Exhibit 99.4
ASSIGNMENT OF CREDIT AGREEMENT, NOTE,
LIENS, AND SECURITY DOCUMENTS
This ASSIGNMENT OF CREDIT AGREEMENT, NOTE, LIENS, AND SECURITY DOCUMENTS
dated as of October 1, 2002 (this Instrument), is made by and among AQUILA
ENERGY CAPITAL CORPORATION (Assignor), BLACK HILLS CORPORATION (Assignee),
XXXXXX RESOURCES CORPORATION (MRC) and XXXXXX OIL COMPANY (MOC and, together
with MRC, Borrower).
RECITALS:
WHEREAS, Borrower and Assignor are parties to that certain Credit Agreement
dated September 9, 1999, as amended by that certain First Amendment to Credit
Agreement dated November 21, 2000 and that Second Amendment to Credit Agreement
dated February 8, 2002 (as amended, the Credit Agreement), providing for,
among other things, loans to be made by Assignor to Borrower; and
WHEREAS, the loans made pursuant to the Credit Agreement are evidenced by
that certain Advancing Note dated September 9, 1999 made by Borrower payable to
the order of Assignor in the original principal amount of $60,000,000 (the
Note); and
WHEREAS, the payment of the Note and the performance of all obligations of
Borrower under the Credit Agreement are secured by certain security documents
and financing statements as described therein (as heretofore supplemented or
amended, collectively the Security Documents), including without limitation
the security documents listed on Schedule 1 attached hereto and made a part
hereof; and
WHEREAS, in connection with the Note and the Credit Agreement, Assignor has
received or otherwise benefited by the various other Loan Documents (as defined
in the Credit Agreement); and
WHEREAS, in connection with the requirements of the Credit Agreement,
Borrower has issued to Assignor 615,000 shares of common stock of Borrower (the
Borrower Stock); and
WHEREAS, Borrower has requested that Assignor surrender the Borrower Stock
to Borrower and assign Assigno's rights and interests in, to and under the
Credit Agreement, the Notes and the other Loan Documents, including without
limitation the Security Documents, to Assignee, and Assignee has agreed to
purchase such rights and interests, all on the terms and conditions provided
herein;
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto hereby act and agree as follows:
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Article I.
ASSIGNMENT OF ASSIGNED RIGHTS
Section 1.1 Assignment and Assumption of Assigned Rights; Conditions.
(a) Assignor, for and in consideration of the sum of $29,304,338.42 paid by
Assignee to Assignor, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby sell, transfer,
convey, assign, endorse, set over and deliver unto Assignee all of Assignor's
right, title and interest in the following:
(i) all indebtedness owing to Assignor under or pursuant to the Credit
Agreement, the Note and the other Loan Documents (collectively the
Assigned Indebtedness);
(ii) all liens, rights, titles, interests, privileges, claims,
demands, equities, charges and security interests of Assignor existing
under or as security for the Assigned Indebtedness, including without
limitation, those existing under or pursuant to the Security Documents and
all other mortgages, deeds of trust, security agreements, financing
statements, assignments of proceeds, indentures of trusts, assignments,
pledges and other documents or instruments securing the Assigned
Indebtedness (collectively the Assigned Liens); and
(iii) all other rights, benefits, remedies and privileges of Assignor
under or pursuant to the Credit Agreement, the Note, and the other Loan
Documents, including, without limitation, Assignor's rights under that
certain Intercreditor Agreement dated September 9, 1999 among Assignor,
Universal Compression, Inc., and Borrower;
LESS AND EXCEPT the Reserved Indemnities and the Reserved Interests (as
each such term is hereinafter defined).
TO HAVE AND TO HOLD the Assigned Indebtedness, the Assigned Liens, and all
such other rights, benefits, remedies and privileges. The Assigned Indebtedness,
the Assigned Liens and all such other rights, benefits, remedies and privileges,
less and except the Reserved Indemnities and the Reserved Interests, are
collectively referred to herein as the Assigned Rights.
(b) Assignee hereby accepts the foregoing assignment and assumes any and
all obligations of Assignor to Assignee to make loans or otherwise extend credit
in accordance with the terms of the Credit Agreement and the other Loan
Documents.
(c) Borrower hereby consents to the foregoing assignment and assumption.
BORROWER HEREBY RATIFIES AND CONFIRMS THE ASSIGNED INDEBTEDNESS, THE ASSIGNED
LIENS, THE OTHER ASSIGNED RIGHTS, AND THE LOAN DOCUMENTS.
