-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Eq8pBFs3KLdXQ50WNWtXu+V5b7gunhx7hgoXC2oq7fwGoP90BD74DDSlN5nyQ5/s h6dk7EReN+ejFhEpu7qp3w== 0001116679-03-000221.txt : 20030210 0001116679-03-000221.hdr.sgml : 20030210 20030210172419 ACCESSION NUMBER: 0001116679-03-000221 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20030210 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHWESTERN CORP CENTRAL INDEX KEY: 0000073088 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 460172280 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10499 FILM NUMBER: 03548057 BUSINESS ADDRESS: STREET 1: 125 S DAKOTA AVENUE STREET 2: SUITE 1100 CITY: SIOUX STATE: SD ZIP: 57104 BUSINESS PHONE: 6059782908 MAIL ADDRESS: STREET 1: 125 S DAKOTA AVENUE STREET 2: SUITE 1100 CITY: SIOUX STATE: SD ZIP: 57104 FORMER COMPANY: FORMER CONFORMED NAME: NORTHWESTERN PUBLIC SERVICE CO DATE OF NAME CHANGE: 19920703 8-K 1 nw8k.txt DATE OF REPORT: FEB. 10. 2003 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 February 10, 2002 - -------------------------------------------------------------------------------- Date of Report NORTHWESTERN CORPORATION - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) DELAWARE - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 0-692 46-0172280 - -------------------------------------------------------------------------------- (Commission File No.) (IRS Employer Identification Number) 125 South Dakota Avenue, Suite 1100 Sioux Falls, South Dakota 57104 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (605) 978-2908 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Item 5. OTHER EVENTS - ------- On December 17, 2002, NorthWestern Corporation (the "Company") entered into a new $390.0 million senior secured credit agreement with Credit Suisse First Boston to replace its existing $280.0 million credit agreement that would have expired February 14, 2003 (subject to the Company's right to convert up to $225.0 million of the amount outstanding as of February 11, 2003 into a term loan expiring on February 14, 2004), with funding thereunder conditional on, among other things, regulatory approval from the Montana Public Service Commission (the "MPSC"). On January 27, 2003, the Company received regulatory approval from the MPSC. On February 10, 2003, NorthWestern announced that it had closed the new credit facility, and that Credit Suisse First Boston had funded the $390.0 million term loan, of which $259.6 million was used to repay the amounts outstanding under the existing $280.0 million credit agreement. The new credit agreement provides a senior secured term loan facility that matures in December 2006. The new senior credit facility is secured by $280.0 million in aggregate principal amount of First Mortgage Bonds (the "Montana Bonds") issued under the Company's First Mortgage and Deed of Trust (the "Montana Mortgage"), which grants a first mortgage in the electric and natural gas assets of the Company's NorthWestern Energy-Montana division, and $110.0 million in aggregate principal amount of First Mortgage Bonds (the "South Dakota Bonds") issued under the Company's General Mortgage Indenture and Deed of Trust, which grants a first mortgage in the electric and natural gas assets of the Company's NorthWestern Energy-SD/NE division. The new credit agreement contains a number of restrictive covenants, including restrictions on additional indebtedness, liens, sales of assets or mergers, and sale-leasebacks. The new credit agreement also contains several financial covenants, as specifically defined in the loan documents, including (a) a minimum net worth test, (b) a total capitalization test, (c) minimum utility business EBITDA to interest expense ratios, and (d) a maximum leverage (total funded debt to utility business EBITDA) ratio. Under the terms of the new credit agreement, the Company may pay dividends so long as it maintains compliance with the credit agreement. The press release announcing the closing of the new senior secured credit facility is included as Exhibit 99.1 hereto and is incorporated herein by reference. The credit agreement under the new senior secured credit facility is included as Exhibit 99.2 hereto, the first amendment to the credit agreement is included as Exhibit 99.3 hereto and the second amendment to the credit agreement is included as Exhibit 99.4 hereto. The supplemental indenture governing the Montana Bonds is included as Exhibit 4.2 hereto and the supplemental indenture governing the South Dakota bonds is included as Exhibit 4.3 hereto. Included as Exhibit 4.1 hereto is a supplemental indenture to the Montana Mortgage, by which the Company assumed the obligations under the Montana Mortgage. A bond collateral agreement, which governs the deposit of the Montana Bonds and the South Dakota Bonds with the collateral agent, as security for the new senior credit facility, and sets forth other rights and responsibilities of the collateral agent, is included as Exhibit 99.5 hereto. On February 6, 2003, the Company issued a press release announcing that its Board of Directors had deferred a decision on the Company's common stock dividend. The press release is included as Exhibit 99.6 hereto and is incorporated herein by reference. 1 Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, AND EXHIBITS -- (c) Exhibits -------- Exhibit Number Description - ------- ----------- 4.1 * Twenty-second Supplemental Indenture, dated as of November 15, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1945, from the Company (as successor thereunder to NorthWestern Energy, L.L.C., in turn successor to The Montana Power Company) to the trustees named therein. 4.2 * Twenty-third Supplemental Indenture, dated as of February 1, 2003, to the Mortgage and Deed of Trust, dated as of October 1, 1945, from the Company (as successor thereunder to NorthWestern Energy, L.L.C., in turn successor to The Montana Power Company) to the trustees named therein. 4.3 * Supplemental Indenture, dated as of February 1, 2003, to the General Mortgage Indenture and Deed of Trust, dated as of August 1, 1993, between the Company and JPMorgan Chase Bank (as successor thereunder to The Chase Manhattan Bank (National Association)), as trustee 99.1 * Press Release of NorthWestern Corporation, dated February 10, 2003 99.2 * Credit Agreement, dated as of December 17, 2002, among the Company, the lending institutions from time to time party thereto, and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent 99.3 * Amendment No. 1 to Credit Agreement, dated as of January 8, 2003, among the Company, the lending institutions from time to time party thereto, and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent 99.4 * Amendment No. 2 to Credit Agreement, dated as of February 10, 2003, among the Company, the lending institutions from time to time party thereto, and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent 99.5 * Bond Collateral Agreement, dated as of February 10, 2003, between the Company and Credit Suisse First Boston, acting through its Cayman Islands Branch, as collateral agent 99.6 * Press Release of NorthWestern Corporation, dated February 6, 2003 - ----------- * Filed herewith. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: February 10, 2003 NORTHWESTERN CORPORATION By: /s/ Kipp D. Orme ------------------------------------ Kipp D. Orme Vice President and Chief Financial Officer 3 EXHIBIT INDEX Exhibit Number Description - ------- ----------- 4.1 * Twenty-second Supplemental Indenture, dated as of November 15, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1945, from the Company (as successor thereunder to NorthWestern Energy, L.L.C., in turn successor to The Montana Power Company) to the trustees named therein. 4.2 * Twenty-third Supplemental Indenture, dated as of February 1, 2003, to the Mortgage and Deed of Trust, dated as of October 1, 1945, from the Company (as successor thereunder to NorthWestern Energy, L.L.C., in turn successor to The Montana Power Company) to the trustees named therein. 4.3 * Supplemental Indenture, dated as of February 1, 2003, to the General Mortgage Indenture and Deed of Trust, dated as of August 1, 1993, between the Company and JPMorgan Chase Bank (as successor thereunder to The Chase Manhattan Bank (National Association)), as trustee 99.1 * Press Release of NorthWestern Corporation, dated February 10, 2003 99.2 * Credit Agreement, dated as of December 17, 2002, among the Company, the lending institutions from time to time party thereto, and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent 99.3 * Amendment No. 1 to Credit Agreement, dated as of January 8, 2003, among the Company, the lending institutions from time to time party thereto, and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent 99.4 * Amendment No. 2 to Credit Agreement, dated as of February 10, 2003, among the Company, the lending institutions from time to time party thereto, and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent 99.5 * Bond Collateral Agreement, dated as of February 10, 2003, between the Company and Credit Suisse First Boston, acting through its Cayman Islands Branch, as collateral agent 99.6 * Press Release of NorthWestern Corporation, dated February 6, 2003 - ----------- * Filed herewith. 4 EX-4 3 ex4-1.txt EX. 4.1: 22ND SUPPLEMENTAL INDENTURE Execution Version - -------------------------------------------------------------------------------- NORTHWESTERN CORPORATION (SUCCESSOR TO NORTHWESTERN ENERGY, L.L.C., FORMERLY KNOWN AS THE MONTANA POWER, L.L.C.) TO THE BANK OF NEW YORK AND DOUGLAS J. MacINNES As Trustees under Mortgage and Deed of Trust, dated as of October 1, 1945, with NorthWestern Energy, L.L.C. (formerly known as The Montana Power, L.L.C., successor by merger to The Montana Power Company) ---------------------------------------------------------- TWENTY-SECOND SUPPLEMENTAL INDENTURE Providing, among other things, for the assumption by NorthWestern Corporation of the due and punctual payment of all Bonds and performance and observance of all covenants and conditions of NorthWestern Energy, L.L.C. under such Mortgage and Deed of Trust, as amended and supplemented. ---------------------------------------------------------- Dated as of November 15, 2002 - -------------------------------------------------------------------------------- TWENTY-SECOND SUPPLEMENTAL INDENTURE ---------------------------------------------------------- THIS TWENTY-SECOND SUPPLEMENTAL INDENTURE, dated as of November 15, 2002, between NORTHWESTERN CORPORATION, a corporation duly incorporated and existing under the laws of the State of Delaware (hereinafter called the "Company"), having its principal office at 125 S. Dakota Avenue, Suite 1100, Sioux Falls, South Dakota 57104, and THE BANK OF NEW YORK (hereinafter called the "Corporate Trustee"), a corporation of the State of New York, whose principal corporate trust office is located at 101 Barclay Street, New York, New York 10286 (successor to MORGAN GUARANTY TRUST COMPANY OF NEW YORK) (formerly Guaranty Trust Company of New York), and DOUGLAS J. MACINNES, whose post office address is c/o The Bank of New York, 101 Barclay Street, New York, New York 10286 (successor to Arthur E. Burke, Karl R. Henrich, H.H. Gould, R. Amundsen, P.J. Crowley and W.T. Cunningham) (said Douglas J. MacInnes being hereinafter sometimes called the "Co-Trustee", and the Corporate Trustee and the Co-Trustee being hereinafter together sometimes called the "Trustees"), as Trustees under the Mortgage and Deed of Trust, dated as of October 1, 1945 (hereinafter called the "Mortgage" and, together with any indentures supplemental thereto, the "Indenture"), which Mortgage was executed and delivered by The Montana Power Company, a corporation of the State of New Jersey (hereinafter called the "Company - New Jersey"), as predecessor by merger to NorthWestern Energy, L.L.C. (hereinafter called "NorthWestern Energy"), formerly known as The Montana Power, L.L.C., a limited liability company of the State of Montana (successor by merger to The Montana Power Company, a corporation of the State of Montana (hereinafter called the "Company-Montana")), to Guaranty Trust Company of New York and Arthur E. Burke, as Trustees, to secure the payment of bonds issued or to be issued under and in accordance with the provisions of the Mortgage, reference to which Mortgage is hereby made, this instrument (hereinafter called the "Twenty-second Supplemental Indenture") being supplemental thereto; WHEREAS, by the Mortgage, the Company-New Jersey covenanted that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Indenture and to make subject to the lien of the Indenture any property thereafter acquired, made or constructed and intended to be subject to the lien thereof; and WHEREAS, the Company-New Jersey executed and delivered to the Trustees its First Supplemental Indenture, dated as of May 1, 1954 (hereinafter called the "First Supplemental Indenture") and its Second Supplemental Indenture, dated as of April 1, 1959 (hereinafter called the "Second Supplemental Indenture"); and WHEREAS, the Company-New Jersey was merged into the Company-Montana on November 30, 1961, and to evidence the succession of the Company-Montana to the Company-New Jersey and the assumption by the Company-Montana of the covenants and conditions of the Company-New Jersey in the bonds and in the Indenture contained and to enable the Company-Montana to have and exercise the powers and rights of the Company-New Jersey under the Indenture in accordance with the terms thereof, the Company-Montana executed and delivered to the Trustees its Third Supplemental Indenture, dated as of November 30, 1961 (hereinafter called the "Third Supplemental Indenture"); and WHEREAS, the Company-Montana executed and delivered to the Trustees its Fourth Supplemental Indenture, dated as of April 1, 1970 (hereinafter called the "Fourth Supplemental Indenture"); its Fifth Supplemental Indenture, dated as of April 1, 1971 (hereinafter called the "Fifth Supplemental Indenture"); its Sixth Supplemental Indenture, dated as of March 1, 1974 (hereinafter called the "Sixth Supplemental Indenture"); its Seventh Supplemental Indenture, dated as of December 1, 1974 (hereinafter called the "Seventh Supplemental Indenture"); its Eighth Supplemental Indenture, dated as of July 1, 1975 (hereinafter called the "Eighth Supplemental Indenture"); its Ninth Supplemental Indenture, dated as of December 1, 1975 (hereinafter called the "Ninth Supplemental Indenture"); its Tenth Supplemental Indenture, dated as of January 1, 1979 (hereinafter called the "Tenth Supplemental Indenture"); its Eleventh Supplemental Indenture, dated as of October 1, 1983 (hereinafter called the "Eleventh Supplemental Indenture"); its Twelfth Supplemental Indenture, dated as of January 1, 1984 (hereinafter called the "Twelfth Supplemental Indenture"); its Thirteenth Supplemental Indenture, dated as of December 1, 1991 (hereinafter called the "Thirteenth Supplemental Indenture"); its Fourteenth Supplemental Indenture, dated as of January 1, 1993 (hereinafter called the "Fourteenth Supplemental Indenture"); its Fifteenth Supplemental Indenture, dated as of March 1, 1993 (hereinafter called the "Fifteenth Supplemental Indenture"); its Sixteenth Supplemental Indenture, dated as of May 1, 1993 (hereinafter called the "Sixteenth Supplemental Indenture"); its Seventeenth Supplemental Indenture, dated as of December 1, 1993 (hereinafter called the "Seventeenth Supplemental Indenture"); its Eighteenth Supplemental Indenture, dated as of August 5, 1994 (hereinafter called the "Eighteenth Supplemental Indenture"); its Nineteenth Supplemental Indenture, dated as of December 16, 1999 (hereinafter called the "Nineteenth Supplemental Indenture"); and its Twentieth Supplemental Indenture, dated as of November 1, 2001 (hereinafter called the "Twentieth Supplemental Indenture"); and WHEREAS, the Mortgage and the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth and Twentieth Supplemental Indentures were recorded in the official records of various counties and states as required by the Indenture; and WHEREAS, an instrument dated March 15, 1955 was executed by the Company-New Jersey appointing Karl R. Henrich as Co-Trustee in succession to said Arthur E. Burke, resigned, under the Mortgage and by Karl R. Henrich accepting the appointment as Co-Trustee under the Mortgage in succession to said Arthur E. Burke, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and 2 WHEREAS, an instrument dated June 29, 1962 was executed by the Company-Montana appointing H.H. Gould as Co-Trustee in succession to said Karl R. Henrich, resigned, under the Mortgage and by H.H. Gould accepting the appointment as Co-Trustee under the Mortgage in succession to said Karl R. Henrich, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, an instrument dated June 22, 1973 was executed by the Company-Montana appointing R. Amundsen as Co-Trustee in succession to said H.H. Gould, resigned, under the Mortgage and by R. Amundsen accepting the appointment as Co-Trustee under the Mortgage in succession to said H.H. Gould, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, an instrument dated July 1, 1986 was executed by the Company-Montana appointing P.J. Crowley as Co-Trustee in succession to said R. Amundsen, resigned, under the Mortgage and by P.J Crowley accepting the appointment as Co-Trustee under the Mortgage in succession to said R. Amundsen, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, by the Eighteenth Supplemental Indenture, the Company-Montana appointed (i) W.T. Cunningham as Co-Trustee in succession to said P.J. Crowley, resigned, under the Mortgage and W.T. Cunningham accepted the appointment as Co-Trustee under the Mortgage in succession to said P.J. Crowley, and (ii) The Bank of New York as Corporate Trustee in succession to Morgan Guaranty Trust Company of New York, resigned, under the Mortgage and The Bank of New York accepted the appointment as Corporate Trustee under the Mortgage in succession to said Morgan Guaranty Trust Company of New York, which supplemental indenture was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, an instrument dated March 29, 1999 was executed by the Company-Montana appointing Douglas J. MacInnes as Co-Trustee in succession to said W.T. Cunningham, resigned, under the Mortgage and by Douglas J. MacInnes accepting the appointment as Co-Trustee under the Mortgage in succession to said W.T. Cunningham, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, in addition to the property described in the Mortgage, the Company-Montana has acquired certain other property, rights and interests in property; and WHEREAS, the Company-New Jersey or the Company-Montana has heretofore issued, in accordance with the provisions of the Mortgage, the following series of First Mortgage Bonds:
Principal Amount Principal Amount Series Issued Outstanding ------ ------ ----------- 2-7/8% Series due 1975.......................... $40,000,000 NONE
3
Principal Amount Principal Amount Series Issued Outstanding ------ ------ ----------- 3-1/8% Series due 1984.......................... 6,000,000 NONE 4-1/2% Series due 1989.......................... 15,000,000 NONE 8-1/4% Series due 1974.......................... 30,000,000 NONE 7-1/2% Series due 2001 (Fifth).................. 25,000,000 NONE 8-5/8% Series due 2004.......................... 60,000,000 NONE 8-3/4% Series due 1981.......................... 30,000,000 NONE 9.60% Series due 2005........................... 35,000,000 NONE 9.70% Series due 2005........................... 65,000,000 NONE 9-7/8% Series due 2009.......................... 50,000,000 NONE 11-3/4% Series due 1993......................... 75,000,000 NONE 10/10-1/8% Series due 2004/2014................. 80,000,000 NONE 8-1/8% Series due 2014.......................... 41,200,000 NONE 7.70% Series due 1999 (Fourteenth).............. 55,000,000 NONE 8-1/4% Series due 2007 (Fifteenth).............. 55,000,000 $365,000 8.95% Series 2002 (Sixteenth)................... 50,000,000 1,466,000 Secured Medium-Term Notes (Seventeenth)......... 68,000,000 28,000,000 7% Series due 2005 (Eighteenth)................. 50,000,000 5,386,000 6-1/8% Series due 2023 (Nineteenth)............. 90,205,000 90,205,000 5.90% Series due 2023 (Twentieth)............... 80,000,000 80,000,000 0% Series due 1999 (Twenty-first)............... 210,321,007 NONE 7.30% Series due 2006 (Twenty-second)........... 150,000,000 150,000,000
which bonds are also hereinafter sometimes called "Bonds of the First through Twenty-second Series", respectively; and WHEREAS, the Company-Montana entered into an Agreement and Plan of Merger, dated as of February 20, 2001, among the Company-Montana, Touch America Holdings, Inc. (a Delaware corporation and a wholly owned subsidiary of the Company-Montana), and NorthWestern Energy (under its then name, The Montana Power, L.L.C.), a wholly owned subsidiary of Touch America Holdings, Inc., pursuant to which agreement the Company-Montana was merged into NorthWestern Energy (under its then name, The Montana Power, L.L.C.), on such terms as fully preserve and in no respect impair the lien or security of the Indenture on the mortgaged property or any of the rights or powers of the Trustees or of the bondholders thereunder; and WHEREAS, NorthWestern Energy, under its then name of The Montana Power, L.L.C., executed and delivered the Twenty-first Supplemental Indenture, dated as of February 13, 2002 (hereinafter called the "Twenty-first Supplemental Indenture"), for the purpose of evidencing the succession of NorthWestern Energy (under its then name, The Montana Power, L.L.C.) to the Company-Montana, and the assumption by NorthWestern Energy (under its then name, The Montana Power, L.L.C.) of the covenants and conditions of the Company-Montana under the Indenture and any bonds then issued or to be issued thereunder, and the succession of NorthWestern Energy (under its then name, The Montana Power, L.L.C.) to the powers and rights of the Company-Montana under the Indenture and any bonds now issued or to be issued thereunder, in accordance with the respective terms 4 thereof which Twenty-first Supplemental Indenture was recorded in the official records of various counties and states as required by the Indenture; WHEREAS, the Company-Montana merged with The Montana Power, L.L.C. on February 13, 2002 and thereafter ceased to exist independently; WHEREAS, The Montana Power, L.L.C. changed its name to NorthWestern Energy, L.L.C. on March 19, 2002; WHEREAS, NorthWestern Energy and the Company have entered into that certain Asset and Stock Transfer Agreement, dated as of November 15, 2002, providing for the transfer of substantially all of the assets as an entirety and liabilities of NorthWestern Energy to the Company (the "Transaction"), which Transaction is expected to be completed on or about the date hereof; WHEREAS, the Company desires to execute and deliver this Twenty-second Supplemental Indenture for the purposes of evidencing the assumption by the Company of the covenants and conditions of NorthWestern Energy under the Indenture and any bonds now issued or to be issued thereunder, and the succession of the Company to the powers and rights of NorthWestern Energy under the Indenture and any bonds now issued or to be issued thereunder, in accordance with the respective terms thereof; WHEREAS, the Company expects to record this Twenty-second Supplemental Indenture in the official records of various counties and states as required by the Indenture; and WHEREAS, the execution and delivery by the Company of this Twenty-second Supplemental Indenture have been duly authorized by the Company by appropriate Resolutions. NOW, THEREFORE, THIS INDENTURE WITNESSETH: That the Company, in consideration of the premises and of $1.00 to it duly paid by the Trustees at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustees and in order further to secure the payment of both the principal of and interest and premium, if any, on the bonds from time to time issued under the Indenture, according to their tenor and effect and the performance of all the provisions of the Indenture (including any modification made as in the Mortgage provided) and of said bonds, and to confirm the lien of the Mortgage, as heretofore supplemented, on certain after-acquired property, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of the Mortgage, as heretofore supplemented) unto Douglas J. MacInnes, the Co-Trustee, and (to the extent of its legal capacity to hold the same for the purposes hereof) to The Bank of New York, the Corporate Trustee, as Trustees under the Indenture, and to their successor or successors in said trust, and to said Trustees and their successors and assigns forever, all property, real, personal and mixed, of the kind or nature specifically mentioned in the 5 Mortgage, as heretofore supplemented, or of any other kind or nature (whether or not located in the State of Montana), acquired by the Company after the date of the execution and delivery of the Mortgage, as heretofore supplemented (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted), now owned or, subject to the provisions of subsection (I) of Section 87 of the Mortgage, as heretofore supplemented, hereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing, or of any general description contained in the Indenture) all lands, power sites, flowage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites, aqueducts and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants for the generation of electricity by steam, water and/or other power; all powerhouses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-conditioning systems and equipment incidental thereto, water works, water systems, steam heat and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and the equipment thereof, all machinery, engines, boilers, dynamos, electric, gas and other machines, regulators, meters, transformers, generators, motors, electrical, gas and mechanical appliances, conduits, cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture and chattels; all franchises, consents or permits, all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and other rights in or relating to real estate or the occupancy of the same and (except as herein or in the Mortgage, as heretofore supplemented, expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Mortgage, as heretofore supplemented, described. TOGETHER with all and singular the tenements, hereditaments, prescriptions, servitudes and appurtenances belonging or in anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof. IT IS HEREBY AGREED by the Company that, subject to the provisions of subsection (I) of Section 87 of the Mortgage, as heretofore supplemented, all the property, rights and franchises acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) after the date hereof, except any herein 6 or in the Mortgage, as heretofore supplemented, expressly excepted, shall be and are as fully granted and conveyed hereby and as fully embraced within the lien hereof and the lien of the Mortgage, as heretofore supplemented, as if such property, rights and franchises were now owned by the Company and were specifically described herein and conveyed hereby. PROVIDED that the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of the Mortgage, as supplemented, viz: (1) cash, shares of stock, bonds, notes and other obligations and other securities not specifically pledged, paid, deposited, delivered or held under the Mortgage, as supplemented, or covenanted so to be; (2) merchandise, equipment, apparatus, materials or supplies held for the purpose of sale or other disposition in the usual course of business; fuel, oil and similar materials and supplies consumable in the operation of any of the properties of the Company; all aircraft, tractors, rolling stock, trolley coaches, buses, motor coaches, automobiles, motor trucks, and other vehicles and materials and supplies held for the purpose of repairing or replacing (in whole or part) any of the same; (3) bills, notes and accounts receivable, judgments, demands and chooses in action, and all contracts, leases and operating agreements not specifically pledged under the Mortgage, as supplemented, or covenanted so to be; the Company's contractual rights or other interest in or with respect to tires not owned by the Company; (4) the last day of the term of any lease or leasehold which may be or become subject to the lien of the Mortgage, as supplemented; (5) electric energy, gas, steam, water, ice, and other materials or products generated, manufactured, produced, purchased or acquired by the Company for sale, distribution or use in the ordinary course of its business; all timber, minerals, mineral rights and royalties and all Gas and Oil Production Property, as defined in Section 4 of the Mortgage, as supplemented; (6) the Company's franchise to be a corporation; and (7) any property heretofore released pursuant to any provisions of the Indenture and not heretofore disposed of by the Company-New Jersey, the Company-Montana, NorthWestern Energy or the Company; provided, however, that the property and rights expressly excepted from the lien and operation of the Mortgage, as supplemented, in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that either or both of the Trustees or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XIII of the Mortgage by reason of the occurrence of a Default as defined in Section 65 thereof. TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto DOUGLAS J. MACINNES and (to the extent of its legal capacity to hold the same for the purposes hereto) unto THE BANK OF NEW YORK, as Trustees, and their successors and assigns forever. IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Mortgage, as supplemented, this Twenty-second Supplemental Indenture being supplemental thereto. 7 AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as supplemented, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and the Trustees and the beneficiaries of the trust with respect to said property, and to the Trustees and their successors as Trustees of said property in the same manner and with the same effect as if the said property had been owned by the Company-New Jersey at the time of the execution of the Mortgage, and had been specifically and at length described in and conveyed to the Trustees, by the Mortgage as a part of the property therein stated to be conveyed. SUBJECT NEVERTHELESS, to the limitation permitted by subsection (I) of Section 87 of the Mortgage, as supplemented, namely, that notwithstanding the foregoing, the Mortgage, as supplemented, shall not become or be or be required to become or be a lien upon any of the properties or franchises then owned or thereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) except (a) those acquired by it from NorthWestern Energy, and improvements, extensions and additions thereto and renewals and replacements thereof, (b) the property made and used by the Company as the basis under any of the provisions of the Indenture for the authentication and delivery of additional bonds or the withdrawal of cash or the release of property or a credit under Section 39 or Section 40 of the Indenture, and (c) such franchises, repairs and additional property as may be acquired, made or constructed by Company (1) to maintain, renew and preserve the franchises covered by the Indenture, or (2) to maintain the property mortgaged and intended to be mortgaged under the Indenture as an operating system or systems in good repair, working order and condition, or (3) in rebuilding or renewal of property, subject to the Lien under the Indenture, damaged or destroyed, or (4) in replacement of or substitution for machinery, apparatus, equipment, frames, towers, poles, wire, pipe, tools, implements and furniture, subject to the Lien thereunder, which shall have become old, inadequate, obsolete, worn out, unfit, unadapted, unserviceable, undesirable or unnecessary for use in the operation of the property mortgaged and intended to be mortgaged thereunder. The Company further covenants and agrees to and with the Trustees and their successors in said trust under the Indenture, as follows: ARTICLE I Covenants and Agreements of the Company Section 1. The Company hereby expressly assumes the due and punctual payment of the principal and interest of all the bonds secured by the Indenture according to their tenor and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be kept or performed by NorthWestern Energy, and the Company herein expressly assumes and agrees to pay, duly and punctually, the principal of and interest on the bonds issued under the Indenture in accordance with the provisions of said bonds and coupons and the Indenture, and agrees to perform and fulfill all the covenants and conditions of the Indenture to be kept or performed by NorthWestern Energy. As permitted 8 by Section 86 of the Mortgage, the Company shall be deemed to succeed to and be substituted for NorthWestern Energy with the same effect as if it had been named in the Indenture, and shall have and may exercise under the Indenture the same powers and rights as NorthWestern Energy. ARTICLE II Miscellaneous Provisions Section 1. The terms defined in the Mortgage, as heretofore supplemented, shall, for all purposes of this Twenty-second Supplemental Indenture, have the meaning specified in the Mortgage, as heretofore supplemented. Section 2. The Trustees hereby accept the trusts herein declared, provided, created or supplemented and agree to perform the same upon the terms and conditions herein and in the Mortgage, as heretofore supplemented, set forth and upon the following terms and conditions. The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Twenty-second Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XVII of the Mortgage, as heretofore supplemented, shall apply to and form part of this Twenty-second Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Twenty-second Supplemental Indenture. Section 3. Whenever in this Twenty-second Supplemental Indenture any of the parties hereto is named or referred to, this shall, subject to the provisions of Articles XVI and XVII of the Mortgage, as heretofore supplemented, be deemed to include the successors and assigns of such party, and all the covenants and agreements in this Twenty-second Supplemental Indenture contained by or on behalf of the Company, or by or on behalf of the Trustees shall, subject as aforesaid, bind and inure to the respective benefits of the respective successors and assigns of such parties, whether so expressed or not. Section 4. Nothing in this Twenty-second Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or to give to, any person, firm or corporation, other than the parties hereto and the holders of the bonds and coupons Outstanding under the Indenture, any right, remedy or claim under or by reason of this Twenty-second Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Twenty-second Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the bonds and coupons now, or to be, Outstanding under the Indenture. 9 Section 5. This Twenty-second Supplemental Indenture shall be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Signature Pages to Follow] 10 IN WITNESS WHEREOF, NORTHWESTERN CORPORATION has caused its name to be hereunto affixed, and this instrument to be signed and sealed by its President or one of its Vice Presidents, and its seal to be attested by its Secretary or one of its Assistant Secretaries for and in its behalf, and THE BANK OF NEW YORK, in token of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents or one of its Assistant Vice Presidents, and its corporate seal to be attested by one of its Assistant Vice Presidents, Assistant Secretaries or Assistant Treasurers, and DOUGLAS J. MACINNES, for all like purposes, has hereunto set his hand and affixed his seal, as of the day and year first above written. [Seal] NORTHWESTERN CORPORATION By: /s/ Eric R. Jacobsen -------------------------------------- Name: Eric R. Jacobsen Title: SVP, General Counsel and CLO Attest: /s/ Michael J. Young -------------------- Name: Michael J. Young Title: Assistant Secretary Executed, sealed and delivered by NORTHWESTERN CORPORATION in the presence of: /s/ Corinne Bohrer ------------------ /s/ Karen L. Smook ------------------ STATE OF SOUTH DAKOTA ) : ss. County of MINNEHAHA ) This instrument was acknowledged before me on this 12th day of November, 2002, by Eric R. Jacobsen, SVP, General Counsel and CLO of NORTHWESTERN CORPORATION, a Delaware corporation. /s/ Karen L. Smook ------------------------------------ Print Name: Karen L. Smook Notary Public for the State of South Dakota Residing at Sioux Falls, South Dakota My Commission expires 7-12-2005 [SEAL] THE BANK OF NEW YORK, as Corporate Trustee By: /s/ MaryBeth Lewicki ------------------------- Name: MaryBeth Lewicki Title: Vice President Attest: /s/ Stacey Poindexter --------------------- Name: Stacey Poindexter Title: Assistant Treasurer /s/ Douglas J. MacInnes ------------------------------------------ DOUGLAS J. MACINNES, as Co-Trustee Executed, sealed and delivered by THE BANK OF NEW YORK and DOUGLAS J. MACINNES in the presence of: /s/ Jeremy Finkelstein ---------------------- /s/ Regina F. Johnson --------------------- STATE OF NEW YORK ) : ss. County of New York ) This instrument was acknowledged before me on this 15th day of November, 2002, by MaryBeth Lewicki, Vice President of Bank of New York, a New York banking corporation. /s/ William J. Cassels --------------------------------------- Print Name: William J. Cassels Notary Public for the State of New York Residing at Bronx County, New York My Commission expires May 18, 2006 [SEAL] STATE OF NEW YORK ) : ss. County of New York ) This instrument was acknowledged before me on this 15th day of November, 2002, by Douglas A. MacInnes. /s/ William J. Cassels --------------------------------------- Print Name: William J. Cassels Notary Public for the State of New York Residing at Bronx County, New York My Commission expires May 18, 2006 [SEAL] EX-4 4 ex4-2.txt EX. 4.2: 23RD SUPPLEMENTAL INDENTURE - -------------------------------------------------------------------------------- NORTHWESTERN CORPORATION TO THE BANK OF NEW YORK AND MARYBETH LEWICKI As Trustees under Mortgage and Deed of Trust, dated as of October 1, 1945, with NorthWestern Corporation ----------------- TWENTY-THIRD SUPPLEMENTAL INDENTURE Providing, among other things, for the succession of MaryBeth Lewicki to Douglas J. MacInnes as Co-Trustee under such Mortgage and Deed of Trust and First Mortgage Bonds, Credit Agreement (2002) Series, due 2006 ----------------- Dated as of February 1, 2003 - -------------------------------------------------------------------------------- TWENTY-THIRD SUPPLEMENTAL INDENTURE -------------- THIS TWENTY-THIRD SUPPLEMENTAL INDENTURE, dated as of February 1, 2003, between NORTHWESTERN CORPORATION, a corporation duly incorporated and existing under the laws of the State of Delaware (hereinafter called the "Company"), having its principal office at 125 S. Dakota Avenue, Suite 1100, Sioux Falls, South Dakota 57104, and THE BANK OF NEW YORK (hereinafter called the "Corporate Trustee"), a corporation of the State of New York, whose principal corporate trust office is located at 101 Barclay Street, New York, New York 10286 (successor to MORGAN GUARANTY TRUST COMPANY OF NEW YORK (formerly Guaranty Trust Company of New York)), and MARYBETH LEWICKI, whose post office address is c/o The Bank of New York, 101 Barclay Street, New York, New York 10286, who hereby is appointed successor Co-Trustee to Douglas J. MacInnes (successor to Arthur E. Burke, Karl R. Henrich, H.H. Gould, R. Amundsen, P.J. Crowley and W.T. Cunningham) (said MaryBeth Lewicki being hereinafter sometimes called the "Co-Trustee", and the Corporate Trustee and the Co-Trustee being hereinafter together sometimes called the "Trustees"), as Trustees under the Mortgage and Deed of Trust, dated as of October 1, 1945 (hereinafter called the "Mortgage" and, together with any indentures supplemental thereto, the "Indenture"), which Mortgage was executed and delivered by The Montana Power Company, a corporation of the State of New Jersey (hereinafter called the "Company-New Jersey"), as indirect predecessor under the Mortgage to the Company (the Company being successor under the Mortgage to NorthWestern Energy, L.L.C. (hereinafter called "NorthWestern Energy"), formerly known as The Montana Power, L.L.C., a limited liability company of the State of Montana, and NorthWestern Energy being the successor under the Mortgage to The Montana Power Company, a corporation of the State of Montana (hereinafter called the "Company-Montana")), to Guaranty Trust Company of New York and Arthur E. Burke, as Trustees, to secure the payment of bonds issued or to be issued under and in accordance with the provisions of the Mortgage, reference to which Mortgage is hereby made, this instrument (hereinafter called the "Twenty-third Supplemental Indenture") being supplemental thereto; WHEREAS, by the Mortgage, the Company-New Jersey covenanted that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Indenture and to make subject to the lien of the Indenture any property thereafter acquired, made or constructed and intended to be subject to the lien thereof; and WHEREAS, the Company-New Jersey executed and delivered to the Trustees its First Supplemental Indenture, dated as of May 1, 1954 (hereinafter called the "First Supplemental Indenture"), and its Second Supplemental Indenture, dated as of April 1, 1959 (hereinafter called the "Second Supplemental Indenture"); and WHEREAS, the Company-New Jersey was merged into the Company-Montana on November 30, 1961, and to evidence the succession of the Company-Montana to the Company-New Jersey for purposes of the bonds and the Indenture and the assumption by the Company-Montana of the covenants and conditions of the Company-New Jersey in the bonds and in the Indenture contained and to enable the Company-Montana to have and exercise the powers and rights of the Company-New Jersey under the Indenture in accordance with the terms thereof, the Company-Montana executed and delivered to the Trustees its Third Supplemental Indenture, dated as of November 30, 1961 (hereinafter called the "Third Supplemental Indenture"); and WHEREAS, the Company-Montana executed and delivered to the Trustees its Fourth Supplemental Indenture, dated as of April 1, 1970 (hereinafter called the "Fourth Supplemental Indenture"); its Fifth Supplemental Indenture, dated as of April 1, 1971 (hereinafter called the "Fifth Supplemental Indenture"); its Sixth Supplemental Indenture, dated as of March 1, 1974 (hereinafter called the "Sixth Supplemental Indenture"); its Seventh Supplemental Indenture, dated as of December 1, 1974 (hereinafter called the "Seventh Supplemental Indenture"); its Eighth Supplemental Indenture, dated as of July 1, 1975 (hereinafter called the "Eighth Supplemental Indenture"); its Ninth Supplemental Indenture, dated as of December 1, 1975 (hereinafter called the "Ninth Supplemental Indenture"); its Tenth Supplemental Indenture, dated as of January 1, 1979 (hereinafter called the "Tenth Supplemental Indenture"); its Eleventh Supplemental Indenture, dated as of October 1, 1983 (hereinafter called the "Eleventh Supplemental Indenture"); its Twelfth Supplemental Indenture, dated as of January 1, 1984 (hereinafter called the "Twelfth Supplemental Indenture"); its Thirteenth Supplemental Indenture, dated as of December 1, 1991 (hereinafter called the "Thirteenth Supplemental Indenture"); its Fourteenth Supplemental Indenture, dated as of January 1, 1993 (hereinafter called the "Fourteenth Supplemental Indenture"); its Fifteenth Supplemental Indenture, dated as of March 1, 1993 (hereinafter called the "Fifteenth Supplemental Indenture"); its Sixteenth Supplemental Indenture, dated as of May 1, 1993 (hereinafter called the "Sixteenth Supplemental Indenture"); its Seventeenth Supplemental Indenture, dated as of December 1, 1993 (hereinafter called the "Seventeenth Supplemental Indenture"); its Eighteenth Supplemental Indenture, dated as of August 5, 1994 (hereinafter called the "Eighteenth Supplemental Indenture"); its Nineteenth Supplemental Indenture, dated as of December 16, 1999 (hereinafter called the "Nineteenth Supplemental Indenture"); and its Twentieth Supplemental Indenture, dated as of November 1, 2001 (hereinafter called the "Twentieth Supplemental Indenture"); and WHEREAS, the Company-Montana was merged into NorthWestern Energy (under its then name, The Montana Power, L.L.C.) on February 13, 2002, and to evidence the succession of NorthWestern Energy (under its then name, The Montana Power, L.L.C.) to the Company-Montana for purposes of the bonds and the Indenture and the assumption by NorthWestern Energy (under its then name, The Montana Power, L.L.C.) of the covenants and conditions of the Company-Montana in the bonds and in the Indenture contained and to enable NorthWestern Energy (under its then name, The Montana Power, L.L.C.) to have and exercise the powers and rights of the Company-Montana under the Indenture in accordance 2 with the terms thereof, NorthWestern Energy (under its then name, The Montana Power, L.L.C.) executed and delivered to the Trustees its Twenty-First Supplemental Indenture, dated as of February 13, 2002 (hereinafter called the "Twenty-first Supplemental Indenture"); and WHEREAS, NorthWestern Energy changed its name from The Montana Power, L.L.C. to NorthWestern Energy, L.L.C. on March 19, 2002; and WHEREAS, NorthWestern Energy transferred, subject to the Lien of the Indenture, substantially all of the Mortgaged and Pledged Property as an entirety to the Company on November 20, 2002 (the "Transfer Date"), and to evidence the succession of the Company to NorthWestern Energy for purposes of the bonds and the Indenture and the assumption by the Company of the covenants and conditions of NorthWestern Energy in the bonds and in the Indenture contained and to enable the Company to have and exercise the powers and rights of NorthWestern Energy under the Indenture in accordance with the terms thereof, the Company executed and delivered to the Trustees its Twenty-second Supplemental Indenture, dated as of November 15, 2002 (hereinafter called the "Twenty-second Supplemental Indenture"); and WHEREAS, the Mortgage and the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-first and Twenty-second Supplemental Indentures were recorded in the official records of various counties and states as required by the Indenture; and WHEREAS, an instrument dated March 15, 1955 was executed by the Company-New Jersey appointing Karl R. Henrich as Co-Trustee in succession to said Arthur E. Burke, resigned, under the Mortgage and by Karl R. Henrich accepting the appointment as Co-Trustee under the Mortgage in succession to said Arthur E. Burke, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, an instrument dated June 29, 1962 was executed by the Company-Montana appointing H.H. Gould as Co-Trustee in succession to said Karl R. Henrich, resigned, under the Mortgage and by H.H. Gould accepting the appointment as Co-Trustee under the Mortgage in succession to said Karl R. Henrich, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, an instrument dated June 22, 1973 was executed by the Company-Montana appointing R. Amundsen as Co-Trustee in succession to said H.H. Gould, resigned, under the Mortgage and by R. Amundsen accepting the appointment as Co-Trustee under the Mortgage in succession to said H.H. Gould, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, an instrument dated July 1, 1986 was executed by the Company-Montana appointing P.J. Crowley as Co-Trustee in succession to said R. Amundsen, resigned, under the Mortgage and by P.J Crowley accepting the appointment as Co-Trustee 3 under the Mortgage in succession to said R. Amundsen, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, by the Eighteenth Supplemental Indenture, the Company-Montana appointed (i) W.T. Cunningham as Co-Trustee in succession to said P.J. Crowley, resigned, under the Mortgage and W.T. Cunningham accepted the appointment as Co-Trustee under the Mortgage in succession to said P.J. Crowley, and (ii) The Bank of New York as Corporate Trustee in succession to Morgan Guaranty Trust Company of New York, resigned, under the Mortgage and The Bank of New York accepted the appointment as Corporate Trustee under the Mortgage in succession to said Morgan Guaranty Trust Company of New York, which supplemental indenture was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, an instrument dated March 29, 1999 was executed by the Company-Montana appointing Douglas J. MacInnes as Co-Trustee in succession to said W.T. Cunningham, resigned, under the Mortgage and by Douglas J. MacInnes accepting the appointment as Co-Trustee under the Mortgage in succession to said W.T. Cunningham, which instrument was recorded in various counties in the states of Montana, Idaho and Wyoming; and WHEREAS, as permitted by Section 101 and Section 102 of the Mortgage (as heretofore supplemented), and there being no Default and no occurrence of an event which, after notice, the passage of time, or both, would constitute a Default, the Company desires to remove Douglas J. MacInnes as Co-Trustee under the Mortgage and to appoint MaryBeth Lewicki as successor Co-Trustee under the Mortgage, subject to the conditions of Article XVII of the Mortgage, effective as of the close of business on February 7, 2003, and said MaryBeth Lewicki desires to accept such appointment, effective as of the close of business on February 7, 2003, in each case, pursuant to this Twenty-third Supplemental Indenture; WHEREAS, the Company-New Jersey or the Company-Montana has heretofore issued, in accordance with the provisions of the Mortgage, the following series of First Mortgage Bonds:
