b) amend or supplement such
Indenture for the purpose of conveying, transferring or assigning to the trustee
thereunder additional property for the purpose of subjecting such property to
the lien of such Indenture, subject to the terms of Section 6.17, or (c) amend
or supplement such Indenture, in the case of the Montana First Mortgage
Indenture, pursuant to and as permitted by Section 120 thereof or, in the case
of the South Dakota First Mortgage Indenture, pursuant and as permitted by
Section 14.01 thereof, provided that in each such case such amendment or
supplement will not adversely affect the First Mortgage Bonds.
6.20 Prohibition on Second Mortgage Bonds. Issue any bonds (or other
Debt for Borrowed Money) that is secured by a lien (subordinate to the lien of
either Indenture) on the property or other assets subject to the lien of such
Indenture. ARTICLE 7. EVENTS OF DEFAULT
7.1 Events of Default. If any of the following events shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan, or any fee or any other amount payable hereunder or any other Loan
Document, within three (3) days after any such interest, fee or other amount
becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or in any other Loan Document or which is contained in any certificate,
document or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made; or
(c) The Borrower shall default in the observance or performance of any
agreement contained in Article 6 (other than Section 6.12) or Section 5.7; or
(d) The Borrower shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of 30 days; or
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(e) The Borrower or any Material Subsidiary shall (A) default in any
payment (regardless of amount) of principal of, premium, if any, or interest on
any Indebtedness having an aggregate principal amount in excess of $30,000,000
(other than the Notes) beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such Indebtedness was
created or (B) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice, if required, such
Indebtedness to become due prior to its stated maturity; provided that any such
default by the Borrower or any Material Subsidiary under Non-Recourse Debt will
not constitute an Event of Default unless such default also constitutes a
default under other recourse Indebtedness of the Borrower or such Subsidiary in
an aggregate outstanding principal amount of $30,000,000 or more; or
(f) (i) The Borrower or any Material Subsidiary shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any such Subsidiary shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower or any
such Subsidiary any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
un-bonded for a period of 60 days; or (iii) there shall be commenced against the
Borrower or any such Subsidiary any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distrait or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
the Borrower or any such Subsidiary shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any such
Subsidiary shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Pension Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of the Borrower, any
Subsidiary or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer
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or to terminate, any Pension Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such plan for purposes
of Title IV of ERISA, (iv) any Pension Plan shall terminate for purposes of
Title IV of ERISA, (v) the Borrower, any Subsidiary or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is likely to,
incur any liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Pension Plan; and in each case in clauses
(i) through (vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any Subsidiary involving in the aggregate a liability (to the extent
not covered by third-party insurance as to which the insurer has acknowledged
coverage) of $30,000,000 or more and sufficient judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof to reduce such amount to less than $30,000,000; or
(i) (x) The Security Agreement, the Bond Collateral Agreement, either
Indenture or either Supplemental Indenture shall cease, for any reason, to be in
full force and effect, other than pursuant to the terms thereof and hereof, (y)
the Lien created thereby shall cease to be enforceable and of the same effect as
to perfection and priority purported to be created thereby with respect to any
significant portion of the collateral thereunder, or (z) there shall occur an
"Event of Default" under either Indenture; or
(j) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, by notice to the Borrower, declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder and the Notes to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
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ARTICLE 8. THE AGENTS
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
CSFB as Administrative Agent and as Collateral Agent (for purposes of this
Article 8, collectively, the "Agents"), and to act as its agent under this
Agreement and the other Loan Documents. Each such Lender irrevocably authorizes
each Agent, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to each Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Each Lender further authorizes and directs each
Agent to execute and deliver releases (or similar agreements) to give effect to
the provisions of this Agreement and the other Loan Documents, including
specifically, without limitation, the provisions of Section 6.7 hereof.
Notwithstanding any provision to the contrary elsewhere in this Agreement, no
Agent shall have any duties or responsibilities, except those expressly set
forth herein or in therein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against either Agent. Without limiting the generality of the
foregoing, the Agents are hereby expressly authorized to execute any and all
documents (including releases) with respect to the Collateral and the rights of
the Secured Parties with respect thereto, as contemplated by and in accordance
with the provisions of this Agreement, the Security Agreement and the Bond
Collateral Agreement.
8.2 Delegation of Duties. Each Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. No Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties, made
by the Borrower or any officer or any of them contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by either Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any failure of the
Borrower to perform its obligations hereunder or thereunder. No Agent shall be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower, any Subsidiary or any Excluded Subsidiary.
