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THIRD
 
AMENDED AND RESTATED
 
CREDIT AGREEMENT
 

 
Dated to be Effective as of May 8, 2009
among
 
ENSERCO ENERGY INC.
 
as Borrower,
 
and
 
FORTIS CAPITAL CORP.
 
as Administrative Agent, Collateral Agent,
 
Co-Lead Arranger, Co-Bookrunner, an Issuing Bank, and a Bank
 
and
 
SOCIETE GENERALE
 
as Co-Lead Arranger, Co-Bookrunner, Syndication Agent, an Issuing Bank, and a
Bank
 
and
 
BNP PARIBAS
 
as Co-Lead Arranger, Co-Bookrunner, Documentation Agent, an Issuing Bank, and a
Bank
 
and
 
U.S. BANK NATIONAL ASSOCIATION
 
as a Bank
 
and
 
THE BANK OF TOKYO MITSUBISHI UFJ, LTD., NEW YORK BRANCH
 
as a Bank
 
and
 
THE OTHER FINANCIAL INSTITUTIONS WHICH
MAY BECOME PARTIES HERETO

3rd A&R Credit Agreement [Enserco]
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TABLE OF CONTENTS
 
ARTICLE I DEFINITIONS
 
1.01
Certain Defined Terms

 
1.02
Other Interpretive Provisions

 
1.03
Accounting Principles

 
ARTICLE II THE CREDITS
 
2.01
Amounts and Terms of Committed Line

 
2.01A
Increase in Subscribed Amounts

 
2.01B
Increase in Committed Line Portions

 
2.02
Loan Accounts

 
2.03
Procedure for Borrowing.

 
2.03A
Conversion and Continuation Elections.

 
2.04
Optional Prepayments

 
2.05
Mandatory Prepayments of Loans.

 
2.06
Repayment

 
2.07
Interest.

 
2.08
Fees.

 
2.09
Computation of Interest and Fees.

 
2.10
Payments by the Borrower.

 
2.11
Payments by the Banks to Agent

 
2.12
Sharing of Payments, Etc.

 
2.13
Defaulting Bank.

 
2.14
Termination or Reduction of Committed Line Portions.

 
ARTICLE III THE LETTERS OF CREDIT
 
3.01
The Letter of Credit Lines.

 
3.02
Issuance, Amendment and Renewal of Letters of Credit.

 
3.03
Risk Participations, Drawings, Reducing Letters of Credit and Reimbursements.

 
3.04
Repayment of Participations.

 
3.05
Role of the Issuing Banks.

 
3.06
Obligations Absolute

 
3.07
Cash Collateral Pledge

 
3.08
Letter of Credit Fees.

 
3.09
Applicability of UCP

 
3.10
Existing Letters of Credit

 
ARTICLE IV TAXES AND YIELD PROTECTION
 
4.01
Taxes.

 
4.02
Increased Costs and Reduced Return; Capital Adequacy.

 
4.03
Matters Applicable to all Requests for Compensation

 
4.04
Funding Losses

 
4.05
Survival

 
ARTICLE V CONDITIONS PRECEDENT
 
5.01
Matters to be Satisfied Upon Execution of Agreement

 
5.02
Matters to be Satisfied Prior to Each Request for Extension of Credit

 
ARTICLE VI REPRESENTATIONS AND WARRANTIES
 
6.01
Existence and Power

 
6.02
Authorization; No Contravention

 
6.03
Governmental Authorization

 
6.04
Binding Effect

 
6.05
Litigation

 
6.06
No Default

 
6.07
ERISA Compliance

 
6.08
Use of Proceeds; Margin Regulations

 
6.09
Title to Properties

 
6.10
Taxes

 
6.11
Financial Condition.

 
6.12
Environmental Matters

 
6.13
Regulated Entities

 
6.14
No Burdensome Restrictions

 
6.15
Copyrights, Patents, Trademarks and Licenses, etc

 
6.16
Subsidiaries

 
6.17
Insurance

 
6.18
Full Disclosure

 
6.19
Bank Accounts.

 
ARTICLE VII AFFIRMATIVE COVENANTS
 
7.01
Financial Statements

 
7.02
Certificates; Other Information

 
7.03
Notices

 
7.04
Preservation of Corporate Existence, Etc

 
7.05
Maintenance of Property

 
7.06
Insurance

 
7.07
Payment of Obligations

 
7.08
Compliance with Laws

 
7.09
Compliance with ERISA

 
7.10
Inspection of Property and Books and Records

 
7.11
Environmental Laws

 
7.12
Use of Proceeds

 
7.13
Collateral Position Audit.

 
7.14
Payments to Bank Blocked Accounts

 
7.15
Financial Covenants

 
7.16
Net Cumulative Loss

 
7.17
Security for Obligations

 
ARTICLE VIII NEGATIVE COVENANTS
 
8.01
Limitation on Liens

 
8.02
Consolidations, Mergers and Dispositions

 
8.03
Limitation on Indebtedness

 
8.04
Transactions with Affiliates

 
8.05
Use of Proceeds

 
8.06
Contingent Obligations

 
8.07
Restricted Payments

 
8.08
ERISA

 
8.09
Change in Business

 
8.10
Accounting Changes

 
8.11
Net Fixed Price Volume Limits.

 
8.12
Change of Management

 
8.13
Risk Management Policy

 
8.14
Capital Expenditures

 
8.15
Unhedged Transportation Exposure

 
8.16
Proprietary Value-at-Risk

 
8.17
Transportation Value-at-Risk

 
8.18
Loans and Investments

 
8.19
Bank Blocked Accounts Investments

 
8.20
Additional Subsidiaries.

 
ARTICLE IX EVENTS OF DEFAULT
 
9.01
Event of Default

 
9.02
Remedies

 
9.03
Rights Not Exclusive

 
9.04
Application of Payments

 
ARTICLE X AGENT
 
10.01
Appointment and Authorization.

 
10.02
Delegation of Duties

 
10.03
Liability of Agent

 
10.04
Reliance by Agent.

 
10.05
Notice of Default

 
10.06
Credit Decision

 
10.07
Indemnification

 
10.08
Agent in Individual Capacity

 
10.09
Successor Agent

 
10.10
Foreign Banks

 
10.11
Collateral Matters.

 
10.12
Monitoring Responsibility

 
10.13
The Arrangers and Certain Agents

 
ARTICLE XI MISCELLANEOUS
 
11.01
Amendments and Waivers

 
11.02
Notices.

 
11.03
No Waiver; Cumulative Remedies

 
11.04
Costs and Expenses

 
11.05
Indemnity

 
11.06
Payments Set Aside

 
11.07
Successors and Assigns.

 
11.08
Confidentiality

 
11.09
Set-off

 
11.10
Interest Rate Limitations

 
11.11
Automatic Debits of Fees

 
11.12
Notification of Addresses, Lending Offices, Etc

 
11.13
Bank Blocked Accounts Charges and Procedures

 
11.14
Counterparts

 
11.15
Severability

 
11.16
No Third Parties Benefited

 
11.17
Integration

 
11.18
Survival of Representations and Warranties

 
11.19
Governing Law and Jurisdiction.

 
11.20
Waiver of Jury Trial

 
11.21
Intercreditor Agreement

 
11.22
Amendment and Restatement

 
11.23
Entire Agreement

 
11.24
USA PATRIOT Act Notice

 

3rd A&R Credit Agreement
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SCHEDULES
 
Schedule 1.01
Existing Letters of Credit
Schedule 2.01
Committed Line and Committed Line Portion
Schedule 6.05
Litigation, and Patent, Trademark, etc. Claims
Schedule 6.07
ERISA Matters
Schedule 6.12
Environmental Matters
Schedule 6.16
Subsidiaries and Equity Investments
Schedule 6.17
Insurance Matters
Schedule 6.19
Bank Accounts
Schedule 7.03(f)
Inventory Locations
Schedule 8.01
Permitted Indebtedness and Liens
Schedule 8.06
Contingent Obligations
Schedule 8.12
Directors and Officers
Schedule 11.02
Lending Offices and Addresses for Notices

 
 EXHIBITS
 
Exhibit A-1
Form of Notice of Borrowing
Exhibit A-2
Form of Notice of Conversion/Continuation
Exhibit B
Form of Compliance Certificate
Exhibit C
Form of Assignment and Acceptance
Exhibit D
Form of Borrowing Base Collateral Position Report
Exhibit E
Form of Net Fixed Price Volume Report
Exhibit F
[Reserved]
Exhibit G
[Reserved]
Exhibit H
Subordination Agreement
Exhibit I
Form of Notice of Borrowing Base Sub-Cap Election
Exhibit J
[Reserved]
Exhibit K
Form of Notice of Ninety (90) Day Swap L/C Cap Election
Exhibit L
Form of Three Hundred Sixty-Five (365) Day Swap L/C Cap Election
Exhibit M
Form of Notice of Transportation and Storage L/C Cap Election
Exhibit N
Form of Assignment of Hedging Account
Exhibit O-1
Form of Notice of Subscription Increase
Exhibit O-2
Form of Notice of Committed Line Portion Increase
Exhibit P
Form of Agent Confirmation of Letter of Credit Issuance/Amendment Approval
   

 
3rd A&R Credit Agreement [Enserco]
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
 
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered
into effective as of May 8, 2009, by and among ENSERCO ENERGY INC., a South
Dakota corporation (the “Borrower”), FORTIS CAPITAL CORP., a Connecticut
corporation (“Fortis”), as a Bank, an Issuing Bank and as administrative agent,
documentation agent and collateral agent for the Banks, SOCIETE GENERALE, a bank
organized under the laws of France (“SocGen”), as an Issuing Bank, a Bank and
the Syndication Agent, BNP PARIBAS, a bank organized under the laws of France
(“BNP”), as an Issuing Bank, a Bank and the Documentation Agent,  U.S. BANK
NATIONAL ASSOCIATION, a national banking association (“U.S. Bank”), as a Bank,
THE BANK OF TOKYO MITSUBISHI UFJ, LTD., NEW YORK BRANCH, a bank organized under
the laws of Japan, acting through its New York Branch, as a Bank, and each other
financial institution which may become a party hereto (collectively, the
“Banks”).
 
WHEREAS, Fortis, as Agent, the Banks and the Borrower have entered into a Second
Amended and Restated Credit Agreement effective as of June 1, 2006 (as amended,
the “Existing Credit Agreement”) which presently provides for an Uncommitted
Line of $300,000,000.00; and
 
WHEREAS, the Borrower has requested and the Banks are prepared to extend the
existing facility for a period of one year, to convert the facility into a
committed facility, and to make certain other amendments to the Existing Credit
Agreement;
 
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
 
 
ARTICLE I
 
 
DEFINITIONS
 
1.01           Certain Defined Terms
 
The following terms have the following meanings:
 
“Account” has the meaning stated in the New York Uniform Commercial Code as in
effect from time to time.
 
“Account Debtor” means a Person who is obligated to the Borrower under an
Account of the Borrower.
 
“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests or equity of any Person, or otherwise causing any Person
to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary);
provided, however, that the relevant Borrower or the Subsidiary is the surviving
entity.
 
“Advance Maturity Date” means the maturity date of advances made hereunder which
will be the Expiration Date.
 
“Advance Line Limit” means the maximum amount of Revolving Loans which may be
outstanding at any time, which maximum amount shall be $50,000,000.00.
 
“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person.  A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract, or otherwise.
 
“Agent” means Fortis in its capacity as administrative agent and collateral
agent for the Banks hereunder, and any successor agent arising under
Section 10.09.
 
“Agents” means the Agent, the Documentation Agent and the Syndication Agent.
 
“Agent’s Payment Office” means the address for payments set forth on
Schedule 11.02 hereto in relation to Agent, or such other address as Agent may
from time to time specify.
 
“Agreement” means this Credit Agreement.
 
“Aggregate Amount” means the Effective Amount of all outstanding Revolving Loans
plus the Effective Amount of all L/C Obligations.
 
“Applicable Margin” means two and three-quarters of one percent (2.75%).
 
“Approved Brokerage Accounts” means brokerage accounts maintained by the
Borrower with an Eligible Broker for the purpose of allowing the Borrower to
engage in the purchase and sale of commodity futures, commodity options, forward
or leverage contracts and/or actual or cash commodities, and subject to a fully
perfected first priority security interest in favor of Agent for the benefit of
the Banks (including a tri-party control agreement, acceptable to Banks).
 
“Arrangers” means Fortis, SocGen and BNP.
 
“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel, the reasonable allocated cost of internal
legal services and all disbursements of internal counsel.
 
“Available Committed Line Portion” means, with respect to any Bank at any time,
an amount equal to the excess, if any, of (a) such Bank’s Committed Line Portion
then subscribed by it over (b) such Bank’s total Effective Amount at such time.
 
“Bank Blocked Accounts” means (a) account no. __________ in the name of Borrower
maintained with Wells Fargo into which collections from the Borrower’s Accounts
will be deposited pursuant to Section 7.14 below and which is subject to a
Blocked Account Agreement, (b) account no. ______ CAD in the name of the
Borrower maintained with Wells Fargo into which collections in Canadian Dollars
from the Borrower’s Accounts will be deposited pursuant to Section 7.14 below
and which is subject to a Blocked Account Agreement, and (c) any other account
approved by Agent which is also subject to a Blocked Account Agreement.
 
“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978, as amended
(11 U.S.C. §101, et seq.).
 
“Banks” shall initially mean the Banks identified on the signature pages hereto
and their successors and assigns.  At such time as additional lending
institutions are added to this Agreement, either pursuant to Section 2.01A,
through an amendment to this Agreement or through an Assignment and Acceptance
in accordance with Section 11.07 hereof, the term “Banks” shall mean the Banks
identified on the signature pages hereto and their successors and assigns and
each such additional lending institution.  References to the “Banks” shall
include Fortis, SocGen and BNP, including in their capacity as Issuing Banks;
for purposes of clarification only, to the extent that Fortis, SocGen and BNP
may have any rights or obligations in addition to those of the Banks due to
their status as Issuing Banks and, in the case of Fortis, as Agent, Fortis’,
SocGen’s and BNP’s status as such will be specifically referenced.
 
“Base Rate” means, for any day, the higher of: (a) 0.50% per annum above the
latest Federal Funds Rate; or (b) the per annum rate of interest established by
Fortis Bank S.A./N.V. from time to time at its principal office in New York City
as its “prime rate” or “base rate” for U.S. dollar loans (with any change on
such “prime rate” or “base rate” to become effective as and when such “prime
rate” or “base rate” changes).  (The “prime rate” or “base rate” is a rate set
by Fortis Bank S.A./N.V. based upon various factors including Fortis Bank
S.A./N.V.’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.)
 
“Base Rate Loan” means any Loan bearing interest based upon the Base Rate.
 
“Blocked Account Agreements” means (a) the Blocked Account Agreement dated June
1, 2007, as amended, among Agent, Borrower and Wells Fargo, and (b) any other
Blocked Account Agreement pertaining to a Bank Blocked Account.
 
“Borrower” means Enserco Energy Inc., a South Dakota corporation.
 
“Borrower’s Canadian Security Agreement” means a security agreement, as amended,
in form and substance acceptable to Agent, duly executed by the Borrower and
delivered to Agent, for the benefit of the Banks, granting to Agent, as
collateral agent for the Banks, a first and prior security interest in and Lien
upon the Borrower’s Collateral located in Canada, subject to Permitted Liens.
 
“Borrower’s Second Amended and Restated Security Agreement” means a security
agreement, as amended, in form and substance acceptable to Agent, duly executed
by the Borrower and delivered to Collateral Agent (as defined therein), for the
benefit of the Secured Parties (as defined therein), granting to Collateral
Agent, as collateral agent for the Secured Parties, a first and prior security
interest in and Lien upon all Collateral, subject to Permitted Liens.
 
“Borrowing” means a borrowing hereunder consisting of Revolving Loans made to
the Borrower on the same day by the Banks under Article II.
 
“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 which as of the date of the Agreement aggregate
$200,000,000.00;
 
(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 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 that is not line fill or tank bottom;
plus

 
 
(viii)
50% of the amount of Eligible Inventory which consists of line fill or tank
bottom; provided that the amount to be included in the Borrowing Base Advance
Cap under this clause (viii) after the application of the 50% advance rate shall
not to exceed $5,000,000.00; plus

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

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

 
 
(xi)
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

 
 
(xii)
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)(x) 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.
 
“Borrowing Base Collateral Position Report” means a report, substantially in the
form of Exhibit D attached hereto, detailing all Collateral which has been or is
being used in determining availability for an advance or letter of credit
issuance under the Borrowing Base Line.  Such report to be executed by a
Responsible Officer of the Borrower, delivered to the Agent and each Bank in
accordance with the requirements of Section 7.02(b) of this Agreement, including
schedules in form and substance reasonably acceptable to the Agent showing the
Borrower’s (a) balances of all Cash Collateral, (b) Tier I Accounts (describing
in sufficient detail any  offsets, counterclaims, deductions, or
reconciliations, by counterparty, as provided in the definitions of “Eligible
Accounts” or “Tier I Accounts”, as well as credit limits), (c) Tier II Accounts
(describing in sufficient detail any offsets, counterclaims or deductions, by
counterparty, as provided in the definitions of “Eligible Accounts” or “Tier II
Accounts”, as well as credit limits), (d) Tier I Unbilled Eligible Accounts
(including any offsets, counterclaims or deductions by counterparty, as provided
in the definitions of “Eligible Accounts” or “Tier I Accounts”, as well as
credit limits), (e) Tier II Unbilled Eligible Accounts (including any offsets,
counterclaims or deductions by counterparty, as provided in the definitions of
“Eligible Accounts” or “Tier II Accounts”, as well as credit limits), (f) a
schedule of Eligible Inventory (including Eligible Inventory that is line fill
and/or tank bottom, detailed as separate items) together with supporting
information including but not limited to market values, (g) any broker’s account
statements reflecting the net liquidating value of Approved Brokerage Accounts
and balances in such accounts, (h) a schedule of Eligible Exchange Receivables
(describing in sufficient detail any offsets, counterclaims or deductions by
counterparty, as provided in the definition of “Eligible Exchange Receivables”,
as well as credit limits), (i) Undelivered Product Value, by counterparty,
showing all related liabilities including accounts payable, accrued payables,
and mark-to-market losses, (j) a schedule of all actual and potential first
purchaser liabilities, (k) the amount of mark-to-market exposure owed to the
Swap Banks under Swap Contracts as reported by the Swap Banks, and (l) all Loans
and Letters of Credit outstanding.  The Borrower will also provide the Agent and
the Banks, together with the delivery of each Borrowing Base Collateral Position
Report, if available, but in no event less than once a month, bank account
statements covering Cash Collateral and copies of any other supporting third
party documentation relating to the assets more fully described in any Borrowing
Base Collateral Position Report that the Agent may reasonably request.
 
“Borrowing Base Line” means the line of credit (a) to finance working capital
requirements related to Product activities; (b) to provide for Letters of Credit
as described hereunder; and (c) to fund payments due to any Swap Bank under a
Swap Contract.
 
“Borrowing Base Sub-Cap” means, on the Closing Date, an amount equal to
$200,000,000.00; provided, however, Borrower may elect to change such Borrowing
Base Sub-Cap five (5) times during any twelve (12) month period to be any of
$100,000,000.00, $150,000,000.00, $175,000,000.00, $200,000,000.00,
$250,000,000.00, $300,000,000.00, $325,000,000.00 or $350,000,000.00; provided
that the Borrowing Base Sub-Cap shall never exceed the lower of (a) the
Committed Line Portions subscribed to by the Banks as shown on Schedule 2.01 at
the time of such election or (b) the Total Available Committed Line Portion if a
Defaulting Bank exists hereunder; provided further that such modified Borrowing
Base Sub-Cap shall continue in effect until again changed by Borrower in
accordance with this Agreement, or until automatically reduced as hereinafter
set forth.  Notwithstanding the foregoing, Borrower may not elect a Borrowing
Base Sub-Cap unless Borrower’s Net Working Capital and Tangible Net Worth at the
time of election are each greater than, or equal to, the greater of
$50,000,000.00 or 25% of the elected Borrowing Base Sub-Cap.
 
Borrower may elect to change which Borrowing Base Sub-Cap is in effect from time
to time by delivering to Agent and Banks a written notice of such election in
the form of Exhibit I which is attached hereto.  In the event that at the time
or after Borrower makes a Borrowing Base Sub-Cap election Borrower’s Net Working
Capital or Tangible Net Worth as reflected on a Compliance Certificate delivered
to Agent is not in compliance with the requirements set forth above for such
Borrowing Base Sub-Cap, the Borrowing Base Sub-Cap shall be automatically
reduced to the appropriate level set forth above to cause compliance with the
requirements set forth above.  Such reduction shall take place upon Agent’s
receipt of such Compliance Certificate or notice of election. NOTWITHSTANDING
THE FOREGOING, BORROWER MAY NOT ELECT A BORROWING BASE SUB-CAP IN AN AMOUNT IN
EXCESS OF THE LOWER OF (A) THE THEN TOTAL COMMITTED LINE AMOUNT SUBSCRIBED AS
SET FORTH ON SCHEDULE 2.01 FROM TIME TO TIME OR (B) THE TOTAL AVAILABLE
COMMITTED LINE PORTION IF A DEFAULTING BANK EXISTS HEREUNDER.
 
“Borrowing Date” means any date on which a Borrowing occurs under Section 2.03.
 
“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York or Dallas, Texas are authorized, or
required, by law to close, and, if such day relates to any Eurodollar Rate Loan,
means any such day on which dealings in U.S. dollar deposits are conducted by
and between banks in the London interbank eurodollar market.
 
“Canadian Dollars,” and “C $” each mean lawful money of Canada.
 
“Capital Adequacy Regulation” means any guideline, request or directive of any
central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Bank or of any corporation controlling a Bank.
 
“Capital Stock” means capital stock, equity interest or other obligations or
securities of, or any interest in, any Person.
 
“Cash Collateral” means currency issued by the United States or Canada and
Marketable Securities which have been Cash Collateralized for the benefit of the
Banks or the Swap Banks, as applicable.
 
“Cash Collateralize” means to pledge and deposit with or deliver to Wells Fargo,
for the benefit of Agent, the Issuing Banks and the Banks, Cash Collateral as
collateral for the Obligations pursuant to documentation in form and substance
satisfactory to Agent (which documents are hereby consented to by all the
Banks).  The Borrower hereby grants Agent, for the benefit of Agent, the Issuing
Banks and the Banks, a security interest in all such Cash Collateral to secure
the Obligations.  Cash Collateral consisting of cash shall be maintained in the
Bank Blocked Accounts.
 
“Change of Control” means the sale, pledge, hypothecation, assignment or other
transfer, whether direct or indirect, of more than twenty-five percent (25%) of
the Capital Stock or other ownership rights in the Borrower to any entity other
than Parent, Black Hills Non-regulated Holdings, LLC or any other direct or
indirect Subsidiary of Parent (including any sale, pledge, hypothecation,
assignment or other transfer by Parent of the Capital Stock or other ownership
rights in any Person owning, directly or indirectly, more than twenty-five
percent (25%) of the Capital Stock or other ownership rights in the Borrower)
without the prior written consent of all of the Banks.
 
“Clearinghouse Account” means the account entitled “ENSERCO” maintained on
behalf of the Borrower with Natural Gas Exchange Inc.
 
“Close-out Amount” shall have the meaning ascribed to it in the Intercreditor
Agreement.
 
“Closing Date” means the date on which all conditions precedent set forth in
Section 5.01 are satisfied or waived by all Banks.
 
“Code” means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
 
“Collateral” means all assets of the Borrower including, without limitation, all
accounts, equipment, chattel paper, inventory, Product in transit, instruments,
contract rights, the Bank Blocked Accounts, stock, partnership interests, and
general intangibles, whether presently existing or hereafter acquired or created
and the proceeds thereof and excluding the Borrower’s real estate and fixed
assets and funds held in the Borrower’s Clearinghouse Account.
 
“Collateral Position” means the total availability under the Borrowing Base
Advance Cap.
 
“Commercial Letters of Credit” means a Letter of Credit which is intended at the
time of Issuance to be drawn upon for the purchase of Product.
 
“Commitment Fee Rate” means, for any day, the rate per annum equal to 0.50%.
 
“Committed Line” means the aggregate Committed Line Portions of all the Banks as
is set forth on Schedule 2.01 hereto, as may be increased from time to time
pursuant to Section 2.01B.
 
“Committed Line Portion” means for each Bank the “Dollar Amount” of the
“Committed Line Portions” assigned to such Bank as set forth on Schedule 2.01
hereto, as may be increased from time to time pursuant to Section 2.01B.
 
“Committed Line Portion Increase” has the meaning specified in Section 2.01B(a).
 
“Committed Line Portion Increase Effective Date” has the meaning specified in
Section 2.01B(b).
 
“Compliance Certificate” means a certificate, in form attached hereto as
Exhibit B, whereby the Borrower certifies that it is in compliance with this
Agreement.
 
“Contingent Obligation” means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without recourse,
(a) with respect to any Indebtedness, lease, dividend, letter of credit or other
obligation of another Person (which obligations and Person are referred to
herein as the “primary obligation” and the “primary obligor,” respectively),
including any obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefore, (ii) to advance or
provide funds for the payment or discharge of any such primary obligation, or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof (each, a
“Guaranty Obligation”); (b) with respect to any Surety Instrument (other than
any Letter of Credit) issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments; or (c) to
purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered; or (d) in respect of any swap contract,
including Swap Contracts.
 
“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.
 
“Control Agreements” means (a) the Security Agreement Assignment of Hedging
Account, dated September 15, 2008, between Agent, Borrower and BNP Paribas
Commodity Futures, Inc., and (b) any other control agreement, in form and
substance satisfactory to Agent, executed by Agent, Borrower and a depository
institution, pursuant to which Borrower assigns, pledges and transfers all of
its right, title and interest in and to an account specified therein and
pursuant to which the parties agree that such account will be under the sole
dominion and control of Agent.
 
“Conversion/Continuation Date” means any date on which, under Section 2.04, the
Borrower (a) converts Loans of one Type to another Type, or (b) continues such
Loans as Loans of the same Type, but with a new Interest Period.
 
“Cost of Funds” means with respect to any Bank, the rate per annum quoted by
such Bank to the Agent as contemplated in the Reference Bank Cost of Funds Rate
as its cost of funds with respect to a requested Eurodollar Rate Loan, as
determined solely by such Bank in its reasonable discretion which determination
may include, without limitation, such factors as such Bank shall deem
appropriate from time to time, including without limitation, market, regulatory
and liquidity conditions; provided that such rate is not necessarily the cost to
such Bank of funding the specific requested Eurodollar Rate Loan, and may exceed
such Bank’s actual cost of borrowing in the interbank market or other markets in
which such Bank may obtain funds from time to time for amounts similar to the
amount of the requested Eurodollar Rate Loan.
 
“Credit Extension” means and includes (a) the making of any Loans hereunder, and
(b) the Issuance of any Letters of Credit hereunder.
 
“Credit Limit” means the maximum amount of Accounts and Exchange Receivables, in
the aggregate, owing by a Person to the Borrower which may be treated as
Eligible Accounts and Eligible Exchange Receivables with respect to such Person,
as indicated on the approved account list as agreed to by the Banks from time to
time.
 
“Current Assets” means those assets of the Borrower and its consolidated
Subsidiaries which would be classified as current assets of a corporation
conducting a business the same as or similar to the businesses of the Borrower
and its consolidated Subsidiaries.
 
“Current Liabilities” means Indebtedness of the Borrower and its consolidated
Subsidiaries which would be classified as current liabilities of a corporation
conducting a business the same as or similar to the businesses of the Borrower
and its consolidated Subsidiaries.
 
“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would constitute an Event of Default.
 
“Default Rate” has the meaning specified in Subsection 2.07(a).
 
“Defaulting Bank” means at any time any Bank that (a) within one Business Day of
when due, has failed to fund any portion of any Revolving Loan or L/C Advance
(or any participation in the foregoing) to the Borrower, the Agent, or Issuing
Bank, required pursuant to the terms of this Agreement to be funded by such
Bank, or has notified the Agent that it does not intend to do so; (b) within one
Business Day of when due, has failed to pay over to the Agent or any other Bank
any amount other than as set forth in clause (a) above, required to be paid by
such Bank pursuant to the terms hereof, unless such amount is the subject of a
good faith dispute; (c) that has become subject to a bankruptcy proceeding or
other similar proceeding as debtor; or (d) that is controlled by an entity which
has been deemed insolvent or has become subject to a bankruptcy proceeding or
similar proceeding as debtor.  With respect to any Bank that is a “Defaulting
Bank” pursuant to clauses (a) through (d) above, upon (i) such “Defaulting Bank”
paying all amounts owed to the applicable Bank(s) or the Agent pursuant to the
terms hereof, as reasonably determined by such Bank(s), Issuing Banks, and the
Agent, as applicable, and (ii) the approval of the Borrower, Issuing Banks and
Agent, such “Defaulting Bank” shall cease to be a “Defaulting Bank;” provided,
however, for the avoidance of doubt, any interest that accrued under this
Agreement on any amount that a Defaulting Bank failed to advance, shall be for
the account of the party that advanced such amount (or parties on a pro rata
basis if more than one Bank advanced such amount), from the time such advance
was made by the applicable Bank(s) until, but not including, the date that the
Defaulting Bank made the applicable payment or advance (as the case may be) to
such Bank(s).
 
“Delta” in relation to an option contract referencing Product, means the change
in the option premium under such option for a one unit change in the price of
the underlying Product.
 
“Delta Equivalent Basis” means the method of calculating the quantity of cash
(or futures) position in Product that will theoretically hedge an option
position against an adverse change in the price of any underlying Product by
multiplying the Delta of the option by the relevant contract size or nominal
amount.
 
“Documentation Agent” means BNP.
 
“Economic Basis” means GAAP adjusted to include (a) the forward value of both
hedged and unhedged physical transportation capacity for up to four (4) years,
net of associated transportation costs for such period, (b) the forward value of
both hedged and unhedged physical storage capacity for up to four (4) years net
of associated storage costs for such period, and (c) the lower of cost or market
adjustment to bring the value of Product inventory to market for inventory
transactions that do not classify for “hedge accounting treatment.”
 
“Effective Amount” means (a) with respect to any Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Loans occurring on such date; and
(b) with respect to any outstanding L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any Issuances of
Letters of Credit occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including changes as a result of
expiration or cancellation, any amendments, reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.  In
determining the Effective Amount of any Letter of Credit that is denominated in
Canadian Dollars, the Agent may at any time determine the United States Dollar
Equivalent of such Letter of Credit and if the Agent determines that the United
States Dollar Equivalent is in excess of the U.S. Dollar amounts shown on the
Agent’s books and records at such time, the Agent may advise the Borrower.  In
such event, the Effective Amount of such Letter of Credit shall be deemed to be
the United States Dollar Equivalent amount and the Agent shall record and
reflect such revised amount on its books and records.
 
“Elected Ninety (90) Day Swap L/C Cap” means an initial election of an amount
equal to $50,000,000.00; provided, however, Borrower may elect to change such
Elected Ninety (90) Day Swap L/C Cap five (5) times during any twelve (12) month
period to be $25,000,000.00, $50,000,000.00, $75,000,000.00 or $100,000,00.00,
which modified Elected Ninety (90) Day Swap L/C Cap shall continue in effect
until again changed by Borrower in accordance with this Agreement, or until
automatically reduced as hereinafter set forth.  Notwithstanding the foregoing,
Borrower may not elect an Elected Ninety (90) Day Swap L/C Cap unless the
Borrowing Base Sub-Cap in effect at the time of election is greater than or
equal to, the amounts specified below:
 
(a)           If the Borrower elects $25,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$100,000,000.00; or
 
(b)           If the Borrower elects $50,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$175,000,000.00; or
 
(c)           If the Borrower elects $75,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$250,000,000.00; or
 
(d)           If the Borrower elects $100,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to $300,000,000.00.
 
Borrower may elect to change which Elected Ninety (90) Day Swap L/C Cap is in
effect from time to time by delivering to Agent a written notice of such
election in the form of Exhibit K which is attached hereto.  In the event that
at the time or after Borrower makes an Elected Ninety (90) Day Swap L/C Cap
election the Borrowing Base Sub-Cap is not in compliance with the requirements
set forth above, the Elected Ninety (90) Day Swap L/C Cap shall be automatically
reduced to the appropriate level set forth above to cause compliance with the
requirements set forth above, provided that if Borrower fails to qualify for any
of (a), (b), (c) or (d) above, the Elected Ninety (90) Day Swap L/C Cap shall be
zero.  Such reduction shall take place upon Agent’s receipt of such Compliance
Certificate or notice of election.  NOTWITHSTANDING THE FOREGOING, BORROWER MAY
NOT ELECT AN ELECTED NINETY (90) DAY SWAP L/C CAP IN AN AMOUNT IN EXCESS OF THE
AMOUNT OF THE THEN L/C SUB-LIMIT CAP FOR NINETY (90) DAY SWAP LC/S AS SET FORTH
IN THE DEFINITION OF L/C SUB-LIMIT CAP BELOW.
 
“Elected Ninety (90) Day Transportation and Storage L/C Cap” means an initial
election of an amount equal to $50,000,000.00; provided, however, Borrower may
elect to change such Elected Ninety (90) Day Transportation and Storage L/C Cap
five (5) times during any twelve (12) month period to be $50,000,000.00,
$100,000,000.00 or $150,000,000.00, which modified Elected Ninety (90) Day
Transportation and Storage L/C Cap shall continue in effect until again changed
by Borrower in accordance with this Agreement, or until automatically reduced as
hereinafter set forth.  Notwithstanding the foregoing, Borrower may not elect an
Elected Ninety (90) Day Transportation and Storage L/C Cap unless the Borrowing
Base Sub-Cap in effect at the time of election is greater than or equal to, the
amounts specified below:
 
(a)           If the Borrower elects $50,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$100,000,000.00; or
 
(b)           If the Borrower elects $100,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$175,000,000.00; or
 
(c)           If the Borrower elects $150,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to $300,000,000.00.
 
Borrower may elect to change which Elected Ninety (90) Day Transportation and
Storage L/C Cap is in effect from time to time by delivering to Agent a written
notice of such election in the form of Exhibit M which is attached hereto.  In
the event that at the time or after Borrower makes an Elected Ninety (90) Day
Transportation and Storage L/C Cap election the Borrowing Base Sub-Cap is not in
compliance with the requirements set forth above, the Elected Ninety (90) Day
Transportation and Storage L/C Cap shall be automatically reduced to the
appropriate level set forth above to cause compliance with the requirements set
forth above, provided that if Borrower fails to qualify for any of (a), (b) or
(c) above, the Elected Ninety (90) Day Transportation and Storage L/C Cap shall
be zero.  Such reduction shall take place upon Agent’s receipt of such
Compliance Certificate or notice of election.  NOTWITHSTANDING THE FOREGOING,
BORROWER MAY NOT ELECT AN ELECTED NINETY (90) DAY TRANSPORTATION AND STORAGE L/C
CAP IN AN AMOUNT IN EXCESS OF THE AMOUNT OF THE THEN L/C SUB-LIMIT CAP FOR
NINETY (90) DAY TRANSPORTATION AND STORAGE LC/S AS SET FORTH IN THE DEFINITION
OF L/C SUB-LIMIT CAP BELOW.
 
Any such election made by the Borrower shall at all times be subject to the
following:
 
If the then elected Borrowing Base Sub-Cap is:
   
Then the aggregate amount of the Elected Ninety (90) Day Transportation and
Storage L/C Cap and the Elected Three Hundred Sixty-Five (365) Day
Transportation and Storage L/C Cap may not exceed:
  $ 100,000,000.00     $ 50,000,000.00   $ 150,000,000.00     $ 50,000,000.00  
$ 175,000,000.00     $ 100,000,000.00   $ 200,000,000.00     $ 100,000,000.00  
$ 250,000,000.00     $ 100,000,000.00  
$300,000,000.00 
 or more   $ 150,000,000.00  

 
“Elected Three Hundred Sixty-Five (365) Day Swap L/C Cap” means an initial
election of an amount equal to $50,000,000.00; provided, however, Borrower may
elect to change such Elected Three Hundred Sixty-Five (365) Day Swap L/C Cap
five (5) times during any twelve (12) month period to be $25,000,000.00,
$50,000,000.00 or $75,000,000.00, which modified Elected Three Hundred
Sixty-Five (365) Day Swap L/C Cap shall continue in effect until again changed
by Borrower in accordance with this Agreement, or until automatically reduced as
hereinafter set forth.  Notwithstanding the foregoing, Borrower may not elect an
Elected Three Hundred Sixty-Five (365) Day Swap L/C Cap unless the Borrowing
Base Sub-Cap in effect at the time of election is greater than or equal to, the
amounts specified below:
 
(a)           If the Borrower elects $25,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$100,000,000.00; or
 
(b)           If the Borrower elects $50,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$175,000,000.00; or
 
(c)           If the Borrower elects $75,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$250,000,000.00.
 