Principal Amount Principal Amount Series Issued Outstanding ------ ------ ----------- 2-7/8% Series due 1975 ................................... $40,000,000 NONE 3-1/8% Series due 1984 ................................... 6,000,000 NONE 4-1/2% Series due 1989 ................................... 15,000,000 NONE 8-1/4% Series due 1974 ................................... 30,000,000 NONE 7-1/2% Series due 2001 (Fifth)............................ 25,000,000 NONE 8-5/8% Series due 2004.................................... 60,000,000 NONE 8-3/4% Series due 1981.................................... 30,000,000 NONE 9.60% Series due 2005..................................... 35,000,000 NONE 9.70% Series due 2005..................................... 65,000,000 NONE
4
Principal Amount Principal Amount Series Issued Outstanding ------ ------ ----------- 9-7/8% Series due 2009.................................... 50,000,000 NONE 11-3/4% Series due 1993................................... 75,000,000 NONE 10/10-1/8% Series due 2004/2014........................... 80,000,000 NONE 8-1/8% Series due 2014.................................... 41,200,000 NONE 7.70% Series due 1999 (Fourteenth)........................ 55,000,000 NONE 8-1/4% Series due 2007 (Fifteenth)........................ 55,000,000 $365,000 8.95% Series 2022 (Sixteenth)............................. 50,000,000 1,466,000 Secured Medium-Term Notes (Seventeenth)................... 68,000,000 13,000,000 7% Series due 2005 (Eighteenth)........................... 50,000,000 5,386,000 6-1/8% Series due 2023 (Nineteenth)....................... 90,205,000 90,205,000 5.90% Series due 2023 (Twentieth)......................... 80,000,000 80,000,000 0% Series due 1999 (Twenty-first)......................... 210,321,007 NONE 7.30% Series due 2006 (Twenty-second)..................... 150,000,000 150,000,000
which bonds are also hereinafter sometimes called "Bonds of the First through Twenty-second Series", respectively; and WHEREAS, Section 8 of the Mortgage provides that the form of each series of bonds (other than the First Series) issued thereunder and of the coupons to be attached to coupon bonds of such series shall be established by Resolution of the Board of Directors of the Company and that the form of such series, as established by said Board of Directors, shall specify the descriptive title of the bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Indenture as the Board of Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which such bonds are to be issued and/or secured under the Indenture; and WHEREAS, Section 120 of the Mortgage provides, among other things, that any power, privilege or right expressly or impliedly reserved to or in any way conferred upon the Company by any provision of the Indenture, whether such power, privilege or right is in any way restricted or is unrestricted, may be in whole or in part waived or surrendered or subjected to any restriction if at the time unrestricted or to additional restriction if already restricted, and the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may cure any ambiguity contained therein or in any supplemental indenture or may (in lieu of establishment by Resolution as provided in Section 8 of the Mortgage) establish the terms and provisions of any series of bonds other than the First Series, by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to record in all of the states in which any property at the time subject to the lien of the Indenture shall be situated; and WHEREAS, the Company now desires to create a new series of bonds and (pursuant to the provisions of Section 120 of the Mortgage) to add to its covenants and agreements contained in the Mortgage certain other covenants and agreements to be observed by it and to alter and amend in certain respects the covenants and provisions contained in the Indenture; and 5 WHEREAS, the execution and delivery by the Company of this Twenty-third Supplemental Indenture, and the terms of the Bonds of the Twenty-third Series, hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate Resolutions of said Board of Directors. NOW, THEREFORE, THIS INDENTURE WITNESSETH: That the Company, pursuant to Section 101 of the Mortgage (as heretofore supplemented), and by order of its Board of Directors, hereby removes Douglas J. MacInnes as Co-Trustee under the Mortgage (and will furnish to said Douglas J. MacInnes a manually signed original of this Supplemental Indenture as an instrument of such removal) effective as of the close of business on February 7, 2003; That, pursuant to Section 102 of the Mortgage (as heretofore supplemented), and by order of its Board of Directors, the Company hereby appoints MaryBeth Lewicki as successor Co-Trustee under the Mortgage, subject to the conditions of Article XVII thereof, effective as of the close of business on February 7, 2003; That the undersigned MaryBeth Lewicki, a citizen of the United States of America, hereby accepts her appointment by the Company as successor Co-Trustee under the Mortgage (and, pursuant to Section 104 of the Mortgage, will furnish to said Douglas J. MacInnes and the Company a manually signed original of this Supplemental Indenture as an instrument of such acceptance) effective as of the close of business on February 7, 2003; That the Company will proceed with the publication of the notice of the aforesaid removal and the notice of the aforesaid appointment, as required, respectively, by Section 101 and Section 102 of the Mortgage (as heretofore supplemented), in substantially the forms provided, respectively, in Exhibit A-1 and Exhibit A-2 attached hereto; That the Company, in consideration of the premises and of $1.00 to it duly paid by the Trustees at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustees and in order further to secure the payment of both the principal of and interest and premium, if any, on the bonds from time to time issued under the Indenture, according to their tenor and effect and the performance of all the provisions of the Indenture (including any modification made as in the Mortgage provided) and of said bonds, and to confirm the lien of the Mortgage, as heretofore supplemented, on certain after-acquired property, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of the Mortgage, as heretofore supplemented) unto Douglas J. MacInnes, who is being removed as Co-Trustee effective as of the close of business on February 7, 2003, and to MaryBeth Lewicki, who is being appointed as Co-Trustee and accepting such appointment as Co-Trustee effective as of the close of business on February 7, 2003, and (to the extent of its legal capacity to hold the same for the purposes hereof) to The Bank of New York, the Corporate Trustee, as Trustees under the Indenture, and to their successor or successors in said trust, and to said Trustees and their successors and assigns forever, all property, real, 6 personal and mixed, of the kind or nature specifically mentioned in the Mortgage, as heretofore supplemented, or of any other kind or nature (whether or not located in the State of Montana), acquired by the Company after the date of the execution and delivery of the Mortgage, as heretofore supplemented (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted), now owned or, subject to the provisions of subsection (I) of Section 87 of the Mortgage, as heretofore supplemented, hereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing, or of any general description contained in the Indenture) all lands, power sites, flowage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites, aqueducts and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants for the generation of electricity by steam, water and/or other power; all powerhouses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-conditioning systems and equipment incidental thereto, water works, water systems, steam heat and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and the equipment thereof, all machinery, engines, boilers, dynamos, electric, gas and other machines, regulators, meters, transformers, generators, motors, electrical, gas and mechanical appliances, conduits, cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture and chattels; all franchises, consents or permits, all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and other rights in or relating to real estate or the occupancy of the same and (except as herein or in the Mortgage, as heretofore supplemented, expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Mortgage, as heretofore supplemented, described. TOGETHER with all and singular the tenements, hereditaments, prescriptions, servitudes and appurtenances belonging or in anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof. IT IS HEREBY AGREED by the Company that, subject to the provisions of subsection (I) of Section 87 of the Mortgage, as heretofore supplemented, all the property, rights and franchises acquired by the Company (by purchase, consolidation, merger, 7 donation, construction, erection or in any other way) after the date hereof, except any herein or in the Mortgage, as heretofore supplemented, expressly excepted, shall be and are as fully granted and conveyed hereby and as fully embraced within the lien hereof and the lien of the Mortgage, as heretofore supplemented, as if such property, rights and franchises were now owned by the Company and were specifically described herein and conveyed hereby. PROVIDED that the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of the Mortgage, as supplemented, viz: (1) cash, shares of stock, bonds, notes and other obligations and other securities not specifically pledged, paid, deposited, delivered or held under the Mortgage, as supplemented, or covenanted so to be; (2) merchandise, equipment, apparatus, materials or supplies held for the purpose of sale or other disposition in the usual course of business; fuel, oil and similar materials and supplies consumable in the operation of any of the properties of the Company; all aircraft, tractors, rolling stock, trolley coaches, buses, motor coaches, automobiles, motor trucks, and other vehicles and materials and supplies held for the purpose of repairing or replacing (in whole or part) any of the same; (3) bills, notes and accounts receivable, judgments, demands and choses in action, and all contracts, leases and operating agreements not specifically pledged under the Mortgage, as supplemented, or covenanted so to be; the Company's contractual rights or other interest in or with respect to tires not owned by the Company; (4) the last day of the term of any lease or leasehold which may be or become subject to the lien of the Mortgage, as supplemented; (5) electric energy, gas, steam, water, ice, and other materials or products generated, manufactured, produced, purchased or acquired by the Company for sale, distribution or use in the ordinary course of its business; all timber, minerals, mineral rights and royalties and all Gas and Oil Production Property, as defined in Section 4 of the Mortgage, as supplemented; (6) the Company's franchise to be a corporation; and (7) any property heretofore released pursuant to any provisions of the Indenture and not heretofore disposed of by the Company-New Jersey, the Company-Montana, NorthWestern Energy or the Company; provided, however, that the property and rights expressly excepted from the lien and operation of the Mortgage, as supplemented, in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that either or both of the Trustees or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XIII of the Mortgage by reason of the occurrence of a Default as defined in Section 65 thereof. TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto the Co-Trustee and (to the extent of its legal capacity to hold the same for the purposes hereto) unto the Corporate Trustee, as Trustees, and their successors and assigns forever. IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are 8 set forth in the Mortgage, as supplemented, this Twenty-third Supplemental Indenture being supplemental thereto. AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as supplemented, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and the Trustees and the beneficiaries of the trust with respect to said property, and to the Trustees and their successors as Trustees of said property in the same manner and with the same effect as if the said property had been owned by the Company-New Jersey at the time of the execution of the Mortgage, and had been specifically and at length described in and conveyed to the Trustees, by the Mortgage as a part of the property therein stated to be conveyed. SUBJECT NEVERTHELESS, to the limitation permitted by subsection (I) of Section 87 of the Mortgage, as supplemented, namely, that notwithstanding the foregoing, the Mortgage, as supplemented, shall not become or be or be required to become or be a lien upon any of the properties or franchises owned by the Company on the Transfer Date or thereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) except (a) those acquired by it from NorthWestern Energy, and improvements, extensions and additions thereto and renewals and replacements thereof, (b) the property made and used by the Company as the basis under any of the provisions of the Indenture for the authentication and delivery of additional bonds or the withdrawal of cash or the release of property or a credit under Section 39 or Section 40 of the Indenture, and (c) such franchises, repairs and additional property as may be acquired, made or constructed by the Company (1) to maintain, renew and preserve the franchises covered by the Indenture, or (2) to maintain the property mortgaged and intended to be mortgaged under the Indenture as an operating system or systems in good repair, working order and condition, or (3) in rebuilding or renewal of property, subject to the Lien under the Indenture, damaged or destroyed, or (4) in replacement of or substitution for machinery, apparatus, equipment, frames, towers, poles, wire, pipe, tools, implements and furniture, subject to the Lien thereunder, which shall have become old, inadequate, obsolete, worn out, unfit, unadapted, unserviceable, undesirable or unnecessary for use in the operation of the property mortgaged and intended to be mortgaged thereunder. The Company further covenants and agrees to and with the Trustees and their successors in said trust under the Indenture, as follows: ARTICLE I Twenty-third Series of Bonds Section 1.1 There shall be a series of bonds designated "Credit Agreement (2002) Series, due 2006" (such series herein sometimes referred to as the "Twenty-third Series" and the bonds of such series herein sometimes referred to as the "Bonds of the Twenty-third Series") each of which shall also bear the descriptive title "First Mortgage Bond", and the form thereof, which as established by Resolution of the Board of Directors of the Company, 9 shall be substantially as provided in Exhibit B attached hereto and, thereby, shall contain suitable provisions with respect to the matters hereinafter in this Section specified. Bonds of the Twenty-third Series shall be issued to Credit Suisse First Boston, acting through its Cayman Islands Branch, as collateral agent (together with its successors in such capacity, the "Collateral Agent") under the Bond Collateral Agreement, dated as of February 10, 2003 (as amended or otherwise modified, or as waived, or as replaced in each case, from time to time in accordance with its terms, the "Collateral Agreement"), between the Company and the Collateral Agent, to secure the obligations of the Company to pay when due the Applicable Share (as hereinafter defined) of the principal of and interest on the loans (the "Loans") made and outstanding under the Credit Agreement, dated as of December 17, 2002 (as amended or otherwise modified, or as waived, or as replaced, in each case, from time to time in accordance with its terms, the "Credit Agreement"), among the Company, as borrower, the several lenders from time to time parties thereto (the "Lenders") and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent (together with its successors in such capacity, the "Administrative Agent"). As used herein, "Applicable Share" means, as of any day, a fraction (expressed as a percentage rounded to the eighth decimal place), (i) the numerator of which is the aggregate principal amount of the Bonds of the Twenty-third Series that are Outstanding on such day, and (ii) the denominator of which is the sum of (a) the aggregate principal amount of the Bonds of the Twenty-third Series that are Outstanding on such day, plus (b) the aggregate principal amount of the New Mortgage Bonds, Credit Agreement (2002) Series, due 2006, of the Company (the "South Dakota Credit Agreement Bonds") that are outstanding on such day under the Company's Mortgage Indenture and Deed of Trust, dated as of August 1, 1993, relating (among other things) to property owned by the Company in the States of South Dakota, Nebraska, Iowa and North Dakota (as amended and supplemented, the "South Dakota Mortgage"). Initially, the Applicable Share will be 71.79487179% (being the expression as a percentage (rounded to the eighth decimal place) of a fraction, the numerator of which is $280,000,000 (the aggregate principal amount of the Bonds of the Twenty-third Series that are to be issued and become Outstanding) and the denominator of which is $390,000,000 (the sum of $280,000,000, the aggregate principal amount of the Bonds of the Twenty-third Series that are to be issued and become Outstanding, plus $110,000,000, the aggregate principal amount of the South Dakota Credit Agreement Bonds that are to be issued and become outstanding under the South Dakota Mortgage simultaneously with the issuance of the Bonds of the Twenty-third Series). Pursuant to the Collateral Agreement, the Collateral Agent will furnish to the Corporate Trustee (with a copy to the Company) as soon as practicable after any change in the Applicable Share, a certificate, signed by a person purporting to be its duly authorized officer, notifying the Corporate Trustee of such change in the Applicable Share (an "Applicable Share Certificate"). Each Applicable Share Certificate shall set forth (i) the changed Applicable Share, (ii) the date such change occurred, (iii) the aggregate principal amount of the Bonds of the Twenty-third Series then Outstanding, and (iv) the aggregate principal amount of the South Dakota Credit Agreement Bonds then outstanding under the South Dakota Mortgage. The Corporate Trustee may conclusively presume that the Applicable Share is 10 71.79487179% unless and until the Corporate Trustee receives an Applicable Share Certificate. Following receipt by the Corporate Trustee of an Applicable Share Certificate, the Corporate Trustee may conclusively presume that the Applicable Share is as set forth in such Applicable Share Certificate unless and until the Corporate Trustee receives a subsequent Applicable Share Certificate (and the Corporate Trustee shall be fully protected in relying thereon). Bonds of the Twenty-third Series shall mature on December 1, 2006 (the "Maturity Date"), with an installment of the principal of the Bonds of the Twenty-third Series in an amount equal to $700,000 (said amount representing one quarter of one percent (0.25%) of the original aggregate principal amount of the Bonds of the Twenty-third Series) being payable on the last Business Day (as hereinafter defined) of each March, June, September and December occurring prior to the Maturity Date, commencing March 31, 2003, and the balance of the principal of the Bonds of the Twenty-third Series being payable on the Maturity Date (in each case, unless an equal installment or balance of principal of the Loans is not due and payable on such Business Day or on the Maturity Date, as applicable, in accordance with the Credit Agreement by reason of prior prepayment of the Loans (in which event, there shall be due and payable on the Bonds of the Twenty-third Series on such Business Day or on the Maturity Date, as applicable, an amount of principal of said Bonds equal to the Applicable Share of the amount of principal of the Loans that is payable on such Business Day or on the Maturity Date, as applicable, in accordance with the Credit Agreement)); they shall be issued as fully registered bonds in denominations of One Thousand Dollars or in any integral multiple of One Dollar in Excess of One Thousand Dollars; the unpaid principal amount of the Bonds of the Twenty-third Series shall bear interest at one or more variable interest rates per annum which rate or rates for each day shall be equal to the rate or rates per annum borne by the Loans in accordance with the Credit Agreement for such day (calculated in the manner provided in the Credit Agreement for the calculation of interest on the Loans), payable on each day on which interest is payable on the Loans in accordance with the Credit Agreement (and in an amount equal to the Applicable Share of the amount of interest that is payable on the Loans on such day in accordance with the Credit Agreement) to the Collateral Agent, as the registered owner, without regard to, or necessity for, any record date; the principal of and interest on each said Bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts. Bonds of the Twenty-third Series shall be dated as in Section 10 of the Mortgage provided. As used herein, "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. For the avoidance of any doubt, it is expressly stated that scheduled amortization payments with respect to the Bonds of the Twenty-third Series (as specified for the Bonds of the Twenty-third Series prior to the Maturity Date pursuant to the preceding paragraph of this Section 1.1) shall not constitute a redemption in part of the Bonds of the Twenty-third Series for purposes of Section 53 of the Mortgage (as supplemented) (and, therefore, surrender of the Bonds of the Twenty-third Series shall not be a condition to the 11 receipt by the registered owners of the Bonds of the Twenty-third Series of such scheduled amortization payments). At the option of the registered owner, any Bonds of the Twenty-third Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, shall be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations. Bonds of the Twenty-third Series shall not be transferable except to any successor Collateral Agent under the Collateral Agreement; provided, however, that, subject to compliance with the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), (i) on or after the day on which the Loans are accelerated in accordance with the Credit Agreement (the "Acceleration Day"), all (but not less than all) of the Bonds of the Twenty-third Series shall be transferable by the Collateral Agent (together with all (but not less than all) of the South Dakota Credit Agreement Bonds) to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement, and (ii) following such transfer by the Collateral Agent, Bonds of the Twenty-third Series shall be transferable (without restriction (except as hereinafter in the following two paragraphs described)) by the registered owners thereof. As a condition precedent to any transfer of the Bonds of the Twenty-third Series by the Collateral Agent, the Collateral Agent shall submit to the Company, the Corporate Trustee and, if applicable, any bond registrar or transfer agent for the Bonds of the Twenty-third Series (in addition to all other documents and instruments required to be submitted pursuant to the Mortgage) a certificate of the Collateral Agent, signed by a person purporting to be its duly authorized officer, certifying that the transferee in such transfer is a successor Collateral Agent under the Collateral Agreement or that the transferees in such transfer are the Lenders or persons or entities specified by the Lenders to which on or after the Acceleration Day all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds are being transferred in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement (and the Corporate Trustee may conclusively presume the statements in any such certificate of the Collateral Agent to be correct and shall be fully protected in relying thereon). As a condition precedent to any transfer of any Bond of the Twenty-third Series to a transferee other than a successor Collateral Agent, the transferor in such transfer shall deliver to the Company, the Corporate Trustee and, if applicable, any bond registrar or transfer agent for the Bonds of the Twenty-third Series (in addition to all other documents and instruments required to be submitted pursuant to the Mortgage), (i) an opinion of counsel reasonably satisfactory to the Company, the Corporate Trustee and, if applicable, any bond registrar or transfer agent for the Bonds of the Twenty-third Series, or (ii) a certificate of the transferor in such transfer, signed by a person purporting to be its duly authorized officer, reasonably satisfactory to the Company, the Corporate Trustee and, if applicable, the bond registrar or transfer agent for the Bonds of the Twenty-third Series, in either case, to the effect that such transfer is either (A) covered by an effective registration statement of the Company under the Securities Act 12 (setting forth the registration number and the date of effectiveness of such registration statement), or (B) exempt from registration under the Securities Act (setting forth the applicable exemption from registration being relied upon and the reason such exemption is applicable to such transfer). Any transfer of Bonds of the Twenty-third Series (i) shall be subject to the provisions of Section 12 of the Mortgage, except that the provisions of the last two sentences of such Section 12 shall not be applicable to any transfer of Bonds of the Twenty-third Series which occurs on or prior to the Remedy Exercise Day (as hereinafter defined) (and the Company hereby waives the provisions of such sentences with respect to any such transfer), and (ii) shall be made at the office or agency of the Company in the Borough of Manhattan, The City of New York. The Company hereby waives any right to make any charge for any exchange or transfer of Bonds of the Twenty-third Series by the Collateral Agent or any person or entity that is a direct transferee of the Collateral Agent (but not by any other transferee of Bonds of the Twenty-third Series), whether to reimburse itself for any tax or taxes or other governmental charge or otherwise (it being understood that the Company shall pay any tax or taxes or governmental or other charge which may be payable by reason of any exchange or transfer of Bonds of the Twenty-third Series by the Collateral Agent or any person or entity that is a direct transferee of the Collateral Agent). However, the Company reserves the right to require payment of a sum sufficient to cover any tax or taxes or governmental or other charge that may be imposed in connection with any transfer or exchange of Bonds of the Twenty-third Series by any registered owner other than the Collateral Agent or any person or entity that is a direct transferee of the Collateral Agent, other than any exchange pursuant to Section 15, 54 or 115 of the Indenture not involving any transfer. The Company has appointed The Bank of New York as its agent to receive Bonds of the Twenty-third Series presented or surrendered for payment, to receive Bonds of the Twenty-third Series surrendered for registration of transfer or exchange and to receive notices and demands to or upon the Company in respect of the Bonds of the Twenty-third Series and the Indenture; and the corporate trust office of The Bank of New York in the Borough of Manhattan, The City of New York shall be the office or agency of the Company in the Borough of Manhattan, The City of New York at which such presentations, surrenders, notices and demands may be made or served. Upon the delivery of this Twenty-third Supplemental Indenture, Bonds of the Twenty-third Series in the aggregate principal amount of $280,000,000 are to be issued forthwith and will be Outstanding in addition to the bonds hereinbefore stated to be Outstanding. Bonds of the Twenty-third Series shall be subject to the following redemption and other terms and conditions: (I) Bonds of the Twenty-third Series shall be subject to redemption as follows (but shall not otherwise be or become subject to redemption, whether at the option of 13 the holders thereof or the Company or pursuant to any other requirements or provisions of the Indenture): (A) on each day on which the Loans are subject to prepayment in accordance with the Credit Agreement, Bonds of the Twenty-third Series shall be subject to redemption in an aggregate principal amount equal to the Applicable Share of the aggregate principal amount of the Loans that are so subject to prepayment on such day; and (B) on the Acceleration Day, the entire aggregate principal amount of the Bonds of the Twenty-third Series shall be subject to redemption (the "Acceleration Redemption"); in each case, without any necessity for notice or call by the Company or by the Corporate Trustee (such notice and call being waived by the registered owners of the Bonds of the Twenty-third Series by the acceptance of the Bonds of the Twenty-third Series and in connection with each Redemption Demand hereinafter described). Redemption of Bonds of the Twenty-third Series shall be at a redemption price equal to the principal amount of such Bonds of the Twenty-third Series (without premium), together with interest accrued on said principal to and including the date of redemption (collectively, a "Redemption Amount"). In the event of any failure by the Company to pay when due the Redemption Amount with respect to any redemption of Bonds of the Twenty-third Series, interest shall accrue on such unpaid Redemption Amount at the rates (and in amounts equal to the Applicable Share of the amounts) of interest that accrue on the corresponding unpaid principal of and interest on the Loans in accordance with the Credit Agreement. The Corporate Trustee may conclusively presume that no redemption of Bonds of the Twenty-third Series is required pursuant to this subdivision (I) unless and until it shall have received a written notice from the Administrative Agent, signed by a person purporting to be its duly authorized officer, stating that the Loans are subject to prepayment or have been accelerated, in either case, in accordance with the Credit Agreement (a "Redemption Demand"). Each Redemption Demand also shall state the date on which the Loans are subject to prepayment or acceleration in accordance with the Credit Agreement, the principal amount of the Loans subject to such prepayment or acceleration on such date, the principal amount of Bonds of the Twenty-third Series to be redeemed on such date in accordance with this Twenty-third Supplemental Indenture by reason of such prepayment or acceleration, and the Redemption Amount payable with respect to such Bonds of the Twenty-third Series (determined in accordance with this Twenty-third Supplemental Indenture) and setting forth the amounts of the respective portions thereof representing principal of and interest on such Bonds of the Twenty-third Series. Each Redemption Demand shall be accompanied by a written waiver by the Collateral Agent, as registered owner of all Bonds of the Twenty-third Series then Outstanding, of notice of redemption and call for redemption by the Company or the Corporate Trustee of the Bonds of the Twenty-third Series subject to redemption as described in such Redemption Demand. The Corporate Trustee may conclusively presume the statements contained in each Redemption Demand to be correct (and the Corporate Trustee shall be fully protected in relying thereon). (II) For the avoidance of any doubt (in the case of the following clauses (i) and (ii)) and notwithstanding anything herein or in any Bond of the Twenty-third Series to the contrary other than the provisions of subdivision (IV) below (in the case of the following clause (iii)): (i) prior to the Remedy Exercise Day (as hereinafter defined), each payment of 14 principal of or interest on the Bonds of the Twenty-third Series that becomes due and payable on any day in accordance with this Twenty-third Supplemental Indenture (whether by reason of stated due date, acceleration, redemption or otherwise) shall correspond to, and be equal to the Applicable Share of, a payment of principal of or interest on the Loans that becomes due and payable on such day in accordance with the Credit Agreement; (ii) on the Acceleration Day, the Redemption Amount with respect to the Acceleration Redemption shall be due and payable; and (iii) on and after the Remedy Exercise Day (as hereinafter defined), (a) the Redemption Amount with respect to the Acceleration Redemption shall bear interest (to the extent permitted by law in the case of interest on the portion of the Redemption Amount representing interest on the applicable Bonds) at a variable rate per annum which rate for each day shall be equal to the Prime-Based Rate (as hereinafter defined and as calculated by the Corporate Trustee) for such day plus 6.75%, payable to the registered owners of the Bonds of the Twenty-third Series in the manner provided in the Mortgage for the payment of defaulted interest (including, without limitation, and if applicable, Section 76 of the Mortgage (as supplemented), and (b) payments of principal of and interest on the Bonds of the Twenty-third Series shall cease to correspond to payments of principal of and interest on the Loans (and shall not be satisfied and discharged by the satisfaction and discharge of the Loans). As used herein, "Remedy Exercise Day" means the day (on or after the Acceleration Day) on which all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds are transferred by the Collateral Agent to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement (as such transfer is evidenced by the registration in the names of the transferees in such transfer of certificates evidencing all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds). The Corporate Trustee may conclusively presume that the Remedy Exercise Day has not occurred unless and until it shall have received a written notice from the Collateral Agent, signed by a person purporting to be its duly authorized officer, stating that the Remedy Exercise Day has occurred (the "Remedy Exercise Day Notice"). The Remedy Exercise Day Notice (i) shall set forth the date of the Remedy Exercise Day, (ii) in the case of any such transfer with respect to which the Corporate Trustee is not the transfer agent, have attached thereto, as evidence of the transfer of the Bonds of the Twenty-third Series and the South Dakota Credit Agreement Bonds that gave rise to the occurrence of the Remedy Exercise Day, copies of certificates registered in the names of the transferees in such transfer of all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds, and (iii) if the Remedy Exercise Day Notice is received by the Corporate Trustee on a day other than the Remedy Exercise Day, the Prime Rate (as hereinafter defined) for each day on and after the Remedy Exercise Day and on and prior to the Business Day on which the Corporate Trustee received the Remedy Exercise Day Notice. The Corporate Trustee may conclusively presume the statements in the Remedy Exercise Day Notice to be correct (and the Corporate Trustee shall be fully protected in relying thereon). 15 As used herein, "Prime-Based Rate" means, with respect to a particular day (on or after the Remedy Exercise Day), the higher rate per annum of: (i) the "Prime Rate" (as hereinafter defined) for such day; and (ii) 4.0%. As used herein, "Prime Rate" means, with respect to a particular day, the "Prime-1 Rate" for such day as such rate shall appear on the Business Day next succeeding such day on the display on Moneyline Telerate, Inc. or any successor service on page 128 or any page that may replace page 128 on such service; provided that (a) if such day is not a Business Day, the Prime Rate for such day shall be such rate for the next preceding Business Day as so appearing on the next succeeding Business Day, and (b) if no such rate so appears on such next succeeding Business Day, the Prime Rate for such day shall be the "prime rate" for such day (or, if such day is not a Business Day, for the next preceding Business Day) as such rate appears on the next succeeding Business Day in the Wall Street Journal under the caption "Money Rates" (or if the Wall Street Journal ceases to be published or of general circulation, such other financial journal or newspaper of general circulation as is selected by the Corporate Trustee); provided further that, if no rate so appears on such next succeeding Business Day in the Wall Street Journal or such other financial journal or newspaper of general circulation, the Prime Rate for such day shall be the Prime Rate in effect with respect to the day on which the Prime Rate was last determinable in accordance with the foregoing provisions of this definition; and provided further that the Prime Rate for each day on and after the Remedy Exercise Day and on and prior to the Business Day on which the Corporate Trustee received the Remedy Exercise Day Notice shall be (i) the rate stated in the Remedy Exercise Day Notice as the Prime Rate for such day, or (ii) if no such rate for such day is stated in the Remedy Exercise Day Notice, the Prime Rate for the Business Day next succeeding the Business Day on which the Corporate Trustee received the Remedy Exercise Day Notice (as determined in accordance with the foregoing provisions of this definition). (III) Prior to the Remedy Exercise Day, the obligation of the Company to make each payment of principal of or interest on the Bonds of the Twenty-third Series that becomes due and payable in accordance with this Twenty-third Supplemental Indenture (i) shall be fully satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been fully paid under and in accordance with the Credit Agreement, and (ii) shall be partially satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been partially paid under and in accordance with the Credit Agreement (such partial satisfaction and discharge with respect to the Bonds of the Twenty-third Series to be in an amount equal to the Applicable Share of the amount of such partial payment with respect to the Loans). Prior to the Remedy Exercise Day, the Corporate Trustee may conclusively presume that the obligation of the Company to make payments with respect to the principal of and interest on the Bonds of the Twenty-third Series shall have been fully satisfied and discharged unless and until the Corporate Trustee shall have received a written notice from the Administrative Agent, signed by a person purporting to be its duly authorized officer, stating (i) that the Company has failed to make timely payment in full or in part of an amount of principal of and/or interest on the Loans which became due and payable in accordance with the Credit Agreement, (ii) the amount and date of such payment of principal of and/or interest on the Loans which the Company has failed to make in accordance with the Credit Agreement, and (iii) the amount of principal of 16 and/or interest on the Bonds of the Twenty-third Series which, in accordance with this Twenty-third Supplemental Indenture, has not been satisfied and discharged by reason of such failure of the Company. The Corporate Trustee may conclusively presume the statements contained in any such notice from the Administrative Agent to be correct unless and until the Corporate Trustee shall receive a subsequent and/or modified notice from the Administrative Agent pursuant to and in accordance with this subdivision III (and the Corporate Trustee shall be fully protected in relying thereon). Without limitation of the foregoing, and for the avoidance of any doubt, it is expressly stated that, prior to the Remedy Exercise Day, the Corporate Trustee shall not be responsible for (i) the calculation of interest on the Bonds of the Twenty-third Series, or (ii) the determination of any amount (including, without limitation, any principal of or interest on the Loans) that is payable or paid under the Credit Agreement. (IV) Nothing herein or in any of the Bonds of the Twenty-third Series (including, without limitation, any reference to the principal payable with respect to the Bonds of the Twenty-third Series being determined on the basis of the Applicable Share of the principal payable with respect to the Loans) shall, or shall be deemed or construed to, (i) increase the aggregate principal amount of the Bonds of the Twenty-third Series that are Outstanding from time to time, (ii) cause or permit an amount of principal of the Bonds of the Twenty-third Series to be or to become due and payable which, when added to all other principal of such Bonds theretofore paid, exceeds $280,000,000, or (iii) cause or permit to be or to become due and payable interest on the Bonds of the Twenty-third Series which is payable on any principal of the Bonds of the Twenty-third Series that is in excess of the principal of the Bonds of the Twenty-third Series as restricted pursuant to the preceding clauses (i) and (ii). ARTICLE II Additional Covenant for the Benefit of the Bonds of the Twenty-third Series Section 2.1 The Company covenants that so long as any of the Bonds of the Twenty-third Series shall remain Outstanding, (i) the Company shall not submit a request to the Corporate Trustee or otherwise apply to the Corporate Trustee for (a) the authentication and delivery of bonds pursuant to Article V, VI or VII of the Mortgage (as supplemented), (b) the application of insurance proceeds pursuant to Section 37 of the Mortgage (as supplemented), (c) the release of property (including the withdrawal of cash) pursuant to Article XI of the Mortgage (as supplemented), or (d) the execution and delivery of an indenture supplemental to such Mortgage (as supplemented) (any such request or application being referred to as an "Application"), in any case, unless the Company shall have given to the Administrative Agent, at least the Required Number of Days (as hereinafter defined) prior to the submission to the Corporate Trustee of such Application, notice of its intention to apply to the Corporate Trustee for the taking of such action (an "Administrative Agent Notice"), and (ii) the Company shall have furnished to the Corporate Trustee, in addition to the other materials required by the provisions of the Mortgage (as supplemented) to be furnished to the Corporate Trustee as part of such Application, a copy of the Administrative 17 Agent Notice with respect to such Application and a certificate of the President or a Vice President of the Company to the effect that at least the Required Number of Days has elapsed subsequent to the giving by the Company to the Administrative Agent of the Administrative Agent Notice with respect to such Application and prior to the submission to the Corporate Trustee of such Application (an "Administrative Agent Notice Certificate"). Receipt by the Corporate Trustee of a copy of the Administrative Agent Notice and the Administrative Agent Notice Certificate with respect to an Application shall be conditions to the taking of any action applied for in such Application. The Corporate Trustee shall have no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon, any Administrative Agent Notice and any Administrative Agent Notice Certificate. As used herein, "Required Number of Days" means, with respect to an Application, three (3) Business Days (as defined in Article I, Section 1.1 of this Twenty-third Supplemental Indenture) or such shorter period of time to which the Administrative Agent shall have agreed in writing. For the avoidance of doubt, it is expressly stated that (i) an Administrative Agent Notice may cover one or more different Applications and one or more different actions to be taken pursuant to the same or different provisions of the Mortgage (as supplemented), and (ii) notwithstanding the number of Applications or actions covered by an Administrative Agent Notice, such Administrative Agent Notice need be given by the Company to the Administrative Agent only once (at least the Required Number of Days prior to the submission to the Corporate Trustee of the first Application covered by such Administrative Agent Notice). ARTICLE III Amendments to Mortgage Section 3.1 . So long as any of the Bonds of the Twenty-third Series remain Outstanding, Section 7 of the Mortgage is amended by adding at the end thereof the following additional paragraphs: If any bonds Outstanding at the date of a Net Earning Certificate (except any for the refunding of which the bonds applied for are to be issued) or any bonds then applied for in pending applications (including the application in connection with which such Net Earning Certificate is made) bear or are to bear interest at a variable rate or variable rates such that the interest requirements with respect to such bonds for any twelve (12) month period prior to the stated maturity date of such bonds are not determinable at the date of such Net Earning Certificate (any such bonds being referred to as "Variable Rate Bonds"), then (in lieu of setting forth the Annual Interest Requirements (as otherwise prescribed by this Section 7), such Net Earning Certificate shall (A) set forth (i) the sum of the amounts required by clauses (i) through (iv) of paragraph (B) of this Section 7 (in the case of such clauses (i) and (ii), excluding the interest requirements in respect of the Variable Rate Bonds) (the sum of such amounts being referred to herein and to be referred to in such Net Earning Certificate as the "Fixed Rate Interest Amount"), and (ii) the amount (referred to herein and to be referred to in such 18 Net Earning Certificate as the "Maximum Permitted Variable Rate Interest Amount") by which (x) one-half of the Adjusted Net Earnings of the Company set forth in such Net Earning Certificate, exceeds (y) the Fixed Rate Interest Amount set forth in such Net Earning Certificate, and (ii) if such Net Earning Certificate is accompanied by a certificate of an independent (as hereinafter defined) investment banking firm, signed by a managing director or officer thereof, to the effect that, based upon historical fluctuations in the indices upon which the variable rate or variable rates borne by the Variable Rate Bonds are based, and taking into account the margins to be added to or subtracted from such indices and/or any other adjustments to be made in determining such variable rate or variable rates and prevailing and projected conditions in the markets influencing such indices, such independent (as hereinafter