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8.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by such Agent. Each Agent may deem and treat the payee of any Note or
any loan account in the Register as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement, the Notes and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the amounts owing hereunder.
8.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless such Agent
has received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders. Each
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided that unless and
until such Agent shall have received such directions, such Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that no Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by either Agent hereafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by either Agent to any Lender. Each Lender represents
to each Agent that it has, independently and without reliance upon either Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon either Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to
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inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or furnished to the Administrative Agent for the
account of, or with a counterpart or copy for, each Lender, no Agent shall have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower, any of its
Subsidiaries or any Excluded Subsidiary which may come into the possession of
either Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) and their respective
directors, officers, employees and agents, ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section (or, if indemnification is sought after the date upon which
the Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with their Commitment Percentages immediately prior
to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of all amounts owing hereunder) be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out
of this Agreement, any of the other Loan Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from such Agent's gross negligence or willful misconduct. The agreements in this
Section shall survive the payment of the Obligations hereunder.
8.8 Agent in Its Individual Capacity. Each Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower, any Subsidiary and any Excluded Subsidiary as though such
Agent were not an Agent hereunder and under the other Loan Documents. With
respect to Loans made or renewed by it and any Note issued to it, each Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Agent, and the terms "Lender" and "Lenders" shall include each Agent in its
individual capacity.
8.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon ten days' notice to the Lenders and the Borrower.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall, with
the consent of the Borrower (which consent shall not be unreasonably withheld
and shall not be required if an Event of Default shall have occurred that is
continuing) appoint a successor administrative agent, whereupon such successor
Administrative Agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative
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Agent" shall mean such successor Administrative Agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of any amounts payable hereunder.
After any retiring or terminated Administrative Agent's resignation or
termination, as the case may be, as Administrative Agent, the provisions of this
Section shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement and the other
Loan Documents.
ARTICLE 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Note or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section. The Required Lenders may, or, with the written consent of the Required
Lenders, the Administrative Agent may, from time to time, (a) enter into with
the Borrower written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or changing in any manner the
rights of the Lenders or of the Borrower hereunder, (b) enter into with the
Borrower written amendments, supplements or modifications to the Note and the
other Loan Documents for the purpose of adding provisions to the Notes or such
other Loan Documents or changing in any manner the rights of the Lenders or the
Borrower thereunder or (c) waive, on such terms and conditions as the Required
Lenders or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement, the Notes or the other
Loan Documents or any Default or Event of Default and its consequences; provided
that no such waiver and no such amendment, supplement or modification (i) shall
reduce the amount or extend the scheduled date of maturity of the Note or Loan
of any Lender or of any installment thereof, or reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof or increase the amount or extend the expiration date of any Lender's
Commitment, in each case, without the consent of such Lender, (ii) shall amend,
modify or waive any provision of this Section, Section 2.12 in a manner that
would alter the pro rata sharing payments required by Section 2.12, Section 2.6
or 2.12 in a manner that would eliminate or limit a Lender's right to reject
prepayments under Section 2.6, or vary any provision of this Agreement or any
other Loan Document which specifically by its terms requires the approval or
consent of all the Lenders or reduce the percentage specified in the definition
of Required Lenders, or consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement, the Notes and the other
Loan Documents, or release any material portion of the Collateral (other than in
accordance with the terms of the Loan Documents), in each case, without the
written consent of all the Lenders, or (iii) shall amend, modify or waive any
provision of Article 8 or any other provision in any Loan Document governing the
rights or obligations of the Administrative Agent or the Collateral Agent
without the written consent of the then Administrative Agent and the Collateral
Agent. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Borrower, the
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Lenders, the Administrative Agent and all future holders of the Notes. In the
case of any waiver, the Borrower, the Lenders and the Administrative Agent shall
be restored to their former position and rights hereunder and under the
outstanding Notes and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
9.2 Notice. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or, in the case of notice by mail, when
received, or, in the case of telecopy notice, when received, addressed as
follows in the case of the Borrower or the Administrative Agent, and as set
forth in Schedule I in the case of any Lender, or to such other address as may
be hereafter notified by the respective parties hereto and any future holders of
the amounts payable hereunder:
Borrower: Northwestern Corporation
125 S. Dakota Avenue, Suite 1100
Sioux Falls, South Dakota 57104
Attention: Chief Financial Officer
with a copy to: Northwestern Corporation
125 S. Dakota Avenue, Suite 1100
Sioux Falls, South Dakota 57104
Attention: Eric R. Jacobsen, Senior Vice
President and General Counsel
Administrative Agent: Credit Suisse First Boston
Eleven Madison Avenue
New York, New York 10010-3629
Attention: Agency Department Manager
provided that any notice, request or demand to or upon the Administrative Agent
made under this Agreement may be made by telephone, with prompt written
confirmation thereafter of such telephonic notice, and the Administrative Agent
shall be entitled to rely on such telephonic notice; provided, further, that any
notice, request or demand to or upon the Administrative Agent and the Lenders
pursuant to Section 2.3, Section 2.6, or Section 2.7, shall not be effective
until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
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9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans hereunder.