Borrower may elect to change which Elected Three Hundred Sixty-Five (365) Day
Swap L/C Cap is in effect from time to time by delivering to Agent a written
notice of such election in the form of Exhibit L which is attached hereto.  In
the event that at the time or after Borrower makes an Elected Three Hundred
Sixty-Five (365) Day Swap L/C Cap election the Borrowing Base Sub-Cap is not in
compliance with the requirements set forth above, the Elected Three Hundred
Sixty-Five (365) Day Swap L/C Cap shall be automatically reduced to the
appropriate level set forth above to cause compliance with the requirements set
forth above, provided that if Borrower fails to qualify for any of (a), (b), (c)
or (d) above, the Elected Three Hundred Sixty-Five (365) Day Swap L/C Cap shall
be zero.  Such reduction shall take place upon Agent’s receipt of such
Compliance Certificate or notice of election.  NOTWITHSTANDING THE FOREGOING,
BORROWER MAY NOT ELECT AN ELECTED THREE HUNDRED SIXTY-FIVE (365) DAY SWAP L/C
CAP IN AN AMOUNT IN EXCESS OF THE AMOUNT OF THE THEN L/C SUB-LIMIT CAP FOR THREE
HUNDRED SIXTY-FIVE (365) DAY SWAP LC/S AS SET FORTH IN THE DEFINITION OF L/C
SUB-LIMIT CAP BELOW.
 
“Elected Three Hundred Sixty-Five (365) Day Transportation and Storage L/C Cap”
means an initial election of an amount equal to $50,000,000.00; provided,
however, Borrower may elect to change such Elected Three Hundred Sixty-Five
(365) Day Transportation and Storage L/C Cap five (5) times during any twelve
(12) month period to be $25,000,000.00, $50,000,000.00, $75,000,000.00 or
$100,000,000.00 which modified Elected Three Hundred Sixty-Five (365) Day
Transportation and Storage L/C Cap shall continue in effect until again changed
by Borrower in accordance with this Agreement, or until automatically reduced as
hereinafter set forth.  Notwithstanding the foregoing, Borrower may not elect an
Elected Three Hundred Sixty-Five (365) Day Transportation and Storage L/C Cap
unless the Borrowing Base Sub-Cap in effect at the time of election is greater
than or equal to, the amounts specified below:
 
(a)           If the Borrower elects $25,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$100,000,000.00; or
 
(b)           If the Borrower elects $50,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$175,000,000.00;
 
(c)           If the Borrower elects $75,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be equal to or greater than
$250,000,000.00; or
 
(d)           If the Borrower elects $100,000,000.00, the Borrowing Base Sub-Cap
in effect at the time of election must be $350,000,000.00.
 
Borrower may elect to change which Elected Three Hundred Sixty-Five (365) Day
Transportation and Storage L/C Cap is in effect from time to time by delivering
to Agent a written notice of such election in the form of Exhibit M which is
attached hereto.  In the event that at the time or after Borrower makes an
Elected Three Hundred Sixty-Five (365) Day Transportation and Storage L/C Cap
election the Borrowing Base Sub-Cap is not in compliance with the requirements
set forth above, the Elected Three Hundred Sixty-Five (365) Day Transportation
and Storage L/C Cap shall be automatically reduced to the appropriate level set
forth above to cause compliance with the requirements set forth above, provided
that if Borrower fails to qualify for any of (a), (b), (c) or (d) above, the
Elected Three Hundred Sixty-Five (365) Day Transportation and Storage L/C Cap
shall be zero.  Such reduction shall take place upon Agent’s receipt of such
Compliance Certificate or notice of election.  NOTWITHSTANDING THE FOREGOING,
BORROWER MAY NOT ELECT AN ELECTED THREE HUNDRED SIXTY-FIVE (365) DAY
TRANSPORTATION AND STORAGE L/C CAP IN AN AMOUNT IN EXCESS OF THE AMOUNT OF THE
THEN L/C SUB-LIMIT CAP FOR THREE HUNDRED SIXTY-FIVE (365) DAY TRANSPORTATION AND
STORAGE LC/S AS SET FORTH IN THE DEFINITION OF L/C SUB-LIMIT CAP BELOW.
 
 
 

--------------------------------------------------------------------------------

 
Any such election made by the Borrower shall at all times be subject to the
following:
 
If the then elected Borrowing Base Sub-Cap is:
   
Then the aggregate amount of the Elected Ninety (90) Day Transportation and
Storage L/C Cap and the Elected Three Hundred Sixty-Five (365) Day
Transportation and Storage L/C Cap may not exceed:
  $ 100,000,000.00     $ 50,000,000.00   $ 150,000,000.00     $ 50,000,000.00  
$ 175,000,000.00     $ 100,000,000.00   $ 200,000,000.00     $ 100,000,000.00  
$ 250,000,000.00     $ 100,000,000.00  
$300,000,000.00
 or more   $ 150,000,000.00  

 
“Eligible Accounts” means, at the time of any determination thereof, each of the
Borrower’s Accounts as to which the following requirements have been fulfilled
to the satisfaction of all the Banks:
 
(a)           Such Account is the result of a sale of Product to a Tier I or
Tier II Account Party, subject to the following limits;
 
(i)           If the aggregate amount of Accounts for an Account Debtor exceeds
$500,000.00, the Eligible Accounts from such Account Debtor may not exceed the
aggregate amount pre-approved by the Required Banks; or
 
(ii)           If such Account is secured by letters of credit issued in favor
of the Borrower by a bank with a credit rating equal to A- (Standard & Poor’s)
or A3 (Moody’s) or higher or by a bank approved by the Required Banks, the
aggregate undrawn amount of such letter(s) of credit; or
 
(iii)           $500,000.00 in the aggregate amount per Account Debtor if no
limit has been established pursuant to (i) or (ii) above.
 
(b)           Borrower has lawful and absolute title to such Account;
 
(c)           Such Account is a valid, legally enforceable obligation of the
Person who is obligated under such Account for goods actually delivered to such
Account Debtor in the ordinary course of the Borrower’s business;
 
(d)           Such Account shall have excluded therefrom any portion that is
subject to any dispute, offset, counterclaim reduction, adjustment, contra
account or other claim or defense on the part of the Account Debtor or to any
claim on the part of the Account Debtor denying liability under such Account or
to any offset relating to out-of-the-money mark to market exposure with respect
to such Account; provided, however, that in the event that the portion that is
subject to any such dispute, counterclaim or other claim or defense is secured
with a letter of credit, such portion secured by the letter of credit shall not
be excluded;
 
(e)           Such Account is not evidenced by any chattel paper, promissory
note or other instrument;
 
(f)           Such Account is subject to a perfected first priority security
interest (or properly filed and acknowledged assignment, in the case of U.S.
government contracts, if any) in favor of Agent pursuant to the Loan Documents,
prior to the rights of, and enforceable as such against, any other Person, and
such Account is not subject to any security interest or Lien in favor of any
Person other than the Liens of the Banks pursuant to the Loan Documents and
First Purchaser Liens;
 
(g)           Such Account shall have excluded therefrom any portion which is
not payable in United States Dollars or Canadian Dollars.  If an Account is
payable in Canadian Dollars, it shall be taken into account for purposes of any
dollar limitations contained herein at the United States Dollar Equivalent of
such Account;
 
(h)           Such Account has been due and payable for 15 days or less (or 30
days or less, if the Account Debtor is a governmental entity) from the due date
under the related invoice and no extension or indulgence has been granted
extending the due date beyond a 15 day period (or 30 days, as the case may be)
and no invoice shall have a due date more than 45 days from the date of the
invoice.  In the event that 25% or more of the Accounts of any Account Debtor
exceed the time limitations set forth above, all Accounts of such Account Debtor
shall be excluded;
 
(i)           No Account Debtor in respect of such Account is an Affiliate of
the Borrower; provided, however, if the Account Debtor which is an Affiliate of
the Borrower is a Tier II Account Party and, at the time the Account is created,
Parent has an investment grade credit rating, such Account shall not be
excluded, except that Accounts where the Account Debtor is an Affiliate of the
Borrower shall be excluded if they exceed in the aggregate ten percent (10%) of
the Borrowing Base Advance Cap;
 
(j)           No Account Debtor in respect of such Account is incorporated in or
primarily conducting business in any jurisdiction outside of the U.S. or Canada,
unless such Account Debtor and the Account is approved in writing by all Banks;
and
 
(k)           No Account Debtor, or guarantor of such Account Debtor’s
Obligations with respect to such Account (provided the Banks have relied on the
creditworthiness of the guarantor in approving such Account), in respect of such
Account (i) is insolvent, or generally fails to pay, or admits in writing its
inability to pay its debts as they become due, whether at stated maturity or
otherwise, or (ii) commences any Insolvency Proceeding with respect to itself;
or (iii) has had an Insolvency Proceeding commenced or filed against it;
 
provided that the amount of Accounts owing by an Account Debtor to the Borrower
(excluding Accounts described in paragraph (a)(ii) above relating to Accounts
secured by letters of credit) which may be treated as Eligible Accounts may not
exceed the Credit Limit for such Account Debtor.
 
For purposes of applying the above requirements for determining an Eligible
Account, if the Agent requests the approval of a Bank to treat an Account as an
Eligible Account, and such Bank does not respond to Agent within five (5)
Business Days of the receipt of such written request, such Bank shall be deemed
to have approved the treatment of the Account as an Eligible Account.
 
“Eligible Assignee” means (a) a commercial bank organized under the laws of the
United States, or any state thereof, and having a combined capital and surplus
of at least $100,000,000.00; (b) a commercial bank organized under the laws of
any other country which is a member of the Organization for Economic Cooperation
and Development (the “OECD”), or a political subdivision of any such country,
and having a combined capital and surplus of at least $100,000,000.00; provided,
however, that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial lending and that is (i) a Subsidiary of a Bank (or bank referred to
in the preceding clauses (a) or (b)), (ii) a Subsidiary of a Person of which a
Bank (or bank referred to in the preceding clauses (a) or (b)), is a Subsidiary,
or (iii) a Person of which a Bank (or bank referred to in the preceding
clauses (a) or (b)) is a Subsidiary; and (d) any Person upon which Agent, the
Issuing Banks and Borrower have agreed may serve as an Eligible Assignee.
 
“Eligible Broker” means any broker approved in writing by Agent and all the
Banks.
 
“Eligible Commodity Futures Accounts” means an account or accounts with an
Eligible Broker in which Agent is granted a first and prior security interest as
Agent for the Banks pursuant to Hedging Assignments which security interest is
subject only to the rights of the Eligible Broker under such accounts.
 
“Eligible Exchange Receivables” means all enforceable rights of the Borrower
under an Exchange Receivable which (a) are evidenced by a written agreement
enforceable against the Exchange Debtor thereof, (b) are current pursuant to the
terms of the contract or invoice, (c) are free and clear of all Liens in favor
of third parties, except Liens in favor of the Agent for the benefit of the
Banks, (d) are not the subject of a dispute between the Exchange Debtor and the
Borrower, (e) are valued at an independent posting acceptable to the Agent in
its sole discretion, (f) if arising pursuant to contracts involving an amount in
excess of an aggregate of $500,000.00, are (i) contracts by exchangers
pre-approved by the Required Banks in their sole discretion, or (ii) contracts
secured by letters of credit in form acceptable to Agent in its sole discretion,
(g) when added to the Exchange Receivables owing by any one Exchange Debtor, is
for an amount less than $500,000.00 in the aggregate, and (h) have not been
otherwise determined by the Required Banks in their sole discretion to be
unacceptable to the Required Banks; provided that the amount of Exchange
Receivables owing by an Exchange Debtor to the Borrower (excluding Exchange
Receivables described in clause (f)(ii) above relating to contracts secured by
letters of credit) which may be treated as an Eligible Exchange Receivables may
not exceed the Credit Limit for such Exchange Debtor.  Such Exchange Receivable
shall have excluded therefrom any portion that is subject to any dispute,
offset, counterclaim reduction, adjustment, contra account, account payable
exchange payable or other claim or defense on the part of the Exchange Debtor or
to any claim on the part of the Exchange Debtor denying liability under such
Exchange Receivable; provided, however, that in the event that the portion that
is subject to any such dispute, counterclaim or other claim or defense is
secured with a letter of credit, such portion secured by the letter of credit
shall not be excluded.  The Product and Account relating to or creating any
Eligible Exchange Receivable shall not be simultaneously included in any other
availability calculation, including, without limitation, Undelivered Product
Value, Eligible Inventory or Eligible Accounts.
 
“Eligible Inventory” means, at the time of determination thereof, all of the
Borrower’s inventory located in the U.S. or Canada valued at current market (as
referenced by a published source reasonably acceptable to the Agent), and in all
instances as to which the following requirements have been fulfilled to the
satisfaction of the Required Banks:
 
(a)           The inventory is owned by the Borrower free and clear of all Liens
in favor of third parties, except Liens in favor of the Banks under the Loan
Documents and except for Permitted Liens;
 
(b)           The inventory has not been identified to deliveries with the
result that a buyer would have rights to the inventory that would be superior to
Agent’s security interest for the benefit of the Banks, nor shall such inventory
have become the subject of a customer’s ownership or Lien;
 
(c)           The inventory is in transit in the U.S. or Canada under the
control and ownership of the Borrower or is in a pipeline or a bill of lading
has been issued to Agent if such inventory is in the hands of a third party
carrier or is located in the U.S. or Canada at the locations described on
Schedule 7.03(f), or at such other place as has been specifically agreed to in
writing by the Agent and the Borrower;
 
(d)           If the inventory is located in a terminal or storage facility,
such terminal or facility, together with the related storage agreement, must be
acceptable to the Agent in its sole discretion, and the Borrower shall have
furnished to each owner of a storage facility (with a copy delivered to the
Agent) a signed letter noting the Banks’ first priority security interest in
such inventory (subject to Permitted Liens) in form and substance satisfactory
to Agent addressed to each such owner of a storage facility;
 
(e)           The inventory is subject to a fully perfected first priority
security interest in favor of Agent for the benefit of the Banks pursuant to the
Loan Documents; and
 
(f)           With respect to natural gas inventory located in a storage
facility or pipeline, the following shall apply:
 
(i)           Eligible Inventory shall have excluded therefrom any portion that
is subject to any dispute, offset, counterclaim reduction, adjustment, or other
claim (other than any rights to applicable contractual future demand charges for
storage and transportation (“Demand Charges”)).
 
(ii)           Eligible Inventory in a storage facility or pipeline of a
specific operator (each, and “Operator”) will be reduced by: (A) for Eligible
Inventory in a third-party storage facility, 100% of the Demand Charges of such
specific Operator (the “Storage Inventory Reduction”) and (B) for Eligible
Inventory in a third-party pipeline, 50% of the Demand Charges of such specific
Operator (the “Pipeline Inventory Reduction”), but in the case of (A) or (B),
Eligible Inventory will be reduced only by Demand Charges beyond the mark to
market valuation period; provided, however, (x) if the Borrower fails to deliver
within sixty (60) days after the Closing Date a legal opinion or other evidence
reasonably acceptable to the Supermajority Banks confirming that each Operator
has the right (contractual or otherwise) to rebid capacity should the Borrower
default in the payment of any Demand Charges, then the Pipeline Inventory
Reduction with respect to all Operators shall be 100% or (y) if the Borrower
delivers within sixty (60) days after the Closing Date a legal opinion or other
evidence reasonably acceptable to the Supermajority Banks confirming that some
or all Operators have the right (contractual or otherwise) to rebid capacity
should the Borrower default in the payment of any Demand Charges, then the
Pipeline Inventory Reduction with respect to each Operator that has the right to
rebid capacity as confirmed by such legal opinion or other evidence shall remain
at 50% and the Pipeline Inventory Reduction with respect to all other Operators
shall be 100%.
 
(iii)           The Storage Inventory Reduction and the applicable Pipeline
Inventory Reduction shall be reduced (i.e. the percentages shall be decreased)
by a percentage determined in the good faith discretion of the Supermajority
Banks upon receipt of a legal opinion or other evidence confirming, to the
reasonable satisfaction of the Supermajority Banks, that (A) if the Borrower
defaults under any storage or transport service contract, its liability for
Demand Charges are limited to the difference between the replacement shipper’s
rate and the amount set forth in the applicable storage or pipeline service
agreement or (B) the exposure of Eligible Inventory to Demand Charges is
otherwise limited.
 
(iv)           In the event that any portion of Eligible Inventory that is
subject to any such dispute, counterclaim or other claim (including Demand
Charges) is secured with a letter of credit, such portion secured by the letter
of credit shall not be excluded from Eligible Inventory.
 
“Environmental Claims” means all claims, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the environment.
 
“Environmental Laws” means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
 
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
 
“Eurodollar Effective Amount” means the product of the principal amount of a
Eurodollar Rate Loan or requested Eurodollar Rate Loan and the number of days in
the applicable Interest Period for such Eurodollar Rate Loan.
 
“Eurodollar Rate” means for any Interest Period with respect to any Eurodollar
Rate Loan:
 
(a)           the rate per annum equal to the rate determined by Agent to be the
offered rate that appears on the page of the Dow Jones Market Service screen (or
any successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or
 
(b)           if the rate referenced in the preceding subsection (a) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum equal to the rate determined by Agent to be the
offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
 
(c)           if the rates referenced in the preceding subsections (a) and (b)
are not available, the rate per annum determined by Agent as the rate of
interest (rounded upward to the next 1/100th of 1%) at which deposits in Dollars
for delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or
converted and with a term equivalent to such Interest Period would be offered by
the London Branch of Fortis Bank, S.A./N.V. as stated on Dow Jones Market
Service Page 3750 as of 11:00 a.m. (London time) two (2) Business Days prior to
the first day of such Interest Period.  If such interest rates shall cease to be
available from Dow Jones Market Service, such interest rates shall be determined
from such financial reporting service or other information as shall be mutually
acceptable to Agent and the Borrower.
 
“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.
 
“Event of Default” means any of the events or circumstances specified in
Section 9.01.
 
“Exchange Act” means the Securities and Exchange Act of 1934, as amended, and
regulations promulgated thereunder.
 
“Exchange Debtor” means a Person who is obligated to the Borrower under an
Exchange Receivable.
 
“Exchange Receivable” means a right of the Borrower to receive Product in
exchange for the sale or trade of Product previously delivered to an Exchange
Debtor by the Borrower.
 
“Existing Letters of Credit” means all Letters of Credit existing as of the
Closing Date as set forth on Schedule 1.01.
 
“Expiration Date” means the earliest to occur of:
 
(a)           May 7, 2010; or
 
(b)           the date on which this Agreement is terminated pursuant to Section
9.02.
 
“FDIC” means the Federal Deposit Insurance Corporation, and any Governmental
Authority succeeding to any of its principal functions.
 
“Federal Funds Rate” means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
“H.15(519)”) on the preceding Business Day opposite the caption “Federal Funds
(Effective)”; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by Agent of the rates for the last transaction in overnight
Federal Funds arranged prior to 9:00 a.m. (New York City time) on that day by
each of three leading brokers of Federal Funds transactions in New York City
selected by Agent.
 
“First Purchaser Lien” has the meaning specified in the definition of “Borrowing
Base Advance Cap.”
 
“Foreign Bank” has the meaning specified in Section 10.10.
 
“FRB” means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
 
“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
 
“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
 
“Guaranty Obligation” has the meaning specified in the definition of “Contingent
Obligation.”
 
“Hedging Assignment” means a security agreement among Borrower, Agent and a
broker relating to the collateral assignment to Agent, as collateral agent for
the Banks, of all sums owing from time to time to Borrower with respect to any
Eligible Commodities Futures Accounts maintained by Borrower, such agreement to
be substantially in the form attached hereto as Exhibit N or in other form and
substance acceptable to the Banks in their sole discretion.
 
“Honor Date” has the meaning specified in Subsection 3.03(b).
 
“ICC” has the meaning specified in Section 3.09.
 
“Indebtedness” of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business on ordinary terms); (c) all
non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligations with respect to capital leases; (g)
all obligations with respect to Swap Contracts; (h) all indebtedness referred to
in clauses (a) through (g) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such indebtedness; and (i) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses
(a) through (g) above.
 
“Indemnified Liabilities” has the meaning specified in Section 11.05.
 
“Indemnitees” has the meaning specified in Section 11.05.
 
“Independent Auditor” has the meaning specified in Subsection 7.01(a).
 
“Information” has the meaning specified in Section 11.08.
 
“Insolvency Proceeding” means, with respect to any Person (a) any case, action
or proceeding with respect to such Person before any court or other Governmental
Authority relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its creditors generally
or any substantial portion of its creditors; undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
 
“Intercreditor Agreement” means the First Amended and Restated Intercreditor
Agreement dated as of May 8, 2009, among the Banks relating to the sharing of
Collateral with and among the Swap Banks.
 
“Intercreditor Agreement Adjusted Pro Rata Share” shall have the meaning
ascribed to the term “Adjusted Pro Rata Share” in the Intercreditor Agreement.
 
“Interest Payment Date” means the later of (a) the 5th Business Day of each
month, or (b) the date of payment shown on the monthly billing delivered to the
Borrower by the Agent (which date of payment shall be no less than two (2)
Business Days after delivery of such monthly billing), but in no event later
than the Expiration Date.
 
“Interest Period” means, as to any Eurodollar Rate Loan, the period commencing
on the Borrowing Date of such Loan or on the Conversion/Continuation Date on
which the Loan is converted into or continued as a Eurodollar Rate Loan, and
ending on the date selected by the Borrower in its Notice of Borrowing or Notice
of Conversion/Continuation as the ending date thereof, not to exceed a period of
one week or one, two or three months thereafter; provided, however, that:
 
(a)           any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Rate Loan, such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day;
 
(b)           any Interest Period pertaining to a Eurodollar Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
 
(c)           no Interest Period shall extend beyond the scheduled Expiration
Date.
 
“IRS” means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.
 
“Issuance Date” means the date on which any Letter of Credit is actually issued
hereunder.
 
“Issue” means, with respect to any Letter of Credit, to issue or to extend the
expiry of, or to renew or increase the amount of, such Letter of Credit; and the
terms “Issued,” “Issuing” and “Issuance” have corresponding meanings.
 
“Issuing Bank Sub-Limit” means, with respect to each Issuing Bank, the limit set
opposite such Issuing Bank under the heading “Sub-Limit” in the table below;
provided that while any Bank qualifies as a Defaulting Bank hereunder, each
Bank’s “Sub-Limit” shall be reduced to an amount equal to (a) such Issuing
Bank’s Issuing Percentage Cap (expressed as a decimal, rounded to the ninth
decimal place) at such time, times (b) the Total Available Committed Line
Portion at such time, rounded to the nearest whole dollar.
 
Issuing Bank   
 
Sub-Limit
 
Fortis   
  $ 300,000,000.00  
SocGen   
  $ 0  
BNP   
  $ 66,000,000.00  

 
At such time as SocGen notifies the Borrower and the Agent that it may serve as
an Issuing Bank, it shall notify the Borrower, the Agent and the other Issuing
Banks of its Issuing Bank Sub-Limit.
 
“Issuing Banks” means Fortis and BNP and any of their Affiliates, and any other
Bank, subject to Agent’s consent not to be unreasonably withheld (upon Agent’s
consent such Bank shall provide written notice to the Agent, the Borrower and
the other Issuing Banks of such Bank’s Issuing Bank Sub-Limit and Issuing
Percentage Cap), in such Bank’s or Affiliate’s capacity as an issuer of one or
more Letters of Credit hereunder, together with any replacement letter of credit
issuer arising under Section 2.14.  At such time as SocGen notifies the Borrower
and Agent in writing that it has received internal credit approval to act as an
Issuing Bank, it shall be considered an Issuing Bank hereunder.
 
“Issuing Percentage Cap” means, with respect to each Issuing Bank, the
percentage set opposite such Issuing Bank under the heading “Issuing Percentage”
in the table below, as such amounts may be amended from time to time pursuant to
Section 11.01 hereof.
 
Issuing Bank
Issuing Percentage
Fortis
81.967213115%
SocGen
0%
BNP
18.032786885%

At such time as SocGen notifies the Borrower and the Agent that it may serve as
an Issuing Bank, it shall notify the Borrower, the Agent and the other Issuing
Banks of its Issuing Percentage Cap.
 
“L/C Advance” means each Bank’s participation in any L/C Borrowing or Reducing
L/C Borrowing in accordance with its Pro Rata Advance Share with respect to
Letters of Credit Issued hereunder (or if a Defaulting Bank exists, and without
limitation to the obligations of such Defaulting Bank under this Agreement, with
respect to each Non-Defaulting Bank, its Pro Rata Adjusted Share, if
applicable).
 
“L/C Amendment Application” means an application form for amendment of
outstanding Standby or Commercial Letters of Credit as shall at any time be in
use at any Issuing Bank, as such Issuing Bank shall request.
 
“L/C Application” means an application form for Issuances of Standby or
Commercial Letters of Credit as shall at any time be in use at any Issuing Bank,
as such Issuing Bank shall request.
 
“L/C Borrowing” means an extension of credit resulting from either a drawing
under any Letter of Credit or a Reducing L/C Borrowing, which extension of
credit shall not have been reimbursed on the date when made nor converted into a
Borrowing of Revolving Loans under Section 3.03.
 
“L/C Cap” means the maximum availability for Issuance of Letters of Credit under
the Borrowing Base Line which shall be an amount equal to the total Effective
Amount of L/C Obligations plus the Effective Amount of then outstanding Loans
not to exceed the lesser of the Borrowing Base Advance Cap or the L/C Sub-limit
Cap for each type of Letter of Credit.
 
“L/C Obligations” means at any time the sum of (a) the aggregate undrawn amount
of all Letters of Credit then outstanding, plus (b) the amount of all
unreimbursed drawings under all Letters of Credit, including all outstanding L/C
Borrowings.
 
“L/C-Related Documents” means the Letters of Credit, the L/C Applications, the
L/C Amendment Applications and any other document relating to any Letter of
Credit, including, but not limited to, any Issuing Bank’s standard form
documents for letter of credit issuances.
 
“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
- $75,000,000.00 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)           Ninety (90) Day Supply L/Cs – the Committed Line Portions
subscribed to by the Banks as shown on Schedule 2.01 less (i) any amounts
outstanding under (a), (b), (c), (d) and (e) above, (ii) the aggregate undrawn
amounts of all outstanding Three Hundred Sixty-Five (365) Day Supply L/Cs and
(iii) the Effective Amount of all Revolving Loans; and
 
(g)           Three Hundred Sixty-Five (365) Day Supply L/Cs - $25,000,000.00.
 
In the event Committed Line Portions are increased to $350,000,000.00 pursuant
to Section 2.01B, the dollar limit in paragraph (c) above shall be
$100,000,000.00.

“Lending Office” means, as to any Bank, the office or offices of such Bank
specified as its “Lending Office” on Schedule 11.02, or such other office or
offices as such Bank may from time to time notify the Borrower and Agent.
 
“Letters of Credit” means (a) any letters of credit (whether Standby Letters of
Credit or Commercial Letters of Credit) Issued by an Issuing Bank pursuant to
Article III, (b) any Reducing Letters of Credit, and (c) any Existing Letters of
Credit.
 
“Lien” means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge, encumbrance, or lien, statutory or other in
respect of any property, including those created by, arising under or evidenced
by any conditional sale or other title retention agreement, the interest of a
lessor under a capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as debtor,
under the Uniform Commercial Code or any comparable law.
 
“Loan” means any extension of credit by a Bank to the Borrower under Article II
or Article III in the form of a Revolving Loan or an L/C Advance.
 
“Loan Documents” means this Agreement, the Notes, the Security Agreements, the
L/C-Related Documents, the fee letters and all other documents delivered to
Agent or any Bank in connection herewith.
 
“Loan Parties” means the Borrower and any Subsidiaries.  “Loan Party” means any
of the foregoing.
 
“Long Position” means the aggregate number of MMBTUS of natural gas or barrels
of crude oil/distillates for crude blending which are either held in inventory
or which Borrower has contracted to purchase (whether by purchase of a contract
on a commodities exchange or otherwise), or which Borrower will receive in
exchange or under a swap contract including, without limitation, all option
contracts (calculated on a Delta Equivalent Basis) representing the obligation
of Borrower to purchase Product at the option of a third party, and in each
case, for which a fixed purchase price has been set.  Long Positions will be
expressed as a positive number.
 
“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the FRB.
 
“Marketable Securities” means (a) certificates of deposit issued by any bank
with a Fitch rating of A or better, (b) commercial paper rated P-1, A-1 or F-1,
(c) bankers acceptances rated prime, or (d) U.S. Government obligations with
tenors of 90 days or less.
 
“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of the Borrower or the Borrower and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party; (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party or (d) any Loan Party at any time asserts that any Loan Document is not
legal or valid, or is not binding upon or enforceable against such Loan Party.
 
“Maturity Date” means May 7, 2011.
 
“Maximum Rate” has the meaning specified in Section 11.10.
 
“Multiemployer Plan” means a “multiemployer plan”, within the meaning of
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes,
is making, or is obligated to make contributions or, during the preceding three
(3) calendar years, has made, or been obligated to make, contributions.
 
“Net Fixed Price Volume” means the number of MMBTUS of natural gas or barrels of
crude oil/distillates for crude blending resulting from the netting of the sum
of all Long Positions and Short Positions of Borrower.
 
“Net Fixed Price Volume Report” means a report in form attached hereto as
Exhibit E.
 
“Net Working Capital” means the excess of Current Assets over Current
Liabilities (excluding the current portion of Subordinated Debt), less
investments in Capital Stock.  In calculating Net Working Capital, (i) the
amount of Subordinated Debt excluded from liabilities in such calculation shall
not exceed 50% of the resulting Net Working Capital, provided, however, in the
event Subordinated Debt is used to prevent any financial covenant default, the
limitation on the amount of Subordinated Debt excluded from liabilities may be
removed upon approval of the Required Banks; and (ii) all amounts due from
Parent, employees, owners, Subsidiaries and Affiliates shall be excluded from
Current Assets.
 
“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 for resale or
to secure the purchase of Product.
 
“Ninety (90) Day Swap L/Cs” means standby Letters of Credit with a tenor of less
than ninety-one (91) days Issued to support payments owed to counterparties
under swap contracts.
 
“Ninety (90) Day Transportation and Storage L/Cs” means Letters of Credit with a
tenor of less than ninety-one (91) days Issued to secure companies for
transportation expenses and storage expenses.
 
“Non-Defaulting Banks” means, at any time, each Bank that is not a Defaulting
Bank at such time.
 
“Notes” means the promissory notes executed by the Borrower in favor of a Bank
pursuant to Subsection 2.02(b), in form approved by the Banks.  A Note will be
issued by the Borrower to each entity that becomes a Bank hereunder from time to
time, but will not be issued to Participants of a Bank.
 
“Notice of Borrowing” means the applicable notice in substantially the form of
Exhibit A-1.
 
“Notice of Committed Line Portion Increase” has the meaning specified in Section
2.01B(b).
 
“Notice of Conversion/Continuation” means a notice in substantially the form of
Exhibit A-2.
 
“Notice of Subscription Increase” has the meaning specified in Section 2.01A(b).
 
“Obligations” means (a) all advances, debts, liabilities, obligations, covenants
and duties arising under any Loan Document owing by the Borrower to any Bank, or
any affiliate of any Bank, Agent, or any Indemnitee, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising, including without limitation
overdraft costs arising as a result of transfers of funds made through the
automated clearinghouse system and all obligations of the Borrower under
Revolving Loans and arising from Letters of Credit, excluding any of the
foregoing referred to in clause (b) hereof, and (b) all indebtedness,
liabilities and obligations owing by Borrower to any Swap Bank under a Swap
Contract, whether due or to become due, absolute or contingent, or now existing
or hereafter arising.  For purposes of determining the amount of the Borrower’s
Obligations under a Swap Contract, the amount of such Obligation shall be an
amount equal to the Close-out Amount with respect to such Swap Contract.
 
“Organization Documents” means (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any
partnership, the partnership agreement, (c) for any limited liability company,
the articles of organization and all other documents or filings as may be
required by the Secretary of State (or other applicable governmental agency) in
the state of such limited liability company’s formation.
 
“Other Taxes” has the meaning specified in Subsection 4.01(b).
 
“Parent” means Black Hills Corporation.
 
“Participant” has the meaning specified in Subsection 11.07(d).
 
“PBGC” means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
 
“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Borrower sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan years.
 
“Performance L/C” means any Letters of Credit securing counterparties for
performance under Product contracts with an expiry date of 365 days or less.
 
“Permitted Liens” has the meaning specified in Section 8.01.
 
“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
 
“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Borrower sponsors or maintains or to which the Borrower makes, is
making, or is obligated to make contributions and includes any Pension Plan.
 
“Product” means natural gas, crude oil or distillates for crude blending.
 
“Pro Rata Adjusted Share” means, at any time that one or more Banks qualifies as
a Defaulting Bank hereunder, with respect to each Non-Defaulting Bank, the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) at such time of such Bank’s Committed Line Portion divided by the
Committed Line (excluding the aggregate Committed Line Portions of all
Defaulting Banks); provided that the application of the Pro Rata Adjusted Share
shall in no event result in a Non-Defaulting Bank being obligated to extend
credit in an amount in excess of its Committed Line Portion, and no adjustment
to a Non-Defaulting Bank’s Committed Line Portion shall arise from such
Non-Defaulting Bank’s agreement herein to fund in accordance with its Pro Rata
Adjusted Share.
“Pro Rata Advance Share” means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Bank’s Committed Line Portion divided by the Committed Line.
 
“Pro Rata Share” means, as to any Bank at any time, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such time of
such Bank’s total Effective Amount divided by the combined total Effective
Amount of all the Banks.
 
“Reducing Letters of Credit” means any letters of credit (whether Standby
Letters of Credit or Commercial Letters of Credit) that (a) are Issued by an
Issuing Bank pursuant to Article III, and (b) specifically provide that the
amount available for drawing under such letters of credit will be reduced,
automatically and without any further amendment or endorsement to such letters
of credit, by the amount of any payment or payments made to the beneficiary of
such Letter of Credit by the Borrower if such payment or payments (i) are made
through a Bank and (ii) reference such letters of credit by the letter of credit
numbers thereof, notwithstanding the fact that such payment or payments are not
made pursuant to conforming and proper draws under such letters of credit.
 
“Reducing L/C Borrowing” means any extension of credit by the Banks to the
Borrower for the purpose of funding any payment or payments made to the
beneficiary of a Reducing Letter of Credit by the Borrower if such payment or
payments (a) are made through a Bank, (b) reference the Reducing Letter of
Credit by the letter of credit number thereof, and (c) are not made pursuant to
a conforming and proper draws under such Reducing Letter of Credit.
 
“Reference Bank Cost of Funds Rate” means an average rate determined from time
to time as a simple average of the Cost of Funds rates submitted at the sole
discretion of the Non-Defaulting Banks (at the request of the Agent, it being
understood that any Non-Defaulting Bank will have the right to elect not to
submit its Cost of Funds to the Agent (as contemplated below)), which average
rate shall be calculated as follows, with respect to each determination
date:  (i) a simple average of all of the Cost of Funds rates submitted by the
Banks with respect to such determination date; and (ii) the minimum number of
Cost of Funds rates to be used to calculate the simple average shall not be less
than half the number of Banks (excluding Defaulting Banks) holding a Committed
Line Portion as of the applicable determination date.  If the number of
submitted Cost of Funds rates, with respect to any determination date, is fewer
than the minimum number of Cost of Funds rates required pursuant to clause (ii)
above, then the highest of the Eurodollar Rates determined as of such
determination date based on an Interest Period lasting (w) one week, (x) two
weeks, (y) one month or (z) two months, shall be used in substitution for each
such rate fewer than the minimum number of Cost of Funds rates required pursuant
to clause (ii) above so that the average rate shall be determined from a number
of rates equal to the minimum number of Cost of Funds rates required pursuant to
clause (ii) above (even if, for the avoidance of doubt, such Eurodollar Rate is
used multiple times for the purposes of such calculation).
 
Upon the Agent’s receipt of a Notice of Borrowing requesting a Eurodollar Rate
Loan, the Agent shall promptly request each Non-Defaulting Bank to submit its
Cost of Funds rate for purposes of calculating the Reference Bank Cost of Funds
Rate.  Each Non-Defaulting Bank shall provide its Cost of Funds rate to the
Agent no later than 10:00 a.m. (New York City time) on the Business Day
immediately succeeding the day on which such Cost of Funds rate was requested by
the Agent (such Business Day, the “Determination Date”).  Any Non-Defaulting
Bank that fails to submit a Cost of Funds rate by such time on the Determination
Date shall be deemed to have elected not to submit a Cost of Funds rate with
respect to such Notice of Borrowing.  The Agent shall calculate the “Reference
Bank Cost of Funds Rate” in accordance with the procedures set forth above and
shall provide such rate to the Borrower no later than noon (New York City time)
on the Determination Date, which rate, in each case, shall be provided to the
Borrower as a simple average rate, without identifying the underlying rates
submitted by the Banks.  Notwithstanding any provisions to the contrary in this
Agreement, with respect to any Notice of Borrowing that is designated a
“revocable” notice by the Borrower (by checking the appropriate box on such
Notice of Borrowing), the Borrower shall be permitted to revoke such Notice of
Borrowing by providing a written refusal to borrow to the Agent not later than
2:00 p.m. (New York City time) on the Determination Date; provided that the
Borrower shall be permitted to invoke such refusal to borrow not more than three
times in any calendar month.  If no refusal to borrow is received by the Agent
prior to 2:00 p.m. (New York City time) on a Determination Date, the Agent will
promptly provide each Bank with a confirmed Notice of Borrowing confirming the
initial Notice of Borrowing and the applicable rate that shall initially apply
to such Borrowing.
 
