Execution Copy
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3-YEAR
CREDIT AGREEMENT
DATED AS OF
AUGUST 28, 2001
AMONG
BLACK HILLS CORPORATION,
as Borrower,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as Banks,
ABN AMRO BANK N.V.,
as Administrative Agent,
UNION BANK OF CALIFORNIA, N.A.,
as Syndication Agent,
BANK OF MONTREAL,
as Co-Syndication Agent,
U.S. BANK, NATIONAL ASSOCIATION,
as Documentation Agent
and
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agent
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TABLE OF CONTENTS
(This Table of Contents is not part of the Agreement)
PAGE
SECTION 1 DEFINITIONS; INTERPRETATION.....................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Interpretation........................................................................14
SECTION 2 THE CREDITS....................................................................................14
Section 2.1 The Revolving Loan Commitment.........................................................14
Section 2.2 Letters of Credit. (a)................................................................15
Section 2.3 Applicable Interest Rates. (a) Base Rate Loans........................................17
Section 2.4 Minimum Borrowing Amounts.............................................................19
Section 2.5 Manner of Borrowing Loans and Designating Interest Rates Applicable
to Loans 19
Section 2.6 Interest Periods......................................................................21
Section 2.7 Maturity of Loans.....................................................................22
Section 2.8 Prepayments...........................................................................22
Section 2.9 Default Rate..........................................................................22
Section 2.10 The Notes.............................................................................23
Section 2.11 Funding Indemnity.....................................................................23
Section 2.12 Commitments...........................................................................24
SECTION 3 FEES...........................................................................................24
Section 3.1 Fees..................................................................................24
SECTION 4 PLACE AND APPLICATION OF PAYMENTS..............................................................26
Section 4.1 Place and Application of Payments.....................................................26
SECTION 5 REPRESENTATIONS AND WARRANTIES.................................................................26
Section 5.1 Corporate Organization and Authority..................................................26
Section 5.2 Subsidiaries..........................................................................27
Section 5.3 Corporate Authority and Validity of Obligations.......................................27
Section 5.4 Financial Statements..................................................................27
Section 5.5 No Litigation; No Labor Controversies.................................................28
Section 5.6 Taxes.................................................................................28
Section 5.7 Approvals.............................................................................28
Section 5.8 ERISA.................................................................................28
Section 5.9 Government Regulation.................................................................28
Section 5.10 Margin Stock; Use of Proceeds.........................................................28
Section 5.11 Licenses and Authorizations; Compliance with Laws.....................................29
Section 5.12 Ownership of Property; Liens..........................................................29
Section 5.13 No Burdensome Restrictions; Compliance with Agreements................................29
Section 5.14 Full Disclosure.......................................................................30
Section 5.15 Solvency..............................................................................30
SECTION 6 CONDITIONS PRECEDENT...........................................................................30
Section 6.1 Initial Credit Event..................................................................30
Section 6.2 All Credit Events.....................................................................31
SECTION 7 COVENANTS......................................................................................31
Section 7.1 Corporate Existence; Subsidiaries.....................................................32
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Section 7.2 Maintenance...........................................................................32
Section 7.3 Taxes.................................................................................32
Section 7.4 ERISA.................................................................................32
Section 7.5 Insurance.............................................................................32
Section 7.6 Financial Reports and Other Information...............................................33
Section 7.7 Bank Inspection Rights................................................................34
Section 7.8 Conduct of Business...................................................................35
Section 7.9 Liens.................................................................................35
Section 7.10 Use of Proceeds; Regulation U.........................................................37
Section 7.11 Sales and Leasebacks..................................................................37
Section 7.12 Mergers, Consolidations and Sales of Assets...........................................37
Section 7.13 Use of Property and Facilities; Environmental and Health and Safety Laws..............38
Section 7.14 Investments, Acquisitions, Loans, Advances and Guaranties.............................39
Section 7.15 Restrictions on Indebtedness..........................................................41
Section 7.16 Consolidated Net Worth................................................................42
Section 7.17 Recourse Leverage Ratio...............................................................43
Section 7.18 Interest Coverage Ratio...............................................................43
Section 7.19 Dividends and Other Shareholder Distributions.........................................43
Section 7.20 No Negative Pledge....................................................................43
Section 7.21 Transactions with Affiliates..........................................................43
Section 7.22 Compliance with Laws..................................................................43
Section 7.23 Pari-Passu............................................................................44
Section 7.24 Certain Subsidiaries..................................................................44
SECTION 8 EVENTS OF DEFAULT AND REMEDIES.................................................................44
Section 8.1 Events of Default.....................................................................44
Section 8.2 Non-Bankruptcy Defaults...............................................................46
Section 8.3 Bankruptcy Defaults...................................................................46
Section 8.4 Collateral for Outstanding Letters of Credit..........................................47
Section 8.5 Expenses..............................................................................47
SECTION 9 CHANGE IN CIRCUMSTANCES........................................................................47
Section 9.1 Change of Law.........................................................................47
Section 9.2 Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR............................................................................48
Section 9.3 Increased Cost and Reduced Return.....................................................48
Section 9.4 Lending Offices.......................................................................50
Section 9.5 Discretion of Bank as to Manner of Funding............................................50
SECTION 10 THE AGENT......................................................................................50
Section 10.1 Appointment and Authorization of Administrative Agent.................................50
Section 10.2 Administrative Agent and its Affiliates...............................................50
Section 10.3 Action by Administrative Agent........................................................51
Section 10.4 Consultation with Experts.............................................................51
Section 10.5 Liability of Administrative Agent; Credit Decision....................................51
Section 10.6 Indemnity.............................................................................52
Section 10.7 Resignation of Administrative Agent and Successor Administrative Agent................52
SECTION 11 MISCELLANEOUS..................................................................................52
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Section 11.1 Withholding Taxes.....................................................................52
Section 11.2 No Waiver of Rights...................................................................54
Section 11.3 Non-Business Day......................................................................54
Section 11.4 Documentary Taxes.....................................................................54
Section 11.5 Survival of Representations...........................................................54
Section 11.6 Survival of Indemnities...............................................................54
Section 11.7 Set-Off...............................................................................54
Section 11.8 Notices...............................................................................55
Section 11.9 Counterparts..........................................................................56
Section 11.10 Successors and Assigns................................................................57
Section 11.11 Participants and Note Assignees.......................................................57
Section 11.12 Assignment of Commitments by Banks....................................................57
Section 11.13 Amendments............................................................................58
Section 11.14 Headings..............................................................................58
Section 11.15 Legal Fees, Other Costs and Indemnification...........................................58
Section 11.16 Entire Agreement......................................................................59
Section 11.17 Construction..........................................................................59
Section 11.18 Governing Law.........................................................................59
Section 11.19 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL......................................59
Section 11.20 Replacement of Bank...................................................................60
Section 11.21 Confidentiality.......................................................................61
Section 11.22 Rights and Liabilities of Documentation Agent and Syndication Agent..................61
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EXHIBITS ** The Exibits have been omitted but will be furnished to the SEC upon
- ----------- request.
A - Form of Note
B - Form of Compliance Certificate
SCHEDULES**The Schedules have been omitted but will be furnished to the SEC upon
- --------- request.
SCHEDULE 1 Pricing Grid
SCHEDULE 4 Administrative Agent Notice and Payment Info
SCHEDULE 5.2 Schedule of Existing Subsidiaries
SCHEDULE 5.5 Litigation and Labor Controversies
SCHEDULE 5.11 Environmental Matters
SCHEDULE 7.9 Existing Liens
SCHEDULE 7.14 Existing Investments
SCHEDULE 7.15(a) Marketing Subsidiary Indebtedness
SCHEDULE 7.15(b) Existing Secured Indebtedness
SCHEDULE 7.19 Restrictions on Distributions and Existing Negative Pledges
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3 YEAR CREDIT AGREEMENT
3 YEAR CREDIT AGREEMENT, dated as of August 28, 2001 among Black Hills
Corporation, a South Dakota corporation ("Borrower"), the financial institutions
from time to time party hereto (each a "Bank," and collectively the "Banks"),
U.S. Bank, National Association and The Bank of Nova Scotia, in their capacity
as documentation agents for the Banks hereunder (in such capacity,
"Documentation Agents"), Union Bank of California, N.A. and Bank of Montreal, in
their capacity as syndication agents for the Banks hereunder (in such capacity,
"Syndication Agents") and ABN AMRO Bank N.V. in its capacity as agent for the
Banks hereunder (in such capacity, the "Administrative Agent").
WITNESSETH THAT:
WHEREAS, the Borrower desires to obtain the several commitments of the
Banks to make available a revolving credit for loans and letters of credit (the
"Revolving Credit"), as described herein; and
WHEREAS, the Banks are willing to extend such commitments subject to
all of the terms and conditions hereof and on the basis of the representations
and warranties hereinafter set forth.
NOW, THEREFORE, in consideration of the recitals set forth above and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1 DEFINITIONS; INTERPRETATION.
Section 1.1 Definitions. The following terms when used herein have the
following meanings:
"ABN AMRO Credit Agreement" means that certain Credit Agreement by and
among the Borrower, BHP, ABN AMRO Bank N.V., as Administrative Agent and the
financial institutions from time to time party thereto dated as of December 29,
2000.
"ABN AMRO Letter of Credit" means that certain letter of number S315879
in the face amount of $10,000,000 issued by ABN AMRO Bank N.V. with the Public
Service Company of Colorado as Beneficiary with an expiry date of August 31,
2001.
"Account" is defined in Section 8.4(b) hereof.
"Adjusted Consolidated EBITDA" means, for any period, (A) Consolidated
EBITDA less (B) Restricted Earnings.
"Adjusted LIBOR" is defined in Section 2.3(b) hereof.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "control" (including, with their correlative
meanings, "controlled by" and "under common control with") means possession,
directly or indirectly, of power to direct or cause the
direction of management or policies of a Person (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event for purposes of this definition: (i) any
Person which owns directly or indirectly twenty percent (20%) or more of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation or twenty percent (20%) or more of the
partnership or other ownership interests of any other Person will be deemed to
control such corporation or other Person; and (ii) each director and executive
officer of Borrower or any Subsidiary of Borrower shall be deemed an Affiliate
of Borrower and each of its Subsidiaries.
"Administrative Agent" is defined in the first paragraph of this
Agreement and includes any successor Administrative Agent pursuant to Section
10.7 hereof.
"Agreement" means this Credit Agreement, including all Exhibits and
Schedules hereto, as it may be amended, supplemented or otherwise modified from
time to time in accordance with the terms hereof.
"Applicable Margin" means, at any time (i) with respect to Base Rate
Loans, the Base Rate Margin and (ii) with respect to Eurodollar Loans, the
Eurodollar Margin.
"Application" is defined in Section 2.2(b) hereof.
"Applicable Telerate Page" is defined in Section 2.3(b) hereof.
"Arrangers" means, collectively, ABN AMRO Bank N.V., Union Bank
of California, N.A., and U.S. Bank, National Association.
"Authorized Representative" means those persons shown on the list of
officers provided by Borrower pursuant to Section 6.1(e) hereof, or on any
updated such list provided by Borrower to the Administrative Agent, or any
further or different officer of Borrower so named by any Authorized
Representative of Borrower in a written notice to the Administrative Agent.
"Bank" and "Banks" are defined in the first paragraph of this
Agreement.
"Base Rate" is defined in Section 2.3(a) hereof.
"Base Rate Loan" means a Loan bearing interest prior to maturity at a
rate specified in Section 2.3(a) hereof.
"Base Rate Margin" means the percentage set forth in Schedule 1 hereto
beside the then applicable Level.
"BHP" means Black Hills Power, Inc., a South Dakota corporation.
"Borrower" is defined in the first paragraph of this Agreement.
"Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different type
into such type by the Banks on a single date and for a single Interest Period.
Borrowings of Loans are made by and maintained ratably for each of the Banks
according to their Percentages. A Borrowing is "advanced" on the
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day Banks advance funds comprising such Borrowing to Borrower, is
"continued" on the date a new Interest Period for the same type of Loans
commences for such Borrowing and is "converted" when such Borrowing is changed
from one type of Loan to the other, all as requested by Borrower pursuant to
Section 2.5(a).
"Business Day" means any day other than a Saturday or Sunday on which
Banks are not authorized or required to close in New York, New York, Chicago,
Illinois or Rapid City, South Dakota and, if the applicable Business Day relates
to the borrowing or payment of a Eurodollar Loan, on which banks are dealing in
U.S. Dollars in the interbank market in London, England.
"Capital" means, as of any date of determination thereof, without
duplication, the sum of (A) Consolidated Net Worth plus (B) all Recourse
Indebtedness (provided that for purposes of clause (B) of this definition, to
the extent otherwise included, Indebtedness of Marketing Subsidiaries in an
aggregate amount not to exceed the Marketing Subsidiary Indebtedness Limit
incurred under Marketing Subsidiary Excluded Credit Facilities shall not be
deemed to be Recourse Indebtedness).
"Capital Lease" means at any date any lease of Property which, in
accordance with GAAP, would be required to be capitalized on the balance sheet
of the lessee.
"Capitalized Lease Obligations" means, for any Person, the amount of
such Person's liabilities under Capital Leases determined at any date in
accordance with GAAP.
"Change of Control Event" means one or more of the following events:
(a) less than a majority of the members of the Board of Directors of
Borrower shall be persons who either (i) were serving as directors on
the Effective Date or (ii) were nominated as directors and approved by
the vote of the majority of the directors who are directors referred to
in clause (i) above or this clause (ii); or
(b) the stockholders of Borrower shall approve any plan or proposal for
the liquidation or dissolution of Borrower; or
(c) a Person or group of Persons acting in concert (other than the direct
or indirect beneficial owners of the Voting Stock of Borrower as of the
Effective Date) shall, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise, have
become the direct or indirect beneficial owner (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended from
time to time) of Voting Stock of Borrower representing more than ten
percent (10%) of the combined voting power of the outstanding Voting
Stock or other ownership interests for the election of directors or
shall have the right to elect a majority of the Board of Directors of
Borrower; or
(d) Except as permitted by Section 7.12, Borrower ceases at any time to own
one hundred percent (100%) of the Voting Stock and other equity
interest of any Material Subsidiary.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commitment" and "Commitments" are defined in Section 2.1 hereof.
"Compliance Certificate" means a certificate in the form of Exhibit B
hereto.
"Consolidated Assets" means all assets which should be listed on the
consolidated balance sheet of Borrower and its Consolidated Subsidiaries, as
determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" means, for any period, for Borrower and its
Consolidated Subsidiaries on a consolidated basis, (A) the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) to the extent deducted in
arriving at Consolidated Net Income, net federal, state and local income taxes
in respect of such period, (iii) to the extent deducted in arriving at
Consolidated Net Income, Consolidating Interest Expense, (iv) to the extent
deducted in arriving at Consolidated Net Income, the amount charged for the
amortization of intangible assets, (v) to the extent deducted in arriving at
Consolidated Net Income, the amount charged for the depreciation of assets, and
(vi) to the extent deducted in arriving at Consolidated Net Income, losses on
sales of assets (excluding sales in the ordinary course of business) and other
extraordinary losses, less (B) the amount for such period of (i) to the extent
added in arriving at Consolidated Net Income, interest income arising from
traditional investment activities with banks, investments banks and other
financial institutions or relating to governmental or other marketable
securities, (ii) to the extent added in arriving at Consolidated Net Income,
gains on sales of assets (excluding sales in the ordinary course of business)
and other extraordinary gains, all as determined on a consolidated basis in
accordance with GAAP, (iii) any maintenance capital expenditures made by the
Borrower or its Consolidated Subsidiaries in such period, (iv) without
duplication, any payments made by a Consolidated Subsidiary constituting a
repayment of principal Indebtedness (other than (x) the Obligations and (y)
repayments of principal made with the proceeds of a refinancing of such
Indebtedness otherwise permitted pursuant to this Agreement) or with respect to
a reserve, and (v) without duplication, any other mandatory payment made by a
Consolidated Subsidiary in such period not included as an expense or loss in
calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period of the Borrower and its
Consolidated Subsidiaries, the amount for such period of consolidated net income
(or net loss) of the Borrower and its Consolidated Subsidiaries, as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth" means, as of any time the same is to be
determined, the total shareholders' equity (including capital stock, additional
paid-in-capital and retained earnings after deducting treasury stock, but
excluding (to the extent otherwise included in calculating shareholders'
equity), minority interests in Subsidiaries) which would appear on the
consolidated balance sheet of Borrower determined on a consolidated basis in
accordance with GAAP.
"Consolidated Subsidiary" means, as to any Person, each subsidiary of
such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated, with
the financial statements of such Person in accordance with GAAP, including
principles of consolidation.
4
"Consolidating Interest Expense" means, with reference to any period of
the Borrower, the sum of (i) all interest charges (including imputed interest
charges with respect to Capitalized Lease Obligations and all amortization of
debt discount and expense and other deferred financing charges) of the Borrower
on a consolidating (i.e. stand-alone) basis for such period determined in
accordance with GAAP, other than interest charges relating to Non-Recourse
Indebtedness plus (ii) all fees payable in respect of the issuance of standby
letters of credit for the account of the Borrower.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its Property is bound.
"Controlled Group" means all members of a controlled group of
corporations and all trades and businesses (whether or not incorporated) under
common control that, together with Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Credit Documents" means this Agreement, the Notes, the Fee Letter, the
Master Letter of Credit Agreement, the Applications, the Letters of Credit and
all other documents executed in connection herewith or therewith.
"Credit Event" means any Borrowing or the issuance of, or extension of
the expiration date or increase in the amount of, any Letter of Credit.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"Derivative Arrangement" means any agreement (including any master
agreement and any agreement, whether or not in writing, relating to any single
transaction) that is an interest rate swap agreement, basis swap, forward rate
agreement, commodity swap, commodity option, equity or equity index swap or
option, bond option, interest rate option, forward foreign exchange agreement,
rate cap, collar or floor agreement, future agreement, currency swap agreement,
cross-currency rate swap agreement, swaption, currency option, that relates to
fluctuations in raw material prices or utility or energy prices or other costs,
or any other similar agreement, including any option to enter into any of the
foregoing, or any combination of any of the foregoing. "Derivative Arrangements"
shall include all such agreements or arrangements made or entered into at any
time, or in effect at any time, whether or not related to a Loan or L/C
Obligations.
"Derivative Obligations" means, with respect to any Person, all
liabilities of such Person under any Derivative Arrangement (including but not
limited to obligations and liabilities arising in connection with or as a result
of early or premature termination of a Derivative Arrangement, whether or not
occurring as a result of a default thereunder), absolute or contingent, now or
hereafter existing or incurred or due or to become due.
"Documentation Agents" is defined in the first paragraph of this
Agreement.
"Effective Date" means August 28, 2001.
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"Environmental and Health Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, judgments, permits and
other governmental rules or restrictions relating to human health, safety
(including without limitation occupational safety and health standards), or the
environment or to emissions, discharges or releases of pollutants, contaminants,
hazardous or toxic substances, wastes or any other controlled or regulated
substance into the environment, including without limitation ambient air,
surface water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, hazardous or toxic substances, wastes or
any other controlled or regulated substance or the clean-up or other remediation
thereof.
"ERISA" is defined in Section 5.8 hereof.
"Eurodollar Loan" means a Loan bearing interest prior to its maturity
at the rate specified in Section 2.3(b) hereof.
"Eurodollar Margin" means the percentage set forth in Schedule 1 hereto
beside the then applicable Level.
"Eurodollar Reserve Percentage" is defined in Section 2.3(b) hereof.
"Event of Default" means any of the events or circumstances specified
in Section 8.1 hereof.
"Existing Letters of Credit" means the ABN AMRO Letter of Credit, the
U.S. Bank Letter of Credit and the Wells Fargo Letter of Credit.
"Facility Fee Rate" means the percentage set forth in Schedule 1 hereto
beside the then applicable Level.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to:
(a) the weighted average of the rates on overnight federal funds
transactions with members of the United States Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by
the United States Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a Business Day,
the average of the quotations for such day on such transactions
received by the Administrative Agent from three federal funds brokers
of recognized standing selected by it.
"Fee Letter" means that certain letter among the Administrative Agent
and Borrower pertaining to fees to be paid by Borrower to the Administrative
Agent for its sole account and benefit.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time, applied by Borrower and its Subsidiaries on
a basis consistent with the
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preparation of Borrower's financial statements furnished to the Banks as
described in Section 5.4 hereof.