9.5 Payment of Expenses and Taxes; Indemnification. The Borrower agrees
(a) to pay or reimburse the Administrative Agent and the Collateral Agent for
all its reasonable out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the Notes and the other Loan Documents and any
other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent and the Collateral Agent, (b) to pay or
reimburse the Administrative Agent, the Collateral Agent and each Lender for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel (including allocated costs of internal counsel) to
the Administrative Agent, the Collateral Agent and each Lender, (c) to pay, and
indemnify and hold harmless the Administrative Agent, the Collateral Agent and
each Lender from, any and all present or future stamp, documentary or excise
taxes or similar charges, any and all recording and filing fees, and any and all
liabilities with respect thereto, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or payment under, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the Notes, the other Loan Documents and any such
other documents, and (d) to pay, and indemnify and hold harmless the
Administrative Agent, the Collateral Agent and each Lender (including each of
their respective parents, subsidiaries, officers, directors, employees, agents
and affiliates) from and against, any and all claims, demands, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits (regardless
of whether such Person is a party thereto), costs, settlements, expenses or
disbursements of whatever kind or nature arising from, in connection with or
with respect to (i) the execution, delivery, enforcement, performance and
administration of this Agreement, the Notes, the other Loan Documents, or any
other documents, (ii) the proposed or actual use of the proceeds of the Loans or
(iii) any other Transaction or any transaction or document related thereto or in
connection therewith (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"); provided that the Borrower shall not have any
obligation hereunder to any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the Administrative
Agent, the Collateral Agent or such Lender. The agreements in this Section 9.5
shall survive repayment of the Obligations hereunder.
9.6 Successors and Assigns; Participations and Assignments(a). (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the amounts owing
hereunder and their respective successors and assigns, except that the Borrower
may not assign or transfer
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any of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement and the other Loan
Documents, the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents and such Lender
shall retain the sole right to enforce the obligations of the Borrower relating
to the Loans and other obligations owing to such Lender and to approve any
amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers (i) decreasing the amount of
principal of or the rate at which interest is payable on such Loans or Notes,
(ii) extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Notes, (iii) extending its Commitment, (iv)
permitting any assignment or transfer of any of the Borrower's rights or
obligations under this Agreement) or (v) releasing all or substantially all of
the Collateral. The Borrower agrees that if amounts outstanding under this
Agreement and the Notes are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement or any Note; provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 9.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Section 2.14, Section 2.15 and
Section 2.16 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided that, in the case
of Section 2.15, such Participant shall have complied with the requirements of
said Section; and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time may, with the consent of the Administrative Agent (which consent shall not
be unreasonably withheld), assign to any Lender or any affiliate or Approved
Fund thereof, an additional bank, financial institution, fund or commingled
investment vehicle, or other Person (an "Assignee") all or any part of its
rights and obligations under this Agreement and the Notes pursuant to an
assignment agreement, substantially in the form of Exhibit D (or
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such other form approved by the Administrative Agent's in its sole discretion)
(an "Assignment and Assumption Agreement"), executed by such Assignee, such
assigning Lender and, in the case of an Assignee that is not then a Lender or an
affiliate or Approved Fund thereof, by the Administrative Agent and delivered to
the Administrative Agent for its acceptance and recording in the Register;
provided that (i) any such assignment must be in a minimum amount equal to the
lesser of (x) $1,000,000 and (y) the aggregate Commitments and outstanding Loans
of such Lender then in effect, and (ii) after giving effect to any such
assignment, such Lender shall have either (x) sold all its rights and
obligations hereunder and under the Notes or (y) retained at least $1,000,000 of
the aggregate Commitments and outstanding Loans. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Assumption Agreement, (1) the Assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Assumption
Agreement, have the rights and obligations of a Lender hereunder with a
Commitment and Loans as set forth therein and (2) the assigning Lender
thereunder, to the extent provided in such Assignment and Assumption Agreement,
shall be released from its obligations under this Agreement (and, in the case of
an Assignment and Assumption Agreement covering all or the remaining portion of
an assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto; provided that the provisions
of Section 2.14, Section 2.15, Section 2.16 and Section 9.5 shall continue to
benefit such assigning Lender to the extent required by such Sections). On or
prior to the effective date determined pursuant to such Assignment and
Assumption Agreement, (i) appropriate entries shall be made in the accounts of
the assigning Lender and the Register evidencing such assignment and releasing
the Borrower from any and all obligations to the assigning Lender in respect of
the assigned Loan or Loans and (ii) appropriate entries evidencing the assigned
Loan or Loans shall be made in the accounts of the Assignee and the Register as
required by Section 9.6(d). In the event that any Notes have been issued in
respect of the assigned Loan or Loans, such Notes shall be marked "cancelled"
and surrendered by the assigning Lender to the Administrative Agent for return
to the Borrower.