“Related Persons” means any Person, together with its respective Affiliates and
the officers, directors, employees, agents, attorneys-in-fact, correspondents,
participants and assignees of such Persons and Affiliates.
 
“Reportable Event” means, any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
 
“Required Banks” means Banks, at any time, with a minimum of two (2) Banks,
holding at least fifty-one percent (51%) of all of the Total Available Committed
Line Portion at such time, which amount shall, for the avoidance of doubt, be
allocated to each Non-Defaulting Bank in an amount equal to its Committed Line
Portion, and to each Defaulting Bank, its Effective Amount thereof, in each case
at such time.
 
“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
 
“Responsible Officer” means those persons named on the Responsible Officer List.
 
“Responsible Officer List” means the list of the Borrower’s Responsible Officers
furnished to Agent hereunder as it may be modified from time to time.
 
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock, membership
interest or equity interest of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock, membership interest or
equity interest or of any option, warrant or other right to acquire any such
capital stock, membership interest or equity interest.
 
“Revolving Loan” has the meaning specified in Section 2.01.
 
“Security Agreements” means the Borrower’s Second Amended and Restated Security
Agreement, the Borrower’s Canadian Security Agreement, the Blocked Account
Agreements, the Control Agreements, and all Hedging Assignments, all of which
shall also secure the Swap Banks (as more fully described in such agreements),
notwithstanding the fact that the definitions used herein of any of the
foregoing terms may refer to the securing only of the Banks.
 
“Sharing Event” shall have the meaning ascribed to it in the Intercreditor
Agreement.
 
“Short Position” means the aggregate number of MMBTUS of natural gas or barrels
of crude oil/distillates for crude blending which Borrower has contracted to
sell (whether by sale of a contract on a commodities exchange or otherwise) or
deliver on exchange or under a swap contract, including, without limitation, all
option contracts (calculated on a Delta Equivalent Basis) representing the
obligation of Borrower to sell Product at the option of a third party and in
each case for which a fixed sales price has been set.  Short Positions shall be
expressed as a negative number.
 
“SocGen Canada” has the meaning specified in Section 8.06(e).
 
“Standby Letter of Credit” means a Letter of Credit which is not intended at the
time Issued to be drawn upon.
 
“Subordinated Debt” means Indebtedness of the Borrower which has been reported
to the Banks and which has been subordinated to the Obligations pursuant to a
subordination agreement substantially in the form attached hereto as Exhibit H.
 
“Subscription Increase” has the meaning specified in Section 2.01A(c).
 
“Subscription Increase Effective Date” has the meaning specified in Section
2.01A(b).
 
“Subsidiary” of a Person means any corporation, association, partnership, joint
venture or other business entity of which more than 50% of the voting stock or
other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.  Unless the context
otherwise clearly requires, references herein to a “Subsidiary” refer to a
Subsidiary of the Borrower.
 
“Supermajority Banks” means a minimum of two (2) Banks, holding at least
sixty-seven percent (67%) of all of the Total Available Committed Line Portion
at such time, which amount shall, for the avoidance of doubt, be allocated to
each Non-Defaulting Bank in an amount equal to its Committed Line Portion, and
to each Defaulting Bank, its Effective Amount thereof, in each case at such
time.
 
“Supply L/Cs” means Ninety (90) Day Supply L/Cs and Three Hundred Sixty-Five
(365) Day Supply L/Cs.
 
“Support Agreement” means the Support Agreement dated May 8, 2009 from Parent
addressed to Agent for the benefit of the Banks.
 
“Surety Instruments” means all letters of credit (including standby and
commercial), banker’s acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
 
“Swap Banks” means Fortis, BNP, SocGen and U.S. Bank and their Affiliates in
their capacity as a party to a Swap Contract, and any other Bank approved by all
the Banks which has signed and become a party to the Intercreditor
Agreement.  The term ‘Swap Banks’ shall also include a former Bank or an
Affiliate of a former Bank that is party to a Swap Contract with the Borrower,
provided that such former Bank or Affiliate was a Bank or an Affiliate of a Bank
at the time it entered into such Swap Contract and thereafter remains a party to
the Intercreditor Agreement and entitled to the benefit of the Security
Agreements.  BNP Paribas Futures, Inc. shall not be treated as a Swap Bank.
 
“Swap Contract” means any agreement entered into with any Swap Bank, whether or
not in writing, relating to any single transaction that is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or bill option, interest rate option,
forward foreign exchange transaction, cap, collar or floor transaction, currency
swap, cross-currency rate swap, currency option or any other similar transaction
(including any option to enter into any of the foregoing) or any combination of
the foregoing and, unless the context clearly requires, any master agreement
relating to or governing any or all of the foregoing.  No Swap Contract will be
executed hereunder unless it is subject to the applicable ISDA Master Agreement
or its equivalent (i.e., long-form confirmations).
 
“Swap L/Cs” means Ninety (90) Day Swap L/Cs and Three Hundred Sixty-Five (365)
Day Swap L/Cs.
 
“Syndication Agent” means SocGen.
 
“Tangible Net Worth” means (a) the Borrower’s and its Subsidiaries’ assets, on a
consolidated basis, less (b) Total Liabilities, less (c) all amounts due from
Parent, employees, owners, Subsidiaries and Affiliates, less (d) investments in
Capital Stock (other than Subsidiaries), less (e) the intangible assets of the
Borrower and its Subsidiaries.  In calculating Tangible Net Worth, the amount of
Subordinated Debt excluded from liabilities in such calculation shall not exceed
50% of the resultant Tangible Net Worth, provided, however, in the event
Subordinated Debt is used to prevent any financial covenant default, the
limitation on the amount of Subordinated Debt excluded from liabilities may be
removed upon approval of the Required Banks.
 
“Taxes” has the meaning specified in Subsection 4.01(a).
 
“Three Hundred Sixty-Five (365) Day Supply L/Cs” means Letters of Credit with a
tenor greater than ninety (90) days and less than three hundred sixty-five (365)
days Issued to facilitate the purchase of Product for resale or to secure the
purchase of Product, which Letter of Credit may contain a clause providing for
automatic renewal of the expiry date for periods up to 365 days with a 90-day
minimum notice of non-renewal.
 
“Three Hundred Sixty-Five (365) Day Swap L/Cs” means standby Letters of Credit
with a tenor greater than ninety (90) days and less than three hundred
sixty-five (365) days Issued to support payments owed to counterparties under
swap contracts.
 
“Three Hundred Sixty-Five (365) Day Transportation and Storage L/Cs” means
Letters of Credit with a tenor greater than ninety (90) days and less than three
hundred sixty-five (365) days Issued to secure companies for transportation
expenses and storage expenses.
 
“Tier I Account” means an Eligible Account with a Tier I Account Party.
 
“Tier I Account Party” means an Account Debtor which is approved by the Agent as
a Tier I Account Party.
 
“Tier I Unbilled Eligible Account” means Unbilled Eligible Accounts with a Tier
I Account Party.
 
“Tier II Account” means an Eligible Account with a Tier II Account Party.
 
“Tier II Account Party” means an Account Debtor which is not a Tier I Account
Party.
 
“Tier II Unbilled Eligible Account” means Unbilled Eligible Accounts with a Tier
II Account Party.
 
“Total Available Committed Line Portion” means, at any time, the Committed Line
minus the aggregate Available Committed Line Portions of all Defaulting Banks at
such time.

“Total Liabilities” means all of Borrower’s and its Subsidiaries’ liabilities,
on a consolidated basis, excluding Subordinated Debt.
 
“Transportation Agreement” means any agreement between Borrower and any
transporter of Product.
 
“Transportation Agreement Report” means a report containing (a) the value of
Borrower’s liability under each Transportation Agreement, (b) the related
marketing contracts and offsetting profits for each Transportation Agreement,
and (c) a certification of compliance of limits set for Unhedged Transportation
Exposure.
 
“Transportation and Storage L/Cs” means Ninety (90) Day Transportation and
Storage L/Cs and Three Hundred Sixty-Five (365) Day Transportation and Storage
L/Cs.
 
“Type” means either a Base Rate Loan or a Eurodollar Rate Loan, or in the case
of Letters of Credit, a category of Letter of Credit (see definition of “L/C
Sub-limit Cap”).
 
“Unbilled Eligible Accounts” means Accounts of the Borrower for Product which
has been delivered to an Account Debtor and which would be Eligible Accounts but
for the fact that such Accounts have not actually been invoiced at such time.
 
“Undelivered Product Value” means the lesser of the (a) cost or (b) current
market value of Product purchased by the Borrower under the Letters of Credit
but which has not been physically delivered to the Borrower, net of
offsets.  For the avoidance of doubt, Transportation and Storage L/Cs and Swap
L/Cs may not be included in this calculation.  Undelivered Product Value cannot
simultaneously be included in an Eligible Exchange Receivable.
 
“Unfunded Pension Liability” means the excess of a Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.
 
“Unhedged Transportation Exposure” means the amount of any transportation
expenses Borrower incurs prior to the transportation of Product less any such
expenses that are supported by Transportation and Storage L/Cs issued pursuant
to this Agreement.
 
“United States” and “U.S.” each means the United States of America.
 
“United States Dollar Equivalent,” of any Canadian Dollars shall mean the amount
of such Canadian Dollars converted to United States Dollars computed, unless
otherwise agreed, at Fortis’ selling rate for Canadian Dollars most recently in
effect on or prior to the date of determination.
 
“United States Dollars,” and “U.S.$” each mean lawful money of the United
States.
 
“Wells Fargo” means Wells Fargo Bank, National Association.
 
1.02           Other Interpretive Provisions.
 
(a)           The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
 
(b)           The words “hereof”, “herein”, “hereunder” and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
 
(c)    (i)           The term “documents” includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
 
(ii)           The term “including” is not limiting and means “including without
limitation.”
 
(iii)           In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”, and the word “through” means “to and
including.”
 
(d)           Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
 
(e)           The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
 
(f)           This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.  All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
 
(g)           This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to Agent, the Banks, the
Borrower and the other parties, and are the products of all
parties.  Accordingly, they shall not be construed against the Banks or Agent
merely because of Agent’s or Banks’ involvement in their preparation.
 
(h)           Unless otherwise indicated, references to “$” shall mean United
States Dollars.
 
1.03           Accounting Principles.
 
(a)           Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made in accordance with
GAAP, consistently applied, except for the financial computations relating to
the terms “Net Cumulative Loss,” “Net Working Capital,” “Tangible Net Worth” and
“Total Liabilities” as used in Section 7.15(c) which are to be made on an
Economic Basis.
 
(b)           References herein to “fiscal year” and “fiscal quarter” refer to
such fiscal periods of the Borrower.
 
 
ARTICLE II
 
 
THE CREDITS
 
2.01           Amounts and Terms of Committed Line
 
Each Bank severally agrees on the terms and conditions set forth herein, to make
Loans, from time to time, in United States Dollars, to the Borrower under the
Borrowing Base Line (each such loan, a “Revolving Loan”) on any Business Day
during the period from the Closing Date to the Expiration Date to finance
working capital needs of the Borrower, in an aggregate amount not to exceed at
any time (a) such Bank’s Committed Line Portion for the Borrowing Base Line; or
(b) such Bank’s Pro Rata Advance Share of such Loans (or, if a Defaulting Bank
exists, and without limitation to the obligations of such Defaulting Bank under
this Section 2.01, with respect to any Non-Defaulting Bank, its Pro Rata
Adjusted Share of such Loans, if applicable); provided, however, that, after
giving effect to any Borrowing of Revolving Loans, (i) the Aggregate Amount
shall not at any time exceed the lesser of (x) the Borrowing Base Advance Cap or
(y) the Total Available Committed Line Portion, (ii) the Effective Amount of all
Revolving Loans shall not exceed the Advance Line Limit, and (iii) the Effective
Amount of all Revolving Loans of any Bank plus such Bank’s Pro Rata Share of the
Effective Amount of all L/C Obligations shall not exceed such Bank’s Committed
Line Portion.
 
2.01A           Increase in Subscribed Amounts.
 
(a)           Subject to the terms and conditions set forth herein, Borrower
shall have the right, without the consent of the Banks, but with the prior
approval of the Agent and the Issuing Banks (not to be unreasonably withheld or
delayed), to solicit the Banks or any other lending institutions to increase the
subscribed amount of such Bank’s Committed Line Portion or to become a Bank
hereunder, in each case to provide Borrower with an increase in the subscribed
amounts of the Committed Line Portions (a “Subscription Increase”), provided
that (i) at the time of such solicitation and at the time of the effectiveness
of a Subscription Increase, no Event of Default shall have occurred and be
continuing, (ii) the aggregate subscribed amount of Committed Line Portions,
after the Subscription Increase, does not exceed $300,000,000.00, and (iii) no
Bank’s subscribed amount of its Committed Line Portion shall be increased
without its consent.
 
(b)           Any Subscription Increase shall be requested by written notice
from the Borrower to the Agent and the Issuing Banks (a “Notice of Subscription
Increase”) in the form of Exhibit O-1 attached hereto and shall be approved by
the Agent and the Issuing Banks, such consent not to be unreasonably withheld or
delayed.  Each such Notice of Subscription Increase shall specify (i) the
proposed effective date of such Subscription Increase, which date shall be no
earlier than five (5) Business Days after receipt by the Agent and the Issuing
Banks of such Notice of Subscription Increase, (ii) the amount of the requested
Subscription Increase, (iii) the identity of each existing Bank or new Bank that
has agreed in writing to participate in the Subscription Increase, and (iv) the
amount of the respective subscriptions of the then existing Banks from and after
the Subscription Increase Effective Date (as defined below), as well as the
subscriptions of the new Banks.  The Agent and the Issuing Banks shall review
each Notice of Subscription Increase and shall notify the Borrower whether or
not the Agent and the Issuing Banks consent to the proposed Subscription
Increase.  If the Agent and the Issuing Banks consent to such Subscription
Increase (such consent not to be unreasonably withheld or delayed), the Agent
and the Issuing Banks shall execute a counterpart of the Notice of Subscription
Increase and such Subscription Increase shall be effective on the proposed
effective date set forth in the Notice of Subscription Increase or on another
date agreed to by the Agent, the Issuing Banks and the Borrower (such date
referred to as the “Subscription Increase Effective Date”).
 
(c)           On each Subscription Increase Effective Date, to the extent that
there are Loans outstanding as of such date, (i) each Bank shall, by wire
transfer of immediately available funds, deliver to the Agent such Bank’s New
Funds Amount, which amount, for each Bank, shall constitute Loans made by such
Bank to the Borrower pursuant to this Agreement on such Subscription Increase
Effective Date, (ii) the Agent shall, by wire transfer of immediately available
funds, pay to each then Reducing Percentage Bank its Reduction Amount, which
amount, for each such Reducing Percentage Bank, shall constitute a prepayment by
the Borrower pursuant to Section 2.05, ratably in accordance with the respective
principal amounts thereof, of the principal amounts of all then outstanding
Loans of such Reducing Percentage Bank, and (iii) the Borrower shall be
responsible to pay to each Bank any breakage fees or costs in connection with
the reallocation of any outstanding Loans as provided in Section 4.04.
 
(d)           For purposes of this Section 2.01A and Exhibit O-1, the following
defined terms shall have the following meanings:  (i) “New Funds Amount” means
the amount equal to the product of a Bank’s increased Committed Line Portion
represented as a percentage of the aggregate increase in the Committed Line
after giving effect to the Subscription Increase, times the aggregate principal
amount of the outstanding Loans immediately prior to giving effect to the
Subscription Increase, if any, as of a Subscription Increase Effective Date
(without regard to any increase in the aggregate principal amount of Loans as a
result of Borrowings made after giving effect to the Subscription Increase on
such Subscription Increase Effective Date); (ii) “Reducing Percentage Bank”
means each then existing Bank immediately prior to giving effect to the
Subscription Increase that does not increase its respective Committed Line
Portions as a result of the Subscription Increase and any Defaulting Bank and
whose relative percentage of the Committed Line Portions shall be reduced after
giving effect to such Subscription Increase; and (iii) “Reduction Amount” means
the amount by which a Reducing Percentage Bank’s outstanding Loans decrease as
of a Subscription Increase Effective Date (without regard to the effect of any
Borrowings made on such Subscription Increase Effective Date after giving effect
to the Subscription Increase).
 
(e)           Each Subscription Increase shall become effective on its
Subscription Increase Effective Date and upon such effectiveness (i) the Agent
shall record in the register each new Bank’s information as provided in the
Notice of Subscription Increase and pursuant to an administrative questionnaire
satisfactory to the Agent that shall be executed and delivered by each new Bank
to the Agent on or before the Subscription Increase Effective Date, (ii)
Schedule 2.01 hereof shall be amended and restated to set forth all Banks that
will be Banks hereunder after giving effect to such Subscription Increase (which
shall be set forth in Annex I to the applicable Notice of Subscription Increase)
and the Agent shall distribute to each Bank a copy of such amended and restated
Schedule 2.01, and (iii) each new Bank identified on the Notice of Subscription
Increase for such Subscription Increase shall be a “Bank” for all purposes under
this Agreement.
 
2.01B           Increase in Committed Line Portions.
 
(a)           Subject to the terms and conditions set forth herein, Borrower
shall have the right, without the consent of the Banks, but with the prior
approval of the Agent and the Issuing Banks (not to be unreasonably withheld or
delayed), to solicit the Banks or any other lending institutions to increase the
amount of such Bank’s Committed Line Portion or to become a Bank hereunder, in
each case to provide Borrower with an increase in the amounts of the Committed
Line Portions (a “Committed Line Portion Increase”), provided that (i) at the
time of such solicitation and at the time of the effectiveness of a Committed
Line Portion Increase, no Event of Default shall have occurred and be
continuing, (ii) the aggregate amount of Committed Line Portions, after the
Committed Line Portion Increase, does not exceed $350,000,000.00, and (iii) no
Bank’s Committed Line Portion shall be increased without its consent.
 
(b)           Any Committed Line Portion Increase shall be requested by written
notice from the Borrower to the Agent and the Issuing Banks (a “Notice of
Committed Line Portion Increase”) in the form of Exhibit O-2 attached hereto and
shall be approved by the Agent and the Issuing Banks, such consent not to be
unreasonably withheld or delayed.  Each such Notice of Committed Line Portion
Increase shall specify (i) the proposed effective date of such Committed Line
Portion Increase, which date shall be no earlier than five (5) Business Days
after receipt by the Agent and the Issuing Banks of such Notice of Committed
Line Portion Increase, (ii) the amount of the requested Committed Line Portion
Increase, (iii) the identity of each existing Bank or new Bank that has agreed
in writing to participate in the Committed Line Portion Increase, and (iv) the
amount of the respective increases of the then existing Banks from and after the
Committed Line Portion Increase Effective Date (as defined below), as well as
the Committed Line Portion of the new Banks.  The Agent and the Issuing Banks
shall review each Notice of Committed Line Portion Increase and shall notify the
Borrower whether or not the Agent and the Issuing Banks consent to the proposed
Committed Line Portion Increase.  If the Agent and the Issuing Banks consent to
such Committed Line Portion Increase (such consent not to be unreasonably
withheld or delayed), the Agent and the Issuing Banks shall execute a
counterpart of the Notice of Committed Line Portion Increase and such Committed
Line Portion Increase shall be effective on the proposed effective date set
forth in the Notice of Committed Line Portion Increase or on another date agreed
to by the Agent, the Issuing Banks and the Borrower (such date referred to as
the “Committed Line Portion Increase Effective Date”).
 
(c)           On each Committed Line Portion Increase Effective Date, to the
extent that there are Loans outstanding as of such date, (i) each Bank shall, by
wire transfer of immediately available funds, deliver to the Agent such Bank’s
New Funds Amount, which amount, for each Bank, shall constitute Loans made by
such Bank to the Borrower pursuant to this Agreement on such Committed Line
Portion Increase Effective Date, (ii) the Agent shall, by wire transfer of
immediately available funds, pay to each then Reducing Percentage Bank its
Reduction Amount, which amount, for each such Reducing Percentage Bank, shall
constitute a prepayment by the Borrower pursuant to Section 2.05, ratably in
accordance with the respective principal amounts thereof, of the principal
amounts of all then outstanding Loans of such Reducing Percentage Bank, and
(iii) the Borrower shall be responsible to pay to each Bank any breakage fees or
costs in connection with the reallocation of any outstanding Loans as provided
in Section 4.04.
 
(d)           For purposes of this Section 2.01B and Exhibit O-2, the following
defined terms shall have the following meanings:  (i) “New Funds Amount” means
the amount equal to the product of a Bank’s increased Committed Line Portion
represented as a percentage of the aggregate increase in the Committed Line
after giving effect to the Committed Line Portion Increase, times the aggregate
principal amount of the outstanding Loans immediately prior to giving effect to
the Committed Line Portion Increase, if any, as of a  Committed Line Portion
Increase Effective Date (without regard to any increase in the aggregate
principal amount of Loans as a result of Borrowings made after giving effect to
the Committed Line Portion Increase on such Committed Line Portion Increase
Effective Date); (ii) “Reducing Percentage Bank” means each then existing Bank
immediately prior to giving effect to the Committed Line Portion Increase that
does not increase its respective Committed Line Portions as a result of the
Committed Line Portion Increase and any Defaulting Bank and whose relative
percentage of the Committed Line Portions shall be reduced after giving effect
to such Committed Line Portion Increase; and (iii) “Reduction Amount” means the
amount by which a Reducing Percentage Bank’s outstanding Loans decrease as of a
Committed Line Portion Increase Effective Date (without regard to the effect of
any Borrowings made on such Committed Line Portion Increase Effective Date after
giving effect to the Committed Line Portion Increase).
 
(e)           Each Committed Line Portion Increase shall become effective on its
Committed Line Portion Increase Effective Date and upon such effectiveness (i)
the Agent shall record in the register each new Bank’s information as provided
in the Notice of Committed Line Portion Increase and pursuant to an
administrative questionnaire satisfactory to the Agent that shall be executed
and delivered by each new Bank to the Agent on or before the Committed Line
Portion Increase Effective Date, (ii) Schedule 2.01 hereof shall be amended and
restated to set forth all Banks that will be Banks hereunder after giving effect
to such Committed Line Portion Increase (which shall be set forth in Annex I to
the applicable Notice of Committed Line Portion Increase) and the Agent shall
distribute to each Bank a copy of such amended and restated Schedule 2.01, (iii)
the sub-limit caps set forth herein shall be adjusted as appropriate to take
into account such Committed Line Portion Increase, and (iv) each new Bank
identified on the Notice of Committed Line Portion Increase for such Committed
Line Portion Increase shall be a “Bank” for all purposes under this Agreement.
 
2.02           Loan Accounts.
 
(a)           The Loans made by each Bank and the Letters of Credit Issued by an
Issuing Bank shall be evidenced by one or more accounts or records maintained by
Agent in the ordinary course of business.  The accounts or records maintained by
Agent shall be rebuttable presumptive evidence of the amount of the Loans made
by the Banks to the Borrower and the Letters of Credit Issued for the account of
the Borrower hereunder, and the interest and payments thereon.  Any failure to
so record or any error in so doing shall not, however, limit or otherwise affect
the Obligation of the Borrower hereunder to pay any amount owing with respect to
the Loans or any Letter of Credit.
 
(b)           Upon the request of any Bank made through Agent, the Loans made by
such Bank may be evidenced by one or more Notes, instead of loan accounts.  Each
such Bank may endorse on the schedules annexed to its Note(s) the date, amount
and maturity of each Loan made by it and the amount of each payment of principal
made by the Borrower with respect thereto.  Each such Bank is irrevocably
authorized by the Borrower to endorse its Note(s) and each Bank’s record shall
be rebuttable presumptive evidence of the information set forth therein;
provided, however, that the failure of a Bank to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect
the Obligations of the Borrower hereunder or under any such Note to such Bank.
 
2.03           Procedure for Borrowing.
 
(a)           Each Borrowing of Revolving Loans consisting only of Base Rate
Loans shall be made upon the Borrower’s irrevocable written notice delivered to
the Agent in the form of a Notice of Borrowing, which notice must be received by
Agent prior to 1:00 p.m. (New York City time) one (1) Business Day prior to the
requested Borrowing Date, specifying the amount of the Borrowing.  Each such
Notice of Borrowing shall be by electronic transfer or facsimile, confirmed
immediately in an original writing.  Each Borrowing of Revolving Loans that
includes any Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable
written notice delivered to the Agent in the form of a Notice of Borrowing which
notice must be received by Agent prior to 1:00 p.m. (New York City time) three
(3) Business Days prior to the requested Borrowing Date, specifying the amount
of the Borrowing.  Each such Notice of Borrowing shall be by electronic transfer
or facsimile, confirmed immediately in an original writing.  Each requested
Eurodollar Rate Loan must have a Eurodollar Effective Amount of at least
$5,000,000.00.
 
(b)           Agent will promptly notify each Bank of its receipt of any Notice
of Borrowing and of the amount of such Bank’s Pro Rata Share of that Borrowing
(or if a Defaulting Bank exists, and without limitation to the obligations of
such Defaulting Bank under this Section 2.03(b), with respect to any
Non-Defaulting Bank, its Pro Rata Adjusted Share, if applicable).  If such
Notice of Borrowing relates to a request for a Eurodollar Rate Loan, the Agent
will provide such notification to each Bank at least three (3) Business Days
prior to the requested Borrowing Date.
 
(c)           Each Bank will make the amount of its Pro Rata Share (or if a
Defaulting Bank exists, and without limitation to the obligations of such
Defaulting Bank under this Section 2.03(c), with respect to any Non-Defaulting
Bank, its Pro Rata Adjusted Share, if applicable) of such Borrowing available to
Agent for the account of the Borrower at Agent’s Payment Office by 3:00 p.m.
(New York City time) on the Borrowing Date requested by the Borrower in funds
immediately available to Agent.  The proceeds of such Loan will be made
available to the Borrower by the Agent at such office by crediting the
Borrower’s Bank Blocked Account referred to in clause (a) of the definition
thereof with the aggregate of the amounts made available by the Agent.
 
2.03A           Conversion and Continuation Elections.
 
(a)           The Borrower may, upon irrevocable written notice to Agent in
accordance with Subsection 2.03A(b):
 
 
(i)
elect, as of any Business Day, in the case of Base Rate Loans, or as of the last
day of the applicable Interest Period, in the case of any Eurodollar Rate Loan,
to convert any such Loans into Loans of any other Type (provided, however, the
Eurodollar Effective Amount of each Eurodollar Rate Loan must be at least
$5,000,000.00); or

 
 
(ii)
elect, as of the last day of the applicable Interest Period, to continue any
Revolving Loans having Interest Periods expiring on such day (provided, however,
the Eurodollar Effective Amount of each Eurodollar Rate Loan must be at least
$5,000,000.00);

 
provided, however, that if at any time the aggregate amount of Eurodollar Rate
Loans in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof, to have a Eurodollar Effective Amount of less than
$5,000,000.00, such Eurodollar Rate Loans shall automatically convert into Base
Rate Loans, and on and after such date the right of the Borrower to continue
such Loans as, and convert such Loans into, Eurodollar Rate Loans shall
terminate.
 
(b)           The Borrower shall deliver a Notice of Conversion/Continuation to
be received by Agent not later than 1:00 p.m. (New York City time) on the
Conversion/Continuation Date if the Loans are to be converted into Base Rate
Loans; and three (3) Business Days in advance of the Conversion/Continuation
Date, if the Loans are to be converted into or continued as Eurodollar Rate
Loans, specifying:
 
 
(i)
the proposed Conversion/Continuation Date;

 
 
(ii)
the aggregate amount of Loans to be converted or continued;

 
 
(iii)
the Type of Loans resulting from the proposed conversion or continuation; and

 
 
(iv)
other than in the case of conversions into Base Rate Loans, the duration of the
requested Interest Period.

 
(c)           If upon the expiration of any Interest Period applicable to
Eurodollar Rate Loans, the Borrower has failed to timely select a new Interest
Period to be applicable to its Eurodollar Rate Loans, or if any Default or Event
of Default then exists, the Borrower shall be deemed to have elected to convert
such Eurodollar Rate Loans into Base Rate Loans effective as of the expiration
date of such Interest Period.
 
(d)           Agent will promptly notify each Bank of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Borrower,
Agent will promptly notify each Bank of the details of any automatic
conversion.  All conversions and continuations shall be made ratably according
to the respective outstanding principal amounts of the Loans, with respect to
which the notice was given, held by each Bank.  Agent will promptly notify, in
writing, each Bank of the amount of such Bank’s Pro Rata Share of that
Conversion/Continuation (or, if a Defaulting Bank exists, and without limitation
to the obligations of such Defaulting Bank under this Section 2.03(A), with
respect to any Non-Defaulting Bank, its Pro Rata Adjusted Share, if applicable).
 
(e)           Unless all Banks otherwise agree, during the existence of a
Default or Event of Default, the Borrower may not elect to have a Loan converted
into or continued as a Eurodollar Rate Loan.
 
(f)           After giving effect to any Borrowing, conversion or continuation
of Loans, there may not be more than ten (10) Interest Periods in effect.
 
2.04           Optional Prepayments
 
The Borrower may, at any time or from time to time, upon the Borrower’s
irrevocable written notice to Agent received prior to 12:00 p.m. noon (New York
City time) on the date of prepayment, prepay Loans in whole or in part, together
with any amounts due under Section 4.04.  Agent will promptly notify each Bank
of its receipt of any such prepayment, and of such Bank’s Pro Rata Share of such
prepayment (which share may be affected by the allocation rules set forth in
Section 2.10 with respect to Defaulting Banks).
 
2.05           Mandatory Prepayments of Loans.
 
(a)           The Aggregate Amount shall not at any time exceed the Borrowing
Base Advance Cap.  If the Aggregate Amount on any day ever exceeds the Borrowing
Base Advance Cap, the Borrower shall immediately (1) repay on that date the
excess amount or (2) Cash Collateralize on such date the excess amount.
 
(b)           If on any date the Effective Amount of all L/C Obligations exceeds
the L/C Cap, or any LC Obligations relating to a Type of Letter of Credit
described herein exceeds the applicable L/C Sub-limit Cap, the Borrower shall
Cash Collateralize on such date the outstanding Letters of Credit, or the
outstanding Type of Letters of Credit, as the case may be, in an amount equal to
the excess above any such cap, and on the Maturity Date, Borrower shall Cash
Collateralize all then outstanding Letters of Credit in an amount equal to the
Effective Amount of all L/C Obligations related to such Letters of Credit.  If
on any date after giving effect to any Cash Collateralization made on such date
pursuant to the preceding sentence, the Effective Amount of all Revolving Loans
then outstanding plus the Effective Amount of all L/C Obligations exceeds the
lesser of (a) the Borrowing Base Advance Cap or (b) the total Committed Line,
the Borrower shall immediately, and without notice or demand, prepay the
outstanding principal amount of the Revolving Loans and L/C Borrowings by an
amount equal to the applicable excess.
 
2.06           Repayment
 
The Borrower shall repay the principal amount of each Revolving Loan to Agent on
behalf of the Banks, on the Advance Maturity Date for such Loan.
 
2.07           Interest.
 
(a)           Each Revolving Loan (except for a Revolving Loan made as a result
of a drawing under a Letter of Credit or a Reducing L/C Borrowing) shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a floating rate per annum equal to the Base Rate plus the
Applicable Margin at all times such Loan is a Base Rate Loan or at the greater
of (i) the Eurodollar Rate plus the Applicable Margin, and (ii) the Reference
Bank Cost of Funds Rate plus the Applicable Margin, at all times such Loan is an
Eurodollar Rate Loan.  Each Revolving Loan made as a result of a drawing under a
Letter of Credit or a Reducing L/C Borrowing shall bear interest on the
outstanding principal amount thereof from the date funded at a floating rate per
annum equal to the Base Rate plus the Applicable Margin until such Loan has been
outstanding for more than two (2) Business Days and, thereafter, shall bear
interest on the outstanding principal amount thereof at a floating rate per
annum equal to the Base Rate, plus three percent (3.0%) per annum (the “Default
Rate”).
 
(b)           Interest on each Revolving Loan shall be paid in arrears on each
Interest Payment Date.
 
(c)           Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Loan Document is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), the Borrower agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Default Rate.
 
(d)           Anything herein to the contrary notwithstanding, the Obligations
of the Borrower to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Borrower shall pay such Bank interest at the highest rate permitted by
applicable law.
 
(e)           Regardless of any provision contained in any Note or in any of the
Loan Documents, none of the Banks shall ever be deemed to have contracted for or
be entitled to receive, collect or apply as interest under any such Note or any
Loan Document, or otherwise, any amount in excess of the maximum rate of
interest permitted to be charged by applicable law, and, in the event that any
of the Banks ever receive, collect or apply as interest any such excess, such
amount which would be excessive interest shall be applied to the reduction of
the unpaid principal balance of the Note, and, if the principal balance of such
Note is paid in full, any remaining excess shall forthwith be paid to the
Borrower.  In determining whether or not the interest paid or payable under any
specific contingency exceeds the highest lawful rate, the Borrower and such Bank
shall, to the maximum extent permitted under applicable law, (i) characterize
any non-principal payment as an expense, fee, or premium, rather than as
interest, (ii) exclude voluntary prepayments and the effect thereof, and
(iii) spread the total amount of interest throughout the entire contemplated
term of such Note so that the interest rate is uniform throughout such term;
provided, however, that if all Obligations under the Note and all Loan Documents
are performed in full prior to the end of the full contemplated term thereof,
and if the interest received for the actual term thereof exceeds the maximum
lawful rate, such Bank shall refund to the Borrower the amount of such excess,
or credit the amount of such excess against the aggregate unpaid principal
balance of such Bank’s Note at the time in question.
 
2.08           Fees.
 
(a)           In addition to certain fees described in Section 3.08, the
Borrower shall pay the Agent, the Arrangers and the Banks fees in accordance
with separate fee letters between the Agent, the Banks and Borrower.
 
(b)           The Borrower agrees to pay to the Agent for the account of each
Bank a commitment fee for the period from and including the Closing Date to but
not including the Maturity Date, computed at the Commitment Fee Rate on the
average daily Available Committed Line Portion of such Bank during the period
for which payment is made; provided that for any day that a Bank is a Defaulting
Bank hereunder, its average daily Available Committed Line Portion shall be
deemed to be, solely for purposes of this Section 2.08(b), zero.  The commitment
fee shall accrue through the last day of each calendar month and shall be
payable monthly in arrears on the later of (i) the fifth (5th) Business Day of
each of calendar month, or (ii) the date of payment shown on the billing
delivered to the Borrower by the Agent (which date of payment shall be no less
than two (2) Business Days after delivery of such billing), but in no event
later than the Maturity Date, or such earlier date as the Committed Line Portion
of such Bank shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof (or if such day is not a Business Day, the
next succeeding Business Day).
 
(c)           Except as provided in clauses (a) and (b) above, the Borrower
shall not pay any fees to any of the Banks without providing prior notice to
Agent and the Arrangers.
 
2.09           Computation of Interest and Fees.
 
(a)           All computations of interest and fees (other than fees due and
payable at closing) shall be made on the basis of a 360-day year and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year).  Interest and fees shall accrue during each period during
which interest or such fees are computed from the first day thereof through the
last day thereof.
 
(b)           Each determination of an interest rate by Agent shall be
rebuttable presumptive evidence thereof.
 
2.10           Payments by the Borrower.
 
(a)           All payments to be made by the Borrower shall be made without
set-off, recoupment or counterclaim.  Except as otherwise expressly provided
herein, all payments by the Borrower shall be made to Agent for the account of
the Banks at Agent’s Payment Office, and shall be made in United States Dollars
and in immediately available funds, no later than 1:00 p.m. (New York City time)
on the date specified herein.  Agent will promptly distribute to each Bank its
Pro Rata Share (or after the occurrence of a Sharing Event, under the
Intercreditor Agreement, its Intercreditor Agreement Adjusted Pro Rata Share) of
such payment in like funds as received.  Any payment received by Agent later
than 1:00 p.m. (New York City time) shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue.  If and to the extent the Borrower makes a payment in full to Agent no
later than 1:00 p.m. (New York City time) on any Business Day and Agent does not
distribute to each Bank its Pro Rata Share of such payment in like funds as
received on the same Business Day, Agent shall pay to each Bank on demand
interest on such amount as should have been distributed to such Bank at the
Federal Funds Rate for each day from the date such payment was received until
the date such amount is distributed.
 