defined) investment banking firm believes (or is of the view), as of the date of such certificate, that the aggregate amount of interest to be payable on all of the Variable Rate Bonds during any period of twelve (12) months prior to the stated maturity date last to occur of any of the Variable Rate Bonds will not exceed the Maximum Permitted Variable Rate Interest Amount (as calculated by the Company in such Net Earning Certificate without any responsibility on the part of such independent (as hereinafter defined) investment banking firm for the calculation thereof), such Net Earning Certificate shall be deemed for all purposes of the Mortgage (including, without limitation, Sections 26, 28 and 29 of the Mortgage) to show Adjusted Net Earnings of the Company to be as required by Section 27 of the Mortgage. As used in this Section 7, "independent" means, with respect to an investment banking firm that provides a certificate pursuant to this Section 7, that: (i) such investment banking firm is competent to provide such certificate (and such investment banking firm shall be conclusively presumed to be competent to provide such certificate if such investment banking firm is an investment banking firm of nationally recognized standing and engages in interest rate swap transactions in the ordinary course of its business); (ii) such investment banking firm does not have any direct or indirect investment in the Company or in any bonds that, as of the date of such certificate, are Outstanding or the subject of a pending application for authentication and delivery under the Mortgage (including, without limitation, any bonds that are subject of the Net Earning Certificate to which such certificate relates) or in any affiliate of the Company (other than de minimus amounts of loans or securities of the Company or affiliates of the Company held in its or its affiliates' accounts and any investment in, or ownership of, additional securities or loans of the Company or affiliates of the Company resulting from its market making activities in the ordinary course of its business); (iii) such investment banking firm is not, and none of its officers or directors is, an affiliate of the Company; and (iv) such investment banking firm is not acting as an underwriter with respect to any bonds that are the subject of the Net Earning Certificate to which such certificate relates or as an arranger or 19 provider of the loans, extensions of credit or other securities (if any) for which such bonds are collateral security. If the Company is a successor corporation (within the meaning of Section 86 of this Indenture), the "Adjusted Net Earnings of the Company" as set forth in each Net Earning Certificate shall be calculated as described in the last two sentences of Section 86 of this Indenture. Section 3.2 So long as any of the Bonds of the Twenty-third Series remain Outstanding, Section 27 of the Mortgage is amended by adding at the end thereof the following additional sentence: As described in the penultimate paragraph of Section 7 hereof, and subject to the conditions therein specified, a Net Earning Certificate shall be deemed to show Adjusted Net Earnings of the Company to be as required by this Section 27 (without any necessity for such Net Earning Certificate to specify Annual Interest Requirements). Section 3.3 So long as any of the Bonds of the Twenty-third Series are Outstanding, Section 86 of the Mortgage is amended by adding at the end thereof the following additional sentences: For the avoidance of any doubt, it is expressly stated that in the event that a successor corporation (having succeeded to and having been substituted for the Company in accordance with this Section 86) shall exercise any right under this Indenture (whether as to the issuance of additional bonds (including, without limitation, the Bonds of the Twenty-third Series), the withdrawal of cash, the release of property, the taking of credit under Section 39 or Section 40 hereof, or otherwise) and a Net Earning Certificate shall be required by the terms of this Indenture in connection therewith, the "Adjusted Net Earnings of the Company" shall be, and shall be stated in such Net Earning Certificate to be, the lesser of (A) the amount (for the applicable period selected in accordance with paragraph (A) of Section 7 of this Indenture) determined in accordance with paragraph (A) of Section 7 of this Indenture (and the other provisions of such Section 7 that are relevant to such paragraph) on the basis of (i) the items set forth in clauses (1), (2), (4) and (6) of paragraph (A) of such Section 7 being such portions of such items of such successor corporation as are reasonably allocated by such successor corporation to or from the Mortgaged and Pledged Property as a plant or plants and an operating system or operating systems (and if, on the date of a Net Earning Certificate, such successor corporation shall be a party to any other general or first mortgage indenture and deed of trust relating to property other than the Mortgaged and Pledged Property and the lien of such other mortgage indenture and deed of trust shall not have been discharged, such reasonable allocation shall be in a manner consistent with the manner of allocation utilized and/or to be utilized by such successor corporation in 20 making calculations of the "Adjusted Net Earnings of the Company" (or other comparable term) under and as defined in such other mortgage indenture and deed of trust), (ii) the item set forth in clause (8) of paragraph (A) of such Section 7 being calculated without regard to income (net) derived from any electric and/or gas utility business of the successor corporation in which the Mortgaged and Pledged Property is not utilized (but otherwise in accordance with such Section 7), and (iii) the item set forth in clause (10) of paragraph (A) of such Section 7 being calculated without regard to sub-clause (b) of such clause and without regard to the proviso to such clause (but otherwise in accordance with such clause), and (B) the amount (for the applicable period selected in accordance with paragraph (A) of Section 7 of this Indenture) determined in accordance with paragraph (A) of Section 7 of this Indenture (and the other provisions of such Section 7 that are relevant to such paragraph) (without any allocation or distinction as to the derivation of the items set forth in any of the clauses of paragraph (A) of such Section 7, other than allocation or distinction between (i) the electric and/or gas utility business or businesses in which such successor corporation is engaged (whether or not the Mortgaged and Pledged Property is utilized in connection therewith), and (ii) the other business or businesses in which such successor corporation is engaged (with such other business or businesses being given effect under the items set forth in clauses (8) and (10) of paragraph (A) of such Section 7)). Each such Net Earning Certificate shall contain a statement of the signers of such Net Earning Certificate that, in the opinion of such signers, the allocations made in the calculations of "Adjusted Net Earnings of the Company" as set forth in such Net Earning Certificate are in accordance with the requirements of the preceding sentence of this Section 86. ARTICLE IV Miscellaneous Section 4.1 Except as otherwise expressly provided herein, the terms defined in the Mortgage, as heretofore supplemented, shall, for all purposes of this Twenty-third Supplemental Indenture, have the meaning specified in the Mortgage, as heretofore supplemented. Section 4.2 The Trustees hereby accept the trust herein declared, provided, created or supplemented and agree to perform the same upon the terms and conditions herein and in the Mortgage, as heretofore supplemented, set forth and upon the following terms and conditions. The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Twenty-third Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XVII of the Mortgage, as heretofore 21 supplemented, shall apply to and form part of this Twenty-third Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Twenty-third Supplemental Indenture. Section 4.3 Whenever in this Twenty-third Supplemental Indenture any of the parties hereto is named or referred to, this shall, subject to the provisions of Articles XVI and XVII of the Mortgage, as heretofore supplemented, be deemed to include the successors and assigns of such party, and all the covenants and agreements in this Twenty-third Supplemental Indenture contained by or on behalf of the Company, or by or on behalf of the Trustees shall, subject as aforesaid, bind and inure to the respective benefits of the respective successors and assigns of such parties, whether so expressed or not. Section 4.4 Nothing in this Twenty-third Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or to give to, any person, firm or corporation, other than the parties hereto and the holders of the bonds and coupons Outstanding under the Indenture, any right, remedy or claim under or by reason of this Twenty-third Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Twenty-third Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the bonds and coupons now, or to be, Outstanding under the Indenture. Section 4.5 This Twenty-third Supplemental Indenture shall be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Signature Pages Follow] 22 IN WITNESS WHEREOF, NORTHWESTERN CORPORATION has caused its name to be hereunto affixed, and this instrument to be signed and sealed by its President or one of its Vice Presidents, and its seal to be attested by its Secretary or one of its Assistant Secretaries for and in its behalf, and THE BANK OF NEW YORK, in token of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents or one of its Assistant Vice Presidents, and its corporate seal to be attested by one of its Assistant Vice Presidents, Assistant Secretaries or Assistant Treasurers, and MARYBETH LEWICKI, for all like purposes, has hereunto set her hand and affixed her seal, as of the day and year first above written. NORTHWESTERN CORPORATION By: /s/ Eric R. Jacobsen --------------------------------- Name: Eric R. Jacobsen Title: Senior Vice President, General Counsel, Chief Legal Officer and Assistant Corporate Secretary [SEAL] Attest: /s/ Alan D. Dietrich - ----------------------------- Name: Alan D. Dietrich Title: Corporate Secretary Executed, sealed and delivered by NORTHWESTERN CORPORATION in the presence of: /s/ Karen L. Smook - ----------------------------- /s/ Corinne Bohrer - ----------------------------- STATE OF SOUTH DAKOTA) : ss. COUNTY OF MINNEHAHA ) This instrument was acknowledged before me on this 10th day of February, 2003, by Eric R. Jacobsen, Senior Vice President, General Counsel, Chief Legal Officer and Assistant Corporate Secretary, of NORTHWESTERN CORPORATION, a Delaware corporation. /s/ Karen L. Smook -------------------------------------------- Print Name: Karen L. Smook Notary Public for the State of South Dakota Residing at Brandon, South Dakota My Commission expires 7-12-2005 [SEAL] THE BANK OF NEW YORK, as Corporate Trustee By: /s/ Barbara A. Bevelaqua ---------------------------- Name: Barbara A. Bevelaqua Title: Vice President [SEAL] Attest: /s/ Stacey B. Poindexter - ------------------------------------ Name: Stacey B. Poindexter Title: Assistant Treasurer /s/ MaryBeth Lewicki --------------------------------- MARYBETH LEWICKI, as Co-Trustee Executed, sealed and delivered by THE BANK OF NEW YORK and MARYBETH LEWICKI in the presence of: /s/ Jeremy Finkelstein - ----------------------------- /s/ Regina F. Johnson - ----------------------------- STATE OF NEW YORK ) : ss. COUNTY OF NEW YORK ) This instrument was acknowledged before me on this 10th day of February, 2003, by Barbara A. Bevelaqua, Vice President of THE BANK OF NEW YORK, a New York corporation. /s/ William J. Cassells ------------------------ WILLIAM J. CASSELLS Notary Public, State of New York No. 01CA5027729 Qualified in Bronx County Commission Expires May 16, 2006 [SEAL] STATE OF NEW YORK ) : ss. COUNTY OF NEW YORK ) This instrument was acknowledged before me on this 10th day of February, 2003, by MARYBETH LEWICKI. /s/ William J. Cassells ------------------------ WILLIAM J. CASSELLS Notary Public, State of New York No. 01CA5027729 Qualified in Bronx County Commission Expires May 16, 2006 [SEAL] Exhibit A-1 to Twenty-third Supplemental Indenture [FORM OF NOTICE OF REMOVAL OF CO-TRUSTEE] NOTICE IS HEREBY GIVEN that the undersigned NORTHWESTERN CORPORATION has removed DOUGLAS J. MACINNES as successor Co-Trustee under the Mortgage and Deed of Trust, dated as of October 1, 1945, as amended, of NorthWestern Corporation (as successor thereunder to NorthWestern Energy, L.L.C., in turn successor thereunder to The Montana Power Company) to The Bank of New York (as successor thereunder to Guaranty Trust Company of New York) and Douglas J. MacInnes (as indirect successor thereunder to Arthur E. Burke), as Trustees, such removal having taken effect at the close of business on February 7, 2003. Dated: February , 2003 NORTHWESTERN CORPORATION A-1-1 Exhibit A-2 to Twenty-third Supplemental Indenture [FORM OF NOTICE OF APPOINTMENT OF SUCCESSOR CO-TRUSTEE] NOTICE IS HEREBY GIVEN that the undersigned NORTHWESTERN CORPORATION, having removed Douglas J. MACInnes as successor Co-Trustee under the Mortgage and Deed of Trust, dated as of October 1, 1945, as amended, of NorthWestern Corporation (as successor thereunder to NorthWestern Energy, L.L.C., in turn successor thereunder to The Montana Power Company) to The Bank of New York (successor thereunder to Guaranty Trust Company of New York) and Douglas J. MacInnes (as indirect successor thereunder to Arthur E. Burke), as Trustees, has appointed MARYBETH LEWICKI as successor Co-Trustee under such Mortgage and Deed of Trust, and MaryBeth Lewicki has accepted such appointment, effective as of the close of business on February 7, 2003. Dated: February , 2003 NORTHWESTERN CORPORATION A-2-1 Exhibit B to Twenty-third Supplemental Indenture Form of Bond [FORM OF FIRST MORTGAGE BOND, CREDIT AGREEMENT (2002) SERIES, DUE 2006] TRANSFER OF THIS BOND IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN THE MORTGAGE TO WHICH REFERENCE IS MADE IN THIS BOND. THE TRANSFER RESTRICTIONS ARE DESCRIBED ON THE REVERSE OF THIS BOND. NORTHWESTERN CORPORATION First Mortgage Bond, Credit Agreement (2002) Series, due 2006 No. R- $ ________________ NORTHWESTERN CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Company"), for value received, hereby promises to pay to CREDIT SUISSE FIRST BOSTON, AS COLLATERAL AGENT UNDER THE BOND COLLATERAL AGREEMENT to which reference is hereinafter made, or (subject to the transfer restrictions hereinafter described) registered assigns, at the office or agency of the Company in the Borough of Manhattan, The City of New York, the sum of _________ dollars, in installments prior to, and the balance on, December 1, 2006 (the "Maturity Date"), in each case, in such amount as is hereinafter described for such installment or such balance, as applicable, and in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts, and to pay to the registered owner interest thereon as hereinafter described in like coin or currency and at such office or agency. The bonds of the series of which this bond is one have been issued to Credit Suisse First Boston, acting through its Cayman Islands Branch, as collateral agent (together with its successors in such capacity, the "Collateral Agent") under the Bond Collateral Agreement, dated as of February 10, 2003 (as amended or otherwise modified, or as waived, or as replaced, in each case, from time to time in accordance with its terms, the "Collateral Agreement"), between the Company and the Collateral Agent, to secure the obligations of the Company to pay when due the Applicable Share (as hereinafter defined) of the principal of and interest on the loans (the "Loans") made and outstanding under the Credit Agreement, dated as of December 17, 2002 (as amended or otherwise modified, or as waived, or as replaced, in each case, from time to time in accordance with its terms, the "Credit Agreement"), among the Company, as borrower, the several lenders from time to time parties thereto (the "Lenders") and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent (together with its successors in such capacity, the "Administrative Agent"). B-1 The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though set fully forth at this place. This instrument shall not become obligatory until The Bank of New York (successor to Morgan Guaranty Trust Company of New York), the Corporate Trustee under the Mortgage (referred to on the reverse hereof), or its successors thereunder, shall have signed the form of authentication certificate endorsed hereon. IN WITNESS WHEREOF, NORTHWESTERN CORPORATION has caused this instrument to be signed in its corporate name by its Chairman of the Board or its President or one of its Vice Presidents by his or her signature or a facsimile thereof, and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries by his or her signature or a facsimile thereof. Dated: NORTHWESTERN CORPORATION By: ---------------------------------------------- [Title] Attest: - ------------------------- [Title] (Seal) CORPORATE TRUSTEE'S AUTHENTICATION CERTIFICATE This bond is one of the bonds, of the series herein designated, described or provided for in the within-mentioned Mortgage. THE BANK OF NEW YORK, as Corporate Trustee By: ---------------------------------------------- Authorized Signatory B-2 [FORM OF REVERSE OF BOND] General - ------- This bond is one of an issue of bonds of the Company issuable in series and is one of a series known as its First Mortgage Bonds, Credit Agreement (2002) Series, due 2006 (sometimes herein referred to as the "Bonds of the Twenty-third Series"), all bonds of all series issued and to be issued under and equally secured (except in so far as any sinking or other fund, established in accordance with the provisions of the Mortgage hereinafter mentioned, may afford additional security for the bonds of any particular series) by a Mortgage and Deed of Trust (herein, together with any indenture supplemental thereto, including the Twenty-third Supplemental Indenture dated as of February 1, 2003 (the "Twenty-third Supplemental Indenture"), called the "Mortgage"), dated as of October 1, 1945, executed by The Montana Power Company (NorthWestern Corporation, successor thereunder) to Guaranty Trust Company of New York (The Bank of New York, successor thereunder) and Arthur E. Burke (MaryBeth Lewicki, successor thereunder), as Trustees. Reference is made to the Mortgage for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds and of the Trustees in respect thereof, the duties and immunities of the Trustees, the terms and conditions upon which the bonds are and are to be secured, the circumstances under which additional bonds may be issued and the definition of any capitalized term used herein but not defined herein. With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations of the Company and/or the rights of the holders of the bonds and/or coupons and/or the terms and provisions of the Mortgage may be modified or altered by affirmative vote of the holders of at least 66-2/3% in principal amount of the bonds then Outstanding under the Mortgage and, if the rights of the holders of one or more, but less than all, series of bonds then Outstanding are to be affected, then also by affirmative vote of the holders of at least 66-2/3% in principal amount of the bonds then Outstanding of each series of bonds so to be affected (excluding in any case bonds disqualified from voting by reason of the Company's interest therein as provided in the Mortgage); provided that, without the consent of the holder hereof, no such modification or alteration shall, among other things, impair or affect the right of the holder to receive payment of the principal of and interest on this bond, on or after the respective due dates expressed herein, or permit the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of the benefit of a lien on the mortgaged and pledged property. The principal hereof may be declared or may become due prior to the maturity date hereinbefore named on the conditions, in the manner and at the time set forth in the Mortgage, upon the occurrence of a default as in the Mortgage provided. No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such, either directly or through the Company or any predecessor or successor B-3 corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage. Transfer Provisions and Restrictions - ------------------------------------ Bonds of the Twenty-third Series shall not be transferable except to any successor Collateral Agent under the Collateral Agreement; provided, however, that, subject to compliance with the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), (i) on or after the day on which the Loans are accelerated in accordance with the Credit Agreement (the "Acceleration Day"), all (but not less than all) of the Bonds of the Twenty-third Series shall be transferable by the Collateral Agent (together with all (but not less than all) of the South Dakota Credit Agreement Bonds (as hereinafter defined)) to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement, and (ii) following such transfer by the Collateral Agent, Bonds of the Twenty-third Series shall be transferable (without restriction (except as hereinafter in the following two paragraphs described)) by the registered owners thereof. As a condition precedent to any transfer of the Bonds of the Twenty-third Series by the Collateral Agent, the Collateral Agent shall submit to the Company, the Corporate Trustee and, if applicable, any bond registrar or transfer agent for the Bonds of the Twenty-third Series (in addition to all other documents and instruments required to be submitted pursuant to the Mortgage) a certificate of the Collateral Agent, signed by a person purporting to be its duly authorized officer, certifying that the transferee in such transfer is a successor Collateral Agent under the Collateral Agreement or that the transferees in such transfer are the Lenders or persons or entities specified by the Lenders to which on or after the Acceleration Day all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds (as hereinafter defined) are being transferred in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement (and the Corporate Trustee may conclusively presume the statements in any such certificate of the Collateral Agent to be correct and shall be fully protected in relying thereon). As a condition precedent to any transfer of any Bond of the Twenty-third Series to a transferee other than a successor Collateral Agent, the transferor in such transfer shall deliver to the Company, the Corporate Trustee and, if applicable, any bond registrar or transfer agent for the Bonds of the Twenty-third Series (in addition to all other documents and instruments required to be submitted pursuant to the Mortgage), (i) an opinion of counsel reasonably satisfactory to the Company, the Corporate Trustee and, if applicable, any bond registrar or transfer agent for the Bonds of the Twenty-third Series, or (ii) a certificate of the transferor in such transfer, signed by a person purporting to be its duly authorized officer, reasonably satisfactory to the Company, the Corporate Trustee and, if applicable, the bond registrar or transfer agent for the Bonds of the Twenty-third Series, in either case, to the B-4 effect that such transfer is either (A) covered by an effective registration statement of the Company under the Securities Act (setting forth the registration number and the date of effectiveness of such registration statement), or (B) exempt from registration under the Securities Act (setting forth the applicable exemption from registration being relied upon and the reason such exemption is applicable to such transfer). Any such transfer is to be made as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of the applicable Bond of the Twenty-third Series, and, thereupon, a new fully registered temporary or definitive bond of the same series for a like principal amount will be issued to the transferee in exchange therefor as provided in the Mortgage. The Company and the Trustees may deem and treat the person in whose name any Bond of the Twenty-third Series is registered as the absolute owner thereof for the purpose of receiving payment and for all other purposes and neither the Company nor the Trustees shall be affected by any notice to the contrary. In the manner prescribed in the Mortgage, Bonds of the Twenty-third Series upon surrender thereof, for cancellation, at the office or agency of the Company in the Borough of Manhattan, The City of New York, are exchangeable for a like aggregate principal amount of registered bonds of the same series of other authorized denominations. As provided in the Mortgage, the Company shall not be required to make transfers or exchanges of bonds of any series for a period of ten days next preceding any interest payment date for bonds of said series, or next preceding any designation of bonds of said series to be redeemed; provided, however, that pursuant to a waiver by the Company in the Twenty-Third Supplemental Indenture, these restrictions shall not be applicable to any transfer of the Bonds of the Twenty-third Series on or prior to the Remedy Exercise Day (as hereinafter defined). Principal - --------- Principal of the Bonds of the Twenty-third Series, of which this bond is one, is scheduled to be paid as follows: (A) on the last Business Day (as hereinafter defined) of each March, June, September and December occurring prior to the Maturity Date (commencing March 31, 2003), an installment of principal of the Bonds of the Twenty-third Series in an amount equal to $700,000 (said amount representing one quarter of one percent (0.25%) of the original aggregate principal amount of the Bonds of the Twenty-third Series) is due and payable; and (B) on the Maturity Date, the balance of the principal of the Bonds of the Twenty-third Series is due and payable; in each case, unless an equal installment or balance of the principal of the Loans is not due and payable on such Business Day or the Maturity Date, as applicable, in accordance with the Credit Agreement by reason of prior prepayment of the Loans (in which event, there shall be due and payable on the Bonds of the Twenty-third Series on such Business Day or on the Maturity Date, as applicable, an amount of principal of said Bonds equal to the Applicable Share of the amount of principal of the B-5 Loans that is payable on such Business Day or on the Maturity Date, as applicable, in accordance with the Credit Agreement). As used herein, "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. Interest - -------- The unpaid principal amount of the Bonds of the Twenty-third Series, of which this Bond is one, bears interest at one or more variable interest rates per annum which rate or rates for each day shall be equal to the rate or rates per annum borne by the Loans in accordance with the Credit Agreement for such day (calculated in the manner provided in the Credit Agreement for the calculation of interest on the Loans), payable on each day on which interest is payable on the Loans in accordance with the Credit Agreement (and in an amount equal to the Applicable Share of the amount of interest that is payable on the Loans on such day in accordance with the Credit Agreement) to the Collateral Agent, as the registered owner, without regard to, or necessity for, any record date. Applicable Share - ---------------- As used herein, "Applicable Share" means, as of any day, a fraction (expressed as a percentage rounded to the eighth decimal place), (i) the numerator of which is the aggregate principal amount of the Bonds of the Twenty-third Series that are Outstanding on such day, and (ii) the denominator of which is the sum of (a) the aggregate principal amount of the Bonds of the Twenty-third Series that are Outstanding on such day, plus (b) the aggregate principal amount of the New Mortgage Bonds, Credit Agreement (2002) Series, due 2006, of the Company (the "South Dakota Credit Agreement Bonds") that are outstanding on such day under the Company's South Dakota Mortgage (as defined in the Twenty-third Supplemental Indenture). Redemption - ---------- Bonds of the Twenty-third Series, of which this bond is one, are subject to redemption as follows (but shall not otherwise be or become subject to redemption, whether at the option of the holders thereof or the Company or pursuant to any other requirements or provisions of the Indenture): (A) on each day on which the Loans are subject to prepayment in accordance with the Credit Agreement, Bonds of the Twenty-third Series shall be subject to redemption in an aggregate principal amount equal to the Applicable Share of the aggregate principal amount of the Loans that are so subject to prepayment on such day; and (B) on the Acceleration Day, the entire aggregate principal amount of the Bonds of the Twenty-third Series shall be subject to redemption (the "Acceleration Redemption"); in each case, without any necessity for notice or call by the Company or the Corporate Trustee (such notice and call being waived by the registered owners of the Bonds of the Twenty-third Series by the acceptance of the Bonds of the Twenty-third Series and in connection with each Redemption Demand (as hereinafter defined)). Redemption of Bonds of the Twenty-third Series, of which this bond is one, shall be at a redemption price equal to the principal amount B-6 of such Bonds of the Twenty-third Series (without premium), together with interest accrued on said principal to and including the date of redemption (collectively, a "Redemption Amount"). In the event of any failure by the Company to pay when due the Redemption Amount with respect to any redemption of Bonds of the Twenty-third Series, interest shall accrue on such unpaid Redemption Amount at the rate or rates (and in amounts equal to the Applicable Share of the amounts) of interest that accrue on the corresponding unpaid principal of and interest on the Loans in accordance with the Credit Agreement. The Corporate Trustee may conclusively presume that no redemption of Bonds of the Twenty-third Series is required unless and until it shall have received a written notice from the Administrative Agent, signed by a person purporting to be its duly authorized officer, stating that the Loans are subject to prepayment or have been accelerated, in either case, in accordance with the Credit Agreement (a "Redemption Demand"). Each Redemption Demand also shall state the date on which the Loans are subject to prepayment or acceleration in accordance with the Credit Agreement, the principal amount of the Loans subject to such prepayment or acceleration on such date, the principal amount of the Bonds of the Twenty-third Series to be redeemed on such date in accordance with the Twenty-third Supplemental Indenture by reason of such prepayment or acceleration, and the Redemption Amount payable with respect to such Bonds of the Twenty-third Series (determined in accordance with the Twenty-third Supplemental Indenture and setting forth the amounts of the respective portions thereof representing principal of and interest on such Bonds of the Twenty-third Series). Each Redemption Demand shall be accompanied by a written waiver by the Collateral Agent, as registered owner of all of the Bonds of the Twenty-third Series then Outstanding, of notice of redemption and call for redemption by the Company or the Corporate Trustee of the Bonds of the Twenty-third Series subject to redemption as described in such Redemption Demand. The Corporate Trustee may conclusively presume the statements contained in each Redemption Demand to be correct. Additional Terms - ---------------- Bonds of the Twenty-third Series shall be subject to the following other terms and conditions: (I) For the avoidance of any doubt (in the case of the following clauses (ii) and (iii)) and notwithstanding anything herein or in the Twenty-third Supplemental Indenture to the contrary other than the provisions of subdivision (III) below (in the case of the following clause (iii)): (i) prior to the Remedy Exercise Day (as hereinafter defined), each payment of principal of or interest on the Bonds of the Twenty-third Series that becomes due and payable on any day (whether by reason of stated due date, acceleration, redemption or otherwise) shall correspond to, and be equal to the Applicable Share of, a payment of principal of or interest on the Loans that becomes due and payable on such day in accordance with the Credit Agreement; (ii) on the Acceleration Day, the Redemption Amount with respect to the Acceleration Redemption shall be due and payable; and (iii) on and after the Remedy Exercise Day (as hereinafter defined), (a) the Redemption Amount with respect to the B-7 Acceleration Redemption shall bear interest (to the extent permitted by law in the case of interest on the portion of the Redemption Amount representing interest on the applicable Bonds) at a variable rate per annum which rate for each day shall be equal to the Prime-Based Rate (as defined in the Twenty-third Supplemental Indenture and as calculated by the Corporate Trustee) for such day plus 6.75%, payable in the manner provided in the Mortgage for the payment of defaulted interest (including, without limitation, if applicable, Section 76 of the Mortgage), and (b) payments of principal of and interest on the Bonds of the Twenty-third Series shall cease to correspond to payments of principal of and interest on the Loans (and shall not be satisfied and discharged by the satisfaction and discharge of the Loans). As used herein, "Remedy Exercise Day" means the day (on or after the Acceleration Day) on which all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds are transferred by the Collateral Agent to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement (as such transfer is evidenced by the registration in the names of the transferees in such transfer of certificates evidencing all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds). The Corporate Trustee may conclusively presume that the Remedy Exercise Day has not occurred unless and until it shall have received a written notice from the Collateral Agent, signed by a person purporting to be its duly authorized officer, stating that the Remedy Exercise Day has occurred (the "Remedy Exercise Day Notice"). The Remedy Exercise Day Notice (i) shall set forth the date of the Remedy Exercise Day, (ii) in the case of any such transfer with respect to which the Corporate Trustee is not the transfer agent, have attached thereto, as evidence of the transfer of the Bonds of the Twenty-third Series and the South Dakota Credit Agreement Bonds that gave rise to the occurrence of the Remedy Exercise Day, copies of certificates registered in the names of the transferees in such transfer of all (but not less than all) of the Bonds of the Twenty-third Series and all (but not less than all) of the South Dakota Credit Agreement Bonds, and (iii) if the Remedy Exercise Day Notice is received by the Corporate Trustee on a day other than the Remedy Exercise Day, the Prime Rate (as defined in the Supplemental Indenture) for each day on and after the Remedy Exercise Day and on and prior to the Business Day on which the Corporate Trustee received the Remedy Exercise Day Notice. The Corporate Trustee may conclusively presume the statements in the Remedy Exercise Day Notice to be correct (and the Corporate Trustee shall be fully protected in relying thereon). (II) Prior to the Remedy Exercise Day, the obligation of the Company to make each payment of principal of or interest on the Bonds of the Twenty-third Series that becomes due and payable in accordance with the Twenty-third Supplemental Indenture (i) shall be fully satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been fully paid under and in accordance with the Credit Agreement, and (ii) shall be partially satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been partially paid under and in accordance with the Credit Agreement (such partial satisfaction and discharge with respect to B-8 the Bonds of the Twenty-third Series to be in an amount equal to the Applicable Share of the amount of such partial payment with respect to the Loans). (III) Nothing in any of the Bonds of the Twenty-third Series (including, without limitation, any reference to the principal payable with respect to the Bonds of the Twenty-third Series being determined on the basis of the Applicable Share of the principal payable with respect to the Loans) shall, or shall be deemed or construed to, (i) increase the aggregate principal amount of the Bonds of the Twenty-third Series that are Outstanding from time to time, (ii) cause or permit an amount of principal of the Bonds of the Twenty-third Series to be or to become due and payable which, when added to all other principal of such Bonds theretofore paid, exceeds $280,000,000, or (iii) cause or permit to be or to become due and payable interest on the Bonds of the Twenty-third Series which is payable on any principal of the Bonds of the Twenty-third Series that is in excess of the principal of the Bonds of the Twenty-third Series as restricted pursuant to the preceding clauses (i) and (ii). B-9 EX-4 5 ex4-3.txt EX. 4.3: SUPPLEMENTAL INDENTURE - -------------------------------------------------------------------------------- NORTHWESTERN CORPORATION TO JPMORGAN CHASE BANK as Trustee ----------------------------------- SUPPLEMENTAL INDENTURE Providing, among other things, for New Mortgage Bonds, Credit Agreement (2002) Series, due 2006 ----------------------------------- Dated as of February 1, 2003 - -------------------------------------------------------------------------------- SUPPLEMENTAL INDENTURE, dated as of February 1, 2003 (this "Supplemental Indenture"), made by and between NORTHWESTERN CORPORATION (formerly known as NorthWestern Public Service Company), a corporation organized and existing under the laws of the State of Delaware (the "Company"), the post office address of which is 125 S. Dakota Avenue, Suite 1100, Sioux Falls, South Dakota 57104, and JPMORGAN CHASE BANK (successor by merger to The Chase Manhattan Bank (National Association)), a bank organized and existing under the laws of the State of New York (the "Trustee"), as Trustee under the General Mortgage Indenture and Deed of Trust dated as of August 1, 1993, hereinafter mentioned, the post office address of which is 4 New York Plaza, 15th Floor, New York, New York 10004; WHEREAS, the Company has heretofore executed and delivered its General Mortgage Indenture and Deed of Trust dated as of August 1, 1993 (the "Original Indenture"), to the Trustee, for the security of the Bonds of the Company issued and to be issued thereunder (the "Bonds"); and WHEREAS, the Company has heretofore executed and delivered to the Trustee five indentures supplemental to the Original Indenture, the first dated as of August 15, 1993, the second dated as of August 1, 1995 and each of the third, fourth and fifth dated as of September 1, 1995 (the Original Indenture, as supplemented and amended by the aforementioned five supplemental indentures and by this Supplemental Indenture, being hereinafter referred to as the "Indenture"); and WHEREAS, the Company desires to create a new series of Bonds to be issued under the Indenture, to be known as New Mortgage Bonds, Credit Agreement (2002) Series, due 2006 (the "New Mortgage Bonds of the Credit Agreement (2002) Series"); and WHEREAS, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture, and pursuant to appropriate resolutions of the Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, THIS INDENTURE WITNESSETH: THAT NorthWestern Corporation, in consideration of the acceptance or the purchase and ownership (as applicable) from time to time of the Bonds and the service by the Trustee and its successors, under the Indenture and of One Dollar to it, duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the trust under the Indenture, for the benefit of those who shall hold the Bonds as follows: ARTICLE I DESCRIPTION OF NEW MORTGAGE BONDS OF THE CREDIT AGREEMENT (2002) SERIES SECTION 1. The Company hereby creates a new series of Bonds to be known as "New Mortgage Bonds, Credit Agreement (2002) Series, due 2006." The New Mortgage Bonds of the Credit Agreement (2002) Series shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture, as supplemented and modified. The aggregate principal amount of New Mortgage Bonds of the Credit Agreement (2002) Series which may be authenticated and delivered under the Indenture (except for New Mortgage Bonds of the Credit Agreement (2002) Series authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other New Mortgage Bonds of the Credit Agreement (2002) Series pursuant to the Indenture and except for New Mortgage Bonds of the Credit Agreement (2002) Series which, pursuant to the Indenture, are deemed never to have been authenticated and delivered under the Indenture) is limited to $110,000,000. New Mortgage Bonds of the Credit Agreement (2002) Series shall be issued to Credit Suisse First Boston, acting through its Cayman Islands Branch, as collateral agent (together with its successors in such capacity, the "Collateral Agent") under the Bond Collateral Agreement, dated as of February 10, 2003 (as amended or otherwise modified, or as waived, or as replaced, in each case, from time to time in accordance with its terms, the "Collateral Agreement"), between the Company and the Collateral Agent, to secure the obligations of the Company to pay when due the Applicable Share (as hereinafter defined) of the principal of and interest on the loans (the "Loans") made and outstanding under the Credit Agreement, dated as of December 17, 2002 (as amended or otherwise modified, or as waived, or as replaced, in each case, from time to time in accordance with its terms, the "Credit Agreement"), among the Company, as borrower, the several lenders from time to time parties thereto (the "Lenders") and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent (together with its successors in such capacity, the "Administrative Agent"). As used herein, "Applicable Share" means, as of any day, a fraction (expressed as a percentage rounded to the eighth decimal place), (i) the numerator of which is the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are Outstanding on such day, and (ii) the denominator of which is the sum of (a) the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are Outstanding on such day, plus (b) the aggregate principal amount of the First Mortgage Bonds, Credit Agreement (2002) Series, due 2006, of the Company (the "Montana Credit Agreement Bonds") that are outstanding on such day under the Company's Mortgage and Deed of Trust, dated as of October 1, 1945, relating (among other things) to property acquired by the Company from NorthWestern Energy, L.L.C., which in turn acquired such property from The Montana Power Company (as amended and supplemented, the "Montana Mortgage"). Initially, the Applicable Share will be 28.20512821% (being the expression as a percentage (rounded to the eighth decimal place) of a fraction, the numerator of which is $110,000,000 (the aggregate principal 2 amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are to be issued and become Outstanding) and the denominator of which is $390,000,000 (the sum of $110,000,000, the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are to be issued and become Outstanding, plus $280,000,000, the aggregate principal amount of the Montana Credit Agreement Bonds that are to be issued and become outstanding under the Montana Mortgage simultaneously with the issuance of the New Mortgage Bonds of the Credit Agreement (2002) Series). Pursuant to the Collateral Agreement, the Collateral Agent will furnish to the Trustee (with a copy to the Company) as soon as practicable after any change in the Applicable Share, a certificate, signed by a person purporting to be its duly authorized officer, notifying the Trustee of such change in the Applicable Share (an "Applicable Share Certificate"). Each Applicable Share Certificate shall set forth (i) the changed Applicable Share, (ii) the date such change occurred, (iii) the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series then Outstanding, and (iv) the aggregate principal amount of the Montana Credit Agreement Bonds then outstanding under the Montana Mortgage. The Trustee may conclusively presume that the Applicable Share is 28.20512821% unless and until the Trustee receives an Applicable Share Certificate. Following receipt by the Trustee of an Applicable Share Certificate, the Trustee may conclusively presume that the Applicable Share is as set forth in such Applicable Share Certificate unless and until the Trustee receives a subsequent Applicable Share Certificate. New Mortgage Bonds of the Credit Agreement (2002) Series shall mature on December 1, 2006 (the "Maturity Date"), with an installment of principal of the New Mortgage Bonds of the Credit Agreement (2002) Series in an amount equal to $275,000 (said amount representing one quarter of one percent (0.25%) of the original aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series) being payable on the last Business Day (as hereinafter defined) of each March, June, September and December occurring prior to the Maturity Date, commencing March 31, 2003, and the balance of the principal of the New Mortgage Bonds of the Credit Agreement (2002) Series being payable on the Maturity Date; in each case, unless an equal installment or balance of the principal of the Loans is not due and payable on such Business Day or the Maturity Date, as applicable, in accordance with the Credit Agreement by reason of prior prepayment of the Loans (in which event, there shall be due and payable on the New Mortgage Bonds of the Credit Agreement (2002) Series on such Business Day or on the Maturity Date, as applicable, an amount of principal of said bonds equal to the Applicable Share of the amount of principal of the Loans that is payable on such Business Day or on the Maturity Date, as applicable, in accordance with the Credit Agreement); the unpaid principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series shall bear interest at one or more variable interest rates per annum which rate or rates for each day shall be equal to the rate or rates per annum borne by the Loans in accordance with the Credit Agreement for such day (calculated in the manner provided in the Credit Agreement for the calculation of interest on the Loans), payable on each day on which interest is payable on the Loans in accordance with the Credit Agreement (and in an amount equal to the Applicable Share of the amount of interest that is payable on the Loans on such day in accordance with the Credit Agreement) to the Collateral Agent, as the registered owner, without regard to, or 3 necessity for, any record date; the principal of and interest on each said Bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts. New Mortgage Bonds of the Credit Agreement Series (2002) shall be dated as in Section 3.03(c) of the Original Indenture (as supplemented) provided. As used herein, "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. As permitted pursuant to Sections 3.01 and 5.06 of the Mortgage (as supplemented), scheduled amortization payments with respect to the New Mortgage Bonds of the Credit Agreement (2002) Series (as specified for the New Mortgage Bonds of the Credit Agreement (2002) Series prior to the Maturity Date pursuant to the preceding paragraph of this Section 1) shall not constitute redemption in part of the New Mortgage Bonds of the Credit Agreement (2002) Series for purposes of Section 5.06 of the Mortgage (as supplemented) (and, therefore, surrender of the New Mortgage Bonds of the Credit Agreement (2002) Series shall not be a condition to the receipt by the registered owners of the New Mortgage Bonds of the Credit Agreement (2002) Series of such scheduled amortization payments). SECTION 2. New Mortgage Bonds of the Credit Agreement (2002) Series shall be issued only as registered Bonds without coupons of the denomination of $1,000, or any integral multiple of $1 in excess of $1,000, appropriately numbered. New Mortgage Bonds of the Credit Agreement (2002) Series may be exchanged, upon surrender thereof, at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, for one or more New Mortgage Bonds of the Credit Agreement (2002) Series of other authorized denominations, for the same aggregate principal amount, subject to the terms and conditions set forth in the Indenture. New Mortgage Bonds of the Credit Agreement (2002) Series shall not be transferable except to any successor Collateral Agent under the Collateral Agreement; provided, however, that, subject to compliance with the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), (i) on or after the day on which the Loans are accelerated in accordance with the Credit Agreement (the "Acceleration Day"), all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series shall be transferable by the Collateral Agent (together with all (but not less than all) of the Montana Credit Agreement Bonds) to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement, and (ii) following such transfer by the Collateral Agent, New Mortgage Bonds of the Credit Agreement (2002) Series shall be transferable (without restriction (except as hereinafter in the following two paragraphs described)) by the registered owners thereof. As a condition precedent to any transfer of the New Mortgage Bonds of the Credit Agreement (2002) Series by the Collateral Agent, the Collateral Agent shall submit to the Company, the Trustee and the Bond Registrar (in addition to all other documents and instruments required to be submitted to the Bond Registrar pursuant to the Indenture) a 4 certificate of the Collateral Agent, signed by a person purporting to be its duly authorized officer, certifying that the transferee in such transfer is a successor Collateral Agent under the Collateral Agreement or that the transferees in such transfer are the Lenders or Persons specified by the Lenders to which on or after the Acceleration Day all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds are being transferred in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement (and the Trustee and the Bond Registrar may conclusively presume the statements in any such certificate of the Collateral Agent to be correct). As a condition precedent to the transfer of any New Mortgage Bond of the Credit Agreement (2002) Series to a transferee other than a successor Collateral Agent, the transferor in such transfer shall deliver to the Company, the Trustee and the Bond Registrar (in addition to all other documents and instruments required to be submitted to the Bond Registrar pursuant to the Indenture) (i) an opinion of counsel reasonably satisfactory to the Company, the Trustee and the Bond Registrar, or (ii) a certificate of the transferor in such transfer, signed by a person purporting to be its duly authorized officer, reasonably satisfactory to the Company, the Trustee and the Bond Registrar, in either case, to the effect that such transfer is either (A) covered by an effective registration statement of the Company under the Securities Act (setting forth the registration number and the date of effectiveness of such registration statement), or (B) exempt from registration under the Securities Act (setting forth the applicable exemption from registration being relied upon and the reason such exemption is applicable to such transfer). Any transfer of New Mortgage Bonds of the Credit Agreement (2002) Series (i) shall be subject to the provisions of Section 3.05 of the Indenture, except that the provisions of paragraph (g) of such Section 3.05 shall not be applicable to any transfer of New Mortgage Bonds of the Credit Agreement (2002) Series which occurs on or prior to the Remedy Exercise Day (as hereinafter defined) (and the Company hereby waives the provisions of such paragraph with respect to any such transfer), and (ii) shall be made at the office or agency of the Company in the Borough of Manhattan, The City of New York. The Company hereby waives any right to make any charge for any exchange or transfer of New Mortgage Bonds of the Credit Agreement (2002) Series by the Collateral Agent or any Person that is a direct transferee of the Collateral Agent (but not by any other transferee of New Mortgage Bonds of the Credit Agreement (2002) Series), whether to reimburse itself for any tax or taxes or other governmental charge or otherwise (it being understood that the Company shall pay any tax or taxes or governmental or other charge which may be payable by reason of any exchange or transfer of New Mortgage Bonds of the Credit Agreement (2002) Series by the Collateral Agent or any Person that is a direct transferee of the Collateral Agent). However, the Company reserves the right to require payment of a sum sufficient to cover any tax or taxes or governmental or other charge that may be imposed in connection with any transfer or exchange of New Mortgage Bonds of the Credit Agreement (2002) Series by any registered owner other than the Collateral Agent or any Person that is a direct transferee 5 of the Collateral Agent, other than any exchange pursuant to Section 3.04, 5.06 or 14.06 of the Indenture not involving any transfer. The Company has appointed JPMorgan Chase Bank as its agent to receive New Mortgage Bonds of the Credit Agreement (2002) Series presented or surrendered for payment, to receive New Mortgage Bonds of the Credit Agreement (2002) Series surrendered for registration of transfer or exchange and to receive notices and demands to or upon the Company in respect of the New Mortgage Bonds of the Credit Agreement (2002) Series and the Indenture; and the corporate trust office of JPMorgan Chase Bank in the Borough of Manhattan, The City of New York, State of New York shall be the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York at which such presentations, surrenders, notices and demands may be made or served. SECTION 3. The New Mortgage Bonds of the Credit Agreement (2002) Series and the Trustee's Certificate of Authentication shall be substantially in the following forms respectively: [The form of the New Mortgage Bond of the Credit Agreement (2002) Series begins on the following page of this Supplemental Indenture.] 