"Guarantee" means, in respect of any Person, any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligations of another Person, including, without
limitation, by means of an agreement to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to maintain financial
covenants, or to assure the payment of such Indebtedness by an agreement to make
payments in respect of goods or services regardless of whether delivered, or
otherwise, provided, that the term "Guarantee" shall not include endorsements
for deposit or collection in the ordinary course of business; and such term when
used as a verb shall have a correlative meaning.
"Hazardous Material" means any substance or material which is hazardous
or toxic, and includes, without limitation, (a) asbestos, polychlorinated
biphenyls, dioxins and petroleum or its by-products or derivatives (including
crude oil or any fraction thereof) and (b) any other material or substance
classified or regulated as "hazardous" or "toxic" pursuant to any Environmental
and Health Law.
"Immaterial Subsidiary" shall mean, any direct or indirect subsidiary
of Borrower (i) whose total assets (as determined in accordance with GAAP) do
not represent at least five percent (5%) of the total assets (as determined in
accordance with GAAP) of Borrower and its subsidiaries on a consolidated basis
or (ii) whose total revenues (as determined in accordance with GAAP) do not
represent at least five percent (5%) of the total revenues (as determined in
accordance with GAAP) of Borrower and its subsidiaries on a consolidated basis,
provided that no subsidiary shall be deemed an Immaterial Subsidiary to the
extent (a) the total assets of such subsidiary, when combined with the total
assets of other subsidiaries which are Immaterial Subsidiaries, represent at
least ten percent (10%) of the total assets (as determined in accordance with
GAAP) of Borrower and its subsidiaries on a consolidated basis or (ii) the total
revenues of such subsidiary, when combined with the total revenues of other
Immaterial Subsidiaries, (as determined in accordance with GAAP) represent at
least ten percent (10%) of the total revenues (as determined in accordance with
GAAP) of Borrower and its subsidiaries on a consolidated basis. As used in this
definition "subsidiary" shall mean any Person whose financial statements are
consolidated into the financial statements of Borrower in accordance with GAAP.
"Indebtedness" means, as to any Person, without duplication: (i) all
obligations of such Person for borrowed money or evidenced by bonds, debentures,
notes or similar instruments; (ii) all obligations of such Person for the
deferred purchase price of property or services (other than in respect of trade
accounts payable arising in the ordinary course of business which are not
past-due); (iii) all Capitalized Lease Obligations of such Person; (iv) all
Indebtedness of others secured by a Lien on any properties, assets or revenues
of such Person (other than stock, partnership interests or other equity
interests of Borrower or any Subsidiary of Borrower in other entities) to the
extent of the lesser of the value of the property subject to such Lien or the
amount of such Indebtedness; (v) all Indebtedness of others Guaranteed by such
Person provided that Long-Term Guaranties shall not be deemed "Indebtedness" for
purposes of calculating Borrower's compliance with the financial covenants set
forth herein; (vi) all obligations of such Person, contingent or otherwise, in
respect of any letters or credit (whether commercial or standby) or bankers'
acceptances, (vii) all Derivative Obligations of such Person, provided that for
purposes of determining Borrower's compliance with the financial covenants set
forth herein,
7
only Borrower's Derivative Obligations under Derivative Arrangements which
must be marked-to-market in accordance with GAAP shall be included as
Indebtedness of Borrower, and (viii) all obligations of such Person under
synthetic (and similar type) lease arrangements, provided that for purposes of
calculating such Person's Indebtedness under such synthetic (or similar type)
lease arrangements, such lease arrangement shall be treated as if it were a
Capitalized Lease.
"Interest Coverage Ratio" means, for any period of four consecutive
fiscal quarters of the Borrower ending with the most recently completed such
fiscal quarter, the ratio of (A) Adjusted Consolidated EBITDA to (B)
Consolidating Interest Expense for such period.
"Interest Period" is defined in Section 2.6 hereof.
"Investments" is defined in Section 7.14.
"Issuing Agents" means each of the Limited Issuing Agents, Union Bank
Of California, N.A., and U.S. Bank, National Association.
"L/C Commitment" means an amount equal to the Commitments from time to
time in effect.
"L/C Documents" means the Letters of Credit, any draft or other
document presented in connection with a drawing thereunder, the Applications and
this Agreement.
"L/C Fee Rate" means the percentage set forth in Schedule 1 hereto
beside the then applicable Level.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lending Office" is defined in Section 9.4 hereof.
"Letter of Credit" is defined in Section 2.2(a) hereof.
"Level I Status" means Borrower's S&P Rating (once obtained) is A+ or
higher and its Moody's Rating is A1 or higher.
"Level II Status" means Level I Status does not exist, but Borrower's
S&P Rating (once obtained) is A- or higher and its Moody's Rating is A3 or
higher.
"Level III Status" means neither Level I Status nor Level II Status
exists, but Borrower's S&P Rating (once obtained) is BBB+ or higher and its
Moody's rating is Baa1 or higher.
"Level IV Status" means neither Level I Status, Level II Status, nor
Level III Status exists, but Borrower's S&P Rating (once obtained) is BBB or
higher and its Moody's rating is Baa2 or higher.
"Level V Status" means neither Level I Status nor Level II Status
exists, but Borrower's S&P Rating (once obtained) is BBB- or higher and its
Moody's rating is Baa3 or higher.
8
"Level VI Status" means none of Level I Status, Level II Status, Level
III Status, Level IV Status nor Level V Status exists.
"LIBOR" is defined in Section 2.3(b) hereof.
"LIBOR Loan Restriction Period" means the period commencing on and
including the fifth to last Business Day of any calendar year and ending on and
including the fifth Business Day of the immediately succeeding calendar year.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, including, but not
limited to, the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale, security agreement or trust receipt, or a lease,
consignment or bailment for security purposes. For the purposes of this
definition, a Person shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, Capital Lease or
other arrangement pursuant to which title to the Property has been retained by
or vested in some other Person for security purposes, and such retention of
title shall constitute a "Lien."
"Limited Issuing Agents" means ABN AMRO Bank N.V., as issuer of the
ABN AMRO Letter of Credit and Wells Fargo Bank West N.A., as issuer of the Wells
Fargo Letter of Credit.
"Loan" and "Loans" are defined in Section 2.1 hereof and includes a
Base Rate Loan or Eurodollar Loan, each of which is a "type" of Loan hereunder.
"Long-Term Guarantee" means (i) any Guarantee issued by Borrower or its
Subsidiaries under which the holder or beneficiary of such Guarantee is not
permitted under any circumstance or contingency to make demand or exercise any
other remedies under such Guarantee prior to the Termination Date, as extended
from time to time in accordance with the terms hereof and (ii) any coal mining
reclamation bonds or contingent indemnity or reimbursement obligations with
respect to such reclamation bonds (so long as such reclamation bonds have not
been called upon).
"Marketing Subsidiary" means each of Black Hills Coal Network, Inc.,
a South Dakota corporation, Black Hills Energy Resources, Inc., a South
Dakota corporation, and Enserco Energy, Inc., a South Dakota corporation,
and their respective subsidiaries.
"Marketing Subsidiary Excluded Credit Facilities" means those certain
credit facilities of the Marketing Subsidiaries described on Schedule 7.15(a)
hereof, as such credit facilities are in effect on the Effective Date, provided
that such credit facilities shall cease to be Marketing Subsidiary Excluded
Credit Facilities to the extent availability thereunder is increased, any
substantive term thereof is materially modified, or such credit facility is
extended more than once in any fiscal year for a period of more than one year.
Any replacement credit facility of a Marketing Subsidiary Excluded Credit
Facility shall be deemed a Marketing Subsidiary Excluded Credit Facility only if
such replacement credit facility contains terms substantially the same as the
Marketing Subsidiary Excluded Credit Facility being replaced (including tenor)
or is approved in writing by the Required Banks.
9
"Marketing Subsidiary Indebtedness Limit" means the sum of (i)
aggregate amount of credit availability (used or unused) under Marketing
Subsidiary Excluded Credit Facilities as of the Effective Date and (ii)
$25,000,000.
"Master Letter of Credit Agreement" is defined in Section 2.2(a)
hereof.
"Material Adverse Effect" means a material adverse effect on (i) the
business, financial position or results of operations of Borrower or Borrower
and its Subsidiaries taken as a whole, (ii) the ability of Borrower to perform
its material obligations under the Credit Documents, (iii) the validity or
enforceability of the material obligations of Borrower under any Credit
Document, (iv) the rights and remedies of the Banks, the Issuing Agents or the
Administrative Agent against Borrower; or (v) the timely payment of the
principal of and interest on the Loans or other amounts payable by Borrower
hereunder.
"Material Subsidiaries" means BHP, Black Hills Energy Ventures, Inc., a
South Dakota corporation, Wyodak Resources Development Corp., a Delaware
corporation, Black Hills Energy Capital, Inc., a Delaware corporation and any
other Subsidiary of Borrower which is not either an Immaterial Subsidiary or a
Project Finance Subsidiary.
"Moody's Rating" means the rating assigned by Moody's Investors
Service, Inc. and any successor thereto that is a nationally recognized rating
agency to the outstanding senior unsecured non-credit enhanced long-term
indebtedness of a Person (or if neither Moody's Investors Service, Inc. nor any
such successor shall be in the business of rating long-term indebtedness, a
nationally recognized rating agency in the United States of America as mutually
agreed between the Required Banks and Borrower). Any reference in this Agreement
to any specific rating is a reference to such rating as currently defined by
Moody's Investors Service, Inc. (or such a successor) and shall be deemed to
refer to the equivalent rating if such rating system changes.
"Non-Recourse Indebtedness" means, without duplication, all
Indebtedness of Borrower and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with GAAP incurred in connection with project
financings (including project financings of existing assets the proceeds of
which are used to refinance such assets) as to which the holder of such
Indebtedness has recourse solely against the assets which were purchased or
refinanced with, or leased in connection with, such Indebtedness and not against
Borrower or a Consolidated Subsidiary of Borrower other than a Project Finance
Subsidiary or any of their other assets (whether directly, through a Guarantee
or otherwise), other than the pledge of the stock (or similar equity interest)
of the Project Finance Subsidiary which incurred such Indebtedness. For purposes
of clarification, any Indebtedness of a Project Finance Subsidiary which would
otherwise constitute Non-Recourse Indebtedness but for the issuance by the
Borrower or a Consolidated Subsidiary of the Borrower of a Guarantee or other
document which provides recourse with respect to such Indebtedness, such
Indebtedness shall for all purposes of this Agreement be deemed Non-Recourse
Indebtedness so long as (i) the Borrower's or such Consolidated Subsidiary's
obligations under such Guarantee or other document are treated for all purposes
as Recourse Indebtedness hereunder, (ii) such Recourse Indebtedness of the
Borrower or such Consolidated Subsidiary is unsecured and is otherwise permitted
by this Agreement, and (iii) such Recourse Indebtedness of the Borrower or such
Consolidated Subsidiary does not in the aggregate exceed $100,000,000 at any one
time outstanding.
10
"Note" is defined in Section 2.10(a) hereof.
"Obligations" means all fees payable hereunder, all obligations of
Borrower to pay principal or interest on Loans and L/C Obligations, fees,
expenses, indemnities, and all other payment obligations of Borrower arising
under or in relation to any Credit Document.
"Participating Interest" is defined in Section 2.2(d) hereof.
"Percentage" means, for each Bank, the percentage of the Commitments
represented by such Bank's Commitment or, if the Commitments have been
terminated, the percentage held by such Bank (including through participation
interests in L/C Obligations) of the aggregate principal amount of all
outstanding Obligations.
"Permitted Derivative Obligations" means all Derivative Obligations as
to which the Derivative Arrangements giving rise to such Derivative Obligation
are entered into in the ordinary course of business to hedge interest rate risk,
currency risk, commodity price risk or the production of Borrower or its
Subsidiaries (and not for speculative purposes) and if such Derivative
Obligation is an obligation of Borrower, such Derivative Obligation ranks no
greater than pari passu to the Obligations.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or any agency or political
subdivision thereof.
"Plan " means at any time an employee pension benefit plan covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code that is either (i) maintained by a member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"PBGC" is defined in Section 5.8 hereof.
"Project Finance Subsidiary" means any special purpose Subsidiary of
Borrower created to limit the recourse of the creditors of such Subsidiary and
as to which the creditors and other holders of Indebtedness of such Subsidiary
have recourse solely against the assets of such Subsidiary and not against
Borrower or any other Subsidiary of Borrower or any of their other assets
(whether directly, through a Guarantee or otherwise) other than (i) pursuant to
a Guarantee permitted hereunder and (ii) the stock of such special purpose
Subsidiary (or similar equity interest).
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, whether now owned or
hereafter acquired.
"Recourse Indebtedness" means, without duplication, all Indebtedness of
Borrower and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with GAAP other than Non-Recourse Indebtedness.
11
"Recourse Leverage Ratio" means, as of any time the same is to be
determined, the ratio of the amount of (A) Recourse Indebtedness outstanding at
such time (provided that for purposes of clause (A) of this definition, to the
extent otherwise included, Indebtedness of Marketing Subsidiaries in an
aggregate amount not to exceed the Marketing Subsidiary Indebtedness Limit
incurred under Marketing Subsidiary Excluded Credit Facilities shall not be
deemed to be Recourse Indebtedness) to (B) the amount of Capital at such time.
"Reimbursement Obligation" is defined in Section 2.2(c) hereof.
"Required Banks" means, as of the date of determination thereof, any
Banks holding in the aggregate more than fifty percent (50%) of the Percentages,
provided, that at any time there are two (2) or less Banks, Required Banks shall
mean Banks holding one hundred percent (100%) of the Percentages.
"Restricted Earnings" means, for any period, the amount of all
Consolidated Net Income earned by each of Borrower's Consolidated Subsidiaries
during such period which may not be distributed or dividended to Borrower due to
contractual or other restrictions on such distributions or dividends.
"SEC" means the United States Securities and Exchange Commission.
"Security" has the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"S&P Rating" means the rating assigned by Standard & Poor's Ratings
Group, a division of The McGraw-Hill Companies, Inc. and any successor thereto
that is a nationally recognized rating agency to the outstanding senior
unsecured non-credit enhanced long-term indebtedness of a Person (or, if neither
such division nor any successor shall be in the business of rating long-term
indebtedness, a nationally recognized rating agency in the United States as
mutually agreed between the Required Banks and Borrower). Any reference in this
Agreement to any specific rating is a reference to such rating as currently
defined by Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, Inc. (or such a successor) and shall be deemed to refer to the
equivalent rating if such rating system changes.
"Solvent" means that (a) the fair value of a Person's assets is in
excess of the total amount of such Person's debts, as determined in accordance
with the United States Bankruptcy Code, and (b) the present fair saleable value
of a Person's assets is in excess of the amount that will be required to pay
such Person's debts as they become absolute and matured. As used in this
definition, the term "debts" includes any legal liability, whether matured or
unmatured, liquidated or unliquidated, absolute, fixed or contingent, as
determined in accordance with the United States Bankruptcy Code.
"Subsidiary" means, as to Borrower, any corporation or other entity (i)
which is consolidated into the financial statements of such Borrower in
accordance with GAAP or (ii) of which more than fifty percent (50%) of the
outstanding stock or comparable equity interests having ordinary voting power
for the election of the Board of Directors of such corporation or similar
governing body in the case of a non-corporation (irrespective of whether or not,
at the time, stock or other equity interests of any other class or classes of
such corporation or other
12
entity shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned by such Borrower or by
one or more of its Subsidiaries.
"Syndication Agents" is defined in the first paragraph of this
Agreement.
"Telerate Service" means the Dow Jones Telerate Service.
"Termination Date" means August 27, 2004.
"364 Day Credit Agreement" means that certain 364 Day Credit Agreement
dated as of the Effective Date among Borrower, ABN AMRO Bank, N.V., in its
capacity as administrative agent for the Banks thereunder, U.S. Bank, National
Association and The Bank of Nova Scotia, in their capacity as documentation
agents for the Banks thereunder, Union Bank of California, N.A. and Bank of
Montreal, in their capacity as syndication agents for the Banks thereunder and
the various financial institutions from time to time party thereto as Banks.
"364 Day Commitments" shall mean "Commitments", as such term is defined
in the 364 Day Credit Agreement.
"364 Day Credit Documents" shall mean "Credit Documents", as such term
is defined in the 364 Day Credit Agreement.
"364 Day Loans" shall mean "Loans", as such term is defined in the 364
Day Credit Agreement.
"Total Commitments" shall mean the sum of the Commitments and the 364
Day Commitments.
"Total Loans" shall mean the sum of the Loans and the 364 Day Loans.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable accrued benefits under such Plan exceeds (ii) the fair market
value of all Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the Controlled Group to
the PBGC or the Plan under Title IV of ERISA.
"Utilization Fee Rate" means the percentage set forth in Schedule 1
hereto beside the then applicable Level.
"US Bank Credit Agreements" means (i) that certain unsecured Credit
Agreement dated as of August 31, 2000 by and among Borrower, BHC, Black Hills
Holding Corporation, a South Dakota corporation, the banks party thereto and
U.S. Bank National Association, as Agent, and (ii) that certain agreement dated
February 5,1999 between U S Bank National Association and Black Hills
Corporation.
"U.S. Bank Letter of Credit" means that certain letter of credit number
SLCMMSP01047 in the face amount of $5,800,000 issued by U.S. Bank National
Association with the Public Service Company of Colorado as Beneficiary with an
expiry date of August 31, 2001.
13
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"Voting Stock" of any Person means capital stock of any class or
classes or other equity interests (however designated) having ordinary voting
power for the election of directors or similar governing body of such Person.
"Welfare Plan" means a "welfare plan", as defined in Section 3(l) of
ERISA.
"Wells Fargo Credit Agreement" means that certain unsecured Credit
Agreement by and among Borrower, BHC, Black Hills Holding Corporation, Wells
Fargo Bank West N.A. dated as of November 21, 2000.
"Wells Fargo Letter of Credit" means that certain letter of credit
number NZS404769 in the face amount of $4,450,000 issued by Wells Fargo Bank
West N.A. with The Bank of Nova Scotia as Beneficiary with an expiry date of
August 30, 2001.
"Wholly-Owned" when used in connection with any Subsidiary means a
Subsidiary of which all of the issued and outstanding shares of stock or other
equity interests (other than directors' qualifying shares as required by law)
shall be owned by Borrower and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 Interpretation. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the terms defined. All
references to times of day in this Agreement shall be references to New York,
New York time unless otherwise specifically provided. The word "including" means
including without limiting the generality of any description preceding such
term. Where the character or amount of any asset or liability or item of income
or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the same
shall be done in accordance with GAAP in effect on the Effective Date, to the
extent applicable, except where such principles are inconsistent with the
specific provisions of this Agreement.
SECTION 2 THE CREDITS.
Section 2.1 The Revolving Loan Commitment. Subject to the terms and conditions
hereof (including Sections 6.1 and 6.2), each Bank, by its acceptance hereof,
severally agrees to make a loan or loans (individually a "Loan" and collectively
"Loans") to Borrower from time to time on a revolving basis in U.S. Dollars in
an aggregate outstanding amount up to the amount of its commitment set forth on
the applicable signature page hereof (such amount, as reduced pursuant to
Section 2.12(a), increased pursuant to Section 2.12(b), or changed as a result
of one or more assignments under Section 11.12, its "Commitment" and,
cumulatively for all the Banks, the "Commitments") before the Termination Date,
provided that the sum of the aggregate amount of Loans and of L/C Obligations at
any time outstanding shall not exceed the Commitments in effect at such time. On
the Termination Date the Commitments shall terminate. Each Borrowing of Loans
shall be made ratably from the Banks in proportion to their respective
Percentages. As provided in Section 2.5(a) hereof, Borrower may elect that each
Borrowing of Loans be either Base Rate Loans or Eurodollar Loans. Loans may be
repaid and the principal amount thereof reborrowed before the Termination Date,
subject to all the terms and conditions
14
hereof. Unless an earlier maturity is provided for hereunder, all Loans
shall mature and be due and payable on the Termination Date. Notwithstanding
anything is this Agreement to the contrary, no Eurodollar Loans may be advanced
during the LIBOR Loan Restriction Period.