(i)           For any payment received by Agent from or on behalf of the
Borrower in respect of Obligations that are then due and payable (and
prepayments pursuant to Section 2.04), and with respect to any proceeds obtained
upon the exercise of any remedies of Agent for the benefit of the Banks
hereunder or under any other Loan Document, in each case prior to the occurrence
of a Sharing Event, Agent will promptly distribute such amounts in like funds as
received to each Bank, its Pro Rata Share; provided, however, that with respect
to any Bank that is a Defaulting Bank at the time that Agent makes any
distribution of payments contemplated above, all amounts paid by or on behalf of
the Borrower for the account of such Defaulting Bank arising from any such
Obligation will be applied, as follows: first, to Agent, any Issuing Bank, or
any other Bank, on a pro rata basis, for amounts then due and payable from such
Defaulting Bank to such parties in connection with any such party’s advance of
funds that have not been reimbursed by the Defaulting Bank under this Agreement
with respect to any Revolving Loans or L/C Advance to the extent that such
obligations of the Defaulting Bank relate to Revolving Loans or Letters of
Credit extended or Issued (as applicable) prior to such Bank becoming a
Defaulting Bank and not thereafter repaid, amended or Issued; second, to an
account identified by and under the control of Agent (maintained for the benefit
of the Banks), until amounts deposited in such account, with respect to a
Defaulting Bank, equal such Defaulting Bank’s Pro Rata Advance Share or its Pro
Rata Adjusted Share, as applicable, of each Letter of Credit outstanding at the
time that such Bank became a Defaulting Bank and not thereafter repaid, amended,
or Issued, as the case may be; and third, the remainder, if any, to the
Defaulting Bank. Any amounts held from time to time with respect to a Defaulting
Bank in the account referred to in the last clause of the preceding sentence (i)
which then exceed the amount referred to in such clause or (ii) when such bank
shall cease to be a Defaulting Bank shall be paid to such Defaulting Bank within
one (1) Business Day.  
 
(ii)           For any payment received from or on behalf of the Borrower by
Agent on or after the occurrence of a Sharing Event, Agent will promptly
distribute such payment in accordance with Section 2.01 of the Intercreditor
Agreement.
 
(b)           Subject to the provisions set forth in the definition of “Interest
Period” here, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
 
(c)           Unless Agent receives notice from the Borrower prior to the date
on which any payment is due to the Banks that the Borrower will not make such
payment in full as and when required, Agent may assume that the Borrower has
made such payment in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Bank on such due date an amount equal to the amount then due
such Bank.  If and to the extent the Borrower has not made such payment in full
to Agent, each Bank shall repay to Agent on demand such amount distributed to
such Bank, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Bank until the date repaid.
 
2.11           Payments by the Banks to Agent
 
If and to the extent any Bank shall not have made its full amount available to
Agent in immediately available funds and Agent in such circumstances has made
available to the Borrower such amount, that Bank shall on the Business Day
following such Borrowing Date make such amount available to Agent, together with
interest at the Federal Funds Rate for each day during such period.  A notice by
Agent submitted to any Bank with respect to amounts owing under this
Section 2.11 shall be conclusive, absent manifest error.  If such amount is so
made available, such payment to Agent shall constitute such Bank’s Loan on the
date of Borrowing for all purposes of this Agreement.  If such amount is not
made available to Agent on the Business Day following the Borrowing Date, Agent
will notify the Borrower of such failure to fund and, upon demand by Agent, the
Borrower shall pay such amount to Agent for Agent’s account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
 
2.12           Sharing of Payments, Etc.
 
  If, other than as expressly provided elsewhere herein, any Bank shall obtain
on account of the Loans made by it any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its Pro
Rata Share (or after the occurrence of a Sharing Event, under the Intercreditor
Agreement, its Intercreditor Agreement Adjusted Pro Rata Share) such Bank shall
immediately (a) notify Agent of such fact, and (b) purchase from the other Banks
such participations in the Loans made by them as shall be necessary to cause
such purchasing Bank to share the excess payment pro rata with each of them,
except that with respect to any Bank that is a Defaulting Bank by virtue of such
Bank failing to fund its Pro Rata Advance Share or Pro Rata Adjusted Share of
any Revolving Loan or L/C Borrowing, such Defaulting Bank’s pro rata share of
the excess payment shall be allocated to the Bank (or the Banks, pro rata) that
funded such Defaulting Bank’s Pro Rata Advance Share or Pro Rata Adjusted Share;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefore, together with an amount equal to such paying
Bank’s ratable share (according to the proportion of (i) the amount of such
paying Bank’s required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered.  The Borrower
agrees that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 11.09) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation.  Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
 
2.13           Defaulting Bank.
 
Notwithstanding any other provision in this Agreement to the contrary, if at any
time a Bank becomes a Defaulting Bank, the following provisions shall apply so
long as any Bank is a Defaulting Bank.
 
(a)           Until such time as the Defaulting Bank ceases to be a Bank under
this Agreement, it will retain its Committed Line Portion and will remain
subject to all of its obligations as a Bank hereunder, although it will be
presumed that such Defaulting Bank will fail to satisfy any funding obligation
and, accordingly, all other Banks hereby agree to fund Loans and Letters of
Credit in accordance with the terms hereof and their respective Pro Rata
Adjusted Shares.
 
(b)           A Defaulting Bank may cease to be a Defaulting Bank (i) as
specified in the second sentence of the definition thereof, and (ii) to the
extent such Defaulting Bank makes such purchases and/or Loans and/or accepts
such L/C Obligations as are required to make the Pro Rata Adjusted Share of each
Bank of the Effective Amount, after giving effect to all such purchases and new
Loans and any amounts received by any Bank pursuant to Section 2.10(a)(i), equal
to such Bank’s Pro Rata Advance Share of such  Effective Amount; provided that
if there is more than one Defaulting Bank at such time, the Pro Rata Advance
Share of the Non-Defaulting Banks (including any Defaulting Bank that after
giving effect to the required purchases of Loans and acceptances of L/C
Obligations, would cease to be a Defaulting Bank) shall be calculated using the
aggregate Committed Line Portions of only such Non-Defaulting Banks in the
denominators of the Pro Rata Advance Share calculation (in lieu of the Committed
Line Portions of all Banks). Each Bank agrees to sell to the Defaulting Bank,
such Effective Amounts as may be required to effect clause (ii) above.
 
(c)           A Defaulting Bank that is a Swap Bank which has closed out Swap
Contracts with the Borrower after it has become a Defaulting Bank shall only be
entitled to sharing of amounts pursuant to the Intercreditor Agreement with
respect to such Swap Contracts closed out after it has become a Defaulting Bank
notwithstanding any other provision to the contrary herein.
 
2.14           Termination or Reduction of Committed Line Portions.
 
(a)           Subject to Subsection 2.14(b), the Borrower shall have the right,
upon not less than three (3) Business Days’ notice to the Agent, to terminate
the Banks’ Committed Line Portions or, from time to time, to reduce the amount
of the Banks’ Committed Line Portions.  Any such reduction shall be in an amount
equal to $5,000,000.00 or a whole multiple of $1,000,000.00 in excess thereof
and shall reduce permanently the Banks’ Committed Line Portions then in
effect.  Termination of the Banks’ Committed Line Portions shall also terminate
the obligation of the Issuing Banks to issue Letters of Credit.
 
(b)           In the event of any termination of the Banks’ Committed Line
Portions, the Borrower shall on the date of such termination repay or prepay all
of its outstanding Revolving Loans (together with accrued and unpaid interest on
the Revolving Loans and any amounts payable pursuant to Section 4.04, and any
other amounts payable hereunder), reduce the L/C Obligations to zero and cause
all Letters of Credit to be cancelled and returned to the Issuing Banks (or
shall cash collateralize the L/C Obligations (or provide supporting letters of
credit from an institution reasonably acceptable to the Agent) on terms and
pursuant to documentation reasonably satisfactory to the Issuing Banks and the
Agent).  In the event of any partial reduction of the Banks’ Committed Line
Portions, then at or prior to the effective date of such reduction, the Agent
shall notify the Borrower and the Banks of the outstanding Revolving Loans, and
if such outstanding Revolving Loans would exceed the aggregate Banks’ Committed
Line Portions after giving effect to such reduction, then, prior to giving
effect to such reduction, the Borrower shall, on the date of such reduction,
first, repay or prepay Revolving Loans and second, reduce the L/C Obligations
(or cash collateralize the L/C Obligations or provide supporting letters of
credit from an institution reasonably acceptable to the Agent and the Issuing
Banks on terms and pursuant to documentation reasonably satisfactory to the
Issuing Banks and the Agent), in an aggregate amount sufficient to eliminate
such excess.
 
 
ARTICLE III
 
 
THE LETTERS OF CREDIT
 
3.01           The Letter of Credit Lines.
 
(a)           Subject to the limitations set forth in Subsection 3.01(b) below,
(i) each Issuing Bank agrees, (A) from time to time on any Business Day during
the period from the Closing Date to the Expiration Date, to Issue Letters of
Credit for the account of the Borrower under the Borrowing Base Line and to
amend or renew Letters of Credit previously Issued by it, in accordance with
Subsection 3.02(c), and (B) to honor conforming drafts under the Letters of
Credit; and (ii) each of the Banks will be deemed to have approved such
Issuance, amendment or renewal, and shall participate in Letters of Credit
Issued for the account of the Borrower.  Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower’s ability to
request that an Issuing Bank Issue Letters of Credit shall be fully revolving,
and, accordingly, the Borrower may, during the foregoing period, request that an
Issuing Bank Issue Letters of Credit to replace Letters of Credit which have
expired or which have been drawn upon and reimbursed.  Borrower acknowledges and
agrees that the Existing Letters of Credit are an Obligation under this
Agreement.
 
(b)           No Issuing Bank is under any obligation to Issue, amend or renew
any Letter of Credit if:
 
 
(i)
any order, judgment or decree of any Governmental Authority or arbitrator shall
by its terms purport to enjoin or restrain such Issuing Bank from Issuing such
Letter of Credit, or any Requirement of Law applicable to such Issuing Bank or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over such Issuing Bank shall prohibit,
or request that such Issuing Bank refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose upon
such Issuing Bank with respect to such Letter of Credit any restriction, reserve
or capital requirement (for which such Issuing Bank is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Issuing
Bank any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which such Issuing Bank in good faith deems material to it;

 
 
(ii)
such Issuing Bank has received written notice from any Bank, any other Issuing
Bank, Agent or the Borrower, on or prior to the Business Day prior to the
requested date of Issuance of such Letter of Credit, that one or more of the
applicable conditions contained in Article V is not then satisfied;

 
 
(iii)
the expiry date of any requested Type of Letter of Credit exceeds the earlier of
(a) the expiry date set forth herein for such Type, or (b) the Maturity Date, or
the amount of any requested Type of Letter of Credit exceeds the applicable L/C
Sub-limit Cap after taking into account all outstanding L/C Obligations with
respect to such Type of Letter of Credit;

 
 
(iv)
such requested Letter of Credit is not in form and substance acceptable to such
Issuing Bank;

 
 
(v)
such Letter of Credit is for the purpose of supporting the Issuance of any
letter of credit by any other Person;

 
 
(vi)
such Letter of Credit is denominated in a currency other than United States
Dollars or Canadian Dollars;

 
 
(vii)
the amount of such requested Letter of Credit, plus the Effective Amount of all
of the L/C Obligations, plus the Effective Amount of all Revolving Loans exceeds
the lesser of (x) the Borrowing Base Advance Cap or (y) the Total Available
Committed Line Portion, in which case the Agent shall notify each other Issuing
Bank that there is a deficiency;

 
 
(viii)
the amount of a Letter of Credit to be Issued by an Issuing Bank, plus the
Effective Amount of all of the L/C Obligations of such Issuing Bank exceeds such
Issuing Bank’s Issuing Bank Sub-Limit; or

 
 
(ix)
such Letter of Credit is not otherwise in compliance with the terms of this
Agreement.

 
(c)           Subject to the individual Sub-limits referenced under the
definition of “L/C Sub-limit Cap,” any Letter of Credit may be issued in
Canadian Dollars, provided that the aggregate amount of all Letters of Credit
issued and outstanding hereunder in Canadian Dollars may not exceed the United
States Dollar Equivalent of U.S. $25,000,000.00.
 
(d)           Any Letter of Credit requested by the Borrower to be Issued
hereunder may be Issued by any Issuing Bank or any Affiliate of such Issuing
Bank, and if a Letter of Credit is Issued by an Affiliate of the Issuing Bank,
such Letter of Credit shall be treated, for all purposes of this Agreement and
the Loan Documents, as if it were issued by the Issuing Bank.
 
(e)           If an Issuing Bank has Issued a transferable Letter of Credit
within the meaning of Article 38 of the Uniform Customs and Practice for
Documentary Credits, 2007 Revision, and pursuant to the terms of such
transferable Letter of Credit the Issuing Bank has reserved the right to approve
transferees thereunder, then the Agent must also approve such transferees.
 
3.02           Issuance, Amendment and Renewal of Letters of Credit.
 
(a)           Each Letter of Credit which is Issued hereunder shall, subject to
the limitations set forth in Section 3.01(b) above, be Issued upon the
irrevocable written request of the Borrower pursuant to a Notice of Borrowing
(Letter of Credit) in the applicable form attached hereto as Exhibit A received
by an Issuing Bank and the Agent by no later than 12 noon (New York City time)
on the proposed date of Issuance or at such later time as agreed to by such
Issuing Bank; provided that with respect to any such request received after 12
noon (New York City time) such Issuing Bank agrees to use commercially
reasonable best efforts to Issue the Letter of Credit on the same day the notice
is received.  Each such request for Issuance of a Letter of Credit shall be by
electronic transfer or facsimile, confirmed by the close of the next Business
Day in an original writing, in the form of an L/C Application, and shall specify
in form and detail satisfactory to such Issuing Bank and Agent:  (i) the
proposed date of Issuance of the Letter of Credit (which shall be a Business
Day); (ii) the face amount of the Letter of Credit; (iii) the expiry date of the
Letter of Credit; (iv) the name and address of the beneficiary thereof; (v) the
documents to be presented by the beneficiary of the Letter of Credit in case of
any drawing thereunder; (vi) the full text of any certificate to be presented by
the beneficiary in case of any drawing thereunder; (vii) whether the Letter of
Credit is a Standby or Commercial Letter of Credit; and (viii) such other
matters as such Issuing Bank may require.  Upon receipt of such request for
Issuance of a Letter of Credit, the Agent shall promptly notify the Issuing
Banks by delivery of a notification in the form of Exhibit P attached hereto
whether or not such Issuance is in compliance with the provisions of Section
3.01.
 
(b)           From time to time while a Letter of Credit is outstanding and
prior to the Expiration Date, an Issuing Bank shall, subject to the limitations
set forth in Section 3.01(b) above, upon the written request of the Borrower
received by such Issuing Bank and the Agent prior to 12 noon (New York City
time) on the proposed date of amendment, amend any Letter of Credit issued by it
or at such later time as agreed to by such Issuing Bank; provided that with
respect to any such request received after 12 noon (New York City time) such
Issuing Bank agrees to use its commercially reasonable best efforts to Issue the
Letter of Credit on the same day the notice is received.  Each such request for
amendment of a Letter of Credit shall be made by electronic transfer or
facsimile, confirmed by the close of the next Business Day in an original
writing, made in the form of an L/C Amendment Application and shall specify in
form and detail satisfactory to the Issuing Banks and Agent:  (i) the Letter of
Credit to be amended; (ii) the proposed date of amendment of the Letter of
Credit (which shall be a Business Day); (iii) the nature of the proposed
amendment; and (iv) such other matters as such Issuing Bank may require.
 
(c)           If any outstanding Letter of Credit Issued by an Issuing Bank
shall, subject to the limitations set forth in Section 3.01(b) above, provide
that it shall be automatically renewed unless the beneficiary thereof receives
notice from such Issuing Bank that such Letter of Credit shall not be renewed,
and if at the time of renewal such Issuing Bank would be entitled to authorize
the automatic renewal of such Letter of Credit in accordance with this
Subsection 3.02(c) upon the request of the Borrower, then such Issuing Bank
shall nonetheless be permitted to allow such Letter of Credit to renew, and the
Borrower and the Banks hereby authorize such renewal, and, accordingly, such
Issuing Bank shall be deemed to have received an L/C Amendment Application from
the Borrower requesting such renewal.
 
(d)           This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).
 
(e)           Each Issuing Bank will also deliver to Agent a true and complete
copy of each Letter of Credit or amendment to or renewal of a Letter of Credit
Issued by it.
 
3.03           Risk Participations, Drawings, Reducing Letters of Credit and
Reimbursements.
 
(a)           Immediately upon the Issuance of each Letter of Credit Issued by
an Issuing Bank, each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from such Issuing Bank a participation in
such Letter of Credit and each drawing or Reducing Letter of Credit Borrowing
thereunder in an amount equal to the product of (i) the Pro Rata Advance Share
(or, if a Defaulting Bank exists, and without limitation to the obligations of
such Defaulting Bank under this Section 3.03, with respect to any Non-Defaulting
Bank, its Pro Rata Adjusted Share, if applicable) of such Bank, times (ii) the
maximum amount available to be drawn under such Letter of Credit and the amount
of such drawing or Reducing Letter of Credit Borrowing, respectively.  For
purposes of Section 2.01, each Issuance of a Letter of Credit shall be deemed to
utilize the Committed Line Portion of each Bank by an amount equal to the amount
of such participation.
 
(b)           In the event of any request for a drawing under a Letter of Credit
Issued by an Issuing Bank by the beneficiary or transferee thereof, such Issuing
Bank will promptly notify the Borrower.  Any notice given by an Issuing Bank or
Agent pursuant to this Subsection 3.03(b) may be oral if immediately confirmed
in writing (including by facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.  The Borrower shall reimburse an Issuing Bank prior to 5:00 p.m. (New
York City time), on each date that any amount is paid by such Issuing Bank under
any Letter of Credit or to a Bank paying a beneficiary of a Reducing Letter of
Credit in the form of a Reducing L/C Borrowing (each such date, an “Honor
Date”), in an amount equal to the amount so paid by such Issuing Bank.  Amounts
reimbursed by the Borrower with respect to draws under Letters of Credit issued
in Canadian Dollars shall be paid in United States Dollars at the United States
Dollar Equivalent of such draw.  In the event the Borrower fails to reimburse
such Issuing Bank for the full amount of any drawing under any Letter of Credit
or of any Reducing L/C Borrowing, as the case may be, by 5:00 p.m. (New York
City time) on the Honor Date, such Issuing Bank will promptly notify Agent and
Agent will promptly notify each Bank thereof, and Borrower shall be deemed to
have requested that Revolving Loans be made by the Banks to be disbursed to such
Issuing Bank not later than one (1) Business Day after the Honor Date under such
Letter of Credit, subject to the amount of the unutilized portion of the
Borrowing Base Line.
 
(c)           In the event of any request for a Reducing L/C Borrowing by the
Borrower in association with any Reducing Letter of Credit, the amount available
for drawing under such Reducing Letter of Credit will be reduced automatically,
and without any further amendment or endorsement to such Reducing Letter of
Credit, by the amount actually paid to such beneficiary, notwithstanding the
fact that the payment creating such Reducing L/C Borrowing is not made pursuant
to a conforming and proper draw under the corresponding Reducing Letter of
Credit; provided, however, if any Bank has given the Issuing Banks, Agent, the
Borrower and each of the other Banks written notice that such Bank objects to
further Reducing L/C Borrowings at least three (3) Business Days prior to the
date the Borrower requests the Reducing L/C Borrowing, then the Issuing Banks
will not make such Reducing L/C Borrowing unless all Banks consent thereto.
 
(d)           Each Bank shall upon any notice pursuant to Subsection 3.03(b)
make available to Agent for the account of any Issuing Bank an amount in United
States Dollars at the United States Dollar Equivalent and in immediately
available funds equal to its Pro Rata Share (or, if a Defaulting Bank exists,
and without limitation to the obligations of such Defaulting Bank under this
Section 3.03, with respect to any Non-Defaulting Bank, its Pro Rata Adjusted
Share, if applicable) of the amount of the drawing or of the Reducing L/C
Borrowing, as the case may be, whereupon the participating Banks shall (subject
to Subsection 3.03(e)) each be deemed to have made a Revolving Loan to the
Borrower in that amount.  If any Bank so notified fails to make available to
Agent for the account of such Issuing Bank the amount of such Bank’s Pro Rata
Share (or, if a Defaulting Bank exists, and without limitation to the
obligations of such Defaulting Bank under this Section 3.03, with respect to any
Non-Defaulting Bank, its Pro Rata Adjusted Share, if applicable) of the amount
of the drawing or of the Reducing L/C Borrowing, as the case may be, by no later
than 3:00 p.m. (New York City time) on the Business Day following the Honor
Date, then interest shall accrue on such Bank’s obligation to make such payment,
from the Honor Date to the date such Bank makes such payment, at a rate per
annum equal to the Federal Funds Rate in effect from time to time during such
period.  Agent will promptly give notice of the occurrence of the Honor Date,
but failure of Agent to give any such notice on the Honor Date or in sufficient
time to enable any Bank to effect such payment on such date shall not relieve
such Bank from its obligations under this Section 3.03.
 
(e)           With respect to any unreimbursed drawing or Reducing L/C
Borrowing, as the case may be, that is not converted into Revolving Loans in
whole or in part for any reason, the Borrower shall be deemed to have incurred
from the relevant Issuing Bank an L/C Borrowing in United States Dollars at the
United States Dollar Equivalent of such drawing or Reducing L/C Borrowing, as
the case may be, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at a rate per annum equal to
the Default Rate, and each Bank’s payment to such Issuing Bank pursuant to
Subsection 3.03(d) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Bank in
satisfaction of its participation obligation under this Section 3.03.
 
(f)           Each Bank’s obligation in accordance with this Agreement to make
the Revolving Loans or L/C Advances, as contemplated by this Section 3.03, as a
result of a drawing under a Letter of Credit or Reducing L/C Borrowing, shall be
absolute and unconditional and without recourse to the relevant Issuing Bank and
shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against such Issuing Bank, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default, an Event of Default
or a Material Adverse Effect; or (iii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
 
3.04           Repayment of Participations.
 
(a)           Upon (and only upon) receipt by Agent for the account of an
Issuing Bank of immediately available funds from the Borrower (i) in
reimbursement of any payment made by such Issuing Bank under a Letter of Credit
or in connection with a Reducing L/C Borrowing with respect to which any Bank
has paid Agent for the account of such Issuing Bank for such Bank’s
participation in the Letter of Credit pursuant to Section 3.03 or (ii) in
payment of interest thereon, Agent will pay to each Bank, in the same funds as
those received by Agent for the account of such Issuing Bank, the amount of such
Bank’s Pro Rata Share (or, if a Defaulting Bank exists, and without limitation
to the obligations of such Defaulting Bank under this Section 3.04, with respect
to any Non-Defaulting Bank, its Pro Rata Adjusted Share, if applicable) of such
funds, and such Issuing Bank shall receive the amount of the Pro Rata Share (or,
if a Defaulting Bank exists, and without limitation to the obligations of such
Defaulting Bank under this Section 3.04, with respect to any Non-Defaulting
Bank, its Pro Rata Adjusted Share, if applicable) of such funds of any Bank that
did not so pay Agent for the account of such Issuing Bank.
 
(b)           If Agent or an Issuing Bank is required at any time to return to
the Borrower, or to a trustee, receiver, liquidator, custodian, or any official
in any Insolvency Proceeding, any portion of the payments made by the Borrower
to Agent for the account of such Issuing Bank pursuant to Subsection 3.04(a) in
reimbursement of a payment made under a Letter of Credit or in connection with a
Reducing L/C Borrowing or interest or fee thereon, each Bank shall, on demand of
such Issuing Bank, forthwith return to Agent or such Issuing Bank the amount of
its Pro Rata Share (or, if a Defaulting Bank exists, and without limitation to
the obligations of such Defaulting Bank under this Section 3.04, with respect to
any Non-Defaulting Bank, its Pro Rata Adjusted Share, if applicable) of any
amounts so returned by Agent or such Issuing Bank plus interest thereon from the
date such demand is made to the date such amounts are returned by such Bank to
Agent or such Issuing Bank, at a rate per annum equal to the Federal Funds Rate
in effect from time to time.
 
3.05           Role of the Issuing Banks.
 
(a)           Each Bank and the Borrower agree that, in paying any drawing under
a Letter of Credit Issued by an Issuing Bank or funding any Reducing L/C
Borrowing, such Issuing Bank shall not have any responsibility to obtain any
document (other than any sight draft or certificates expressly required by such
Letter of Credit, but with respect to Reducing Letter of Credit Borrowings, no
document of any kind need be obtained) or to ascertain or inquire as to the
validity or accuracy of any such document or the authority of the Person
executing or delivering any such document.
 
(b)           None of Agent or any Issuing Bank or any of their Related Persons
shall be liable to any Bank for:  (i) any action taken or omitted in connection
herewith at the request or with the approval or deemed approval of the Banks;
(ii) any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
 
(c)           The Borrower hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Borrower pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement.  None of
Agent or any Issuing Bank or any of their Related Persons shall be liable or
responsible for any of the matters described in clauses (a) through (g) of
Section 3.06; provided, however, anything in such clauses or elsewhere herein to
the contrary notwithstanding, that the Borrower may have a claim against an
Issuing Bank, and such Issuing Bank may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by such Issuing Bank’s willful misconduct or gross negligence or such
Issuing Bank’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit.  In
furtherance and not in limitation of the foregoing:  (i) the Issuing Banks may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Banks shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
 
3.06           Obligations Absolute
 
The Obligations of the Borrower under this Agreement and any L/C-Related
Document to reimburse an Issuing Bank for a drawing under a Letter of Credit or
for a Reducing L/C Borrowing, and to repay any L/C Borrowing and any drawing
under a Letter of Credit or Reducing L/C Borrowing converted into Revolving
Loans, shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement and each such other L/C-Related
Document under all circumstances, including the following:
 
(a)           any lack of validity or enforceability of this Agreement or any
L/C-Related Document;
 
(b)           any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of any
Letter of Credit or any other amendment or waiver of or any consent to departure
from all or any of the L/C-Related Documents;
 
(c)           the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee of
any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), any Issuing Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C-Related Documents or any unrelated transaction;
 
(d)           any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit;
 
(e)           any payment by any Issuing Bank under any Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of any Letter of Credit; or any payment made by any Issuing Bank under any
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;
 
(f)           any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Obligations of the Borrower in respect of any
Letter of Credit; or
 
(g)           any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower.
 
Notwithstanding anything to the contrary in this Section 3.06, the Issuing Banks
shall not be excused from liability to Borrower to the extent of any direct
damages (as opposed to consequential, indirect and punitive damages, claims in
respect of which are hereby waived by Borrower) suffered by Borrower that are
caused by any of the Issuing Bank’s gross negligence or willful misconduct when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof, provided, however, that the parties hereto
expressly agree that:
 
 
(i)
the Issuing Banks may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit without
responsibility for further investigation and may make payment upon presentation
of documents that appear on their face to be in substantial compliance with the
terms of such Letter of Credit.

 
 
(ii)
the Issuing Banks shall have the right, in their sole discretion, to decline to
accept documents and to make such payment if such documents are not in strict
compliance with the terms of such Letter of Credit; and

 
 
(iii)
this sentence shall establish the standard of care to be exercised by the Banks
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof (and the parties hereto hereby waive, to
the extent permitted by applicable law, any standard of care inconsistent with
the foregoing).

 
3.07           Cash Collateral Pledge
 
Upon the request of Agent, (i) if an Issuing Bank has honored any full or
partial drawing request on any Letter of Credit and such drawing has resulted in
an L/C Borrowing hereunder, (ii) if, as of the Maturity Date, any Letters of
Credit may for any reason remain outstanding and partially or wholly undrawn, or
(iii) upon an Event of Default, the Borrower shall immediately Cash
Collateralize the L/C Obligations in an amount equal to such L/C
Obligations.  Upon the occurrence of the circumstances described in Section 2.05
requiring the Borrower to Cash Collateralize Letters of Credit, then, the
Borrower shall immediately Cash Collateralize the L/C Obligations in an amount
equal to the applicable excess.
 
3.08           Letter of Credit Fees.
 
(a)           The Borrower shall pay to Agent for the account of each of the
Banks, a letter of credit fee with respect to each of the Letters of Credit
Issued hereunder equal to the greater of (i) $500.00 per Letter of Credit, or
(ii) per annum fees of (x) 2.25% of the undrawn amount of Ninety (90) Day Supply
L/Cs and (y) 2.75% of the undrawn amount of all other Letters of Credit.
 
(b)           The Borrower shall pay to the Agent for the account of each
Issuing Bank Issuing a Letter of Credit, an issuance fee of $250.00 for each
Letter of Credit issued.
 
(c)           The Borrower shall pay to the Agent for the account of each
Issuing Bank Issuing a Letter of Credit, a re-issuance fee of $100.00 for each
Letter of Credit that is re-issued.
 
(d)           The Borrower shall pay to the Agent for the account of each
Issuing Bank Issuing a Letter of Credit, an amendment fee equal to $100.00 for
each amendment to any Letter of Credit.
 
(e)           The Borrower shall pay to Agent for the account of each Issuing
Bank Issuing a Letter of Credit, a letter of credit fee with respect to each of
the Letters of Credit Issued hereunder by such Issuing Bank equal to a fronting
fee of 0.25% of the face amount of each such Letter of Credit.
 
(f)           Such letter of credit fees as described in sub-paragraphs (a),
(b), (c), (d) and (e) above for each Letter of Credit, unless otherwise
specified, shall be due and payable monthly in arrears for the preceding month
during which Letters of Credit are outstanding, on the later of (i) the 5th
Business Day of each month, or (ii) the date of payment shown on the monthly
billing delivered to the Borrower by the Agent (which date of payment shall be
no less than two (2) Business Days after delivery of such billing, but in no
event later than the Expiration Date.
 
(g)           With reference to Letter of Credit fees for all Letters of Credit
denominated in Canadian Dollars, the Agent shall calculate their United States
Dollar Equivalents for each month in advance based upon the Canadian Dollar/US
Dollar exchange rate in effect, as determined by the Agent as of the first
calendar day of such month (without limiting the Agent’s right to determine the
United States Dollar Equivalent at any time as provided in the definition of
“Effective Amount”).  Such United States Dollar Equivalents shall be used for
calculating the amount of such fees.  New Letters of Credit denominated in
Canadian Dollars shall be assigned United States Dollar Equivalents by the Agent
and such United States Dollar Equivalents shall apply until the next succeeding
United States Dollar Equivalents are calculated by the Agent.
 
3.09           Applicability of UCP
 
When a Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), at the option of the Issuing Bank, the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce (the “ICC”) at the time of issuance or
the International Standby Practices 1998 published by the Institute of
International Bank and Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Letter of Credit.
 
3.10           Existing Letters of Credit
 
Borrower hereby acknowledges and agrees that the Existing Letters of Credit
shall be deemed to be Letters of Credit Issued under this Agreement for all
purposes.
 
 
ARTICLE IV
 
 
TAXES AND YIELD PROTECTION
 
4.01           Taxes.
 
(a)           Any and all payments by the Borrower to or for the account of
Agent or any Bank under any Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of Agent and each Bank,
taxes imposed on or measured by its net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which Agent or such Bank, as the case may
be, is organized or maintains a lending office (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as “Taxes”).  If the
Borrower shall be required by any Laws to deduct any Taxes from or in respect of
any sum payable under any Loan Document to Agent or any Bank, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), Agent and such Bank receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, the Borrower shall
furnish to Agent (which shall forward the same to such Bank) the original or a
certified copy of a receipt evidencing payment thereof.
 
(b)           In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).
 
(c)           If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to
Agent or any Bank, the Borrower shall also pay to Agent (for the account of such
Bank) or to such Bank, at the time interest is paid, such additional amount that
such Bank specifies as necessary to preserve the after-tax yield (after
factoring in all taxes, including taxes imposed on or measured by net income)
such Bank would have received if such Taxes or Other Taxes had not been imposed.
 
(d)           The Borrower agrees to indemnify Agent and each Bank for (i) the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section) paid by
Agent and such Bank, (ii) amounts payable under Subsection 4.01(c) and (iii) any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  Payment under this subsection (d) shall be made within 30 days after
the date the Bank or Agent makes a demand therefore.
 
4.02           Increased Costs and Reduced Return; Capital Adequacy.
 
(a)           If any Bank determines that as a result of the introduction of or
any change in or in the interpretation of any Law, after the Closing Date or
such Bank’s compliance therewith, there shall be any increase in the cost to
such Bank of issuing or participating in Letters of Credit or advancing
Revolving Loans, or a reduction in the amount received or receivable by such
Bank in connection with any of the foregoing (excluding for purposes of this
subsection (a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 4.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Bank is organized or has its Lending
Office, and (iii) reserve requirements), then from time to time upon demand of
such Bank (with a copy of such demand to Agent), the Borrower shall pay to such
Bank such additional amounts as will compensate such Bank for such increased
cost or reduction.
 
(b)           If any Bank determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, after
the Closing Date or compliance by such Bank (or its Lending Office) therewith,
has the effect of reducing the rate of return on the capital of such Bank or any
corporation controlling such Bank as a consequence of such Bank’s obligations
hereunder (taking into consideration its policies with respect to capital
adequacy and such Bank’s desired return on capital), then from time to time upon
demand of such Bank (with a copy of such demand to Agent), the Borrower shall
pay to such Bank such additional amounts as will compensate such Bank for such
reduction.
 
4.03           Matters Applicable to all Requests for Compensation
 
A certificate of Agent or any Bank claiming compensation under this Article IV
and setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error.  In determining such
amount, Agent or such Bank may use any reasonable averaging and attribution
methods.
 
4.04           Funding Losses
 
The Borrower shall reimburse each Bank and hold each Bank harmless from any loss
or expense which the Bank may sustain or incur as a consequence of:
 
(a)           the failure of the Borrower to make on a timely basis any payment
of principal of any Eurodollar Rate Loan;
 
(b)           the failure of the Borrower to borrow, continue or convert a Loan
after the Borrower has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/Continuation;
 
(c)           the failure of the Borrower to make any prepayment in accordance
with any notice delivered under Section 2.05;
 
(d)           the prepayment (including prepayments made pursuant to Article II)
or other payment (including after acceleration thereof) of a Eurodollar Rate
Loan on a day that is not the last day of the relevant Interest Period; or
 
(e)           the automatic conversion under Section 2.03 of any Eurodollar Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
 
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained.  For
purposes of calculating amounts payable by the Borrower to the Banks under this
Section and under Section 4.02, each Eurodollar Rate Loan made by a Bank (and
each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the Eurodollar Rate for such
Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan is in fact so funded.
 
4.05           Survival
 
The agreements and Obligations of the Borrower in this Article IV shall survive
the payment of all other Obligations.
 
 
ARTICLE V
 
 
CONDITIONS PRECEDENT
 
5.01           Matters to be Satisfied Upon Execution of Agreement
 
At the time the Banks execute this Agreement, unless otherwise waived by the
Banks, Agent shall have received all of the following, in form and substance
satisfactory to Agent and each Bank, and in sufficient copies for each Bank:
 
(a)           Loan Documents.  This Agreement, the Notes, appropriate amendments
to the Security Agreements, financing statements and financing statement
amendments, and each other document or certificate executed in connection with
this Agreement, executed by each party thereto;
 
(b)           Incumbency.  Certificate of the Secretary of the Borrower,
certified as of the Closing Date, and certifying the names and true signatures
of the officers of the Borrower authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered by the
Borrower hereunder;
 
(c)           Organization Documents; Existence; Good Standing.  The articles or
certificate of incorporation and the bylaws of the Borrower as in effect on the
Closing Date, all certified by the Secretary of the Borrower as of the Closing
Date, together with certificates of existence for the Borrower and a good
standing certificate for the Borrower from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation and each state
where the Borrower is qualified to do business as a foreign corporation,
certified as of, or reasonably close to, the Closing Date;
 
(d)           Legal Opinion.  Opinions of counsel to the Borrower and addressed
to Agent and the Banks in form and substance acceptable to Agent and the Banks;
 
(e)           Payment of Fees.  The fee letters executed by the Borrower and
evidence of payment by the Borrower of all accrued and unpaid fees, costs and
expenses to the extent then due and payable on the Closing Date, together with
Attorney Costs of Agent to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of Attorney Costs as shall constitute Fortis’
reasonable estimate of Attorney Costs incurred or to be incurred by it through
the closing proceedings (provided, however, that such estimate shall not
thereafter preclude final settling of accounts between the Borrower and Agent);
including any such costs, fees and expenses arising under or referenced in
Sections 2.08 and 11.04(a) and all costs of the auditors and consultants
retained by the Banks in connection with the Obligations of the Borrower to
Agent;
 
(f)           Certificate.  A certificate signed by a Responsible Officer of the
Borrower, dated as of the Closing Date, stating to the best of such officer’s
knowledge that:
 
 
(i)
The representations and warranties contained in Article VI of the Agreement are
true and correct in all material respects on and as of the date of this
certificate;

 
 
(ii)
No Default or Event of Default exists or would result from the Credit Extension;
and

 
 
(iii)
There has occurred no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

 
(g)           Filings.  Evidence that all filings needed to perfect the security
interests granted by the Security Agreements have been completed or due
provision has been made therefore;
 
(h)           Intercreditor Agreement.  The Intercreditor Agreement executed by
each party thereto.
 