6 [FORM OF BOND OF THE CREDIT AGREEMENT (2002) SERIES, DUE 2006] TRANSFER OF THIS BOND IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER CONTAINED IN THE INDENTURE TO WHICH REFERENCE IS MADE IN THIS BOND. THE TRANSFER RESTRICTIONS ARE DESCRIBED ON THE REVERSE OF THIS BOND. NORTHWESTERN CORPORATION (Incorporated under the laws of the State of Delaware) NEW MORTGAGE BOND, CREDIT AGREEMENT (2002) SERIES, DUE 2006 No. R- $_____________ NorthWestern Corporation, a corporation organized and existing under the laws of the State of Delaware (the "Company", which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to Credit Suisse First Boston, acting through its Cayman Islands Branch, as collateral agent under the Bond Collateral Agreement to which reference is hereinafter made, or (subject to the transfer restrictions described on the reverse hereof) registered assigns, the sum of _________ dollars, in installments prior to, and the balance on, the first day of December, 2006 (the "Maturity Date"), in each case, in such amount as is described on the reverse hereof for such installment or such balance, as applicable, and in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts, and to pay interest thereon as described on the reverse hereof in like coin or currency. The Bonds of the series of which this Bond is one have been issued to Credit Suisse First Boston, acting through its Cayman Islands Branch, as collateral agent (together with its successors in such capacity, the "Collateral Agent") under the Bond Collateral Agreement, dated as of the date set forth on the reverse hereof (as amended or otherwise modified, or as waived, or as replaced, in each case, from time to time in accordance with its terms, the "Collateral Agreement"), between the Company and the Collateral Agent, to secure the obligations of the Company to pay when due the Applicable Share (as hereinafter defined) of the principal of and interest on the loans (the "Loans") made and outstanding under the Credit Agreement, dated as of December 17, 2002 (as amended or otherwise modified, or as waived, or as replaced, in each case, from time to time in accordance with its terms, the "Credit Agreement"), among the Company, as borrower, the several lenders from time to time parties thereto (the "Lenders") and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent (together with its successors in such capacity, the "Administrative Agent"). This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the form of certificate endorsed herein shall have been signed by or on behalf of JPMorgan Chase Bank, the Trustee under the Indenture, or a successor trustee thereto under the Indenture, or by an authenticating agent duly appointed by the Trustee in accordance with the terms of the Indenture. The provisions of this Bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, NorthWestern Corporation has caused this Bond to be signed (manually or by facsimile signature) in its name by an Authorized Executive Officer, as defined in the Indenture, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested (manually or by facsimile signature) by an Authorized Executive Officer, as defined in the Indenture. Dated: NORTHWESTERN CORPORATION By____________________________________ Authorized Executive Officer ATTEST: By____________________________________ Authorized Executive Officer [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Bonds of the series designated therein referred to in the within-mentioned Indenture and Supplemental Indenture dated as of February 1, 2003. JPMORGAN CHASE BANK, AS TRUSTEE By____________________________________ Authorized Officer 7 [FORM OF REVERSE OF BOND] Indenture and Series Designation - -------------------------------- This Bond is one of a duly authorized issue of bonds of the Company (the "Bonds"), of the series hereinafter specified, all issued and to be issued under and equally secured by a General Mortgage Indenture and Deed of Trust (the "Indenture"), dated as of August 1, 1993, executed by the Company (under its then name, NorthWestern Public Service Company) to The Chase Manhattan Bank (National Association), the predecessor to JPMorgan Chase Bank (the "Trustee"), as Trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of registered owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured (and for the definition of any capitalized term used herein but not defined herein (with any term defined herein and in the Indenture being used herein as defined herein)). The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Indenture. This Bond is one of a series designated as the "New Mortgage Bonds, Credit Agreement (2002) Series, due 2006" (the "New Mortgage Bonds of the Credit Agreement (2002) Series") of the Company issued under and secured by the Indenture and described in the supplemental indenture dated as of February 1, 2003 (the "Supplemental Indenture") between the Company and the Trustee, supplemental to the Indenture. Issuance to Collateral Agent under Collateral Agreement - ------------------------------------------------------- The Bonds of the Credit Agreement (2002) Series have been issued to the Collateral Agent under the Collateral Agreement to secure the obligations of the Company to pay when due the Applicable Share (as hereinafter defined) of the principal of and interest on the Loans made and outstanding under the Credit Agreement. The Collateral Agreement is dated as of February 10, 2003. Principal - --------- Principal of the New Mortgage Bonds of the Credit Agreement (2002) Series, of which this Bond is one, is scheduled to be paid as follows: (A) on the last Business Day (as hereinafter defined) of each March, June, September and December occurring prior to the Maturity Date (commencing March 31, 2003), an installment of principal of the New Mortgage Bonds of the Credit Agreement (2002) Series in an amount equal to $275,000 (said amount representing one quarter of one percent (0.25%) of the original aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series) is due and payable; and (B) on December 1, 2006 (the "Maturity Date"), the balance of the principal of the New Mortgage Bonds of the Credit Agreement (2002) Series is due and payable; in each case, unless an equal installment or balance of the principal of the Loans is not due and payable on such Business Day or the Maturity Date, as applicable, in accordance with the Credit Agreement by reason of prior prepayment of the Loans (in which event, there shall be due and payable on the New Mortgage Bonds of the Credit Agreement (2002) Series on such Business Day or on the Maturity Date, as applicable, an 8 amount of principal of said Bonds equal to the Applicable Share of the amount of principal of the Loans that is payable on such Business Day or on the Maturity Date, as applicable, in accordance with the Credit Agreement). As used herein, "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. Interest - -------- The unpaid principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series, of which this Bond is one, bears interest at one or more variable interest rates per annum which rate or rates for each day shall be equal to the rate or rates per annum borne by the Loans in accordance with the Credit Agreement for such day (calculated in the manner provided in the Credit Agreement for the calculation of interest on the Loans), payable on each day on which interest is payable on the Loans in accordance with the Credit Agreement (and in an amount equal to the Applicable Share of the amount of interest that is payable on the Loans on such day in accordance with the Credit Agreement) to the Collateral Agent, as the registered owner, without regard to, or necessity for, any record date. Applicable Share - ---------------- As used herein, "Applicable Share" means, as of any day, a fraction (expressed as a percentage rounded to the eighth decimal place), (i) the numerator of which is the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are Outstanding on such day, and (ii) the denominator of which is the sum of (a) the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are Outstanding on such day, plus (b) the aggregate principal amount of the First Mortgage Bonds, Credit Agreement (2002) Series, due 2006, of the Company (the "Montana Credit Agreement Bonds") that are outstanding on such day under the Company's Montana Mortgage (as defined in the Supplemental Indenture). Redemption - ---------- New Mortgage Bonds of the Credit Agreement (2002) Series, of which this Bond is one, are subject to redemption as follows (but shall not otherwise be or become subject to redemption, whether at the option of the holders thereof or the Company or pursuant to any other requirements or provisions of the Indenture): (A) on each day on which the Loans are subject to prepayment in accordance with the Credit Agreement, New Mortgage Bonds of the Credit Agreement (2002) Series shall be subject to redemption in an aggregate principal amount equal to the Applicable Share of the aggregate principal amount of the Loans that are so subject to prepayment on such day; and (B) on the day on which the Loans are accelerated in accordance with the Credit Agreement (the "Acceleration Day"), the entire aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series shall be subject to redemption (the "Acceleration Redemption"); in each case, without any necessity for notice or call by the Trustee (such notice and call being waived by the registered owners of the New Mortgage Bonds of the Credit Agreement (2002) Series by the acceptance of the New Mortgage Bonds of the Credit Agreement (2002) Series and in connection with each Redemption Demand (as 9 hereinafter defined)). Redemption of New Mortgage Bonds of the Credit Agreement (2002) Series, of which this Bond is one, shall be at a redemption price equal to the principal amount of such New Mortgage Bonds of the Credit Agreement (2002) Series (without premium), together with interest accrued on said principal to and including the date of redemption (collectively, a "Redemption Amount"). In the event of any failure by the Company to pay when due the Redemption Amount with respect to any redemption of New Mortgage Bonds of the Credit Agreement (2002) Series, interest shall accrue on such unpaid Redemption Amount at the rate or rates (and in amounts equal to the Applicable Share of the amounts) of interest that accrue on the corresponding unpaid principal of and interest on the Loans in accordance with the Credit Agreement. The Trustee may conclusively presume that no redemption of New Mortgage Bonds of the Credit Agreement (2002) Series is required unless and until it shall have received a written notice from the Administrative Agent, signed by a person purporting to be its duly authorized officer, stating that the Loans are subject to prepayment or have been accelerated, in either case, in accordance with the Credit Agreement (a "Redemption Demand"). Each Redemption Demand also shall state the date on which the Loans are subject to prepayment or acceleration in accordance with the Credit Agreement, the principal amount of the Loans subject to such prepayment or acceleration on such date, the principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series to be redeemed on such date in accordance with the Supplemental Indenture by reason of such prepayment or acceleration, and the Redemption Amount payable with respect to such New Mortgage Bonds of the Credit Agreement (2002) Series (determined in accordance with the Supplemental Indenture and setting forth the amounts of the respective portions thereof representing principal of and interest on such New Mortgage Bonds of the Credit Agreement (2002) Series). Each Redemption Demand shall be accompanied by a written waiver by the Collateral Agent, as registered owner of all of the New Mortgage Bonds of the Credit Agreement (2002) Series then Outstanding, of notice of redemption and call for redemption by the Trustee of the New Mortgage Bonds of the Credit Agreement (2002) Series subject to redemption as described in such Redemption Demand. The Trustee may conclusively presume the statements contained in each Redemption Demand to be correct. Additional Terms - ---------------- New Mortgage Bonds of the Credit Agreement (2002) Series shall be subject to the following other terms and conditions: (I) For the avoidance of any doubt (in the case of the following clauses (i) and (ii)) and notwithstanding anything herein or in the Supplemental Indenture to the contrary other than the provisions of subdivision (III) below (in the case of the following clause (iii)): (i) prior to the Remedy Exercise Day (as hereinafter defined), each payment of principal of or interest on the New Mortgage Bonds of the Credit Agreement (2002) Series that becomes due and payable on any day (whether by reason of stated due date, acceleration, redemption or otherwise) shall correspond to, and be equal to the Applicable Share of, a payment of principal of or interest on the Loans that becomes due and payable on such day in accordance with the Credit Agreement; (ii) on the Acceleration Day, the 10 Redemption Amount with respect to the Acceleration Redemption shall be due and payable; and (iii) on and after the Remedy Exercise Day (as hereinafter defined), (a) the Redemption Amount with respect to the Acceleration Redemption shall bear interest (to the extent permitted by law in the case of interest on the portion of the Redemption Amount representing interest on the applicable Bonds) at a variable rate per annum which rate for each day shall be equal to the Prime-Based Rate (as defined in the Supplemental Indenture and as calculated by the Trustee) for such day plus 6.75%, payable to the registered owners of the New Mortgage Bonds of the Credit Agreement (2002) Series in the manner provided in Section 3.07(b) of the Original Indenture (as supplemented) or Section 10.07 of the Original Indenture (as supplemented), whichever is applicable, and (b) payments of principal of and interest on the New Mortgage Bonds of the Credit Agreement (2002) Series shall cease to correspond to payments of principal of and interest on the Loans (and shall not be satisfied and discharged by the satisfaction and discharge of the Loans). As used herein, "Remedy Exercise Day" means the day (on or after the Acceleration Day) on which all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds are transferred by the Collateral Agent to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement (as such transfer is evidenced by the registration in the names of the transferees in such transfer of certificates evidencing all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds). The Trustee may conclusively presume that the Remedy Exercise Day has not occurred unless and until it shall have received a written notice from the Collateral Agent, signed by a person purporting to be its duly authorized officer, stating that the Remedy Exercise Day has occurred (the "Remedy Exercise Day Notice"). The Remedy Exercise Day Notice (i) shall set forth the date of the Remedy Exercise Day, (ii) in the case of any such transfer with respect to which the Trustee is not the transfer agent, have attached thereto, as evidence of the transfer of the New Mortgage Bonds of the Credit Agreement (2002) Series and the Montana Credit Agreement Bonds that gave rise to the occurrence of the Remedy Exercise Day, copies of certificates registered in the names of the transferees in such transfer of all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds, and (iii) if the Remedy Exercise Day Notice is received by the Trustee on a day other than the Remedy Exercise Day, the Prime Rate (as defined in the Supplemental Indenture) for each day on and after the Remedy Exercise Day and on and prior to the Business Day on which the Trustee received the Remedy Exercise Day Notice. The Trustee may conclusively presume the statements in the Remedy Exercise Day Notice to be correct. (II) Prior to the Remedy Exercise Day, the obligation of the Company to make each payment of principal of or interest on the New Mortgage Bonds of the Credit Agreement (2002) Series that becomes due and payable in accordance with the Supplemental Indenture (i) shall be fully satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been fully paid under and 11 in accordance with the Credit Agreement, and (ii) shall be partially satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been partially paid under and in accordance with the Credit Agreement (such partial satisfaction and discharge with respect to the New Mortgage Bonds of the Credit Agreement (2002) Series to be in an amount equal to the Applicable Share of the amount of such partial payment with respect to the Loans). Without limitation of the foregoing, and for the avoidance of any doubt, it is expressly stated that, prior to the Remedy Exercise Day, the Trustee shall not be responsible for (i) the calculation of interest on the New Mortgage Bonds of the Credit Agreement (2002) Series, or (ii) the determination of any amount (including, without limitation, any principal of or interest on the Loans) that is payable or paid under the Credit Agreement. (III) Nothing in any of the New Mortgage Bonds of the Credit Agreement (2002) Series (including, without limitation, any reference to the principal payable with respect to the New Mortgage Bonds of the Credit Agreement (2002) Series being determined on the basis of the Applicable Share of the principal payable with respect to the Loans) shall, or shall be deemed or construed to, (i) increase the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are Outstanding from time to time, (ii) cause or permit an amount of principal of the New Mortgage Bonds of the Credit Agreement (2002) Series to be or to become due and payable which, when added to all other principal of such Bonds theretofore paid, exceeds $110,000,000, or (iii) cause or permit to be or become due and payable interest on the New Mortgage Bonds of the Credit Agreement (2002) Series which is payable on any principal of the New Mortgage Bonds of the Credit Agreement (2002) Series that is in excess of the principal of the New Mortgage Bonds of the Credit Agreement (2002) Series as restricted pursuant to the preceding clauses (i) and (ii). Transfer Restrictions - --------------------- New Mortgage Bonds of the Credit Agreement (2002) Series shall not be transferable except to any successor Collateral Agent under the Collateral Agreement; provided, however, that, subject to compliance with the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), (i) on or after the Acceleration Day, all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series (together with all (but not less than all) of the Montana Credit Agreement Bonds) shall be transferable by the Collateral Agent to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement, and (ii) following such transfer by the Collateral Agent, New Mortgage Bonds of the Credit Agreement (2002) Series shall be transferable (without restriction (except as hereinafter in the following two paragraphs described)) by the registered owners thereof. As a condition precedent to any transfer of the New Mortgage Bonds of the Credit Agreement (2002) Series by the Collateral Agent, the Collateral Agent shall submit to the Company, the Trustee and the Bond Registrar (in addition to all other documents and instruments required to be submitted to the Bond Registrar pursuant to the Indenture) a certificate of the Collateral Agent, signed by a person purporting to be its duly authorized 12 officer, certifying that the transferee in such transfer is a successor Collateral Agent under the Collateral Agreement or that the transferees in such transfer are the Lenders or Persons specified by the Lenders to which on or after the Acceleration Day all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds are being transferred in full satisfaction and discharge of the Loans pursuant to Section 4.1 of the Collateral Agreement (and the Trustee and the Bond Registrar may conclusively presume the statements in any such certificate of the Collateral Agent to be correct). As a condition precedent to the transfer of any New Mortgage Bond of the Credit Agreement (2002) Series to a transferee other than a successor Collateral Agent, the transferor shall deliver to the Company, the Trustee and the Bond Registrar (in addition to all other documents and instruments required to be submitted to the Bond Registrar pursuant to the Indenture) (i) an opinion of counsel reasonably satisfactory to the Company, the Trustee and the Bond Registrar, or (ii) a certificate of the transferor in such transfer, signed by a person purporting to be its duly authorized officer, reasonably satisfactory to the Company, the Trustee and the Bond Registrar, in either case, to the effect that such transfer is either (A) covered by an effective registration statement of the Company under the Securities Act (setting forth the registration number and the date of effectiveness of such registration statement), or (B) exempt from registration under the Securities Act (setting forth the applicable exemption from registration being relied upon and the reason such exemption is applicable to such transfer). Any transfer of New Mortgage Bonds of the Credit Agreement (2002) Series (i) shall be subject to the provisions of Section 3.05 of the Indenture, except that the provisions of paragraph (g) of such Section 3.05 shall not be applicable to any transfer of New Mortgage Bonds of the Credit Agreement (2002) Series which occurs on or prior to the Remedy Exercise Day, and (ii) shall be made at the office or agency of the Company in the Borough of Manhattan, The City of New York. The Company has waived any right to make any charge for any exchange or transfer of New Mortgage Bonds of the Credit Agreement (2002) Series by the Collateral Agent or any Person that is a direct transferee of the Collateral Agent (but not by any other transferee of New Mortgage Bonds of the Credit Agreement (2002) Series), whether to reimburse itself for any tax or taxes or other governmental charge or otherwise (it being understood that the Company shall pay any tax or taxes or governmental or other charge which may be payable by reason of any exchange or transfer of New Mortgage Bonds of the Credit Agreement (2002) Series by the Collateral Agent or any Person that is a direct transferee of the Collateral Agent). However, the Company reserves the right to require payment of a sum sufficient to cover any tax or taxes or governmental or other charge that may be imposed in connection with any transfer or exchange of New Mortgage Bonds of the Credit Agreement (2002) Series by any registered owner other than the Collateral Agent or any Person that is a direct transferee of the Collateral Agent, other than any exchange pursuant to Section 3.04, 5.06 or 14.06 of the Indenture not involving any transfer. 13 General - ------- To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds may be made with the consent of the Company by an affirmative vote of the holders of a majority in aggregate principal amount of the Bonds entitled to vote then outstanding, at a meeting of the holders of the Bonds called and held as provided in the Indenture, and by an affirmative vote of the holders of a majority in aggregate principal amount of the Bonds of any series or any tranche or tranches of any series entitled to vote then outstanding and affected by such modification or alteration, in case one or more but less than all of the series of Bonds or of any tranche or tranches of any series of Bonds then Outstanding under the Indenture are so affected; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or interest or premium, if any, on this Bond. In case an Event of Default, as defined in the Indenture, shall occur, the principal of all the New Mortgage Bonds of the Credit Agreement (2002) Series at any such time Outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may be rescinded under certain circumstances. ARTICLE II ISSUE OF NEW MORTGAGE BONDS OF THE CREDIT AGREEMENT (2002) SERIES SECTION 1. The Company hereby exercises the right to obtain the authentication of $62,500,000 principal amount of Bonds pursuant to the terms of Section 4.03 of the Indenture. All such Bonds shall be New Mortgage Bonds of the Credit Agreement (2002) Series. SECTION 2. The Company hereby exercises the right to obtain the authentication of $47,500,000 principal amount of Bonds pursuant to the terms of Section 4.04 of the Indenture. All such Bonds shall be New Mortgage Bonds of the Credit Agreement (2002) Series. SECTION 3. Such New Mortgage Bonds of the Credit Agreement (2002) Series may be authenticated and delivered prior to the filing for recordation of this Supplemental Indenture. ARTICLE III REDEMPTION AND OTHER PROVISIONS SECTION 1. New Mortgage Bonds of the Credit Agreement (2002) Series shall be subject to the following redemption and other terms and conditions: (I) New Mortgage Bonds of the Credit Agreement (2002) Series shall be subject to redemption as follows (but shall not otherwise be or become subject to 14 redemption, whether at the option of the holders thereof or the Company or pursuant to any other requirements or provisions of the Indenture): (A) on each day on which the Loans are subject to prepayment in accordance with the Credit Agreement, New Mortgage Bonds of the Credit Agreement (2002) Series shall be subject to redemption in an aggregate principal amount equal to the Applicable Share of the aggregate principal amount of the Loans that are so subject to prepayment on such day; and (B) on the Acceleration Day, the entire aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series shall be subject to redemption (the "Acceleration Redemption"); in each case, without any necessity for notice or call by the Trustee (such notice and call being waived by the registered owners of the New Mortgage Bonds of the Credit Agreement (2002) Series by the acceptance of the New Mortgage Bonds of the Credit Agreement (2002) Series and in connection with each Redemption Demand hereinafter described). Redemption of New Mortgage Bonds of the Credit Agreement (2002) Series shall be at a redemption price equal to the principal amount of such New Mortgage Bonds of the Credit Agreement (2002) Series (without premium), together with interest accrued on said principal to and including the date of redemption (collectively, a "Redemption Amount"). In the event of any failure by the Company to pay when due the Redemption Amount with respect to any redemption of New Mortgage Bonds of the Credit Agreement (2002) Series, interest shall accrue on such unpaid Redemption Amount at the rate or rates (and in amounts equal to the Applicable Share of the amounts) of interest that accrue on the corresponding unpaid principal of and interest on the Loans in accordance with the Credit Agreement. The Trustee may conclusively presume that no redemption of New Mortgage Bonds of the Credit Agreement (2002) Series is required pursuant to this subdivision (I) unless and until it shall have received a written notice from the Administrative Agent, signed by a person purporting to be its duly authorized officer, stating that the Loans are subject to prepayment or have been accelerated, in either case, in accordance with the Credit Agreement (a "Redemption Demand"). Each Redemption Demand also shall state the date on which the Loans are subject to prepayment or acceleration in accordance with the Credit Agreement, the principal amount of the Loans subject to such prepayment or acceleration on such date, the principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series to be redeemed on such date in accordance with this Supplemental Indenture by reason of such prepayment or acceleration, and the Redemption Amount payable with respect to such New Mortgage Bonds of the Credit Agreement (2002) Series (determined in accordance with this Supplemental Indenture and setting forth the amounts of the respective portions thereof representing principal of and interest on such Bonds). Each Redemption Demand shall be accompanied by a written waiver by the Collateral Agent, as registered owner of all of the New Mortgage Bonds of the Credit Agreement (2002) Series then Outstanding, of notice of redemption and call for redemption by the Trustee of the New Mortgage Bonds of the Credit Agreement (2002) Series subject to redemption as described in such Redemption Demand. The Trustee may conclusively presume the statements contained in each Redemption Demand to be correct. (II) For the avoidance of any doubt (in the case of the following clauses (i) and (ii)) and notwithstanding anything herein or in any of the New Mortgage Bonds of the 15 Credit Agreement (2002) Series to the contrary other than the provisions of subdivision (IV) below (in the case of the following clause (iii)): (i) prior to the Remedy Exercise Day (as hereinafter defined), each payment of principal of or interest on the New Mortgage Bonds of the Credit Agreement (2002) Series that becomes due and payable on any day in accordance with this Supplemental Indenture (whether by reason of stated due date, acceleration, redemption or otherwise) shall correspond to, and be equal to the Applicable Share of, a payment of principal of or interest on the Loans that becomes due and payable on such day in accordance with the Credit Agreement; (ii) on the Acceleration Day, the Redemption Amount with respect to the Acceleration Redemption shall be due and payable; and (iii) on and after the Remedy Exercise Day (as hereinafter defined), (a) the Redemption Amount with respect to the Acceleration Redemption shall bear interest (to the extent permitted by law in the case of interest on the portion of the Redemption Amount representing interest on the applicable Bonds) at a variable rate per annum which rate for each day shall be equal to the Prime-Based Rate (as hereinafter defined and as calculated by the Trustee) for such day plus 6.75%, payable to the registered owners of the New Mortgage Bonds of the Credit Agreement (2002) Series in the manner provided in Section 3.07(b) of the Original Indenture (as supplemented) or Section 10.07 of the Original Indenture (as supplemented), whichever is applicable, and (b) payments of principal of and interest on the New Mortgage Bonds of the Credit Agreement (2002) Series shall cease to correspond to payments of principal of and interest on the Loans (and shall not be satisfied and discharged by the satisfaction and discharge of the Loans). As used herein, "Remedy Exercise Day" means the day (on or after the Acceleration Day) on which all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds are transferred by the Collateral Agent to or upon the order of the Lenders in full satisfaction and discharge of the Loans and the Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement (as such transfer is evidenced by the registration in the names of the transferees in such transfer of certificates evidencing all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds). The Trustee may conclusively presume that the Remedy Exercise Day has not occurred unless and until it shall have received a written notice from the Collateral Agent, signed by a person purporting to be its duly authorized officer, stating that the Remedy Exercise Day has occurred (the "Remedy Exercise Day Notice"). The Remedy Exercise Day Notice (i) shall set forth (i) the date of the Remedy Exercise Day, (ii) in the case of any such transfer with respect to which the Trustee is not the transfer agent, have attached thereto, as evidence of the transfer of the New Mortgage Bonds of the Credit Agreement (2002) Series and the Montana Credit Agreement Bonds that gave rise to the occurrence of the Remedy Exercise Day, copies of certificates registered in the names of the transferees in such transfer of all (but not less than all) of the New Mortgage Bonds of the Credit Agreement (2002) Series and all (but not less than all) of the Montana Credit Agreement Bonds, and (iii) if the Remedy Exercise Day Notice is received by the Trustee on a day other than the Remedy Exercise Day, the Prime Rate (as hereinafter defined) for each day on and after the Remedy Exercise Day and on and prior to the Business Day on 16 which the Trustee received the Remedy Exercise Day Notice. The Trustee may conclusively presume the statements in the Remedy Exercise Day Notice to be correct. As used herein, "Prime-Based Rate" means, with respect to a particular day (on or after the Remedy Exercise Day), the higher rate per annum of: (i) the "Prime Rate" (as hereinafter defined) for such day; and (ii) 4.0%. As used herein, "Prime Rate" means, with respect to a particular day, the "Prime-1 Rate" for such day as such rate shall appear on the Business Day next succeeding such day on the display on Moneyline Telerate, Inc. or any successor service on page 128 or any page that may replace page 128 on such service; provided that (a) if such day is not a Business Day, the Prime Rate for such day shall be such rate for the next preceding Business Day as so appearing on the next succeeding Business Day, and (b) if no such rate so appears on such next succeeding Business Day, the Prime Rate for such day shall be the "prime rate" for such day (or, if such day is not a Business Day, for the next preceding Business Day) as such rate appears on the next succeeding Business Day in the Wall Street Journal under the caption "Money Rates" (or if the Wall Street Journal ceases to be published or of general circulation, such other financial journal or newspaper of general circulation as is selected by the Trustee); provided further that if no rate so appears on such next succeeding Business Day in the Wall Street Journal or such other financial journal or newspaper of general circulation, the Prime Rate for such day shall be the Prime Rate in effect with respect to the day on which the Prime Rate was last determinable in accordance with the foregoing provisions of this definition; and provided further that the Prime Rate for each day on and after the Remedy Exercise Day and on and prior to the Business Day on which the Trustee received the Remedy Exercise Day Notice shall be (i) the rate stated in the Remedy Exercise Day Notice as the Prime Rate for such day, or (ii) if no such rate for such day is stated in the Remedy Exercise Day Notice, the Prime Rate for the Business Day next succeeding the Business Day on which the Trustee received the Remedy Exercise Day Notice (as determined in accordance with the foregoing provisions of this definition). (III) Prior to the Remedy Exercise Day, the obligation of the Company to make each payment of principal of or interest on the New Mortgage Bonds of the Credit Agreement (2002) Series that becomes due and payable in accordance with this Supplemental Indenture (i) shall be fully satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been fully paid under and in accordance with the Credit Agreement, and (ii) shall be partially satisfied and discharged if the corresponding payment of the principal of or interest on the Loans shall have been partially paid under and in accordance with the Credit Agreement (such partial satisfaction and discharge with respect to the New Mortgage Bonds of the Credit Agreement (2002) Series to be in an amount equal to the Applicable Share of the amount of such partial payment with respect to the Loans). Prior to the Remedy Exercise Day, the Trustee may conclusively presume that the obligation of the Company to make payments with respect to the principal of and interest on New Mortgage Bonds of the Credit Agreement (2002) Series shall have been fully satisfied and discharged unless and until the Trustee shall have received a written notice from the Administrative Agent, signed by a person purporting to be its duly authorized officer, stating (i) that the Company has failed to make timely payment in full or in part of an amount of principal 17 of and/or interest on the Loans which became due and payable in accordance with the Credit Agreement, (ii) the amount and date of such payment of principal of and/or interest on the Loans which the Company has failed to make in accordance with the Credit Agreement, and (iii) the amount of principal of and/or interest on the New Mortgage Bonds of the Credit Agreement (2002) Series which, in accordance with this Supplemental Indenture, has not been satisfied and discharged by reason of such failure of the Company. The Trustee may conclusively presume the statements contained in any such notice from the Administrative Agent to be correct (unless and until the Trustee shall receive a subsequent and/or modified notice from the Administrative Agent pursuant to and in accordance with this subdivision III). Without limitation of the foregoing, and for the avoidance of any doubt, it is expressly stated that, prior to the Remedy Exercise Day, the Trustee shall not be responsible for (i) the calculation of interest on the New Mortgage Bonds of the Credit Agreement (2002) Series, or (ii) the determination of any amount (including, without limitation, any principal of or interest on the Loans) that is payable or paid under the Credit Agreement. (IV) Nothing herein or in any of the New Mortgage Bonds of the Credit Agreement (2002) Series (including, without limitation, any reference to the principal payable with respect to the New Mortgage Bonds of the Credit Agreement (2002) Series being determined on the basis of the Applicable Share of the principal payable with respect to the Loans) shall, or shall be deemed or construed to, (i) increase the aggregate principal amount of the New Mortgage Bonds of the Credit Agreement (2002) Series that are Outstanding from time to time, (ii) cause or permit an amount of principal of the New Mortgage Bonds of the Credit Agreement (2002) Series to be or to become due and payable which, when added to all other principal of such Bonds theretofore paid, exceeds $110,000,000, or (iii) cause or permit to be or to become due and payable interest on the New Mortgage Bonds of the Credit Agreement (2002) Series which is payable on any principal of the New Mortgage Bonds of the Credit Agreement (2002) Series that is in excess of the principal of the New Mortgage Bonds of the Credit Agreement (2002) Series as restricted pursuant to the preceding clauses (i) and (ii). (V) The provisions of Sections 1.l6 and 3.07(b) of the Original Indenture shall not be applicable with respect to New Mortgage Bonds of the Credit Agreement Series (2002) prior to the Remedy Exercise Day (the provisions of such Bonds establishing the dates for payment of principal and interest on such Bonds prior to the Remedy Exercise Day being in lieu of the provisions of Section 1.16 of the Original Indenture). ARTICLE IV ADDITIONAL COVENANT FOR THE BENEFIT OF THE NEW MORTGAGE BONDS OF THE CREDIT AGREEMENT (2002) SERIES SECTION 1. The Company covenants that so long as any of the New Mortgage Bonds of the Credit Agreement (2002) Series shall remain Outstanding, (i) the Company shall not submit a request to the Trustee or otherwise apply to the Trustee for (a) the authentication and delivery of Bonds pursuant to Article Four of the Original Indenture (as supplemented), (b) the application of insurance proceeds pursuant to Section 6.07 of the Original Indenture (as supplemented), (c) the release of property (including the 18 withdrawal of proceeds of insurance or other cash) pursuant to Article Eight of the Original Indenture (as supplemented), or (d) the execution and delivery of an indenture supplemental to the Indenture (any such request or application being referred to as an "Application"), in any such case, unless the Company shall have given to the Administrative Agent, at least the Required Number of Days (as hereinafter defined) prior to the submission to the Trustee of such Application, notice of its intention to apply to the Trustee for the taking of such action (an "Administrative Agent Notice"), and (ii) the Company shall have furnished to the Trustee, in addition to the other materials required by the provisions of the Original Indenture (as supplemented) to be furnished to the Trustee as part of such Application, a copy of the Administrative Agent Notice with respect to such Application and an Officer's Certificate to the effect that at least the Required Number of Days has elapsed subsequent to the giving by the Company to the Administrative Agent of the Administrative Agent Notice with respect to such Application and prior to the submission to the Trustee of such Application (an "Administrative Agent Notice Certificate"). Receipt by the Trustee of a copy of the Administrative Agent Notice and the Administrative Agent Notice Certificate with respect to an Application shall be conditions to any action applied for in such Application. As used herein, "Required Number of Days" means, with respect to an Application, three (3) Business Days (as defined in Article I, Section 1 of this Supplemental Indenture) or such shorter period of time to which the Administrative Agent shall have agreed in writing. For the avoidance of doubt, it is expressly stated that (i) an Administrative Agent Notice may cover one or more different Applications and/or one or more different actions to be taken pursuant to the same or different provisions of the Original Indenture (as supplemented), and (ii) notwithstanding the number of Applications or actions covered by an Administrative Agent Notice, such Administrative Agent Notice need be given by the Company to the Administrative Agent only once (at least the Required Number of Days prior to the submission to the Trustee of the first Application covered by such Administrative Agent Notice). ARTICLE V AMENDMENTS TO MORTGAGE SECTION 1. Section 1.03 of the Original Indenture is amended by adding at the end thereof the following additional paragraph: Notwithstanding anything herein to the contrary, (i) with respect to the Net Earnings Certificate required as a condition to the issuance of New Mortgage Bonds of the Credit Agreement (2002) Series pursuant to Section 4.03 and, if applicable, Section 4.04 of the Original Indenture, and (ii) with respect to each Net Earnings Certificate required at any time at which (a) any of the New Mortgage Bonds of the Credit Agreement (2002) Series are Outstanding under the Indenture, and (b) any bonds are outstanding under the Montana Mortgage, the "Adjusted Net Earnings of the Company" shall be, and shall be stated in such Net Earnings Certificate to be, the lesser of (A) the amount (for the applicable period selected in accordance with paragraph (a) of this Section 1.03) determined in accordance with paragraph (a) of this Section 1.03 (and the other provisions of this Section 1.03 that are relevant to such paragraph) on the basis of (i) the items 19 set forth in clauses (i) and (ii) of paragraph (a) of this Section 1.03 being such portions of such items of the Company as have been reasonably allocated by the Company to or from the Mortgaged Property as a plant or plants and an operating system or operating systems in a manner consistent with the manner of allocation utilized and/or to be utilized by the Company in making calculations of the "Adjusted Net Earnings of the Company" under and as defined in the Montana Mortgage, and (ii) the item set forth in clause (iv) of paragraph (a) of this Section 1.03 being calculated without regard to income derived by the Company from any electric and/or gas utility business of the Company in which the Mortgaged Property is not utilized (but otherwise in accordance this Section 1.03), and (B) the amount (for the applicable period selected in accordance with paragraph (a) of this Section 1.03) determined in accordance with paragraph (a) of this Section 1.03 (and the other provisions of this Section 1.03 that are relevant to such paragraph) (without any allocation or distinction as to the derivation of the items set forth in any of the clauses of paragraph (a) of this Section 1.03, other than allocation or distinction between (i) the electric and/or gas utility business or businesses in which the Company is engaged (whether or not the Mortgaged Property is utilized in connection therewith), and (ii) the other business or businesses (if any) in which the Company is engaged (with such other business or businesses being given effect under the item set forth in clause (iv) of paragraph (a) of this Section 1.03). Each such Net Earnings Certificate shall contain a statement of the signers of such Net Earnings Certificate that, in the opinion of such signers, the allocations made in the calculations of "Adjusted Net Earnings of the Company" as set forth in such Net Earnings Certificate are in accordance with the requirements of this final paragraph of this Section 1.03. ARTICLE VI THE TRUSTEE The Trustee hereby accepts the trust hereby declared and provided, and agrees to perform the same upon the terms and conditions in the Indenture set forth and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article Eleven of the Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. 