Common use of Loan and Lease Obligations Clause in Contracts

Loan and Lease Obligations. It will be necessary for SABINE from time to time during the term of this Agreement to incur Loan and Lease Obligations. SWEPCO recognizes that such Loan and Lease Obligations will also be required for reasonable replacements at the end of the useful life of certain of SABINE's equipment, for additions to certain of SABINE's equipment, for meeting payment obligations incurred by SABINE in connection with Loan and Lease Obligations and for maintaining working capital necessary for operating the Mine in the most cost effective manner. SWEPCO shall have the right to direct SABINE in incurring all such Loan and Lease Obligations; provided, however, that SABINE shall not be required to incur any Loan or Lease Obligation directed by SWEPCO if the terms thereof are less favorable to SABINE than the terms of a Loan or Lease Obligation which, for the same term, could be obtained by SABINE without such direction by SWEPCO. SWEPCO shall have the right to approve or disapprove any agreement in respect of any Loan or Lease Obligation which SABINE proposes to incur to carry out its obligations under this Agreement. SABINE shall submit to SWEPCO a summary of the terms and conditions of any such proposed Loan or Lease Obligation. Within thirty (30) days after receipt by SWEPCO of written notice from SABINE requesting approval or disapproval of such terms and conditions, SWEPCO shall give SABINE written notice of SWEPCO's approval or disapproval thereof. If SWEPCO fails to give such notice within such thirty (30) day period, SWEPCO shall be deemed to have disapproved the same. Upon disapproval by SWEPCO, SABINE shall promptly renegotiate and resubmit to SWEPCO any new or alternate proposed arrangement involving a Loan or Lease Obligation, and the same procedure mentioned above shall be followed. No such Loan or Lease Obligation shall be incurred or agreed to by SABINE without SWEPCO's advance approval. In connection with any financing pursuant to this Article VIII, SABINE, subject to SWEPCO's prior written approval, which approval shall not be unreasonably withheld, may create a security interest and/or grant a deed of trust or other appropriate lien, or any right of participation in respect thereof, on any or all assets of SABINE, including without limitation all or any portion of its rights hereunder, in favor of any lender or lessor to SABINE and/or any guarantor of any Loan or Lease Obligation of SABINE. SABINE shall have the right to pay dividends on its stock only from earned surplus. For this purpose, "earned surplus" shall mean without duplication net income for the most recent fiscal period and/or retained income since incorporation less dividends previously paid, as determined in accordance with generally accepted accounting principles and as certified to annually by SABINE's independent public accountants.

Loan and Lease Obligations. It will be necessary for SABINE from time Coteau to time during obtain loans and/or leases for the construction and equipping of Coteau's Mine, which shall be indebtedness or lease obligations of Coteau not guaranteed by North American Coal. If Dakota so requests, Coteau shall use its best efforts to obtain long-term loans and/or long-term leases (such loans and leases and such continued or additional loans or leases as may be necessitated by replacement of or addition to Coteau's · equipment, or by the expiration of any lease of equipment to Coteau prior to the expiration of this Agreement being referred to incur Loan herein collectively as the "Loans and Lease Obligations. SWEPCO recognizes that such Loan Leases'') in amounts sufficient for the following purposes: developing, equipping and Lease Obligations will also be required for reasonable replacements at the end operating of the useful life of certain of SABINECoteau's equipmentMine, for additions to certain of SABINE's equipmentincluding, for meeting payment obligations incurred by SABINE in connection with Loan without limitation, (a) developing roadways, (b) constructing tipples and Lease Obligations cleaning plants, (c) acquiring machinery and for (d) maintaining working capital necessary for operating the Mine in the most cost effective manner. SWEPCO shall have the right to direct SABINE in incurring all such Loan and Lease ObligationsCoteau's Mine; provided, however, that SABINE (i) the Loans and Leases and the amounts thereof must be approved by Dakota in its sole discretion and shall be made if directed by Dakota and (ii) if such Loans and Leases are not available to Coteau, or Dakota does not request that Coteau obtain the same or does not approve the same, Dakota shall assume the responsibility for obtaining the Loans and Leases for such amounts and on such terms as it shall reasonably determine to be necessary to meet the foregoing purposes. If Dakota has such responsibility, Dakota itself shall (w) provide the Loans and Leases, (x) arrange for Loans or Leases by Coteau from third persons, (y) direct Coteau to borrow or lease from third persons or (z) combine Dakota's Loans or Leases with those of third persons. If the Loans and Leases shall be arranged with third persons, Dakota shall have the right subsequently to discharge the Loans or Leases and substitute itself as lender or lessor for the balance of the term of such Loans or Leases. Any Loan or Lease provided, arranged for or directed by Dakota in the exercise of its rights under this Section 10.1 shall not be required to incur any Loan or Lease Obligation directed by SWEPCO if the terms thereof are less favorable to SABINE Coteau than the terms of a Loan or Lease Obligation which, for the same term, term which could be obtained by SABINE without such direction by SWEPCOCoteau directly. SWEPCO Dakota shall have the right to approve cause part or disapprove any agreement in respect all of any Loan or Lease Obligation which SABINE proposes to incur to carry out its obligations under this Agreement. SABINE shall submit Section 10.1 with respect to SWEPCO a summary of the terms and conditions of any Coteau's Mine to be performed by an Affiliate, but such proposed Loan or Lease Obligation. Within thirty (30) days after receipt performance by SWEPCO of written notice from SABINE requesting approval or disapproval of such terms and conditions, SWEPCO shall give SABINE written notice of SWEPCO's approval or disapproval thereof. If SWEPCO fails to give such notice within such thirty (30) day period, SWEPCO shall be deemed to have disapproved the same. Upon disapproval by SWEPCO, SABINE shall promptly renegotiate and resubmit to SWEPCO any new or alternate proposed arrangement involving a Loan or Lease Obligation, and the same procedure mentioned above shall be followed. No such Loan or Lease Obligation shall be incurred or agreed to by SABINE without SWEPCO's advance approval. In connection with any financing pursuant to this Article VIII, SABINE, subject to SWEPCO's prior written approval, which approval an Affiliate shall not be unreasonably withheld, may create a security interest and/or grant a deed of trust or other appropriate lien, or any right of participation in respect thereof, on any or all assets of SABINE, including without limitation all or any portion relieve Dakota of its rights hereunder, in favor of any lender or lessor to SABINE and/or any guarantor of any Loan or Lease Obligation of SABINE. SABINE shall have the right to pay dividends on its stock only from earned surplus. For this purpose, "earned surplus" shall mean without duplication net income responsibility for the most recent fiscal period and/or retained income since incorporation less dividends previously paid, as determined in accordance with generally accepted accounting principles arranging subsequent Loans and as certified to annually by SABINELeases for Coteau's independent public accountantsMine.