(i)           Responsible Officer List.  The Responsible Officer List;
 
(j)           Support Agreement.  The Support Agreement executed by the Parent;
 
(k)           Financial Statements.  The Borrower’s audited financial statements
for its 2008 fiscal year in compliance with Section 7.01(a);
 
(l)           Borrowing Base Collateral Position Report.  The Borrower’s most
recent Borrowing Base Collateral Position Report;
 
(m)           Risk Management Policy.  The Borrower’s most recent risk
management policy;
 
(n)           Audit Report.  The final signed audit report relating to the
Borrower’s Collateral Position;
 
(o)           Non-Utility Money Pool Agreement.  An executed copy of the
Non-Utility Money Pool Agreement dated June 12, 2008, including any amendments
thereto, entered into by the Borrower, the Parent, Black Hills Service Company,
LLC, Black Hills Non-regulated Holdings, LLC and certain other non-utility
Subsidiaries of Parent named therein;
 
(p)           Subordination Agreement.  An executed subordination agreement
substantially in the form attached hereto as Exhibit H among the Parent, the
Borrower and the Agent; and
 
(q)           Other Documents.  Such other approvals, opinions, documents or
materials as Agent or any Bank may request.
 
5.02           Matters to be Satisfied Prior to Each Request for Extension of
Credit
 
On any date on which Borrower requests that any Bank make any Loans or Issue any
Letter of Credit hereunder, unless otherwise waived by the Banks, each of the
following shall be true:
 
(a)           Representations and Warranties.  Each of the representations and
warranties made by Borrower in or pursuant to this Agreement or the other Loan
Documents shall be true and correct in all material respects on and as of such
date as if made on and as of such date (except to the extent such
representations and warranties relate solely to an earlier date).
 
(b)           Default.  No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extension of credit
requested to be made on such date.
 
(c)           No Material Adverse Effect.   Since the Closing Date, there shall
have been no Material Adverse Effect.
 
(d)           Borrowing Availability.  The aggregate Effective Amount
outstanding under this Agreement shall not exceed the lesser of the Borrowing
Base Advance Cap or the Total Available Committed Line Portion.
 
 
ARTICLE VI
 
 
REPRESENTATIONS AND WARRANTIES
 
The Borrower represents and warrants to Agent and each Bank that:
 
6.01           Existence and Power
 
The Borrower and each of its Subsidiaries:
 
(a)           is a corporation or limited liability company, as the case may be,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization;
 
(b)           have the power and authority and all governmental licenses,
authorizations, consents and approvals that are necessary to own their assets,
carry on their business and to execute, deliver, and perform their respective
Obligations under the Loan Documents;
 
(c)           is duly qualified as a foreign corporation or limited liability
company, as the case may be, and is licensed and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification or license; and
 
(d)           to the best knowledge of the Borrower, is in compliance with all
Requirements of Law.
 
6.02           Authorization; No Contravention
 
The execution, delivery and performance by the Borrower of this Agreement and
each other Loan Document to which the Borrower is party, have been duly
authorized by its board of directors, and if necessary, shareholder action, and
do not and will not:
 
(a)           contravene the terms of the Organization Documents of the
Borrower;
 
(b)           conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Borrower is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject; or
 
(c)           to the best knowledge of the Borrower, violate any Requirement of
Law.
 
6.03           Governmental Authorization
 
No approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower or any of its Subsidiaries, as applicable, of the
Agreement or any other Loan Document.
 
6.04           Binding Effect
 
This Agreement and each other Loan Document to which the Borrower or any of its
Subsidiaries is a party constitute the legal, valid and binding obligations of
such Person to the extent it is a party thereto, enforceable against such Person
in accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors’ rights generally or by general principles of equity.
 
6.05           Litigation
 
Except as specifically disclosed in Schedule 6.05, there are no actions, suits
or proceedings, pending, or to the knowledge of the Borrower, threatened at law,
in equity, in arbitration or before any Governmental Authority, against the
Borrower, or any of its Subsidiaries or any of their respective properties which
purport to affect or pertain to this Agreement or any other Loan Document, or
any of the transactions contemplated hereby or thereby; and no injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
 
6.06           No Default
 
No Default or Event of Default exists or would result from the incurring of any
Obligations by the Borrower.  As of the Closing Date, neither the Borrower nor
any of its Subsidiaries is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse Effect.
 
6.07           ERISA Compliance
 
Except as specifically disclosed in Schedule 6.07:
 
(a)           Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.  Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Borrower, nothing has occurred which would cause the loss of such
qualification.  The Borrower and each ERISA Affiliate have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
 
(b)           There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which have resulted or could reasonably be expected to
result in a Material Adverse Effect.  There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result in a Material
Adverse Effect.
 
(c)           (i) To the Borrower’s best knowledge, no ERISA Event has occurred
or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded
Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or 4212(c) or
ERISA.
 
6.08           Use of Proceeds; Margin Regulations
 
The proceeds of the Loans are to be used solely (a) to finance working capital
requirements related to Product marketing activities; (b) to provide for Letters
of Credit as described hereunder; and (c) to fund payments due to any Swap Bank
under a Swap Contract.  Neither the Borrower nor any Subsidiary is generally
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
 
6.09           Title to Properties
 
The Borrower and each of its Subsidiaries have good record and marketable title
in fee simple to, or valid leasehold interests in, all real property necessary
or used in the ordinary conduct of their respective businesses, except for such
defects in title as could not, individually or in the aggregate, have a Material
Adverse Effect.  As of the Closing Date, the property of the Borrower and its
Subsidiaries is subject to no Liens, other than Permitted Liens.
 
6.10           Taxes
 
The Borrower and its Subsidiaries have filed all Federal and other material tax
returns and reports required to be filed, and have paid all Federal and other
material taxes, assessments, fees and other governmental charges shown thereon
to be due and payable, and have paid all material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets as due and payable, except those which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP.  There is no proposed tax assessment against
the Borrower or any of its Subsidiaries that would, if made, have a Material
Adverse Effect.
 
6.11           Financial Condition.
 
(a)           The audited balance sheet of Borrower dated as of December 31,
2008:
 
 
(i)
fairly presents the financial condition of the Borrower as of the date thereof;
and

 
 
(ii)
shows all material indebtedness and other liabilities, direct or contingent, of
the Borrower as of the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations.

 
(b)           Since December 31, 2008, there has been no Material Adverse
Effect.
 
6.12           Environmental Matters
 
Except as previously specifically disclosed in Schedule 6.12, such Environmental
Laws and Environmental Claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
6.13           Regulated Entities
 
Neither the Borrower, nor any Person controlling the Borrower, or any of its
Subsidiaries, is an “Investment Company” within the meaning of the Investment
Company Act of 1940.  The Borrower is not subject under any Federal or state
statute or regulation to restrictions limiting its ability to incur the
Obligations.
 
6.14           No Burdensome Restrictions
 
Neither the Borrower nor any of its Subsidiaries is a party to or bound by any
Contractual Obligation, or subject to any restriction in any Organization
Document, or any Requirement of Law, which could reasonably be expected to have
a Material Adverse Effect.
 
6.15           Copyrights, Patents, Trademarks and Licenses, etc
 
To the Borrower’s best knowledge, the Borrower or its Subsidiaries own or are
licensed or otherwise have the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises, authorizations
and other rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person.  To
the knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrower or any Subsidiary infringes upon
any rights held by any other Person.  Except as specifically disclosed in
Schedule 6.05, no claim or litigation regarding any of the foregoing is pending
or threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending or, to the knowledge
of the Borrower, proposed.
 
6.16           Subsidiaries
 
The Borrower has no Subsidiaries other than those specifically disclosed in part
(a) of Schedule 6.16 hereto (as such schedule may be amended from time to time
in accordance with Section 8.20) and have no equity investments in any other
corporation or entity other than those specifically disclosed in part (b) of
Schedule 6.16.
 
6.17           Insurance
 
Except as specifically disclosed in Schedule 6.17, the properties of the
Borrower and its Subsidiaries are insured with financially sound and reputable
insurance companies not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or such Subsidiary operates.
 
6.18           Full Disclosure
 
To the Borrower’s best knowledge, none of the representations or warranties made
by the Borrower or any of its Subsidiaries in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any of its Subsidiaries in connection with
the Loan Documents (including the offering and disclosure materials delivered by
or on behalf of the Borrower to the Banks prior to the Closing Date), contains
any untrue statement of a material fact or omits any material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading as of the time when
made or delivered.
 
6.19           Bank Accounts.
 
  The Borrower and its Subsidiaries have no bank accounts other than those
specifically disclosed in Schedule 6.19 hereto.

 
ARTICLE VII
 
 
AFFIRMATIVE COVENANTS
 
So long as any Bank shall be continuing to consider making Revolving Loans or
Issuing Letters of Credit hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding:
 
7.01           Financial Statements
 
The Borrower shall deliver to the Banks, in form and detail satisfactory to the
Banks:
 
(a)           as soon as available, but not later than 120 days after the end of
each fiscal year, a copy of the audited financial statements of Borrower to
include a balance sheet as at the end of such year and the related statements of
income or operations, members’ equity and cash flows for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of a nationally-recognized independent public
accounting firm reasonably acceptable to Agent which report shall state that
such financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years.  Such opinion shall not be qualified or limited because of a restricted
or limited examination by the public accounting firm of any material portion of
Borrower’s records;
 
(b)           as soon as available, but not later than 120 days after the end of
each fiscal year, a copy of the financial statements of Borrower to include a
balance sheet as at the end of such year and the related statements of income or
operations, members’ equity and cash flows for such year, in each case prepared
on an Economic Basis and accompanied by a special purpose report acceptable to
the Banks issued by a nationally-recognized independent accounting firm
reasonably acceptable to Agent; and
 
(c)           as soon as available, but not later than forty-five (45) days
after the end of each month, Borrower-prepared financial statements prepared in
accordance with GAAP and on an Economic Basis and accompanied by an explanation
of any discrepancy between such statements resulting from the differing methods
of preparation.
 
7.02           Certificates; Other Information
 
The Borrower shall furnish to the Agent and the Banks:
 
(a)           concurrently with the delivery of the financial statements
referred to in Subsections 7.01(a) and (b), a Compliance Certificate executed by
a Responsible Officer of the Borrower;
 
(b)           as of the 15th and last day of each month, delivered within seven
(7) days of the reporting date (or the next succeeding Business Day after such
date in the event that such date is not a Business Day), a Borrowing Base
Collateral Position Report, certified by a Responsible Officer of the Borrower;
provided, however, that if any Borrowing Base Collateral Position Report fails
to reflect an “excess” (as contemplated by such report) of greater than
$20,000,000.00, then until two consecutive Borrowing Base Collateral Position
Reports have evidenced an “excess” (as contemplated by such report) of greater
than $25,000,000.00, the Borrower shall provide additional Borrowing Base
Collateral Position Reports per month, one as of each Friday of each week.  Upon
the delivery of the second consecutive Borrowing Base Collateral Position Report
evidencing an excess greater than $25,000,000.00, the Borrower will revert to
delivering two (2) Borrowing Base Collateral Position Reports per month as
described in the first portion of this Section 7.02(b);
 
(c)           as of the 15th and last day of each month, delivered within seven
(7) days of the reporting date (or the next succeeding Business Day after such
date in the event that such date is not a Business Day), a Net Fixed Price
Volume Report, certified by a Responsible Officer of the Borrower that the
Borrower is in compliance with the Net Fixed Price Volume limitations set forth
in Section 8.11 of this Agreement;
 
(d)           on the tenth (10th) Business Day of each month a Transportation
Agreement Report, in form and substance acceptable to Banks, as of the last
calendar day of the preceding month, certified by a Responsible Officer of the
Borrower;
 
(e)           on the tenth (10th) Business Day of each month a forward position
report, in form and substance acceptable to the Banks, showing the marked to
market position of the Borrower’s forward book as of the last calendar day of
the preceding month, certified by a Responsible Officer of the Borrower;
 
(f)           promptly when available, such additional information regarding the
business, financial or corporate affairs of the Borrower or any Subsidiary as
the Agent, at the request of any Bank, may from time to time reasonably request;
 
(g)           within forty-five (45) days of the end of each quarter, a
quarterly report of inventory storage locations at each quarter end;
 
(h)           within forty-five (45) days of the end of each quarter, a
quarterly report reflecting any advances made by Borrower to Parent or any other
Affiliates;
 
(i)           within forty-five (45) days of the end of each quarter, a
quarterly report reflecting total future demand charge obligations;
 
(j)           updated risk management policies which shall cover Borrower’s
trading activities in natural gas, crude oil and distillates for crude blending,
such policies to be reasonably satisfactory to the Agent and the Banks; and
 
(k)           promptly upon receipt thereof, copies of any detailed audit
reports, management letters and any reports as to material inadequacies in
accounting controls (including reports as to the absence of any such
inadequacies) or recommendations submitted to the board of directors (or the
audit committee of the board of directors) of the Borrower by independent
accountants in connection with the accounts or books of the Borrower or any of
its Subsidiaries, or any audit of any of them.
 
Whenever any report or other information due under this Section 7.02 is due on a
day other than a Business Day, such report or other information shall be due on
the following Business Day.

7.03           Notices
 
The Borrower shall promptly notify Agent and each Bank:
 
(a)           of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that could reasonably be
expected to become a Default or Event of Default;
 
(b)           the occurrence of any event which could reasonably be expected to
cause a material impairment of the Collateral Position;
 
(c)           the occurrence of any event which could reasonably be expected to
cause a Material Adverse Effect, including any of the following to the extent
they individually or in the aggregate cause or could reasonably be expected to
cause a Material Adverse Effect:  (i) breach or non-performance of, or any
default under, a material Contractual Obligation of the Borrower or any
Subsidiary; (ii) any material dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;
 
(d)           of the occurrence of any of the following events affecting the
Borrower or any ERISA Affiliate (but in no event more than 10 days after the
Borrower receives notice or becomes aware of such event), and deliver to Agent
and each Bank a copy of any notice with respect to such event that is filed with
a Governmental Authority and any notice delivered by a Governmental Authority to
the Borrower or any ERISA Affiliate with respect to such event:
 
 
(i)
an ERISA Event;

 
 
(ii)
a material increase in the Unfunded Pension Liability of any Pension Plan;

 
 
(iii)
the adoption of, or the commencement of contributions to, any Plan subject to
Section 412 of the Code by the Borrower or any ERISA Affiliate;

 
 
(iv)
the adoption of any amendment to a Plan subject to Section 412 of the Code, if
such amendment results in a material increase in contributions or Unfunded
Pension Liability;

 
(e)           of any material change in accounting policies or financial
reporting practices by the Borrower; and
 
(f)           of any intended relocation of inventory or any intended new
location of inventory owned by the Borrower, at least ten (10) Business Days
prior to the date such inventory is to be stored at such location.
 
Each notice under this Section shall be accompanied by a written statement by a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein, and stating what action the Borrower or any affected
Subsidiary proposes to take with respect thereto and at what time.  Each notice
under Subsection 7.03(a) shall describe with particularity any and all clauses
or provisions of this Agreement or other Loan Document that have been (or
reasonably could be expected to be) breached or violated as therein provided.
 
Each Swap Bank that has concluded a Swap Contract shall promptly notify the
Agent of the early termination, or its equivalent, of the Swap Contract and the
Agent shall promptly notify the Banks of the same.
 
7.04           Preservation of Corporate Existence, Etc
 
The Borrower shall, and shall cause each of its Subsidiaries to:
 
(a)           preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
organization;
 
(b)           preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business;
 
(c)           use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
 
(d)           preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
 
7.05           Maintenance of Property
 
The Borrower shall maintain, and shall cause each of its Subsidiaries to
maintain, and preserve all its property which is used or useful in its business
in good working order and condition, ordinary wear and tear excepted and make
all necessary repairs thereto and renewals and replacements thereof except in
any case where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
 
7.06           Insurance
 
The Borrower shall maintain, and shall cause each of its Subsidiaries to
maintain, with financially sound and reputable independent insurers, insurance
with respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.  Agent, for the benefit of the Banks, shall
be named as an additional insured and loss payee under all such polices, without
liability for premiums or club calls.
 
7.07           Payment of Obligations
 
The Borrower shall, and shall cause each of its Subsidiaries to, pay and
discharge as the same shall become due and payable, all their respective
obligations and liabilities, including:
 
(a)           all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary;
 
(b)           all lawful claims which, if unpaid, would by law become a Lien
upon its property, except for Permitted Liens, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Borrower or Subsidiary, and
provided that at such time the claim becomes a Lien (other than a lis pendens
notice), it shall be promptly paid; and
 
(c)           all indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing or
relating to such Indebtedness.
 
7.08           Compliance with Laws
 
The Borrower shall comply, and shall cause each of its Subsidiaries to comply,
with all Requirements of Law of any Governmental Authority having jurisdiction
over it or its business (including the Federal Fair Labor Standards Act).
 
7.09           Compliance with ERISA
 
The Borrower shall, and shall cause each of its ERISA Affiliates
to:  (a) maintain each Plan in compliance with the applicable provisions of
ERISA, the Code and other federal or state law; (b) cause each Plan which is
qualified under Section 401(a) of the Code to maintain such qualification; and
(c) make all required contributions to any Plan subject to Section 412 of the
Code.
 
7.10           Inspection of Property and Books and Records
 
The Borrower shall maintain and shall cause each of its Subsidiaries to maintain
proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Borrower and
such Subsidiary.  The Borrower shall permit, and shall cause each of its
Subsidiaries to permit representatives and independent contractors of Agent or
any Bank to visit and inspect any of their respective properties, to examine
their respective corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and independent
public accountants, all at the expense of Agent or Bank causing such inspection
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, when an Event of Default exists Agent or any Bank may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.
 
7.11           Environmental Laws
 
The Borrower shall, and shall cause each of its Subsidiaries to, conduct its
operations and keep and maintain its property in compliance in all material
respects with all Environmental Laws.
 
7.12           Use of Proceeds
 
The Borrower shall use the proceeds of the Loans for the uses described in this
Agreement and not in contravention of any Requirement of Law or of any Loan
Document restrictions on use of loan proceeds.  The Borrower shall not use the
proceeds of the Loan or any Letter of Credit to acquire, directly or indirectly,
any Margin Stock.
 
7.13           Collateral Position Audit.
 
At such times as Agent deems advisable, the Borrower will allow Agent or an
entity satisfactory to Agent to conduct a thorough examination of the Borrower’s
Collateral Position and its risk management practices, and the Borrower will
fully cooperate in such examination.  The Borrower will pay the costs and
expenses of one such examination per calendar year and any additional
examinations during such time as an Event of Default has occurred and is
continuing.  The Borrower acknowledges that Agent will conduct a minimum of one
such audit per year and may conduct additional audits during the year.  At the
request of any Bank, the Agent will provide such Bank with the results of such
audit.
 
7.14           Payments to Bank Blocked Accounts
 
The Borrower shall (i) notify in writing and otherwise take such reasonable
steps to ensure that all Account Debtors under any of its Accounts forward
payment in the form of cash, checks, drafts or other similar items of payment
directly to the Bank Blocked Accounts or directly by wire transfer to the Bank
Blocked Accounts and shall, if requested by Agent, provide Banks with reasonable
evidence of such notification, (ii) deposit and cause its Subsidiaries to
deposit or cause to be deposited all payments under such Accounts to the Bank
Blocked Accounts.  In the event that any Account Debtor does make any payment
directly to the Bank Blocked Accounts, Borrower shall promptly deposit such
amounts into the Bank Blocked Accounts, and (iii) to the extent any funds are
withdrawn by the Borrower or any of its Subsidiaries from the Clearinghouse
Account, deposit and cause its Subsidiaries to deposit such funds to the Bank
Blocked Accounts.  Agent at any time may apply amounts contained in the Bank
Blocked Accounts toward satisfaction of the Obligations.  Upon the written
notice of Agent, Wells Fargo shall cease to transfer any funds from the Bank
Blocked Accounts until further notified in writing by Agent.
 
7.15           Financial Covenants
 
The Borrower shall at all times maintain:
 
(a)           Minimum Net Working Capital equal to the greater of (i)
$50,000,000.00 or (ii) 25% of the then-elected Borrowing Base Sub-Cap, subject
to adjustment as provided in Section 8.11(b).
 
(b)           Minimum Tangible Net Worth equal to the greater of (i)
$50,000,000.00 or (ii) 25% of the then-elected Borrowing Base Sub-Cap, subject
to adjustment as provided in Section 8.11(b).
 
(c)           A ratio of Total Liabilities to Tangible Net Worth not to exceed
5:1.
 
7.16           Net Cumulative Loss
 
The Borrower shall not incur a Net Cumulative Loss during any twelve (12)
consecutive calendar months in excess of the lower of the following:  (a)
$30,000,000.00, or (b)(x) $10,000,000.00 plus (y) to the extent it results in a
positive number, eighteen percent (18%) times the following:
 
 
(i)
the lower of Net Working Capital or Tangible Net Worth (as of most recent period
available), minus

 
 
(ii)
$75,000,000.00.

 
For purposes of this Section 7.16, Net Cumulative Loss shall mean the
consolidated net loss of the Borrower and its Subsidiaries computed on an
Economic Basis.
 
7.17           Security for Obligations
 
The Borrower shall at all times maintain security interests in favor of the
Banks so that the Banks shall have a first priority perfected lien (other than
Permitted Liens) on all of assets of the Borrower and any of its Subsidiaries to
the extent required pursuant to the Loan Documents, to secure the Borrower’s
Obligations hereunder, under the other Loan Documents and with respect to Swap
Contracts, and the Borrower’s Obligations under Swap Contracts shall be secured
on a pari passu basis with the Borrower’s other Obligations, provided that with
respect to a Defaulting Bank or its Affiliate which has entered into a Swap
Contract with the Borrower, the Defaulting Bank shall only be entitled to
sharing of amounts pursuant to the Intercreditor Agreement with respect to such
Swap Contracts notwithstanding any other provision to the contrary herein.
 
 
ARTICLE VIII
 
 
NEGATIVE COVENANTS
 
So long as any Loan or other Obligation shall remain unpaid or unsatisfied, or
any Letter of Credit shall remain outstanding, unless the Banks waive compliance
in writing:
 
8.01           Limitation on Liens
 
The Borrower shall not, and shall not suffer or permit any Subsidiary to,
directly or indirectly, make, create, incur, assume or suffer to exist any Lien
upon or with respect to any part of its property, whether now owned or hereafter
acquired, other than the following (“Permitted Liens”):
 
(a)           any Lien existing on property of the Borrower or any of its
Subsidiaries on the Closing Date and set forth in Schedule 8.01 securing
Indebtedness;
 
(b)           any Lien created under any Loan Document or Swap Contract;
 
(c)           Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.07, provided that no notice
of lien has been filed or recorded under the Code;
 
(d)           carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s, First Purchaser Liens or other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable without
penalty and, with respect to any such warehousemen’s or landlord’s lien, such
liens only secure accrued rental charges;
 
(e)           Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation;
 
(f)           Liens on the property of the Borrower or its Subsidiaries securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, (ii) contingent obligations on
surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
 
(g)           Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
unstayed liens in the aggregate at any time outstanding for the Borrower and its
Subsidiaries do not exceed $1,000,000.00;
 
(h)           easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially interfere with the ordinary conduct of the business of the Borrower
and its Subsidiaries;
 
(i)           purchase money security interests (including capital leases) on
any property acquired or held by the Borrower or its Subsidiaries in the
ordinary course of business, securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such property;
provided, however, that (i) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (ii) such Lien attaches
solely to the property so acquired in such transaction, (iii) the principal
amount of the debt secured thereby does not exceed 100% of the cost of such
property, and (iv) the principal amount of the Indebtedness secured by any and
all such purchase money security interests shall not at any time exceed
$2,000,000.00; and
 
(j)           any Lien in the form of Cash Collateral (which has not been Cash
Collateralized for the benefit of the Banks) which has been granted by the
Borrower to secure the margin requirements of a swap contract permitted under
Section 8.06(b), provided that such Cash Collateral has been deducted from the
Borrowing Base Advance Cap.
 
8.02           Consolidations, Mergers and Dispositions
 
The Borrower shall not suffer or permit any of its Subsidiaries to merge,
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person except for (a) the sale of assets in the ordinary course of its
business, (b) mergers and consolidations with an aggregate value of less than
$10,000,000.00 less the aggregate value of any acquisitions permitted under
Section 8.18 during any consecutive 12 calendar month period, and (c) asset
sales with an aggregate value of less than $10,000,000.00 during any consecutive
12 calendar month period.
 
8.03           Limitation on Indebtedness
 
The Borrower shall not suffer or permit any of its Subsidiaries to, create,
incur, assume, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, except:
 
(a)           Indebtedness incurred pursuant to or in accordance with, this
Agreement;
 
(b)           Indebtedness consisting of trade payables in the ordinary course
of business;
 
(c)           Indebtedness existing on the Closing Date, and described on
Schedule 8.01;
 
(d)           Indebtedness in respect of purchase money security interests
permitted by Section 8.01 hereof;
 
(e)           Indebtedness in respect of Contingent Obligations permitted by
Section 8.06 hereof;
 
(f)           Subordinated Debt that has been approved by the Banks;
 
(g)           Intercompany loans to the Borrower which are subordinated to the
Obligations pursuant to a subordination agreement or on other terms and
conditions satisfactory to the Banks; and
 
(h)           Intercompany loans incurred by a Subsidiary to the extent
permitted under Section 8.18.
 
8.04           Transactions with Affiliates
 
The Borrower shall not suffer or permit any of its Subsidiaries to, enter into
any material transaction with any Affiliate of the Borrower, except upon fair
and reasonable terms no less favorable to the Borrower or such Subsidiary than
would obtain in a comparable arm’s-length transaction with a Person not an
Affiliate of the Borrower or such Subsidiary.
 
8.05           Use of Proceeds
 
The Borrower shall not suffer or permit any of its Subsidiaries to, use any
portion of the Loan proceeds or any Letter of Credit, directly or indirectly,
(a) to purchase or carry Margin Stock, (b) to repay or otherwise refinance
indebtedness of the Borrower or others incurred to purchase or carry Margin
Stock, (c) to extend credit for the purpose of purchasing or carrying any Margin
Stock, (d) to acquire any security in any transaction that is subject to
Section 13 or 14 of the Exchange Act, or (e) in a manner inconsistent with this
Agreement.
 
8.06           Contingent Obligations
 
The Borrower shall not suffer or permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Contingent Obligations except:
 
(a)           endorsements for collection or deposit in the ordinary course of
business;
 
(b)           swap contracts entered into in the ordinary course of business as
bona fide hedging transactions (including Swap Contracts);
 
(c)           Contingent Obligations of the Borrower and its Subsidiaries
existing as of the Closing Date and described on Schedule 8.06;
 
(d)           Contingent Obligations of the Borrower with respect to any
obligations of its Subsidiaries; and
 
(e)           Contingent Obligations of the Borrower in favor of Societe
Generale Energie (Canada) Inc. (“SocGen Canada”) pursuant to the terms of an
agency agreement between the Borrower and SocGen Canada.  Specifically, the
Borrower will indemnify SocGen Canada for errors made by the Borrower in the
execution of transactions entered into on behalf of SocGen Canada.  The Borrower
will also assume the risks of any disruption in the flow of natural gas from the
initial seller to SocGen Canada into and out of storage and to the final
purchaser from SocGen Canada.
 
8.07           Restricted Payments
 
The Borrower shall not declare or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except
that:
 
(a)           each Subsidiary may make Restricted Payments to the Borrower and
to wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock of such Subsidiary on a pro rata basis based on
their relative ownership interests);
 
(b)           the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock of such
Person;
 
(c)           the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or warrants or options to acquire any such
shares with the proceeds received from the substantially concurrent issue of new
shares of its common stock; and
 
(d)           the Borrower may declare or pay cash dividends to its
stockholders; provided, however, that, immediately after giving effect to such
proposed action, no Default or Event of Default would exist.
 
8.08           ERISA
 
The Borrower shall not, nor suffer or permit any of its ERISA Affiliates
to:  (a) engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan; or (b) engage in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
 
8.09           Change in Business
 
The Borrower shall not, nor suffer or permit any of its Subsidiaries to, engage
in any line of business or trading strategy materially different from the line
of business or trading strategy carried on by the Borrower and its Subsidiaries
on the date hereof.
 
8.10           Accounting Changes
 
The Borrower shall not, nor suffer or permit any of its Subsidiaries to, make
any significant change in accounting treatment or reporting practices, except as
required by GAAP, or change the fiscal year of the Borrower or of any
Subsidiary.
 
8.11           Net Fixed Price Volume Limits.
 
(a)           At no time will the Borrower allow the Net Fixed Price Volume of
natural gas to exceed 3,000,000 MMBTUS and the Net Fixed Price Volume of crude
oil and distillates for crude blending to exceed 50,000 bbls.
 
(b)           In the event the Borrower’s Net Fixed Price Volume of natural gas
exceeds 1,500,000 MMBTUS, the financial covenants set forth at Section 7.15(a)
and (b) shall be adjusted by increasing the required minimum Net Working Capital
and the required Tangible Net Worth by an amount equal to the Borrower’s actual
Net Fixed Price Volume of natural gas less 1,500,000 MMBTUS times $5.00 per
MMBTU.
 
8.12            Change of Management
 
Borrower shall notify the Agent prior to any Change of Management.  For purposes
of this Section 8.12, “Change of Management” shall mean an officer of the
Borrower as of the Closing Date and listed as of the date hereof on Schedule
8.12 hereto ceases to be an officer of the Borrower or more than 50% of the
Persons serving as directors of the Borrower as of the Closing Date and listed
as of the date hereof on Schedule 8.12 hereto cease to serve as directors.
 
8.13           Risk Management Policy
 
The Borrower will not materially change its risk management policies or increase
any board of director established volumetric or dollar limits thereunder without
the prior written consent of Agent and all the Required Banks.  Borrower agrees
that upon request by Agent, from time to time, the Borrower and the Banks will
review and evaluate Borrower’s risk management policies.
 
8.14           Capital Expenditures
 
Borrower will not make or commit to make any capital expenditure if after such
commitment or expenditure a Default or Event of Default would exist under this
Agreement.
 
8.15           Unhedged Transportation Exposure
 
At no time will the Borrower allow its Unhedged Transportation Exposure for the
next succeeding two-year period to exceed the amounts specified below, provided,
however, that Borrower’s Unhedged Transportation Exposure may exceed such
amounts by one-third (1/3) of the amount by which its Net Working Capital and
Tangible Net Worth exceeds the minimum amount required under Section 7.15.
 
       Borrowing Base
       Sub-Cap in Effect
   
Unhedged Transportation
Exposure May Not Exceed
  $ 100,000,000.00     $ 3,000,000.00   $ 150,000,000.00     $ 3,000,000.00   $
175,000,000.00     $ 4,000,000.00   $ 200,000,000.00     $ 4,000,000.00   $
250,000,000.00     $ 5,500,000.00  
          $300,000,000.00 or more   
    $ 6,500,000.00  

8.16           Proprietary Value-at-Risk
 
Borrower’s Proprietary Value-at-Risk shall not at any time exceed $8,000,000.00
(95% confidence interval and one-day time horizon).  “Proprietary Value-at-Risk”
shall mean the risk of mark to market value loss for proprietary positions
calculated using historical market trends, prices, volatility and correlations.
 
8.17           Transportation Value-at-Risk
 
Borrower’s Transportation Value-at-Risk shall not at any time exceed
$10,000,000.00 (95% confidence interval and one-day time
horizon).  “Transportation Value-at-Risk” shall mean the risk of mark to market
value loss for transportation positions calculated using historical market
trends, prices, volatility and correlations.
 
8.18           Loans and Investments
 
Borrower shall not, nor shall it permit any of its Subsidiaries to, purchase or
acquire, or make any commitment therefor, any equity interest, or any
obligations or other securities of, or any interest in, any Person, or make or
commit to make any acquisitions, or make or commit to make any advance, loan,
extension of credit (other than pursuant to sales on open account in the
ordinary course of Borrower’s business) or capital contribution to or any other
investment in, any Person; provided, however, that (a) Borrower may make
advances and loans to Parent, and (b) Borrower and any of its Subsidiaries may
make such investments, capital contributions, acquisitions, loans or advances,
as long as (i) after giving effect to such proposed action, no Default or Event
of Default would exist; and (ii) except for advances and loans by Borrower to
Parent, the aggregate amount of all such investments, capital contributions,
acquisitions, loans or advances does not exceed $15,000,000.00 less the
aggregate value of any mergers and consolidations permitted under Section 8.02;
 
8.19           Bank Blocked Accounts Investments
 
Borrower shall not (a) purchase or acquire any investments to be held in a Bank
Blocked Accounts other than cash equivalents and Marketable Securities; or (b)
open or maintain any bank account unless such bank account is subject to a
Blocked Account Agreement.
 
8.20           Additional Subsidiaries.
 
 The Borrower shall not, nor shall it permit any of its Subsidiaries to, create
or acquire any additional Subsidiaries without (a) prior written notice to the
Agent, (b) such new Subsidiary executing and delivering to the Agent, at its
request, a guaranty, a joinder to the Borrower’s Second Amended and Restated
Security Agreement, and such other security agreements as the Agent or the
Required Banks may reasonably request, (c) the equity holder of such Subsidiary
executing and delivering to the Agent a security agreement pledging one hundred
percent (100%) of the Capital Stock owned by such equity holder of such
Subsidiary along with the certificates pledged thereby, if any, and
appropriately executed stock powers in blank, if applicable, and (d) the
delivery by the Borrower and such Subsidiary of any certificates, opinions of
counsel, title opinions or other documents as the Agent may reasonably request
relating to such Subsidiary; provided that the tangible net worth according to
GAAP of each such Subsidiary shall at all times equal or exceed $250,000.00.
 
 
ARTICLE IX
 
 
EVENTS OF DEFAULT
 
9.01           Event of Default
 
Any of the following shall constitute an “Event of Default”:
 
(a)           Non-Payment.  The Borrower fails to pay any amount due hereunder
or under any other Loan Document within one (1) Business Day after the same
becomes due; or
 
(b)           Representation or Warranty.  Any representation or warranty made
or deemed made herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Borrower, or any
Responsible Officer furnished at any time under this Agreement, or in or under
any other Loan Document, is incorrect or incomplete in any material respect on
or as of the date made or deemed made; or
 
(c)           Covenant Defaults.  The Borrower fails to perform or observe:
 
(i)           any term, covenant or agreement contained in Sections 7.03,
7.04(a), 7.07, 7.14 and 7.17 of this Agreement and such default shall continue
unremedied for a period of five (5) days after the occurrence of such default,
 
(ii)           any term, covenant or agreement contained in Sections 7.05, 7.06,
7.08, 7.09 and 7.11 of this Agreement and such default shall continue unremedied
for a period of twenty (20) days after the occurrence of such default, and
 
(iii)           any other term, covenant or agreement contained in any of the
Loan Documents, other than those expressly set forth in clauses (i) and (ii)
above; or
 
(d)           Cross-Default.  The Borrower or any Subsidiary of the Borrower
(i) fails to make any payment in respect of any Indebtedness or Contingent
Obligation having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement or otherwise) of more than
$5,000,000.00 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise); or (ii) fails to perform or observe any
other material condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement or otherwise)
of more than $5,000,000.00, if, after expiration of any grace or cure period
therein provided, the effect of such failure, event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
 
(e)           Swap Contracts.  There shall have occurred with respect to any
Swap Contract to which the Borrower is a party an “Event of Default” or a
“Termination Event” (as defined in the applicable ISDA Master Agreement and any
related Credit Support Annex or Schedule) which entitles the applicable Swap
Bank to terminate the Swap Contract; or
 
(f)           Insolvency; Voluntary Proceedings.  The Borrower or any Subsidiary
of the Borrower (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, whether at
stated maturity or otherwise; (ii) commences any Insolvency Proceeding with
respect to itself; or (iii) takes any action to effectuate or authorize any of
the foregoing; or
 
(g)           Involuntary Proceedings.  (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower or any Subsidiary of the
Borrower, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of the properties of
Borrower, any Subsidiary of the Borrower, and any such proceeding or petition
shall not be dismissed, or such writ, judgment, warrant of attachment, execution
or similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Borrower, any Subsidiary of the
Borrower admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) the Borrower, any
Subsidiary of the Borrower acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefore), or other similar Person for itself or a substantial portion of its
property or business; or
 
(h)           ERISA.  (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000.00;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $500,000.00; or (iii) the Borrower or any ERISA Affiliate
shall fail to pay when due, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $500,000.00, or the aggregate of (i), (ii) and
(iii) exceeds $1,000,000.00; or
 
(i)           Monetary Judgments.  One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Borrower or any Subsidiary of the Borrower, which such judgment, order, decree
or award is not effectively stayed pending appeal thereof, involving in the
aggregate a liability as to any single or related series of transactions,
incidents or conditions, to pay an amount of $5,000,000.00 or more, unless
Borrower’s or any of its Subsidiary’s potential liability under such judgment,
order, decree or award is covered by insurance and the insurer acknowledges in
writing such coverage within thirty (30) days of the date such judgment, order,
decree or award is entered; or
 
(j)           Non-Monetary Judgments.  Any non-monetary judgment, order or
decree is entered against the Borrower or any Subsidiary of the Borrower which
does or would reasonably be expected to have a Material Adverse Effect; or
 
(k)           Change of Control.  There occurs any Change of Control not
previously approved by all the Banks; or
 
(l)           Adverse Change.  There occurs a Material Adverse Effect; or
 
(m)           Support Agreement.  The Parent shall terminate or fail to perform
its obligations under the Support Agreement.
 
