Exhibit 10.2

 
Execution Version

 
FOURTH AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is entered into effective as of May 28, 2010, by and among ENSERCO
ENERGY INC., a South Dakota corporation (the “Borrower”), BNP PARIBAS, a bank
organized under the laws of France (“BNP”), Administrative Agent, Collateral
Agent, Documentation Agent, as an Issuing Bank and a Bank, SOCIETE GENERALE, a
bank organized under the laws of France (“SocGen”), as an Issuing Bank, a Bank
and the Syndication Agent, and each of the other financial institutions which
are parties hereto (collectively, the “Banks”).
 
WHEREAS, the Borrower, Agent and the Banks have entered into that certain Third
Amended and Restated Credit Agreement, dated to be effective as of May 8, 2009,
(including all annexes, exhibits and schedules thereto, as from time to time
amended, restated, supplemented, or otherwise modified, the “Credit Agreement”);
and
 
WHEREAS, the Borrower and the Banks have agreed to make certain changes to the
Credit Agreement;
 
NOW, THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
 
1.           Defined Terms.  All capitalized terms used but not otherwise
defined in this Amendment shall have the meaning ascribed to them in the Credit
Agreement.  Unless otherwise specified, all section references herein refer to
sections of the Credit Agreement.
 
1.1           Section 1.01 – Amended and Restated Definitions.  The following
definitions contained in Section 1.01 of the Credit Agreement shall be and
hereby are amended and restated in their entirety to read as follows:
 
“‘Borrowing Base Advance Cap’ means at any time an amount equal to the least of:
 
 
(a)
the Committed Line Portions then subscribed to by the Banks as shown on Schedule
2.01;

 
(b)           the Borrowing Base Sub-Cap; or
 
(c)           the sum of:
 
 
(i)
the amount of Cash Collateral and other liquid investments which are acceptable
to the Banks in their sole discretion and which are subject to a first perfected
security interest in favor of Agent, as collateral agent for the Banks, which
shall not include Cash Collateral in which a Lien has been granted by the
Borrower in

 

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order to secure the margin requirements of a swap contract permitted under
Section 8.06(b); plus

 
 
(ii)
90% of equity (net liquidity value) in Approved Brokerage Accounts; plus

 
 
(iii)
90% of the amount of Tier I Accounts; plus

 
 
(iv)
85% of the amount of Tier II Accounts; plus

 
 
(v)
85% of the amount of Tier I Unbilled Eligible Accounts; plus

 
 
(vi)
80% of the amount of Tier II Unbilled Eligible Accounts; plus

 
 
(vii)
80% of the amount of Eligible Inventory (other than coal) that is not line fill;
plus

 
 
(viii)
70% of Eligible Inventory (other than coal) which is hedged crude oil “line
fill” inventory (excluding line fill located in “gathering lines”) valued at
market, not to exceed a net eligible collateral value of $15,000,000.00; plus

 
 
(ix)
75% of Eligible Hedged Coal Inventory; plus

 
 
(x)
80% of the amount of Eligible Exchange Receivables; plus

 
 
(xi)
80% of the amount of Undelivered Product Value; less

 
 
(xii)
the amounts (including disputed items) which would be subject to a so-called
“First Purchaser Lien” as defined in Texas Bus. & Com. Code Section 9.343,
comparable laws of the states of Oklahoma, Kansas, Wyoming or New Mexico, or any
other comparable law, except to the extent a Letter of Credit or other
Collateral acceptable to Agent secures payment of amounts subject to such First
Purchaser Lien; less

 
 
(xiii)
120% of the amount of any mark to market exposure to the Swap Banks under Swap
Contracts as reported by the Swap Banks, reduced by Cash Collateral or other
Collateral acceptable to Agent held by a Swap Bank.

 
In no event shall any amounts described in (c)(i) through (c)(xi) above which
may fall into more than one of such categories be counted more than once when
making the calculation under subsection (c) of this definition.  In no event
shall any amount described in (c)(ix) above exceed fifteen percent (15%) of the
sum of (c)(i) through (c)(xiii) nor shall amounts attributable to coal in (c)(i)
through (c)(xiii) above exceed thirty percent (30%) of the sum of (c)(i) through
(c)(xiii) above.”
 

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“‘Exchange Receivable’ means a right of the Borrower to receive Product (other
than coal) in exchange for the sale or trade of Product (other than coal)
previously delivered to an Exchange Debtor by the Borrower.”
 