Section 1.2 Representations and Warranties of Assignor. Assignor hereby
represents and warrants to Assignee that:
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(a) Assignor is the owner and holder of the Note and the Assigned
Indebtedness, the Assigned Liens, and the other Assigned Rights and has good
title thereto and full right, power and authority to transfer to Assignee all of
the Assigned Indebtedness, the Assigned Liens and the other Assigned Rights,
free of encumbrances, liens and claims thereto by any person, arising by,
through, or under Assignor, but not otherwise. Assignor has not made or
consented to any agreement that subordinates any of the Assigned Indebtedness to
any loans, notes or other indebtedness owed by Borrower to any other person.
(b) As of the date hereof, the aggregate unpaid principal balance which is
due and owing on the Note is equal to $29,211,338.
(c) The Base Agreement for Natural Gas Purchases dated September 9, 1999
between MOC and Aquila Energy Marketing Corporation (AEMC) is being terminated
contemporaneous with Assignor's receipt of the cash consideration prescribed in
Section 1.1(a) hereof, whereupon neither Borrower nor AEMC will have any
continuing rights or obligations thereunder.
(d) The ISDA Master Swap Agreement dated September 9, 1999 between MRC and
Aquila Merchant Services, Inc., as successor in interest to Aquila Risk
Management Corporation (AMS), and the Transactions entered into thereunder are
being terminated contemporaneous with the later of (i) Assignor's receipt of the
cash consideration prescribed in Section 1.1(a) hereof and (ii) the execution
and delivery of the related Termination of Agreement and Mutual Release between
MRC and AMS and AMS's receipt of the cash consideration prescribed therein,
whereupon neither MRC nor AMS will have any continuing rights or obligations
thereunder.
(e) The ISDA Master Swap Agreement dated September 9, 1999 between MOC and
AMS, and the Transactions entered into thereunder are being terminated
contemporaneous with the later of (i) Assignor's receipt of the cash
consideration prescribed in Section 1.1(a) hereof and (ii) the execution and
delivery of the related Termination of Agreement and Mutual Release between MOC
and AMS and AMS's receipt of the cash consideration prescribed therein,
whereupon neither MOC nor AMS will have any continuing rights or obligations
thereunder.
(f) The Borrower Stock being surrendered to Borrower pursuant to
Section 1.61.7 below is owned solely by Assignor, and is free and clear of all
liens, claims and encumbrances arising by, through, or under Assignor, but not
otherwise.
Section 1.3 Representation and Warranty of Assignee. Assignee hereby
represents and warrants to Assignor that Assignee has made an independent
decision to enter into this Instrument, without reliance on any representation,
warranty, covenant or undertaking by Assignor, whether written, oral or
implicit, other than as expressly set out herein.
Section 1.4 Representations and Warranties of Borrower. Borrower hereby
represents and warrants to Assignor and Assignee that, as of the date hereof:
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(a) There are no offsets, defenses or counterclaims against the enforcement
of the Assigned Indebtedness, the Assigned Liens or the other Assigned Rights,
whether held by Assignor or Assignee, and the Assigned Indebtedness, the
Assigned Liens and the other Assigned Rights are in full force and effect.
(b) As of the date hereof, the aggregate unpaid principal balance which is
due and owing on the Note is equal to $29,211,338.
(c) No release or subordination relating to the Assigned Liens has been
executed. Borrower has not subordinated (or consented to the subordination of)
the Assigned Indebtedness to any other indebtedness owing to any person.
(d) No Unmatured Event of Default or Event of Default (as defined in the
Credit Agreement) has occurred and is continuing other than the Unmatured Events
of Default and/or the Events of Default disclosed on Schedule 2 attached hereto.
(e) Borrower has not entered into any amendments or modifications to the
Credit Agreement, the Notes or any other Loan Document prior to the date hereof
other than the First Amendment to Credit Agreement and Second Amendment to
Credit Agreement described above (the Amendments), and Borrower has received
no waivers (other than those which no longer remain in effect or those contained
in any Amendment) with respect to any of the Loan Documents other than the
waivers disclosed on Schedule 3 attached hereto.
(f) The Base Agreement for Natural Gas Purchases dated September 9, 1999
between MOC and AEMC is being terminated contemporaneous with Assignor's receipt
of the cash consideration prescribed in Section 1.1(a) hereof, whereupon neither
Borrower nor AEMC will have any continuing rights or obligations thereunder.