(d) The Administrative Agent shall maintain, at its address referred to
in Section 9.2, a copy of each Assignment and Assumption Agreement delivered to
it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. To the extent permitted by
applicable law, the entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrower and the Administrative Agent may (and, in
the case of any Loan not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein as
the owner thereof for all purposes of this Agreement and the other Loan
Documents, notwithstanding notice to the contrary. Any assignment of any Loan or
other obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower at any reasonable
time and from time to time upon reasonable prior notice.
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(e) Upon its receipt of an Assignment and Assumption Agreement executed
by the assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Administrative Agent )
together with payment by the assigning Lender or by the Assignee to the
Administrative Agent of a registration and processing fee of $3,500, the
Administrative Agent shall promptly accept such Assignment and Assumption
Agreement and, on the effective date determined pursuant thereto, shall record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Borrower.
(f) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any advance
hereunder, (ii) if an SPC elects not to exercise such option or otherwise fails
to provide all or any part of such Loan, the Granting Lender shall be obligated
to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC
hereunder shall utilize the applicable Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
9.6(f), any SPC may (i) with notice to, but without the prior written consent
of, the Borrower and the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Loans to the
Granting Lender or to any financial institutions (consented to by the Borrower
and the Administrative Agent) providing liquidity and/or credit support to or
for the account of such SPC to support the funding or maintenance of Loans and
(ii) disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This section may not
be amended without the written consent of the SPC.
(g) The Borrower authorizes the Lenders to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, any and all
financial information in the Lenders' possession concerning the Borrower and its
respective Affiliates which has been delivered to the Administrative Agent or
the Lenders by or on behalf of the Borrower pursuant to this Agreement or which
has been delivered to the Administrative Agent or the Lenders by or on behalf of
the Borrower in connection with the Lender's credit evaluation of the Borrower
and its respective Affiliates prior to
73
becoming a party to this Agreement; provided that each such Transferee and
prospective Transferee agrees in writing to be bound by the provisions of
Section 9.8.
(h) Nothing herein shall prohibit any Lender from pledging or assigning
any Note to any Federal Reserve Bank in accordance with applicable law. In order
to facilitate such pledge or assignment, the Borrower hereby agrees that, upon
request of any Lender at any time and from time to time on or after the Cash
Collateral Release Date, the Borrower shall provide to such Lender, at the
Borrower's own expense, a promissory note in substantially the form of Exhibit
A-1.
9.7 Adjustments; Setoff(a) . (a) If any Lender (a "Benefited Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by setoff, pursuant to events or proceedings of the nature
referred to in Section 7.1(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided that
if all or any portion of such excess payment or benefits is thereafter recovered
from such Benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) Upon the occurrence and during the continuance of an Event of
Default, in addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, (without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law), upon any amount becoming due and payable by the Borrower
hereunder or under the Notes (whether at the stated maturity, by acceleration or
otherwise), to setoff and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender; provided that the failure to give
such notice shall not affect the validity of such setoff and application.
9.8 Confidentiality. Each Lender agrees to exercise all reasonable
efforts (consistent with its customary methods for keeping information
confidential) to keep any information delivered or made available by the
Borrower confidential from anyone other than persons employed or retained by
such Lender who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
prevent any Lender from disclosing such information (a) to any Affiliate of such
Lender or to any other Lender, (b) upon the order of any court or
74
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Lender, (d) that has been publicly
disclosed, (e) in connection with any litigation relating to the Loans, this
Agreement or any transaction contemplated hereby to which any Lender or the
Administrative Agent may be a party, (f) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (g) to such Lender's legal
counsel and independent auditors, and (h) to any actual or proposed participant
or assignee of all or any part of its Loans hereunder, if such other Person,
prior to such disclosure, agrees, in writing, for the benefit of the Borrower to
comply with the provisions of this Section 9.8.