20 ARTICLE VII MISCELLANEOUS PROVISIONS Except as otherwise defined herein, all capitalized terms used in this Supplemental Indenture have the meanings stated in the Original Indenture, as heretofore supplemented. This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. [Signature Pages Follow] 21 IN WITNESS WHEREOF, NorthWestern Corporation has caused this Supplemental Indenture to be executed on its behalf by an Authorized Executive Officer as defined in the Indenture, and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by an Authorized Executive Officer as defined in the Indenture; and JPMorgan Chase Bank, in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Vice Presidents; all as of the 1st day of February, 2003. NORTHWESTERN CORPORATION By /s/ Eric R. Jacobsen ------------------------------------ Eric R. Jacobsen (CORPORATE SEAL) ATTEST: /s/ Alan D. Dietrich - ------------------------------------ Alan D. Dietrich JPMORGAN CHASE BANK By /s/ L. O'Brien -------------------------------------------- Vice President (CORPORATE SEAL) ATTEST: /s/ William G. Keenan - ------------------------------------ Vice President STATE OF SOUTH DAKOTA ) ) SS COUNTY OF MINNEHAHA ) BE IT REMEMBERED, that on this 10th day of February, 2003, before me, Karen L. Smook, a Notary Public within and for the County and State aforesaid, personally came Eric R. Jacobsen, Senior Vice President, General Counsel, Chief Legal Officer and Assistant Corporate Secretary and an Authorized Executive Officer (as such term is defined in the Indenture referred to in the foregoing Supplemental Indenture) and Alan D. Dietrich, the Corporate Secretary and an Authorized Executive Officer (as such term is defined in the Indenture referred to in the foregoing Supplemental Indenture) of NorthWestern Corporation, a Delaware corporation, who are personally known to me to be such officers, and who are personally known to me to be the same persons who executed as such officers the within instrument of writing, and such persons duly acknowledged that they signed, sealed and delivered the said instrument as their free and voluntary act as such officers and as the free and voluntary act of NorthWestern Corporation for the uses and purposes therein set forth. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year last above written. /s/ Karen L. Smook ------------------------------------ Karen L. Smook Notary Public, Minnehaha County, S.D. {NOTARIAL SEAL) My Commission expires 7-12-2005 STATE OF NEW YORK ) ) SS COUNTY OF NEW YORK ) BE IT REMEMBERED, that on this 10th day of February, 2003, before me, Emily Fayan, a Notary Public within and for the County and State aforesaid, personally came L. O'Brien, a Vice President, and William G. Keenan, a Vice President, of JPMorgan Chase Bank, a bank organized under the laws of the State of New York, who are personally known to me to be such officers, and who are personally known to me to be the same persons who executed as such officers the within instrument of writing, and such persons duly acknowledged that they signed, sealed and delivered the said instrument as their free and voluntary act, each as such Vice President and as the free and voluntary act of JPMorgan Chase Bank for the uses and purposes therein set forth. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year last above written. /s/ Emily Fayan Emily Fayan Notary Public, State of New York No. 01FA4737006 Qualified in Kings County Certificate Filed in New York County (NOTARIAL SEAL) Commission expires Dec. 31, 2005 EX-99 6 ex99-1.txt EX. 99.1: PRESS RELEASE, FEB. 10, 2003 EXHIBIT 99.1 [LOGO OMITTED] News Release NYSE: NOR Contacts: Investors/Media: Roger Schrum 605-978-2848 roger.schrum@northwestern.com - -------------------------------------------------------------------------------- NORTHWESTERN CLOSES $390 MILLION SENIOR SECURED CREDIT FACILITY - -------------------------------------------------------------------------------- SIOUX FALLS, S.D. - Feb. 10, 2003 - NorthWestern Corporation (NYSE:NOR) today announced that it has closed and received funds from a $390 million senior secured credit facility with Credit Suisse First Boston. The new facility matures in December 2006, and will be used to repay NorthWestern's existing $280 million working capital facility and for other corporate purposes. NorthWestern Corporation is a leading provider of services and solutions to more than 2 million customers across America. NorthWestern's partner businesses include NorthWestern Energy, a provider of electricity, natural gas and related services to customers in Montana, Nebraska and South Dakota; Expanets, the largest mid-market provider of networked communications solutions and services in the United States; and Blue Dot, a leading provider of air conditioning, heating, plumbing and related services. ### EX-99 7 credit.txt EX. 99.2: CREDIT AGREEMENT EXECUTION VERSION ================================================================================ CREDIT AGREEMENT among NORTHWESTERN CORPORATION, as Borrower, The Several Lenders from Time to Time Parties Hereto, and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as Administrative Agent, Lead Arranger and Sole Book Runner Dated as of December 17, 2002 ================================================================================
TABLE OF CONTENTS Page ---- ARTICLE 1. DEFINITIONS...............................................................1 1.1 Defined Terms..............................................................1 1.2 Other Definitional Provisions.............................................21 ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS..........................................22 2.1 Commitments and Loans.....................................................22 2.2 Evidence of Indebtedness..................................................22 2.3 Procedure for Borrowing...................................................23 2.4 Fees......................................................................23 2.5 Repayment of Loans........................................................23 2.6 Optional and Mandatory Prepayments........................................23 2.7 Interest Rate Conversion and Continuation Options.........................25 2.8 Maximum Amounts of Eurodollar Tranches....................................26 2.9 Interest Rates; Default Rate Payment Dates................................26 2.10 Computation of Interest...................................................26 2.11 Inability to Determine Interest Rate......................................27 2.12 Pro Rata Treatment and Payments; Funding Reliance.........................27 2.13 Illegality................................................................28 2.14 Requirements of Law.......................................................28 2.15 Taxes.....................................................................29 2.16 Indemnity.................................................................32 2.17 Discretion of Lender as to Manner of Funding..............................32 2.18 Change of Lending Office; Replacement Lender..............................33 ARTICLE 3. REPRESENTATIONS AND WARRANTIES...........................................33 3.1 Financial Condition.......................................................34 3.2 No Change.................................................................34 3.3 Corporate Existence; Compliance with Law..................................34 3.4 Corporate Power; Authorization; Enforceable Obligations...................35 3.5 No Legal Bar..............................................................35 3.6 No Material Litigation....................................................36 3.7 No Default................................................................36 3.8 Ownership of Property; Liens..............................................36 3.9 [Intentionally Omitted]...................................................36 3.10 Intellectual Property.....................................................36 3.11 No Burdensome Restrictions................................................36 3.12 Taxes.....................................................................36 3.13 Margin Stock..............................................................37 3.14 ERISA.....................................................................37 3.15 Holding Company; Investment Company Act; Other Regulations................37 3.16 Purpose of Loans..........................................................38 3.17 Environmental Matters.....................................................38 3.18 Insurance.................................................................38
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3.19 Accuracy and Completeness of Information..................................39 3.20 Leaseholds, Permits, etc..................................................39 3.21 No Restrictive Covenants..................................................39 3.22 Solvency..................................................................40 3.23 Montana First Mortgage Indenture..........................................40 3.24 South Dakota First Mortgage Indenture.....................................41 3.25 Subsidiaries..............................................................42 ARTICLE 4. CONDITIONS PRECEDENT.....................................................43 4.1 Conditions to Closing Date................................................43 4.2 Conditions to the Funding Date............................................45 4.3 Conditions to Cash Collateral Release.....................................46 ARTICLE 5. AFFIRMATIVE COVENANTS....................................................48 5.1 Financial Statements......................................................48 5.2 Certificates; Other Information...........................................48 5.3 Payment and Performance of Obligations....................................49 5.4 Maintenance of Existence..................................................49 5.5 Maintenance of Property; Insurance........................................50 5.6 Inspection of Property; Books and Records; Discussions....................50 5.7 Notices...................................................................50 5.8 Environmental Laws........................................................51 5.9 ERISA.....................................................................51 5.10 Use of Proceeds...........................................................52 5.11 Margin Stock..............................................................52 5.12 Maintain Ownership of the Utility Business................................52 5.13 Post-Closing Matters......................................................52 5.14 Credit Ratings............................................................52 5.15 Excluded Subsidiaries.....................................................53 ARTICLE 6. NEGATIVE COVENANTS.......................................................53 6.1 Financial Covenants.......................................................53 6.2 Limitation on Fundamental Changes.........................................54 6.3 Limitation on Transactions with Affiliates................................55 6.4 Limitation on Liens.......................................................55 6.5 Amendments of Organizational Documents....................................55 6.6 Limitation on Guarantee Obligations.......................................55 6.7 Limitation on Sale of Assets..............................................55 6.8 Limitation on Investments, Loans and Advances.............................56 6.9 Limitation on Dividends and Stock Repurchases.............................57 6.10 Limitation on Indebtedness or Mandatory Redeemable Stock..................58 6.11 Limitation on Sales and Leasebacks........................................59 6.12 Limitation on Negative Pledge Clauses; Payment Restrictions...............60 6.13 Limitation on Businesses..................................................60 6.14 Limitation on Certain Prepayments and Amendments..........................60 6.15 Limitations on Subsidiaries' Equity Interests.............................61
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6.16 Limitation on Release of Mortgaged Property; Limitation in Respect of Insurance.................................................................61 6.17 Limitation on Subjecting Property or Other Assets to the Lien of the Other Indenture.................................................................61 6.18 Prohibition on Designating Class "A" Mortgages or Permitting Qualified Lien Bonds to Exist.......................................................62 6.19 Limitation on Amendments or Supplements to the Indentures.................62 6.20 Prohibition on Second Mortgage Bonds......................................62 ARTICLE 7. EVENTS OF DEFAULT........................................................62 7.1 Events of Default.........................................................62 ARTICLE 8. THE AGENTS...............................................................65 8.1 Appointment...............................................................65 8.2 Delegation of Duties......................................................65 8.3 Exculpatory Provisions....................................................65 8.4 Reliance by Agents........................................................66 8.5 Notice of Default.........................................................66 8.6 Non-Reliance on Agents and Other Lenders..................................66 8.7 Indemnification...........................................................67 8.8 Agent in Its Individual Capacity..........................................67 8.9 Successor Administrative Agent............................................67 ARTICLE 9. MISCELLANEOUS............................................................68 9.1 Amendments and Waivers....................................................68 9.2 Notice....................................................................69 9.3 No Waiver; Cumulative Remedies............................................69 9.4 Survival of Representations and Warranties................................70 9.5 Payment of Expenses and Taxes; Indemnification............................70 9.6 Successors and Assigns; Participations and Assignments....................70 9.7 Adjustments; Setoff.......................................................74 9.8 Confidentiality...........................................................74 9.9 Effectiveness.............................................................75 9.10 Counterparts..............................................................75 9.11 Severability..............................................................75 9.12 Integration...............................................................75 9.13 GOVERNING LAW.............................................................75 9.14 Submission To Jurisdiction; Waivers.......................................75 9.15 Acknowledgments...........................................................76 9.16 Waivers of Jury Trial.....................................................76
iii EXHIBITS AND SCHEDULES Exhibit A-1 Form of Term Note Exhibit A-2 Form of QFL Note Exhibit B-1 Form of Notice of Borrowing Exhibit B-2 Form of Notice of Interest Rate Conversion Exhibit C Form of Closing Certificate Exhibit D Form of Assignment and Assumption Agreement Schedule I Lending Offices of Lenders Schedule 3.4a First Mortgage Approvals Schedule 3.4b Required Consents of Governmental Authorities Schedule 3.8 Exceptions to Title to Borrower's Properties Schedule 3.12 Taxes Schedule 3.14 ERISA Schedule 3.15 Regulations Limiting Indebtedness Schedule 3.17 Environmental Matters Schedule 3.25 Subsidiaries Schedule 6.3 Transactions with Affiliates Schedule 6.4 Liens Securing Indebtedness for Money Borrowed Schedule 6.6 Guarantee Obligations Schedule 6.8 Investments Schedule 6.10 Indebtedness, Mandatory Redeemable Stock and Preferred Stock iv CREDIT AGREEMENT, dated as of December 17, 2002, among NORTHWESTERN CORPORATION, a Delaware corporation (the "Borrower"), the several banks and other financial institutions from time to time party hereto (the "Lenders"), and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as Administrative Agent (in such capacity the "Administrative Agent"), Lead Arranger and Sole Book Runner. PRELIMINARY STATEMENTS 1. The Borrower has requested the Lenders extend credit to the Borrower in the form of term loans in an aggregate principal amount not in excess of $390,000,000. The proceeds of the Loans are to be used by the Borrower first to repay in full, and terminate, the Existing Credit Agreement and thereafter to provide working capital and for other general corporate purposes. The Loans shall be secured by the issuance of certain first mortgage bonds to and registered in the name of the Collateral Agent for the ratable benefit of the Lenders (it being understood that payments on the Loans shall be deemed payments on such first mortgage bonds and payments on such first mortgage bonds shall be applied to the payment of the Loans). Prior to the issuance of such first mortgage bonds, the Loans shall be secured by the proceeds of the Loans. 2. In consideration of the foregoing premises and the mutual covenants herein contained and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE 1. DEFINITIONS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Administrative Agent" shall have the meaning ascribed thereto in the heading hereto and shall include such other Lender or financial institution as shall have subsequently been appointed as the successor Administrative Agent pursuant to Section 8.9. "Affected Lender" shall have the meaning ascribed thereto in Section 2.18. "Affiliate" shall mean, as to any Person, any other Person which, directly or indirectly, is in control of (including all directors and officers of such Person), is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person shall mean the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether by ownership of voting securities, by contract or otherwise. "Agents" shall have the meaning ascribed thereto in Section 8.1. 1 "Agreement" shall mean this Credit Agreement, as amended, supplemented or otherwise modified from time to time. "Alternate Base Rate" shall mean, on any particular date, a rate of interest per annum equal to the highest of (a) the rate of interest most recently announced by CSFB as its prime rate in effect at its principal office in New York City (which rate is not necessarily intended to be the lowest rate of interest charged by CSFB in connection with extensions of credit); (b) the Federal Funds Rate for such date plus 0.50% and (c) 4.00%. "Alternate Base Rate Loans" shall mean Loans the rate of interest applicable to which is based upon the Alternate Base Rate. "Approved Fund" shall mean, with respect to any Lender that is a fund or commingled investment vehicle that invests in commercial loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor. "Arranger" shall mean CSFB and its successors. "Asset Disposition" shall mean (i) any sale, lease or other disposition (including (x) any such transaction effected by way of merger or consolidation and (y) any sale-leaseback transaction, whether or not involving a Financing Lease) (any such transaction, a "disposition"), by the Borrower or any of its Subsidiaries, of any asset subject to the Lien of an Indenture (other than any disposition of any asset released from the Lien of an Indenture as described in clause (i), (ii) or (iv) of Section 6.16), and (ii) receipt by the Borrower or any of its Subsidiaries of any proceeds of insurance, condemnation awards (or payments in lieu thereof) or indemnity payments payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any equipment, fixed asset, real property or other asset subject to the Lien of an Indenture (other than as permitted in clause (iv) of Section 6.16). "Assignee" shall have the meaning ascribed thereto in Section 9.6(c). "Assignment and Assumption Agreement" shall have the meaning ascribed thereto in Section 9.6(c). "Availability Period" shall mean the period from and including the Closing Date to, and including, February 10, 2003. "Benefited Lender" shall have the meaning ascribed thereto in Section 9.7(a). 2 "Blue Dot" shall mean, collectively, Blue Dot Services, Inc., a Delaware corporation and an indirect wholly owned subsidiary of the Borrower, and its Subsidiaries. "Bond Collateral Agreement" shall mean a bond collateral agreement between the Borrower and the Collateral Agent for the benefit of the Secured Parties (as therein defined) in form and substance reasonably satisfactory to the Borrower and the Collateral Agent. "Borrower" shall have the meaning ascribed thereto in the heading hereto. "Business" shall have the meaning ascribed thereto in Section 3.17(a). "Business Day" shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close; provided, however, that, when used in connection with a Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in Dollars in the interbank market in London, England. "Capital Expenditures" of any Person shall mean, for any period, without duplication, all expenditures (whether paid in cash or other consideration) during such period that, in accordance with GAAP, are or should be included in additions to property, plant and equipment or similar items reflected in the statement of cash flows for such period for such Person. "Capital Stock" shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing. "Cash Collateral Account" shall have the meaning ascribed thereto in the Security Agreement. "Cash Collateral Release Date" shall mean the date on which all of the conditions precedent set forth in Section 4.3 have been satisfied or waived by the Required Lenders and the Collateral Agent is required pursuant to the terms thereof to release the amounts then on deposit in the Cash Collateral Account as provided for herein. "Cash Equivalents" shall mean (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any Lender and certificates of deposit with maturities of one year or less from the date of acquisition and overnight bank deposits of any other commercial bank having capital and surplus in excess of $500,000,000, (c) commercial paper of any issuer rated at least A-2 by Standard & Poor's or P-2 by Moody's, (d) additional money market investments with 3 maturities of one year or less from the date of acquisition rated at least A1 or AA by Standard & Poor's or P-1 or Aa by Moody's and (e) tax-exempt debt obligations of any State of the United States or of any county or other municipal government subdivision of any State of the United States with maturities of one year or less from the date of acquisition rated at the highest investment grade rating by Standard & Poor's or by Moody's, or publicly traded or open-end bond funds that invest exclusively in such tax-exempt debt obligations. "Change of Control" shall mean the occurrence of any of the following: (a) any Person or "group" (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934) (i) shall have acquired beneficial ownership of 40% or more of the aggregate outstanding classes of Capital Stock having voting power in the election of directors of the Borrower or (ii) shall obtain the power (whether or not exercised) to elect a majority of the Borrower's directors; (b) a majority of the persons who comprised the Board of Directors of the Borrower on the date hereof shall be replaced, unless such replacement shall have been approved by at least two-thirds of the Board of Directors of the Borrower then still in office who either were members of such Board of Directors on the date hereof or whose election as a member of such Board of Directors was previously so approved; or (c) the Borrower shall be liquidated or dissolved. "Closing Date" shall mean the date on which the conditions precedent set forth in Section 4.1 shall be satisfied or waived by the Required Lenders. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Collateral" shall have the meaning ascribed thereto in the Collateral Documents. "Collateral Agent" shall mean CSFB as collateral agent under the Security Agreement and the Bond Collateral Agreement. "Collateral Documents" shall mean a collective reference to the First Mortgage Bonds, the Bond Collateral Agreement, the Supplemental Indentures (upon effectiveness thereof), the Security Agreement and such other documents executed and delivered in connection with the attachment and perfection of the Collateral Agent's security interest and liens arising thereunder, including, without limitation, UCC financing statements filed in connection therewith. "Commitment" shall mean, as to any Lender, the obligation of such Lender to make a Loan to the Borrower in a principal amount not to exceed the 4 amount set forth opposite such Lender's name on Schedule I. The aggregate amount of the Commitments is $390,000,000. "Commitment Percentage" shall mean, as to any Lender at any time, the percentage which such Lender's Commitment then constitutes of the aggregate Commitments (or, at any time after the Closing Date, the percentage which the aggregate principal amount of such Lender's Loans then outstanding constitutes of the aggregate principal amount of the Loans then outstanding). "Commonly Controlled Entity" shall mean an entity, whether or not incorporated, which is under common control with the Borrower and/or any Subsidiary within the meaning of Section 4001(a)(14) of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 of the Code. "Compliance Certificate" shall have the meaning ascribed thereto in Section 5.2(b). "Consolidated Group" shall mean the Borrower and its Consolidated Subsidiaries. "Consolidated Recourse Interest Expense" shall mean, for any period, the aggregate amount of interest expense of the Consolidated Group minus, to the extent included therein, (i) the aggregate amount of interest accrued on Non-Recourse Debt, (ii) non-cash charges, determined on a consolidated basis in accordance with GAAP and (iii) payments made in the form of dividends under existing mandatorily redeemable preference securities of any trust which is a Subsidiary (or under any refinancing thereof on substantially similar terms). "Consolidated Subsidiary" shall mean, at any time, any Subsidiary or other Person the accounts of which are consolidated with the Borrower in its consolidated financial statements as of such time; provided that in any event the term "Consolidated Subsidiary" shall not include any Excluded Subsidiary. "Contractual Obligation" shall mean as to the Borrower or any Subsidiary, any provision of any security issued by the Borrower or any Subsidiary or of any agreement, instrument or other undertaking to which the Borrower or any Subsidiary is a party or by which it or any of its property is bound. "Cornerstone" shall mean, collectively, Cornerstone GP, Inc., Syn Inc. and CornerStone Propane Partners L.P. and their respective Subsidiaries. "CSFB" shall mean Credit Suisse First Boston. "Debt for Borrowed Money" shall mean, as to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all Financing Lease obligations of such Person, and (d) all 5 obligations of such Person under synthetic leases, tax retention operating leases, off-balance sheet loans or other off-balance sheet financing products that, for tax purposes, are considered indebtedness for borrowed money of the lessee but are classified as operating leases under GAAP. "Default" shall mean any of the events specified in Section 7.1, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Designated Agents" shall have the meaning described thereto in the Syndication Letter. "Dollars" and "$" shall mean dollars in lawful currency of the United States of America. "Domestic Lending Office" shall mean, initially, the office of each Lender designated as such in Schedule I (or the office of an Assignee designated pursuant to an Assignment and Assumption Agreement), and thereafter, such other office of such Lender, if any, which shall be making or maintaining Alternate Base Rate Loans as may be designated from time to time by notice from such Lender to the Borrower and the Administrative Agent. "Environmental Laws" shall mean any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, judgments, permits, licenses, registrations or authorizations or requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning the health and safety of humans and other living organisms as it relates to exposures to Materials of Environmental Concern, protection of natural resources or the environment, including the manufacture, distribution in commerce, and use of, or Release to the environment of, Materials of Environmental Concern, as now or may at any time hereafter be in effect. "Equity Issuance" shall mean the issuance of any Capital Stock by the Borrower other than (i) Capital Stock issued in the ordinary course of business in connection with director or employee stock purchase plans and arrangements and other director or employee compensation arrangements and (ii) Capital Stock issued in the ordinary course of business under any dividend reinvestment and stock purchase plan maintained by the Borrower. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurodollar Base Rate" shall mean, with respect to any Eurodollar Loan for any Interest Period, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date which is two Business Days prior to the beginning of such Interest Period by reference to the British Bankers' Association Interest Settlement Rates for deposits in Dollars (as 6 set forth by any service selected by the Administrative Agent which has been nominated by the British Bankers' Association as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the "Eurodollar Rate" shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in Dollars are offered for such Interest Period to major banks in the London interbank market in London, England by the Administrative Agent at approximately 11:00 a.m. (London time) on the date which is two Business Days prior to the beginning of such Interest Period; provided, further, that if the Eurodollar Base Rate determined as provided above with respect to any Loan for any Interest Period would be less than 3.00% per annum, then the "Eurodollar Base Rate" with respect to such Loan for such Interest Period shall be deemed to be 3.00% per annum. Each determination by the Administrative Agent pursuant to this definition shall be conclusive absent manifest error. "Eurodollar Loans" shall mean Loans the rate of interest applicable to which is based upon the Eurodollar Rate. "Eurodollar Office" shall mean, initially, the office of each Lender designated as such in Schedule I (or the office of an Assignee designated pursuant to an Assignment and Assumption Agreement), and thereafter, such other office of such Lender, if any, which shall be making or maintaining Eurodollar Loans as may be designated from time to time by notice from such Lender to the Borrower and the Administrative Agent. "Eurodollar Rate" shall mean with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula: Eurodollar Base Rate -------------------------------------- 1.00 - Eurodollar Reserve Requirements "Eurodollar Reserve Requirements" shall mean, for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as a decimal) of reserve requirements in effect on such day (including, without limitation, basic, supplemental, marginal and emergency reserves) under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a member bank of such System. "Eurodollar Tranche" shall mean all Loans which consist of Eurodollar Loans incurred on the Closing Date (or which result from continuations or 7 conversions on a given date after the Closing Date) and have the same Interest Period. "Event of Default" shall mean any of the events specified in Section 7.1; provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Excluded Subsidiaries" shall mean, collectively, Blue Dot, Cornerstone and Expanets. "Existing Credit Agreement" shall mean that certain Credit Agreement dated as of January 14, 2002 among the Borrower, the lenders party thereto and CSFB as administrative agent, as amended to the date hereof. "Expanets" shall mean, collectively, Expanets, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the Borrower, and its Subsidiaries. "FDIC" shall mean the Federal Deposit Insurance Corporation or any successor thereto. "Federal Funds Rate" shall mean for any particular date, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent (in its individual capacity) on such day on such transactions as determined by the Administrative Agent. "FERC" shall mean the Federal Energy Regulatory Commission. "Financing Lease" shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "First Mortgage Approvals" shall have the meaning ascribed thereto in Section 3.4. "First Mortgage Bonds" shall mean the first mortgage bonds issued, pursuant to the Indentures, to and registered in the name of the Collateral Agent. "Funded Debt" shall mean, as of any date of determination, the sum of all Indebtedness of the Borrower and each of its Consolidated Subsidiaries (without 8 duplication) other than (i) Indebtedness of the type described in clause (e) of the definition thereof and (ii) Non-Recourse Debt. "Funding Date" shall mean the date on which the conditions precedent set forth in Section 4.2 shall be satisfied or waived by the Required Lenders or such later date as may be designated by the Administrative Agent in its sole judgment but in any event not later than the Cash Collateral Release Date. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect from time to time consistent with those utilized in preparing the audited financial statements referred to in Section 3.1; provided that in the event that any change in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions) results in a change in the calculation of any of the financial covenants hereunder, the Required Lenders and the Borrower will in good faith enter into negotiations in order to reevaluate such financial covenants in light of such change; and provided, further, that this provision shall not operate as a waiver of any right, remedy, power or privilege available to any Lender under any provision of any Loan Document or pursuant to any applicable law. "Governmental Authority" shall mean any national government (United States or foreign), any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any agency, authority, instrumentality, or regulatory body of any thereof. "Granting Lender" shall have the meaning ascribed thereto in Section 9.6(f). "Guarantee Obligation" shall mean as to any Person (the "guaranteeing person"), any obligation of the guaranteeing person (including, without limitation, any reimbursement, counter-indemnity or similar obligation), guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or other similar obligation (the "primary obligation") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth, liquidity or solvency 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 owner of any such primary obligation against loss in respect thereof; provided that the term Guarantee Obligation shall not include 9 endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person as of any date of determination shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith. "Hedging Agreements" shall mean (a) any interest rate protection agreement, interest rate future, interest rate option, interest rate swap, interest rate cap or other interest rate hedge or arrangement under which the Borrower is a party or a beneficiary and (b) any other agreement or arrangement designed to limit or eliminate the risk or exposure of the Borrower to fluctuations in currency exchange rates. "Indebtedness" of any Person at any date shall mean, without duplication, (a) Debt for Borrowed Money of such Person, (b) all indebtedness of such Person for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (c) all outstanding reimbursement obligations of such Person in respect of outstanding letters of credit, acceptances and similar obligations issued or created for the account of such Person, (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (e) liabilities arising under Hedging Agreements (other than interest rate caps) of such Person and (f) all Guarantee Obligations of such Person. "Indentures" shall mean collectively the Montana First Mortgage Indenture and the South Dakota First Mortgage Indenture. "Insolvency" shall mean with respect to any Multiemployer Plan, the condition that such plan is insolvent within the meaning of Section 4245 of ERISA. "insolvent" shall mean pertaining to a condition of Insolvency. "Intellectual Property" shall have the meaning set ascribed thereto in Section 3.10. "Interest Payment Date" shall mean (a) as to any Alternate Base Rate Loan, the last Business Day of each March, June, September and December to occur while such Loan is outstanding, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) 10 as to any Eurodollar Loan having an Interest Period longer than three months, each day which is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period. "Interest Period" with respect to any Eurodollar Loan shall mean: (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its Notice of Borrowing or Notice of Interest Rate Conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (and, with respect to payments of principal and interest thereon, shall be payable at the then applicable rate during such extension) unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (ii) no Interest Period shall be selected which would extend beyond the Maturity Date; (iv) any Interest Period pertaining to a Eurodollar 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 a calendar month; and (v) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest Period for such Loan. "Investment" shall have the meaning ascribed thereto in Section 6.8. "ISO" shall mean any "Independent System Operator" or similar entity approved by FERC to manage transmission systems owned by the Borrower. 11 "Lender" shall have the meaning ascribed thereto in the heading hereto. "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction, other than any such filing in connection with any true lease or operating lease). "Loan Documents" shall mean collectively, this Agreement, the Collateral Documents, the Notes, the Syndication Letter and each other agreement, instrument or certificate issued, executed and delivered to the Administrative Agent, the Collateral Agent, or the Lenders hereunder or thereunder or pursuant hereto or thereto (in each case as the same may be amended, restated, supplemented, extended, renewed or replaced from time to time), and "Loan Document" means any one of them. "Loans" shall mean the loans made by the Lenders to the Borrower pursuant to this Agreement. "Mandatory Redeemable Stock" shall mean, with respect to any Person, any share of such Person's Capital Stock, to the extent that it is (a) redeemable, payable or required to be purchased or otherwise retired or extinguished, or convertible into any Indebtedness or other liability, obligation, covenant or duty of or binding upon, or any term or condition to be observed by or binding upon such Person or any of its assets, (i) at a fixed or determinable date, whether by operation of a sinking fund or otherwise, (ii) at the option of any other Person or (iii) upon the occurrence of a condition not solely within the control of such Person such as a redemption required to be made utilizing future earnings, or (b) convertible into Capital Stock which has the features set forth in clause (a). "Material Adverse Effect" shall mean a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Borrower and its Consolidated Subsidiaries (taken as a whole), (b) the validity or enforceability of this Agreement, any of the Notes, any of the First Mortgage Bonds, any of the other Loan Documents or either Indenture, or the rights or remedies of the Administrative Agent, the Collateral Agent, or the Lenders hereunder or thereunder (or the trustee under an Indenture), (c) the property (taken as a whole) subject to the Lien of an Indenture, or (d) the perfection, priority or enforceability of the Lien of the Montana First Mortgage Indenture, the South Dakota Indenture or any other Collateral Document. "Material Subsidiary" shall mean, as at any time of determination, each present or future Subsidiary of the Borrower other than any one or more 12 Subsidiaries which, in the aggregate, as at the end of the fiscal quarter immediately preceding such time of determination, shall have a net worth (calculated as the stockholder's equity of such Subsidiary disregarding any liabilities of such Subsidiary to an Affiliate) equal to or less than 10% of the Net Worth of the Borrower and its Consolidated Subsidiaries as at the end of such fiscal quarter, and net income equal to or less than 10% of the Net Income of the Borrower and its Consolidated Subsidiaries for the four fiscal quarter period ending at the end of such fiscal quarter, as determined in accordance with GAAP. "Materials of Environmental Concern" shall mean any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any other pollutant, contaminant, hazardous substance, hazardous waste, special waste, toxic substance, radioactive material, or other compound, element, material or substance in any form whatsoever (including products) regulated, restricted or addressed by or under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation. "Maturity Date" shall mean December 1, 2006. "Montana First Mortgage Indenture" shall mean the Mortgage and Deed of Trust dated October 1, 1945 from the Borrower (as successor to Montana Power) to the trustee named therein, as supplemented and amended to the date hereof. "Montana Power" shall mean The Montana Power LLC, a Montana limited liability company, acquired by the Borrower on February 15, 2002. "Montana Utility Business" shall mean the regulated electric and natural gas transmission and distribution assets and businesses owned and operated by the Borrower in the State of Montana or otherwise subject to the Lien of the Montana First Mortgage Indenture. "Montana Utility Business EBITDA" shall mean, for any period for the Montana Utility Business, the sum of (i) the operating income of the Montana Utility Business for such period plus, without duplication and to the extent reflected as a charge in the statement of operating income of the Montana Utility Business for such period, (ii) depreciation and amortization, in each case on a consolidated basis determined in accordance with GAAP; provided, however, with respect to any fiscal quarter ended on or prior to March 31, 2002, the Utility Business EBITDA shall include the utility business and operations of Montana Power. "Moody's" shall mean Moody's Investors Service, Inc. "Multiemployer Plan" shall mean a plan which is a "multiemployer plan" as defined in Section 3(37) or 4001(a)(3) of ERISA. 13 "Net Cash Proceeds" shall mean, with respect to any Reduction Event, an amount equal to the cash proceeds received by the Borrower from or in respect of such Reduction Event (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received), less (a) any investment banking and underwriting fees and any other fees and expenses reasonably incurred by such Person in respect of such Reduction Event, and (b) if such Reduction Event is a disposition of assets, (i) the amount of any Debt for Borrowed Money secured by a Lien on any asset disposed of in such Reduction Event to the extent such Lien is senior to the Lien of the applicable Indenture and discharged from the proceeds thereof and (ii) any taxes actually paid or to be payable by such Person (as estimated by a senior financial or accounting officer of the Borrower, giving effect to the overall tax position of the Borrower) in respect of such Reduction Event; provided that the term Net Cash Proceeds shall not include any cash proceeds to the extent such cash proceeds are (and remain) subject to the Lien of an Indenture. "Net Income" for any period shall mean, net income (or deficit) of the Borrower and its Consolidated Subsidiaries for such period determined on a consolidated basis in accordance with GAAP. "Net Worth" shall mean, (a) as of December 31, 2002, (i) the sum of shareholders' equity and preferred stock (including mandatorily redeemable preferred stock of subsidiary trusts), preference stock and preferred securities of the Borrower and its subsidiaries (including Excluded Subsidiaries but excluding discontinued operations) on September 30, 2002 plus any gain in (or minus any loss in) (ii) the sum of shareholders' equity and preferred stock (including mandatorily redeemable preferred stock of subsidiary trusts), preference stock and preferred securities of the Borrower and the Consolidated Subsidiaries on December 31, 2002 (but without duplication of equity issuances after September 30, 2002 but prior to the date hereof) from the immediately preceding fiscal quarter and (b) on the last day of each fiscal quarter thereafter, (i) the Net Worth as calculated as of the preceding fiscal quarter plus any gain in (or minus any loss in) (ii) the sum of shareholders' equity and preferred stock (including mandatorily redeemable preferred stock of subsidiary trusts), preference stock and preferred securities of the Borrower and the Consolidated Subsidiaries on the last day of such fiscal quarter from the immediately preceding fiscal quarter. The sum of shareholders' equity and preferred stock (including mandatorily redeemable preferred stock of subsidiary trusts), preference stock and preferred securities of the Borrower and its subsidiaries (including Excluded Subsidiaries) on September 30, 2002 was $770,000,000. For the avoidance of doubt, calculations of Net Worth after the date hereof shall be without giving effect to net gains or losses in the Excluded Subsidiaries. "1940 Mortgage" shall have the meaning ascribed thereto in the South Dakota First Mortgage Indenture. 