February 6, 2007
Black Hills Corporation
625 9th Street
Rapid City, South Dakota 57709
Attention: Messrs. Mark T. Thies and Garner M.
Anderson
Ladies and Gentlemen:
Black Hills Corporation (referred to
herein at times as ” you ” and the “
Company ”) have advised ABN AMRO BANK N.V. (“
ABN AMRO ”), CREDIT SUISSE, Cayman Islands Branch
(“ Credit Suisse ”), UNION BANK OF CALIFORNIA,
N.A. (“ Union Bank ”), and BMO CAPITAL MARKETS
FINANCING, INC. (“ BMO ” BMO, together with ABN
AMRO, Credit Suisse and Union Bank, each referred to herein at
times individually as an “ Institution ” and
collectively as the “ Institutions ”) that you
are seeking senior unsecured credit facilities consisting of (i) an
eighteen month acquisition facility (with a follow-on bridge
facility) on the terms and conditions attached as Exhibit A
to this Commitment Letter (the “ Term Sheet ”),
which forms an integral part of this Commitment Letter and is
incorporated herein by reference (referred to herein at times as
the “ Acquisition Facility ”) and (ii) a 364 day
backstop revolving credit facility to be generally consistent with
the terms and conditions in that certain Credit Agreement dated as
of May 5, 2005 by and among, inter alia , ABN AMRO, as
Agent, you and the various financial institutions party thereto as
“Banks” (as amended, supplemented or otherwise modified
from time to time prior to the date hereof, the “ Existing
Credit Agreement ”), but updated to reflect current
market conditions regarding pricing and other economic and
financial terms (referred to herein at times as the “
Backstop Facility ” the Acquisition Facility and the
Backstop Facility are referred to herein at times together as the
“ Facilities ”).
Each of the Institutions is pleased
to advise you it is willing, subject to the terms and conditions
contained in the Term Sheet (with respect to the Acquisition
Facility) and this Commitment Letter (with respect to the Backstop
Facility), to individually each commit (taken together, the “
Commitment ”) (i) to the Acquisition Facility, up to
the amount set forth opposite the name of such Institution in
Exhibit B attached hereto under the “Acquisition
Facility” heading appearing therein, and (ii) solely in the
event it is determined by ABN AMRO in consultation with the Company
that the required number of banks under the Existing Credit
Agreement are not willing to consent to consummation of (x) the
Acquisition Facility or the purchase and acquisition of assets from
the Target Companies (as defined below) or (y) transactions
undertaken by you to raise capital sufficient to consummate such
purchase and acquisition, to the Backstop Facility, up to the
amount set forth opposite the name of such Institution in
Exhibit B attached hereto under the “Backstop
Facility” heading appearing therein; accordingly, if such a
consent under the Existing Credit Facility is so delivered, the
commitment for the Backstop Facility shall thereby be automatically
terminated.
The proceeds of the Acquisition
Facility will be used to: (i) finance certain costs and expenses
related to the purchase and acquisition of all or substantially all
of the assets of Nebraska Gas, Iowa Natural Gas, Colorado Gas,
Kansas Gas and Colorado Electric (the “ Target
Companies ”), (ii) repay certain obligations of such
regulated utility assets, (iii) finance a portion of the purchase
price of such regulated utility assets, and (iv) finance certain
transaction and integration costs arising from the foregoing. If
the required bank votes are not received under the Existing Credit
Agreement and the Backstop Facility is consummated, the proceeds of
the Backstop Facility will be used to (x) refinance all
indebtedness outstanding under the Existing Credit Agreement, (y)
finance certain costs and expenses related to consummation of the
Backstop Facility and termination of the Existing Credit Agreement,
and (z) other uses of loan proceeds which are currently permitted
by the terms of the Existing Credit Agreement.
ABN AMRO will act as the
administrative agent (in such capacity, the “
Administrative Agent ”) and arranger in connection
with the Facilities.
The fees payable to ABN AMRO and the
other Institutions in connection with the Facilities and certain
fees payable to the Institutions are set forth in separate letters,
both of even date herewith (together, the “ Fee
Letters ”).
To assist the Institutions in their
respective syndication efforts, you agree to provide upon request
by any of them all information reasonably deemed necessary by any
of them to successfully complete the syndication of the
Facilities.
You hereby agree (and each of the
Institutions hereby agrees) ABN AMRO shall have the exclusive right
to arrange and syndicate the financing contemplated by the
Facilities and that no additional agents, co-agents or arrangers
will be appointed, or other titles allocated, without ABN
AMRO’s prior written consent; provided , (x) ABN
AMRO’s exclusive right to syndicate the Acquisition Facility
shall continue for the first ninety (90) days after the closing of
the Acquisition Facility, during which period any syndication of
the Acquisition Facility by ABN AMRO will be on a pro rata
basis among the Institutions based on the proportion of their
respective shares of the Commitment for the Acquisition Facility,
(y) thereafter, each Institution shall have the ability to assign
its portion of the shares of the Commitment for the Acquisition
Facility. You also agree that, without the consent of each
Institution, none of the Company nor any of its subsidiaries will,
directly or indirectly, through any officer, director, agent or
otherwise, solicit, initiate or knowingly encourage submission of
proposals or offers from any person or entity relating to the
financing contemplated by the Facilities, or participate in any
negotiations regarding or furnish to any other person or entity any
information with respect to, or otherwise cooperate in any way
with, or assist or participate in, facilitate or encourage any
effort or attempt by any other person or entity to do or seek any
of the foregoing. You will (a) provide each Institution with
sufficient information, including financial projections, to enable
such Institution to prepare an information package describing the
Company and its subsidiaries and (b) make the Company’s
management available for one or more banks’ meetings to be
held by ABN AMRO during the syndication process. Each Institution
shall be expressly permitted to distribute any and all documents
and information relating to the transactions contemplated hereby
and received from you or any other source to any potential lender,
participant or assignee on a confidential basis.
2
In additio