Section 2.2 Letters of Credit. (a) (a)General Terms. Subject to the terms and
conditions hereof, as part of the Revolving Credit the Issuing Agents shall
issue standby letters of credit denominated in U.S. Dollars (each a "Letter of
Credit") for Borrower's account, provided that the aggregate L/C Obligations at
any time outstanding shall not exceed the lesser of (i) the difference between
the Commitments in effect at such time and the aggregate amount of Loans then
outstanding and (ii) the L/C Commitment. Each Letter of Credit shall be issued
by the applicable Issuing Agent, but each Bank shall be obligated to purchase an
undivided percentage participation interest of such Letter of Credit from the
applicable Issuing Agent pursuant to Section 2.2(d) hereof in an amount equal to
its Percentage of the amount of each drawing thereunder and, accordingly, the
undrawn face amount of each Letter of Credit shall constitute usage of the
Commitment of each Bank pro rata in accordance with each Bank's Percentage. The
Borrower shall execute a master letter of credit agreement with each Issuing
Agent (collectively, the "Master Letter of Credit Agreement") which shall
contain certain terms applicable to the Letters of Credit. To the extent any
provision of the Master Letter of Credit Agreement is inconsistent with the
terms of this Agreement, the terms of this Agreement shall control. Each
Existing Letter of Credit shall for all purposes be deemed to by a Letter of
Credit issued on the Effective Date under this Agreement. No extension of a
Existing Letter of Credit issued by a Limited Issuing Agent shall be requested
by the Borrower or granted by a Limited Issuing Agent. The Limited Issuing
Agents shall have no obligation to issue any additional Letters of Credit under
this Agreement. Once the Existing Letters of Credit have expired, the Limited
Issuing Agents shall cease to be Issuing Agents hereunder.
(b) Applications. At any time before thirty (30) days prior to the Termination
Date, a Issuing Agent shall, at the request of Borrower given to such Issuing
Agent at least three (3) Business Days prior to the requested date of issuance,
issue one or more Letters of Credit, in a form satisfactory to such Issuing
Agent, with expiration dates no later than five (5) Business Days prior to the
Termination Date, in an aggregate face amount as set forth above, upon the
receipt of a duly executed application for the relevant Letter of Credit in the
form customarily prescribed by such Issuing Agent for the type of Letter of
Credit, requested (each an "Application"). No Letter of Credit may contain an
clause which provides for the extension of the expiration date of such Letter of
Credit absent an affirmative request from Borrower to the such Issuing Agent and
the Administrative Agent requesting such extension. Notwithstanding anything
contained in any Application to the contrary (i) Borrower's obligation to pay
fees in connection with each Letter of Credit shall be as exclusively set forth
in Section 3.1(b) hereof, and (ii) if the applicable Issuing Agent is not timely
reimbursed for the amount of any drawing under a Letter of Credit on the date
such drawing is paid (it being understood that a drawing which is reimbursed
pursuant to, and in accordance with, the last sentence of Section 2.5(c) shall
be deemed to have been timely reimbursed), Borrower's obligation to reimburse
the applicable Issuing Agent for the amount of such drawing shall bear interest
(which Borrower hereby promises to pay on demand) from and after the date such
drawing is paid at a rate per annum equal to the sum of two percent (2%) plus
the Base Rate Margin plus the Base Rate from time to time in effect. The
applicable Issuing Agent will promptly notify the Banks of each issuance by it
of a Letter of Credit and any amendment or extension of a Letter of Credit.
15
Each Issuing Agent agrees to issue amendments to any Letters of Credit
issued by it increasing the amount, or extending the expiration date, thereof at
the request of Borrower subject to the conditions set forth herein (including
the conditions set forth in Section 6.2 and the other terms of this Section
2.2). Without limiting the generality of the foregoing, a Issuing Agent's
obligation to issue, amend or extend the expiration date of a Letter of Credit
is subject to the conditions set forth herein (including the conditions set
forth in Section 6.2 and the other terms of this Section 2.2) and an Issuing
Agent will not issue, amend or extend the expiration date of any Letter of
Credit if any Bank notifies such Issuing Agent of any failure to satisfy or
otherwise comply with such conditions and terms and directs such Issuing Agent
not to take such action.
(c) The Reimbursement Obligations. Subject to Section 2.2(b) hereof, the
obligation of Borrower to reimburse the applicable Issuing Agent for all
drawings under a Letter of Credit (a "Reimbursement Obligation") shall be
governed, to the extent not inconsistent with this Agreement, by the Master
Letter of Credit Agreement and the Application related to such Letter of Credit,
except that reimbursement of each drawing shall be made in immediately available
funds at the applicable Issuing Agent's principal office in New York, New York
by no later than 1:30 p.m. (New York time) on the date when such drawing is paid
or, if such drawing was paid after 1:30 p.m. (New York time), by the end of such
day. If Borrower does not make any such reimbursement payment on the date due
(whether through a deemed request for a Base Rate Loan pursuant to Section
2.5(c) or otherwise) and the Banks fund their participations therein in the
manner set forth in Section 2.2(d) below, then all payments thereafter received
by an Issuing Agent in discharge of any of the relevant Reimbursement
Obligations shall be distributed in accordance with Section 2.2(d) below. An
Issuing Agent shall notify Borrower promptly of its intent to pay, or payment
of, a drawing under a Letter of Credit.
(d) The Participating Interests. Each Bank, by its acceptance hereof, severally
agrees to purchase from each Issuing Agent, and each Issuing Agent hereby agrees
to sell to each such Bank, an undivided percentage participating interest (a
"Participating Interest"), to the extent of its Percentage, in each Letter of
Credit issued by, and each Reimbursement Obligation owed to, such Issuing Agent.
Upon any failure by Borrower to pay any Reimbursement Obligation at the time
required on the date the related drawing is paid, as set forth in Section 2.2(c)
above, or if an Issuing Agent is required at any time to return to Borrower or
to a trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Bank shall, not later than the
Business Day it receives a demand from such Issuing Agent to such effect, if
such demand is received before 2:00 p.m. (New York time), or not later than the
following Business Day, if such demand is received after such time, pay to such
Issuing Agent an amount equal to its Percentage of such unpaid or recaptured
Reimbursement Obligation together with interest on such amount accrued from the
date the related payment was made by such Issuing Agent to the date of such
payment by such Bank a rate per annum equal to (i) from the date the related
payment was made by such Issuing Agent to the date two (2) Business Days after
payment by such Bank is due hereunder, the Federal Funds Rate for each such day
and (ii) from the date two (2) Business Days after the date such payment is due
from such Bank to the date such payment is made by such Bank, the Base Rate in
effect for each such day. Each such Bank shall thereafter be entitled to receive
its Percentage of each payment received in respect of the relevant Reimbursement
Obligation and of interest paid thereon, with the applicable Issuing Agent
retaining its Percentage as a Bank hereunder.
16
The several obligations of the Banks to the Issuing Agents under this
Section 2.2 shall be absolute, irrevocable and unconditional under any and all
circumstances whatsoever and shall not be subject to any set-off, counterclaim
or defense to payment which any Bank may have or have had against Borrower, the
Administrative Agent, the Issuing Agents, any Bank or any other Person
whatsoever. Without limiting the generality of the foregoing, such obligations
shall not be affected by any Default or Event of Default or by any reduction or
termination of any Commitment of any Bank, and each payment by a Bank under this
Section 2.2 shall be made without any offset, abatement, withholding or
reduction whatsoever. The Issuing Agents and the Administrative Agent shall be
entitled to offset amounts received for the account of a Bank under the Credit
Documents against unpaid amounts due from such Bank to the applicable Issuing
Agent or the Administrative Agent, as applicable, hereunder (whether as fundings
of participations, indemnities or otherwise).
(e) Indemnification. The Banks shall, to the extent of their respective
Percentages, indemnify each Issuing Agent (to the extent not reimbursed by
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such Issuing Agent's gross negligence or willful misconduct) that an
Issuing Agent may suffer or incur in connection with any Letter of Credit issued
by it. The Issuing Agents shall be entitled to all of the rights and protections
afforded the Administrative Agent under Section 10 hereof. The obligations of
the Banks under this Section 2.2(e) and all other parts of this Section 2.2
shall survive termination of this Agreement and of all other L/C Documents.
(f) Issuing Agents. Each Bank hereby appoints each of Union Bank Of California,
N.A., or U.S. Bank, National Association, as the Issuing Agents hereunder and
hereby authorizes each of the Issuing Agent to take such action as Issuing Agent
on its behalf and to exercise such powers under the Credit Documents as are
delegated to the Issuing Agents by the terms thereof, together with such powers
as are reasonably incidental thereto. The relationship between each of the
Issuing Agent and the Banks is and shall be that of agent and principal only,
and nothing contained in this Agreement or any other Credit Document shall be
construed to constitute either Issuing Agent as a trustee or fiduciary for any
Bank or the Borrower.
Section 2.3 Applicable Interest Rates. (a) Base Rate Loans. Each Base Rate Loan
made or maintained by a Bank shall bear interest during each Interest Period it
is outstanding (computed (x) at all times the Base Rate is based on the rate
described in clause (i) of the definition thereof, on the basis of a year of 365
or 366 days, as applicable, and actual days elapsed or (y) at all times the Base
Rate is based on the rate described in clause (ii) of the definition thereof, on
the basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued or created by
conversion from a Eurodollar Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Base Rate from time to time in effect, payable on the last day of its
Interest Period and at maturity (whether by acceleration or otherwise).
"Base Rate" means for any day the greater of:
(i) the rate of interest announced by ABN AMRO Bank N.V. from time to time
as its prime rate, or equivalent, for U.S. Dollar loans within the
United States as in
17
effect on such day, with any change in the Base Rate resulting from a
change in said prime rate to be effective as of the date of the
relevant change in said prime rate; and
(ii) the sum of (x) the Federal Funds Rate, plus (y)1/2of 1% (0.50%).
(b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a Bank shall
bear interest during each Interest Period it is outstanding (computed on the
basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued, or created by
conversion from a Base Rate Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Adjusted LIBOR applicable for such Interest Period, payable on the last day
of the Interest Period and at maturity (whether by acceleration or otherwise),
and, if the applicable Interest Period is longer than three months, on each day
occurring every three months after the commencement of such Interest Period.
"Adjusted LIBOR" means, for any Borrowing of Eurodollar Loans, a rate
per annum determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
----------------------------------
1 - Eurodollar Reserve Percentage
"LIBOR" means, for an Interest Period for a Borrowing of Eurodollar
Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the
arithmetical average of the rates of interest per annum (rounded upwards, if
necessary, to the nearest one-sixteenth of one percent) at which deposits in
U.S. Dollars, in immediately available funds are offered to the Administrative
Agent at 11:00 a.m. (London, England time) two (2) Business Days before the
beginning of such Interest Period by major banks in the interbank eurodollar
market for delivery on the first day of and for a period equal to such Interest
Period in an amount equal or comparable to the principal amount of the
Eurodollar Loan scheduled to be made by each Lender as part of such Borrowing.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one-sixteenth of one percent)
for deposits in U.S. Dollars for delivery on the first day of and for a period
equal to such Interest Period in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made by each Lender as part of
such Borrowing, which appears on the Applicable Telerate Page as of 11:00 a.m.
(London, England time) on the day two (2) Business Days before the commencement
of such Interest Period.
"Applicable Telerate Page" means the display page designated as "Page
3750" on the Telerate Service (or such other pages as may replace any such page
on that service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rates for deposits in U.S.
Dollars).
"Eurodollar Reserve Percentage" means for an Borrowing of Eurodollar
Loans from any Bank, the daily average for the applicable Interest Period of the
actual effective rate, expressed as a decimal, at which reserves (including,
without limitation, any supplemental, marginal and
18
emergency reserves) are maintained by such Bank during such Interest Period
pursuant to Regulation D of the Board of Governors of the Federal Reserve System
(or any successor) on "eurocurrency liabilities", as defined in such Board's
Regulation D (or in respect of any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Loans is
determined or any category of extensions of credit or other assets that include
loans by non-United States offices of any Bank to United States residents),
subject to any amendments of such reserve requirement by such Board or its
successor, taking into account any transitional adjustments thereto. For
purposes of this definition, the Eurodollar Loans shall be deemed to be
"eurocurrency liabilities" as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D.
(c) Rate Determinations. The Administrative Agent shall determine
each interest rate applicable to Obligations, and a determination thereof
by the Administrative Agent shall be conclusive and binding except in
the case of manifest error.
Section 2.4 Minimum Borrowing Amounts. Each Borrowing of Base Rate Loans and
Eurodollar Loans shall be in an amount not less than (i) if such Borrowing is
comprised of Borrowing of Base Rate Loans, $1,000,000 and integral multiples of
$500,000 in excess thereof, and (ii) if such Borrowing is comprised of Borrowing
of Eurodollar Loans, $2,000,000 and integral multiples of $1,000,000 in excess
thereof, provided that a Borrowing of Base Rate Loans applied to pay a
Reimbursement Obligation pursuant to Section 2.5(c) hereof shall be in an amount
equal to such Reimbursement Obligation.
Section 2.5 Manner of Borrowing Loans and Designating Interest Rates Applicable
to Loans. (a) Notice to the Administrative Agent. (a) The Borrower shall give
notice to the Administrative Agent by no later than 12:00 noon (New York time)
(i) at least three (3) Business Days before the date on which Borrower requests
the Banks to advance a Borrowing of Eurodollar Loans, or (ii) on the date on
which Borrower requests the Banks to advance a Borrowing of Base Rate Loans. The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified in such notice of a new Borrowing. Thereafter, Borrower may from
time to time elect to change or continue the type of interest rate borne by each
Borrowing or, subject to Section 2.4's minimum amount requirement for each
outstanding Borrowing, a portion thereof, as follows: (i) if such Borrowing is
of Eurodollar Loans, on the last day of the Interest Period applicable thereto,
Borrower may continue part or all of such Borrowing as Eurodollar Loans for an
Interest Period or Interest Periods specified by Borrower or convert part or all
of such Borrowing into Base Rate Loans, and (ii) if such Borrowing is of Base
Rate Loans, on any Business Day, Borrower may convert all or part of such
Borrowing into Eurodollar Loans for an Interest Period or Interest Periods
specified by Borrower. Borrower shall give all such notices requesting, the
advance, continuation, or conversion of a Borrowing to the Administrative Agent
by telephone or telecopy (which notice shall be irrevocable once given and, if
by telephone, shall be promptly confirmed in writing). Notices of the
continuation of a Borrowing of Eurodollar Loans for an additional Interest
Period or of the conversion of part or all of a Borrowing of Eurodollar Loans
into Base Rate Loans or of Base Rate Loans into Eurodollar Loans must be given
by no later than 12:00 noon (New York time) at least three (3) Business Days
before the date of the requested continuation or conversion. All such notices
concerning the advance, continuation, or conversion of a
19
Borrowing shall be irrevocable once given and shall specify the date of the
requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced, continued,
or converted, the type of Loans to comprise such new, continued or converted
Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the
Interest Period applicable thereto. Borrower agrees that the Administrative
Agent may rely on any such telephonic or telecopy notice given by any person it
in good faith believes is an Authorized Representative without the necessity of
independent investigation, and in the event any such notice by telephone
conflicts with any written confirmation, such telephonic notice shall govern if
the Administrative Agent has acted in reliance thereon. There may be no more
than six different Interest Periods in effect at any one time, provided that for
purposes of determining the number of Interest Periods in effect at any one
time, all Base Rate Loans shall be deemed to have one and the same Interest
Period.
(b) Notice to the Banks. The Administrative Agent shall give prompt telephonic
or telecopy notice to each Bank of any notice from Borrower received pursuant to
Section 2.5(a) above. The Administrative Agent shall give notice to Borrower and
each Bank by like means of the interest rate applicable to each Borrowing of
Eurodollar Loans.
(c) Borrower' Failure to Notify. Any outstanding Borrowing of Base Rate Loans
shall, subject to Section 6.2 hereof, automatically be continued for an
additional Interest Period on the last day of its then current Interest Period
unless Borrower has notified the Administrative Agent within the period required
by Section 2.5(a) that it intends to convert such Borrowing into a Borrowing of
Eurodollar Loans or notifies the Administrative Agent within the period required
by Section 2.8(a) that it intends to prepay such Borrowing. If Borrower fails to
give notice pursuant to Section 2.5(a) above of the continuation or conversion
of any outstanding principal amount of a Borrowing of Eurodollar Loans before
the last day of its then current Interest Period within the period required by
Section 2.5(a) and has not notified the Administrative Agent within the period
required by Section 2.8(a) that it intends to prepay such Borrowing, such
Borrowing shall automatically be converted into a Borrowing of Base Rate Loans,
subject to Section 6.2 hereof. The Administrative Agent shall promptly notify
the Banks of Borrower's failure to so give a notice under Section 2.5(a). In the
event Borrower fails to give notice pursuant to Section 2.5(a) above of a
Borrowing equal to the amount of a Reimbursement Obligation and has not notified
the Administrative Agent by 12:00 noon (New York time) on the day such
Reimbursement Obligation becomes due that it intends to repay such Reimbursement
Obligation through funds not borrowed under this Agreement, Borrower shall be
deemed to have requested a Borrowing of Base Rate Loans on such day in the
amount of the Reimbursement Obligation then due, subject to Section 6.2 hereof,
which Borrowing shall be applied to pay the Reimbursement Obligation then due.
(d) Disbursement of Loans. Not later than 12:00 noon (New York time) on the date
of any requested advance of a new Borrowing of Eurodollar Loans, and not later
than 2:00 p.m. (New York time) on the date of any requested advance of a new
Borrowing of Base Rate Loans, subject to Section 6 hereof, each Bank shall make
available its Loan comprising part of such Borrowing in funds immediately
available at the principal office of the Administrative Agent in New York, New
York. The Administrative Agent shall make available to Borrower Loans at the
Administrative Agent's principal office in New York, New York or such other
office as the Administrative Agent has previously agreed in writing to with
Borrower, in each case in the type of funds received by the Administrative Agent
from the Banks.
20
(e) Administrative Agent Reliance on Bank Funding. Unless the Administrative
Agent shall have been notified by a Bank before the date on which such Bank is
scheduled to make payment to the Administrative Agent of the proceeds of a Loan
(which notice shall be effective upon receipt) that such Bank does not intend to
make such payment, the Administrative Agent may assume that such Bank has made
such payment when due and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to Borrower the
proceeds of the Loan to be made by such Bank and, if any Bank has not in fact
made such payment to the Administrative Agent, such Bank shall, on demand, pay
to the Administrative Agent the amount made available to Borrower attributable
to such Bank together with interest thereon in respect of each day during the
period commencing on the date such amount was made available to Borrower and
ending on (but excluding) the date such Bank pays such amount to the
Administrative Agent at a rate per annum equal to (i) from the date the related
payment was made by the Administrative Agent to the date two (2) Business Days
after payment by such Bank is due hereunder, the Federal Funds Rate for each
such day and (ii) from the date two (2) Business Days after the date such
payment is due from such Bank to the date such payment is made by such Bank, the
Base Rate in effect for each such day. If such amount is not received from such
Bank by the Administrative Agent immediately upon demand, Borrower will, on
demand, repay to the Administrative Agent the proceeds of the Loan attributable
to such Bank with interest thereon at a rate per annum equal to the interest
rate applicable to the relevant Loan.
Section 2.6 Interest Periods. As provided in Section 2.5(a) hereof, at the time
of each request of a Borrowing of Eurodollar Loans, Borrower shall select an
Interest Period applicable to such Loans from among the available options. The
term "Interest Period" means the period commencing on the date a Borrowing of
Loans is advanced, continued, or created by conversion and ending: (a) in the
case of Base Rate Loans, on the last Business Day of the calendar quarter in
which such Borrowing is advanced, continued, or created by conversion (or on the
last day of the following calendar quarter if such Loan is advanced, continued
or created by conversion on the last Business Day of a calendar quarter), and
(b) in the case of Eurodollar Loans, 1, 2, 3, or 6 months thereafter; provided,
however, that:
(a) any Interest Period for a Borrowing of Base Rate Loans that otherwise
would end after the Termination Date shall end on the Termination Date;
(b) for any Borrowing of Eurodollar Loans, Borrower may not select an
Interest Period that extends beyond either (i) the fifth to last
Business Day of any calendar year or (ii) the Termination Date;
(c) whenever the last day of any Interest Period would otherwise be a day
that is not a Business Day, the last day of such Interest Period shall
be extended to the next succeeding Business Day, provided that, if such
extension would cause the last day of an Interest Period for a
Borrowing of Eurodollar Loans to occur in the following calendar month,
the last day of such Interest Period shall be the immediately preceding
Business Day; and
(d) for purposes of determining an Interest Period for a Borrowing of
Eurodollar Loans, a month means a period starting on one day in a
calendar month and ending on the numerically corresponding day in the
next calendar month; provided,
21
however, that if there is no numerically corresponding day in the
month in which such an Interest Period is to end or if such an
Interest Period begins on the last Business Day of a calendar
month, then such Interest Period shall end on the last Business
Day of the calendar month in which such Interest Period is to end.