14 "Non-Excluded Taxes" shall have the meaning ascribed thereto in Section 2.15(a). "Non-Recourse Debt" shall mean any Indebtedness as to which the Borrower has no direct or indirect liability whether as primary obligor, guarantor, surety, provider of collateral security or through any other right or arrangement of any nature (including any election by the holder of such indebtedness) providing direct or indirect assurance of payment or performance of any such obligations in whole or in part (other than direct or indirect liability which by its terms may be payable solely in Capital Stock (other than Mandatory Redeemable Stock) of the Borrower). "NorthWestern Energy" shall mean the regulated electric and natural gas transmission and distribution assets and businesses owned and operated by the Borrower (formerly known as NorthWestern Public Service and including, without limitation, the regulated electric and natural gas transmission and distribution assets and business formerly owned and operated by Montana Power), historically reported under the headings titled "Electric" and "Natural Gas" on the SEC Reports of the Borrower filed annually with the SEC. "Note" shall mean, as applicable, a Term Note or a QFL Note. "Notice of Borrowing" shall mean a notice given by the Borrower pursuant to Section 2.3(a). "Notice of Interest Rate Conversion" shall have the meaning ascribed thereto in Section 2.7. "Obligations" shall mean the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower or any Subsidiary, as applicable, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and whether the Administrative Agent, for the benefit of the Lenders, is oversecured or undersecured with respect to such Loans) the Notes and all other obligations and liabilities of the Borrower to the Administrative Agent, the Collateral Agent and the Lenders, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, the Notes, the other Loan Documents or any other document made, delivered or given in connection therewith or herewith, whether on account of principal, interest, fees, indemnities, costs, expenses (including, without limitation, all fees and disbursements of counsel to the Administrative Agent, the Collateral Agent or the Lenders that are required to be paid by the Borrower pursuant to the terms of this Agreement or any other Loan Document) or otherwise. 15 "Participant" shall have the meaning ascribed thereto in Section 9.6(b). "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor thereto. "Pension Plan" shall mean any single-employer plan, as defined in Section 4001(a)(15) of ERISA, which the Borrower, any Subsidiary or any Commonly Controlled Entity maintains, administers, contributes to or is required to contribute to, or under which the Borrower, any Subsidiary or any Commonly Controlled Entity has any liability. "Permitted Liens" shall mean (a) Liens for taxes, assessments, governmental charges or levies not yet due or which are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Consolidated Subsidiaries, as the case may be, in conformity with GAAP; (b) Landlord liens for rent not yet due and payable and statutory Liens of carriers', warehousemen's, mechanics', materialmen's, repairmen's or other similar nonconsensual Liens imposed by law arising in the ordinary course of business securing obligations which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; (c) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation; (d) deposits securing liability to insurance carriers under insurance or self- insurance arrangements, and deposits to secure true operating leases in the ordinary course; (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower; (f) any attachment or judgment Lien not constituting an Event of Default under Section 7.1(h); (g) Liens solely on assets of a Subsidiary incurring Indebtedness, which Liens secure such Indebtedness; (h) the Lien of each Indenture, as such Indenture may be amended or supplemented from time to time in accordance with the terms hereof, securing first mortgage bonds permitted to be outstanding pursuant to Section 6.10(e) or (f); 16 (i) Liens on accounts receivables or inventory of the Borrower (provided such assets are not subject to the Lien of either Indenture) securing Indebtedness permitted to be outstanding pursuant to Section 6.10(g); (j) Liens on assets of the Borrower not subject to the Lien of either Indenture securing Indebtedness permitted to be outstanding pursuant to Section 6.10(h); (k) any Lien vested in any licensor or permitter for obligations or acts to be performed, the performance of which obligations or acts is required under licenses or permits, so long as the performance of such obligations or acts is not delinquent or is being contested in good faith and by appropriate proceedings; (l) any controls, restrictions, obligations, duties or other burdens imposed by any federal, state, municipal or other law, or by any rule, regulation or order of any Governmental Authority, upon any property of the Borrower or the operation or use thereof or upon the Borrower with respect to any of its property or the operation or use thereof or with respect to any franchise, grant, license, permit or public purpose requirement, or any rights reserved to or otherwise vested in any Governmental Authority to impose any such controls, restrictions, obligations, duties or other burdens; (m) any right which any Governmental Authority may have by virtue of any franchise, license, contract or statute to purchase, or designate a purchaser of or order the sale of, any property of the Borrower upon payment of cash or reasonable compensation therefor or to terminate any franchise, license or other rights or to regulate the property and business of the Borrower; (n) party-wall agreements and agreements, in each case existing on the date hereof, for and obligations relating to the joint or common use of property owned solely by the Borrower or owned by the Borrower in common or jointly with one or more parties; (o) liens existing on the date hereof securing indebtedness incurred by a Person, other than the Borrower which indebtedness has been neither assumed nor guaranteed by the Borrower nor on which it customarily pays interest, existing on property which the Borrower owns jointly or in common with such Person or such Person and others, if there is a bar against partition of such property which 17 (p) would preclude the sale of such property by such other Person or the holder of such lien without the consent of the Borrower; Liens existing on the date hereof securing Debt for Money Borrowed as set forth in Schedule 6.4 hereto; and (q) other Liens not securing Indebtedness existing on the date hereof. "Person" shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority, ISO or other entity of whatever nature. "Plan" shall mean at a particular time, any employee benefit plan which is defined in Section 3(2) of ERISA and in respect of which the Borrower or any Subsidiary is, an "employer" as defined in Section 3(5) of ERISA. "Properties" shall have the meaning ascribed thereto in Section 3.17(a). "QFL Note" shall have the meaning ascribed thereto in Section 2.15. "Qualified Foreign Lender" shall have the meaning ascribed thereto in Section 2.15. "Reduction Event" shall mean any Asset Disposition or Equity Issuance. "Register" shall have the meaning ascribed thereto in Section 9.6(d). "Regulation D, T, U or X" shall mean Regulation D, T, U or X, respectively, of the Board of Governors of the Federal Reserve System as in effect from time to time, or any successor regulation. "Release" shall mean any release, pumping, pouring, emptying, injecting, escaping, leaching, migrating, dumping, seepage, spill, leak, flow, discharge, disposal or emission. "Reorganization" shall mean with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "Replaced Note" shall have the meaning ascribed thereto in Section 2.15. "Replacement Lender" shall have the meaning ascribed thereto in Section 2.18. "Reportable Event" shall mean any of the events set forth in Section 4043(c) of ERISA other than those events for which the notice requirement has been waived under applicable regulations. 18 "Required Lenders" shall mean, at any time, Lenders having Commitments (or after the Funding Date, Loans) representing 51% or more of the aggregate of all Commitments (or after the Funding Date, Loans) outstanding at such time. "Requirement of Law" as to any Person shall mean the articles of organization and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority (including, without limitation, the Public Utility Holding Company Act of 1935, as amended, any of the foregoing relating to employee health and safety or public utilities and any Environmental Law), in each case, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Responsible Officer" shall mean, with respect to a Person, the chairman of the board of directors, the chief executive officer or the president of such Person or, with respect to financial matters, the chief financial officer of such Person, or any other officer of such Person designated as a Responsible Officer by any of the foregoing. "Restricted Payment" shall have the meaning ascribed thereto in Section 6.9. "SEC" shall mean the Securities and Exchange Commission. "SEC Reports" shall mean the reports filed by the Borrower with the SEC on Form 10-K, Form 10-Q or Form 8-K or any successor Form. "Secured Parties" shall mean the Administrative Agent, the Collateral Agent and the Lenders. "Security Agreement" shall mean the security agreement between the Borrower and the Collateral Agent for the benefit of the Secured Parties in form and substance reasonably satisfactory to the Borrower and the Collateral Agent. "South Dakota First Mortgage Indenture" shall mean the General Mortgage Indenture and Deed of Trust dated as of August 1, 1993 between the Borrower and The Chase Manhattan Bank, as trustee, as supplemented and amended to the date hereof. "South Dakota Utility Business" shall mean the regulated electric and natural gas transmission and distribution assets and businesses owned and operated by the Borrower in the States of South Dakota and Nebraska or otherwise subject to the Lien of the South Dakota First Mortgage Indenture. "South Dakota Utility Business EBITDA" shall mean, for any period for the South Dakota Utility Business, the sum of (i) the operating income of the South Dakota Utility Business for such period plus, without duplication and to the 19 extent reflected as a charge in the statement of operating income of the South Dakota Utility Business for such period, (ii) depreciation and amortization, in each case on a consolidated basis determined in accordance with GAAP. "SPC" shall have the meaning ascribed thereto in Section 9.6(f). "Special Purpose Subsidiary" shall mean a direct or indirect Subsidiary of the Borrower, formed solely for the purpose of acquiring and owning certain assets and issuing Indebtedness which is secured solely by such assets (or the assets of one or more other Special Purpose Subsidiaries) and as to which the Borrower and each other Subsidiary (other than any Special Purpose Subsidiary) has no Guarantee Obligation or other liability or obligation to contribute additional equity or for which the Borrower or any other Subsidiary (other than a Special Purpose Subsidiary) has general partner liability or other derivative liability by operation of law or contract. The term "Special Purpose Subsidiary" shall also include any Subsidiary whose assets consist solely of equity interests in another Special Purpose Subsidiary and, other than having general partner liability, otherwise meets the requirements of the preceding sentence. "Standard & Poor's" shall mean Standard & Poor's Rating Group, a division of The McGraw-Hill Companies, Inc. "Subsidiary" shall mean, as to any Person, a corporation, company, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the occurrence of a contingency) to elect a majority of the board of directors or other managers of such corporation, company, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise expressly stated herein all references to any Subsidiary are to direct or indirect subsidiaries of the Borrower; provided that in no event shall any Excluded Subsidiary be deemed a Subsidiary of the Borrower. "Supplemental Indentures" shall mean collectively the supplemental indentures to the Indentures pursuant to which, among other things, the First Mortgage Bonds are issued. The Supplemental Indentures are sometimes called, as applicable, the Montana Supplemental Indenture and the South Dakota Supplemental Indenture herein. "Syndication Letter" shall mean the Senior Secured Credit Facility Syndication Letter from CSFB to the Borrower dated the date hereof. "Term Note" shall have the meaning ascribed thereto in Section 9.6(h). "Total Capital" shall mean on any date (a) Funded Debt on such date plus (b) Net Worth as of the end of the most recent fiscal quarter. 20 "Transactions" shall mean, collectively, (a) borrowings hereunder, (b) the authorization, issuance and delivery of the First Mortgage Bonds to the Collateral Agent, (c) the granting of security interests pursuant to the Collateral Documents and (d) any other transactions related or entered into in connection with any of the foregoing or otherwise in connection with any of the Loan Documents. "Transferee" shall have the meaning ascribed thereto in Section 9.6(g). "Type" shall mean as to any Loan, its nature as an Alternate Base Rate Loan or a Eurodollar Loan, as the context may require. "Utility Business" shall mean the utility business and operations of the Borrower conducted through NorthWestern Energy. "Utility Business EBITDA" shall mean, for any period for the Utility Business, the sum of (i) the operating income of the Utility Business for such period plus, without duplication and to the extent reflected as a charge in the statement of operating income of the Utility Business for such period, (ii) depreciation and amortization, in each case on a consolidated basis determined in accordance with GAAP; provided, however, with respect to any fiscal quarter ended on or prior to March 31, 2002, the Utility Business EBITDA shall include the utility business and operations of Montana Power. "Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary 100% of whose Capital Stock is at the time owned by such Person directly or indirectly through other Wholly Owned Subsidiaries (other than qualifying directors' shares). 1.2 Other Definitional Provisions(a) . (a) Unless otherwise specified therein, all terms defined in this Agreement shall have their respective defined meanings when used in the Notes or any certificate or other document made or delivered pursuant hereto. (b) As used herein, in the Notes and in any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Borrower or any Subsidiary not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (e) The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "or" shall not be exclusive. The word "will" shall be construed to have the same meaning and effect as the word "shall". 21 (f) Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, and (iii) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS 2.1 Commitments and Loans Subject to the terms and conditions hereof (including, without limitation, the conditions precedent set forth in Sections 4.1 and 4.2 hereof), each Lender severally agrees to make a term loan to the Borrower in a principal amount not to exceed such Lender's Commitment on the Funding Date which shall be a Business Day during the Availability Period. The Loans (i) at the option of the Borrower may be incurred and maintained as, or converted into, Alternate Base Rate Loans or Eurodollar Loans in accordance with the provisions hereof and (ii) shall be repaid in accordance with the provisions hereof, but once repaid, may not be reborrowed. For the avoidance of doubt, the Administrative Agent may designate any Business Day during the Availability Period (but in any event on or prior to the Cash Collateral Release Date) as the Funding Date. In connection with such designation, the Required Lenders may, in their sole discretion, waive conditions precedent set forth in Section 4.2 to the extent not then satisfied. 2.2 Evidence of Indebtedness(a) . (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from the Loan made by such Lender, including, without limitation, the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. (b) The Administrative Agent shall maintain the Register pursuant to Section 9.6(d) and a subaccount therein for each Lender, in which shall be recorded (i) the amount of the Loan made by each Lender through the Administrative Agent hereunder, the type thereof and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable from the Borrower to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender's share thereof. (c) The entries made in the Register and the accounts of each Lender maintained pursuant to Section 9.6(d) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amount of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans 22 actually made to the Borrower by such Lender in accordance with the terms of this Agreement. 2.3 Procedure for Borrowing. As a condition precedent to borrowing hereunder, the Borrower shall give the Administrative Agent an irrevocable notice substantially in the form of Exhibit B-1 on or prior to the Funding Date (which notice must be received by the Administrative Agent prior to 10:00 a.m., New York City time on the Funding Date), specifying (1) that a Loan is requested, (2) the aggregate amount to be borrowed, (3) the requested Funding Date, (4) whether the borrowing is to be of Eurodollar Loans, Alternate Base Rate Loans or a combination thereof, (5) if the borrowing is to be entirely or partly of Eurodollar Loans, the amounts of such Eurodollar Loans and the lengths of the initial Interest Periods therefor and (6) the number and the location of the account to which the proceeds are to be disbursed (consistent with the provisions of hereof). Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in Section 9.2 prior to 11:00 a.m., New York City time, on the date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent in the manner specified by the Borrower in such Notice of Borrowing in the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. If the Borrower fails to indicate the initial Interest Periods in such notice, the Interest Period shall be one month. 2.4 Fees.The Borrower agrees to pay to the Administrative Agent, for the account of CSFB or the Administrative Agent, as applicable as set forth therein, concurrent with signing of this Agreement (or as otherwise specified therein), the fees set forth in the Syndication Letter. All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for the benefit of the parties entitled thereto. Fees paid shall not be refundable under any circumstances. 2.5 Repayment of Loans(a). Commencing on March 31, 2003 and on the last Business Day of March, June, September and December thereafter prior to the Maturity Date, the Borrower shall make quarterly principal payments on the Loans, each quarterly payment in an amount equal to one quarter of one percent (0.25%) of the original aggregate principal amount of the Loans. The Borrower shall repay the then outstanding aggregate principal amount of the Loans on the Maturity Date, together with accrued and unpaid interest thereon as provided herein. Any prepayments of the Loans pursuant to Section 2.6 shall be applied in inverse chronological order to the principal amounts due pursuant to this Section. 2.6 Optional and Mandatory Prepayments. (a) Optional Offer of Prepayment. The Borrower may, upon written notice delivered to the Administrative Agent at least 10 days (but not more than 30 days) prior to the proposed date of prepayment (which notice shall state the date of such proposed prepayment, the aggregate principal amount of the Loans to be prepaid and the proposed prepayment price thereof), 23 offer to prepay the outstanding principal amounts of the Loans in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that no Lender shall be obligated to accept such offer; and provided further that the Borrower shall not be permitted to make an offer to purchase more than once during any three month period. Any Lender may in its discretion accept such offer by written notice to the Administrative Agent (which notice shall also state the maximum principal amount of prepayment such Lender is willing to accept). To the extent one or more Lenders accepts any such offer and one or more Lenders rejects such offer, the amounts that would have been allocable to the rejecting Lenders may (if and to the extent accepted by the accepting Lenders) be paid to accepting Lenders in accordance with their Commitment Percentages. Any Lender that shall have failed to respond to an offer described in this Section 2.6(a) shall be deemed to have rejected such offer. If any Lender shall have rejected (or been deemed to have rejected) any offer to prepay described above and the Borrower shall thereafter vary the offer, the Borrower shall make the modified offer available to all Lenders for a period of at least three Business Days before making the contemplated prepayment. Except as provided in this Section 2.6(a), the Borrower shall not have the right to prepay the Loans. (b) [Intentionally Omitted] (c) Mandatory Offer of Prepayment. If the Borrower or any of its Subsidiaries shall at any time, or from time to time, after the date hereof receive Net Cash Proceeds in respect of any Reduction Event which, individually or in the aggregate for all prior Reduction Events not the subject of a mandatory offer of prepayment, exceeds $10,000,000, then, on the first Business Day immediately succeeding the date of such receipt, such Net Cash Proceeds shall be applied to the prepayment of any Loans then outstanding to the extent and in the manner as provided below in this Section 2.6(c). At least 10 days (but not more than 30 days) prior to any proposed Reduction Event, the Borrower shall give written notice to the Administrative Agent stating the date of the proposed Reduction Event together with a certificate signed by a Responsible Officer of the Borrower setting forth in reasonable detail the calculation of the Net Cash Proceeds therefrom and shall offer to prepay the outstanding principal amounts of the Loans comprising part of the same borrowing in an amount equal to, in the case of an Asset Disposition, 100% of the Net Cash Proceeds therefrom or, in the case of an Equity Issuance, 50% of the Net Cash Proceeds therefrom, as applicable, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that no Lender shall be obligated to accept such offer. Any Lender may in its discretion accept such offer by written notice to the Administrative Agent (which notice shall also state the maximum principal amount of prepayment such Lender is willing to accept). To the extent one or more Lenders accepts any such offer and one or more Lenders rejects such offer, the amounts that would have been allocable to the rejecting Lenders may (if and to the extent accepted by the accepting Lenders) be paid to accepting Lenders in accordance with their Commitment Percentages. Any Lender that shall have failed to respond to an offer described in this Section 2.6(c) shall be deemed to have rejected such offer. If for any reason the proposed Reduction Event is delayed by more than 15 days, the Borrower shall resend the notice and offer provided for in this Section 2.6(b). 24 (d) Mandatory Prepayment. If the Cash Collateral Release Date has not occurred on or prior to February 10, 2003, then the Loans shall become due and payable in full on February 11, 2003 and the Borrower shall prepay the Loans on such date, together with a prepayment fee equal to one percent (1%) thereof (or if no Loans are then outstanding, the Commitments (and the Lenders' obligations hereunder to extend any credit) shall terminate in full). (e) Additional Amounts. Each prepayment of Loans pursuant to this Section 2.6 shall be accompanied by payment in full of all accrued interest thereon, to and including the date of such prepayment, together with any additional amounts owing pursuant to Section 2.16 and any outstanding fees and expenses due and owing with respect to the amount prepaid. 2.7 Interest Rate Conversion and Continuation Options(a) . (a) The Borrower may elect from time to time to convert Eurodollar Loans to Alternate Base Rate Loans by giving the Administrative Agent prior irrevocable notice of such election substantially in the form of Exhibit B-2 (a "Notice of Interest Rate Conversion") (which notice must be received by the Administrative Agent by at least 10:00 a.m., New York City time, two Business Days prior to such election); provided that any such conversion of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Alternate Base Rate Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election (which notice must be received by the Administrative Agent by at least 10:00 a.m., New York City time, three Business Days prior to such election). Any such Notice of Interest Rate Conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice, the Administrative Agent shall promptly notify each Lender thereof. All or any part of the outstanding Eurodollar Loans and Alternate Base Rate Loans may be converted as provided herein; provided that (i) no Loan may be converted into a Eurodollar Loan when any Default has occurred and is continuing, (ii) no Loan may be converted into a Eurodollar Loan after the date that is one month prior to the Maturity Date and (iii) such conversion shall be in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. (b) Any Eurodollar Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving notice to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in Section 1.1 of the length of the next Interest Period to be applicable to such Loans; provided that (i) no Eurodollar Loan may be continued as such when any Default has occurred and is continuing and (ii) no Eurodollar Loan which is a Loan may be continued as a Eurodollar Loan after the date that is one month prior to the Maturity Date; provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph, or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall be automatically converted to Alternate Base Rate Loans on the last day of such then expiring Interest Period. The Administrative Agent agrees to notify the Lenders of any notice of continuation referred to herein received by the Administrative Agent. 25 2.8 Maximum Amounts of Eurodollar Tranches. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and shall be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof. There shall not be more than five Eurodollar Tranches at any one time outstanding. 2.9 Interest Rates; Default Rate Payment Dates(a) . (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for the first day of such Interest Period (subject to daily adjustments, if any, required by changes in the Eurodollar Reserve Requirements) plus 5.75%. (b) Each Alternate Base Rate Loan shall bear interest at a rate per annum equal to the Alternate Base Rate plus 4.75%. (c) If an Event of Default has occurred and is continuing, the Loans shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% from the date of occurrence of such Event of Default until the date such Event of Default is cured or waived (after as well as before judgment). In addition, should any interest on such Loans or any fees or other amount (other than principal) payable hereunder not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest (to the extent permitted by law in the case of interest on interest) at a rate per annum as determined pursuant to the preceding sentence which would be applicable to an Alternate Base Rate Loan, in each case, from the date of such non-payment until such amount is paid in full (after as well as before judgment). (d) Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to Section 2.9(c) shall be payable from time to time on demand. 2.10 Computation of Interest(a) . (a) The Alternate Base Rate interest (when calculated based upon the prime rate) shall be calculated on the basis of a 365/366 day year and all other interest shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate or the Eurodollar Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall, as soon as practicable, notify the Borrower and the Lenders of the effective date and the amount of each such change in interest rate. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent, at 26 the request of the Borrower, shall deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.10(a). 2.11 Inability to Determine Interest Rate. If prior to the first day of any Interest Period: (a) the Administrative Agent shall have reasonably determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining its affected Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given, (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Alternate Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Alternate Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the first day of such Interest Period, to Alternate Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Alternate Base Rate Loans to Eurodollar Loans. 2.12 Pro Rata Treatment and Payments; Funding Reliance(a) . (a) The borrowing by the Borrower of Loans from the Lenders hereunder and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Commitment Percentages of the Lenders. Except as provided in Section 2.6, each payment (including each prepayment) by the Borrower on account of principal of and interest on the Loans of any one Type shall (except as may be required as a result of Section 2.16) be made pro rata according to the respective outstanding principal amounts of the Loans of such Type then held by the Lenders. All payments (including prepayments) to be made by the Borrower hereunder and under the Notes, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 12:00 noon, New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Administrative Agent's office specified in Section 9.2, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal and interest thereon, shall be payable at the then applicable rate during such extension. 27 (b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make available to the Administrative Agent the amount that would constitute its Commitment Percentage of such borrowing, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If the Administrative Agent makes such amount available to the Borrower and if such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Rate for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such borrowing. If such Lender's Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to the applicable Loan, on demand, from the Borrower. The obligations of the Lenders hereunder are several and no Lender shall be responsible for any other Lender's failure to make Loans as required hereunder. 2.13 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law after the date hereof or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Alternate Base Rate Loans to Eurodollar Loans shall forthwith be suspended until such condition shall cease to exist and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Alternate Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Section 2.16. 2.14 Requirements of Law(a) . (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement, its Notes, any Eurodollar Loan, or its obligation to make Eurodollar Loans, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.15 and changes in the rate of tax on the overall net income of such Lender); 28 (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender reasonably deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify the Borrower through the Administrative Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender through the Administrative Agent to the Borrower shall be in writing and accompanied by calculations in reasonable detail demonstrating the basis for such Lender's claim and shall be considered conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Obligations hereunder. (b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof has or shall have the effect of reducing the rate of return on such Lender's or the corporation's capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor accompanied by calculations in reasonable detail demonstrating the basis for such Lender's claims, the Borrower shall pay to such Lender the additional amount or amounts as will compensate such Lender for such reduction. This covenant shall survive the termination of this Agreement and the payment of the Obligations hereunder. 2.15 Taxes(a). (a) Any and all payments made by the Borrower to or for the account of the Administrative Agent or any Lender under this Agreement, the Notes or the other Loan Documents shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, and all liabilities with respect thereto, now or hereafter imposed, levied, collected, withheld or assessed by any 29 Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent or any Lender by a jurisdiction under the Laws of which such Lender or its applicable lending office, or the Administrative Agent, as the case may be, is organized or maintained. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions, withholdings or liabilities ("Non-Excluded Taxes") are required to be deducted or withheld from or in respect of any amounts payable to the Administrative Agent or any Lender hereunder or under the Notes, (i) the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary, so that after making all required deductions or withholdings (including deductions or withholdings applicable to additional sums payable under this Section 2.15), the Administrative Agent or such Lender receives an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) the Borrower shall make such deductions or withholdings, and (iii) the Borrower shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law; provided that the Borrower shall not be required to increase any such amounts payable to any Lender if such Lender fails to comply with the applicable requirements of paragraph (b) of this Section. Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as possible thereafter, the Borrower shall send to the Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. The Borrower agrees to indemnify and hold harmless each Lender and the Administrative Agent from the full amount of Non-Excluded Taxes (including, without limitation, any such taxes imposed or asserted by any jurisdiction on amounts payable under this Section 2.15) paid or incurred by such Lender or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. The covenants in this Section shall survive the termination of this Agreement and the payment of the Notes and payment of the Obligations hereunder. (b) Each Lender shall: (i) deliver to the Borrower and the Administrative Agent (A) in the case of a Lender that is not incorporated under the laws of the United States or any state thereof, either (x) two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, as applicable, or successor applicable forms, as the case may be, or, (y) if such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and intends to claim exemption from U.S. Federal withholding tax under Section 871(h) or Section 881(c) of the Code with respect to payments of "portfolio interest", a Form W-8BEN, or any subsequent versions thereof or successors thereto together with a certificate executed by such Lender representing that (1) such Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10 percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code), and claiming complete exemption from U.S. Federal withholding tax on payments of interest by 30 the Borrower under this Agreement, the Notes and the other Loan Documents and (2) the Lender has received in replacement of any Note held by or assigned to it, a QFL Note in accordance with Section 2.15(c), and (B) in the case of any other Lender, an Internal Revenue Service Form W-9, as applicable, or successor applicable form, as the case may be; (ii) deliver to the Borrower and the Administrative Agent two further copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrower; and (iii) obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by the Borrower or the Administrative Agent; unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders such form inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and the Administrative Agent. Such Lender shall certify (i) in the case of a Form W-8BEN or W-8ECI, as applicable, that it is entitled to receive payments under this Agreement at a reduced rate of withholding, or without deduction or withholding, as the case may be, of any United States federal income taxes and (ii) in the case of a Form W-9, that it is entitled to an exemption from United States backup withholding tax. Each Person that shall become a Lender or a Participant pursuant to Section 9.6 shall, upon the effectiveness of the related transfer, be required to provide all the applicable forms and statements required pursuant to this Section; provided that, in the case of a Participant, such Participant shall furnish all such required forms and statements to the Lenders from which the related participation shall have been purchased. (c) Any Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and satisfies the requirements of Section 2.15(b)(i)(A)(y) (a "Qualified Foreign Lender") shall, upon receipt of the written request of the Administrative Agent or the Borrower and may, upon its own written request to the Administrative Agent, exchange any Note held by or assigned to it for a qualified foreign lender note (a "QFL Note"). A QFL Note shall be substantially in the form attached hereto as Exhibit A-2 and shall contain the following legend, "This Note is a QFL Note, and as such, ownership of the obligation represented by such QFL Note may be transferred only in accordance with Section 2.15 of the Credit Agreement." Any QFL Note issued in replacement of any existing Note pursuant to this Section 2.15(c) shall be (i) dated the Closing Date, (ii) issued in the name of the entity in whose name such existing Note was issued and (iii) issued in the same principal amount as such existing Note. Any Note replaced pursuant to this Section is sometimes referred to herein as a "Replaced Note". 31 (d) The Borrower agrees that, upon the request of, or delivery of a request to, a Qualified Foreign Lender pursuant to paragraph (c) of this Section, it shall execute and deliver a QFL Note to the Administrative Agent in replacement of the Replaced Note surrendered in connection with such request conforming to the requirements of this paragraph. Each Qualified Foreign Lender shall surrender its Note in connection with any replacement pursuant to this Section 2.15. Upon receipt by the Administrative Agent, in connection with any replacement, of a QFL Note and the existing Note to be replaced by such QFL Note in accordance with this paragraph, the Administrative Agent shall forward the QFL Note to the Lender which has surrendered its Note for replacement by such QFL Note and shall forward the surrendered Note to the Borrower marked "canceled". Once issued, QFL Notes (i) shall be deemed to and shall be "Notes" for all purposes under the Loan Documents, (ii) may not be exchanged for Notes which are not QFL Notes, notwithstanding anything to the contrary in the Loan Documents and (iii) shall at all times thereafter be QFL Notes, including, without limitation, following any transfer or assignment thereof. (e) Notwithstanding anything to the contrary in the Loan Documents, the QFL Notes are registered obligations as to both principal and interest with the Borrower and transfer of the obligations underlying such QFL Note may be effected only by surrender of the QFL Note to the Borrower and either reissuance by the Borrower of such QFL Note to the transferee or issuance by the Borrower of a new QFL Note to the transferee. A QFL Note shall only evidence the Lender's or an assignee's right, title and interest in and to the related obligation, and in no event is a QFL Note to be considered a bearer instrument or obligation. This Section 2.15 shall be construed so that the obligations underlying the QFL Notes are at all times maintained in "registered form" within the meaning of Sections 871(h)(2) and 881(c)(2) of the Code. 2.16 Indemnity. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in payment when due of the principal amount of or interest on any Eurodollar Loan, (b) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same, (c) default by the Borrower in making any prepayment after the Borrower has given a notice thereof or (d) the making of a prepayment or conversion of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto including, without limitation, in each case, any such loss or expense arising from the redeployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained. This covenant shall survive the termination of this Agreement and the payment of the Obligations hereunder. 2.17 Discretion of Lender as to Manner of Funding. Notwithstanding any other provisions of this Agreement (but subject to Section 2.18), each Lender shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood that for the purposes of this Agreement all determinations hereunder shall be made assuming each Lender had actually funded and maintained each Eurodollar Loan through the purchase of deposits of Dollars in the London interbank 32 market having a maturity corresponding to each Loan's Interest Period and bearing an interest rate equal to the Eurodollar Rate for such Interest Period. 2.18 Change of Lending Office; Replacement Lender(a) . (a) Each Lender agrees that if it makes any demand for payment under Section 2.14 or Section 2.15 or if any adoption or change of the type described in Section 2.13 shall occur with respect to it, such Lender will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it as determined in its sole discretion) to designate a different lending office if the making of such a designation would reduce or obviate the need for the Borrower to make payments under Section 2.14 or Section 2.15, or would eliminate or reduce the effect of any adoption or change described in Section 2.13. (b) In determining the amount of any claim for reimbursement or compensation hereunder, each Lender will use reasonable methods of calculation consistent with such methods customarily employed by such Lender in similar situations. (c) Each Lender will notify the Borrower and the Administrative Agent of any event giving rise to a claim under Sections 2.13, 2.14, 2.15 or 2.16 promptly after the occurrence thereof, which notice shall be accompanied by a certificate of such Lender setting forth in reasonable detail the circumstances of such claim. (d) If any Lender, other than (in its capacity as a Lender) the Administrative Agent (an "Affected Lender"), seeks payment or indemnification from the Borrower pursuant to Section 2.14 or Section 2.15(a) (without prejudice to any amounts then due to such Lender under such Sections) that are not applicable to all Lenders, then the Borrower may designate another Lender or another bank or financial institution acceptable to the Administrative Agent to assume, in accordance with Section 9.6, all (but not less than all) the Commitments, Loans and other rights and obligations of such Affected Lender hereunder (a "Replacement Lender"), in each case, on a date mutually acceptable to the Replacement Lender, the Affected Lender, the Borrower and the Administrative Agent, without recourse upon, warranty by, or expense to, such Affected Lender or the Administrative Agent, for a purchase price equal to the outstanding principal amount of the Loans of such Affected Lender plus all interest accrued thereon and all other amounts owing to such Affected Lender hereunder, or such other purchase price as may be mutually agreed upon between the Affected Lender and the Replacement Lender, upon such assumption and purchase by the Replacement Lender, such Replacement Lender shall be deemed a "Lender" for purposes of this Agreement and the other Loan Documents and such Affected Lender shall cease to be a "Lender" for such purposes and shall no longer have any obligations hereunder. ARTICLE 3. REPRESENTATIONS AND WARRANTIES To induce the Administrative Agent and the Lenders to enter into this Agreement and to make or participate in extensions of credit hereunder, the Borrower hereby represents and warrants to the Administrative Agent and each Lender: 33 3.1 Financial Condition(a) . (a) The consolidated balance sheets of the Borrower as of December 31, 1999, December 31, 2000 and December 31, 2001 and the related consolidated statements of income, retained earnings and cash flows for the fiscal year ended on such date, and the unaudited consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as of September 30, 2002; and the related consolidated statements of income, retained earnings and cash flows for the period ending as of such date, reported on, in the case of the 1999 and 2000 annual audited financial statements, by Arthur Andersen LLP, or in the case of the 2001 annual audited financial statements, by Deloitte & Touche LLP, copies of which have heretofore been furnished to the Lenders, present fairly the consolidated financial condition of the Borrower and its Consolidated Subsidiaries as at such date, and the results of their operations and their retained earnings and cash flows for each of the fiscal periods then ended. All such financial statements, including the related schedules and notes thereto relating to the audited financials, have been prepared in accordance with GAAP applied consistently throughout the periods involved. (b) All balance sheets, all statements of income and shareholders equity and of cash flows and all other financial information which shall hereafter be furnished by or on behalf of or the Borrower to the Administrative Agent for the purposes of, or in connection with, this Agreement or any transaction contemplated hereby have been or will be prepared in accordance with GAAP consistently applied throughout the periods involved (except as disclosed therein) and do or will present fairly (subject to normal year-end adjustment and the absence of footnotes in the case of financial statements for any fiscal quarter) the financial condition of the Borrower and its Consolidated Subsidiaries, as the case may be, as at the dates thereof and the results of their operations and their shareholders equity and cash flows for the periods then ended. (c) The sum of shareholders' equity and preferred stock (including mandatorily redeemable preferred stock of subsidiary trusts), preference stock and preferred securities of the Borrower and its subsidiaries (including Excluded Subsidiaries but excluding discontinued operations) on September 30, 2002 was $770,000,000. 3.2 No Change. Since December 31, 2001, there has been no development or event which has had, or could reasonably be expected to have, a Material Adverse Effect. 3.3 Corporate Existence; Compliance with Law. Each of the Borrower and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate or limited liability company power and authority, and the legal right to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or limited liability company 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 except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law, 34 except to the extent that the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. 