(g) The ISDA Master Swap Agreement dated September 9, 1999 between MRC and
AMS, and the Transactions entered into thereunder are being terminated
contemporaneous with the later of (i) Assignor's receipt of the cash
consideration prescribed in Section 1.1(a) hereof and (ii) the execution and
delivery of the related Termination of Agreement and Mutual Release between MRC
and AMS and AMS's receipt of the cash consideration prescribed therein,
whereupon neither MRC nor AMS will have any continuing rights or obligations
thereunder.
(h) The ISDA Master Swap Agreement dated September 9, 1999 between MOC and
AMS, and the Transactions entered into thereunder are being terminated
contemporaneous with the later of (i) Assignor's receipt of the cash
consideration prescribed in Section 1.1(a) hereof and (ii) the execution and
delivery of the related Termination of Agreement and Mutual Release between MOC
and AMS and AMS's receipt of the cash consideration prescribed therein,
whereupon neither MOC nor AMS will have any continuing rights or obligations
thereunder.
Section 1.5 Representations and Warranties by each Party. Each
party hereto represents and warrants the following to the other parties:
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(a) Authority; Execution. The party has all requisite power and authority
to execute this Instrument and consummate the transactions contemplated hereby.
The execution, delivery, and performance of this Instrument and the consummation
of the transactions contemplated hereby on the part of the party have been duly
and validly authorized by all necessary action on the part of such party.
(b) No Conflict. The execution, delivery and performance by the party of
this Instrument does not and will not conflict with or violate any provision of
its respective articles of incorporation, bylaws or other organizational
documents or any other material agreement, contract or instrument to which it is
a party.
Section 1.6 Endorsement of Note. Upon the execution of this Instrument,
Assignor shall deliver the Note to Assignee, which Assignor shall have endorsed
as follows: Pay to the order of Black Hills Corporation, without any warranty,
representation or recourse whatsoever, express or implied, whether statutory or
otherwise, other than as expressly set forth in that certain Assignment of
Credit Agreement, Note, Liens and Security Documents dated as of October 1,
2002, by and among Aquila Energy Capital Corporation, Black Hills Corporation,
Xxxxxx Resources Corporation and Xxxxxx Oil Company.
Section 1.7 Surrender of Stock. Assignor hereby assigns to Xxxxxx the
Borrower Stock. Upon the execution of this Instrument, Assignor shall surrender
to Borrower all shares of Borrower Stock, which Borrower shall cancel. Upon such
surrender by Assignor, Assignor shall have no further rights with respect to the
Borrower Stock, or with respect to any other stock of or interest in Borrower.
Section 1.8 Delivery of Insurance Certificates. Upon the execution of this
Instrument, Borrower shall deliver to Assignee the certificates of insurance
required by Section 7.1(p) of the Credit Agreement, showing Assignee as a loss
payee and an additional party insured as its interest may appear.
Section 1.9 Reserved Indemnities and Reserved Interests. Notwithstanding
any other provision hereof or in any other agreement: (a) Borrower shall remain
fully liable to Assignor and its shareholders, officers, directors, attorneys,
agents and representatives (collectively the ndemnified Assignor Parties)
with respect to all valid and existing obligations and liabilities of Borrower
to provide indemnification to the Indemnified Assignor Parties pursuant to the
Credit Agreement, which obligations and liabilities shall survive the execution
and delivery of this Instrument and any subsequent amendment, restatement or
termination of the Credit Agreement (collectively, the Reserved Indemnities),
and such Reserved Indemnities: (x) shall be and are hereby excepted and reserved
from the Assigned Rights and (y) are not included among any of the liabilities
or obligations released by Assignor pursuant to Section 1.11 hereof; and
(b) Assignor hereby also excepts from the Assigned Rights all of the rights
under the Agency Agreement identified in Section 1.2(c), the Base Agreement for
Natural Gas Purchases identified in Section 1.2(d) and the ISDA Master Swap
Agreements identified in Sections 1.2(e) and (f), all of which are being
terminated as provided herein; as well as the Borrower Stock that is being
surrendered to Borrower pursuant to Section 1.7 hereof (collectively, the
Reserved Interests).