“‘L/C Sub-limit Cap’ means the cap upon L/C Obligations under particular
categories of Letters of Credit Issued under the Borrowing Base Line as follows
(each such category below is referred to herein as a “Type” of Letter of
Credit):
 
(a)           Performance L/Cs - $25,000,000.00;
 
 
(b)
Ninety (90) Day Transportation and Storage L/Cs - $150,000,000.00 but not to
exceed the Elected Ninety (90) Day Transportation and Storage L/C Cap then in
effect;

 
 
(c)
Three Hundred Sixty-Five (365) Day Transportation and Storage L/Cs -
$100,000,000.00 but not to exceed the Elected Three Hundred Sixty-Five (365) Day
Transportation and Storage L/C Cap then in effect;

 
 
(d)
Ninety (90) Day Swap L/Cs - $100,000,000.00, but not to exceed the Elected
Ninety (90) Day Swap L/C Cap then in effect;

 
 
(e)
Three Hundred Sixty-Five (365) Day Swap L/Cs - $75,000,000.00 but not to exceed
the Elected Three Hundred Sixty-Five (365) Day Swap L/C then in effect;

 
 
(f)
Three Hundred Sixty-Five (365) Day Supply L/Cs - $25,000,000.00;

 
 
(g)
NGL Supply L/Cs - $25,000,000.00;

 
 
(h)
Coal Supply L/Cs - $25,000,000.00 and

 
 
(i)
Ninety (90) Day Supply L/Cs – the lesser of (A) Committed Line Portions
subscribed to by the Banks as shown on Schedule 2.01 and (B) the Borrowing Base
Sub-Cap then in effect less (i) any amounts outstanding under (a), (b), (c),
(d), (e), (f), (g) and (h) above and (ii) the Effective Amount of all Loans.”

 
“‘Ninety (90) Day Supply L/Cs’ means Letters of Credit with a tenor of less than
ninety-one (91) days Issued to facilitate the purchase of Product (other than
natural gas liquids or coal) for resale or to secure the purchase of Product
(other than natural gas liquids or coal).”
 
1.2           Section 1.01 – Amendments to Definitions.  The following
definitions are hereby amended as set forth below:
 

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1.2.1       The definition of “Borrowing Base Collateral Position Report” is
hereby amended by relettering sub-clauses (g) through (l) in the second sentence
thereof with the subsequent alphabetical letter and adding a new sub-clauses (g)
following sub-clause (f) to read as follows:
 
“(g) a schedule of Eligible Hedged Coal Inventory,”
 
 
1.2.2
The definition of “Eligible Inventory” is amended by adding the parenthetical
“(other than coal)” following the phrase “all of the Borrower’s inventory” in
the introductory paragraph thereof.

 
 
1.2.3
The definitions of “Long Position”, “Net Fixed Price Volume” and “Short
Position” are amended by adding the phrase “tons of coal” following the phrase
“gallons of natural gas liquids” therein.

 
 
1.2.4
The definition of “Product” is amended by adding “coal,” following “natural gas
liquids”.

 
1.3           Section 1.01 – New Definitions.  The following definition is
hereby added to Section 1.01 of the Credit Agreement in its appropriate
alphabetical order:
 
“‘Coal Supply L/Cs’ means Letters of Credit with a tenor of less than ninety-one
(91) days Issued to facilitate the purchase of coal for resale or to secure the
purchase of coal.”
 
“‘Eligible Hedged Coal Inventory’ means at the time of determination thereof,
inventory consisting of coal, valued at the current market price (as referenced
by a published source acceptable to the Agent in the exercise of reasonable
discretion), and in all instances as to which the purchase price of such
inventory is hedged to the reasonable satisfaction of the Agent and the
inventory otherwise meets the requirements for Eligible Inventory.”
 
1.4           Section 7.02(j) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
 
“(j)           updated risk management policies which shall cover Borrower’s
trading activities in natural gas, natural gas liquids, crude oil, distillates
for crude blending and coal, such policies to be reasonably satisfactory to the
Agent and the Banks; and”
 
1.5           Section 8.11(a) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
 
“(a)           At no time will the Borrower allow the Net Fixed Price Volume of
natural gas to exceed 3,000,000 MMBTUS, the Net Fixed Price Volume of crude oil
and distillates for crude blending to exceed 50,000 bbls, the Net Fixed Price
Volume of natural gas liquids to exceed 1,000,000 gallons or the Net Fixed Price
Volume of coal to exceed 1,000,000 tons.”
 

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1.6           A new Section 8.21 is hereby added to the Credit Agreement
following Section 8.20 thereof to read as follows:
 
“8.21           Coal Value at Risk.  Borrower’s Coal Value-at-Risk shall not at
any time exceed $3,000,000.00 (95% confidence interval and one-day time
horizon).  “Coal Value-at-Risk” shall mean the risk of mark to market value loss
for all coal positions calculated using historical market trends, prices,
volatility and correlations.”
 
1.7           Exhibit B to the Credit Agreement is hereby amended and restated
in its entirety with Exhibit B attached hereto.
 
1.8           Exhibit D to the Credit Agreement is hereby amended and restated
in its entirety with Exhibit D attached hereto.
 
1.9           Exhibit E to the Credit Agreement is hereby amended and restated
in its entirety with Exhibit E attached hereto.
 
1.10           Exhibit I to the Credit Agreement is hereby amended and restated
in its entirety with Exhibit I attached hereto.
 