Section 2.7 Maturity of Loans. Unless an earlier maturity is provided for
hereunder (whether by acceleration or otherwise), all Obligations (including
principal and interest on all outstanding Loans) shall mature and become due and
payable by Borrower on the Termination Date.
Section 2.8 Prepayments. (a) (a) Borrower may prepay without premium or penalty
and in whole or in part (but, if in part, then (i) in an amount not less than
$5,000,000 and integral multiples of $1,000,000 in excess thereof, and (ii) in
an amount such that the minimum amount required for a Borrowing pursuant to
Section 2.4 hereof remains outstanding) any Borrowing of Eurodollar Loans upon
three (3) Business Days' prior irrevocable notice to the Administrative Agent
or, in the case of a Borrowing of Base Rate Loans, irrevocable notice delivered
to the Administrative Agent no later than 12:00 noon (New York time) on the date
of prepayment, such prepayment to be made by the payment of the principal amount
to be prepaid and accrued interest thereon to the date fixed for prepayment. In
the case of Eurodollar Loans, any amounts owing under Section 2.11 hereof as a
result of such prepayment shall be paid contemporaneously with such prepayment.
The Administrative Agent will promptly advise each Bank of any such prepayment
notice it receives from Borrower. Any amount paid or prepaid before the
Termination Date may, subject to the terms and conditions of this Agreement, be
borrowed, repaid and borrowed again.
(b) If the aggregate amount of outstanding Loans and L/C Obligations shall at
any time for any reason exceed the Commitments then in effect, Borrower shall,
immediately and without notice or demand, pay the amount of such excess to the
Administrative Agent for the ratable benefit of the Banks as a prepayment of the
Loans and, if necessary, a prefunding of Letters of Credit. Immediately upon
determining the need to make any such prepayment Borrower shall notify the
Administrative Agent of such required prepayment. Each such prepayment shall be
accompanied by a payment of all accrued and unpaid interest on the Loans prepaid
and shall be subject to Section 2.11.
Section 2.9 Default Rate. If any payment of principal or interest on any Loan,
or payment of any other Obligation, is not made when due (whether by
acceleration or otherwise), such principal, interest or other Obligation shall
bear interest (computed on the basis of a year of 360 days and actual days
elapsed or, if based on the rate described in clause (i) of the definition of
Base Rate, on the basis of a year of 365 or 366 days, as applicable, and the
actual number of days elapsed) from the date such payment was due until paid in
full, payable on demand, at a rate per annum equal to:
(a) for any Obligation other than a Eurodollar Loan (including principal
and interest relating to Base Rate Loans and interest on Eurodollar
Loans), the sum of two percent (2%) plus the Applicable Margin plus the
Base Rate from time to time in effect; and
22
(b) for the principal of any Eurodollar Loan, the sum of two percent (2%)
plus the rate of interest in effect thereon at the time of such default
until the end of the Interest Period applicable thereto and,
thereafter, at a rate per annum equal to the sum of two percent (2%)
plus the Applicable Margin plus the Base Rate from time to time in
effect.
Section 2.10 The Notes. (a) The Loans made to Borrower by each Bank shall be
evidenced by a single promissory note of Borrower issued to such Bank in the
form of Exhibit A hereto. Each such promissory note is hereinafter referred to
as a "Note" and collectively such promissory notes are referred to as the
"Notes."
(a) Each Bank shall record on its books and records or on a schedule to its Note
the amount of each Loan advanced, continued, or converted by it, all payments of
principal and interest and the principal balance from time to time outstanding
thereon, the type of such Loan, and, for any Eurodollar Loan, the Interest
Period and the interest rate applicable thereto. The record thereof, whether
shown on such books and records of a Bank or on a schedule to any Note, shall be
prima facie evidence of the same; provided, however, that the failure of any
Bank to record any of the foregoing or any error in any such record shall not
limit or otherwise affect the obligation of Borrower to repay all Loans made
hereunder together with accrued interest thereon. At the request of any Bank and
upon such Bank tendering to Borrower the Note to be replaced, Borrower shall
furnish a new Note to such Bank to replace any outstanding Note, and at such
time the first notation appearing on a schedule on the reverse side of, or
attached to, such Note shall set forth the aggregate unpaid principal amount of
all Loans, if any, then outstanding thereon.
Section 2.11 Funding Indemnity. If any Bank shall incur any loss, cost or
expense (including, without limitation, any loss, cost or expense (excluding
loss of margin) incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by such Bank to fund or maintain any Eurodollar
Loan or the relending or reinvesting of such deposits or amounts paid or prepaid
to such Bank) as a result of:
(a) any payment (whether by acceleration or otherwise), prepayment or
conversion of a Eurodollar Loan on a date other than the last day of
its Interest Period,
(b) any failure (because of a failure to meet the conditions of Section 6
or otherwise) by Borrower to borrow or continue a Eurodollar Loan, or
to convert a Base Rate Loan into a Eurodollar Loan, on the date
specified in a notice given pursuant to Section 2.5(a) or established
pursuant to Section 2.5(c) hereof,
(c) any failure by Borrower to make any payment or prepayment of principal
on any Eurodollar Loan when due (whether by acceleration or otherwise),
or
(d) any acceleration of the maturity of a Eurodollar Loan as a result of
the occurrence of any Event of Default hereunder, then, upon the
demand of such Bank, Borrower shall pay to such Bank such amount as
will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to Borrower,
with a copy to the Administrative Agent, a certificate executed by an
officer of such Bank setting forth the amount of such loss, cost or
expense in reasonable detail (including an explanation of the basis
for and the computation of such loss, cost or
23
expense) and the amounts shown on such certificate if reasonably
calculated shall be prima facie evidence of the amount of such loss,
cost or expense.
Section 2.12 Commitments. (a) Borrower shall have the right at any time and from
time to time, upon five (5) Business Days' prior written notice to the
Administrative Agent, to terminate the Commitments without premium or penalty,
in whole or in part, any partial termination to be (i) in an amount not less
than $5,000,000 and integral multiples of $1,000,000 in excess thereof, and (ii)
allocated ratably among the Banks in proportion to their respective Percentages,
provided that the Commitments may not be reduced to an amount less than the sum
of the Loans and all L/C Obligations then outstanding. The Borrower shall have
the right at any time and from time to time, by notice to the Administrative
Agent, to terminate the L/C Commitment without premium or penalty, in whole or
in part, provided that the L/C Commitment may not be reduced to an amount less
than all L/C Obligations then outstanding. Any such termination of the L/C
Commitment shall not reduce the Commitments unless the Borrower elects to do so
in the manner provided in this Section 2.12. The Administrative Agent shall give
prompt notice to each Bank of any such termination of Commitments. Any
termination of Commitments pursuant to this Section 2.12 may not be reinstated.
(b) The Borrower and the Administrative Agent may from time to
time add additional financial institutions as parties to this Agreement or, with
the written consent of an existing Bank, increase the Commitment (including a
pro rata increase of the L/C Commitment) of such existing Bank (any such
financial institution or existing Bank which is increasing its commitment being
referred to as an "Added Bank") pursuant to documentation satisfactory to the
Borrower and the Administrative Agent and any such Added Bank shall for all
purposes be considered a Bank for purposes of this Agreement and the other
Credit Documents with a Commitment as set forth in such documentation. Any such
Added Bank shall on the date it is deemed a party to this Agreement purchase
from the other Banks its Percentage (or the increase in its Percentage, in the
case of an Added Bank which is an existing Bank) of the Loans outstanding and
shall be deemed to purchase pursuant to Section 2.2(d) a Participating Interest
in all Letters of Credit and Reimbursement Obligations outstanding on such date
to the extent of its Percentage (or the increase in its Percentage, in the case
of an Added Bank which is an existing Bank). Notwithstanding anything contained
in this Section 2.12(b) to the contrary, the aggregate amount of Commitments may
not at any time exceed $200,000,000 without the consent of the Required Banks.
SECTION 3 FEES.
Section 3.1 Fees.
(a) Facility Fee. From and after the Effective Date, Borrower shall pay to the
Administrative Agent for the ratable account of the Banks in accordance with
their Percentages a facility fee accruing at a rate per annum equal to the
Facility Fee Rate on the average daily amount of the Commitments (whether used
or unused), or if the Commitments have expired or terminated, on the principal
amount of Loans and L/C Obligations then outstanding. Such facility fee is
payable in arrears on the last Business Day of each calendar quarter and on the
Termination Date, and if the Commitments are terminated in whole prior to the
Termination
24
Date, the fee for the period to but not including the date of such
termination shall be paid in whole on the date of such termination.
(b) Letter of Credit Fees.
(i) Borrower shall pay to the Administrative Agent for the account of each
Bank letter of credit fees with respect to the Letters of Credit at a
rate per annum equal to the L/C Fee Rate on the average daily maximum
face amount of outstanding Letters of Credit (including any Letters of
Credit outstanding after the termination of the Commitments), computed
on a quarterly basis in arrears on the last Business Day of each
calendar quarter and on the Termination Date.
(ii) Borrower shall pay to the Administrative Agent for the benefit of each
Issuing Agent, as issuer of each Letter of Credit issued by such
Issuing Agent, for the sole account of such Issuing Agent, a letter of
credit fronting fee for each outstanding Letter of Credit issued by
such Issuing Agent at the rate per annum equal to 0.125% on the average
daily maximum face amount of outstanding Letters of Credit (including
any Letters of Credit outstanding after the termination of the
Commitments), computed on the last Business Day of each calendar
quarter and on the Termination Date.
(iii) The letter of credit fees payable under Section 3.1(b)(i) and the
fronting fees payable under Section 3.1(b)(ii) shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter
during which Letters of Credit are outstanding, commencing on the first
such quarterly date to occur after the Effective Date, and on the
Termination Date, and if the Commitments are terminated in whole on an
earlier date, the fee for the period to but not including the date of
such termination shall be paid in whole on the date of such
termination.
(iv) Borrower shall pay to each the Issuing Agent from time to time on
demand the normal issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such Issuing
Agent relating to letters of credit as from time to time in effect.
(c) Utilization Fee. From and after the Effective Date, for any day on which (i)
the aggregate principal amount of Total Loans and L/C Obligations then
outstanding exceeds thirty three percent (33%) of the Total Commitments then in
effect or (ii) the Commitments have been terminated by the Administrative Agent
or the Lenders in accordance with this Agreement, Borrower shall pay to the
Administrative Agent for the ratable account of the Banks in accordance with
their Percentages a utilization fee accruing at a rate per annum equal to the
Utilization Fee Rate on the aggregate amount of Total Loans and L/C Obligations
outstanding on such date. Such fee is payable in arrears on the last Business
Day of each calendar quarter and on the Termination Date, and if the Commitments
are terminated in whole prior to the Termination Date, the fee for the period to
but not including the date of such termination shall be paid in whole on the
date of such termination. The utilization fee payable pursuant to this Section
3.2(c) shall be one and the same, and not in addition to, the utilization fee
payable by the Borrower under the 364-Day Credit Agreement and shall be divided
among this Agreement and the 364-Day Credit Agreement pro rata based on the
percentage which the amount of Loans and
25
L/C Obligations outstanding under this Agreement on the date such fee
accrued comprises of the aggregate amount of Total Loans and L/C Obligations
outstanding on such date.
(d) Arranger Fees. Borrower shall pay to the Arrangers for the sole account
of the Arrangers the fees agreed to between the Arrangers and Borrower in the
Fee Letter or as otherwise agreed in writing among them.
(e) Fee Calculations. All fees payable under this Agreement shall be payable in
U.S. Dollars and shall be computed on the basis of a year of 360 days, for the
actual number of days elapsed. All determinations of the amount of fees owing
hereunder (and the components thereof) shall be made by the Administrative Agent
and shall be prima facie evidence of the amount of such fee.
SECTION 4 PLACE AND APPLICATION OF PAYMENTS.
Section 4.1 Place and Application of Payments. All payments of principal of and
interest on the Loans, and of all other Obligations and other amounts payable by
Borrower under the Credit Documents, shall be made by Borrower in U.S. Dollars
to the Administrative Agent or the applicable Issuing Agent if such payment is
being made with respect to a Reimbursement Obligation, by no later than 2:00
p.m. (New York time) on the due date thereof at the principal office of the
Administrative Agent or the applicable Issuing Agent, as applicable, in New
York, New York pursuant to the payment instructions set forth on Part A of
Schedule 4 hereof (or such other location in the, United States as the
Administrative Agent or the applicable Issuing Agent, as applicable, may
designate to Borrower) or, if such payment is on a Reimbursement Obligation, no
later than provided by Section 2.2(c) hereof, in each case for the benefit of
the Person or Persons entitled thereto. Any payments received after such time
shall be deemed to have been received by the Administrative Agent or the Issuing
Agent on the next Business Day. All such payments shall be made free and clear
of, and without deduction for, any set-off, defense, counterclaim, levy, or any
other deduction of any kind in immediately available funds at the place of
payment. The Administrative Agent or the applicable Issuing Agent, as
applicable, will promptly thereafter cause to be distributed like funds relating
to the payment of principal or interest on Loans or applicable fees ratably to
the Banks and like funds relating to the payment of any other amount payable to
any Person to such Person, in each case to be applied in accordance with the
terms of this Agreement.
SECTION 5 REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to each Bank as to itself
and, where the following representations and warranties apply to its
Subsidiaries, as to each Subsidiary of Borrower, as follows:
Section 5.1 Corporate Organization and Authority. Borrower is duly organized and
existing in good standing under the laws of the state of South Dakota; has all
necessary corporate power to carry on its present business; and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business transacted by it or the nature of the Property owned or leased by
it makes such licensing, qualification or good standing necessary and in which
the failure to be so licensed, qualified or in good standing would have a
Material Adverse Effect.
26
Section 5.2 Subsidiaries. Schedule 5.2 (as updated from time to time pursuant to
Section 7.1) hereto identifies each Subsidiary of Borrower, the jurisdiction of
incorporation, the percentage of issued and outstanding shares of each class of
its capital stock owned by the Borrower and its Subsidiaries and, if such
percentage is not one hundred percent (100%) (excluding directors' qualifying
shares as required by law), a description of each class of its authorized
capital stock and the number of shares of each class issued and outstanding.
Each Subsidiary is duly incorporated and existing in good standing as a
corporation under the laws of the jurisdiction of its incorporation, has all
necessary corporate power to carry on its present business, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business transacted by it or the nature of the Property owned or leased by
it makes such licensing or qualification necessary and in which the failure to
be so licensed or qualified would have a Material Adverse Effect. All of the
issued and outstanding shares of capital stock of each Subsidiary owned directly
or indirectly by Borrower are validly issued and outstanding and fully paid and
nonassessable except as set forth on Schedule 5.2 hereto. All such shares owned
by Borrower are owned beneficially, and of record, free of any Lien, except as
permitted in Section 7.9.
Section 5.3 Corporate Authority and Validity of Obligations. Borrower has full
right and authority to enter into this Agreement and the other Credit Documents
to which it is a party, to make the borrowings herein provided for, to issue its
Notes in evidence thereof, to apply (and to have applied) for the issuance of
the Letters of Credit, and to perform all of its obligations under the Credit
Documents to which it is a party. Each Credit Document to which it is a party
has been duly authorized, executed and delivered by Borrower and constitutes
valid and binding obligations of Borrower enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of
creditors' rights generally and by equitable principles of general applicability
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). No Credit Document, nor the performance or observance by
Borrower of any of the matters or things therein provided for, contravenes any
provision of law or any charter or by-law provision of Borrower or any material
Contractual Obligation of or affecting Borrower or any of Borrower's Properties
or results in or requires the creation or imposition of any Lien on any of the
Properties or revenues of Borrower.
Section 5.4 Financial Statements. All financial statements heretofore delivered
to the Banks showing historical performance of Borrower for Borrower's fiscal
years ending on or before December 31, 2000, have been prepared in accordance
generally accepted accounting principles applied on a basis consistent, except
as otherwise noted therein, with that of the previous fiscal year. The unaudited
financial statements for the fiscal period ended June 30, 2001 have been
prepared in accordance generally accepted accounting principles applicable to
interim financial statements applied on a basis consistent, except as otherwise
noted therein, with the previous same fiscal period of Borrower in the prior
fiscal year (subject to normal year-end adjustments). Each of such financial
statements fairly presents on a consolidated basis the financial condition of
Borrower and its Subsidiaries as of the dates thereof and the results of
operations for the periods covered thereby. Borrower and its Subsidiaries have
no material contingent liabilities other than those disclosed in such financial
statements referred to in this Section 5.4 or in comments or footnotes thereto,
or in any report supplementary thereto, heretofore furnished to the Banks. Since
December 31, 2000, there has been no event or series
27
of events which has resulted in, or reasonably could be expected to result
in, a Material Adverse Effect.
Section 5.5 No Litigation; No Labor Controversies.(a) Except as set forth on
Schedule 5.5, there is no litigation or governmental proceeding pending, or to
the knowledge of Borrower, threatened, against Borrower or any Subsidiary of
Borrower in which there is a reasonable possibility of an adverse decision
which, if adversely determined, could (individually or in the aggregate) have a
Material Adverse Effect.
(b) Except as set forth on Schedule 5.5, there are no labor controversies
pending or, to the best knowledge of Borrower, threatened against Borrower or
any Subsidiary of Borrower which could (individually or in the aggregate) have a
Material Adverse Effect.
Section 5.6 Taxes. Borrower and its Subsidiaries have filed all United States
federal tax returns, and all other foreign, state, local and other tax returns,
required to be filed and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by Borrower or any Subsidiary of Borrower,
except such taxes, if any, as are being contested in good faith and for which
adequate reserves have been provided. No notices of tax liens have been filed
and no claims are being asserted concerning any such taxes, which liens or
claims are material to the financial condition of Borrower or any of its
Subsidiaries (individually or in the aggregate). The charges, accruals and
reserves on the books of Borrower and its Subsidiaries for any taxes or other
governmental charges are adequate and in conformance with GAAP.
Section 5.7 Approvals. No authorization, consent, approval, license, exemption,
filing or registration with any court or governmental department, agency or
instrumentality, nor any approval or consent of the stockholders of Borrower or
any Subsidiary of Borrower or from any other Person, is necessary to the valid
execution, delivery or performance by Borrower or any Subsidiary of Borrower of
any Credit Document to which it is a party.
Section 5.8 ERISA. With respect to each Plan, Borrower and each other member of
the Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and with the Code
to the extent applicable to it and has not incurred any liability to the Pension
Benefit Guaranty Corporation ("PBGC") or a Plan under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA. Neither
Borrower nor any Subsidiary of Borrower has any contingent liabilities for any
post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
Section 5.9 Government Regulation. Neither Borrower nor any Subsidiary of
Borrower is an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or a "registered holding company", or a "Subsidiary
company" of a "registered holding company", or an "affiliate" of a "registered
holding company" or of a "Subsidiary company" of a "registered holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
Section 5.10 Margin Stock; Use of Proceeds. Neither Borrower nor any Subsidiary
of Borrower is engaged principally, or as one of its primary activities, in the
business of extending
28
credit for the purpose of purchasing or carrying margin stock ("margin
stock" to have the same meaning herein as in Regulation U of the Board of
Governors of the Federal Reserve System). The proceeds of the Loans and Letters
of Credit are to be used solely (i) to provide liquidity support for Borrower's
commercial paper program, (ii) to fund Borrower's working capital needs, and
(iii) for general corporate purposes of Borrower. Borrower will not use the
proceeds of any Loan or Letter of Credit in a manner that violates any provision
of Regulation U or X of the Board of Governors of the Federal Reserve System.
Section 5.11 Licenses and Authorizations; Compliance with Laws. (a) (a) Borrower
and each of its Subsidiaries has all necessary licenses, permits and
governmental authorizations to own and operate its Properties and to carry on
its business as currently conducted and contemplated. Borrower and each of its
Subsidiaries is in compliance with all applicable laws, regulations, ordinances
and orders of any governmental or judicial authorities except for any such law,
regulation, ordinance or order which, the failure to comply therewith, could not
reasonably expected to have a Material Adverse Effect.
(a) In the ordinary course of its business, Borrower and each of its
Subsidiaries conduct an ongoing review of the effect of Environmental and Health
Laws on the Properties and all aspects of the business and operations of such
Borrower and its Subsidiaries in the course of which such Borrower identifies
and evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
Properties currently or previously owned, any capital or operating expenditures
required to achieve or maintain compliance with standards imposed by law and any
actual or potential liabilities to third parties, including employees or
governmental entities, and any related costs and expenses). On the basis of this
review, Borrower has reasonably concluded that Environmental and Health Laws are
unlikely to have any Material Adverse Effect.