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Section 1.10 Release by Borrower. To induce Assignor to sell, and Assignee
to purchase the Assigned Rights, and at the special insistence and request of
Assignor and Assignee, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower hereby fully
releases and discharges Assignor and its successors and assigns (including but
not limited to Assignee) and their respective officers, directors, employees,
representatives, agents and affiliates, from all claims, demands, causes of
action, liabilities or other obligations (Claims) of any kind whatsoever
(INCLUDING, WITHOUT LIMITATION, OFFSETS, REDUCTIONS, REBATEMENTS OR CLAIMS OF
USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY
PERSON HEREBY INDEMNIFIED), whether known or unknown and whether now existing or
hereafter asserted, to the extent that any such Claims arise from or are related
to events or circumstances occurring or existing on or before the date hereof
and are in any way related to the Notes, the Credit Agreement, any other Loan
Documents, or any of the transactions provided for thereby. The foregoing
release and discharge shall be deemed to be effective immediately following the
assignment and assumption effected by Article I hereof, subject to the
provisions of Section 2.6, and as part of the foregoing release, Borrower hereby
releases Assignor from any of its obligations and commitments to make loans or
otherwise extend credit under the Credit Agreement, provided that such release
shall not impair the assumption by Assignee contained in Section 1.1(b) hereof.
Section 1.11 Release by Assignor. To induce Assignee to purchase the
Assigned Rights, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby fully releases and
discharges Borrower and Assignee, their respective successors and assigns, and
their respective officers, directors, employees, representatives, agents and
affiliates, from all Claims of any kind whatsoever, whether known or unknown and
whether now existing or hereafter asserted, to the extent that any such Claims
arise from or are related to events or circumstances occurring or existing on or
before the date hereof and are in any way related to the Notes, the Credit
Agreement, any other Loan Documents, or any of the transactions provided for
thereby, subject to the provisions of Section 1.13 below, and except for:
(a) any claims, causes of action and other rights of Assignor against Borrower
reserved by Assignor pursuant to Section 1.9, above, and (b) any obligations of
Assignee to Assignor expressly created pursuant to this Instrument.
Section 1.12 Release by Assignee. To induce Assignor to sell and transfer
the Assigned Rights, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Assignee hereby fully releases
and discharges Assignor, its successors and assigns, and their respective
officers, directors, employees, representatives, agents and affiliates, from all
Claims of any kind whatsoever, whether known or unknown and whether now existing
or hereafter asserted, to the extent that any such Claims arise from or are
related to events or circumstances occurring or existing on or before the date
hereof and are in any way related to the Notes, the Credit Agreement, any other
Loan Documents, or any of the transactions provided for thereby, except for any
Claims arising from or related to any obligations of Assignor to Assignee
expressly created pursuant to this Instrument, including, without limitation,
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any Claims arising from any breach by Assignor of any of its representations,
warranties, covenants or agreements hereunder.
Section 1.13 Continuing Indebtedness. The Assigned Indebtedness is
continuing indebtedness, and nothing herein contained shall be construed to
cause or deem any of the Assigned Indebtedness to be paid, or to release or
terminate any of the Assigned Liens (or any other lien securing any of the
Assigned Indebtedness).
Section 1.14 Amendment to Mortgage. Borrower and, at Assignor's request,
Assignor, will execute an amendment to the Deed of Trust, Mortgage, Security
Agreement, Financing Statement and Assignment of Production from MOC to Xxx-Xxx
Choo, Trustee for the benefit if Aquila (the Mortgage) in form and substance
mutually satisfactory, reflecting the assignment of the Mortgage to Assignee
within two business days after Assignee has provided to Borrower (and to
Assignor, if Assignor is to be a party to such amendment) a mutually acceptable
form of such amendment.
Section 1.15 Termination of Agency Agreement. The Agency Agreement dated
September 9, 1999 between Borrower and Assignor is hereby terminated
contemporaneous with Assignor's receipt of the cash consideration prescribed in
Section 1.1(a) hereof, whereupon neither Borrower nor Assignor will have any
continuing rights or obligations thereunder.
Section 1.16 Additional Documents. Assignor will from time to time, at the
reasonable request of Assignee and upon payment of Assignor's expenses, execute
and deliver to Assignee any documents which are necessary or desirable to carry
out more effectively the purposes hereof, including without limitation, any
financing statements or assignments, properly completed (and acknowledged when
required).
Article II.
MISCELLANEOUS
Section 2.1 Addresses. For the purposes hereof, the addresses of the
parties shall be as shown beside their signatures hereto.
Section 2.2 Choice of Law. This Instrument shall be governed by the
internal laws of the State of Texas, without giving effect to that state's
choice of law rules.