9.9 Effectiveness. This Agreement shall become effective on the date
when counterparts hereof executed on behalf of the Borrower, the Administrative
Agent and each Lender shall have been received by the Administrative Agent and
notice thereof shall have been given by the Administrative Agent to the
Borrower.
9.10 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with each of the Borrower and the
Administrative Agent.
9.11 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.12 Integration. This Agreement and the other Loan Documents represent
the agreement of the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof or thereof not expressly set forth or
referred to herein or in the other Loan Documents.
9.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
9.14 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for
75
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower, as the
case may be, at its address set forth in Section 9.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing contained herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
9.15 Acknowledgments. The Borrower hereby acknowledges that:
(a) Neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Administrative Agent and the Lenders, on the one hand, and the Borrower, on
the other hand, in connection herewith or therewith is solely that of creditor
and debtor; and
(b) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby between the
Administrative Agent, the Lenders and the Borrower.
9.16 Waivers of Jury Trial. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
76
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
BORROWER:
NORTHWESTERN CORPORATION
By: /s/ Kipp D. Orme
--------------------------------
Name: Kipp D. Orme
Title: Vice President and CFO
By: /s/ Richard R. Hylland
--------------------------------
Name: Richard R. Hylland
Title: President and COO
ADMINISTRATIVE AGENT:
CREDIT SUISSE FIRST BOSTON,
CAYMAN ISLANDS BRANCH
By: /s/ James S. Finch
--------------------------------
Name: James S. Finch
Title: Managing Director
By: /s/ S. William Fox
--------------------------------
Name: S. William Fox
Title: Vice President
Signature Page to the
NorthWestern 2002 Credit Agreement
LENDER:
CREDIT SUISSE FIRST BOSTON,
CAYMAN ISLANDS BRANCH
By: /s/ James S. Finch
--------------------------------
Name: James S. Finch
Title: Managing Director
By: /s/ S. William Fox
--------------------------------
Name: S. William Fox
Title: Vice President
Signature Page to the
NorthWestern 2002 Credit Agreement
EXHIBIT A-1
TO CREDIT AGREEMENT
-------------------
FORM OF TERM NOTE
-----------------
$ New York, New York
--------------
[__________], 200_
FOR VALUE RECEIVED, the undersigned, NORTHWESTERN CORPORATION, a
Delaware corporation, with its principal place of business at 125 South Dakota
Avenue, Suite 1100, Sioux Falls, South Dakota 57104-6403 (the "Borrower"),
hereby unconditionally promises to pay to the order of ___________________, with
a place of business at ______________________________ (the "Lender"), by wire
transfer to the account of Credit Suisse First Boston, as Administrative Agent
(as defined in the Credit Agreement referred to below), with [ACCOUNT BANK], ABA
NO. [o], Account No. [o], Attn: Agency, Reference: [o], or at such other place
or places and to such account or accounts as the Administrative Agent, may
direct from time to time by notice to the Borrower in accordance with the Credit
Agreement (as hereinafter defined), in lawful money of the United States of
America and in immediately available funds, the principal amount of the lesser
of (a) _______________ DOLLARS ($____________) and (b) the aggregate unpaid
principal amount of all Loans (as defined in the Credit Agreement) made by the
Lender to the undersigned pursuant to the Credit Agreement, payable, subject to
the fourth paragraph hereof, on or before the Maturity Date (as defined in the
Credit Agreement).
The Borrower hereby unconditionally further agrees to pay
interest in like money on the unpaid principal amount hereof from time to time
outstanding from the date hereof, and, to the extent permitted by applicable
law, on any unpaid interest payable hereon, from the date such interest is due
hereunder, at the applicable rates per annum and on the dates specified in
Section 2.9 of the Credit Agreement until such principal amount and interest, as
applicable, is paid in full (both before and after judgment). The Borrower
agrees to pay costs and expenses, including reasonable attorneys' fees, incurred
in connection with the interpretation or enforcement of this Term Note in
accordance with the Credit Agreement.
This Term Note is one of the Term Notes referred to in the Credit
Agreement, dated as of December 17, 2002 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"; terms defined
therein being used herein as defined therein), among the Borrower, the several
banks and other financial institutions parties thereto (including the Lender),
and the Administrative Agent, and is entitled to the benefits thereof and of the
other Loan Documents referred to therein, and is subject to optional and
mandatory prepayment in whole or in part as provided therein. This Term Note is
secured as provided in the Loan Documents. Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security, the terms and
conditions upon which the security interests were granted and the rights of the
holder of this Term Note in respect thereof.