9.02           Remedies
 
If any Event of Default occurs, Agent may and shall, at the request of the
Required Banks:
 
(a)           declare an amount equal to the maximum aggregate amount that is or
at any time thereafter may become available for drawing by the beneficiary under
any outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, and declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and
 
(b)           exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law
including, without limitation, seeking to lift the stay in effect under the
Insolvency Proceeding;
 
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 9.01, the making of Loans and the Issuance of Letters of
Credit under this Agreement shall automatically terminate and an amount equal to
the maximum aggregate amount that is or at any time thereafter may become
available for drawing by the beneficiary under any outstanding Letters of Credit
(whether or not any beneficiary shall have presented, or shall be entitled at
such time to present, the drafts or other documents required to draw under such
Letters of Credit) together with the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of Agent, any Issuing Bank or any Bank.
 
9.03           Rights Not Exclusive
 
The rights provided for in this Agreement and the other Loan Documents are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.
 
9.04           Application of Payments
 
Except as expressly provided in this Agreement, from and after the date of the
occurrence of any Sharing Event, all amounts thereafter received or recovered
under this Agreement or any other Loan Document whether as a result of a payment
by the Borrower, the exercise of remedies by the Agent under any of the Loan
Documents, liquidation of collateral or otherwise, shall be applied according to
Section 2.01 of the Intercreditor Agreement.
 
 
ARTICLE X
 
 
AGENT
 
10.01           Appointment and Authorization.
 
(a)           Each Bank hereby irrevocably (subject to Section 10.09) appoints,
designates and authorizes Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent.  Without limiting the generality of
the foregoing sentence, the use of the term “agent” in this Agreement with
reference to Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable
law.  Instead, such term is used merely as a matter of market custom and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
 
(b)           Each Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as Agent and such Issuing Bank may agree at
the request of the Required Banks that Agent will act for such Issuing Bank with
respect thereto; provided, however, that such Issuing Bank shall have all of the
benefits and immunities (i) provided to Agent in this Article X with respect to
any acts taken or omissions suffered by such Issuing Bank in connection with
Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term “Agent” as used in this Article X included such
Issuing Bank with respect to such acts or omissions, and (ii) as additionally
provided herein with respect to such Issuing Bank.  Prior to the issuance of a
Letter of Credit or upon the payment of any drawing on a Letter of Credit by an
Issuing Bank other than Agent, such Issuing Bank shall provide written notice to
Agent of the dollar amount, the date of such issuance or payment and the expiry
date for such Letter of Credit.  Such issuance shall be subject to the consent
of Agent.  Such consent shall not result in the imposition of any liability upon
Agent.
 
10.02           Delegation of Duties
 
Agent may execute any of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  Agent shall not be responsible for the negligence or misconduct of any
agent or attorney-in-fact that it selects with reasonable care.
 
10.03           Liability of Agent
 
None of the Agent or any of its Related Persons shall (a) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Banks for any recital, statement,
representation or warranty made by the Borrower or any Subsidiary or Affiliate
of the Borrower, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by Agent under or in connection
with, this Agreement or any other Loan Document, or for the value of or title to
any Collateral, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder.  None of Agent or any of its Related Persons shall be
under any obligation to any Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any of the Borrower’s Subsidiaries or Affiliates.
 
10.04           Reliance by Agent.
 
(a)           Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the Banks
or Required Banks, as applicable, as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.  Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Banks or
Required Banks, as applicable, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of the Banks.
 
(b)           For purposes of determining compliance with the conditions
specified in Sections 5.01 and 5.02, each Bank that has executed this Agreement
shall, unless it notifies the Agent to the contrary, be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
either sent by Agent to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Bank.
 
10.05           Notice of Default
 
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to Agent for the account of the
Banks, unless Agent shall have received written notice from a Bank or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  Agent will
notify the Banks of its receipt of any such notice.  Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Banks or Required Banks, as applicable, in accordance with Article IX;
provided, however, that unless and until Agent has received any such request,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Banks.
 
10.06           Credit Decision
 
Each Bank acknowledges that none of Agent or any of its Related Persons has made
any representation or warranty to it, and that no act by Agent hereinafter
taken, including any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by Agent or any of
its Related Persons to any Bank.  Each Bank represents to Agent that it has,
independently and without reliance upon Agent or any of its Related Persons and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Subsidiaries, the value of and title to any Collateral, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the
Borrower hereunder.  Each Bank also represents that it will, independently and
without reliance upon Agent or any of its Related Persons and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower.  Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by Agent, Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower which may come
into the possession of any of Agent or its Related Persons.
 
10.07           Indemnification
 
Whether or not the transactions contemplated hereby are consummated, the Banks
shall indemnify upon demand the Agent, the Issuing Banks and their respective
Related Persons (to the extent not reimbursed by or on behalf of the Borrower
and without limiting the obligation of the Borrower to do so), pro rata in
accordance with each Bank’s Pro Rata Share, from and against any and all
Indemnified Liabilities arising out of actions taken by the Agent, the Issuing
Banks and their respective Related Persons in their respective capacities as
Agent and/or an Issuing Bank; provided, however, that no Bank shall be liable
for the payment to the Agent, the Issuing Banks or any of their respective
Related Persons of any portion of such Indemnified Liabilities resulting from
such Person’s gross negligence or willful misconduct.  Without limitation of the
foregoing, each Bank shall reimburse Agent upon demand for its ratable share of
any costs or out-of-pocket expenses (including Attorney Costs) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of the Borrower.  The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.  THE FORGOING INDEMNITY INCLUDES AN
INDEMNITY FOR THE NEGLIGENCE OF THE AGENT, THE ISSUING BANKS OR ANY OF THEIR
RESPECTIVE RELATED PERSONS.
 
10.08           Agent in Individual Capacity
 
Fortis and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Borrower and its Subsidiaries and Affiliates as though Fortis
were not Agent or an Issuing Bank hereunder and without notice to or consent of
the Banks.  The Banks acknowledge that, pursuant to such activities, Fortis or
its Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Subsidiary) and acknowledge that Agent shall be
under no obligation to provide such information to them.  With respect to its
Loans, Fortis shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not Agent or an Issuing
Bank, and the terms “Bank” and “Banks” include Fortis in its individual
capacity.
 
10.09           Successor Agent
 
Agent may resign as Agent upon thirty (30) days’ notice to the Banks.  If Agent
resigns under this Agreement, the Banks shall appoint, with the approval of the
Required Banks and, so long as no Event of Default has occurred and is
continuing, the consent of the Borrower, from among the Banks, a successor agent
for the Banks; provided that the Committed Line Portion of such successor agent
at the time of such resignation is equal to or greater than the Committed Line
Portion of SocGen.  If no successor agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with the
Banks, and, so long as no Event of Default has occurred and is continuing, with
the consent of the Borrower, a successor agent from among the Banks; provided
that the Committed Line Portion of such successor agent at the time of such
resignation is equal to or greater than the Committed Line Portion of
SocGen.  Upon a change of control of the Agent, so long as no Event of Default
has occurred and is continuing, the Borrower may, at its option, demand the
resignation of the Agent and appoint, with the approval of the Required Banks,
from among the Banks, a successor agent for the Banks; provided that the
Committed Line Portion of such successor agent at the time of such resignation
is equal to or greater than the Committed Line Portion of SocGen.  For the
purposes of the foregoing sentence, a “change of control” of the Agent means the
sale, assignment or other transfer, whether direct or indirect, of more than
fifty percent (50%) of the Capital Stock or other ownership rights of the Agent
or any of its parent entities.  Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term “Agent” shall mean such
successor agent and the retiring Agent’s appointment, powers and duties as Agent
shall be terminated. After any retiring Agent’s resignation hereunder as Agent,
the provisions of this Article X and Sections 11.04 and 11.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.  If no successor agent has accepted appointment as Agent
by the date which is thirty (30) days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of Agent
hereunder until such time, if any, as the Banks appoint a successor agent as
provided for above.
 
10.10           Foreign Banks
 
Each Bank that is a “foreign corporation, partnership or trust” within the
meaning of the Code (a “Foreign Bank”) shall deliver to Agent, prior to receipt
of any payment subject to withholding under the Code (or after accepting an
assignment of an interest herein), two duly signed completed copies of either
IRS Form W-8BEN or any successor thereto (relating to such Person and entitling
it to an exemption from, or reduction of, withholding tax on all payments to be
made to such Person by the Borrower pursuant to this Agreement) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Person by the Borrower pursuant to this Agreement) or such other evidence
satisfactory to the Borrower and Agent that such Person is entitled to an
exemption from, or reduction of, U.S. withholding tax.  Thereafter and from time
to time, each such Person shall (a) promptly submit to Agent such additional
duly completed and signed copies of one of such forms (or such successor forms
as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to the Borrower and
Agent of any available exemption from or reduction of, United States withholding
taxes in respect of all payments to be made to such Person by the Borrower
pursuant to this Agreement, (b) promptly notify Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction, and (c) take such steps as shall not be materially disadvantageous to
it, in the reasonable judgment of such Bank, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of
applicable Laws that the Borrower make any deduction or withholding for taxes
from amounts payable to such Person.  If such Person fails to deliver the above
forms or other documentation, then Agent may withhold from any interest payment
to such Person an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.  If any Governmental
Authority asserts that Agent did not properly withhold any tax or other amount
from payments made in respect of such Person, such Person shall indemnify Agent
therefore, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to Agent under this Section, and costs and
expenses (including Attorney Costs) of Agent.  The obligation of the Banks under
this Section shall survive the payment of all Obligations and the resignation or
replacement of Agent.
 
10.11           Collateral Matters.
 
(a)           The Agent is authorized on behalf of all the Banks, without the
necessity of any notice to or further consent from the Banks, from time to time
to take any action with respect to any Collateral or the Loan Documents which
may be necessary to perfect and maintain perfected the security interest in and
Liens upon the Collateral granted pursuant to the Loan Documents.
 
(b)           The Banks irrevocably authorize the Agent, at its option and in
its discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon payment in full of all Loans and all other Obligations known
to the Agent and payable under this Agreement, any other Loan Document or any
Swap Contract; (ii) constituting property sold or to be sold or disposed of as
part of or in connection with any disposition permitted hereunder;
(iii) constituting property in which the Borrower or any Subsidiary owned no
interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property leased to the Borrower or any Subsidiary under a
lease which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
the Borrower or such Subsidiary to be, renewed or extended; (v) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the indebtedness
evidenced thereby has been paid in full; (vi) upon transfers of funds out of a
Bank Blocked Accounts, or (vii) if approved, authorized or ratified in writing
by all the Banks.  Upon request by the Agent at any time, the Banks will confirm
in writing the Agent’s authority to release particular types or items of
Collateral pursuant to this Subsection 10.11(b); provided, however, that the
absence of any such confirmation for whatever reason shall not affect the
Agent’s rights under this Section 10.11.
 
(c)           Each Bank agrees with and in favor of each other that the
Borrower’s obligations to such Bank under this Agreement and the other Loan
Documents is not and shall not be secured by any real property collateral.
 
10.12           Monitoring Responsibility
 
Each Bank will make its own credit decisions hereunder, including the decision
whether or not to make advances or consent to the Issuance of Letters of Credit,
thus the Agent shall have no duty to monitor the Collateral Position, the
amounts outstanding under sub-lines or the reporting requirements or the
contents of reports delivered by the Borrower.  Each Bank assumes the
responsibility of keeping itself informed at all times.
 
10.13           The Arrangers and Certain Agents
 
The Arrangers, the Syndication Agent and the Documentation Agent shall have no
duties, responsibilities or liabilities under this Agreement and the other Loan
Documents other than their duties, responsibilities and liabilities in their
individual capacity as Banks hereunder to the extent they are a party to this
Agreement as a Bank.
 
 
ARTICLE XI
 
 
MISCELLANEOUS
 
11.01           Amendments and Waivers
 
No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by all the Required
Banks and the Borrower and acknowledged by Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that:
 
(a)           no amendment, waiver or consent shall, unless in writing, signed
by each Issuing Bank and approved by all the Banks, affect the rights or duties
of any Issuing Bank under this Agreement or any Letter of Credit application
relating to any Letter of Credit issued or to be issued by it;
 
(b)           no amendment, waiver or consent shall, unless in writing, signed
by Agent and approved by all the Banks:  (i) affect the rights or duties of
Agent under this Agreement or any other Loan Document, (ii) reduce the amount or
extend the scheduled date of maturity of any Loan or of any installment thereof,
or reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Bank’s Committed Line Portion or amend the Expiration
Date or the Maturity Date, (iii) notwithstanding the terms of paragraph (c)
below, result in a Credit Extension in excess of the Borrowing Base Advance Cap,
(iv) amend, modify or waive any provision of this Section 11.01, any provision
of this Agreement which requires the consent or approval of all the Banks or the
Banks, or reduce the percentage specified in the definition of Required Banks,
(v) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement and the other Loan Documents, (vi) release
any of the Collateral (except as otherwise permitted by
Section 10.11(b)(i)-(vi)), (vii) amend or modify the definitions of “Pro Rata
Adjusted Share,” “Pro Rata Advance Share,” or “Pro Rata Share,” or (viii) amend
or modify the Borrower’s Second Amended and Restated Security Agreement;
 
(c)           no amendment, waiver or consent shall, unless in writing, signed
by Agent and approved by the Supermajority Banks, amend or modify the
definitions of “Advance Line Limit,” “Borrowing Base Advance Cap,” “Borrowing
Base Sub-Cap,” or “Close-out Amount.”
 
(d)           no amendment, waiver or consent shall, unless in writing, signed
by the Issuing Bank so affected, amend or modify the amounts and percentages set
forth opposite such Issuing Bank’s name in the definitions of “Issuing Bank
Sub-Limit” or “Issuing Percentage,” “L/C Sub-Limit Cap,” such Issuing Bank to
provide written notice to Agent and the Banks promptly upon the effective date
of such amendment or modification;
 
(e)           no amendment, waiver or consent shall, unless in writing, signed
by Agent and each Bank that is a Swap Bank that is not then a Defaulting Bank
(if applicable) at the time of such amendment, waiver or consent:  (a) amend,
modify or waive Sections 7.17, 9.04 or 11.21, (b) amend, modify or waive the
Intercreditor Agreement, or (c) amend, modify or waive any other Section of this
Agreement which amendment, modification or waiver would affect the rights and
duties of the Swap Banks hereunder; and
 
(f)           the fee letter may be amended, or rights or privileges thereunder
waived, in a writing executed only by the parties thereto.
 
11.02           Notices.
 
(a)           General.  Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address
specified for notices on Schedule 11.02; or, in the case of the Borrower, Agent,
or the Issuing Banks, to such other address as shall be designated by such party
in a notice to the other parties, and in the case of any other party, to such
other address as shall be designated by such party in a notice to the Borrower,
Agent and the Issuing Banks.  All such notices and other communications shall be
deemed to be given or made upon the earlier to occur of (i) actual receipt by
the intended recipient and (ii) (A) if delivered by hand or by courier, when
signed for by the intended recipient; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however, that notices and other
communications to Agent and the Issuing Banks pursuant to Article II shall not
be effective until actually received by such Person.  Any notice or other
communication permitted to be given, made or confirmed by telephone hereunder
shall be given, made or confirmed by means of a telephone call to the intended
recipient at the number specified on Schedule 11.02, it being understood and
agreed that a voicemail message shall in no event be effective as a notice,
communication or confirmation hereunder.
 
(b)           Effectiveness of Facsimile Documents and Signatures.  Loan
Documents may be transmitted and/or signed by facsimile.  The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, Agent and the Banks.  Agent may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
 
(c)           Limited Use of Electronic Mail.  Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other purpose.
 
(d)           Reliance by Agent and Banks.  Agent and the Banks shall be
entitled to rely and act upon any notices (including telephonic notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation
thereof.  The Borrower shall indemnify the Agent and each of its Related Persons
and each Bank from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower.  All telephonic notices to and other communications with Agent may
be recorded by Agent, and each of the parties hereto hereby consents to such
recording.
 
11.03           No Waiver; Cumulative Remedies
 
No failure by any Bank or Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights,
remedies, powers and privileges herein or therein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
 
11.04           Costs and Expenses
 
The Borrower agrees (a) to pay or reimburse Agent for all reasonable costs and
expenses incurred by Agent in connection with the development, preparation,
negotiation and execution of this Agreement and the other Loan Documents and any
amendment, waiver, consent or other modification of the provisions hereof and
thereof (whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse Agent and each Bank for all costs and expenses incurred in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or the other Loan Documents (including all such
costs and expenses incurred during any “workout” or restructuring in respect of
the Obligations and during any legal proceeding, including any proceeding under
any Debtor Relief Law), including all Attorney Costs.  The foregoing costs and
expenses shall include all search, filing, recording and appraisal charges and
fees and taxes related thereto, and other out-of-pocket expenses incurred by
Agent and the cost of independent public accountants and other outside experts
retained by Agent or any Bank.  The agreements in this Section shall survive the
termination of this Agreement and repayment of all the other Obligations.
 
11.05           Indemnity
 
Whether or not the transactions contemplated hereby are consummated, the
Borrower agrees to indemnify, save and hold harmless the Agents and each of its
Related Persons, each Issuing Bank, each Bank and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the “Indemnitees”) from and against:  (a) any and all claims,
demands, actions or causes of action that are asserted against any Indemnitee by
any Person (other than Agent or any Bank) relating directly or indirectly to a
claim, demand, action or cause of action that such Person asserts or may assert
against any Loan Party, any Affiliate of any Loan Party or any of their
respective officers or directors; (b) any and all claims, demands, actions or
causes of action that may at any time (including at any time following repayment
of the Obligations and the resignation or removal of Agent or the replacement of
any Bank) be asserted or imposed against any Indemnitee, arising out of or
relating to, the Loan Documents, any predecessor loan documents, the use or
contemplated use of the proceeds of any Credit Extension, or the relationship of
any Loan Party, Agent and the Banks under this Agreement or any other Loan
Document; (c) any administrative or investigative proceeding by any Governmental
Authority arising out of or related to a claim, demand, action or cause of
action described in subsection (a) or (b) above; and (d) any and all liabilities
(including liabilities under indemnities), losses, costs or expenses (including
Attorney Costs) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action, cause of action or proceeding,
or as a result of the preparation of any defense in connection with any
foregoing claim, demand, action, cause of action or proceeding, in all cases,
WHETHER OR NOT ARISING OUT OF THE NEGLIGENCE OF AN INDEMNITEE, and whether or
not an Indemnitee is a party to such claim, demand, action, cause of action or
proceeding (all the foregoing, collectively, the “Indemnified Liabilities”);
provided, however, that no Indemnitee shall be entitled to indemnification for
any claim caused by its own gross negligence or willful misconduct as determined
by a court of competent jurisdiction by final judgment.  The agreements in this
Section shall survive the termination of this Agreement and repayment of all the
other Obligations.
 
11.06           Payments Set Aside
 
To the extent that the Borrower makes a payment to Agent or any Bank, or Agent
or any Bank exercises its right of set-off, and such payment or the proceeds of
such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Agent or such Bank in its discretion) to be repaid to
a trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Bank severally agrees to pay to
Agent upon demand its applicable share of any amount so recovered from or repaid
by Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
 
11.07           Successors and Assigns.
 
(a)           The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Bank (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
 
(b)           Any Bank may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Committed Line Portion and the Loans (including for purposes of
this subsection (b) and participations in L/C Obligations) at the time owing to
it); provided, however, that (i) the aggregate amount of the Committed Line
Portion (which for this purpose includes Loans outstanding thereunder) subject
to each such assignment, determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to Agent, shall not be less than
$5,000,000.00, (ii) each of Agent, the Issuing Banks, and, so long as no Event
of Default has occurred and is continuing, the Borrower (except an assignment by
a Bank to another Bank which such assignment shall not require the consent of
Borrower) consents (each such consent not to be unreasonably withheld or
delayed) to such assignment, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Bank’s rights and
obligations under this Agreement with respect to the Loans or the Committed Line
Portion assigned, and (iv) the parties to each assignment shall execute and
deliver to Agent an Assignment and Acceptance, such Assignment and Acceptance to
be in the form attached hereto as Exhibit C, together with a processing and
recordation fee of $3,500.00.  Subject to acceptance and recording thereof by
Agent pursuant to subsection (c) of this Section, from and after the effective
date specified in each Assignment and Acceptance, the Eligible Assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Bank
under this Agreement, and the assigning Bank thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Bank’s rights and obligations under
this Agreement, such Bank shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 4.07, 11.04 and 11.05).  Upon request,
the Borrower (at its expense) shall execute and deliver new or replacement Notes
to the assigning Bank and the assignee Bank provided the replaced Notes are
simultaneously returned to the Borrower.  Any assignment or transfer by a Bank
of rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Bank of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
 
(c)           Agent, acting solely for this purpose as an agent of the Borrower,
shall maintain at Agent’s Office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Banks, and the Committed Line Portions of, and principal amount of the Loans
and L/C Obligations owing to, each Bank pursuant to the terms hereof from time
to time (the “Register”).  The entries in the Register shall be conclusive, and
the Borrower, Agent and the Banks may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Bank hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.  The
Register shall be available for inspection by the Borrower and any Bank, at any
reasonable time and from time to time upon reasonable prior notice.
 
(d)           Any Bank may, without the consent of, or notice to, the Borrower
or Agent, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Bank’s rights and/or obligations
under this Agreement (including all or a portion of its Committed Line Portion
and/or the Loans (including such Bank’s participations in L/C Obligations) owing
to it); provided, however, that (i) such Bank’s obligations under this Agreement
shall remain unchanged, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, Agent and the other Banks shall continue to deal solely and directly
with such Bank in connection with such Bank’s rights and obligations under this
Agreement.  Any agreement or instrument pursuant to which a Bank sells such a
participation shall provide that such Bank shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided, however, that such agreement or
instrument may provide that such Bank will not, without the consent of the
Participant, agree to any amendment, waiver or other modification that would
(i) postpone any date upon which any payment of money is scheduled to be paid to
such Participant, or (ii) reduce the principal, interest, fees or other amounts
payable to such Participant.  Subject to subsection (e) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 4.01 and 4.02 to the same extent as if it were a Bank and had acquired
its interest by assignment pursuant to subsection (b) of this Section.  To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 11.09 as though it were a Bank, provided, however, that such
Participant agrees to be subject to Section 2.12 as though it were a Bank.
 
(e)           A Participant shall not be entitled to receive any greater payment
under Section 4.01 or 4.02 than the applicable Bank would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A Participant that would be a Foreign Bank if it were a Bank
shall not be entitled to the benefits of Section 4.01 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 11.08 as though
it were a Bank.
 
(f)           Any Bank may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its
Notes, if any) to secure obligations of such Bank, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided, however,
that no such pledge or assignment shall release a Bank from any of its
obligations hereunder or substitute any such pledgee or assignee for such Bank
as a party hereto.
 
(g)           If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of Subsection 11.07(b)), the Borrower shall be deemed to
have given its consent five Business Days after the date notice thereof has been
delivered by the assigning Bank (through Agent) unless such consent is expressly
refused by the Borrower prior to such fifth Business Day.
 
(h)           Notwithstanding anything to the contrary contained herein, if at
any time any Issuing Bank assigns all of its Committed Line Portion and Loans
pursuant to subsection (b) above, such Bank shall, (i) upon 30 days’ notice to
the Borrower and the Banks, resign as an Issuing Bank.  In the event of any such
resignation as an Issuing Bank, the Borrower shall be entitled to appoint from
among the Banks a successor Issuing Bank to such Issuing Bank hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of such Bank as an Issuing Bank.  The resigning
Issuing Bank shall retain all the rights and obligations of an Issuing Bank
hereunder with respect to all Letters of Credit outstanding as of the effective
date of each of its resignation as an Issuing Bank and all L/C Obligations with
respect thereto (including the right to require the Banks to make Loans or fund
participations in L/C Obligations pursuant to Section 3.03).
 
11.08           Confidentiality
 
Each of Agent and the Banks agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by any regulatory authority; (c) to
the extent  required by applicable laws or regulations or by any subpoena or
similar legal process; (d) to any other party to this Agreement; (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder;
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty’s or
prospective counterparty’s professional advisor) to any credit derivative
transaction relating to obligations of the Borrower; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
Agent or any Bank on a nonconfidential basis from a source other than the
Borrower; or (i) to the National Association of Insurance Commissioners or any
other similar organization or any nationally recognized rating agency that
requires access to information about a Bank’s or its Affiliates’ investment
portfolio in connection with ratings issued with respect to such Bank or its
Affiliates.  For the purposes of this Section, “Information” means all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to Agent or any Bank on a
nonconfidential basis prior to disclosure by the Borrower; provided, however,
that, in the case of Information received from the Borrower after the date
hereof, such Information is clearly identified in writing at the time of
delivery as confidential.  The foregoing is not intended to limit the Banks’
obligations to maintain confidential information received from the Borrower
under applicable laws.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
 
Each Bank agrees that it and its respective Affiliates, directors, officers,
employees and agents (collectively, “Representatives”) will not use any of the
Information for any reason or purpose other than in connection with its or any
of its Affiliates’ business relationship with Borrower.  Each of the Banks
specifically agrees that the Information will not be utilized to evaluate the
current or prospective banking relationship between such Bank and any person or
entity that is not a party to this Agreement.  Each Bank agrees that it will not
disclose to any person (other than a person to whom Information is otherwise
permitted to be disclosed under this Section 11.08) the fact that Information
has been disclosed to it or its Representatives.  Each Bank shall be responsible
for enforcing this Section 11.08 as to its Representatives.
 
11.09           Set-off
 
In addition to any rights and remedies of the Banks provided by law, upon the
occurrence and during the continuance of any Event of Default, each Bank is
authorized at any time and from time to time, without prior notice to the
Borrower or any other Loan Party, any such notice being waived by the Borrower
(on its own behalf and on behalf of each Loan Party) to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the respective Loan Parties against any and all Obligations owing to such
Bank, now or hereafter existing, irrespective of whether or not Agent or such
Bank shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured.  Each Bank agrees
promptly to notify the Borrower and Agent after any such set-off and application
made by such Bank; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.
 
11.10           Interest Rate Limitations
 
Notwithstanding anything to the contrary contained in any Loan Document, the
interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
Rate”).  If Agent or any Bank shall receive interest in an amount that exceeds
the Maximum Rate, the excess interest shall be applied to the principal of the
Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In
determining whether the interest contracted for, charged, or received by Agent
or a Bank exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations.
 
11.11           Automatic Debits of Fees
 
With respect to any fee, commission, interest or any other cost or expense or
other payment due hereunder (including Attorney Costs) due and payable to the
Agent or any Bank under the Loan Documents, the Borrower hereby irrevocably
authorizes Wells Fargo to debit from the Bank Blocked Accounts an amount such
that the aggregate amount debited from all such deposit accounts does not exceed
such fee, commission, interest or other cost or expense and to transfer such
amount to the Agent to be applied to any such payment due hereunder, provided,
however, that Agent shall promptly notify Borrower of any such debit.  If there
are insufficient funds in the Bank Blocked Accounts to cover the amount of the
fee, commission, interest or other cost or expense then due, such debits will be
reversed (in whole or in part, in the Agent’s sole discretion) and such amount
not debited shall be deemed to be unpaid.  No such debit under this Section
shall be deemed a set-off.
 
11.12           Notification of Addresses, Lending Offices, Etc
 
.  Each Bank shall notify Agent in writing of any changes in the address to
which notices to the Bank should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as Agent shall reasonably
request.
 
11.13           Bank Blocked Accounts Charges and Procedures
 
The Agent may authorize Wells Fargo to (a) charge the Bank Blocked Accounts for
all returned checks, service charges, and other fees and charges associated with
the deposits by the Borrower to and withdrawals by the Borrower from the Bank
Blocked Accounts; and (b) follow its usual procedures in the event the Bank
Blocked Accounts or any check, draft or other order for payment of money should
be or become the subject of any writ, levy, order or other similar judicial or
regulatory order or process; provided, however, that such authorizations may be
terminated at any time by Agent.  Funds are not available if, in the reasonable
determination of Agent, they are subject to a hold, dispute or legal process
preventing their withdrawal.  If the available balances in the Bank Blocked
Accounts relating to the Borrower are not sufficient to pay Wells Fargo for any
returned check, draft or order for the payment of money relating to the
Borrower, or to compensate Wells Fargo for any charges or fees due Wells Fargo
with respect to the deposits by the Borrower to and withdrawals by the Borrower
from the Bank Blocked Accounts, the Borrower agrees to pay on demand the amount
due Wells Fargo.  The Borrower agrees that it cannot, and will not, withdraw any
monies from the Bank Blocked Accounts until such time as the Agent authorizes
such withdrawal and it will not permit the Bank Blocked Accounts to become
subject to any other pledge, assignment, lien, charge or encumbrance of any
kind, nature or description, other than Agent’s security interest.
 
11.14           Counterparts
 
This Agreement may be executed in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument.
 
11.15           Severability
 
The illegality or unenforceability of any provision of this Agreement or any
instrument or agreement required hereunder shall not in any way affect or impair
the legality or enforceability of the remaining provisions of this Agreement or
any instrument or agreement required hereunder.
 
11.16           No Third Parties Benefited
 
This Agreement is made and entered into for the sole protection and legal
benefit of the Borrower, the Banks, the Agent and the Agent’s Related Persons,
and their permitted successors and assigns, and no other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents.
 
11.17           Integration
 
This Agreement, together with the other Loan Documents, comprises the complete
and integrated agreement of the parties on the subject matter hereof and thereof
and supersedes all prior agreements, written or oral, on such subject
matter.  In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, the provisions of this Agreement shall
control; provided, however, that the inclusion of supplemental rights or
remedies in favor of Agent or the Banks in any other Loan Document shall not be
deemed a conflict with this Agreement.  Each Loan Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.
 
11.18           Survival of Representations and Warranties
 
All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by Agent and
each Bank, regardless of any investigation made by Agent or any Bank or on their
behalf and notwithstanding that Agent or any Bank may have had notice or
knowledge of any Default or Event of Default at the time of any Credit
Extension, and shall continue in full force and effect as long as any Loan or
any other Obligation shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
 
11.19           Governing Law and Jurisdiction.
 
(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED, HOWEVER, THAT AGENT AND EACH
BANK SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
 
(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE STATE COURTS LOCATED IN NEW YORK
COUNTY, CITY OF NEW YORK, STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE BORROWER, AGENT AND EACH BANK CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE
BORROWER, AGENT AND EACH BANK IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO.  THE BORROWER, AGENT AND EACH BANK WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, UPON ITSELF AND HAVE
IRREVOCABLY APPOINTED CORPORATION SERVICE COMPANY, 80 STATE STREET, ALBANY, NEW
YORK 12207-2543, AS REGISTERED AGENT FOR PURPOSE OF ACCEPTING SERVICE OF PROCESS
WITHIN THE STATE OF NEW YORK.
 
11.20           Waiver of Jury Trial
 
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
 
11.21           Intercreditor Agreement
 
Each Bank hereby agrees that it shall take no action to terminate its
obligations under the Intercreditor Agreement and will otherwise be bound by and
take no actions contrary to the Intercreditor Agreement.
 
11.22           Amendment and Restatement
 
As of the Closing Date, this Agreement amends and restates in its entirety the
Existing Credit Agreement.  Borrower hereby agrees that (a) the loans
outstanding under the Existing Credit Agreement and all accrued and unpaid
interest thereon, (b) all Letters of Credit issued and outstanding under the
Existing Credit Agreement, and (c) all accrued and unpaid fees under the
Existing Credit Agreement shall be deemed to be outstanding under and payable by
this Agreement.
 
11.23           Entire Agreement
 
THIS AGREEMENT 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.
 
11.24           USA PATRIOT Act Notice
 
Each Bank that is subject to the Act (as hereinafter defined) and the Agent (for
itself and not on behalf of any Bank) hereby notifies the Borrower that pursuant
to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies each Loan Party, which information includes
the name and address of each Loan Party and other information that will allow
such Bank or the Agent, as applicable, to identify each Loan Party in accordance
with the Act.  The Borrower shall, promptly following a request by the Agent or
any Bank, provide all documentation and other information that the Agent or such
Bank requests in order to comply with its ongoing obligations under applicable
“know your customer” anti-money laundering rules and regulations, including the
Act.
 
 
[the remainder of this page intentionally left blank]
 
 

3rd A&R Credit Agreement [Enserco]
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Execution Copy

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
 

 
ENSERCO ENERGY INC.,
 
a South Dakota corporation
         
By:     /s/ Victoria J. Campbell
 
Name: Victoria J. Campbell
 
Title:   Vice President and General Manager
     
350 Indiana Street, Suite 400
 
Golden, Colorado  80401
 
Attention:  Thomas M. Ohlmacher
 
Telephone:  (303) 568-3261
 
Facsimile:  (303) 568-3250

 
FORTIS CAPITAL CORP.,
 
as Agent
         
By:      /s/ Chad Clark
 
Name: Chad Clark
 
Title:   Director
 
Head of Energy Commodities Group
         
By:      /s/ Michiel V.M. van der Voort
 
Name:  Michiel V.M. van der Voort
 
Title:    Managing Director
 
Head of Commodities America
     
15455 North Dallas Parkway, Suite 1400
 
Addison, TX  75001
 
Attention:  Corey Hingson
 
Telephone:  (214) 866-2535
 
Facsimile:  (214) 969-9332

3rd A&R Credit Agreement [Enserco]
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 
Execution Copy

 
SOCIETE GENERALE
 
as a Bank and an Issuing Bank
         
By:     /s/ Chung-Taek Oh
 
Name: Chung-Taek Oh
 
Title:   Vice President
         
By:     /s/ Emmanuel Chesneau
 
Name: Emmanuel Chesneau
 
Title:    Managing Director
     
1221 Avenue of the Americas
 
New York, NY  10020
 
Attn:  Chung Taek Oh
 
Phone:  (212) 278-6345
 
Fax:  (212) 278-7953

 
BNP PARIBAS,
 
as a Bank and an Issuing Bank
         
By:     /s/ Keith Cox
 
Name: Keith Cox
 
Title:   Managing Director
 
By:     /s/ Jordan Nenoff
 
Name: Jordan Nenoff
 
Title:   Director
     
787 Seventh Avenue
 
New York, NY  10019
 
Attn:  Keith Cox
 
Phone:  (212) 841-2575
 
Tax:  (212) 841-2536

3rd A&R Credit Agreement [Enserco]
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 
Execution Copy

 
U.S. BANK NATIONAL ASSOCIATION,
 
as a Bank
         
By:     /s/ Monte E. Deckerd
 
Name: Monte E. Deckerd
 
Title:   Senior Vice President
     
918 17th Street
 
DNCOBB3E
 
Denver, CO  80202
 
Attn:   Monte Deckerd
 
Phone:  (303) 585-4212
 
Fax:  (303) 585-4362
   

 

 

 
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH
 
as a Bank
         
By:     /s/ Chan K. Park
 
Name: Chan K. Park
 
Title:   Senior Vice President and Manager
     
1251 Avenue of the Americas
 
New York, NY  10020-1104
 
Attention:  Commodities & Structured Trade
 
                  Finance Group – Chan Park
 
Phone:  (212) 782-5512
 
Fax:  (212) 782-5871

3rd A&R Credit Agreement [Enserco]
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 
Execution Copy

SCHEDULE 1.01
 
EXISTING LETTERS OF CREDIT
 
Attached

3rd A&R Credit Agreement [Enserco]
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 
Execution Copy

 
SCHEDULE 2.01

COMMITTED LINE AND
COMMITTED LINE PORTIONS
(EXCLUDING SWAP CONTRACTS)
 
 
I.           Committed Line:

  A.  
Maximum Line:
  $ 300,000,000.00                     B.  
Total Line Amount Subscribed:
  $ 240,000,000.00                     C.  
Subscribed Percentage:
    80 %

II.           Committed Line Portions:

A.           Subscribed Amounts:

 
Bank
 
Dollar Amount
   
Pro Rata Share
               
Fortis Capital Corp.
  $ 60,000,000.00       25 %
BNP Paribas
  $ 60,000,000.00       25 %
Societe Generale
  $ 60,000,000.00       25 %
The Bank of Tokyo Mitsubishi UFJ, Ltd., New York Branch
  $ 40,000,000.00       16.666666667 %
U.S. Bank National Association
  $ 20,000,000.00       8.333333333 %
Total Subscribed Line Portions
  $ 240,000,000.00       100 %

 
 
III.           Advance Line
Limit:                                                                        $50,000,000.00

Effective Date:  May 8, 2009

 

3rd A&R Credit Agreement [Enserco]
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

SCHEDULE 6.05
 

 
LITIGATION, AND PATENT, TRADEMARK, ETC. CLAIMS
 
None
 

 

3rd A&R Credit Agreement [Enserco] Schedule 6.05
011038.0122\517034.09
 
 
 
 

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SCHEDULE 6.07
 

 
ERISA MATTERS
 
None
 

3rd A&R Credit Agreement [Enserco] Schedule 6.07
011038.0122\517034.09
 
 
 
 

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SCHEDULE 6.12
 

 
ENVIRONMENTAL MATTERS
 
None
 

3rd A&R Credit Agreement [Enserco] Schedule 6.12
011038.0122\517034.09
 
 
 
 

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SCHEDULE 6.16
 

 
SUBSIDIARIES AND EQUITY INVESTMENTS
 
Borrower owns 100% of the membership interest in VariFuel, LLC a South Dakota
limited liability company.  VariFuel is currently inactive.
 