3.4 Corporate Power; Authorization; Enforceable Obligations. The Borrower has (or with respect to the First Mortgage Bonds, the Supplemental Indentures and the Bond Collateral Agreement, when executed, the Borrower shall have) the corporate power and authority, and the legal right, to make, deliver and perform the Indentures and the Loan Documents and to authorize the execution, delivery and performance of the Loan Documents, and to borrow hereunder. The Borrower has (or with respect to the First Mortgage Bonds, the Supplemental Indentures and the Bond Collateral Agreement, when executed, the Borrower shall have) taken all necessary corporate action to authorize the borrowings on the terms and conditions set forth in this Agreement and in the Notes and to execute, deliver and perform its obligations under the Indentures and the Loan Documents. Set forth on Schedule 3.4a are all consents or authorizations of, filings with, notices to or other acts by or in respect of, any Governmental Authority or any other Person required in connection with the authorization, execution, or issuance of any First Mortgage Bond, the authorization, delivery, performance or validity of any Supplemental Indenture, or the execution, delivery, performance, validity or enforceability of the Bond Collateral Agreement or any Collateral Document related thereto, and in each case any application therefor (collectively, the "First Mortgage Approvals"). No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder, or with the execution, delivery, performance, validity or enforceability of the Loan Documents other than (x) First Mortgage Approvals, (y) as set forth on Schedule 3.4b, or (z) any consents, authorizations and filings in connection with the foregoing that, if not obtained, could not reasonably be expected to have a Material Adverse Effect. On the Closing Date, the Administrative Agent and each Lender shall have received complete and current copies of all consents, authorizations and filings listed on Schedule 3.4b. On the Cash Collateral Release Date, the Administrative Agent and each Lender shall have received complete and current copies of all First Mortgage Approvals. No such consent, authorization or filing is or shall be conditioned upon or otherwise imposes any materially burdensome or adverse condition. This Agreement and the Indentures have been, and each other Loan Document when executed and delivered will be, duly executed and delivered on behalf of the Borrower. This Agreement and the Indentures constitute, and each other Loan Document when executed and delivered will constitute, a legal, valid and binding obligation of the Borrower enforceable against the Borrower, in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 3.5 No Legal Bar. The execution, delivery and performance of the Loan Documents, the borrowings hereunder and the use of the proceeds thereof, will not violate any Requirement of Law or Contractual Obligation of the Borrower or any Subsidiary which violation could reasonably be expected to have a Material Adverse Effect, will not accelerate or result in the acceleration of any payment obligations of the 35 Borrower or such Subsidiary and will not result in, or require, the creation or imposition of any Lien on any of the respective properties or revenues of the Borrower or any such Subsidiary pursuant to any such Requirement of Law or Contractual Obligation (other than Liens pursuant to the Indentures or the Collateral Documents). 3.6 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened by or against the Borrower, any Subsidiary or any Excluded Subsidiary or against any of the respective properties or revenues of the Borrower, any Subsidiary or any Excluded Subsidiary which could reasonably be expected to have a Material Adverse Effect. 3.7 No Default. No Default or Event of Default has occurred and is continuing. 3.8 Ownership of Property; Liens. Except as set forth in Schedule 3.8, each of the Borrower and its Material Subsidiaries has good record and marketable title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property. None of such property is subject to any Lien other than Permitted Liens. 3.9 [Intentionally Omitted]. 3.10 Intellectual Property. Each of the Borrower and its Subsidiaries owns, or is licensed to use, all patents, trademarks, trade names, copyrights, technology, know-how, processes, logos and insignia necessary for the conduct of its business as currently conducted except for those which the failure to own or license could not reasonably be expected to have a Material Adverse Effect (the "Intellectual Property"). No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property which could reasonably be expected to have a Material Adverse Effect, nor does the Borrower or any Consolidated Subsidiary know of any valid basis for any such claim. The use of such Intellectual Property by the Borrower or any Subsidiary does not infringe on the rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 3.11 No Burdensome Restrictions. No Requirement of Law or Contractual Obligation of the Borrower, any Subsidiary or any Excluded Subsidiary could reasonably be expected to have a Material Adverse Effect. 3.12 Taxes. Except as set forth in Schedule 3.12, each of the Borrower and the Subsidiaries has filed or caused to be filed all federal, state and other material tax returns which are required to be filed and has paid all taxes (including interest and penalties) shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any tax, fee or other 36 charge the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Borrower or such Subsidiary, as the case may be); and no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. 3.13 Margin Stock(a) . (a) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U), and no proceeds of any extension of credit hereunder will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock, except in compliance with applicable law and regulations. (b) Following application of the proceeds of each extension of credit hereunder, not more than 25% of the value of the consolidated assets of the Borrower and its Consolidated Subsidiaries that are subject to the provisions of Section 6.3 will be comprised of margin stock. 3.14 ERISA. Neither the Borrower nor any Subsidiary maintains, contributes to or has material obligations with respect to, any welfare plan (as defined in Section(3)(1) of ERISA) which provides benefits to employees after termination of employment other than as required by Part 6 of Title I of ERISA or similar state laws regarding continuation of benefits. Each Plan has complied and is in compliance in all respects with the applicable provisions of ERISA and the Code except where failure to do so could not reasonably be expected to have a Material Adverse Effect. The Borrower and each Subsidiary have not breached any of the responsibilities, obligations or duties imposed on it by ERISA, the Code, or regulations promulgated thereunder with respect to any Plan, which breach could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any Subsidiary nor any fiduciary of any Plan who is an officer or an employee of the Borrower or any Subsidiary has engaged in a nonexempt prohibited transaction described in Section 406 of ERISA or 4975 of the Code with respect to a Plan which could reasonably be expected to have a Material Adverse Effect. With respect to any employee benefit plan (as defined in Section 3(3) of ERISA) currently or formerly maintained or contributed to by any Commonly Controlled Entity, no liability exists and no event has occurred which could subject the Borrower or any Subsidiary to any liability which could reasonably be expected to have a Material Adverse Effect. Except as disclosed in Schedule 3.14, none of the Borrower or any Subsidiary has any liability, direct or indirect, contingent (including, without limitation, any such liability in connection with a Multiemployer Plan) or otherwise, under Title IV of ERISA or under Section 412 of the Code which could reasonably be expected to have a Material Adverse Effect. 3.15 Holding Company; Investment Company Act; Other Regulations. The Borrower is not (a) an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended, or (b) except as described on Schedule 3.15, subject to regulation under any Federal or state statute, regulation, decree or order which limits its ability to incur 37 Indebtedness or conditions such ability upon any act, approval or consent of any Governmental Authority or an ISO. The Borrower is either (i) not a "holding company", a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company", as each such term is defined in the Public Utility Holding Company Act of 1935, as amended, or (ii) exempt from registration as a holding company under The Public Utility Holding Company Act of 1935 by reason of filing an application on Form U-1 in good faith seeking an order of exemption pursuant to Section 3(a)(3) of that Act, and the Borrower has not received notice from the SEC challenging or otherwise calling into question such exemption. 3.16 Purpose of Loans. The proceeds of Loans will be used solely (i) first to repay in full and terminate the Existing Credit Facility and (ii) thereafter for general corporate purposes of the Borrower, its Subsidiaries and its Excluded Subsidiaries as permitted hereunder (in compliance with all applicable legal and regulatory requirements). 3.17 Environmental Matters. Except as set forth on Schedule 3.17, (a) The facilities and properties owned, leased or operated by the Borrower, its Subsidiaries or any Excluded Subsidiary (the "Properties") and all operations at the Properties are in, and have been in, compliance in all material respects with all applicable Environmental Laws, and there is no contamination in, at, under, from or about the Properties or violation of any Environmental Law or other circumstance or condition, with respect to the Properties or the business operated by the Borrower, its Subsidiaries or any Excluded Subsidiary, or any predecessor of any of them (the "Business") which in either case could reasonably be expected to result in any claims, liability, investigation or cost pursuant to any Environmental Law and to have a Material Adverse Effect. (b) None of the Borrower, any Subsidiary or any Excluded Subsidiary, or any predecessor of any of them, has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Business, nor do the Borrower or any Subsidiary have knowledge or reason to believe that any such notice will be received or is being threatened, in each case which could reasonably be expected to have a Material Adverse Effect. (c) There has been no Release or threat of Release of Materials of Environmental Concern at or from any of the Properties, or arising from or related to the operations of the Borrower, any Subsidiary or any Excluded Subsidiary, or any predecessor of any of them, in connection with any of the Properties or otherwise in connection with the Business that could reasonably be expected to have a Material Adverse Effect. 3.18 Insurance. All policies of insurance of any kind or nature maintained by or issued to the Borrower or any Subsidiary, including, without limitation, policies of life, fire, theft, product liability, public liability, property damage, other 38 casualty, employee fidelity, worker's compensation, employee health and welfare, title, property and liability insurance, are in full force and effect in all material respects and are of a nature and provide such coverage as is sufficient and as is customarily carried by companies of similar size and character. 3.19 Accuracy and Completeness of Information. All information, reports and other papers and data (other than projections) with respect to the Borrower, any Subsidiary or any Excluded Subsidiary furnished to the Lenders by the Borrower, or on behalf of the Borrower, and all SEC Reports were, at the time furnished, complete and correct in all material respects, or have been subsequently supplemented by other information, reports or other papers or data, to the extent necessary to give the Lenders a true and accurate knowledge of the subject matter in all material respects. All projections with respect to the Borrower or any Subsidiary furnished by the Borrower, were prepared and presented in good faith by the Borrower based upon facts and assumptions that the Borrower believed to be reasonable in light of current and foreseeable conditions, it being understood that projections are subject to significant uncertainties and contingencies, many of which are beyond the control of the Borrower and that no assurance can be given that the financial results set forth in such projections will actually be realized and the Borrower shall be under no obligation to update such projections. No document furnished or statement made in writing to the Lenders by or on behalf of the Borrower in connection with the negotiation, preparation or execution of this Agreement and no SEC Report contains any untrue statement of a material fact, or omits to state any such material fact necessary in order to make the statements contained therein not misleading, in either case which has not been corrected, supplemented or remedied by subsequent documents furnished or statements made in writing to the Lenders. 3.20 Leaseholds, Permits, etc. The Borrower possesses or has the right to use, all leaseholds, easements, franchises and permits and all authorizations and other rights which are material to and necessary for the conduct of the Business and its business. All the foregoing are in full force and effect, and each of the Borrower and the Subsidiaries is in substantial compliance with the foregoing without any known conflict with the valid rights of others, except for such noncompliance with the foregoing which could not reasonably be expected to have a Material Adverse Effect. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such leasehold, easement, franchise, license or other right, which termination or revocation, considered as a whole, could reasonably be expected to have a Material Adverse Effect. 3.21 No Restrictive Covenants. No Subsidiary of the Borrower is party to, or otherwise bound by, any agreement or other arrangement that prohibits such Subsidiary from making any payments, directly or indirectly, to the Borrower, by way of dividends, advances, repayment of loans or advances, reimbursements of management or other intercompany charges, expenses and accruals or other returns on investment, or any other agreement or arrangement that restricts the ability of such Subsidiary to make any payment, directly or indirectly, to the Borrower, other than prohibitions and restrictions permitted to exist under Section 6.12. 39 3.22 Solvency. The Borrower is solvent, is able to pay its debts as they mature, owns property with fair saleable value greater than the amount required to pay its debts and has capital sufficient to carry on its business as then constituted. 3.23 Montana First Mortgage Indenture. (a) The First Mortgage Bonds to be issued under the Montana First Mortgage Indenture, as heretofore supplemented and to be supplemented by the Twenty-Third Supplemental Indenture (the "Montana Supplemental Indenture"), when delivered to the Collateral Agent, will be duly executed, authenticated, issued and delivered, and will constitute valid and legally binding obligations of the Borrower, entitled to the security and benefits provided by the lien of such Indenture (except to the extent that enforceability of such lien may be limited by the effect of certain laws of the jurisdictions in which the physical properties covered thereby are located upon the remedies provided in such Indenture, which limitations, however, do not make the remedies afforded inadequate for the realization of the security and benefits provided by such Indenture, and except as enforceability of such lien may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights). (b) The Montana First Mortgage Indenture as heretofore supplemented now constitutes, and such Indenture, when the Montana Supplemental Indenture shall have been duly filed for recording and recorded, will constitute, a legally valid and directly enforceable first mortgage lien for the equal and proportionate security of the first mortgage bonds issued or to be issued thereunder, upon substantially all of the physical properties and franchises of the Borrower which are specifically described therein as subject to the lien thereof and which are used or useful in the conduct of the Montana Utility Business, free from all prior liens, charges or encumbrances (except to the extent that enforceability of such lien may be limited by the effect of certain laws of the jurisdictions in which the physical properties covered thereby are located upon the remedies provided in such Indenture as heretofore supplemented and to be supplemented by the Montana Supplemental Indenture, which limitations, however, do not make the remedies afforded inadequate for the realization of the security and benefits provided by such Indenture, and except as enforceability of such lien may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights) and the after-acquired property clause in such Indenture subjects to the lien thereof all after-acquired utility property of the Montana Utility Business as provided therein (except such thereof as is expressly excepted from the lien of such Indenture). (c) The Montana First Mortgage Indenture as heretofore supplemented, (including any necessary related financing statements), has been filed and recorded wherever and to the extent necessary to perfect the lien thereof upon the properties now owned by the Borrower and intended to be subject thereto; all fees or taxes in connection therewith have been paid and no other filing or recordation is presently necessary in order to perfect the lien of such Indenture on such properties. 40 (d) No filing or recording of the Montana Supplemental Indenture is necessary to perfect the lien of the Montana First Mortgage Indenture upon the properties now owned by the Borrower and intended to be subject thereto or to extend such lien for the benefit of the First Mortgage Bonds to be issued thereunder; no re-recording or refiling of such Indenture or any other instruments or documents (except for periodic filings which extend the effectiveness of financing statements) is required to preserve and protect the lien of such Indenture; and under the present laws of the States in which the property intended to be subject to the lien of such Indenture is located, no further supplemental indentures or other instruments or documents are required to be executed, filed and/or recorded to extend the lien of such Indenture to after-acquired property; however, the Borrower is required by the terms of the Montana First Mortgage Indenture to promptly record and file the Montana Supplemental Indenture. (e) The Borrower has good and marketable title to all properties owned by it which are subject to the Montana First Mortgage Indenture, subject only (a) to the lien of such Indenture, (b) to Excepted Encumbrances (as defined in such Indenture) which are Permitted Liens hereunder and (c) to minor exceptions and defects which do not, in the aggregate, materially interfere with the use by the Borrower of such properties for the purposes for which they are held, materially detract from the value of said properties or in any material way impair the security afforded by such Indenture. 3.24 South Dakota First Mortgage Indenture. (a) The First Mortgage Bonds to be issued under the South Dakota First Mortgage Indenture, as heretofore supplemented and to be supplemented by a Supplemental Indenture creating the South Dakota First Mortgage Bonds (the "South Dakota Supplemental Indenture"), when delivered to the Collateral Agent, will be duly executed, authenticated, issued and delivered, and will constitute valid and legally binding obligations of the Borrower, entitled to the security and benefits provided by the lien of such Indenture (except to the extent that enforceability of such lien may be limited by the effect of certain laws of the jurisdictions in which the physical properties covered thereby are located upon the remedies provided in such Indenture, which limitations, however, do not make the remedies afforded inadequate for the realization of the security and benefits provided by such Indenture, and except as enforceability of such lien may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights). (b) The South Dakota First Mortgage Indenture as heretofore supplemented now constitutes, and such Indenture, when the South Dakota Supplemental Indenture shall have been duly filed for recording and recorded, will constitute, a legally valid and directly enforceable first mortgage lien for the equal and proportionate security of the first mortgage bonds issued or to be issued thereunder, upon substantially all of the physical properties and franchises of the Borrower which are specifically described therein as subject to the lien thereof and which are used or useful in the conduct of the South Dakota Utility Business, free from all prior liens, charges or encumbrances (except to the extent that enforceability of such lien may be limited by the effect of certain laws of the jurisdictions in which the physical properties covered thereby are located upon the 41 remedies provided in such Indenture as heretofore supplemented and to be supplemented by the South Dakota Supplemental Indenture, which limitations, however, do not make the remedies afforded inadequate for the realization of the security and benefits provided by such Indenture, and except as enforceability of such lien may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights) and the after-acquired property clause in such Indenture subjects to the lien thereof all after-acquired property of the South Dakota Utility Business as provided therein (except such thereof as is expressly excepted from the lien of such Indenture). (c) The South Dakota First Mortgage Indenture as heretofore supplemented (including any necessary related financing statements), has been filed and recorded wherever and to the extent necessary to perfect the lien thereof upon the properties now owned by the Borrower and intended to be subject thereto; all fees or taxes in connection therewith have been paid and no other filing or recordation is presently necessary in order to perfect the lien of such Indenture on such properties. (d) No filing or recording of the South Dakota Supplemental Indenture is necessary to perfect the lien of the South Dakota First Mortgage Indenture upon the properties now owned by the Borrower and intended to be subject thereto or to extend such lien for the benefit of the First Mortgage Bonds to be issued thereunder; no re-recording or refiling of such Indenture or any other instruments or documents (except for periodic filings which extend the effectiveness of financing statements) is required to preserve and protect the lien of such Indenture; and under the present laws of the States in which the property intended to be subject to the lien of such Indenture is located, no further supplemental indentures or other instruments or documents are required to be executed, filed and/or recorded to extend the lien of such Indenture to after-acquired property; however, the Borrower is required by the terms of the South Dakota First Mortgage Indenture to promptly record and file the South Dakota Supplemental Indenture. (e) The Borrower has good and marketable title to all properties owned by it which are subject to the South Dakota First Mortgage Indenture, subject only (a) to the lien of such Indenture, (b) to Permitted Liens (as defined in such Indenture) which are Permitted Liens hereunder and (c) to minor exceptions and defects which do not, in the aggregate, materially interfere with the use by the Borrower of such properties for the purposes for which they are held, materially detract from the value of said properties or in any material way impair the security afforded by such Indenture. 3.25 Subsidiaries. Set forth on Schedule 3.25 are all of the Material Subsidiaries of the Borrower, which schedule correctly sets forth, as of the date hereof, the percentage ownership (direct and indirect) of the Borrower in each class of capital stock or other equity interests of each of its Material Subsidiaries and also identifies the direct owner thereof. All outstanding shares of capital stock of each Subsidiary of the Borrower has been duly and validly issued, are fully paid and non-assessable and have been issued free of any preemptive rights. No Material Subsidiary of the Borrower has outstanding any securities convertible into or exchangeable for its Capital Stock or 42 outstanding any right to subscribe for or to purchase, or any options or warrants for the purchase or, or any agreement providing for the issuance (contingent or otherwise) of or any calls, commitments or claims of any character relating to, its Capital Stock or any stock appreciation or similar rights. ARTICLE 4. CONDITIONS PRECEDENT 4.1 Conditions to Closing Date. The commencement of the Availability Period is subject to the satisfaction of the following conditions precedent: (a) Documents. The Administrative Agent shall have received each of the following documents, each of which shall be satisfactory to the Administrative Agent (and to the extent specified below, to each Lender) in form and substance: (i) Executed Counterparts. From each party hereto and thereto either (i) multiple counterparts of this Agreement and the Syndication Letter, signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page to this Agreement and the Syndication Letter) that such party has signed a counterpart of this Agreement and the Syndication Letter); (ii) Corporate Documents. Such documents and certificates as the Administrative Agent or its counsel may reasonably request, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the Borrower, relating to (i) the organization, existence and good standing of the Borrower, (ii) the authorization of the execution, delivery and performance by the Borrower of this Agreement, and of the borrowings hereunder by the Borrower, and (iii) certificates as to the incumbency and signature of each individual signing this Agreement and any other agreement or document contemplated hereby on behalf of the Borrower; (iii) Financial Statements. Copies of (i) the audited consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as of December 31, 2001, and the related audited statement of earnings and cash flows for the period ending as of such date, and (ii) the unaudited consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as of September 30, 2002, and the related unaudited statement of earnings and cash flows for the period ending as of such date, and the related unaudited statement of earnings and cash flows for the period ending as of such date, respectively; (iv) Indentures. A certified copy of each of the Indentures (including any amendments and supplements thereto); and 43 (v) Other Documents. Such other documents as the Administrative Agent or any Lender or counsel to CSFB may reasonably request. (b) Consents, Licenses and Approvals. The Administrative Agent shall have received, with a counterpart for each Lender, a certificate of a Responsible Officer of the Borrower (i) attaching copies of all consents, authorizations and filings referred to in Schedule 3.4b, including without limitation, the orders of the FERC referred to in item 1 thereof and the Borrower's applications to the FERC for each such order, and (ii) stating that, except as shown in Schedule 3.4b, such consents, licenses and filings are in full force and effect; and each such consent, authorization and filing shall be in form and substance satisfactory to the Administrative Agent. Without limiting the foregoing, any consents, filings, approvals or notices set forth on Schedule 3.15 (or which are necessary or advisable as a result of the facts or circumstances set forth on such schedule) shall have been obtained or made, as applicable, shall be in full force and effect and shall be in form and substance satisfactory to the Administrative Agent. (c) Closing Fees and Expenses. The Administrative Agent shall have received the fees to be received on the Closing Date referred to in the Syndication Letter and shall have received reimbursement of all costs and expenses (including the fees and expenses of counsel to the Administrative Agent to the extent invoiced). (d) Legal Opinions. The Administrative Agent shall have received, with a counterpart for each Lender, the executed legal opinions of counsel to the Borrower, which opinions shall be satisfactory in form and substance to the Administrative Agent. (e) Closing Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a closing certificate of the Borrower substantially in the form of Exhibit C, dated as of the Closing Date and satisfactory in form and substance to the Administrative Agent. (f) Insurance. The Administrative Agent shall have received evidence satisfactory to it of the existence of the insurance required hereunder. (g) Compliance Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a Compliance Certificate executed by a Chief Financial Officer or Treasurer of the Borrower, dated as of the Closing Date and satisfactory in form and substance to the Administrative Agent. (h) No Material Adverse Effect. Since December 31, 2001, there shall have been no development or event which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (i) Pro Forma Financials. The Administrative Agent shall have received, with a copy for each Lender, pro forma balance sheets as of the end of the fiscal quarter immediately preceding the Closing Date and pro forma statements of operations and cash flows for the immediately preceding fiscal year of the Borrower and its Consolidated Subsidiaries and for the period from the end of such fiscal year to the end of the fiscal 44 quarter immediately preceding the Closing Date, (i) giving effect to the Transactions and (ii) demonstrating that each of the financial covenants set forth in Section 6.1 would have been satisfied as at the end of such fiscal year and at the end of each succeeding fiscal quarter ending on or before the Closing Date, certified by the chief financial officer or treasurer of the Borrower. (j) Outside Closing Date. The Closing Date shall have occurred and each of conditions precedent set forth in this Section 4.1 shall have been satisfied on or prior to February 10, 2003. (k) Representations and Warranties. Each of the representations and warranties made by the Borrower in or pursuant to the Loan Documents (except to the extent applicable to an earlier date) shall be true and correct in all material respects on and as of such date as if made on and as of such date (both before and after giving effect to such Transactions as shall be required to occur on or prior to the Closing Date). (l) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Transactions to be consummated on such date. (m) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the Transactions and the other transactions contemplated by this Agreement, and the other Loan Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents, instruments and legal opinions in respect of any aspect or consequence of the Transactions and the other transactions contemplated hereby or thereby as it shall reasonably request. 4.2 Conditions to the Funding Date. The agreement of each Lender to make any Loan is subject to the satisfaction of the following conditions precedent: (a) Conditions to Closing Date. Each of the conditions precedent set forth in Section 4.1 shall have been satisfied or waived. (b) Notice of Borrowing. The Administrative Agent shall have received a Notice of Borrowing in compliance with the terms hereof. (c) Representations and Warranties. Each of the representations and warranties made by the Borrower in or pursuant to the Loan Documents (except to the extent applicable to an earlier date) shall be true and correct in all material respects on and as of such date as if made on and as of such date (both before and after giving effect to the making of the Loans). (d) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the making of the Loans. (e) Funding Fees and Expenses. The Administrative Agent shall have received the fees to be received on the Funding Date referred to in the Syndication Letter 45 and shall have received reimbursement of all costs and expenses (including the fees and expenses of counsel to the Administrative Agent to the extent invoiced). (f) Northwestern Material Adverse Event. There shall not have occurred, exist or become known to CSFB any event, condition or change in or affecting NorthWestern, or the Utility Business, that, singly or in the aggregate, in the reasonable judgment of CSFB, could reasonably be expected to result in a material adverse change in (a) the business, assets, operations, condition (financial or otherwise) or prospects of the Utility Business, or of NorthWestern and its Consolidated Subsidiaries taken as a whole, or (b) the validity or enforceability of any of the Loan Documents or the rights, remedies and benefits available to the parties thereunder. (g) Security Agreement. The Administrative Agent shall have received the Security Agreement together with all documentation necessary and appropriate to convey (and confirm) a valid and perfected first-priority security interest in the Collateral, as more specifically enumerated in the Security Agreement, executed by a duly authorized officer of the Borrower. (h) Early Funding Date. If the Closing Date occurs on or before December 31, 2002, then the foregoing conditions precedent shall have been met on or before January 3, 2003 (or such later date as the Administrative Agent may designate in its sole discretion) and if the Closing Date occurs after December 31, 2002, then the foregoing conditions precedent shall have been met on the Closing Date (but in any event on or before February 10, 2003). (i) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the Transactions (other than the with respect to the First Mortgage Bonds) and the other transactions contemplated by this Agreement and the other Loan Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents, instruments and legal opinions in respect of any aspect or consequence of the Transactions and the other transactions contemplated hereby or thereby as it shall reasonably request. It being understood that unless the conditions precedent set forth in Section 4.3 have been met at such time, all proceeds of the Loans shall be deposited on the Funding Date into the Cash Collateral Account. 4.3 Conditions to Cash Collateral Release. The release to the Borrower of the proceeds of the Loans or, if applicable, of cash on deposit in the Cash Collateral Account shall be subject to the following conditions precedent: (a) Conditions to Funding Date. Each of the conditions precedent set forth in Section 4.2 shall have been satisfied or waived. (b) Termination of Existing Credit Agreement. The Existing Credit Agreement shall have been terminated and all amounts outstanding thereunder shall have 46 been repaid in full and the liens granted thereunder shall have been released, in each case pursuant to documentation satisfactory to the Administrative Agent and the Lenders). (c) Issuance of First Mortgage Bonds. (i) All First Mortgage Approvals shall have been obtained and shall be in full force and effect; (ii) the Supplemental Indentures shall have been validly authorized, executed and delivered and the First Mortgage Bonds comprising (x) an aggregate principal amount of $280 million in the case of the Montana First Mortgage Bonds, and (y) an aggregate principal amount of $110 million in the case of the South Dakota First Mortgage Bonds (or, if the aggregate principal amount of the Loans is less than $390,000,000, the respective pro rata portions thereof), shall have been validly authorized, executed and authenticated and validly issued and delivered to the Collateral Agent (and copies thereof shall have been delivered to each Lender); and (iii) the Administrative Agent and each Lender shall have received (I) copies of all opinions, certificates, orders, consents and other documents that are delivered to the trustees under the Indentures as conditions precedent to (or otherwise in connection with) the issuance of the First Mortgage Bonds under the Indentures (together with, in the case of each such opinion that is not addressed to the Collateral Agent, a letter from the counsel rendering such opinion to the effect that the Collateral Agent is entitled to rely on such opinion as if such opinion were addressed to the Collateral Agent), (II) copies of all First Mortgage Approvals and (III) such other opinions, certificates and documents reasonably related to the First Mortgage Bonds, the Indentures (including the Supplemental Indentures) and the liens and security interests of the Indentures as the Administrative Agent shall have reasonably requested, and all of the foregoing documents (including without limitation the First Mortgage Approvals, the Supplemental Indentures and the First Mortgage Bonds) shall be in form and substance reasonably satisfactory to the Administrative Agent (and consistent with the Syndication Letter). (d) Appraisals. The delivery to the Administrative Agent at least five days prior to the Cash Collateral Release Date of a written appraisal, by an appraiser and in form reasonably satisfactory to the Administrative Agent, (a) in the case of the Montana First Mortgage Indenture, dated within six months of the Closing Date and covering the assets of the Borrower subject to the lien of the Montana First Mortgage Indenture and (b) in the case of the South Dakota First Mortgage Indenture, dated within thirty days of the Closing Date and covering the assets of the Borrower subject to the lien of the South Dakota First Mortgage Indenture, in each case upon which appraisals Administrative Agent and the Lenders may expressly rely. (e) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the making of the Loans. (f) Outside Cash Collateral Release Date. The Cash Collateral Release Date shall have occurred and each of conditions set forth in this Section 4.2 shall have been satisfied on or prior to February 10, 2003. Upon the satisfaction of the foregoing conditions precedent, the Collateral Agent shall release all of the Collateral then on deposit in the Cash Collateral Account and, on behalf 47 of the Borrower, shall apply the proceeds thereof first, to the repayment of any obligations of the Borrower then outstanding under the Existing Credit Agreement and second, thereafter shall disburse the remaining proceeds to or at the direction of the Borrower (and the Borrower and each Lender hereby consents to the taking of such actions). ARTICLE 5. AFFIRMATIVE COVENANTS The Borrower hereby agrees that for so long as any of the Commitments remains in effect, any Note remains outstanding and unpaid or any Obligation is owing to any Lender, the Collateral Agent or the Administrative Agent hereunder or under any other Loan Document, the Borrower shall and shall cause each of its Subsidiaries to: 5.1 Financial Statements. Furnish to each Lender: (a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a copy of the consolidated balance sheet of the Borrower and the Consolidated Subsidiaries as at the end of such year and the related consolidated and consolidating statements of income, retained earnings and cash flows for such year, setting forth in each case in comparative form the figures as of the end of and for the previous year, reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by Deloitte & Touche LLP or other independent certified public accountants of nationally recognized standing; provided that the submission of the Borrower's report on Form 10-K shall satisfy the foregoing requirements; and (b) as soon as available, but in any event not later than 45 days after the end of each quarterly period for each of the fiscal quarters of each fiscal year of the Borrower, the unaudited consolidated balance sheet of the Borrower and the Consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income, retained earnings and cash flows of the Borrower and the Subsidiaries for such quarter and the portion of the fiscal year through the end of such quarter and setting forth the actual figures for the corresponding date or period in the previous year, certified by the chief financial officer or treasurer of the Borrower as being fairly stated in all material respects (subject to normal year-end audit adjustments); provided that the submission of the Borrower's report on Form 10-Q shall satisfy the foregoing requirements, all such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein). 5.2 Certificates; Other Information. Furnish to each Lender: (a) concurrently with the delivery of the financial statements referred to in Section 5.1(a), a certificate of the independent certified public accountants reporting on 48 such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default, except as specified in such certificate; (b) concurrently with the delivery of the financial statements referred to in Section 5.1(a) or (b), a compliance certificate of the chief financial officer or treasurer of the Borrower, in form and substance satisfactory to the Administrative Agent (the "Compliance Certificate"), (i) showing compliance by the Borrower and the Subsidiaries with the covenants contained in Section 6.1 and (ii) setting forth the description of any Reduction Event occurring during such period and the aggregate amount of Net Cash Proceeds received during such period with respect to any Reduction Event; (c) within 5 Business Days after the filing thereof, copies of all reports which the Borrower sends to any of its stockholders, and copies of all registration statements, reports on Form 10-K, Form 10-Q or Form 8-K (or, in each case, any successor form) and other material reports which the Borrower or any Subsidiary files with the SEC or any successor or analogous Governmental Authority (other than public offerings of securities under employee benefit plans or dividend reinvestment plans); (d) within five days after either of Moody's or Standard & Poor's has raised or lowered its credit rating of any of the First Mortgage Bonds or the credit facility evidenced by the Loan Documents a notice to the Administrative Agent as to such effect; (e) concurrently with the delivery thereof or promptly after receipt thereof, a copy of all notices to the trustee or the Borrower under either Indenture; and (f) promptly, such additional financial and other information as the Administrative Agent or any Lender may from time to time reasonably request. 5.3 Payment and Performance of Obligations. Perform in all respects, material to the Borrower and its Subsidiaries taken as a whole, all of its obligations under the terms of all material agreements, indentures, mortgages, security agreements and other debt instruments to which it is party or bound, including, without limitation, pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all taxes, fees or other charges imposed on it or on any of its properties by any Governmental Authority and all its other obligations of whatever nature, material to the Borrower and its Subsidiaries taken as a whole, except, in each case, where the amount or validity thereof is currently being diligently contested in good faith and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower or any of its Subsidiaries, as the case may be. 5.4 Maintenance of Existence. Renew and keep in full force and effect its corporate existence, take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business except to the extent such failure to maintain could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and comply with all Contractual Obligations and 49 Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 5.5 Maintenance of Property; Insurance. Keep all property useful and necessary in its business in good working order and condition (ordinary wear and tear, and casualties, excepted), maintain with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or a similar business, and furnish to each Lender, upon request, full information as to the insurance carried including certified copies of policies and certificates of insurance from a recognized insurance broker reasonably acceptable to the Required Lenders. 5.6 Inspection of Property; Books and Records; Discussions. Keep proper books of records and accounts, in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit after reasonable notice representatives of the Administrative Agent or any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired, and to discuss the business, operations, properties and financial and other condition of the Borrower and each Subsidiary with officers and employees of the Borrower and such Subsidiary and with their independent certified public accountants. 5.7 Notices(a). (a) Within 5 days after the Borrower knows with respect to any notice under clause (i) or within 10 days with respect to any other notice under this Section 5.7(a), give notice to the Administrative Agent and each Lender of: (i) the occurrence of any Default or Event of Default; (ii) any (i) default or event of default under any Contractual Obligation of the Borrower or any Subsidiary, or (ii) litigation, investigation or proceeding which may exist at any time between the Borrower or any such Subsidiary and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect; (iii) any material labor dispute to which the Borrower or any Subsidiary may become a party and which involves any group of employees, any strikes or walkouts relating to any of its plants or facilities and the expiration or termination of any labor contract to which the Borrower or such Subsidiary is a party or by which the Borrower or such Subsidiary is bound and which dispute could reasonably be expected to have a Material Adverse Effect on the operations of the Borrower or such Subsidiary. Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating 50 what action the Borrower proposes to take with respect thereto. For the purposes of this Section 5.7(a), the Borrower shall be deemed to have knowledge when any officer of the Borrower charged with responsibility for any matter that is the subject of such notice requirement knows or should have known that such notice was required. (b) At least ten (10) days prior to such event, give notice to the Administrative Agent and each Lender of the occurrence of any Reduction Event (i) the Net Cash Proceeds of which are (or are scheduled to be) in excess of $5,000,000 or (ii) together with any other concurrent or prior Reduction Event for which notice has not been given hereunder the aggregate Net Cash Proceeds of which are (or are scheduled to be) in excess of $10,000,000. 5.8 Environmental Laws(a). (a) Comply and cause its Subsidiaries to comply in all material respects with all applicable Environmental Laws and obtain and comply and cause its Subsidiaries to obtain and comply in all material respects with and maintain and cause its Subsidiaries to maintain any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws except to the extent that failure to do so could not be reasonably expected to have a Material Adverse Effect. (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the pendency of such proceedings could not reasonably be expected to have a Material Adverse Effect. (c) Defend, indemnify and hold harmless the Administrative Agent, the Collateral Agent and the Lenders, and their respective parents, subsidiaries, affiliates, employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature (whether arising under theories of negligence, strict or absolute liability, or otherwise) known or unknown, contingent or otherwise, arising out of, or in any way relating to the violation of, noncompliance with or liability under any Environmental Laws in each instance occurring at, or involving the operation of any facility by the Borrower or its Subsidiaries, or arising out of, or relating to the operations of the Borrower or any Subsidiary, or the Business or the Properties, applicable to the operations of the Borrower or any Subsidiary or the Business or the Properties, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney's and consultant's fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the party seeking indemnification therefor. This indemnity shall continue in full force and effect regardless of the termination of this Agreement. 