2.           Effectiveness of Amendment.  This Amendment shall be effective (the
“Effective Date”) upon:
 
(a)           Receipt by the Agent of a copy of this Amendment, duly executed by
the Borrower and Supermajority Banks.
 
(b)           Updated risk management policies which shall cover Borrower’s
trading activities in coal, such policies to be reasonably satisfactory to the
Agent and the Banks.
 
(c)           Receipt by the Agent of all fees due and owing.
 
3.           Ratifications, Representations and Warranties.
 
(a)           The terms and provisions set forth in this Amendment shall modify
and supersede all inconsistent terms and provisions set forth in the Credit
Agreement and, except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.  Borrower and the Banks agree that the
Credit Agreement, as amended hereby, shall continue to be legal, valid, binding
and enforceable in accordance with its terms.
 
(b)           To induce the Banks to enter into this Amendment, the Borrower
ratifies and confirms that each representation and warranty set forth in the
Credit Agreement is true and correct in all material respects as if such
representations and warranties were made on the even date herewith (unless
stated to relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct as of such earlier date), in
each case other than representations and warranties that are (x) subject to
 

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a materiality qualifier, in which case such representations and warranties shall
be (or shall have been) true and correct and (y) modified by the updated
disclosure schedules attached hereto, in which case such representations and
warranties shall be true and correct as modified, and further represents and
warrants (i) that there has occurred since the date of the last financial
statements delivered to the Banks no event or circumstance that has resulted or
could reasonably be expected to result in a Material Adverse Effect, (ii) that
no Event of Default exists both before and after giving effect to this
Amendment, and (iii) that the Borrower is fully authorized to enter into this
Amendment.
 
4.           Benefits.  This Amendment shall be binding upon and inure to the
benefit of the Banks and the Borrower, and their respective successors and
assigns; provided, however, that Borrower may not, without the prior written
consent of the Banks, assign any rights, powers, duties or obligations under
this Amendment, the Credit Agreement or any of the other Loan Documents.
 
5.           Governing Law.  THIS AMEDMENT IS GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE CHOICE OF LAW RULES OF THAT STATE (OTHER THAN
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
 
6.           Invalid Provisions.  If any provision of this Amendment is held to
be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable and the remaining provisions of this
Amendment shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance.
 
7.           Entire Agreement.  THIS CREDIT AGREEMENT, AS AMENDED BY THIS
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
 
8.           Reference to Credit Agreement.  The Credit Agreement and the other
Loan Documents, and any and all other agreements, documents or instruments now
or hereafter executed and delivered pursuant to the terms hereof or pursuant to
the terms of the Credit Agreement, as amended hereby, are hereby amended so that
any reference in the Credit Agreement to the Credit Agreement shall mean a
reference to the Credit Agreement as amended hereby.
 
9.           Loan Document.  This Amendment shall be considered a Loan Document
under the Credit Agreement.
 
10.           Counterparts.  This Amendment may be separately executed in any
number of counterparts, each of which shall be an original, but all of which,
taken together, shall be deemed to constitute one and the same agreement.
 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
 
ENSERCO ENERGY INC.,
a South Dakota corporation

By:  Garner M. Anderson
Name:  /s/ Garner M. Anderson
Title:  VP Treasurer & CRO

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ACCEPTED AND AGREED:

ENSERCO MIDSTREAM, LLC,
a South Dakota limited liability company

By:  Garner M. Anderson
Name:  /s/ Garner M. Anderson
Title:  VP Treasurer & CRO

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BNP PARIBAS,
as Agent

By:/s/ Keith Cox
Name: Keith Cox
Title: Managing Director

By: /s/ Andrew Stratos
Name: Andrew Stratos
Title: Vice President

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BNP PARIBAS,
as a Bank and an Issuing Bank

By:/s/ Keith Cox
Name: Keith Cox
Title: Managing Director

By: /s/ Andrew Stratos
Name: Andrew Stratos
Title: Vice President

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SOCIETE GENERALE,
as a Bank and an Issuing Bank

By: /s/ Chung-Taek Oh
Name: Chung-Taek Oh
Title: Director

By: /s/ Barbara Paulsen
Name: Barbara Paulsen
Title: Managing Director

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U.S. BANK NATIONAL ASSOCIATION,
as a Bank

By: /s/ Monte E. Deckerd
Name: Monte E. Deckerd
Title: Senior Vice President

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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,
as a Bank

By: /s/ Chan K. Park
Name: Chan K. Park
Title: SVP and Manager

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RZB FINANCE LLC,
as a Bank

By: /s/ Nancy Remini
Name: Nancy Remini
Title: Vice President

By: /s/ Pearl Geffers
Name: Pearl Geffers
Title: First Vice President

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COÖPERATIEVE CENTRAL RAIFFEISEN-
BOERENLEENBANK B.A., “Rabobank Nederland,” NEW YORK BRANCH,
as a Bank

By: /s/ Brett Delfino
Name: Brett Delfino
Title: Executive Director

By: /s/ Eva Rushkevich
Name: Eva Rushkevich
Title: Executive Director

 

 
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