Section 2.3 Counterparts. This Instrument may be executed by the different
parties hereto in separate counterparts. All of such counterparts together
constitute one and the same instrument.
Section 2.4 Successors and Assigns. The terms, provisions, covenants and
conditions hereof shall be binding upon the successors and assigns of the
parties hereto, and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
Section 2.5 Entire Agreement. THIS WRITTEN INSTRUMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY
NOT BE CONTRADICTED BY
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EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 2.6 Effective Date. Notwithstanding anything else herein to the
contrary, this instrument shall not become effective unless and until the cash
consideration required to be paid by Assignee to Assignor pursuant to
Section 1.1 (a) hereof has been received by Assignor.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have each executed this Instrument
on the dates set forth in their respective acknowledgments below to be effective
for all purposes as of the date first above written.
Address of Assignor is: AQUILA ENERGY CAPITAL CORPORATION
909 Xxxxxx, Suite 1850
Two Houston Center By:
Xxxxxxx, Xxxxx 00000 Name:
Xx. Xxx-Xxx Xxxx Title:
Address of Assignee is: BLACK HILLS CORPORATION
X.X. Xxx 0000 (57709-1400)
000 Xxxxx Xx.
Xxxxx Xxxx, XX 00000 By:
Xxxxx X. Xxxxx Name: _
Title:
Address of Borrower is: XXXXXX RESOURCES CORPORATION
000 00XX Xxxxxx, Xxxxx 0000 By:
Xxxxxx, Xxxxxxxx 00000 Name:
Xx. Xxxxxx X. Xxxxxx, Xx. Title:
XXXXXX OIL COMPANY
By:
Name:
Title:
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ACKNOWLEDGMENT
(Assignor)
XXXXX XX XXXXXXXX
XXXX XXX XXXXXX XX XXXXXX
The foregoing instrument was acknowledged before me this 1st day of
October, 2002, by Xxxxxxx X. Xxxxx, Vice President of Aquila Energy Capital
Corporation.
Witness my hand and official seal.
________________________________
Notary Public
Name: Xxxxxx X. Xxxxxx
My commission expires: January 20, 2006
(NOTARIAL SEAL)
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ACKNOWLEDGMENTS
(Assignee)
XXXXX XX XXXXXXXX
XXXX XXX XXXXXX XX XXXXXX
The foregoing instrument was acknowledged before me this 1st day of
October, 2002, by Xxxxx X. Xxxxx, Vice President/Fuel Resources of Black Hills
Corporation
Witness my hand and official seal.
_________________________________
Notary Public
Name: Xxxxxx X. Xxxxxx
My commission expires: January 20, 2006
(NOTARIAL SEAL)
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ACKNOWLEDGMENT
(Borrower)
XXXXX XX XXXXXXXX
XXXX XXX XXXXXX XX XXXXXX
The foregoing instrument was acknowledged before me this 1st day of
October, 2002, by Xxx X. Xxxx, Executive Vice President of Xxxxxx Resources
Corporation.
Witness my hand and official seal.
_________________________________
Notary Public
Name: Xxxxxx X. Xxxxxx
My commission expires: January 20, 2006
(NOTARIAL SEAL)
XXXXX XX XXXXXXXX
XXXX XXX XXXXXX XX XXXXXX
The foregoing instrument was acknowledged before me this 1st day of
October, 2002, by Xxx X. Xxxx, Executive Vice President Xxxxxx Oil Company.
Witness my hand and official seal.
_______________________________
Notary Public
Name: Xxxxxx X. Xxxxxx
My commission expires: January 20, 2006
(NOTARIAL SEAL)
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SCHEDULE 1
To Assignment of Credit Agreement, Note, Liens and Security Documents
SECURITY DOCUMENTS
[See attached]
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SCHEDULE 2
To Assignment of Credit Agreement, Note, Liens and Security Documents
EVENTS OF DEFAULT AND UNMATURED EVENTS OF DEFAULT
1. Borrower is not in full compliance with the covenant set forth in Section
7.1(k) [timely payment of trade creditors].
2. Borrower is not in compliance with requirements set forth in Section
10.1(b) [projected net revenues].
3. Borrower is not in compliance with requirements set forth in Section
10.1(g) [P.I.T. lien].
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SCHEDULE 3
To Assignment of Credit Agreement, Note, Liens and Security Documents
WAIVERS
Assignor has heretofore waived Borrower's deficiencies set forth in
Schedule 2, or agreed to refrain from taking action with respect thereto for a
period of time.
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