A-1-1
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts remaining unpaid on this Term
Note shall become, or may be declared to be, immediately due and payable all as
provided therein.
The Lender may proceed against the Borrower in such manner as it
deems desirable in accordance with the Credit Agreement. None of the rights or
remedies of the Lender hereunder are to be deemed waived or affected by failure
or delay on the part of the Lender to exercise the same. All remedies conferred
upon the Lender by this Term Note or any other instrument or agreement or by
applicable law, shall be cumulative and none is exclusive, and such remedies may
be exercised concurrently or consecutively at the Lender's option.
All parties now and hereafter liable with respect to this Term
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand of payment, notice of protest, notice of dishonor and
all other notices of any kind.
THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
NORTHWESTERN CORPORATION
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
A-1-2
EXHIBIT A-2
TO CREDIT AGREEMENT
-------------------
FORM OF QFL NOTE
----------------
$ New York, New York
--------------
[__________], 200_
FOR VALUE RECEIVED, the undersigned, NORTHWESTERN CORPORATION, a
Delaware corporation, with its principal place of business at 125 South Dakota
Avenue, Suite 1100, Sioux Falls, South Dakota 57104-6403 (the "Borrower"),
hereby unconditionally promises to pay to the order of ___________________, with
a place of business at ______________________________ (the "Lender"), by wire
transfer to the account of Credit Suisse First Boston, as Administrative Agent
(as defined in the Credit Agreement referred to below), with [ACCOUNT BANK], ABA
NO. [o], Account No. [o], Attn: Agency, Reference: [o], or at such other place
or places and to such account or accounts as the Administrative Agent, may
direct from time to time by notice to the Borrower in accordance with the Credit
Agreement (as hereinafter defined), in lawful money of the United States of
America and in immediately available funds, the principal amount of the lesser
of (a) _______________ DOLLARS ($____________) and (b) the aggregate unpaid
principal amount of all Loans (as defined in the Credit Agreement) made by the
Lender to the undersigned pursuant to the Credit Agreement, payable, subject to
the fourth paragraph hereof, on or before the Maturity Date (as defined in the
Credit Agreement).
The Borrower hereby unconditionally further agrees to pay
interest in like money on the unpaid principal amount hereof from time to time
outstanding from the date hereof, and, to the extent permitted by applicable
law, on any unpaid interest payable hereon, from the date such interest is due
hereunder, at the applicable rates per annum and on the dates specified in
Section 2.9 of the Credit Agreement until such principal amount and interest, as
applicable, is paid in full (both before and after judgment). The Borrower
agrees to pay costs and expenses, including reasonable attorneys' fees, incurred
in connection with the interpretation or enforcement of this Term Note in
accordance with the Credit Agreement.
This Term Note is one of the Term Notes referred to in the Credit
Agreement, dated as of December 17, 2002 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"; terms defined
therein being used herein as defined therein), among the Borrower, the several
banks and other financial institutions parties thereto (including the Lender),
and the Administrative Agent, and is entitled to the benefits thereof and of the
other Loan Documents referred to therein, and is subject to optional and
mandatory prepayment in whole or in part as provided therein. This Term Note is
secured as provided in the Loan Documents. Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the
A-2-1
security, the terms and conditions upon which the security interests were
granted and the rights of the holder of this Term Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts remaining unpaid on this Term
Note shall become, or may be declared to be, immediately due and payable all as
provided therein.
The Lender may proceed against the Borrower in such manner as it
deems desirable in accordance with the Credit Agreement. None of the rights or
remedies of the Lender hereunder are to be deemed waived or affected by failure
or delay on the part of the Lender to exercise the same. All remedies conferred
upon the Lender by this Term Note or any other instrument or agreement or by
applicable law, shall be cumulative and none is exclusive, and such remedies may
be exercised concurrently or consecutively at the Lender's option.
All parties now and hereafter liable with respect to this Term
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand of payment, notice of protest, notice of dishonor and
all other notices of any kind.
This Term Note is a QFL Note under the Credit Agreement, and as
such, ownership of the obligation represented by this Term Note may be
transferred only in accordance with Section 2.15 of the Credit Agreement.
THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
NORTHWESTERN CORPORATION
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
A-2-2
EXHIBIT B-l
TO CREDIT AGREEMENT
-------------------
FORM OF NOTICE OF BORROWING
---------------------------
Date:
Credit Suisse First Boston,
as Administrative Agent
Eleven Madison Street
New York, New York 10010-3629
Attention: Agency Department Manager
Re: Credit Agreement dated as of December 17, 2002 among
Northwestern Corporation, a Delaware corporation (the
"Borrower"), the Lenders from time to time party thereto,
and the Administrative Agent (as amended, restated,
supplemented or otherwise modified from time to time, the
"Credit Agreement").