(b) Except as set forth on Schedule 5.11 (as amended from time to time in
accordance with the provisions hereof), neither the Borrower nor any Subsidiary
of Borrower has given, nor is it required to give, nor has it received, any
notice, letter, citation, order, warning, complaint, inquiry, claim or demand to
or from any governmental entity or in connection with any court proceeding which
could reasonably have a Material Adverse Effect claiming that: (i) Borrower or
any Subsidiary of Borrower has violated, or is about to violate, any
Environmental and Health Law; (ii) there has been a release, or there is a
threat of release, of Hazardous Materials from Borrower's or any of its
Subsidiary's Property, facilities, equipment or vehicles; (iii) Borrower or any
of its Subsidiary may be or is liable, in whole or in part, for the costs of
cleaning up, remediating or responding to a release of Hazardous Materials; or
(iv) any of Borrower's or any of its Subsidiary's Property or assets are subject
to a Lien in favor of any governmental entity for any liability, costs or
damages, under any Environmental and Health Law arising from, or costs incurred
by such governmental entity in response to, a release of a Hazardous Materials.
Section 5.12 Ownership of Property; Liens. Borrower and each Subsidiary of
Borrower has good title to or valid leasehold interests in all its Property.
None of Borrower's or any Subsidiary's Property is subject to any Lien, except
as permitted in Section 7.9.
Section 5.13 No Burdensome Restrictions; Compliance with Agreements. Neither
Borrower nor any Subsidiary of Borrower is (a) party or subject to any law,
regulation, rule or
29
order, or any Contractual Obligation, that (individually or in the
aggregate) materially adversely affects the business, operations, Property or
financial or other condition of Borrower and its Subsidiaries (individually or
in the aggregate) or (b) in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement to which it is a party (including any Contractual Obligation), which
default could materially adversely affects the business, operations, Property or
financial or other condition of Borrower and its Subsidiaries (individually or
in the aggregate).
Section 5.14 Full Disclosure. All information heretofore furnished by Borrower
to the Administrative Agent or any Bank for purposes of or in connection with
the Credit Documents or any transaction contemplated thereby is, and all such
information hereafter furnished by Borrower to the Administrative Agent or any
Bank will be, true and accurate in all material respects and not misleading.
Section 5.15 Solvency. Borrower and each of its Subsidiaries, individually
and on a consolidated basis, is Solvent.
SECTION 6 CONDITIONS PRECEDENT.
The obligation of each Bank to effect a Borrowing, or of an Issuing
Agent to issue, extend the expiration date of or increase the amount of any
Letter of Credit, shall be subject to the following conditions precedent:
Section 6.1 Initial Credit Event. Before or concurrently with the initial
Credit Event:
(a) The Administrative Agent shall have received for each Bank the
favorable written opinion of (i) Morgan, Lewis & Bockius LLP, counsel
to Borrower, and (ii) General Counsel to the Borrower;
(b) The Administrative Agent shall have received for each Bank copies of
Borrower's (i) Articles of Incorporation, together with all amendments
and (ii) bylaws (or comparable constituent documents) and any
amendments thereto, certified in each instance by its Secretary or an
Assistant Secretary;
(c) The Administrative Agent shall have received for each Bank copies of
resolutions of Borrower's Board of Directors authorizing the execution
and delivery of the Credit Documents and the consummation of the
transactions contemplated thereby together with specimen signatures of
the persons authorized to execute such documents on such Borrower's
behalf, all certified in each instance by its Secretary or Assistant
Secretary;
(d) The Administrative Agent shall have received for each Bank such Bank's
duly executed Note of Borrower dated the date hereof and otherwise in
compliance with the provisions of Section 2.10(a) hereof;
(e) The Administrative Agent shall have received for each Bank a duly
executed original of (i) this Agreement, and (ii) a list of Borrower's
Authorized Representatives;
30
(f) All legal matters incident to the execution and delivery of both the
Credit Documents and the 364 Day Credit Documents shall be satisfactory
to the Banks;
(g) The Administrative Agent shall have received a duly executed original
of the Fee Letter;
(h) The Administrative Agent shall have received a duly executed Compliance
Certificate containing financial information as of June 30, 2001;
(i) With the exception of the $140,000,000 Wygen synthetic lease
transaction and the Guaranty issued in connection with the TLS
Investors acquisition pursuant to which the Borrower has provided a
Guaranty in the amount of $15,000,000, neither Borrower nor any of its
Subsidiaries shall have, during the period from May 7, 2001 to the
Effective Date, issued, incurred, assumed, created, become liable for,
contingently or otherwise, any material Indebtedness;
(j) The Borrower shall have provided a certificate stating that (i) the US
Bank Credit Agreements, the Wells Fargo Credit Agreement, and the ABN
AMRO Credit Agreement have been terminated, or will be terminated
concurrently with the first Borrowing of Loans hereunder, and (ii) the
conditions set forth precedent set forth in this Section 6.1 have been
satisfied; and
(k) The Administrative Agent shall have received such other documents
and information as it may reasonably request.
Section 6.2 All Credit Events. As of the time of each Credit Event
hereunder:
(a) In the case of a Borrowing, the Administrative Agent shall have
received the notice required by Section 2.5 hereof, in the case of the
issuance of any Letter of Credit, the applicable Issuing Agent shall
have received the request for such Letter of Credit required by Section
2.2(b) and a duly completed Application for a Letter of Credit and, in
the case of an extension or increase in the amount of a Letter of
Credit, the applicable Issuing Agent shall have received a written
request therefor, in a form acceptable to such Issuing Agent;
(b) Each of the representations and warranties set forth in Section 5
hereof shall be and remain true and correct in all material respects as
of said time, except that if any such representation or warranty
relates solely to an earlier date it need only remain true as of such
date; and
(c) Borrower shall be in full compliance with all of the terms and
conditions hereof, and no Default or Event of Default shall have
occurred and be continuing or would occur as a result of such Credit
Event.
Each request for a Credit Event shall be deemed to be a representation
and warranty by Borrower on the date of such Credit Event as to the facts
specified in paragraphs (b) and (c) of this Section 6.2.
SECTION 7 COVENANTS.
31
Borrower covenants and agrees that, so long as any Note, Loan or L/C
Obligation is outstanding hereunder, or any Commitment is available to or in use
by Borrower hereunder, except to the extent compliance in any case is waived in
writing by the Required Banks:
Section 7.1 Corporate Existence; Subsidiaries. Borrower shall, and shall cause
each of its Subsidiaries to, preserve and maintain its corporate existence,
subject to the provisions of Section 7.12 hereof. Together with any financial
statements delivered pursuant to Section 7.6 hereof, Borrower shall deliver an
updated Schedule 5.2 to reflect any changes from the existing Schedule 5.2.
Section 7.2 Maintenance. Borrower will maintain, preserve and keep its plants,
Properties and equipment necessary to the proper conduct of its business in
reasonably good repair, working order and condition and will from time to time
make all reasonably necessary repairs, renewals, replacements, additions and
betterments thereto so that at all times such plants, Properties and equipment
shall be reasonably preserved and maintained, and Borrower will cause each of
its Subsidiaries to do so in respect of Property owned or used by it; provided,
however, that nothing in this Section 7.2 shall prevent Borrower or a Subsidiary
of Borrower from discontinuing the operation or maintenance of any such
Properties if such discontinuance is not disadvantageous to the Banks or the
holders of the Notes, does not materially impair the operations of Borrower or
any Subsidiary of Borrower and is, in the judgment of Borrower, desirable in the
conduct of its business or the business of its Subsidiaries.
Section 7.3 Taxes. Borrower will duly pay and discharge, and will cause each of
its Subsidiaries duly to pay and discharge, all taxes, rates, assessments, fees
and governmental charges upon or against it or against its Properties, in each
case before the same becomes delinquent and before penalties accrue thereon,
unless and to the extent that the same is being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP have been provided
therefor on the books of Borrower.
Section 7.4 ERISA. Borrower will, and will cause each of its Subsidiaries to,
promptly pay and discharge all obligations and liabilities arising under ERISA
of a character which if unpaid or unperformed might result in the imposition of
a Lien against any of its properties or assets and will promptly notify the
Administrative Agent of (i) the occurrence of any reportable event (as defined
in ERISA) affecting a Plan, other than any such event of which the PBGC has
waived notice by regulation, (ii) receipt of any notice from PBGC of its
intention to seek termination of any Plan or appointment of a trustee therefor,
(iii) its or any of its Subsidiaries' intention to terminate or withdraw from
any Plan, and (iv) the occurrence of any event affecting any Plan which could
result in the incurrence by Borrower or any of its Subsidiaries of any material
liability, fine or penalty, or any material increase in the contingent liability
of Borrower or any of its Subsidiaries under any post-retirement Welfare Plan
benefit. The Administrative Agent will promptly distribute to each Bank any
notice it receives from Borrower pursuant to this Section 7.4.
Section 7.5 Insurance. Borrower will insure, and keep insured, and will cause
each of its Subsidiaries to insure, and keep insured, with good and responsible
insurance companies, all insurable Property owned by it of a character usually
insured by companies similarly situated and operating like Property. To the
extent usually insured by companies similarly situated and conducting similar
businesses, Borrower will also insure, and cause each of its Subsidiaries to
32
insure, employers' and public and product liability risks with good and
responsible insurance companies. Borrower will, upon request of any Bank,
furnish to such Bank a summary setting forth the nature and extent of the
insurance maintained pursuant to this Section 7.5.
Section 7.6 Financial Reports and Other Information. (a) (a) Borrower will
maintain a system of accounting in accordance with GAAP and will furnish to the
Banks and their respective duly authorized representatives such information
respecting the business and financial condition of Borrower and its Subsidiaries
as any Bank may reasonably request; and without any request, the Borrower shall
deliver to the Administrative Agent in form and detail satisfactory to the
Administrative Agent, with copies for each Bank in form and substance
satisfactory to them each of the following:
(i) within 120 days after the end of each fiscal year of Borrower, a copy of
Borrower financial statements for such fiscal year, including the
consolidated balance sheet of Borrower and its Subsidiaries for such year
and the related statements of income and statements of cash flow, each as
certified by independent public accountants of recognized national standing
selected by Borrower in accordance with GAAP with such accountants'
unqualified opinion to the effect that the financial statements have been
prepared in accordance with GAAP and present fairly in all material
respects in accordance with GAAP the consolidated financial position of
Borrower and its Subsidiaries as of the close of such fiscal year and the
results of their operations and cash flows for the fiscal year then ended
and that an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, such examination included such tests of the
accounting records and such other auditing procedures as were considered
necessary in the circumstances, provided that if Borrower files its annual
report on Form 10-K for the applicable annual period, and such annual
report contains the financial statements and accountants certifications,
opinions and statements described above, the Borrower may satisfy the
requirements of this Section 7.6(a)(i) by delivering a copy of such annual
report to each Bank. Together with such information the Borrower shall
provide to each Bank such consolidating information as may be necessary for
the Banks to determine the Borrower's compliance with Section 7.17 hereof;
(ii) within 60 days after the end of each of the first three quarterly fiscal
periods of Borrower, a consolidated unaudited balance sheet of Borrower and
its Subsidiaries, and the related statements of income and statements of
cash flow, as of the close of such period, all of the foregoing prepared by
Borrower in reasonable detail in accordance with GAAP and certified by
Borrower's chief financial officer or corporate controller as fairly
presenting the financial condition as at the dates thereof and the results
of operations for the periods covered thereby, provided that if Borrower
files a Form 10-Q for the applicable quarterly period, and such quarterly
report contains the financial statements and certifications described
above, the Borrower may satisfy the requirements of this Section 7.6(a)(ii)
by delivering a copy of such quarterly report to each Bank. Together with
such information the Borrower shall provide to each Bank such consolidating
information as may be necessary for the Banks to determine the Borrower's
compliance with Section 7.17 hereof;
33
(iii)within the period provided in subsection (i) above, the written statement
of the accountants who certified the audit report thereby required that in
the course of their audit they have obtained no knowledge of any Default or
Event of Default, or, if such accountants have obtained knowledge of any
such Default or Event of Default, they shall disclose in such statement the
nature and period of the existence thereof; and
(iv) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports Borrower or any of its
Subsidiaries sends to their shareholders, and copies of all other regular,
periodic and special reports and all registration statements Borrower or
any of its Subsidiaries file with the SEC or any successor thereto, or with
any national securities exchanges.
(b) Each financial statement furnished to the Banks pursuant to subsection (i)
or (ii) of this Section 7.6 shall be accompanied by (A) a written certificate
signed by Borrower's chief financial officer or corporate controller to the
effect that (i) no Default or Event of Default has occurred during the period
covered by such statements or, if any such Default or Event of Default has
occurred during such period, setting forth a description of such Default or
Event of Default and specifying the action, if any, taken by Borrower to remedy
the same, (ii) the representations and warranties contained in Section 5 hereof
are true and correct in all material respects as though made on the date of such
certificate (other than those made solely as of an earlier date, which need only
remain true as of such date), except as otherwise described therein, and (B) a
Compliance Certificate in the form of Exhibit B hereto showing Borrower's
compliance with the covenants set forth in Sections 7.9, 7.11, 7.12 and 7.14
through 7.19 hereof.
(c) Borrower will promptly (and in any event within three Business Days after an
officer of Borrower has knowledge thereof) give notice to the Administrative
Agent and each Bank:
(i) of the occurrence of any Default or Event of Default;
(ii) any event or condition which could reasonably be expected to have a
Material Adverse Effect;
(iii) of any litigation or governmental proceeding of the type described in
Section 5.5 hereof;
(iv) of any material change in the information set forth on the Schedules
hereto; and
(v) of the entering into of any Long-Term Guaranties, and Borrower shall
promptly provide the Administrative Agent with a copy of any such
Guarantee and any modification to such Guarantee.
Section 7.7 Bank Inspection Rights. For purposes of confirming compliance with
the Credit Documents or after the occurrence and during the continuance of an
Event of Default, upon reasonable notice from the Administrative Agent or the
Required Banks, Borrower will, at Borrower's expense, permit such Banks (and
such Persons as any Bank may designate) during normal business hours to visit
and inspect, under Borrower's guidance, any of the Properties of
34
Borrower or any of its Subsidiaries, to examine all of their books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers, employees and with their independent public
accountants (and by this provision Borrower authorizes such accountants to
discuss with the Banks (and such Persons as any Bank may designate) the finances
and affairs of Borrower and its Subsidiaries) all at such reasonable times and
as often as may be reasonably requested; provided, however, that except upon the
occurrence and during the continuation of any Default or Event of Default, not
more than one such visit and inspection may be conducted each calendar quarter.
Section 7.8 Conduct of Business. Neither Borrower nor any Subsidiary of Borrower
will engage in any line of business other than business activities in the field
of (i) cogeneration and related thermal uses, (ii) energy production, (iii)
energy development, (iv) energy recovery, (v) utility operation and management,
(vi) demand side management services, (vii) energy trading, (viii) management of
investment funds which invest in energy related businesses and investments in
such funds, (ix) hedging but not speculative activities relating to any of the
foregoing lines of business, (x) telecommunications, (xi) management and
operating services related to any of the foregoing lines of business, and (xii)
other businesses not described in the foregoing so long as the Investments and
expenses made in such other businesses does not exceed $20,000,000.
Section 7.9 Liens. Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, permit to exist or to be incurred any Lien of
any kind on any Property owned by the Borrower or any Subsidiary of Borrower;
provided, however, that this Section 7.9 shall not apply to or operate to
prevent:
(a) Liens arising by operation of law in respect of Property of Borrower or
any of its Subsidiaries which are incurred in the ordinary course of
business which do not in the aggregate materially detract from the
value of such Property or materially impair the use thereof in the
operation of the business of Borrower or any of its Subsidiaries;
(b) Liens securing Non-Recourse Indebtedness of any Subsidiary of Borrower,
provided that any such Lien is limited to the Property being financed
or refinanced by such Indebtedness and the stock (or similar equity
interest) of the Subsidiary which incurred such Non-Recourse
Indebtedness;
(c) Liens for taxes or assessments or other government charges or levies on
Borrower or any Subsidiary of Borrower or their respective Properties
which are being contested in good faith by appropriate proceedings and
for which reserves in conformity with GAAP have been provided on the
books of Borrower; provided that the aggregate amount of liabilities
(including interest and penalties, if any) of Borrower and its
Subsidiaries secured by such Liens shall not exceed $20,000,000 at any
one time outstanding;
(d) Liens arising out of judgments or awards against Borrower or any
Subsidiary of Borrower, or in connection with surety or appeal bonds
in connection with bonding such judgments or awards, the time for
appeal from which or petition for rehearing of which shall not have
expired or with respect to which such Borrower or such
35
Subsidiary shall be prosecuting an appeal or proceeding for review,
and with respect to which it shall have obtained a stay of execution
pending such appeal or proceeding for review; provided that the
aggregate amount of liabilities (including interest and penalties, if
any) of Borrower and its Subsidiaries secured by such Liens shall not
exceed $20,000,000 at any one time outstanding;
(e) Survey exceptions or encumbrances, easements or reservations, or rights
of others for rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real properties which are
necessary for the conduct of the activities of Borrower and any
Subsidiary of Borrower or which customarily exist on properties of
corporations engaged in similar activities and similarly situated and
which do not in any event materially impair their use in the operation
of the business of Borrower or any Subsidiary of Borrower;
(f) Liens existing on the date hereof and listed on Schedule 7.9 hereto;
(g) Liens securing (i) Indebtedness evidencing the deferred purchase
price of newly acquired property or incurred to finance the
acquisition of personal property of Borrower or a Subsidiary of
Borrower used in the ordinary course of business of Borrower or a
Subsidiary of Borrower, (ii) Capitalized Lease Obligations, and (iii)
the performance of tenders, statutory obligations, bids, leases or
other similar obligations (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on
performance bonds; provided, that such Liens shall only be permitted
to the extent the aggregate amount of Indebtedness and other
obligations secured by all such Liens does not exceed five percent
(5%) of Consolidated Assets as reflected on the most recent balance
sheet delivered by Borrower pursuant to Section 7.6;
(h) Liens in favor of carriers, warehousemen, mechanics, materialmen and
landlords granted in the ordinary course of business for amounts not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(i) Liens incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits;
(j) Liens relating to synthetic lease arrangements of Borrower or a
Subsidiary of Borrower, provided that (i) such Lien is limited to the
Property being leased, and (ii) to the extent the lessor or any other
Person has recourse to the Borrower, any Subsidiary or any of their
Property (other than the Property being so leased), through a Guarantee
(including a residual guarantee) or otherwise, such Lien shall be
permitted if Borrower has included the recourse portion of such
obligations as Indebtedness for all purposes (including financial
covenant calculations) under the Credit Documents;
(k) Liens on assets of the Marketing Subsidiaries granted in the ordinary
course of business securing the reimbursement obligations of Marketing
Subsidiaries with respect to letters of credit and any working capital
facility of the Marketing Subsidiaries so long as the holder of such
reimbursement obligation or provider of such
36
working capital facility has no recourse against Borrower or a
Consolidated Subsidiary of Borrower other than such Marketing
Subsidiary or any of their other assets (whether directly, through a
Guarantee or otherwise) other than pursuant to a Guarantee permitted
pursuant to Section 7.15(f);
(l) Liens securing Indebtedness issued pursuant to that certain Restated
and Amended Indenture of Mortgage and Deed of Trust dated as of
September 1, 1999 between Borrower and The Chase Manhattan Bank, as
trustee (and any successor trustee thereunder); and
(m) Any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to
in the foregoing paragraphs (a) through (j), inclusive, provided,
however, that the principal amount of Indebtedness secured thereby
shall not exceed the principal amount of Indebtedness so secured at the
time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to the Property
which was subject to the Lien so extended, renewed or replaced.
provided, that the foregoing paragraphs shall not be deemed under any
circumstance to permit a Lien to exist on any capital stock or other equity
interests of the Material Subsidiaries.
Section 7.10 Use of Proceeds; Regulation U. The proceeds of each Borrowing, and
the credit provided by Letters of Credit, will be used by Borrower solely (i) to
provide liquidity support for Borrower's commercial paper program, (ii) to fund
Borrower's working capital needs, and (iii) for general corporate purposes of
Borrower. Borrower will not use any part of the proceeds of any of the
Borrowings or of the Letters of Credit directly or indirectly to purchase or
carry any margin stock (as defined in Section 5.10 hereof) or to extend credit
to others for the purpose of purchasing or carrying any such margin stock.