3rd A&R Credit Agreement [Enserco] Schedule 6.16
011038.0122\517034.09
 
 
 
 

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SCHEDULE 6.17
 

 
INSURANCE MATTERS
 
None
 

3rd A&R Credit Agreement [Enserco] Schedule 6.17
011038.0122\517034.09
 
 
 
 

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SCHEDULE 6.19

BANK ACCOUNTS

 
1.
The Bank Blocked Accounts (account no. _____________ in the name of Borrower
maintained with Wells Fargo; account no. ___________CAD in the name of the
Borrower maintained with Wells Fargo)

 
2.
The Clearinghouse Account (account entitled “ENSERCO” maintained on behalf of
the Borrower with Natural Gas Exchange Inc.)

 
3.
Hedging Account maintained on behalf of the Borrower with BNP Paribas Commodity
Futures, Inc.

3rd A&R Credit Agreement [Enserco] Schedule 6.19
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

SCHEDULE 7.03(f)

INVENTORY LOCATIONS

Attached

3rd A&R Credit Agreement [Enserco] Schedule 6.19
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
SCHEDULE 8.01
 

 
PERMITTED INDEBTEDNESS AND LIENS
 
None
 

3rd A&R Credit Agreement [Enserco] Schedule 8.01
011038.0122\517034.09
 
 
 
 

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SCHEDULE 8.06
 

 
CONTINGENT OBLIGATIONS
 
 
1.
Borrower is a party to that certain Office Lease with CMD Realty Investment Fund
II. L.P., dated August 2, 1999 (as amended to date, the “Lease”), related to the
premises at 350 Indiana Street, Suites 220, 300 and 400, Golden, Colorado
80401.  Borrower and Borrower’s Affiliate, Black Hills Generation, Inc., are
jointly and severally referred to as the “Tenant” under the Lease.

 
 
2.
Borrower is a party to the certain Master Purchase, Sale and Services Agreement
(the “Falco Agreement”) with Falco Energy Transportation, LLC (“Falco”), dated
as of May 14, 2007, pursuant to which Falco provides crude oil handling and
hauling services.  Pursuant to the Falco Agreement, if the actual volume of
crude oil hauling or mileage amount required by the Borrower decreases to the
point that any truck dedicated to the Falco Agreement is not needed, the
Borrower must pay an “Idle Fee” for each such unutilized truck at a rate of
$1,500 per day.  In addition, should the Borrower terminate the Falco Agreement
prior to expiration thereof, the Borrower must make an early termination payment
based on (1) the original cost of certain GPS units and software dedicated to
the Falco Agreement, (2) 20% of the depreciated value of trucks, trailers and
pump systems (one a five-year, straight line basis) specifically acquired by
Falco for the performance of the Falco Agreement, and (3) the balance of
payments required under two-year employment contracts for Falco employees
dedicated to the Falco Agreement.

 

 

3rd A&R Credit Agreement [Enserco] Schedule 8.06
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

SCHEDULE 8.12

DIRECTORS AND OFFICERS

OFFICER
TITLE
DIRECTOR
     
David R. Emery
625 Ninth Street
Rapid City, SD 57701
Chairman and Chief Executive Officer
X
     
Thomas M. Ohlmacher
350 Indiana St., Suite 400
Golden, CO 80401
President and Chief Operating Officer – Non-regulated Energy
       
Anthony S. Cleberg
625 Ninth Street
Rapid City, SD 57701
Executive Vice President and Chief Financial Officer
(also Assistant Treasurer and Assistant Secretary)
X
     
Steven J. Helmers
625 Ninth Street
Rapid City, SD 57701
Senior Vice President, General Counsel and Chief Compliance Officer (also
Assistant Secretary)
X
     
Robert A. Myers
1815 Capitol Avenue
Omaha, NE 68102
Senior Vice President – Human Resources
       
James M. Mattern
625 Ninth Street
Rapid City, SD 57701
Senior Vice President – Corporate Administration
       
Scott A. Buchholz
1815 Capitol Avenue
Omaha, NE 68102
Senior Vice President – Chief Information Officer
       
Lynnette K. Wilson
350 Indiana St., Suite 400
Golden, CO 80401
Senior Vice President – Communications and Investor Relations
       
Roxann R. Basham
625 Ninth Street
Rapid City, SD 57701
Vice President – Governance and Corporate Secretary
       
Perry S. Krush
625 Ninth Street
Rapid City, SD 57701
Vice President – Corporate Controller
       
Jeffrey B. Berzina
625 Ninth Street
Rapid City, SD 57701
 
Vice President – Finance
       
Garner M. Anderson
625 Ninth Street
Rapid City, SD 57701
Vice President, Treasurer and Chief Risk Officer
       
Kyle D. White
625 Ninth Street
Rapid City, SD 57701
Vice President – Regulatory and Governmental Affairs
       
Richard W. Kinzley
625 Ninth Street
Rapid City, SD 57701
Vice President – Strategic Planning and Development
       
Victoria J. Campbell
350 Indiana St., Suite 400
Golden, CO 80401
Vice President and General Manager
             

3rd A&R Credit Agreement [Enserco] Schedule 8.12
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

11.           SCHEDULE 11.02
 

 
LENDING OFFICES AND ADDRESSES FOR NOTICES
 
FORTIS CAPITAL CORP.,
 
as Agent
 

 
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Phone:  (214) 866-2535
 
Fax:  (214) 969-9332
 
AGENT’S PAYMENT OFFICE:
 

 
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Phone:  (214) 866-2535
 
Fax:  (214) 969-9332
 
FORTIS CAPITAL CORP.,
 
as Issuing Bank
 

 
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Phone:  (214) 866-2535
 
Fax:  (214) 969-9332
 
BNP PARIBAS
 
as a Bank
 

 
BNP Paribas
 
787 Seventh Avenue
 
New York, NY  10019
 
Attention:  Keith Cox
 
Phone:  (212) 841-2575
 
Fax:  (212) 841-2536
 
FORTIS CAPITAL CORP.
 
as a Bank
 

 
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Telephone:  (214) 866-2535
 
Facsimile:  (214) 969-9332
 
U.S. BANK NATIONAL ASSOCIATION
 
as a Bank
 

 
U.S. Bank National Association
 
918 17th Street
 
DNCOBB3E
 
Denver, CO  80202
 
Attn:  Monte Deckerd
 
Telephone:  (303) 585-4212
 
Facsimile:  (303) 585-4362
 
SOCIETE GENERAL
 
as a Bank
 

 
Societe Generale
 
1221 Avenue of the Americas
 
New York, NY  10020
 
Attention:  Chung-Taek Oh
 
Phone:  (212) 278-6345
 
Fax:  (212) 278-7953
 

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

 
 
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
 
 
1251 Avenue of the Americas
 
 
New York, NY  10020-1104
 
 
Attn:  Chan Park
 
 
Phone:  (212) 782-5512
 
 
Fax:  (212) 782-5871
 
ENSERCO ENERGY INC.,
as the Borrower

Enserco Energy Inc.
350 Indiana Street, Suite 400
Golden, CO 80401
Attn:  Victoria Campbell
Phone:  (303) 568-3262
Fax:  (303) 568-3250
 
with a copy to:
 
Black Hills Corporation
P.O. Box 1400
625 Ninth Street
Rapid City, SD 57709
Attn:  Steven J. Helmers
Phone: (605) 721-2303
Fax: (605) 721-2550
 

 

 
 

3rd A&R Credit Agreement [Enserco] Schedule 11.02
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 
Execution Copy

 
EXHIBIT A-1
 
 
FORM OF NOTICE OF BORROWING
 
(LETTERS OF CREDIT)
 
[Date]
 
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Telephone:  (214) 866-2535
 
Facsimile:  (214) 969-9332
 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
III.                      Ladies and Gentlemen:
 
Reference is made to the Agreement (capitalized terms used herein that are not
defined shall have the respective meanings ascribed thereto in the
Agreement).  The Borrower hereby gives notice of its intention to request the
[issuance, amendment, or renewal] of Letters of Credit as is further described
on the Letter of Credit Application attached hereto.
 
The Borrower represents and warrants, as of the date hereof and as of the date
any Letter of Credit is Issued, amended or renewed, that (i) no Default or Event
of Default has occurred and is continuing on the date hereof, nor will any
thereof occur after giving effect to the Letters of Credit requested above;
(ii) that none of the Borrowing Base Advance Cap, the Total Available Committed
Line Portion or any L/C Sub-limit Cap will be exceeded after giving effect to
the Letters of Credit requested above; and (iii) all of Borrower’s
representations and warranties under the Agreement are true and correct in all
material respects on and as of the date hereof (except to the extent such
representations and warranties relate solely an to earlier date).
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

3rd A&R Credit Agreement [Enserco] Exhibit A-1
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

FORM OF NOTICE OF BORROWING
(REVOLVING LOAN)
[Date]
 
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Telephone:  (214) 866-2535
 
Facsimile:  (214) 969-9332
 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy, Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
IV.                      Ladies and Gentlemen:
 
Reference is made to the Agreement (capitalized terms used herein that are not
defined shall have the respective meanings ascribed thereto in the
Agreement).  The Borrower hereby gives notice of its intention to borrow under
the Borrowing Base Line.
 
Please advance $__________ as a Revolving Loan as follows:
 
 
(i)
Date of Borrowing: ___________ (a Business Day).

 
(ii)
In the amount of $__________________.

The Borrower represents and warrants, as of the date hereof and as of the date
any Revolving Loan is made or renewed, that (i) no Default or Event of Default
has occurred and is continuing on the date hereof, nor will any thereof occur
after giving effect to the Revolving Loan requested above; (ii) that none of the
Borrowing Base Advance Cap, the Total Available Committed Line Portion or the
Advance Line Limit will be exceeded after giving effect to the Revolving Loan
requested above; and (iii) all of Borrower’s representations and warranties
under the Agreement are true and correct in all material respects on and as of
the date hereof (except to the extent such representations and warranties relate
solely to an earlier date).
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

3rd A&R Credit Agreement [Enserco] Exhibit A-1
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
EXHIBIT A-2
 
 
FORM OF NOTICE
 
 
OF CONVERSION/CONTINUATION
 
 
[Date]
 
 
Fortis Capital Corp.
 
 
15455 North Dallas Parkway, Suite 1400
 
 
Addison, TX  75001
 
 
Attention:  Marla Jennings
 
 
Telephone:  (214) 866-9314
 
 
Facsimile:  (214) 969-9332
 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy, Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
Ladies and Gentlemen:
 
The Borrower hereby gives you irrevocable notice pursuant to Section 2.03A of
the Agreement that it hereby requests a [conversion] [continuation] of
[outstanding Borrowings] [an outstanding Borrowing] into a new Borrowing (the
“Proposed Borrowing”) on the terms set forth below:
 
Outstanding Borrowing #1
 

 
Date of Borrowing:
 
Aggregate Amount for Conversion1:
 
Type of Advance:
 
Interest Period:
 

 
 
1           The aggregate amount for conversion with respect to Borrowings
comprised of Eurodollar Rate Loans must be made in an amount equal to the
Eurodollar Effective Amount or, if the remaining outstanding amount of such
Borrowing would be less than an amount equal to the Eurodollar Effective Amount
following the conversion or continuation, in the remaining outstanding amount of
such Borrowing.
 

3rd A&R Credit Agreement [Enserco] Exhibit A-2
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

Proposed Borrowing
 

 
Date of Conversion or Continuation2:
 
Aggregate Amount:
 
Type of Advance:
 
Interest Period:
 
The Borrower hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the proposed Borrowing:
 
 
(a)
the representations and warranties contained in the Agreement are correct in all
material respects, before and after giving effect to the proposed Borrowing and
the application of the proceeds therefrom, as though made on the date of the
proposed Borrowing (except to the extent such representations and warranties
relate solely to an earlier date);

 
 
(b)
no Default has occurred and remains uncured, nor would result from the proposed
Borrowing; and

 
 
(c)
the Borrowing Base Advance Cap will not be exceeded after giving effect to the
proposed Borrowing.

 
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

 

 

 
 
2           The date of the proposed conversion must be a Business
Day.  Borrower must give three (3) Business Days’ advance notice for conversions
into or continuations of Borrowings comprised of Eurodollar Rate Loans, and the
same Business Day advance notice for conversions into or continuations of
Borrowings comprised of Base Rate Loans.
 

3rd A&R Credit Agreement [Enserco] Exhibit A-2
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

EXHIBIT B
 
 
FORM OF
 
COMPLIANCE CERTIFICATE
 
[Date]
Fortis Capital Corp
 
15455 North Dallas Parkway
1221 Avenue of the Americas
Suite 1400
New York, New York  10020
Addison, Texas  75001
 
Attention:  Corey Hingson
Attention:  Chung-Taek Oh
Telephone:  (214) 866-2535
Telephone:  (212) 278-6345
Facsimile:  (214) 969-9332
Facsimile:  (212) 278-7953

 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
Ladies and Gentlemen:
 
The Borrower, acting through its duly authorized Responsible Officers (as that
term is defined in the Agreement), certifies to each of the Banks that the
Borrower is in compliance with the Agreement and in particular certifies the
following as of ____________:
 

 
 
I.      Borrowing Base Sub-Cap = $200,000,000

 
    II.      Financial Covenants and Net Cumulative Loss Covenant:
 

 
Actual
 
Requirement
 
Net Working Capital ($)
___________
    50,000,000 1  
Tangible Net Worth ($)
___________
    50,000,000 1  
Total Liabilities to Tangible Net Worth
__________
 
5:11
 
Net Cumulative (Loss) / Gain ($)
___________
    (23,490,616 )

 
1  Based on the Borrowing Base Sub-Cap above, and Section 7.15 (a) through (c)
and 8.11(b)  of the Agreement, as applicable.

3rd A&R Credit Agreement [Enserco] Exhibit B
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
III.      Other Covenants
 

 
Actual
 
Requirement
 
Net Fixed Price Volumes:
       
Natural Gas (MMBTU’s)
__________2
    3,000,000  
Crude Oil and Distillates (bbls)
__________2
    50,000  
Value-at-Risk (1-day/95%):
         
Proprietary ($)
__________3
    8,000,000  
Transportation ($)
__________3
    10,000,000  
Unhedged Transportation Exposure ($)
__________4
 
___________
 

 
2  Represents maximum Net Fixed Price Volumes since the date of the previous
Compliance Certificate.

 
3  Represents maximum VAR since the date of the previous Compliance Certificate.

                  4  Represents maximum Unhedged Transportation Exposure since
the date of the previous Compliance Certificate.
 
Further, the undersigned hereby certifies that (i) the Net Fixed Price Volume of
natural gas and the Net Fixed Price Volume of crude oil and distillates for
crude blending has at no time exceeded the limitations set forth in Section 8.11
of the Agreement, (ii) the Unhedged Transportation Exposure has at no time
exceeded the limitations set forth in Section 8.15 of the Agreement, (iii) the
Proprietary Value-at-Risk has at no time exceeded the limitations set forth in
Section 8.16 of the Agreement, (iv) the Transportation Value-at-Risk has at no
time exceeded the limitations set forth in Section 8.17 of the Agreement, and
(v) that the undersigned has no knowledge of any Defaults or Events of Defaults
under the Agreement which existed as from the Closing Date of the Agreement or
which exist as of the date of this letter.
 
The undersigned also certifies that the accompanying financial statements
present fairly, in all material respects, the financial condition of the
Borrower as of _____________, and the related results of operations for the
___________ then ended, in conformity with generally accepted accounting
principles and in conformity with the definition of Economic Basis under the
Agreement to the extent applicable.
 
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

3rd A&R Credit Agreement [Enserco] Exhibit B
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
EXHIBIT C
 

 
FORM OF ASSIGNMENT AND ACCEPTANCE
 
Reference is made to that certain Third Amended and Restated Credit Agreement,
dated as of May __, 2009 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time the “Agreement;” the terms
defined therein being used herein as therein defined), among Enserco Energy Inc.
(the “Borrower”), the Banks from time to time party thereto, and Fortis Capital
Corp., as Agent and Issuing Bank.
 
The assignor identified on the signature page hereto (the “Assignor”) and the
assignee identified on the signature page hereto (the “Assignee”) agree as
follows:
 
1.      (a)           Subject to paragraph 11, effective as of the date
specified on Schedule 1 hereto (the “Effective Date”), the Assignor hereby
irrevocably sells and assigns to the Assignee without recourse to the Assignor,
and the Assignee hereby irrevocably purchases and assumes from the Assignor
without recourse to the Assignor, the interest described on Schedule 1 hereto
(the “Assigned Interest”) in and to the Assignor’s rights and obligations under
the Agreement.
 
(b)           From and after the Effective Date, (i) the Assignee shall be a
party under the Agreement and will have all the rights and obligations of a Bank
for all purposes under the Loan Documents to the extent of the Assigned Interest
and be bound by the provisions thereof, and (ii) the Assignor shall relinquish
its rights and be released from its obligations under the Agreement to the
extent of the Assigned Interest.  The Assignor and/or the Assignee, as agreed by
the Assignor and the Assignee, shall deliver, in immediately available funds,
any applicable assignment fee required under Subsection 11.07(b) of the
Agreement.
 
2.      On the Effective Date, the Assignee shall pay to the Assignor, in
immediately available funds, an amount equal to the purchase price of the
Assigned Interest as agreed upon by the Assignor and the Assignee.
 
3.      From and after the Effective Date, Agent shall make all payments under
the Agreement and the Notes, if any, in respect of the Assigned Interest
(including all payments of principal, interest and fees with respect thereto) to
the Assignee.  The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Agreement and such Notes, if any, for periods
prior to the Effective Date directly between themselves.
 
4.      The Assignor represents and warrants to the Assignee that:
 
(a)           The Assignor is the legal and beneficial owner of the Assigned
Interest, and the Assigned Interest is free and clear of any adverse claim;
 
(b)           the Assigned Interest listed on Schedule 1 accurately and
completely sets forth the Outstanding Amount of all Loans and L/C Obligations
relating to the Assigned Interest as of the Effective Date;
 
(c)           it has the power and authority and the legal right to make,
deliver and perform, and has taken all necessary action, to authorize the
execution, delivery and performance of this Assignment and Acceptance, and any
and all other documents delivered by it in connection herewith and to fulfill
its obligations under, and to consummate the transactions contemplated by, this
Assignment and Acceptance and the Loan Documents, and no consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority, is required in connection in connection herewith or therewith; and
 
(d)           this Assignment and Acceptance constitutes the legal, valid and
binding obligation of the Assignor.
 
The Assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any of its Affiliates
or the performance by the Borrower or any of its Affiliates of their respective
obligations under the Loan Documents, and assumes no responsibility with respect
to any statements, warranties or representations made under or in connection
with any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document other than as expressly
set forth above.
 
5.      The Assignee represents and warrants to the Assignor and Agent that:
 
(a)           it is an Eligible Assignee;
 
(b)           it has the full power and authority and the legal right to make,
deliver and perform, and has taken all necessary action, to authorize the
execution, delivery and performance of this Assignment and Acceptance, and any
and all other documents delivered by it in connection herewith and to fulfill
its obligations under, and to consummate the transactions contemplated by, this
Assignment and Acceptance and the Loan Documents, and no consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority, is required in connection in connection herewith or therewith;
 
(c)           this Assignment and Acceptance constitutes the legal, valid and
binding obligation of the Assignee;
 
(d)           under applicable Laws no tax will be required to be withheld by
Agent or the Borrower with respect to any payments to be made to the Assignee
hereunder or under any Loan Document, and unless otherwise indicated in the
space opposite the Assignee’s signature below, no tax forms described in
Section 10.10 of the Agreement are required to be delivered by the Assignee; and
 
(e)           the Assignee has received a copy of the Agreement, together with
copies of the most recent financial statements of the Borrower delivered
pursuant thereto, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance.  The Assignee has independently and without reliance
upon the Assignor or Agent and based on such information, as the Assignee has
deemed appropriate, made its own credit analysis and decision to enter into this
Assignment and Acceptance.  The Assignee will, independently and without
reliance upon Agent or any Bank, and based upon such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Agreement.
 
6.      The Assignee appoints and authorizes Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto as are delegated to Agent by the terms thereof, together with
such powers as are incidental thereto.
 
7.      If either the Assignee or the Assignor desires a Note to evidence its
Loans, it shall request Agent to procure a Note from the Borrower.
 
8.      The Assignor and the Assignee agree to execute and deliver such other
instruments, and take such other action, as either party may reasonably request
in connection with the transactions contemplated by this Assignment and
Acceptance.
 
9.      This Assignment and Acceptance shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns; provided,
however, that the Assignee shall not assign its rights or obligations hereunder
without the prior written consent of the Assignor and any purported assignment,
absent such consent, shall be void.
 
10.      This Assignment and Acceptance may be executed by facsimile signatures
with the same force and effect as if manually signed and may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  This Assignment
and Acceptance shall be governed by and construed in accordance with the laws of
the state specified in the Section of the Agreement entitled “Governing Law.”
 
11.      The effectiveness of the assignment described herein is subject to:
 
(a)           if such consent is required by the Agreement, receipt by the
Assignor and the Assignee of the consent of Agent and the Issuing Banks, and/or
the Borrower to the assignment described herein.  By delivering a duly executed
and delivered copy of this Assignment and Acceptance to Agent, the Assignor and
the Assignee hereby request any such required consent and request that Agent
register the Assignee as a Bank under the Agreement effective as of the
Effective Date; and
 
(b)           receipt by Agent of (or other arrangements acceptable to Agent
with respect to) any applicable assignment fee referred to in
Subsection 11.07(b) of the Agreement and any tax forms required by Section 10.10
of the Agreement.
 
By signing below, Agent agrees to register the Assignee as a Bank under the
Agreement, effective as of the Effective Date with respect to the Assigned
Interest, and will adjust the registered Pro Rata Share of the Assignor under
the Agreement to reflect the assignment of the Assigned Interest.
 
Attached hereto as Schedule 2 is all contact, address, account and other
administrative information relating to the Assignee.
 

3rd A&R Credit Agreement [Enserco] Exhibit C
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers.
 
 

 
Assignor:
     
[Name of Assignor],
         
By:
 
Name:
 
Title:

 
 
Tax forms required by
Assignor:
       
Section 10.10 of the Agreement included
[Name of Assignor]

 

 
By:
 
Name:
 
Title:

          (Signatures continue)
 

3rd A&R Credit Agreement [Enserco] Exhibit C
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

    In accordance with and subject to Section 11.07 of
 
the Agreement, the undersigned consents to the
 
foregoing assignment as of the Effective Date:
 
ENSERCO ENERGY INC.,
 
 
By:___________________________
                                              
Name:
__________________________                                                  
 Responsible Officer
 
 
 
FORTIS CAPITAL CORP.,
 
as Agent and Issuing Bank

 
 
By:                                                      
 
Name:                                                      
 
Title:                                                      
 

 
By:                                                      
 
Name:                                                      
 
Title:                                                      
 
 
 
BNP PARIBAS,
 
as an Issuing Bank

 
By:                                                      
 
Name:                                                      
 
Title:                                                      
 

3rd A&R Credit Agreement [Enserco] Exhibit C
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE
 

 
THE ASSIGNED INTEREST
 
                      Effective Date: ______________________
 
 
Assigned Commitment
Type and amount of outstanding Obligations assigned
Assigned Pro Rata Share
$__________________
[type] $______________
__________________%

 

3rd A&R Credit Agreement [Enserco] Exhibit C
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

SCHEDULE 2 TO ASSIGNMENT AND ACCEPTANCE
 

 
ADMINISTRATIVE DETAILS
 
 
(Assignee to list names of credit contacts, addresses, phone and facsimile
numbers, electronic mail addresses and account and payment information)
 

3rd A&R Credit Agreement [Enserco] Exhibit C
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

EXHIBIT D
 
FORM OF BORROWING BASE COLLATERAL POSITION REPORT
[Date]
 
Fortis Capital Corp
 
15455 North Dallas Parkway
1221 Avenue of the Americas
Suite 1400
New York, New York  10020
Addison, Texas  75001
 
Attention:  Corey Hingson
Attention:  Chung-Taek Oh
Telephone:  (214) 866-2535
Telephone:  (212) 278-6345
Facsimile:  (214) 969-9332
Facsimile:  (212) 278-7953

·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy, Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
Ladies and Gentlemen:
 
The Borrower, acting through its duly authorized Responsible Officer (as that
term is defined in the Agreement), delivers the attached report to the Banks and
certifies to each of the Banks that it has at all times been and continues to be
in compliance with the Agreement.  Further, the undersigned hereby certifies
that (i) the undersigned has no knowledge of any Defaults or Events of Default
under the Agreement which existed since the Closing Date of the Agreement (other
than any Defaults or Events of Default of which the Borrower has previously
notified the Agent pursuant to Section 7.02 or 7.03 of the Agreement) or which
exist as of the date of this letter and (ii) as of the date written above, the
amounts indicated on the attached schedule were accurate and true as of the date
of preparation.
 
The undersigned also certifies that the amounts set forth on the attached report
constitute all Collateral which has been or is being used in determining
availability for an advance or letter of credit issued under the Borrowing Base
Line, as of the preceding date of such advance or issuance, as applicable.  This
certificate and attached reports are submitted pursuant to Subsection 7.02(b) of
the Agreement.  Capitalized terms used herein and in the attached reports have
the meanings specified in the Agreement.
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer
 

Enserco Energy Inc.
 
BORROWING BASE COLLATERAL POSITION REPORT
 
AS OF [DATE]
 

  I.  
COLLATERAL
                    A.  
Cash Collateral
 
$_______
      100 %  
$________
    B.  
Equity in Approved Brokerage Accounts
 
$_______
      90 %  
$________
    C.  
Tier I Accounts
 
$_______
      90 %  
$________
    D.  
Tier II Accounts
 
$_______
      85 %  
$________
    E.  
Tier I Unbilled Eligible Accounts
 
$_______
      85 %  
$________
    F.  
Tier II Unbilled Eligible Accounts
 
$_______
      80 %  
$________
    G.  
Eligible Inventory (other than Line Fill or Tank Bottom)
 
$_______
      80 %  
$________
    H.  
Eligible Inventory that is Line Fill or Tank Bottom
 
$_______
      50 %  
$________
    I.  
Eligible Exchange Receivables
 
$_______
      80 %  
$________
    J.  
Undelivered Product Value
 
$_______
      80 %  
$________
    K.  
Amount subject to First Purchaser Lien that is not secured by a L/C
 
($______)
      100 %  
($_______)
    L.  
The mark to market amounts owed to the Swap Banks under Swap Contracts as
reported by the Swap Banks
 
($______)
      120 %  
(________)
              -----------       ----------       ------------            
=======
   
======
   
=======
       
TOTAL COLLATERAL
 
$_______
   
_______
   
$________
       
BORROWING BASE SUB-CAP
                 
$________
       
BORROWING BASE ADVANCE CAP (Least of $_______________, Borrowing Base Sub-Cap or
Total Collateral)
                 
$________
 
II.
 
BANK OUTSTANDINGS
                 
$________
    A.  
Loans from the Banks
                 
$________
    B.  
L/Cs from the Banks
                 
$________
 
TOTAL OUTSTANDINGS UNDER BORROWING BASE LINE
                 
$________
 
III.
 
EXCESS/(DEFICIT) (I-II)
                 
$________
 

3rd A&R Credit Agreement [Enserco] Exhibit D
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

EXHIBIT E
 

 
FORM OF NET POSITION REPORT
 
[Date]
 
Fortis Capital Corp
 
15455 North Dallas Parkway
1221 Avenue of the Americas
Suite 1400
New York, New York  10020
Addison, Texas  75001
 
Attention:  Corey Hingson
Attention:  Chung-Taek Oh
Telephone:  (214) 866-2535
Telephone:  (212) 278-6345
Facsimile:  (214) 969-9332
Facsimile:  (212) 278-7953
 

·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
·      Ladies and Gentlemen:
 
In my capacity as Responsible Officer of Enserco Energy Inc., I hereby certify
to you that as of the date written above, such company’s aggregate net positions
are as follows:
 

 

 
                       Long Position
                     Short Position
Net Position
MMBTUS
     
CRUDE OIL AND DISTILLATES
     

 
 
To the best of my knowledge, these net positions have at no time exceeded the
limitations set forth in Section 8.11 of the Agreement.
 
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

c/c  The Banks
 

3rd A&R Credit Agreement [Enserco] Exhibit E
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
EXHIBIT H
 

 
FORM OF SUBORDINATION AGREEMENT
 
THIS SUBORDINATION AGREEMENT (this “Agreement”) is made as of the _____ day of
__________, 20__, by and between FORTIS CAPITAL CORP. (“Agent”), as Agent for
the ratable benefit of the Banks (hereinafter defined), the Swap Banks (as
defined in the Credit Agreement), ___________________________ (the Subordinated
Creditor”) and acknowledged by ENSERCO ENERGY INC., a South Dakota
corporation(“Borrower”).
 
RECITALS
 
WHEREAS, Agent and the Banks have made, or in the future may make, credit
accommodations available to Borrower, pursuant to the terms and provisions of
that certain Third Amended and Restated Credit Agreement dated to be effective
as of May __, 2009 (as amended, modified, supplemented, extended, restated
and/or replaced from time to time, the “Credit Agreement”) among Agent, the
Borrower and the banks and financial institutions from time to time party
thereto (collectively, the “Banks”); and
 
WHEREAS, Subordinated Creditor has made, or in the future may make, credit
accommodations available to Borrower; and
 
WHEREAS, in order to induce Agent and the Banks to consider making the credit
accommodations described above available to Borrower in the future, Subordinated
Creditor has agreed to subordinate certain of its rights and claims now existing
or hereafter arising against Borrower to the rights and claims of Agent and the
Banks now existing or hereafter arising against Borrower, all in accordance with
the terms and provisions of this Agreement; and
 
WHEREAS, the parties hereto are entering into this Agreement in order to set
forth their agreements as to payment of the Senior Indebtedness (hereinafter
defined) and the Junior Indebtedness (hereinafter defined) and their agreements
as to certain other matters including but not limited to lien priorities.
 
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements contained herein, the parties hereto hereby agree as follows:
 
AGREEMENT
 
ARTICLE I
 
DEFINITIONS
 
As used in this Agreement, the terms defined above shall have their respective
meanings set forth above and the following terms shall have the following
meanings:
 
“Collateral” shall mean any and all property which now constitutes or hereafter
will constitute collateral or other security for payment of the Senior
Indebtedness pursuant to the Senior Documents or otherwise.
 
“Default” shall have the meaning set forth in the Credit Agreement.
 
“Distribution” by any Person shall mean (a) with respect to any stock issued by
such Person, the retirement, redemption, purchase or other acquisition for value
of any such stock, (b) the declaration or payment of any dividend or other
distribution on or with respect to any such stock, (c) any loan or advance by
such Person to, or other investment by such Person in, the holder of any such
stock, and (d) any other payment (other than ordinary salaries to employees or
advances made in the ordinary course of business to employees for travel or
other expenses incurred in the ordinary course of business) by such Person to or
for the benefit of the holder of any such stock.
 
“Event of Default” shall have the meaning set forth in the Credit Agreement.
 
“Federal Bankruptcy Code” shall have the meaning set forth in Article VIII of
this Agreement.
 
“Junior Creditor” shall mean the Subordinated Creditor and its successors and
assigns.
 
“Junior Documents” shall mean any and all agreements, documents and instruments
evidencing, governing or executed or delivered in connection with the Junior
Indebtedness.
 
“Junior Indebtedness” shall mean any and all indebtedness, obligations and
liabilities of every kind and character of Borrower now or hereafter owing to
any party to this Agreement other than Senior Creditor, including, without
limitation, the indebtedness evidenced and to be evidenced by the Junior
Documents, whether such indebtedness, obligations and liabilities are direct or
indirect, primary or secondary, joint, several or joint and several, fixed or
contingent and whether incurred by Borrower as maker, endorser, guarantor or
otherwise.
 
“Permitted Payments” shall have the meaning set forth in Article IV of this
Agreement.
 
“Person” shall mean and include an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated association, a
joint venture or other entity or a governmental authority.
 
“Proceeds” shall have the meaning assigned to it under the Uniform Commercial
Code, shall also include “products” (as defined in the Uniform Commercial Code),
and, in any event, shall include, but not be limited to (a) any and all proceeds
of any insurance, indemnity, warranty, letter of credit or guaranty or
collateral security payable to any grantor from time to time with respect to any
of the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to the owner of the Collateral from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental body, authority, bureau or agency (or
any Person acting under color of governmental authority) and (c) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.
 
“Senior Creditor” shall mean Agent and its successors and assigns.
 
“Senior Documents” shall mean any and all agreements, documents and instruments
evidencing, governing or executed or delivered in connection with the Senior
Indebtedness or the Senior Creditor’s interests in the Collateral, including,
without limitation, the Credit Agreement.
 
“Senior Indebtedness” shall mean any and all indebtedness, obligations and
liabilities of every kind and character of Borrower under the Credit Agreement
or the other Loan Documents, whether such indebtedness, obligations and
liabilities are direct or indirect, primary or secondary, joint, several or
joint and several, fixed or contingent and whether incurred by Borrower as
maker, endorser, guarantor or otherwise, including, without limitation, any and
all indebtedness, obligations and liabilities of Borrower now or hereafter owing
to Senior Creditor pursuant to or evidenced by the Senior Documents.
 
ARTICLE II
 
RIGHTS IN COLLATERAL
 
2.01           Priorities Regarding Collateral.  The Junior Creditor covenants
and agrees that it will not take or hold any liens or security interests on any
property of Borrower.  If for any reason, however, the Junior Creditor does
obtain a lien or security interest in the Collateral, any and every lien and
security interest in the Collateral in favor of or held for the benefit of the
Senior Creditor has and shall have priority over any lien or security interest
that Junior Creditor has or might have or acquire in the Collateral
notwithstanding any statement or provision contained in the Junior Documents or
otherwise to the contrary and irrespective of the time or order of filing or
recording of financing statements, deeds of trust, mortgages or other notices of
security interests, liens or assignments granted pursuant thereto, and
irrespective of anything contained in any filing or agreement to which any party
hereto or its respective successors and assigns may now or hereafter be a party,
and irrespective of the ordinary rules for determining priorities under the
Uniform Commercial Code or under any other law governing the relative priorities
of secured creditors.
 
2.02           Management of Collateral.  Senior Creditor shall have the
exclusive right to manage, perform and enforce the terms of the Senior Documents
with respect to the Collateral, to exercise and enforce all privileges and
rights thereunder according to its discretion and the exercise of its business
judgment including, but not limited to, the exclusive right to take or retake
possession of the Collateral and to hold, prepare for sale, process, sell,
lease, dispose of, or liquidate the Collateral, pursuant to a foreclosure or
otherwise.  Notwithstanding any rights or remedies available to the Junior
Creditor under applicable law or under any document or instrument evidencing,
securing or otherwise executed in connection with the incurrence of the
obligations contemplated by the Junior Documents, Junior Creditor shall not be
permitted to foreclose upon their security interests in any of the Collateral,
or to exercise similar remedies with respect thereto, so long as any of the
Senior Indebtedness shall continue to exist, and only the Senior Creditor shall
have the right to restrict or permit, or approve or disapprove, the sale,
transfer or other disposition of Collateral.  Junior Creditor will not in any
manner interfere with Senior Creditor’s security interests in the Collateral
unless and until Borrower has satisfied in full the Senior Indebtedness and
Senior Creditor has given Junior Creditor written notice thereof.  The Junior
Creditor waives notice of, and agrees not to challenge the method, manner, time,
place or terms, of any disposition of the Collateral by Senior
Creditor.  Accordingly, should Senior Creditor elect to exercise its rights and
remedies with respect to any of the Collateral, Senior Creditor may proceed to
do so without regard to any interest of the Junior Creditor, and the Junior
Creditor waives any claims that it may have against Senior Creditor for any
disposition of the Collateral.  The Junior Creditor agrees, whether or not a
default has occurred in the payment of any indebtedness or the performance of
any other obligations to it, that any liens on and security interests in the
Collateral or any portion thereof that it might have or acquire shall
automatically be fully released ipso facto as to all indebtedness and other
obligations secured thereby owing to Junior Creditor if and when Senior Creditor
releases its lien in and security interest on such Collateral in the event of
any sale, disposition or other realization by Senior Creditor (or any agent
therefore) upon such Collateral.
 
ARTICLE III
 
PROCEEDS
 
3.01           Distribution of Proceeds of Collateral.  At any time during which
all or any part of the Senior Indebtedness remains outstanding, and whether or
not the same is then due and payable, the Proceeds of any sale, disposition or
other realization by Senior Creditor (or any agent therefore) upon all or any
part of the Collateral shall be applied first to the payment in full of all
Senior Indebtedness in such order as Senior Creditor shall determine in its sole
discretion.
 