-----------------------------------------------------------------
Pursuant to Section 2.3 of the Credit Agreement, this Notice of
Borrowing ("Notice") represents the request of the Borrower to borrow on [ , ]
(the "Borrowing Date")1 from the Lenders the principal amount of DOLLARS ($ ) in
Loans as [Alternate Base Rate Loans] [Eurodollar Loans].
1. [$_________ of such Loans will be Eurodollar Loans.] [The
initial Interest Period for such Eurodollar Loans is requested to be a [one]
[two] [three] or [six] month period.]
2. Proceeds of such Loans are to be wire-transferred in
accordance with the following wire instructions:
_____________________________
_____________________________
_____________________________
The undersigned hereby certifies that, as of the Borrowing Date,
all the applicable conditions contained in Sections 4.1 and 4.2 of the Credit
Agreement have been satisfied (or waived pursuant to Section 9.1 of the Credit
Agreement).
Unless otherwise defined herein, terms defined in the Credit
Agreement shall have the same meanings in this Notice.
- -----------------
1 A Notice of Borrowing must be received by the Administrative Agent prior to
10:00 a.m. (New York time) on the requested Borrowing Date.
B-1-1
IN WITNESS WHEREOF, the Borrower has caused this Notice to be
executed and delivered by an authorized officer this ______ day of ____________,
_______.
NORTHWESTERN CORPORATION
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
B-1-2
EXHIBIT B-2
TO CREDIT AGREEMENT
-------------------
FORM OF NOTICE OF INTEREST RATE CONVERSION
------------------------------------------
Date:
Credit Suisse First Boston,
as Administrative Agent
Eleven Madison Street
New York, New York 10010-3629
Attention: Agency Department Manager
Re: Credit Agreement dated as of December 17, 2002 among
Northwestern Corporation, a Delaware corporation (the
"Borrower"), the Lenders from time to time party thereto,
and the Administrative Agent (as amended, restated,
supplemented or otherwise modified from time to time, the
"Credit Agreement").
-----------------------------------------------------------------
Ladies and Gentlemen:
The Borrower hereby gives notice pursuant to Section 2.7 of the
Credit Agreement that it requests a continuation or conversion of Loans
outstanding under the Credit Agreement, and in connection therewith sets forth
below the terms on which such continuation or conversion is requested to be
made; capitalized terms used and not defined herein shall have the meanings
provided in the Credit Agreement:
The Borrower hereby requests that on _____________, _____:2
(1) $ ___________ of the currently outstanding principal amount
of the Loans currently being maintained as [Alternate Base Rate Loans]
[[one] [two] [three] [six] month Eurodollar Loans]3,
(2) be [converted into] [continued as],
(3) [Eurodollar Loans having an Interest Period of [one] [two]
[three] [six] months, which Interest Period will expire on __________,
____]4 [Alternate Base Rate Loans].
- --------------------
2 Conversion of Eurodollar Loans may be made only on the last day of the
applicable Interest Period. A Notice of Conversion must be received by the
Administrative Agent prior to 10:00 a.m. (New York City time), (x) with respect
to Alternate Base Rate Loans, at least three Business Days, and (y) with respect
to Eurodollar Loans, at least two Business Days, prior to the date of Borrower's
election.
3 Select appropriate option.
4 Insert appropriate interest rate option and, if applicable,
number of months (for Eurodollar Loans).
B-2-1
[In the event that such Loans are to be converted into, or
continued as, Eurodollar Loans, the Borrower hereby certifies in accordance with
Section 2.7 of the Credit Agreement that no Default or Event of Default has
occurred and is continuing as of the date of this Notice of Interest Rate
Conversion.]
IN WITNESS WHEREOF, the Borrower has caused this Notice of
Interest Rate Conversion to be executed and delivered, and the certification
contained herein to be made, by an authorized officer this ______ day of
____________, _______.
NORTHWESTERN CORPORATION
By:
-------------------------------
Name:
Title
B-2-2
EXHIBIT C
TO CREDIT AGREEMENT
-------------------
FORM OF CLOSING CERTIFICATE
---------------------------
NORTHWESTERN CORPORATION
Pursuant to Section 4.1(e) of the Credit Agreement dated as of
December 17, 2002 among Northwestern Corporation, a Delaware corporation (the
"Borrower"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders"), and Credit Suisse First Boston, as
administrative agent for the Lenders (the "Credit Agreement"; terms defined
therein shall have their defined meanings when used herein), the undersigned
hereby certifies that [he or she] is the _____________ of the Borrower and in
such capacity further certifies as follows:
1. The representations and warranties of the Borrower set forth
in the Credit Agreement and each of the other Loan Documents to which the
Borrower is a party, are true and correct in all material respects on and as of
the date hereof.