Section 7.11 Sales and Leasebacks. Borrower will not, nor will it permit any of
its Subsidiaries to, enter into any arrangement with any bank, insurance company
or other lender or investor providing for the leasing by Borrower or any
Subsidiary of Borrower of any Property theretofore owned by it and which has
been or is to be sold or transferred by such owner to such lender or investor if
the total amount of rent and other obligations of the Borrower and its
Subsidiaries under such lease, when combined with all rent and other obligations
of Borrower and its Subsidiaries under all such leases, would exceed $30,000,000
in the aggregate, provided that Borrower and its Subsidiaries may engage in
synthetic lease transactions so long as the Borrower's or such Subsidiary's, as
applicable, obligations under such synthetic leases are included as Indebtedness
for all purposes (including financial covenant calculations) under the Credit
Documents.
Section 7.12 Mergers, Consolidations and Sales of Assets.
(a) Borrower will not, and will not permit any of its Material Subsidiaries to,
(i) consolidate with or be a party to merger with any other Person or (ii)
sell, lease or otherwise dispose of all or a "substantial part" of the
assets of Borrower and its Subsidiaries; provided, however, that (w) the
foregoing shall not prohibit any sale, lease, transfer or disposition to
which the Required Banks have consented, such consent not to
37
by unreasonably withheld if (A) such transaction does not result in a
downgrade of either Borrower's S&P Rating or Moody's Rating, (B) such
transaction is for cash consideration (or other consideration acceptable to
the Required Banks) in an amount not less than the fair market value of the
applicable assets, and (C) such transaction, when combined with all other
such transactions, would not have a Material Adverse Effect, taken as a
whole, (x) any Subsidiary of Borrower may merge or consolidate with or into
or sell, lease or otherwise convey all or a substantial part of its assets
to Borrower or any Subsidiary of which Borrower holds (directly or
indirectly) at least the same percentage equity ownership; provided that in
any such merger or consolidation involving Borrower, Borrower shall be the
surviving or continuing corporation, (y) Borrower and its Subsidiaries may
sell inventory, reserves and electricity in the ordinary course of
business, and (z) Borrower may enter into a merger with, or acquisition of
all of, another Person so long as:
(1) Borrower is the surviving entity,
(2) unless consented to by the Required Banks, no downgrade in the
Borrower's S&P Rating or Moody's Rating would occur as a result of the
consummation of such a transaction,
(3) if such transaction is an acquisition, the Board of Directors (or
similar governing body) of the Person being acquired has approved
being so acquired,
(4) no Default or Event of Default would has occurred and is continuing at
the time of, or would occur as a result of, such transaction.
As used in this Section 7.12(a), a sale, lease, transfer or disposition
of assets during any fiscal year shall be deemed to be of a "substantial part"
of the consolidated assets of Borrower and its Subsidiaries if the net book
value of such assets, when added to the net book value of all other assets sold,
leased, transferred or disposed of by the Borrower and its Subsidiaries
(excluding the Marketing Subsidiaries) during such fiscal year (other than
inventory, reserves and electricity in the ordinary course of business) exceeds
ten percent (10%) of the total assets of Borrower and its Consolidated
Subsidiaries, determined on a consolidated basis as of the last day of the
immediately preceding fiscal year.
(b) Except as permitted pursuant to Section 7.14 hereof, Borrower will not
sell, transfer or otherwise dispose of, or permit any of its
Subsidiaries to issue, sell, transfer or otherwise dispose of, any
shares of stock of any class (including as "stock" for purposes of this
Section, any warrants, rights or options to purchase or otherwise
acquire stock or other Securities exchangeable for or convertible into
stock) of any Subsidiary of Borrower, except to Borrower or a
Wholly-Owned Subsidiary of Borrower or except for the purpose of
qualifying directors.
Section 7.13 Use of Property and Facilities; Environmental and Health and
Safety Laws.
(a) Borrower will, and will cause each of its Subsidiaries to, comply in
all material respects with the requirements of all Environmental and
Health Laws applicable
38
to or pertaining to the Properties or business operations of Borrower
or any Subsidiary of Borrower. Without limiting the foregoing,
Borrower will not, and will not permit any Person to, except in
accordance with applicable law, dispose of any Hazardous Material
into, onto or upon any real property owned or operated by Borrower or
any of its Subsidiaries.
(b) Borrower will promptly provide the Banks with copies of any notice or
other instrument of the type described in Section 5.11(b) hereof, and
in no event later than five (5) Business Days after an officer of
Borrower or a Subsidiary of Borrower receives such notice or
instrument.
Section 7.14 Investments, Acquisitions, Loans, Advances and Guaranties. Borrower
will not, nor will it permit any Subsidiary of Borrower to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances to, any
other Person, or acquire all or any substantial part of the assets or business
of any other Person or division thereof, or be or become liable as endorser,
guarantor, surety or otherwise (such as liability as a general partner) for any
debt, obligation or undertaking of any other Person, or otherwise agree to
provide funds for payment of the obligations of another, or supply funds thereto
or invest therein or otherwise assure a creditor of another against loss, or
apply for or become liable to the issuer of a letter of credit which supports an
obligation of another, or subordinate any claim or demand it may have to the
claim or demand of any other Person (cumulatively, all of the foregoing
"Investments"); provided, however, that the foregoing provisions shall not apply
to nor operate to prevent:
(a) investments in direct obligations of the United States of America or of
any agency or instrumentality thereof whose obligations constitute full
faith and credit obligations of the United States of America provided
that any such obligation matures within one year from the date it is
acquired by Borrower or Subsidiary;
(b) investments in commercial paper rated P-1 by Moody's Investors
Services, Inc. or A-1 by Standard & Poor's Corporation maturing
within one year of its date of issuance;
(c) investments in certificates of deposit issued by any Bank or any United
States commercial bank having capital and surplus of not less than
$200,000,000 maturing within one year from the date of issuance thereof
or in banker's acceptances endorsed by any Bank or other such
commercial bank and maturing within six months of the date of
acceptance;
(d) investments in repurchase obligations with a term of not more than
seven (7) days for underlying securities of the types described in
subsection (a) above entered into with any bank meeting the
qualifications specified in subsection (c) above, provided all such
agreements require physical delivery of the securities securing such
repurchase agreement, except those delivered through the Federal
Reserve Book Entry System;
(e) investments in money market funds that invest solely, and which are
restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding
subsections (a), (b), (c) and (d) above;
39
(f) ownership of stock, obligations or securities received in settlement
of debts (created in the ordinary course of business) owing to
Borrower or any Subsidiary;
(g) endorsements of negotiable instruments for collection in the ordinary
course of business;
(h) loans and advances to employees in the ordinary course of business
for travel, relocation, and similar purposes;
(i) Investments (i) existing on the Effective Date in Subsidiaries of
Borrower, (ii) existing on the Effective Date and identified in
Schedule 7.14 hereof, or (iii) consisting of intercompany loans
permitted pursuant to Section 7.15(e);
(j) Investments constituting (i) accounts receivable arising, (ii) trade
debt granted, or (iii) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of
business;
(k) Investments in Persons other than Marketing Subsidiaries engaged in
lines of business related to the lines of business described in
Section 7.8 so long as (i) both before and after giving effect to such
Investment no Default of Event of Default shall have occurred and be
continuing, (ii) such Investments do not permit any creditor of such
Person recourse to Borrower or any other Subsidiary of Borrower or any
of their assets (other than the assets and/or the stock or similar
equity interest of such Person) and (iii) if such Investments are in
Persons engaged in the lines of business described in clause (xii) of
Section 7.8, such Investments and expenses in the aggregate do not
exceed $20,000,000 outstanding at any time;
(l) Guaranties, other than Long-Term Guaranties, so long as such
Indebtedness is permitted pursuant to Section 7.15;
(m) acquisitions permitted pursuant to Section 7.12(a);
(n) Investments constituting Long-Term Guaranties other than Long-Term
Guarantees of Indebtedness of the Marketing Subsidiaries;
(o) (i) Investments in Marketing Subsidiaries (other than Investments in
Marketing Subsidiaries consisting of Guaranties of Indebtedness of
Marketing Subsidiaries) existing on the Effective Date and listed on
Schedule 7.14 and (ii) Investments consisting of Guaranties of
Indebtedness of Marketing Subsidiaries in existence on the Effective
Date and Investments in Marketing Subsidiaries made after the
Effective Date (including through Guaranties (including Long-Term
Guaranties)) provided, that the aggregate amount of Investments
permitted by this clause (ii) when combined with the amount of
intercompany Indebtedness owing by Marketing Subsidiaries permitted
pursuant to Section 7.15(e)(iii) shall not in the aggregate exceed
$10,000,000 outstanding at any time (it being understood that any
increase in the value of any such Investment attributable to the
undistributed net earnings of the Marketing Subsidiaries shall not be
deemed a violation of this Section 7.14(o)); and
40
(p) Investments consisting of promissory notes issued in consideration for
the sale by the Borrower or a Subsidiary of a portion of the stock (or
similar equity interests) of a Subsidiary where (i) such note is
secured by the stock (or similar equity interest) sold, and (ii) one of
the purposes of such sale is to ensure that such Subsidiary qualifies
as a "qualifying facility" under the Public Utility Regulatory Policies
Act of 1978, as amended
Any Investment which when made complies with the requirements of
paragraphs (a) through (e) may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements;
In determining the amount of investments, acquisitions, loans, advances
and guarantees permitted under this Section 7.14, investments and acquisitions
shall always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guarantees shall be taken at
the amount of obligations guaranteed thereby.
Section 7.15 Restrictions on Indebtedness. Borrower will not, nor will it permit
any Subsidiary of Borrower to, issue, incur, assume, create, become liable for,
contingently or otherwise, or have outstanding any Indebtedness; provided,
however, that the foregoing provisions shall not restrict nor operate to prevent
the following Indebtedness, so long as the incurrence and maintenance of such
Indebtedness would not cause the Borrower to be in violation of Section 7.17
hereof if compliance with such covenant were measured on the date of the
incurrence of such Indebtedness:
(a) the Obligations;
(b) Non-Recourse Indebtedness of any Project Finance Subsidiary;
(c) secured Indebtedness (excluding Indebtedness of the type described in
(e), (f), and (g) below but including the pledge of stock or similar
equity interest of any Project Finance Subsidiary or any Subsidiary
which is a special purpose entity whose sole purpose is to own the
stock or similar equity interest of a Project Finance Subsidiary) (A)
set forth on Schedule 7.15(b) hereto, and (B) (i) of BHP, (ii)
evidencing the deferred purchase price of newly acquired property or
incurred to finance the acquisition of personal property of the
Borrower or a Subsidiary of the Borrower used in the ordinary course
of business of the Borrower or Subsidiary, (iii) constituting
Capitalized Lease Obligations or with respect to synthetic (or similar
type) lease arrangements, or (iv) incurred in connection with the
performance of tenders, statutory obligations, bids, leases or other
similar obligations (other than for borrowed money) entered into in
the ordinary course of business or to secure obligations on
performance bonds; provided, that the aggregate amount of Indebtedness
permitted by this clause (B) at any time outstanding shall not exceed
5% of Consolidated Assets as reflected on the most recent balance
sheet delivered by the Borrower pursuant to Section 7.6, provided that
Borrower shall promptly provide the Administrative Agent with a copy
of any documentation evidencing such Indebtedness in excess of
$25,000,000 and any modification to such Indebtedness;
41
(d) other Indebtedness (excluding Indebtedness of the type described in
(e), (f), and (g) below) which is unsecured and either junior in right
of payment to the Obligations or pari passu to the Obligations or is
equally and ratably secured with the Obligations, provided that
Borrower shall promptly provide the Administrative Agent with a copy of
any documentation evidencing such Indebtedness in excess of $25,000,000
and any modification to such Indebtedness;
(e) intercompany loans (i) from (x) Subsidiary to Borrower so long as such
loans are subordinated to the Obligations on terms reasonably
satisfactory to the Administrative Agent, and (y) Borrower to a
Subsidiary of Borrower, (ii) among Wholly-Owned Subsidiaries, and
(iii) from a Subsidiary of Borrower to a Marketing Subsidiary, so long
as the aggregate amount of such loans from time to time owing by the
Marketing Subsidiaries does not exceed the difference between (I)
$10,000,000, less (II) the sum of (A) the aggregate amount of
Guaranties outstanding pursuant to Section 7.15(f), and (B) the
aggregate amount of other Investments then made in the Marketing
Subsidiaries pursuant to Section 7.14(o)(ii) (it being understood that
to the extent such limit is exceeded solely as a result of an increase
in the value of any such Investment attributable to the undistributed
net earnings of the Marketing Subsidiaries, it shall not be deemed a
violation of this Section 7.15(e));
(f) Indebtedness consisting of Guaranties of the Indebtedness of the
Marketing Subsidiaries (including Long-Term Guaranties), provided that
such Indebtedness shall only be permitted to the extent the aggregate
amount of such Indebtedness, when added to the sum of (i) the
aggregate amount of all intercompany loans made to the Marketing
Subsidiaries pursuant to Section 7.15(e), plus (ii) the aggregate
amount of all other Investments made in Marketing Subsidiaries
pursuant to Section 7.14(o)(ii), does not exceed $10,000,000 (it being
understood that to the extent such limit is exceeded solely as a
result of an increase in the value of any such Investment attributable
to the undistributed net earnings of the Marketing Subsidiaries, it
shall not be deemed a violation of this Section 7.15(f)) provided,
further that Borrower shall promptly provide the Administrative Agent
with a copy of any such -------- ------- Guarantee and any
modification to such Guarantee;
(g) Indebtedness of the Marketing Subsidiaries under Marketing Subsidiary
Excluded Credit Facilities in an aggregate amount not to exceed the
Marketing Subsidiary Indebtedness Limit;
(h) Permitted Derivative Obligations; and
(i) Indebtedness pursuant to Long-Term Guaranties (other than Long-Term
Guaranties of Indebtedness of Marketing Subsidiaries).
Indebtedness shall only be permitted under (e), (f), (h), and (i) above
to the extent such Indebtedness will have a priority of payment with the
Obligations which is no greater than pari passu.
Section 7.16 Consolidated Net Worth. Borrower will at the end of each fiscal
quarter maintain Consolidated Net Worth in an amount of not less than the sum of
(i) $375,000,000 and
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(ii) fifty percent (50%) of the aggregate Consolidated Net Income, if positive,
for the period beginning June 30, 2001 and ending on the last day of such fiscal
quarter.
Section 7.17 Recourse Leverage Ratio. Borrower will not at the end of any
fiscal quarter permit the Recourse Leverage Ratio to exceed 0.65 to 1.00.
Section 7.18 Interest Coverage Ratio. Borrower will maintain an Interest
Coverage Ratio of not less than 3.00 to 1.00, as determined at the end of each
fiscal quarter.
Section 7.19 Dividends and Other Shareholder Distributions. (a) (a) Borrower
shall not (i) declare or pay any dividends or make a distribution of any kind
(including by redemption or purchase) on or relating to its outstanding capital
stock, or (ii) repay (directly, through sinking fund payments or otherwise) any
Indebtedness or other obligations owing to a shareholder unless in either
circumstance no Default or Event of Default exists prior to or would result
after giving effect to such action.
(b) Except (i) as set forth on Schedule 7.19 and (ii) in connection with
Non-Recourse Indebtedness of a Project Finance Subsidiary, Borrower will not,
and will not permit any of its Subsidiaries, directly or indirectly to create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to:
(1) pay dividends or make any other distribution on any of such Subsidiary's
capital stock owned by Borrower or any Subsidiary of Borrower; (2) pay any
Indebtedness owed to Borrower or any other Subsidiary; (3) make loans or
advances to Borrower or any other Subsidiary; or (4) transfer any of its
property or assets to Borrower or any other Subsidiary.
Section 7.20 No Negative Pledge. Except (i) as set forth on Schedule 7.19 and
(ii) in connection with Non-Recourse Indebtedness of a Project Finance
Subsidiary, the Borrower will not, and will not permit any of its Subsidiaries
(other than Project Finance Subsidiaries), directly or indirectly to enter into
or assume any agreement (other than customary non-assignment and no sub-letting
provisions in leases consistent with Borrower's past practices and the Credit
Documents and, solely with respect to the asset so financed, Capitalized Leases,
to the extent such Indebtedness is permitted herein) prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired.
Section 7.21 Transactions with Affiliates. Borrower will not, and will not
permit any of its Subsidiaries to, enter into or be a party to any material
transaction or arrangement with any Affiliate of such Person (other than
Borrower), including without limitation, the purchase from, sale to or exchange
of Property with, any merger or consolidation with or into, or the rendering of
any service by or for, any Affiliate, except in the ordinary course of and
pursuant to the reasonable requirements of Borrower's or such Subsidiary's
business and upon terms no less favorable to such Borrower or such Subsidiary
than could be obtained in a similar transaction involving a third-party.
Section 7.22 Compliance with Laws. Without limiting any of the other covenants
of Borrower in this Section 7, Borrower will, and will cause each of its
Subsidiaries to, conduct its business, and otherwise be, in compliance with all
applicable laws, regulations, ordinances and orders of any governmental or
judicial authorities; provided, however, that neither Borrower nor any
Subsidiary of Borrower shall be required to comply with any such law,
regulation, ordinance
44
or order if the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect.
Section 7.23 Pari-Passu. Borrower will at all times cause the Obligations to
rank at least pari passu with all other senior unsecured Indebtedness of
Borrower.
Section 7.24 Certain Subsidiaries. Unless pursuant to Indebtedness which is
authorized pursuant to this Agreement, Borrower will not, and the Subsidiaries
of Borrower will not, permit any creditor of a Marketing Subsidiary or a Project
Finance Subsidiary to have recourse to any Borrower or any Subsidiary of
Borrower or any of their assets (other than (i) the stock or similar equity
interest of the applicable Subsidiary and (ii) with respect to a Permitted
Derivative Obligation) other than recourse under Guaranties permitted pursuant
to Sections 7.15(f) and (i).
Section 7.25 Ratings. Borrower will obtain an S&P Rating within 90 days of the
Effective Date and will at all times this Agreement is in effect maintain a S&P
Rating (once obtained) and a Moody's Rating (or if one or both of such ratings
are unavailable, rating(s) from such other recognized national rating agency or
agencies as may be acceptable to the Administrative Agent and the Required
Banks).
SECTION 8 EVENTS OF DEFAULT AND REMEDIES.
Section 8.1 Events of Default. Any one or more of the following shall
constitute an Event of Default:
(a) (i) default in the payment when due of any fees, interest or of any
other Obligation not covered by clause (ii) below and such payment
default continues for three (3) days or (ii) default in the payment
when due of the principal amount of any Loan or of any Reimbursement
Obligation;
(b) default by Borrower or any Subsidiary in the observance or performance
of any covenant set forth in Section 7.1, Section 7.6(c), Section 7.9
through 7.12, Sections 7.14 through 7.21, 7.23, 7.24 and 7.25 hereof;
(c) default by Borrower or any Subsidiary in the observance or performance
of any provision hereof or of any other Credit Document not mentioned
in (a) or (b) above, which is not remedied within thirty (30) days
after notice thereof shall have been given to the Borrower by the
Administrative Agent;
(d) (i) failure to pay when due Indebtedness in an aggregate principal
amount of (x) $10,000,000 or more of Borrower or any Material
Subsidiary, or (ii) default shall occur under one or more indentures,
agreements or other instruments under which any Indebtedness of
Borrower or any of its Material Subsidiary in an aggregate principal
amount of $10,000,000 or more may be issued or created and such
default shall continue for a period of time sufficient to permit the
holder or beneficiary of such Indebtedness or a trustee therefor to
cause the acceleration of the maturity of any such Indebtedness or any
mandatory unscheduled prepayment, purchase or funding thereof, or
(iii) a default shall occur under the US Bank Credit Agreement or the
Wells Fargo Credit Agreement;
44
(e) any representation or warranty made herein or in any other Credit
Document by Borrower or any Subsidiary of Borrower, or in any statement
or certificate furnished pursuant hereto or pursuant to any other
Credit Document by Borrower or any Subsidiary of Borrower, or in
connection with any Credit Document, proves untrue in any material
respect as of the date of the issuance or making, or deemed making or
issuance, thereof;
(f) Borrower or any Material Subsidiary shall (i) fail to pay its
debts generally as they become due or admit in writing its inability
to pay its debts generally as they become due, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial
part of its Property, (iv) institute any proceeding seeking to have
entered against it an order for relief under the United States
Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations
of any such proceeding filed against it or any analogous action is
taken under any other applicable law relating to bankruptcy or
insolvency, (v) take any corporate action (such as the passage by its
board of directors of a resolution) in furtherance of any matter
described in parts (i)-(iv) above, or (vi) fail to contest in good
faith any appointment or proceeding described in Section 8.1(g)
hereof;
(g) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for Borrower or any Material Subsidiary, or
any substantial part of any of their Property, or a proceeding
described in Section 8.1(f)(iv) shall be instituted against Borrower or
any Material Subsidiary, and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of sixty
(60) days;
(h) Borrower or any Material Subsidiary shall fail within thirty (30) days
to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $10,000,000, which is not stayed on
appeal or otherwise being appropriately contested in good faith in a
manner that stays execution thereon;
(i) Borrower or any other member of the Controlled Group shall fail to
pay when due an amount or amounts which it shall have become liable,
to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $10,000,000 (collectively, a "Material Plan")
shall be filed under Title IV of ERISA by Borrower or any Subsidiary
of Borrower or any other member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause
a trustee to be appointed to administer any Material Plan or a
proceeding shall be instituted by a fiduciary of any Material Plan
against Borrower or any other member of the Controlled Group to
enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within thirty (30) days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be
terminated;
45
(j) Borrower or any Subsidiary of Borrower or any Person acting on behalf
of Borrower, a Subsidiary or any governmental authority challenges the
validity of any Credit Document or Borrower's or one of its
Subsidiary's obligations thereunder or any Credit Document ceases to be
in full force and effect or is modified other than in accordance with
the terms thereof and hereof;
(k) a Change of Control Event shall have occurred;
(l) Borrower shall for any reason cease to be wholly liable for the full
amount of the Obligations; or
(m) Borrower's S&P Rating (once obtained) ceases to be at least BBB- or its
Moody's Rating ceases to be at least Baa3.