3.02           Contingent Obligations.  For purposes of distributing the
Proceeds of Collateral pursuant to this Article III, the portion of Senior
Indebtedness consisting of loans or advances not yet made by Senior Creditor to
Borrower under the Senior Documents (including, but not limited to, amounts with
respect to letters of credit outstanding and reimbursement for fees, costs and
expenses) shall be considered Senior Indebtedness then outstanding, and the
Senior Creditor shall have the right to retain, in a cash collateral account,
cash collateral equal to the amount thereof which Senior Creditor determines, in
its sole good faith discretion, may arise or exist from time to time.
 
3.03           Holding of Proceeds in Trust.  Except as provided for in Article
IV of this Agreement, in the event the Junior Creditor receives Proceeds of the
Collateral, Junior Creditor shall be deemed to hold all of such Proceeds in
trust for the benefit of Senior Creditor until the proper application thereof in
accordance with Section 3.1 hereof.  The Junior Creditor shall not seek to
challenge the validity, enforceability, priority or perfection of any of the
Senior Documents if the purpose or effect thereof would in any manner defeat or
delay the distribution of the Proceeds of any Collateral in the manner set forth
in Section 3.1 hereof.
 
ARTICLE IV
 
SUBORDINATION
 
The Junior Creditor covenants and agrees that the Junior Indebtedness, howsoever
evidenced and whether now existing or hereafter incurred, shall be subordinate
and junior in right of payment, to the extent and in the manner hereinafter set
forth, to all Senior Indebtedness:
 
(a)           The holder of the Senior Indebtedness shall first be finally and
irrevocably paid in cash an aggregate amount equal to the principal thereof and
termination fees, if any, interest at the time due thereon, and all other costs,
fees, expenses and/or obligations now or hereafter owing thereunder, before any
payment or Distribution of any character, whether in cash, securities or other
property, shall be made on account of the Junior Indebtedness or otherwise to or
for the benefit of Junior Creditor; and any payment or Distribution of any
character, whether in cash, securities or other property, which would otherwise,
but for the provisions of this Article IV, be payable or deliverable in respect
of the Junior Indebtedness or otherwise shall be paid or delivered directly to
the holder of the Senior Indebtedness (or its duly authorized representatives),
until all the Senior Indebtedness shall have been paid in full.
 
(b)           Notwithstanding the provisions of subparagraph (a) of this
Article IV, Borrower may pay interest on the unpaid principal balance of the
Junior Indebtedness on a monthly basis in arrears and make both scheduled
payments and prepayments of principal on the terms and conditions set forth in
the Junior Documents (the “Permitted Payments”); provided, however, that as a
condition precedent to Borrower’s right to make (and the Junior Creditor’s
rights to receive) any and all such Permitted Payments, there shall not have
occurred or then exist a Default or Event of Default under any of the Senior
Indebtedness or any of the Senior Documents, or an event or condition which with
notice, lapse of time or the making of such payment would constitute a Default
or Event of Default under any of the foregoing.
 
(c)           The Junior Creditor agrees to promptly notify the Senior Creditor
in writing of any default or event of default on any Junior Indebtedness or
otherwise or under any of the Junior Documents and further agrees not to
exercise any right or remedy or take any enforcement action with respect to any
default or event of default on any of the Junior Indebtedness or otherwise or
under any of the Junior Documents until such time as the Senior Indebtedness has
been paid in full.  Without limiting any of the foregoing, any failure of
Borrower to perform any of its obligations to Junior Creditor as a result of any
of the prohibitions, restrictions or limitations set forth in this Agreement
shall not constitute the basis for a default or event of default on any Junior
Indebtedness or under any Junior Documents.
 
(d)           No reimbursement, payment, direct or indirect, or disbursement of
other property or assets of Borrower shall be made by Borrower on account of the
Junior Indebtedness or otherwise or received, accepted, retained or applied by
the Junior Creditor (except for the account and benefit of Senior Creditor,
which shall be held in trust for Senior Creditor or except for Permitted
Payments as allowed in subparagraph (b) of this Article IV) until such time as
the Senior Indebtedness has been finally and irrevocably paid in full in cash.
 
(e)           Without affecting Junior Creditor’s obligations set forth in this
Agreement not to exercise any remedy as set forth in this Agreement, in the
event that the Junior Creditor receives any payment of any character, whether in
cash, securities, or other properties, payable or deliverable in respect of the
Junior Indebtedness and (i) such payment would cause an event or condition to
occur which, with notice, lapse of time, or both, would cause a Default or an
Event of Default to occur under the Senior Documents; or (ii) such payment is
made after a Default or an Event of Default has occurred under the Senior
Documents; or (iii) such payment is made at a time that the management of
Borrower knew or reasonably should have known that a Default or an Event of
Default had occurred under the Senior Documents, or that such payment could
reasonably be expected to cause a Default or an Event of Default to occur under
the Senior Documents, then such cash, securities or other properties shall be
held in trust for the benefit of the holder of the Senior Indebtedness and shall
be paid or delivered to the holder of the Senior Indebtedness (or its authorized
representatives), in the proportions in which it holds same, until all the
Senior Indebtedness shall have been paid in full.
 
(f)           The provisions of this Agreement are and are intended solely for
the purpose of defining the relative rights of the holder of the Junior
Indebtedness, on the one hand, and the holder of the Senior Indebtedness on the
other hand.  Nothing contained in this Agreement is intended to or shall impair,
as between Borrower and its creditors other than the holder of the Senior
Indebtedness and the holder of the Junior Indebtedness, the obligations of
Borrower which are absolute and unconditional, to pay to the holder of the
Junior Indebtedness the principal thereof and interest thereon as and when the
same shall become due and payable in accordance with its terms, or is intended
to or shall affect the relative rights against Borrower of the holder of the
Senior Indebtedness.
 
(g)           No right of any present or future holder of any of the Senior
Indebtedness to enforce the subordination as herein provided shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
Borrower or by any act in good faith or failure to act in good faith by any such
holder, or by any noncompliance by Borrower with the covenants, agreements and
conditions of the Junior Indebtedness, regardless of any knowledge thereof any
such holder may have or be otherwise charged with.
 
(h)           Senior Creditor shall have no obligation to preserve the rights of
the Collateral against any prior parties or to marshal any of the Collateral for
the benefit of any Person.
ARTICLE V
 
BENEFIT OF AGREEMENT; AMENDMENT
 
This Agreement shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become a Senior Creditor, and such provisions are
made for the benefit of each Senior Creditor and each of them may enforce such
provisions.  The Junior Creditor agrees not to assign or transfer, at any time
this Agreement remains in effect, any rights, claim or interest of any kind in
or to any Junior Indebtedness without first notifying Senior Creditor and making
such assignment expressly subject to this Agreement.  The provisions of the
Junior Documents as in effect on the date hereof may not be amended or modified
in any respect without the prior written consent of Senior Creditor.
 
ARTICLE VI
 
FURTHER ASSURANCES
 
Each of the parties hereto hereby agrees to promptly execute and deliver to the
other parties hereto any and all such further instruments and documents and take
such further action as such other parties may reasonably request in order to
fully effect the purposes of this Agreement.
ARTICLE VII
 
REPRESENTATIONS AND WARRANTIES
 
7.01           Senior Creditor and Junior Creditor.  Each of the parties hereto
hereby represents and warrants to the other party hereto that:
 
(a)           such party has full power, authority and legal right to execute,
deliver and perform this Agreement, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement; and
 
(b)           this Agreement constitutes a legal, valid and binding obligation
of such party enforceable against it in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting creditors rights generally and except as
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
 
ARTICLE VIII
 
BANKRUPTCY
 
The Junior Creditor agrees not to commence, or to join with any other creditor
in commencing, any case under Title 11 of the United States Code, as amended
and/or superseded (the “Federal Bankruptcy Code”) by or against Borrower or any
of its property without the prior written consent of Senior Creditor.  The
provisions of this Agreement shall continue in full force and effect,
notwithstanding the commencement of a case under the Federal Bankruptcy Code by
or against Borrower.  In furtherance of the foregoing, if Junior Creditor
receives any property of, or payments from Borrower after the commencement of
such a case on account of a secured claim which is subordinated by the terms of
this Agreement (whether as “adequate protection” payments or otherwise), Junior
Creditor shall immediately turn such property or payments over to the Senior
Creditor.  To the extent that Junior Creditor has or acquires any rights under
Section 363 or Section 364 of the Federal Bankruptcy Code with respect to the
Collateral, the Junior Creditor hereby agrees not to assert such rights without
the prior written consent of the Senior Creditor.  The Junior Creditor hereby
grants to the Senior Creditor the right, but Senior Creditor shall not be
obligated, to file, prove and vote claims on account of the Junior Indebtedness
in any receivership, bankruptcy, or other proceeding under the Federal
Bankruptcy Code commenced by or against Borrower.
 
ARTICLE IX
 
MISCELLANEOUS
 
9.01           No Waiver, Cumulative Remedies.  No failure to exercise, and no
delay in exercising on the part of any party hereto, any right, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights and remedies provided in this Agreement
are cumulative and shall not be exclusive of any rights or remedies provided by
law.
 
9.02           Notices.  All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telegraph, telecopier, or telex) and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or five days after being deposited in the mail, postage prepaid, or, in the case
of telegraphic notice, when delivered to the telegraph company, or in the case
of telex notice, when sent, answer back received, addressed as set forth below
or to such address or other address as may be hereafter notified by the
respective parties hereto:
To Senior Creditor:
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Phone:  (214) 866-2535
 
Fax:  (214) 969-9332
   
To Junior Creditor:
_________________________
 
_________________________
 
_________________________
 
Attention:_________________
 
Telephone:________________
 
Facsimile:_________________

9.03           GOVERNING LAW.  THIS AGREEMENT SHALL BE INTERPRETED AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES
HERETO AND THEIR RESPECTIVE SUCCESSORS, TRANSFEREES AND ASSIGNS.
 
9.04           Amendments and Waivers.  Neither this Agreement nor any of the
terms hereof may be amended, waived, discharged or terminated unless such
amendment, waiver, discharge or termination is in writing signed by each of the
parties hereto.
 
9.05           Exculpation.  Neither the Senior Creditor nor its agents have
made to the other parties hereto nor do any of them hereby or otherwise make any
representations or warranties, express or implied, nor do they assume any
liability with respect to (i) obligors under any instruments of guarantee;
(ii) the enforceability, validity, value or collectibility of the Senior
Indebtedness, any Collateral therefore, or any guarantee or security which may
have been granted to any of them in connection with the Senior Documents; or
(iii) Borrower’s title or right to transfer any collateral or security.  No
party hereto shall be liable to any other party hereto for any action or failure
to act or any error of judgment, negligence, or mistake or oversight whatsoever
on its part or its respective agents, officers, employees or attorneys with
respect to any transaction relating to the Collateral or this Agreement.  To the
maximum extent permitted by law, except as otherwise provided herein, the Junior
Creditor waives any claim it might have against Senior Creditor with respect to,
or arising out of, the handling of the Collateral (including, without
limitation, any such claim based upon the timing or method of realizing upon
such Collateral).
 
9.05           Third Party Rights.  This Agreement is solely for the benefit of
the parties hereto and their respective successors and assigns, and no other
Person shall have any right, benefit, priority or other interest under, or
because of the existence of, this Agreement.
 
9.06           Termination.  This Agreement shall terminate upon the final and
indefeasible payment in full of all the Senior Indebtedness and the termination
of all of the Senior Documents.
 
9.07           Counterparts.  This Agreement may be executed by one or more of
the parties hereto in any number of separate counterparts, each of which shall
be an original, but all of which shall constitute but one agreement.
 
9.08           Legend.  All promissory notes issued in connection with the
Junior Indebtedness shall contain a legend substantially in the form of the
following:
 
i)                      “THIS PROMISSORY NOTE, AND PAYMENT AND ENFORCEMENT
HEREOF, IS SUBJECT TO THE TERMS AND PROVISIONS OF THAT CERTAIN SUBORDINATION
AGREEMENT DATED AS OF ________________, 20__ BETWEEN FORTIS CAPITAL CORP., AS
AGENT, AND _________________________________ AS SUCH SUBORDINATION AGREEMENT MAY
BE AMENDED FROM TIME TO TIME.”
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

 
[EXECUTION PAGES TO FOLLOW]
 

3rd A&R Credit Agreement [Enserco] Exhibit H
011038.0122\517034.09
 
 
 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their proper and duly authorized officers as of the day and year
first above written.
 

 
 
SENIOR CREDITOR:
     
FORTIS CAPITAL CORP.,
   
as Agent
     
By:                                                                           
   
Name: 
   
Title: 
 

 

 
 

 
 
By:                                                                           
   
Name: 
   
Title:                                                                           
         
JUNIOR CREDITOR:
         
By:                                                                           
   
Name: 
 
Title:

 
                                                                           
 

3rd A&R Credit Agreement
[Enserco]                                                               Exhibit
H
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

ACKNOWLEDGMENT BY ENSERCO ENERGY INC.,
                    Enserco Energy Inc. hereby acknowledges receipt of a copy of
the foregoing Subordination Agreement and agrees that, except as otherwise
provided by the foregoing Subordination Agreement, it will not pay any
indebtedness subordinated by the foregoing Subordination Agreement until all the
Senior Indebtedness shall have been paid in full.
 

 
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

3rd A&R Credit Agreement [Enserco] Exhibit H
011038.0122\517034.09
 
 
 
 

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EXHIBIT I
 

 
FORM OF
 
NOTICE OF BORROWING BASE SUB-CAP ELECTION
 
[Date]
 
Fortis Capital Corp
 
15455 North Dallas Parkway
1221 Avenue of the Americas
Suite 1400
New York, New York  10020
Addison, Texas  75001
 
Attention:  Corey Hingson
Attention:  Chung-Taek Oh
Telephone:  (214) 866-2535
Telephone:  (212) 278-6345
Facsimile:  (214) 969-9332
Facsimile:  (212) 278-7953
 

·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
Ladies and Gentlemen:
 
The Borrower, acting through its duly authorized Responsible Officers (as that
term is defined in the Agreement), notifies the Banks that Borrower elects a
Borrowing Base Sub-Cap of $200,000,000 and certifies to each of the Banks that
the Borrower is in compliance with the Agreement and in particular certifies the
following as of ____________:
 

 
 
I.      Elected L/C Sub-limit Caps:

 

 
Elections
(a)Performance L/Cs
25,000,000
(b)90 Day Transportation and Storage L/Cs 1
50,000,000
(c)365 Day Transportation and Storage L/Cs 1
50,000,000
(d)90 Day Swap L/Cs
50,000,000
(e)365 Day Swap L/Cs
50,000,000
(f)90 Day Supply L/Cs
200,000,000
(g)365 Day Supply L/Cs
25,000,000

1  Aggregate amount may not exceed $100,000,000.
 
 
 

--------------------------------------------------------------------------------

 
 
II.

 

3rd A&R Credit Agreement [Enserco] Exhibit I
011038.0122\517034.09
 
 
  

--------------------------------------------------------------------------------

 
 
 

Financial Covenants and Net Cumulative Loss Covenant:
 

 
Actual
 
Requirement
 
Net Working Capital ($)
__________
    50,000,000 1  
Tangible Net Worth ($)
___________
    50,000,000 1  
Total Liabilities to Tangible Net Worth
__________
 
5:11
 
Net Cumulative (Loss) / Gain
__________
    (23,490,616 )

 
1  Based on the Borrowing Base Sub-Cap above, and Section 7.15(a) through (c)
and 8.11(b) of the Agreement, as applicable.

 
 
III.  Other Covenants
 

 
Actual
 
Requirement
 
Net Fixed Price Volumes:
       
Natural Gas (MMBTU’s)
_________ 2
    3,000,000  
Crude Oil and Distillates (bbls)
_________ 2
    50,000  
Value-at-Risk (1-day/95%):
         
Proprietary ($)
__________ 3
    8,000,000  
Transportation ($)
__________3
    10,000,000  
Unhedged Transportation Exposure ($)
__________4
 
___________
 

 
2  Represents maximum Net Fixed Price Volumes since the date of the  previous
Compliance Certificate.

 
3  Represents maximum VAR since the date of the  previous Compliance
Certificate.

                4  Represents maximum Unhedged Transportation Exposure since the
date of the previous Compliance Certificate.
 
Further, the undersigned hereby certifies that (i) the Net Fixed Price Volume of
natural gas and the Net Fixed Price Volume of crude oil and distillates for
crude blending has at no time exceeded the limitations set forth in Section 8.11
of the Agreement, (ii) the Unhedged Transportation Exposure has at no time
exceeded the limitations set forth in Section 8.15 of the Agreement, (iii) the
Proprietary Value-at-Risk has at no time exceeded the limitations set forth in
Section 8.16 of the Agreement, (iv) the Transportation Value-at-Risk has at no
time exceeded the limitations set forth in Section 8.17 of the Agreement, and
(v) that the undersigned has no knowledge of any Defaults or Events of Defaults
under the Agreement which existed from the Closing Date of the Agreement or
which exist as of the date of this letter.
 
The undersigned also certifies that the accompanying financial statements
present fairly, in all material respects, the financial condition of the
Borrower as of ____________, and the related results of operations for the
___________ then ended, in conformity with generally accepted accounting
principles and in conformity with the definition of Economic Basis under the
Agreement.
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

 c/c The Banks
 

3rd A&R Credit Agreement [Enserco] Exhibit H
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

EXHIBIT K
 

 
FORM OF
 
NOTICE OF NINETY (90) DAY SWAP L/C CAP ELECTION
 
[Date]
 
Fortis Capital Corp.
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Telephone:  (214) 866-2535
 
Facsimile:  (214) 969-9332
 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
Ladies and Gentlemen:
 
The Borrower, acting through its duly authorized Responsible Officers (as that
term is defined in the Agreement), notifies the Banks that Borrower elects a
Ninety (90) Day Swap L/C Cap of $___________ and certifies to each of the Banks
that the Borrower is in compliance with the Agreement and in particular
certifies the following as of ____________:  the Borrowing Base Sub-Cap is
$__________.
 
Further, the undersigned hereby certifies (i) that the Net Fixed Price Volume
has at no time exceeded the limitations set forth in Section 8.11 of the
Agreement; (ii) that the undersigned has no knowledge of any Defaults under the
Agreement which existed as of May __, 2009 or which exist as of the date of this
letter and giving effect to the Borrowing Base Sub-Cap requested herein; and
(iii) all of Borrower’s representations and warranties under the Agreement are
true and correct in all material respects on and as of the date hereof (except
to the extent such representations and warranties relate solely to an earlier
date).

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

3rd A&R Credit Agreement [Enserco] Exhibit K
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

EXHIBIT L
 
FORM OF
 
NOTICE OF THREE HUNDRED SIXTY-FIVE (365) DAY SWAP L/C CAP ELECTION
 
[Date]
 
Fortis Capital Corp.
 
15455 North Dallas Parkway, Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Telephone:  (214) 866-2535
 
Facsimile:  (214) 969-9332
 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
Ladies and Gentlemen:
 
The Borrower, acting through its duly authorized Responsible Officers (as that
term is defined in the Agreement), notifies the Banks that Borrower elects a
Three Hundred Sixty-Five (365) Day Swap L/C Cap of $___________ and certifies to
each of the Banks that the Borrower is in compliance with the Agreement and in
particular certifies the following as of ____________:  the Borrowing Base
Sub-Cap is $__________.
 
Further, the undersigned hereby certifies (i) that the Net Fixed Price Volume
has at no time exceeded the limitations set forth in Section 8.11 of the
Agreement; (ii) that the undersigned has no knowledge of any Defaults under the
Agreement which existed as of May __, 2009 or which exist as of the date of this
letter and giving effect to the Borrowing Base Sub-Cap requested herein; and
(iii) all of Borrower’s representations and warranties under the Agreement are
true and correct in all material respects on and as of the date hereof (except
to the extent such representations and warranties relate solely to an earlier
date).

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

 
c/c The Banks
 
 

3rd A&R Credit Agreement [Enserco] Exhibit L
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
EXHIBIT M
 

 
FORM OF
 
NOTICE OF TRANSPORTATION L/C CAP ELECTION
 
[Date]
 
Fortis Capital Corp.
 
15455 North Dallas Parkway, Suite 1400
 
Addison, Texas  75001
 
Attention:  Corey Hingson
 
Telephone:  (214) 866-2535
 
Facsimile:  (214) 969-9332
 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of May __, 2009 (as amended or supplemented from time to time, the
“Agreement”), by and among Enserco Energy Inc. (the “Borrower”), the banks that
from time to time are parties thereto, and Fortis Capital Corp., as Agent

 
Ladies and Gentlemen:
 
The Borrower, acting through its duly authorized Responsible Officers (as that
term is defined in the Agreement), notifies the Banks that Borrower elects a
Transportation L/C Cap of $___________ and certifies to each of the Banks that
the Borrower is in compliance with the Agreement and in particular certifies the
following as of ____________:  the Borrowing Base Sub-Cap is $__________.
 
Further, the undersigned hereby certifies (i) that the Net Fixed Price Volume
has at no time exceeded the limitations set forth in Section 8.11 of the
Agreement; (ii) that the undersigned has no knowledge of any Defaults under the
Agreement which existed as of May __, 2009 or which exist as of the date of this
letter and giving effect to the Borrowing Base Sub-Cap requested herein; and
(iii) all of Borrower’s representations and warranties under the Agreement are
true and correct in all material respects on and as of the date hereof (except
to the extent such representations and warranties relate solely to an earlier
date).

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

c/c The Banks

3rd A&R Credit Agreement [Enserco] Exhibit M
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
EXHIBIT N
 

 
FORM OF
 
ASSIGNMENT OF HEDGING ACCOUNT
 
WHEREAS, the undersigned, Enserco Energy Inc., a South Dakota corporation (the
“Debtor”), whose address is 350 Indiana Street, Suite 400, Golden, Colorado
80401 has a certain futures account (No. ____________) (the “Account”) with
______________ hereafter called “_______________” whose address is
_____________________________________;
 
WHEREAS, Debtor is now or will be indebted to Fortis Capital Corp., as Agent
(the “Agent”) for the ratable benefit of the banks (the “Banks”) which are
parties to that certain Third Amended and Restated Credit Agreement dated as of
May __, 2009, by and among Debtor, Agent and the Banks (as amended from time to
time, the “Credit Agreement”), and Swap Banks (as defined in the Credit
Agreement), and expects to incur additional indebtedness to the Banks and the
Swap Banks, including, but not limited to, for the purpose of financing futures
hedging transactions in refined petroleum products; and
 
NOW, THEREFORE, it is agreed by and between the parties hereto as follows:
 
As additional security for any and all obligations, liabilities and indebtedness
of Debtor to Agent, the Banks and the Swap Banks (each as defined above), and
their affiliates, direct or indirect, now existing or hereafter arising, of
whatsoever kind or character, absolute or contingent, arising under or related
to the Credit Agreement and the Swap Contracts, including without limitation,
all Obligations (as defined in the Credit Agreement), obligations under the Swap
Contracts, and any and all renewals, extensions for any period, rearrangements
and modifications of any of the foregoing, the Debtor hereby pledges to grant a
security interest in and assign and transfer to Fortis Capital Corp., as Agent
for the Banks and the Swap Banks, hereinafter called the Secured Party, located
at [Three Stamford Plaza, 301 Tresser Boulevard, Stamford, CT 06901-3239], the
Account and all related monies, securities, instruments, documents, futures
contracts, open positions, together with the proceeds and products thereof, and
in any other property or funds which may hereafter accumulate or become
withdrawable from or paid out of the Account, including any balances which may
remain to the credit of the Account upon the closing thereof; subject, however,
to the prior payment of all indebtedness of the Debtor to ________________
solely with respect to the Account, as such may exist from time to time in the
Account, including fees and commissions which may have been incurred in
connection with Debtor’s transactions with ________________ solely with respect
to the Account, and further subject to ________________’ lien and the right of
foreclosure thereof in connection with any indebtedness of Debtor to
________________ solely with respect to the Account (including, but not limited
to, any right of ________________ to close out open positions of the Debtor
without prior demand for additional margin and without prior notice).  Except
for amounts owing to ________________ solely with respect to the Account,
________________ waives all rights of set-off, attachment and other similar
rights against the Account.
 
The Secured Party is hereby authorized and fully empowered, without further
authority from the Debtor, to receive any funds that may be due to the Debtor;
and, ________________ is hereby authorized and directed to pay to the Secured
Party such funds as the Secured Party shall request or demand of
________________ that may hereafter be withdrawable or payable out of the
Account, without the consent of or notice to, the Debtor.
 
If, at any time during the continuance of any futures contract or contracts in
the Account, ________________ may require additional margin with respect to such
contract or contracts, the Secured Party may, but shall not be obligated to,
advance to ________________ on behalf of the Debtor such amounts as may be
requested by ________________ or enter appropriate liquidating orders; provided,
however, that the Debtor shall in all respects remain liable to the Secured
Party for any amounts so advanced pursuant to the terms of any agreement entered
into between the Secured Party and the Debtor in connection with the
transactions covered by this Agreement.  Nothing contained herein shall be
construed to prevent or in any way limit the rights of ________________ to
liquidate the Account whenever, in ________________’ discretion,
________________ deems it necessary to protect its interests.
 
The Debtor hereby constitutes and appoints the Secured Party as its true, lawful
and irrevocable attorney to demand, receive and enforce payments and to give
receipts, releases and satisfactions for all monies payable to the Debtor, and
this may be done in the name of the Secured Party with the same force and effect
as the Debtor could do had this Agreement not been made.  Any and all monies or
payments which may be received by the Debtor, to which the Secured Party is
entitled under and by reason of this Agreement, will be received by the Debtor
as trustee for the Secured Party, and will be immediately delivered in kind to
the Secured Party without commingling.
 
Nothing herein contained shall be construed so as to prevent the Debtor from
remaining the owner, subject to the interest of the Secured Party as it may
appear, of the Account.  ________________ acknowledges that it is acting as
bailee in possession for the benefit of Secured Party.  Until the Secured Party
elects to the contrary and delivers notice of such election in writing to
________________, the Debtor may make such additional transactions in the
Account as ________________ shall be willing to accept for execution.  In the
event the Secured Party does make such election and does deliver such notice in
writing to ________________, the Debtor shall not thereafter execute any
transactions in the Account and ________________ shall not accept for execution
any such transactions without the concurrence of the Secured Party, except
transactions in liquidation of any then outstanding futures positions.  Upon
receipt by ________________ of notice of such election and if directed by the
Secured Party, ________________ will attempt to promptly cancel any open orders
which had been entered by the Debtor but had not yet been executed at the time
such notification is received.  If ________________ is unable to cancel such
orders before they are executed, the transactions will be considered valid and
binding on the Debtor and the Secured Party.  Notwithstanding any of the
foregoing to the contrary, however, under no circumstances shall any payments be
made from the Account to Debtor.  Rather, all payments shall be made to Secured
Party for the account of the Debtor.
 
Whenever the Secured Party deems it necessary for its protection, it shall be
entitled, without the consent or concurrence of, or prior notice to, the Debtor,
to direct ________________ to liquidate any or all then outstanding open
positions in the Account and to direct ________________ to pay to it, the
Secured Party, the credit balance as shall exist in the Account after such
liquidation and after the payment to ________________ of all indebtedness of the
Debtor to ________________ relating solely to the Account.
 
Any sums paid by ________________ from the Account to the Secured Party under
this Agreement shall be paid for the account of the Debtor and applied by the
Secured Party to the payment of any indebtedness secured hereby, including
principal and accrued interest, then owing by the Debtor to the Secured
Party.  The receipt or receipts of the Secured Party for such funds so paid to
it by ________________ shall as to ________________ operate as the receipt of
the Debtor as fully and as complete as if funds had been paid to the Debtor in
person and receipted for by the Debtor.
 
The Secured Party is hereby authorized and empowered to receive from
________________, and ________________ is authorized and directed to deliver to
the Secured Party, for its information, copies of the following written
documents: confirmations of all contracts executed for the account of the
Debtor, monthly statements of the Debtor, notices of liquidation sent to the
Debtor and copies of any written communications pertaining to the Account which
may be sent to the Debtor from time to time.
 
As between the Debtor and the Secured Party, this instrument shall remain in
full force and effect until cancelled in writing by the Secured Party.  Any
cancellation of this instrument shall be without effect as to ________________
until receipt by ________________ of written notice from the Secured Party
advising ________________ of the termination of said Agreement.
 
The Debtor hereby represents and warrants to the Secured Party that the Account
above assigned have not heretofore been alienated or assigned.
 
This Agreement shall be binding upon the Debtor and upon their administrators,
successors and assigns and it shall be binding upon and inure to the benefit of
any successors of the Secured Party and ________________.
 
This Agreement may be executed in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument.
 

3rd A&R Credit Agreement [Enserco] Exhibit N
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

Dated as of the _______ day of ________, 20__.
 
 
SECURED PARTY:
   
FORTIS CAPITAL CORP.
   
as Agent
 
By:
   
Name: 
     
Address:
 
15455 North Dallas Parkway
 
Suite 1400
 
Addison, Texas  75001
   
Attention:  Corey Hingson
   
Telephone:  (214) 866-2535
   
Facsimile:  (214) 969-9332

 
 

 
DEBTOR:
 
ENSERCO ENERGY INC.
   
a South Dakota corporation
   
By:
 
Name: 
   
Responsible Officer
   
Address:               350 Indiana Street, Suite 400
   
Golden, Colorado  80401
 

3rd A&R Credit Agreement
[Enserco]serco                                                                                                                                           Exhibit
N
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

ACKNOWLEDGMENT
 
TO:
Fortis Capital Corp.

 
 
15455 North Dallas Parkway

 
 
Suite 1400

 
 
Addison, Texas  75001

 
 
Attention:  Corey Hingson

 
 
Telephone:  (214) 866-2535

 
 
Facsimile:  (214) 969-9332

 
________________, Inc. located at ___________________________, hereby
acknowledges receipt of a copy of the above mentioned Agreement and agrees to
abide by the terms and conditions thereof to the extent of its obligations as
described therein.  No previous assignment or claims against the above described
Account has been received by the undersigned.
 

 
DATED as of the ____ day of ______________, 20__.
 

 
By:_________________________
 
Name:_______________________
 
Title:________________________
 

3rd A&R Credit Agreement
[Enserco]                                                                                                                                Exhibit
N
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
EXHIBIT O-1
 
NOTICE OF SUBSCRIPTION INCREASE
 
[Date]
 

 
Fortis Capital Corp.
 
15455 N. Dallas Parkway, Suite 1400
 
Addison, TX  75001
 
Attention:  Corey Hingson
 
The undersigned, Enserco Energy Inc. (the “Borrower”) refers to the Third
Amended and Restated Credit Agreement dated to be effective as of May __, 2009
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement,” with terms defined in the Credit Agreement and not otherwise defined
herein being used herein as therein defined) among the Borrower, Fortis Capital
Corp., as Agent, the Issuing Banks and Banks party thereto.  The Borrower hereby
notifies you, pursuant to Section 2.01A of the Credit Agreement, that it hereby
requests that the aggregate amount of the subscriptions of the Uncommitted Line
Portions under the Credit Agreement be increased and the Banks identified in (c)
below agree to make such subscriptions under the Credit Agreement, and in that
connection sets forth below the information relating to such proposed
Subscription Increase as required by Section 2.01A of the Credit Agreement:
 
(a)           the effective date of such increase of aggregate amount of the
Banks’ subscriptions is ________________;
 
(b)           the amount of the requested Subscription Increase is
$____________;
 
(c)           the Banks that have agreed with the Borrower to provide their
respective Subscription Increases are
_______________________________________________________ [INSERT NAMES OF BANKS
AND THEIR RESPECTIVE SUBSCRIPTION INCREASES]; and
 
(d)           set forth on Annex I attached hereto is the amount of the
respective subscriptions of all Banks as of the effective date of such
Subscription Increase.
 
Delivery of an executed counterpart of this Notice of Subscription Increase by
telecopier shall be effective as delivery of an original executed counterpart of
this Notice of Subscription Increase.
 

3rd A&R Credit Agreement
[Enserco]                                                                                                                                Exhibit
O-1
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
Very truly yours,
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

 

 
Approved and Consented to by:
 
FORTIS CAPITAL CORP.,
 
a Connecticut corporation
       By:
           
       Name:
                      
       Title:           
 

 
[ISSUING BANK],
 
a ____________________
 
By:           
 
Name:                      
 
Title:           
 

 
[ISSUING BANK],
 
a ____________________
 
By:           
 
Name:                      
 
Title:           
 

 
[ISSUING BANK],
 
a ____________________
 
By:           
 
Name:                      
 
Title:           
 

3rd A&R Credit Agreement
[Enserco]                                                                                                                                Exhibit
O-1
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

ANNEX I
 
TO
 
NOTICE OF SUBSCRIPTION INCREASE
 
(as of ______________, 20__)
 

 
 
Bank
 
Amount of Subscription
Percentage of Total Subscription
                                 
____________
100%

 

3rd A&R Credit Agreement
[Enserco]                                                                                                                                Annex
I
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
EXHIBIT O-2
 
NOTICE OF COMMITTED LINE PORTION INCREASE
 
[Date]
 

 
Fortis Capital Corp.
 
15455 N. Dallas Parkway, Suite 1400
 
Addison, TX  75001
 
Attention:  Corey Hingson
 
The undersigned, Enserco Energy Inc. (the “Borrower”) refers to the Third
Amended and Restated Credit Agreement dated to be effective as of May __, 2009
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement,” with terms defined in the Credit Agreement and not otherwise defined
herein being used herein as therein defined) among the Borrower, Fortis Capital
Corp., as Agent, the Issuing Banks and Banks party thereto.  The Borrower hereby
notifies you, pursuant to Section 2.01B of the Credit Agreement, that it hereby
notifies you that the aggregate amount of the subscriptions of the Uncommitted
Line Portions under the Credit Agreement shall be increased and the Banks
identified in (c) below shall make such subscriptions under the Credit
Agreement, and in that connection sets forth below the information relating to
such proposed Committed Line Portion Increase as required by Section 2.01B of
the Credit Agreement:
 
(a)           the effective date of such increase of aggregate amount of the
Banks’ subscriptions is ________________;
 
(b)           the amount of the Committed Line Portion Increase is
$____________;
 
(c)           the Banks that will provide their respective Committed Line
Portion Increases are _______________________________________________________
[INSERT NAMES OF BANKS AND THEIR RESPECTIVE COMMITTED LINE PORTION INCREASES];
and
 
(d)           set forth on Annex I attached hereto is the amount of the
respective subscriptions of all Banks as of the effective date of such Committed
Line Portion Increase.
 
Delivery of an executed counterpart of this Notice of Committed Line Portion
Increase by telecopier shall be effective as delivery of an original executed
counterpart of this Notice of Committed Line Portion Increase.
 

3rd A&R Credit Agreement
[Enserco]                                                                                                                                Exhibit
O-2
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
Very truly yours
     
ENSERCO ENERGY INC.,
 
a South Dakota corporation
     
By:
     
Name:
 
Responsible Officer

Approved and Consented to by:
 
FORTIS CAPITAL CORP.,
 
a Connecticut corporation
         By:           
         Name:
       Title:           

[ISSUING BANK],
 
a ____________________
 
By:           
Name:                      
Title:           

[ISSUING BANK],
 
a ____________________
 
By:           
Name:                      
Title:           

[ISSUING BANK],
 
a ____________________
 
By:           
Name:                      
Title:           

3rd A&R Credit Agreement
[Enserco]                                                                                                                                Exhibit
O-2
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

ANNEX I
 
TO
 
NOTICE OF COMMITTED LINE PORTION INCREASE
 
(as of ______________, 20__)
 

 
 
Bank
Amount of Committed Line Portion Increase
Total Committed Line Portion
Percentage of Total Committed Line Portion
                                             
____________
100%

3rd A&R Credit Agreement
[Enserco]                                                                                                                                Exhibit
O-2
011038.0122\517034.09
 
 
 
 

--------------------------------------------------------------------------------

 
 

EXHIBIT P

(AGENT BANK LETTERHEAD)
 
FORM OF AGENT CONFIRMATION OF
 
 
LETTER OF CREDIT ISSUANCE/ AMENDMENT APPROVAL
 
[Date]
 

 
To:  [Issuing Bank]
 
Re:  Confirmation of Approval
 
Dear [Issuing Bank]:
 
·  
Re:           Third Amended and Restated Credit Agreement, dated to be effective
as of __(as amended or supplemented from time to time, the “Agreement”), by and
among Enserco Energy Inc., (the “Borrower”), the Banks that from time to time
are parties thereto, and Fortis Capital Corp., as Agent

 
Pursuant to Section 3.02(a) of the Agreement, the Agent hereby confirms that the
[Issuance/Amendment] of the Letter of Credit requested by the Borrower as of
_________, 20__, pursuant to its submission of the [L/C Application/ LC
Amendment Application] attached hereto as Annex 1 is permitted in accordance
with the terms of the Agreement and, immediately prior to and after giving
effect to the Issuance of such Letter of Credit, no condition set forth in
Section 3.01(b) of the Agreement shall exist or result therefrom.
 

FORTIS CAPITAL CORP.,
 
a Connecticut corporation
 
    By:           
    Name:                      
    Title:           

 
 
 
 

--------------------------------------------------------------------------------

 
 

 
 
 
 

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