2. The Borrower has received all documents and instruments,
including all consents, authorizations and filings, required or advisable under
any Requirement of Law or Contractual Obligation of the Borrower in connection
with the execution, delivery, performance, validity and enforceability of the
Credit Agreement, the Notes and the other Loan Documents except as expressly set
forth in each document. I have examined Schedule 3.4b to the Credit Agreement
and attached hereto are copies of all consents, authorizations and filings
referred to in Schedule 3.4b of the Credit Agreement, which consents,
authorizations and filings are in full force and effect as of the date hereof.
3. No Default or Event of Default has occurred and is continuing
as of the date hereof or after giving effect to the making of the Loans on the
date hereof.
4. There are no liquidation or dissolution proceedings pending or
to my knowledge threatened against the Borrower, nor has any other event
occurred affecting or threatening the existence of the Borrower.
C-1
IN WITNESS WHEREOF, the undersigned has hereunto set his name.
----------------------------
Name:
Title:
Date: [o], 2002
C-2
EXHIBIT D
TO CREDIT AGREEMENT
-------------------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Assignment") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard
Terms and Conditions and the Credit Agreement, as of the Effective Date inserted
by the Administrative Agent as contemplated below, the interest in and to all of
the Assignor's rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor's outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, [__________]) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment, without
representation or warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________
[and is an Affiliate/Approved Fund(5)]
3. Borrower: NorthWestern Corporation, a
Delaware corporation.
4. Administrative Agent: Credit Suisse First
Boston, as the administrative agent under
the Credit Agreement
5. Credit Agreement: Credit Agreement, dated as of December 17,
2002 (as amended, restated, supplemented or
otherwise modified from time to time, the
"Credit Agreement"; terms defined therein
being used herein as defined therein), among
the Borrower, the several banks and other
financial institutions parties thereto
(including the Lender), and the
Administrative Agent
- --------------------
5 Select as applicable.
D-1
6. Assigned Interest:
- -------------------------- ----------------------- ----------------------
Aggregate
Amount of Amount of Percentage
Commitment/Loans Commitment/Loans Assigned of
for all Lenders Assigned Commitment/Loans6
- -------------------------- ----------------------- ----------------------
$------------- $------------- ----------%
- -------------------------- ----------------------- ----------------------
$------------- $------------- ----------%
- -------------------------- ----------------------- ----------------------
[Name of Assignor]
Revised Commitment amount: $
------------------------- -----------------
Revised Commitment Percentage: %
----------------------------- -----------------
Revised Loan amount: $
------------------- -----------------
Fees Assigned (if any): $
---------------------- -----------------
[Name of Assignee]
New Commitment amount: $
--------------------- -----------------
New Commitment Percentage: %
------------------------- ----------------
New Loan amount: $
--------------- -----------------
Address for Notices for Assignee:
- ---------------------------------
[Address]
Attention: __________________
Telephone: __________________
Telecopy: ___________________
Telephone ___________________
Confirmation:________________
Eurodollar Lending Office:
- --------------------------
_____________________________
_____________________________
_____________________________
- --------------------
6 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.
D-2
Domestic Lending Office:
_____________________________
_____________________________
_____________________________
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:______________________________
Name:
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:______________________________
Name:
Title:
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Consented to and Accepted:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent
By_________________________________
Name:
Title:
By_________________________________
Name:
Title:
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ANNEX 1
NORTHWESTERN CORPORATION CREDIT AGREEMENT
DATED AS OF DECEMBER 17, 2002
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i)
it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with any
Credit Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document delivered pursuant thereto, other than this Assignment
(herein collectively the "Credit Documents"), or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Credit Document or
(iv) the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Credit Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i)
it has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Assignee under the Credit Agreement, (iii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement and,
to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section 3.1
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and to purchase the Assigned Interest on the basis of which it
has made such analysis and decision, and (v) if it is a Foreign Lender, attached
to the Assignment is any documentation required to be delivered by it pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on
the Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Documents are required to be
performed by it as a Lender.
2. Payments. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the
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Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of
a signature page of this Assignment by telecopy shall be effective as delivery
of a manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the law of the State of New York.
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