Section 8.2 Non-Bankruptcy Defaults. When any Event of Default other than those
described in subsections (f) or (g) of Section 8.1 hereof has occurred and is
continuing, the Administrative Agent shall, if so directed by the Required
Banks, by written notice to Borrower: (a) terminate the remaining Commitments
and all other obligations of the Banks hereunder on the date stated in such
notice (which may be the date thereof); (b) declare the principal of and the
accrued interest on all outstanding Notes to be forthwith due and payable and
thereupon all outstanding Notes, including both principal and interest thereon,
and all other Obligations, shall be and become immediately due and payable
together with all other amounts payable under the Credit Documents without
further demand, presentment, protest or notice of any kind; and (c) demand that
Borrower immediately pay to the Administrative Agent, subject to Section 8.4,
the full amount then available for drawing under each or any Letter of Credit,
and Borrower agrees to immediately make such payment and acknowledge and agrees
that the Banks would not have an adequate remedy at law for failure by Borrower
to honor any such demand and that the Administrative Agent, for the benefit of
the Banks, shall have the right to require Borrower to specifically perform such
undertaking whether or not any drawings or other demands for payment have been
made under any Letter of Credit. The Administrative Agent, after giving notice
to Borrower pursuant to Section 8.1(c) or this Section 8.2, shall also promptly
send a copy of such notice to the other Banks, but the failure to do so shall
not impair or annul the effect of such notice.
Section 8.3 Bankruptcy Defaults. When any Event of Default described in
subsections (f) or (g) of Section 8.1 hereof has occurred and is continuing,
then all outstanding Notes, including both interest and principal thereon, and
all other Obligations shall immediately become due and payable together with all
other amounts payable under the Credit Documents without presentment, demand,
protest or notice of any kind, the obligation of the Banks to extend further
credit pursuant to any of the terms hereof shall immediately terminate and
Borrower shall immediately pay to the Administrative Agent, subject to Section
8.4, the full amount then available for drawing, under all outstanding Letters
of Credit, Borrower acknowledging that the Banks would not have an adequate
remedy at law for failure by Borrower to honor any such demand and that the
Banks, and the Administrative Agent on their behalf, shall have the right to
require Borrower to specifically perform such undertaking whether or not any
draws or other demands for payment have been made under any of the Letters of
Credit.
46
Section 8.4 Collateral for Outstanding Letters of Credit. (a) (a) If the payment
or prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 2.2(b), Section 2.8(b) or under
Section 8.2 or 8.3 above, Borrower shall forthwith pay the amount required to be
so prepaid, to be held by the Administrative Agent as provided in subsection (b)
below.
(b) All amounts prepaid pursuant to subsection (a) above shall be held by the
Administrative Agent in a separate collateral account (such account, and the
credit balances, properties and any investments from time to time held therein,
and any substitutions for such account, any certificate of deposit or other
instrument evidencing any of the foregoing and all proceeds of and earnings on
any of the foregoing being collectively called the "Account") as security for,
and for application by the Administrative Agent (to the extent available) to,
the reimbursement of any payment under any Letter of Credit then or thereafter
made by the Issuing Agents, and to the payment of the unpaid balance of any
Loans and all other Obligations. The Account shall be held in the name of and
subject to the exclusive dominion and control of the Administrative Agent for
the benefit of the Administrative Agent, the Issuing Agents and the Banks, and
Borrower hereby grants to the Administrative Agent, for the benefit of the
Administrative Agent, the Issuing Agents and the Banks, a security interest in
all of Borrower's rights, title and interest in and to the Account and all
property (including investment property) contained therein or credited thereto.
So long as no Default or Event of Default has occurred, if and when requested by
Borrower, the Administrative Agent shall invest funds held in the Account from
time to time in direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided, that the
Administrative Agent is irrevocably authorized to sell investments held in the
Account when and as required to make payments out of the Account for application
to amounts due and owing from Borrower to the Administrative Agent, the Issuing
Agents or Banks, and provided, further, that if a Default or Event of Default
has then occurred and is continuing, Borrower shall have no access to or right
to control the Account. If (i) Borrower shall have made payment of all such
obligations referred to in subsection (a) above, (ii) all relevant preference or
other disgorgement periods relating to the receipt of such payments have passed,
and (iii) no Letters of Credit, Commitments, Loans or other Obligations remain
outstanding hereunder, then the Administrative Agent shall repay to Borrower any
remaining amounts held in the Account.
Section 8.5 Expenses. Borrower agrees to pay to the Administrative Agent, the
Issuing Agents and each Bank, and any other holder of any Note outstanding
hereunder, all costs and expenses incurred or paid by the Administrative Agent,
the Issuing Agents or such Bank or any such holder, including attorneys' fees
(including allocable fees of in-house counsel) and court costs, in connection
with (i) any amendment or waiver to the Credit Documents requested by Borrower,
(ii) any Default or Event of Default by Borrower hereunder, or (iii) the
enforcement of any of the Credit Documents.
SECTION 9 CHANGE IN CIRCUMSTANCES.
Section 9.1 Change of Law. Notwithstanding any other provisions of this
Agreement or any Note, if at any time after the date hereof any change in
applicable law or regulation or in the interpretation thereof makes it unlawful
for any Bank to make or continue to maintain Eurodollar Loans or to perform its
obligations as contemplated hereby, such Bank shall promptly
47
give notice thereof to Borrower and such Bank's obligations to make or maintain
Eurodollar Loans under this Agreement shall terminate until it is no longer
unlawful for such Bank to make or maintain Eurodollar Loans. Borrower shall
prepay on demand the outstanding principal amount of any such affected
Eurodollar Loans, together with all interest accrued thereon at a rate per annum
equal to the interest rate applicable to such Loan; provided, however, subject
to all of the terms and conditions of this Agreement, Borrower may then elect to
borrow the principal amount of the affected Eurodollar Loans from such Bank by
means of Base Rate Loans from such Bank, which Base Rate Loans shall not be made
ratably by the Banks but only from such affected Bank.
Section 9.2 Unavailability of Deposits or Inability to Ascertain, or Inadequacy
of, LIBOR. If on or prior to the first day of any Interest Period for any
Borrowing of Eurodollar Loans:
(a) the Administrative Agent determines that deposits in U.S. Dollars (in
the applicable amounts) are not being offered to major banks in the
eurodollar interbank market for such Interest Period, or that by reason
of circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR, or
(b) Banks having more than 33% percent (33)% or more of the aggregate
amount of the Commitments reasonably determine and so advise the
Administrative Agent that LIBOR as reasonably determined by the
Administrative Agent will not adequately and fairly reflect the cost to
such Banks or Bank of funding their or its Eurodollar Loans or Loan for
such Interest Period,
then the Administrative Agent shall forthwith give notice thereof to Borrower
and the Banks, whereupon until the Administrative Agent notifies Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks or of the relevant Bank to make Eurodollar Loans shall
be suspended.
Section 9.3 Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending
Office) with any request or directive (whether or not having the force
of law but, if not having the force of law, compliance with which is
customary in the relevant jurisdiction) of any such authority, central
bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to any tax, duty or
other charge with respect to its Eurodollar Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligations owed to it or its obligation to make
Eurodollar Loans, issue a Letter of Credit, or to participate therein,
or shall change the basis of taxation of payments to any Bank (or its
Lending Office) of the principal of or interest on its Eurodollar
Loans, Letter(s) of Credit, or participations therein or any other
amounts due under this Agreement in respect of its Eurodollar Loans,
48
Letter(s) of Credit, or participations therein, any Reimbursement
Obligations owed to it, or its obligation to make Eurodollar Loans,
issue a Letter of Credit, or acquire participations therein (except
for changes in the rate of tax on the overall net income or profits of
such Bank or its Lending Office imposed by the jurisdiction in which
such Bank or its lending office is incorporated in which such Bank's
principal executive office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Eurodollar Loans any
such requirement included in an applicable Eurodollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Lending Office) or shall impose
on any Bank (or its Lending Office) or on the interbank market any
other condition affecting its Eurodollar Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligation owed to it, or its obligation to make
Eurodollar Loans, to issue a Letter of Credit, or to participate
therein; and the result of any of the foregoing is to increase the
cost to such Bank (or its Lending Office) of making or maintaining any
Eurodollar Loan, issuing or maintaining a Letter of Credit, or
participating therein, or to reduce the amount of any sum received or
receivable by such Bank (or its Lending Office) under this Agreement
or under its Notes with respect thereto, by an amount deemed by such
Bank to be material, then, within fifteen (15) days after demand by
such Bank (with a copy to the Administrative Agent), Borrower shall be
obligated to pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or reduction. In the
event any law, rule, regulation or interpretation described above is
revoked, declared invalid or inapplicable or is otherwise rescinded,
and as a result thereof a Bank is determined to be entitled to a
refund from the applicable authority for any amount or amounts which
were paid or reimbursed by Borrower to such Bank hereunder, such Bank
shall refund such amount or amounts to Borrower without interest.
(b) If, after the date hereof, any Bank or the Administrative Agent shall have
determined that the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein (including, without limitation, any
revision in the Final Risk-Based Capital Guidelines of the Board of Governors of
the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225,
Appendix A) or of the Office of the Comptroller of the Currency (12 CFR Part 3,
Appendix A), or in any other applicable capital rules heretofore adopted and
issued by any governmental authority), or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law but, if not having the
force of law, compliance with which is customary in the applicable jurisdiction)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital, or on the capital
of any corporation controlling such Bank, as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount deemed
49
by such Bank to be material, then from time to time, within fifteen (15) days
after demand by such Bank (with a copy to the Administrative Agent), Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank for such reduction.
(c) Each Bank that determines to seek compensation under this Section 9.3 shall
notify Borrower and the Administrative Agent of the circumstances that entitle
the Bank to such compensation pursuant to this Section 9.3 and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section 9.3 and setting forth the additional
amount or amounts to be paid to it hereunder submitted to Borrower and the
Administrative Agent by such Bank in good faith shall be prima facie evidence of
the amount of such compensation. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
Section 9.4 Lending Offices. Each Bank may, at its option, elect to make its
Loans hereunder at the branch, office or affiliate specified on the appropriate
signature page hereof or in the assignment agreement which any assignee bank
executes pursuant to Section 11.12 hereof (each a "Lending Office") for each
type of Loan available hereunder or at such other of its branches, offices or
affiliates as it may from time to time elect and designate in a written notice
to Borrower and the Administrative Agent, so long as such election does not
increase costs or other amounts payable by Borrower to such Bank hereunder.
Section 9.5 Discretion of Bank as to Manner of Funding. Notwithstanding any
other provision of this Agreement, each Bank 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, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually funded and
maintained each Eurodollar Loan through the purchase of deposits in the
eurodollar interbank market having a maturity corresponding to such Loan's
Interest Period and bearing an interest rate equal to LIBOR for such Interest
Period.
SECTION 10 THE AGENT.
Section 10.1 Appointment and Authorization of Administrative Agent. Each Bank
hereby appoints ABN AMRO Bank N.V. as the Administrative Agent under the Credit
Documents and hereby authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under the Credit
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto. The
Administrative Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the Credit Documents. The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Bank, the holder of
any Note or any other Person; and nothing in this Agreement or any other Credit
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein or
therein.
Section 10.2 Administrative Agent and its Affiliates. The Administrative Agent
shall have the same rights and powers under this Agreement and the other Credit
Documents as any
50
other Bank and may exercise or refrain from exercising the same as though it
were not the Administrative Agent, and the Administrative Agent and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with Borrower or any Affiliate of Borrower as if it were not
the Administrative Agent under the Credit Documents.
Section 10.3 Action by Administrative Agent. If the Administrative Agent
receives from Borrower a written notice of an Event of Default pursuant to
Section 7.6(c)(i) hereof, the Administrative Agent shall promptly give each of
the Banks written notice thereof. The obligations of the Administrative Agent
under the Credit Documents are only those expressly set forth therein. Without
limiting the generality of the foregoing, the Administrative Agent shall not be
required to take any action hereunder with respect to any Default or Event of
Default, except as expressly provided in Sections 8.2 and 8.3. In no event,
however, shall the Administrative Agent be required to take any action in
violation of applicable law or of any provision of any Credit Document, and the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder or under any other Credit Document unless it shall be
first indemnified to its reasonable satisfaction by the Banks against any and
all costs, expense, and liability which may be incurred by it by reason of
taking or continuing to take any such action. The Administrative Agent shall be
entitled to assume that no Default or Event of Default exists unless notified to
the contrary in writing by a Bank or Borrower. In all cases in which this
Agreement and the other Credit Documents do not require the Administrative Agent
to take certain actions, the Administrative Agent shall be fully justified in
using its discretion in failing to take or in taking any action hereunder and
thereunder.
Section 10.4 Consultation with Experts. The Administrative Agent may consult
with legal counsel, independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
Section 10.5 Liability of Administrative Agent; Credit Decision. Neither the
Administrative Agent nor any of its directors, officers, agents, or employees
shall be liable for any action taken or not taken by it in connection with the
Credit Documents (i) with the consent or at the request of the Required Banks or
(ii) in the absence of its own gross negligence or willful misconduct. Neither
the Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in connection with this
Agreement, any other Credit Document or any Credit Event; (ii) the performance
or observance of any of the covenants or agreements of Borrower or any other
party contained herein or in any other Credit Document; (iii) the satisfaction
of any condition specified in Section 6 hereof; or (iv) the validity,
effectiveness, genuineness, enforceability, perfection, value, worth or
collectibility hereof or of any other Credit Document or of any other documents
or writing furnished in connection with any Credit Document; and the
Administrative Agent makes no representation of any kind or character with
respect to any such matter mentioned in this sentence. The Administrative Agent
may execute any of its duties under any of the Credit Documents by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Banks, Borrower, or any other Person for the default or misconduct of any such
agents or attorneys-in-fact selected with reasonable care. The Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, other document or statement (whether written or oral)
51
believed by it to be genuine or to be sent by the proper party or parties. In
particular and without limiting any of the foregoing, the Administrative Agent
shall have no responsibility for confirming the accuracy of any Compliance
Certificate or other document or instrument received by it under the Credit
Documents. The Administrative Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with the
Administrative Agent signed by such payee in form satisfactory to the
Administrative Agent. Each Bank acknowledges that it has independently and
without reliance on the Administrative Agent or any other Bank, and based upon
such information, investigations and inquiries as it deems appropriate, made its
own credit analysis and decision to extend credit to Borrower in the manner set
forth in the Credit Documents. It shall be the responsibility of each Bank to
keep itself informed as to the creditworthiness of Borrower and any other
relevant Person, and the Administrative Agent shall have no liability to any
Bank with respect thereto.
Section 10.6 Indemnity. The Banks shall ratably, in accordance with their
respective Percentages, indemnify and hold the Administrative Agent, and its
directors, officers, employees, agents and representatives harmless from and
against any liabilities, losses, costs or expenses suffered or incurred by it
under any Credit Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent the
Administrative Agent is promptly reimbursed for the same by Borrower and except
to the extent that any event giving rise to a claim was caused by the gross
negligence or willful misconduct of the party seeking to be indemnified. The
obligations of the Banks under this Section 10.6 shall survive termination of
this Agreement.
Section 10.7 Resignation of Administrative Agent and Successor Administrative
Agent. The Administrative Agent may resign at any time by giving written notice
thereof to the Banks and Borrower. Upon any such resignation of the
Administrative Agent, the Required Banks shall have the right to appoint a
successor Administrative Agent with the consent of Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Banks, and
shall have accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be any Bank hereunder or any commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as the Administrative Agent hereunder, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring or removed Administrative Agent under
the Credit Documents, and the retiring Administrative Agent shall be discharged
from its duties and obligations thereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 10 and all protective provisions of the other Credit Documents shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent.
SECTION 11 MISCELLANEOUS.
Section 11.1 Withholding Taxes.
(a) Payments Free of Withholding. Subject to Section 11.1 (b) hereof, each
payment by Borrower under this Agreement or the other Credit Documents
shall be made without withholding for or on account of any present or
future taxes (other than overall
52
net income taxes on the recipient). If any such withholding is so required,
Borrower shall make the withholding, pay the amount withheld to the
appropriate governmental authority before penalties attach thereto or
interest accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by each Bank and
the Administrative Agent free and clear of such taxes (including such taxes
on such additional amount) is equal to the amount which that Bank or the
Administrative Agent (as the case may be) would have received had such
withholding not been made. If the Administrative Agent or any Bank pays any
amount in respect of any such taxes, penalties or interest Borrower shall
reimburse the Administrative Agent or that Bank for that payment on demand
in the currency in which such payment was made. If Borrower pay any such
taxes, penalties or interest, they shall deliver official tax receipts
evidencing that payment or certified copies thereof to the Bank or
Administrative Agent on whose account such withholding was made (with a
copy to the Administrative Agent if not the recipient of the original) on
or before the thirtieth day after payment. If any Bank or the
Administrative Agent determines it has received or been granted a credit
against or relief or remission for, or repayment of, any taxes paid or
payable by it because of any taxes, penalties or interest paid by Borrower
and evidenced by such a tax receipt, such Bank or Administrative Agent
shall, to the extent it can do so without prejudice to the retention of the
amount of such credit, relief, remission or repayment, pay to Borrower such
amount as such Bank or Administrative Agent determines is attributable to
such deduction or withholding and which will leave such Bank or
Administrative Agent (after such payment) in no better or worse position
than it would have been in if Borrower had not been required to make such
deduction or withholding. Nothing in this Agreement shall interfere with
the right of each Bank and the Administrative Agent to arrange its tax
affairs in whatever manner it thinks fit nor obligate any Bank or the
Administrative Agent to disclose any information relating to its tax
affairs or any computations in connection with such taxes.
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to Borrower and the Administrative Agent on or before the date of
the initial Borrowing hereunder two duly completed and signed copies of
either Form W8BEN (relating to such Bank and entitling it to a complete
exemption from withholding under the Code on all amounts to be received by
such Bank, including fees, pursuant to the Credit Documents and the Loans)
or Form W8ECI (relating to all amounts to be received by such Bank,
including fees, pursuant to the Credit Documents and the Loans) of the
United States Internal Revenue Service. Thereafter and from time to time,
each Bank shall submit to Borrower and the Administrative Agent such
additional duly completed and signed copies of one or the other of such
Forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may be (i) requested by
Borrower in a written notice, directly or through the Administrative Agent,
to such Bank and (ii) required under then current United States law or
regulations to avoid or reduce United States withholding taxes on payments
in respect of all amounts to be received by such Bank, including fees,
pursuant to the Credit Documents or the Loans.
(c) Inability of Bank to Submit Forms. If any Bank determines, as a result of
any change in applicable law, regulation or treaty, or in any official
application or
53
interpretation thereof, that it is unable to submit to Borrower or
Administrative Agent any form or certificate that such Bank is obligated to
submit pursuant to subsection (b) of this Section 11.1 or that such Bank is
required to withdraw or cancel any such form or certificate previously
submitted or any such form or certificate otherwise becomes ineffective or
inaccurate, such Bank shall promptly notify Borrower and Administrative
Agent of such fact and the Bank shall to that extent not be obligated to
provide any such form or certificate and will be entitled to withdraw or
cancel any affected form or certificate, as applicable.
Section 11.2 No Waiver of Rights. No delay or failure on the part of the
Administrative Agent or any Bank or on the part of the holder or holders of any
Note in the exercise of any power or right under any Credit Document shall
operate as a waiver thereof, nor as an acquiescence in any default, nor shall
any single or partial exercise thereof preclude any other or further exercise of
any other power or right, and the rights and remedies hereunder of the
Administrative Agent, the Banks and the holder or holders of any Notes are
cumulative to, and not exclusive of, any rights or remedies which any of them
would otherwise have.
Section 11.3 Non-Business Day. If any payment of principal or interest on any
Loan or of any other Obligation shall fall due on a day which is not a Business
Day, interest or fees (as applicable) at the rate, if any, such Loan or other
Obligation bears for the period prior to maturity shall continue to accrue on
such Obligation from the stated due date thereof to and including the next
succeeding Business Day, on which the same shall be payable.
Section 11.4 Documentary Taxes. Borrower agrees that it will pay any
documentary, stamp or similar taxes payable in respect to any Credit Document,
including interest and penalties, in the event any such taxes are assessed,
irrespective of when such assessment is made and whether or not any credit is
then in use or available hereunder.
Section 11.5 Survival of Representations. All representations and warranties
made herein or in certificates given pursuant hereto shall survive the execution
and delivery of this Agreement and the other Credit Documents, and shall
continue in full force and effect with respect to the date as of which they were
made as long as any credit is in use or available hereunder.
Section 11.6 Survival of Indemnities. All indemnities and all other provisions
relative to reimbursement to the Banks of amounts sufficient to protect the
yield of the Banks with respect to the Loans, including, but not limited to,
Section 2.11, Section 9.3 and Section 11.15 hereof, shall survive the
termination of this Agreement and the other Credit Documents and the payment of
the Loans and all other Obligations.
Section 11.7 Set-Off. (a) (a) In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Bank and each subsequent holder of any
Note is hereby authorized by Borrower at any time or from time to time, without
notice to Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, and in
whatever currency denominated) and any other Indebtedness at any time held or
owing by that Bank or that subsequent holder to or for the credit
55
or the account of Borrower, whether or not matured, against and on account of
the obligations and liabilities of Borrower to that Bank or that subsequent
holder under the Credit Documents, including, but not limited to, all claims of
any nature or description arising out of or connected with the Credit Documents,
irrespective of whether or not (a) that Bank or that subsequent holder shall
have made any demand hereunder or (b) the principal of or the interest on the
Loans or Notes and other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured.
(b) Each Bank agrees with each other Bank a party hereto that if such Bank shall
receive and retain any payment, whether by set-off or application of deposit
balances or otherwise, on any of the Loans or Reimbursement Obligations in
excess of its ratable share of payments on all such obligations then outstanding
to the Banks, then such Bank shall purchase for cash at face value, but without
recourse, ratably from each of the other Banks such amount of the Loans or
Reimbursement Obligations, or participations therein, held by each such other
Banks (or interest therein) as shall be necessary to cause such Bank to share
such excess payment ratably with all the other Banks; provided, however, that if
any such purchase is made by any Bank, and if such excess payment or part
thereof is thereafter recovered from such purchasing Bank, the related purchases
from the other Banks shall be rescinded ratably and the purchase price restored
as to the portion of such excess payment so recovered, but without interest. For
purposes of this Section 11.7(b), amounts owed to or recovered by, an Issuing
Agent in connection with Reimbursement Obligations in which Banks have been
required to fund their participation shall be treated as amounts owed to or
recovered by such Issuing Agent as a Bank hereunder.
Section 11.8 Notices. Except as otherwise specified herein, all notices under
the Credit Documents shall be in writing (including facsimile or other
electronic communication) and shall be given to a party hereunder at its address
or facsimile number set forth below or such other address or facsimile number as
such party may hereafter specify by notice to the Administrative Agent and
Borrower, given by courier, by United States certified or registered mail, or by
other telecommunication device capable of creating a written record of such
notice and its receipt. Notices under the Credit Documents to the Banks shall be
addressed to their respective addresses, facsimile or telephone numbers set
forth on the signature pages hereof or in the assignment agreement which any
assignee bank executes pursuant to Section 11.12 hereof, and to Borrower and to
the Administrative Agent to:
If to Borrower:
Black Hills Corporation
625 9th Street
Rapid City, South Dakota 57709
Attention: Garner M. Anderson
Facsimile: 605.721.2597
Telephone: 605.721.2311
55
with copies to:
Black Hills Corporation
625 9th Street
Rapid City, South Dakota 57709
Attention: Mark T. Thies
Facsimile: 605.721.2599
Telephone: 605.721.2331
Black Hills Energy Capital, Inc.
1075 Noel Avenue
Wheeling, Illinois 60090
Attention: Richard T. Ashbeck
Facsimile: 847.459.4140
Telephone: 847.465.3033
If to the Administrative Agent:
Notices shall be sent to the applicable address set forth on
Part B of Schedule 4 hereto.
With copies of all such notices to:
ABN AMRO Bank N.V.
135 South LaSalle Street
Suite 710
Chicago, Illinois 60603
Attention: David B. Bryant/Saad Qais
Facsimile: 312.904.1466
Telephone: 312.904.2799 (Mr. Bryant)
312.904.6473 (Mr. Qais)
Each such notice, request or other communication shall be effective (i)
if given by facsimile, when such facsimile is transmitted to the facsimile
number specified in this Section 11.8 or on the signature pages hereof and a
confirmation of receipt of such facsimile has been received by the sender, (ii)
if given by courier, when delivered, (iii) if given by mail, three business days
after such communication is deposited in the mail, registered with return
receipt requested, addressed as aforesaid or (iv) if given by any other means,
when delivered at the addresses specified in this Section 11.8; provided that
any notice given pursuant to Section 2 hereof shall be effective only upon
receipt.
Section 11.9 Counterparts. This Agreement may be executed in any number of
counterpart signature pages, and by the different parties on different
counterparts, each of which when executed shall be deemed an original but all
such counterparts taken together shall constitute one and the same instrument.
56
Section 11.10 Successors and Assigns. This Agreement shall be binding upon
Borrower and its successors and assigns, and shall inure to the benefit of each
of the Banks and the benefit of their permitted respective successors, and
assigns, including any subsequent holder of any Note. Borrower may not assign
any of its rights or obligations under any Credit Document unless (i) such
assignation occurs in connection with a merger or acquisition by Borrower which
is otherwise permitted under the terms of this Agreement and the appropriate
Credit Document, if applicable and (ii) Borrower obtains the prior written
consent of all of the Banks, which consent shall be in form and substance
satisfactory to Administrative Agent.
Section 11.11 Participants and Note Assignees. Each Bank shall have the right at
its own cost to grant participations (to be evidenced by one or more agreements
or certificates of participation) in the Loans made, Commitments held and/or
participations in Letters of Credit, by such Bank at any time and from time to
time, and to assign its rights under such Loans or the Note evidencing such
Loans to a federal reserve bank; provided that (i) no such participation or
assignment shall relieve any Bank of any of its obligations under this
Agreement, (ii) no such assignee or participant shall have any rights under this
Agreement except as provided in this Section 11.11, and (iii) the Administrative
Agent shall have no obligation or responsibility to such participant or
assignee, except that nothing herein is intended to affect the rights of an
assignee of a Note to enforce the Note assigned. Any party to which such a
participation or assignment has been granted shall have the benefits of Section
2.11 and Section 9.3, but shall not be entitled to receive any greater payment
under either such Section than the Bank granting such participation would have
been entitled to receive in connection with the rights transferred. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of Borrower hereunder, including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
that would (A) increase any Commitment of such Bank if such increase would also
increase the participant's obligations, (B) forgive any amount of or postpone
the date for payment of any principal of or interest on any Loan or
Reimbursement Obligation or of any fee payable hereunder in which such
participant has an interest or (C) reduce the stated rate at which interest or
fees in which such participant has an interest accrue hereunder.
Section 11.12 Assignment of Commitments by Banks. Each Bank shall have the right
at any time, with the written consent of Administrative Agent and each Issuing
Agent, which consent shall not be unreasonably withheld, and, prior to the
occurrence of a Default or Event of Default, Borrower, to assign all or any part
of its Commitment (including the same percentage of its Note, outstanding Loans
and participations in Letter of Credit, and provided that the same percentage of
its commitment and loans outstanding under the 364-Day Credit Agreement are also
assigned) to one or more other Persons; provided that such assignment is in an
amount of at least $5,000,000 or the entire Commitment of such Bank, and if such
assignment is not for such Bank's entire Commitment then such Bank's Commitment
after giving effect to such assignment shall not be less than $5,000,000; and
provided further that neither the consent of Borrower nor the Administrative
Agent nor an Issuing Agent shall be required for any Bank to assign all or part
of its Commitment to any Affiliate of the assigning Bank so long as the same
percentage of such Bank's commitment under the 364-Day Credit Agreement are also
assigned to such Affiliate. Each such assignment shall set forth the assignees
address for notices to be given
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under Section 11.8 hereof hereunder and its designated Lending Office pursuant
to Section 9.4 hereof. Upon any such assignment, delivery to the Administrative
Agent of an executed copy of such assignment agreement and the forms referred to
in Section 11.1 hereof, if applicable, and the payment of a $3,500 recordation
fee to the Administrative Agent, the assignee shall become a Bank hereunder, all
Loans, participations in Letters of Credit and the Commitment it thereby holds
shall be governed by all the terms and conditions hereof and the Bank granting
such assignment shall have its Commitment, and its obligations and rights in
connection therewith, reduced by the amount of such assignment.
Section 11.13 Amendments. Any provision of the Credit Documents may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed
by (a) Borrower, (b) the Required Banks, and (c) if the rights or duties of the
Administrative Agent are affected thereby, the Administrative Agent; provided
that:
(i) no amendment or waiver pursuant to this Section. 11.13 shall (A)
increase, decrease or extend any Commitment of any Bank without the
consent of such Bank or (B) reduce the amount of or postpone any fixed
date for payment of any principal of or interest on any Loan or
Reimbursement Obligation or of any fee or other Obligation payable
hereunder without the consent of each Bank; and
(ii) no amendment or waiver pursuant to this Section 11.13 shall, unless
signed by each Bank, change this Section 11.13, or the definition of
Required Banks, or affect the number of Banks required to take any
action under the Credit Documents.
Anything in this Agreement to the contrary notwithstanding, if at any
time when the conditions precedent set forth in Section 6.2 hereof to any Loan
hereunder are satisfied, any Bank shall fail to fulfill its obligations to make
such Loan or such Bank shall fail to fund its Participating Interest pursuant to
Section 2.2(d) (any such Bank, a "Defaulting Bank") then, for so long as such
failure shall continue, the Defaulting Bank shall (unless Borrower, the
Administrative Agent and the Required Banks (determined as if the Defaulting
Bank were not a Bank hereunder) shall otherwise consent in writing) be deemed
for all purposes related to amendments, modifications, waivers or consents under
this Agreement (other than amendments or waivers referred to in clause (i) and
(ii) above) to have no Loans or Commitments and shall not be treated as a Bank
hereunder when performing the computation of the Required Banks. To the extent
the Administrative Agent receives any payments or other amounts for the account
of a Defaulting Bank such Defaulting Bank shall be deemed to have requested that
the Administrative Agent use such payment or other amount first, to fund its
purchase of its Participating Interest pursuant to Section 2.2(d) and secondly,
to fulfill its obligations to make such Loan.
Section 11.14 Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
Section 11.15 Legal Fees, Other Costs and Indemnification. Borrower agrees to
pay all reasonable costs and expenses of the Arrangers in connection with the
preparation and negotiation of the Credit Documents (including past and future
reasonable out-of-pocket expenses incurred by the Arrangers in connection with
the syndication of the transaction), including without limitation, the
reasonable fees and disbursements of counsel to the Arrangers,
58
in connection with the preparation and execution of the Credit Documents, and
any amendment, waiver or consent related hereto, whether or not the transactions
contemplated herein are consummated. Borrower further agrees to indemnify each
Bank, the Administrative Agent and the Issuing Agents, and their respective
directors, agents, officers and employees, against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor, whether or not the
indemnified Person is a party thereto) which any of them may incur or reasonably
pay arising out of or relating to any Credit Document (including any relating to
a misrepresentation by Borrower under any Credit Document) or any of the
transactions contemplated thereby or the direct or indirect application or
proposed application of the proceeds of any Loan or Letter of Credit, other than
those which arise from the gross negligence or willful misconduct of the party
claiming indemnification. Borrower, upon demand by any of the Administrative
Agent, an Issuing Agent or a Bank at any time, shall reimburse the
Administrative Agent, such Issuing Agent or Bank for any reasonable legal or
other expenses (including allocable fees and expenses of in-house counsel)
incurred in connection with investigating or defending against any of the
foregoing except if the same is directly due to the gross negligence or willful
misconduct of the party to be indemnified, provided that with respect to legal
costs and expenses incurred in connection with the enforcement of the Banks
rights hereunder or any work-out or similar situation, Borrower shall only be
obligated to pay the legal fees of the Administrative Agent and not of any other
Bank.
Section 11.16 Entire Agreement. The Credit Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior or contemporaneous agreements, whether written or oral, with
respect thereto are superseded thereby.
Section 11.17 Construction. The parties hereto acknowledge and agree that
neither this Agreement nor the other Credit Documents shall be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation of this Agreement and the other Credit Documents.
Section 11.18 Governing Law. This Agreement and the other Credit Documents, and
the rights and duties of the parties hereto, shall be construed and determined
in accordance with the internal laws of the State of New York.
Section 11.19 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. BORROWER HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE
CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. BORROWER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. BORROWER HEREBY
59
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
Section 11.20 Replacement of Bank. Each Bank agrees that, upon the occurrence of
any event set forth in Sections 9.1, 9.3 and 11.1, such Bank will use reasonable
efforts to book and maintain its Loans through a different Lending Office or to
transfer its Loans to an Affiliate with the objective of avoiding or minimizing
the consequences of such event; provided that such booking or transfer is not
otherwise disadvantageous to such Bank as determined by such Bank in its sole
and absolute discretion. If any Bank has demanded to be paid additional amounts
pursuant to Sections 9.1, 9.3 and 11.1, and the payment of such additional
amounts are, and are likely to continue to be, more onerous in the reasonable
judgment of Borrower than with respect to the other Banks, then Borrower shall
have the right at any time when no Default or Event of Default shall have
occurred and be continuing to seek one or more financial institutions which are
not Affiliates of Borrower (each, a "Replacement Bank") to purchase with the
written consent of the Administrative Agent (which consent shall not be (x)
required if such proposed Replacement Bank is already a Bank, or an Affiliate of
a Bank, or (y) unreasonably delayed or withheld) the outstanding Loans and
Commitments of such Bank (the "Affected Bank"), and if Borrower locate a
Replacement Bank, the Affected Bank shall, upon
i. prior written notice to the Administrative Agent,
ii. (i) payment to the Affected Bank of the purchase price agreed between
it and the Replacement Bank (or, failing such agreement, a purchase
price in the amount of the outstanding principal amount of the
Affected Bank's Loans and accrued interest thereon to the date of
payment) by the Replacement Bank plus (ii) payment by Borrower of all
Obligations (other than principal and interest with respect to Loans)
then due to the Affected Bank or accrued for its account hereunder or
under any other Loan Document,
iii. satisfaction of the provisions set forth in Section 11.12, and
iv. payment by Borrower to the Affected Bank and the Administrative Agent
of all reasonable out-of-pocket expenses in connection with such
assignment and assumption (including the recordation fee described in
Section 11.12),
assign and delegate all its rights and obligations under this Agreement and any
other Credit Document to which it is a party (including its outstanding Loans)
to the Replacement Bank (such assignment to be made without recourse,
representation or warranty), and the Replacement Bank shall assume such rights
and obligations, whereupon the Replacement Bank shall in accordance with Section
11.12 become a party to each Credit Document to which the Affected Bank is a
party and shall have the rights and obligations of a Bank thereunder and the
Affected Bank shall be released from its obligations hereunder and each other
Credit Document to the extent of such assignment and delegation.
60
Section 11.21 Confidentiality. The Administrative Agent and the Banks shall hold
all non-public information provided to them by Borrower pursuant to or in
connection with this Agreement in accordance with their customary procedures for
handling confidential information of this nature, but may make disclosure to any
of their examiners, regulators, Affiliates, outside auditors, counsel and other
professional advisors in connection with this Agreement or any other Credit
Document or as reasonably required by any potential bona fide transferee,
participant or assignee, or in connection with the exercise of remedies under a
Credit Document, or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section 11.21), or to
any nationally recognized rating agency that requires access to information
about a Bank's investment portfolio in connection with ratings issued with
respect to such Bank, or as requested by any governmental agency or
representative thereof or pursuant to legal process; provided, however, that
unless specifically prohibited by applicable law or court order, the
Administrative Agent and each Bank shall use reasonable efforts to promptly
notify Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of the Administrative Agent or such Bank by such
governmental agency) for disclosure of any such non-public information and,
where practicable, prior to disclosure of such information. Prior to any such
disclosure pursuant to this Section 11.21, the Administrative Agent and each
Bank shall require any such bona fide transferee, participant and assignee
receiving a disclosure of non-public information to agree, for the benefit of
Borrower, in writing to be bound by this Section 11.21; and to require such
Person to require any other Person to whom such Person discloses such non-public
information to be similarly bound by this Section 11.21.
Section 11.22 Rights and Liabilities of Documentation Agents and Syndication
Agents. Neither Documentation Agents nor Syndication Agents have any special
rights, powers, obligations, liabilities, responsibilities or duties under this
Agreement as a result of acting in the capacity of Documentation Agents or
Syndication Agents, as applicable, other than those applicable to them in their
capacity as Banks hereunder. Without limiting the foregoing, neither
Documentation Agents nor Syndication Agents shall have or be deemed to have a
fiduciary relationship with any Bank. Each Bank hereby makes the same
acknowledgments and undertakings with respect to Documentation Agents and the
Syndication Agents as it makes with respect to the Administrative Agent and any
directors, officers, agents and employees of the Administrative Agent in Section
10.5.
- Remainder of Page Intentionally Left Blank -
[Signature Page Follows]
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In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York by their duly authorized
officers as of the day and year first above written.
BLACK HILLS CORPORATION, a
South Dakota corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
62
Commitment: $____________ ABN AMRO BANK N.V., in its individual
capacity as a Bank and as Administrative Agent
By: _____________________________
Name: _____________________________
Title: _____________________________
By: _____________________________
Name: _____________________________
Title: _____________________________
Address for notices:
ABN AMRO Bank N.V.
135 South LaSalle Street
Suite 710
Chicago, Illinois 60603
Attention: David B. Bryant/Saad Qais
Facsimile: 312.904.1466
Telephone: 312.904.2799 (Mr. Bryant)
312.904.6473 (Mr. Qais)
With copy to:
ABN AMRO Bank N.V.
208 South LaSalle Street
Suite 1500
Chicago, Illinois 60604-1003
Attention: Ken Keck
Facsimile: (312) 992-5111
Telephone: (312) 992-5134
Lending Offices: Same as above
Base Rate Loans: Same as above
Eurocurrency Loans: Same as above
Commitment: $____________ UNION BANK OF CALIFORNIA, N.A., in its individual
capacity as a Bank, as an Issuing Agent and as
Syndication Agent
By: _____________________________
Name: _____________________________
Title: _____________________________
By: _____________________________
Name: _____________________________
Title: _____________________________
Address for notices:
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, California 90071
Chicago, Illinois 60603
Attention: Mr. Robert Cole
Facsimile: 213.236.4096
Telephone: 213.236.6225
Lending Offices: Same as above
Base Rate Loans: Same as above
Eurocurrency Loans: Same as above
Commitment: $____________ U.S. BANK, NATIONAL ASSOCIATION, in its individual
capacity as a Bank, as an Issuing Agent and as
Documentation Agent
By: _____________________________
Name: _____________________________
Title: Managing Director
Address for notices:
U.S. Bank, National Association
701 St. Joseph Street
Rapid City, South Dakota 57701
Attention: Ms. Sandra Vollmer
Facsimile: 605.394.5500
Telephone: 605.394.2019
Lending Offices: Same as above
Base Rate Loans: Same as above
Eurocurrency Loans: Same as above