5.9 ERISA. Establish, maintain and operate and cause each of its Subsidiaries to establish, maintain and operate all Plans to comply in all material respects with the applicable provisions of ERISA, the Code, and all other applicable laws, and the 51 regulations and interpretations thereunder and the respective requirements of the governing documents for such Plans except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. 5.10 Use of Proceeds. Use the proceeds of each extension of credit hereunder solely for the purposes set forth in Section 3.16. 5.11 Margin Stock. Not permit the aggregate value of margin stock (as defined in Regulation U) at any time owned or held by the Borrower or any of its Subsidiaries to exceed an amount equal to 25% of the value of all consolidated assets subject at such time to any "arrangement" (as such term is used in the definition of "indirectly secured" in Section 221.2 of Regulation U). 5.12 Maintain Ownership of the Utility Business. (a) Maintain ownership, directly (and not through any Subsidiary), of all or substantially all of the assets of the Utility Business, (b) maintain the Lien of the Montana First Mortgage Indenture on all or substantially all of the assets of the Montana Utility Business and (c) maintain the Lien of the South Dakota First Mortgage Indenture on all or substantially all of the assets of the South Dakota Utility Business. 5.13 Post-Closing Matters(a) . (a) Amend this Agreement and the other Loan Documents, and execute such additional documents, as may be reasonably requested by the Arranger, after consultation with the Borrower and prior to completion of the successful syndication (as determined by the Arranger) of the credit facility provided hereby, to make such changes as may be required pursuant to the Syndication Letter if the Arranger determines that such changes are advisable to ensure the successful syndication thereof; (b) Use its commercially best efforts to comply with all of the conditions precedent set forth in Section 4.2 on or before the date then designated by the Administrative Agent as the Funding Date; (c) Use its commercially best efforts to (i) obtain all governmental and regulatory approvals necessary for the Borrower to issue (and perform its obligations under and in respect of) the First Mortgage Bonds, and (ii) issue the First Mortgage Bonds to the Collateral Agent, in each case, by the Cash Collateral Release Date; and (d) Comply with the provisions of, and take such action required by the terms of, the Syndication Letter relating to the syndication of the credit facility evidenced hereby. 5.14 Credit Ratings. Use commercially reasonable efforts to obtain as soon as practicable (and in any event obtain no later than January 3, 2003), and thereafter to maintain, ratings by both Moody's and Standard & Poor's with respect to the credit facility provided hereby (in each case, on a pro forma basis if prior to the issuance of the First Mortgage Bonds). 52 5.15 Excluded Subsidiaries. (i) Maintain, and cause to be maintained, the books and records and bank accounts of the Consolidated Group separate from the books and records and bank accounts of the Excluded Subsidiaries, and at all times present the Excluded Subsidiaries to the public as separate and distinct legal entities; (ii) maintain, and cause to be maintained, financial statements of the Excluded Subsidiaries separate from those of the Consolidated Group; (iii) cause the Excluded Subsidiaries to hold title to any assets they own in their own respective name, and deposit all of their respective funds in checking accounts, saving accounts, time deposits or certificates of deposit in their respective names or invest such funds in their respective names; (iv) cause the Excluded Subsidiaries to observe all corporate formalities under Requirements of Law necessary to maintain their identity as entities separate and distinct from the Consolidated Group; and (v) not commingle the assets of Borrower or any Consolidated Subsidiary with assets of any Excluded Subsidiary. ARTICLE 6. NEGATIVE COVENANTS The Borrower hereby agrees that for so long as the Commitments remain in effect, any Note remains outstanding and unpaid or any Obligation is owing to any Lender, the Collateral Agent or the Administrative Agent hereunder or under any other Loan Document, the Borrower shall not: 6.1 Financial Covenants(a) . (a) Minimum Net Worth. Permit Net Worth on the last day of any fiscal quarter to be less than $616,000,000 plus fifty percent (50%) of Net Income, if positive, for each fiscal quarter ending after the Closing Date. (b) Total Capitalization. Permit the ratio (expressed as a percentage) of Funded Debt to Total Capital on the last day of any fiscal quarter to exceed 72.5%. (c) Utility Business EBITDA to Interest Expense. (i) Permit the ratio of (y) Utility Business EBITDA to (z) Consolidated Recourse Interest Expense, in each case on the last day of any fiscal quarter of the Borrower for the period of four fiscal quarters then ending to be less than 1.40 to 1.00. (ii) Permit the ratio of (y) Montana Utility Business EBITDA to (z) the aggregate amount of interest expense accrued on first mortgage bonds under the Montana First Mortgage Indenture, in each case on the last day of any fiscal quarter of the Borrower for the period of four fiscal quarters then ending to be less than 3.00 to 1.00. (iii) Permit the ratio of (y) South Dakota Utility Business EBITDA to (z) the aggregate amount of interest expense accrued on first mortgage bonds under the South Dakota First Mortgage Indenture, in each case on the last day of any fiscal quarter of the Borrower for the period of four fiscal quarters then ending to be less than 2.50 to 1.00. 53 (d) Funded Debt to Utility Business EBITDA. (i) Permit the ratio of (y) Funded Debt outstanding on the last day of any fiscal quarter to (z) Utility Business EBITDA for the period of four fiscal quarters then ending, to be more than (1) prior to January 1, 2004, 8.75 to 1.00, (2) for the period commencing on January 1, 2004 to and including December 31, 2004, 8.25 to 1.00, and (iii) on and after January 1, 2005, 7.50 to 1.00. (ii) Permit the ratio of (y) the aggregate principal amount of first mortgage bonds outstanding under the Montana First Mortgage Bond Indenture on the last day of any fiscal quarter to (z) Montana Utility Business EBITDA for the period of four fiscal quarters then ending, to be more than (1) prior to January 1, 2005, 4.25 to 1.00 and (2) on and after such date, 3.75 to 1.00. (iii) Permit the ratio of (y) the aggregate principal amount of first mortgage bonds outstanding under the South Dakota First Mortgage Bond Indenture on the last day of any fiscal quarter to (z) South Dakota Utility Business EBITDA for the period of four fiscal quarters then ending, to be more than (1) prior to January 1, 2005, 4.75 to 1.00 and (2) on and after such date, 4.25 to 1.00. 6.2 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all its property, business or assets or all or substantially all of the mortgaged property under an Indenture, acquire any Capital Stock of another Person, or acquire assets of another Person (other than any Subsidiary having Non-Recourse Debt or any Excluded Subsidiary) constituting all or a material part of a business (or all or substantially all of the assets of such Person), except any Person (other than any Excluded Subsidiary) may be merged or consolidated with or into the Borrower, or the Borrower may acquire assets or Capital Stock of another Person (other than any Excluded Subsidiary) constituting all or a material part of a business (or all or substantially all the assets of such Person), in each case provided that (a) the Borrower shall be the continuing or surviving corporation, (b) as of the consummation of, and after giving effect to, such transaction, no Default or Event of Default shall then exist, (c) the Borrower shall not acquire, directly or indirectly, any Capital Stock or assets of an Excluded Subsidiary (except as expressly permitted pursuant to Section 6.8) nor any assets of a Subsidiary subject to a Lien securing Non-Recourse Debt, (d) such transaction relates solely to the acquisition of domestic regulated utility businesses and assets, (e) if the Borrower shall acquire Capital Stock of another Person, such Person shall thereupon be a Subsidiary, and (f) the aggregate principal amount of Indebtedness incurred or assumed by the Borrower and the Subsidiaries in connection with such transaction (together with the aggregate principal amount of Indebtedness of such acquired Person) shall not exceed sixty percent (60%) of the lesser of the fair value or cost of such acquired assets (and, to the extent such Indebtedness is incurred in connection with such transaction or in contemplation of 54 such transaction, such Indebtedness shall not have a scheduled maturity, or require any principal payment, prior to six months after the Maturity Date). 6.3 Limitation on Transactions with Affiliates. Except as described on Schedule 6.3 and except for transactions providing services (including, without limitation, group purchases of equipment or energy) at cost to any Subsidiary, enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is upon fair and reasonable terms no less favorable to the Borrower than it would have obtained in a comparable arm's-length transaction with a Person which is not an Affiliate. 6.4 Limitation on Liens. Create, incur, assume or suffer to exist, and shall not permit any Subsidiary to create, incur, assume or suffer to exist, any Lien upon any of its properties, assets or revenues, whether now owned or hereafter acquired, except for Permitted Liens. 6.5 Amendments of Organizational Documents. Amend, modify or change its articles of incorporation or bylaws that could reasonably be expected to result in a Material Adverse Effect. 6.6 Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist, and shall not permit any Subsidiary to create, incur, assume or suffer to exist, any Guarantee Obligation except: (a) guarantees of obligations to third parties made in the ordinary course of business in connection with relocation of employees of the Borrower or any of its Subsidiaries; (b) Guarantee Obligations existing on the date hereof and described in Schedule 6.6; (c) Guarantee Obligations which by their terms (either mandatorily or at the unfettered option of the Borrower) are payable solely in Capital Stock (other than Mandatory Redeemable Stock) of the Borrower provided that the Borrower agrees to cause any payment under any such outstanding obligation to be made only in such Capital Stock; and (d) Guaranteed Obligations permitted pursuant to Section 6.10(j), 6.8(y) or 6.8(z). 6.7 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of, and shall not permit any Subsidiary (other than any Special Purpose Subsidiary) to convey, sell, lease, assign, transfer or otherwise dispose of any of, its property, business or assets (including, without limitation, tax benefits, receivables and leasehold interests but excluding the Capital Stock of any Special Purpose Subsidiary), whether now owned or hereafter acquired except (a) for the sale or other disposition of any property that, in the reasonable judgment of the Borrower, has become uneconomic, obsolete or worn out, and which is disposed of in the ordinary course of business 55 (provided that, to the extent applicable, the Borrower shall have complied with Section 6.16); (b) for sales of inventory and receivables made in the ordinary course of business; (c) that any Subsidiary of the Borrower may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or, subject to Section 5.12, a Wholly-Owned Subsidiary of the Borrower and any Subsidiary of the Borrower may sell or otherwise dispose of, or part with control of any or all of, the stock of any Subsidiary to a Wholly-Owned Subsidiary of the Borrower or a Subsidiary of the Borrower may merge with the Borrower (so long as the Borrower is the surviving corporation) or, subject to Section 5.12, another Subsidiary; (d) for fair market arm's- length sales or other dispositions of the Colstrip transmission system (consisting of two 500kv transmission lines extending from the Colstrip generating stations to an interconnection with Bonneville Power Administration near Townsend, Montana, together with switchyard facilities in Colstrip and Broadview, Montana, and substation facilities in Colstrip, Montana, and certain related real property interests, easements and rights of way, permits and appurtenances that permit the construction, operation and maintenance of the Colstrip transmission lines) or the assets of, or Capital Stock in, Montana Megawatts I, LLC and other entities formed for the Montana First Megawatts Project; (e) for the sale or other disposition by the Borrower or any of its Subsidiaries of other assets consummated after the date hereof; provided that (i) such sale or other disposition shall be made for fair value on an arm's-length basis, (ii) the aggregate fair market value of all such assets sold or disposed of under this clause (e) together with assets sold or disposed of under Section 6.11 shall not exceed 10% of the consolidated tangible assets of the Borrower and its Subsidiaries as of the Closing Date and (iii) the Borrower shall comply with Section 2.6. 6.8 Limitation on Investments, Loans and Advances. Make, and shall not permit any Subsidiary to make, any advance, loan, extension of credit (excluding Guarantee Obligations but including any payment by a guarantor thereunder) or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of, or make any other investment in, any Person (any of the foregoing, an "Investment"), except: (a) extensions of trade credit in the ordinary course of business; (b) Investments of the Borrower or any Subsidiary existing on the date hereof in any Subsidiary; (c) Investments of the Borrower after the date hereof that are acquisitions permitted pursuant to and made in accordance with Section 6.2; (d) the Borrower and its Subsidiaries may invest in, acquire and hold Cash Equivalents; (e) the Borrower or any of its Subsidiaries may make travel and entertainment advances, relocation loans and payroll advances in the ordinary course of business to officers and employees of the Borrower or any such Subsidiary; 56 (f) Investments of the Borrower or any Subsidiary existing on the date hereof and described in Schedule 6.8 including, without limitation, any investment in an Excluded Subsidiary and the receipt of any additional securities constituting payments in kind on such existing Investments; (g) Investments in obligations arising out of bankruptcy of customers and suppliers; (h) Investments arising out of non-cash consideration received in connection with sales of assets as permitted by Section 6.7; (i) Investments of the Borrower or any Subsidiary after the date hereof of not more than $10,000,000 in the aggregate in Subsidiaries; and (j) Investments permitted pursuant to clause (y) or (z) below; provided that, notwithstanding the foregoing, the Borrower shall not, and shall not permit any Subsidiary to, make any Investment in any Excluded Subsidiary nor create, incur, assume or suffer to exist any Guarantee Obligation with respect to any Excluded Subsidiary, except: (x) Investments or Guarantee Obligations of the Borrower or any Subsidiary existing on the date hereof in or with respect to any Excluded Subsidiary described in Schedule 6.8 and the receipt of any additional securities constituting payments in kind on such existing investments; (y) any advance, loan, extension of credit or Guarantee Obligations of the Borrower or any Subsidiary to or for the benefit of Blue Dot in an aggregate principal amount (whether outstanding, written down or written off but net of any actual cash returns on capital) of not more than $25 million; provided that such advance, loan, extension of credit or Guarantee Obligation shall be used to honor Guarantee Obligations, for working capital, or to refinance on a secured basis the existing secured working capital credit facility of Blue Dot; and (z) Investments or Guarantee Obligations of the Borrower or any Subsidiary in or for the benefit of Expanets in an aggregate principal amount (whether outstanding, written or written off but net of any actual cash returns on capital) of not more than $75 million; provided that such advance, loan, extension of credit or Guarantee Obligation shall be used to honor Guarantee Obligations, for working capital, or to refinance on a secured basis the existing secured working capital credit facility of Expanets. 6.9 Limitation on Dividends and Stock Repurchases. Declare, and shall not permit any Subsidiary to declare, any dividends on any shares of any class of Capital Stock, or make, and shall not permit any Subsidiary to make, any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement or other acquisition of any shares of any class of Capital Stock (including the outstanding Capital Stock of the Borrower), whether now or hereafter outstanding, or 57 make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any of its Subsidiaries (all of the foregoing being referred to herein as "Restricted Payments"); except that: (a) Subsidiaries may pay dividends directly or indirectly to the Borrower or the other Subsidiaries which are directly or indirectly Wholly-Owned by the Borrower; (b) any Subsidiary may redeem or repurchase shares of its Capital Stock to the extent required to do so pursuant to, and upon the terms provided in, any put agreement existing on the date hereof between such Subsidiary and any holder of such Capital Stock; provided that if permitted pursuant to the terms of such agreement, the sole consideration for such Capital Stock shall be Capital Stock (other than Mandatory Redeemable Stock) of the Borrower; and (c) the Borrower or any Subsidiary may make Restricted Payments (other than redemption or repurchase of Capital Stock with respect to such agreements existing as of the date hereof as set forth in clause (b) above) on or with respect to its Capital Stock so long as, after giving effect to such Restricted Payments, no Default or Event of Default shall have occurred and be continuing or shall result therefrom. 6.10 Limitation on Indebtedness or Mandatory Redeemable Stock. Create, incur, issue, assume or suffer to exist, and shall not permit any Subsidiary to create, incur, issue, assume or suffer to exist, any Indebtedness or Mandatory Redeemable Stock (including any Indebtedness or Mandatory Redeemable Stock of any of its Subsidiaries), except: (a) Indebtedness of the Borrower under this Agreement and the Existing Credit Agreement; (b) Indebtedness consisting of reimbursement obligations under surety, indemnity, performance, release and appeal bonds and guarantees thereof and letters of credit required in the ordinary course of business or in connection with the enforcement of rights or claims of the Borrower or its Subsidiaries; (c) Indebtedness of Montana Megawatts I, LLC (or any related Special Purpose Subsidiary) in an aggregate amount not to exceed $200,000,000, which proceeds of such Indebtedness are used to finance construction and related costs of the Montana First Megawatts project, so long as such Indebtedness constitutes Non-Recourse Debt (except to the extent included in the amounts permitted pursuant to clause (j) below); (d) Non-Recourse Debt of any Subsidiary; (e) Indebtedness and Mandatory Redeemable Stock outstanding on the date hereof as set forth on Schedule 6.10 hereto; (f) Debt for Borrowed Money of the Borrower evidenced by first mortgage bonds under either Indenture incurred after the date hereof; provided that (i) such Indebtedness refinances or replaces then outstanding first mortgage bonds issued 58 under such Indenture and so long as the principal amount of the Indebtedness so refinanced or replaced is not increased as a result thereof or (ii) the proceeds of such Indebtedness are used solely to finance Capital Expenditures of the Borrower with respect to assets subject to the lien of such Indenture (which Capital Expenditures are made or incurred after the date hereof) in accordance with the terms of such Indenture and so long as such first mortgage bonds are issued on the basis of Property Additions (as such term is defined in such Indenture) in compliance with such Indenture; (g) Debt for Borrowed Money of the Borrower secured by accounts receivable or inventory of the Borrower in an aggregate outstanding principal amount not to exceed $75 million at any one time; (h) Debt of Money Borrowed incurred or assumed in connection with a transaction expressly permitted pursuant to Section 6.2; provided such Indebtedness complies with the terms of clause (f) of Section 6.2; (i) refinancings, replacements and extensions by the obligor thereof of any Debt for Borrowed Money under clause (c), (d), (e), (f) or (h) above so long as (i) the principal of the Debt for Borrowed Money so refinanced, replaced or extended is not increased as a result thereof, (ii) in the case of any refinancing or replacement of Non-Recourse Debt, after giving effect thereto, such Indebtedness constitutes Non-Recourse Debt, (iii) in the case of any refinancing or replacement of secured Indebtedness, after giving effect thereto, the Lien (other than the Lien of an Indenture) with respect thereto is not extended to any other assets, and (iv) in the case of any refinancing or replacement of unsecured Indebtedness, after giving effect thereto, such Indebtedness remains unsecured; and (j) Indebtedness not otherwise permitted by the preceding clauses of this Section 6.10 not exceeding $50 million in aggregate principal amount at any one time outstanding which Indebtedness shall not be secured by a Lien on any assets of the Borrower (and which may include Guaranteed Obligations of the Borrower with respect to Indebtedness of a Subsidiary); provided that, notwithstanding the foregoing, (y) the Borrower shall not incur, issue or assume any Debt for Borrowed Money or Mandatory Redeemable Stock after the date hereof pursuant to clauses (f), (h) (to the extent required pursuant to Section 6.2), or (i) above which has a scheduled maturity, or requires any principal payment, prior to six months after the Maturity Date and (z) until the earlier of April 11, 2003 and completion of the successful syndication (as determined by the Arranger) of the credit facility provided hereby, the Borrower shall not enter into or seek to arrange any commercial bank facilities or issue any debt securities in a manner inconsistent with the provisions of the Syndication Letter. 6.11 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by the Borrower of real or personal property, in an aggregate amount for all such property together with assets sold or disposed of under Section 6.7(e) exceeding 10% of the consolidated tangible assets of the Borrower and its 59 Subsidiaries as of the Closing Date, which has been or is to be sold or transferred by the Borrower to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Borrower. 6.12 Limitation on Negative Pledge Clauses; Payment Restrictions. Enter into or suffer to exist, and shall not permit any Subsidiary to enter into or suffer to exist, any agreement or other consensual encumbrance or restriction which prohibits or limits the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, or prohibits or limits the ability of the Borrower or any of its Subsidiaries to make loans, payments or dividends to or investments in, or to transfer assets to, the Borrower or any of its Subsidiaries, other than (a) any such agreement, encumbrance or restriction contained in this Agreement, the Security Agreement, the Indentures or the Bond Collateral Agreement, (b) any such agreement, encumbrance or restriction (including any negative pledge) contained in any industrial revenue bonds, purchase money mortgages, development financing, operating leases entered into in the ordinary course of business, acquisition agreements or Financing Leases, in each case permitted by this Agreement (in which cases, any prohibition or limitation shall only be effective against the assets financed, acquired or leased thereby), (c) any such agreement, encumbrance or restriction contained in any loan agreement or other financing document entered into with respect to Debt for Borrowed Money of Subsidiaries (other than industrial revenue bonds, purchase money mortgages, development financing or Financing Leases) permitted to be incurred pursuant to Section 6.10, or (d) customary provisions in any contract entered into in the ordinary course of business (including any licensing agreement, management agreement or franchise agreement) restricting assignments of such contract. 6.13 Limitation on Businesses. Enter into or engage in any business, either directly or through any Subsidiary, except for businesses of the same general type as those in which the Borrower and its Subsidiaries are engaged on the date hereof or other business activities reasonably incidental or related to any of the foregoing. 6.14 Limitation on Certain Prepayments and Amendments. (a) Make any optional payment or prepayment on or redemption, defeasance or purchase of such Person's Debt for Borrowed Money (other than with respect to (i) Indebtedness hereunder or under the First Mortgage Bonds, (ii) any Indebtedness to the extent such Indebtedness by the terms thereof would otherwise have become due and payable within three months of such payment, redemption, defeasance or purchase, (iii) any refinancing or replacement of such Indebtedness in accordance with Section 6.10, or (iv) prepayments of Debt for Borrowed Money in an aggregate principal amount not to exceed the aggregate principal amount of Net Cash Proceeds of Reduction Events offered to the Lenders but not accepted as prepayments of the Loans pursuant to Section 2.6), or (b) amend, modify or change, or consent to any amendment, modification or change to any of the terms relating to the payment or prepayment of principal of or interest on, any such Indebtedness, other than any amendment, modification or change which would extend the maturity or reduce the amount of any payment or prepayment of principal 60 thereof or which would reduce the rate or extend the date for payment of interest thereon or which would not be adverse to the Lenders. 6.15 Limitations on Subsidiaries' Equity Interests. Permit any Subsidiary to issue any preferred Capital Stock or any redeemable common stock other than (a) issuances of preferred Capital Stock in payment of regularly accruing dividends on theretofore outstanding shares of such preferred Capital Stock, (b) issuances of preferred Capital Stock issued to and, so long as thereafter outstanding, held by the Borrower and (c) issuances in consideration of acquisitions permitted under Section 6.8 of preferred Capital Stock which ranks junior, as to the payment of dividends and as to the distribution of assets upon any liquidation, dissolution or winding up of such Subsidiary, to all preferred Capital Stock held by the Borrower in such Subsidiary. 6.16 Limitation on Release of Mortgaged Property; Limitation in Respect of Insurance. Release Mortgaged and Pledged Property (as defined in the Montana First Mortgage Indenture) from the lien of the Montana First Mortgage Indenture or Mortgaged Property (as defined in the South Dakota First Mortgage Indenture) from the lien of the South Dakota First Mortgage Indenture, other than (i) releases of such Mortgaged and Pledged Property pursuant to and in accordance with Sections 58 and 60 of the Montana First Mortgage Indenture; (ii) releases of such Mortgaged Property pursuant to and in accordance with Section 8.02 of the South Dakota First Mortgage Indenture other than clause (f) thereof; (iii) releases of property or other assets that are disposed of in accordance with Section 6.7(d) or (e) and, if in connection with any such disposition and the related release, the Borrower deposits with the trustee under an Indenture cash that would otherwise constitute Net Cash Proceeds, releases of such cash pursuant to and in accordance with such Indenture; and (iv) releases of proceeds of insurance (and/or moneys of the Borrower in lieu thereof or in addition thereto and for the purposes thereof) held under either Indenture in accordance with such Indenture which reimburse the Borrower for amounts spent in the rebuilding or renewal of property destroyed or damaged (including, without limitation, for property rebuilt, restored or replaced) and, if following the completion of any such rebuilding or renewal, any of such insurance proceeds (and/or such moneys of the Borrower) remain unspent, releases of such unspent proceeds (and/or such unspent money of the Borrower) pursuant to and in accordance with such Indenture; provided, however, that the Borrower shall not request or receive any proceeds of any insurance or of any alternative method or plan of protection of the Borrower relating to such Mortgaged Property otherwise payable to it pursuant to Section 6.07(b) of the South Dakota First Mortgage Indenture, and so long as any First Mortgage Bonds are outstanding, no effect shall be given to (x) Section 6.07(b) of the South Dakota First Mortgage Indenture, (y) the language in Section 6.07(c) of the South Dakota First Mortgage Indenture which precedes clause (i) of such Section, or (z) the reference to Section 6.07(b) of the South Dakota First Mortgage Indenture which appears in Section 6.07(d) of the South Dakota First Mortgage Indenture. 6.17 Limitation on Subjecting Property or Other Assets to the Lien of the Other Indenture. Subject any property or other assets to the lien of the Montana First Mortgage Indenture or the lien of the South Dakota First Mortgage Indenture if such property or other assets are subject to the lien of the other Indenture. 61 6.18 Prohibition on Designating Class "A" Mortgages or Permitting Qualified Lien Bonds to Exist. Designate any Class "A" Mortgage under the South Dakota First Mortgage Indenture or permit any Qualified Lien Bonds to exist under the Montana First Mortgage Indenture. 6.19 Limitation on Amendments or Supplements to the Indentures. Amend, modify or supplement the Montana First Mortgage Indenture or the South Dakota First Mortgage Indenture, except to (a) supplement such Indenture to establish the terms of any series of first mortgage bonds to be issued thereunder that are permitted to be issued under Section 6.10(f), (b) amend or supplement such Indenture for the purpose of conveying, transferring or assigning to the trustee thereunder additional property for the purpose of subjecting such property to the lien of such Indenture, subject to the terms of Section 6.17, or (c) amend or supplement such Indenture, in the case of the Montana First Mortgage Indenture, pursuant to and as permitted by Section 120 thereof or, in the case of the South Dakota First Mortgage Indenture, pursuant and as permitted by Section 14.01 thereof, provided that in each such case such amendment or supplement will not adversely affect the First Mortgage Bonds. 6.20 Prohibition on Second Mortgage Bonds. Issue any bonds (or other Debt for Borrowed Money) that is secured by a lien (subordinate to the lien of either Indenture) on the property or other assets subject to the lien of such Indenture. ARTICLE 7. EVENTS OF DEFAULT 7.1 Events of Default. If any of the following events shall occur and be continuing: (a) The Borrower shall fail to pay any principal of any Loan when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan, or any fee or any other amount payable hereunder or any other Loan Document, within three (3) days after any such interest, fee or other amount becomes due in accordance with the terms thereof or hereof; or (b) Any representation or warranty made or deemed made by the Borrower herein or in any other Loan Document or which is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or (c) The Borrower shall default in the observance or performance of any agreement contained in Article 6 (other than Section 6.12) or Section 5.7; or (d) The Borrower shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document, and such default shall continue unremedied for a period of 30 days; or 62 (e) The Borrower or any Material Subsidiary shall (A) default in any payment (regardless of amount) of principal of, premium, if any, or interest on any Indebtedness having an aggregate principal amount in excess of $30,000,000 (other than the Notes) beyond the period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness was created or (B) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice, if required, such Indebtedness to become due prior to its stated maturity; provided that any such default by the Borrower or any Material Subsidiary under Non-Recourse Debt will not constitute an Event of Default unless such default also constitutes a default under other recourse Indebtedness of the Borrower or such Subsidiary in an aggregate outstanding principal amount of $30,000,000 or more; or (f) (i) The Borrower or any Material Subsidiary shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower or any such Subsidiary shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower or any such Subsidiary any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or un-bonded for a period of 60 days; or (iii) there shall be commenced against the Borrower or any such Subsidiary any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distrait or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Borrower or any such Subsidiary shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any such Subsidiary shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Pension Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower, any Subsidiary or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer 63 or to terminate, any Pension Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such plan for purposes of Title IV of ERISA, (iv) any Pension Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower, any Subsidiary or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Pension Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or (h) One or more judgments or decrees shall be entered against the Borrower or any Subsidiary involving in the aggregate a liability (to the extent not covered by third-party insurance as to which the insurer has acknowledged coverage) of $30,000,000 or more and sufficient judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof to reduce such amount to less than $30,000,000; or (i) (x) The Security Agreement, the Bond Collateral Agreement, either Indenture or either Supplemental Indenture shall cease, for any reason, to be in full force and effect, other than pursuant to the terms thereof and hereof, (y) the Lien created thereby shall cease to be enforceable and of the same effect as to perfection and priority purported to be created thereby with respect to any significant portion of the collateral thereunder, or (z) there shall occur an "Event of Default" under either Indenture; or (j) A Change of Control shall occur; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, by notice to the Borrower, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders the Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. 64 ARTICLE 8. THE AGENTS 8.1 Appointment. Each Lender hereby irrevocably designates and appoints CSFB as Administrative Agent and as Collateral Agent (for purposes of this Article 8, collectively, the "Agents"), and to act as its agent under this Agreement and the other Loan Documents. Each such Lender irrevocably authorizes each Agent, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to each Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Each Lender further authorizes and directs each Agent to execute and deliver releases (or similar agreements) to give effect to the provisions of this Agreement and the other Loan Documents, including specifically, without limitation, the provisions of Section 6.7 hereof. Notwithstanding any provision to the contrary elsewhere in this Agreement, no Agent shall have any duties or responsibilities, except those expressly set forth herein or in therein, or any fiduciary relationship with any Lender, 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 either Agent. Without limiting the generality of the foregoing, the Agents are hereby expressly authorized to execute any and all documents (including releases) with respect to the Collateral and the rights of the Secured Parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement, the Security Agreement and the Bond Collateral Agreement. 8.2 Delegation of Duties. Each Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 8.3 Exculpatory Provisions. No Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except for its own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties, made by the Borrower or any officer or any of them contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by either Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or the Notes or any other Loan Document or for any failure of the Borrower to perform its obligations hereunder or thereunder. No Agent shall be under any obligation to any Lender 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, any Subsidiary or any Excluded Subsidiary. 65 8.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order 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, without limitation, counsel to the Borrower), independent accountants and other experts selected by such Agent. Each Agent may deem and treat the payee of any Note or any loan account in the Register as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. Each 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 Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement, the Notes and the other Loan Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the amounts owing hereunder. 8.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless such Agent has received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. Each Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that unless and until such Agent shall have received such directions, such 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 in the best interests of the Lenders. 8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that no Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by either Agent hereafter taken, including any review of the affairs of the Borrower, shall be deemed to constitute any representation or warranty by either Agent to any Lender. Each Lender represents to each Agent that it has, independently and without reliance upon either Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrower and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon either Agent or any other Lender, 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 investigation as it deems necessary to 66 inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder or furnished to the Administrative Agent for the account of, or with a counterpart or copy for, each Lender, no Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Borrower, any of its Subsidiaries or any Excluded Subsidiary which may come into the possession of either Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 8.7 Indemnification. The Lenders agree to indemnify each Agent in its capacity as such (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) and their respective directors, officers, employees and agents, ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with their Commitment Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of all amounts owing hereunder) be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from such Agent's gross negligence or willful misconduct. The agreements in this Section shall survive the payment of the Obligations hereunder. 8.8 Agent in Its Individual Capacity. Each Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower, any Subsidiary and any Excluded Subsidiary as though such Agent were not an Agent hereunder and under the other Loan Documents. With respect to Loans made or renewed by it and any Note issued to it, each Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include each Agent in its individual capacity. 8.9 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon ten days' notice to the Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall, with the consent of the Borrower (which consent shall not be unreasonably withheld and shall not be required if an Event of Default shall have occurred that is continuing) appoint a successor administrative agent, whereupon such successor Administrative Agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term "Administrative 67 Agent" shall mean such successor Administrative Agent effective upon such appointment and approval, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of any amounts payable hereunder. After any retiring or terminated Administrative Agent's resignation or termination, as the case may be, as Administrative Agent, the provisions of this Section shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents. ARTICLE 9. MISCELLANEOUS 9.1 Amendments and Waivers. Neither this Agreement, any Note or any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the Borrower written amendments, supplements or modifications hereto for the purpose of adding any provisions to this Agreement or changing in any manner the rights of the Lenders or of the Borrower hereunder, (b) enter into with the Borrower written amendments, supplements or modifications to the Note and the other Loan Documents for the purpose of adding provisions to the Notes or such other Loan Documents or changing in any manner the rights of the Lenders or the Borrower thereunder or (c) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement, the Notes or the other Loan Documents or any Default or Event of Default and its consequences; provided that no such waiver and no such amendment, supplement or modification (i) shall reduce the amount or extend the scheduled date of maturity of the Note or Loan of any Lender 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 Lender's Commitment, in each case, without the consent of such Lender, (ii) shall amend, modify or waive any provision of this Section, Section 2.12 in a manner that would alter the pro rata sharing payments required by Section 2.12, Section 2.6 or 2.12 in a manner that would eliminate or limit a Lender's right to reject prepayments under Section 2.6, or vary any provision of this Agreement or any other Loan Document which specifically by its terms requires the approval or consent of all the Lenders or reduce the percentage specified in the definition of Required Lenders, or consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement, the Notes and the other Loan Documents, or release any material portion of the Collateral (other than in accordance with the terms of the Loan Documents), in each case, without the written consent of all the Lenders, or (iii) shall amend, modify or waive any provision of Article 8 or any other provision in any Loan Document governing the rights or obligations of the Administrative Agent or the Collateral Agent without the written consent of the then Administrative Agent and the Collateral Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Borrower, the 68 Lenders, the Administrative Agent and all future holders of the Notes. In the case of any waiver, the Borrower, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the outstanding Notes and any other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. 9.2 Notice. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or, in the case of notice by mail, when received, or, in the case of telecopy notice, when received, addressed as follows in the case of the Borrower or the Administrative Agent, and as set forth in Schedule I in the case of any Lender, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the amounts payable hereunder: Borrower: Northwestern Corporation 125 S. Dakota Avenue, Suite 1100 Sioux Falls, South Dakota 57104 Attention: Chief Financial Officer with a copy to: Northwestern Corporation 125 S. Dakota Avenue, Suite 1100 Sioux Falls, South Dakota 57104 Attention: Eric R. Jacobsen, Senior Vice President and General Counsel Administrative Agent: Credit Suisse First Boston Eleven Madison Avenue New York, New York 10010-3629 Attention: Agency Department Manager provided that any notice, request or demand to or upon the Administrative Agent made under this Agreement may be made by telephone, with prompt written confirmation thereafter of such telephonic notice, and the Administrative Agent shall be entitled to rely on such telephonic notice; provided, further, that any notice, request or demand to or upon the Administrative Agent and the Lenders pursuant to Section 2.3, Section 2.6, or Section 2.7, shall not be effective until received. 9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents 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 provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 69 9.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans hereunder. 9.5 Payment of Expenses and Taxes; Indemnification. The Borrower agrees (a) to pay or reimburse the Administrative Agent and the Collateral Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement, the Notes and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and the Collateral Agent, (b) to pay or reimburse the Administrative Agent, the Collateral Agent and each Lender for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the Notes, the other Loan Documents and any such other documents, including, without limitation, the fees and disbursements of counsel (including allocated costs of internal counsel) to the Administrative Agent, the Collateral Agent and each Lender, (c) to pay, and indemnify and hold harmless the Administrative Agent, the Collateral Agent and each Lender from, any and all present or future stamp, documentary or excise taxes or similar charges, any and all recording and filing fees, and any and all liabilities with respect thereto, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or payment under, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the Notes, the other Loan Documents and any such other documents, and (d) to pay, and indemnify and hold harmless the Administrative Agent, the Collateral Agent and each Lender (including each of their respective parents, subsidiaries, officers, directors, employees, agents and affiliates) from and against, any and all claims, demands, liabilities, obligations, losses, damages, penalties, actions, judgments, suits (regardless of whether such Person is a party thereto), costs, settlements, expenses or disbursements of whatever kind or nature arising from, in connection with or with respect to (i) the execution, delivery, enforcement, performance and administration of this Agreement, the Notes, the other Loan Documents, or any other documents, (ii) the proposed or actual use of the proceeds of the Loans or (iii) any other Transaction or any transaction or document related thereto or in connection therewith (all the foregoing in this clause (d), collectively, the "indemnified liabilities"); provided that the Borrower shall not have any obligation hereunder to any Lender with respect to indemnified liabilities arising from the gross negligence or willful misconduct of the Administrative Agent, the Collateral Agent or such Lender. The agreements in this Section 9.5 shall survive repayment of the Obligations hereunder. 9.6 Successors and Assigns; Participations and Assignments(a). (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Administrative Agent, all future holders of the amounts owing hereunder and their respective successors and assigns, except that the Borrower may not assign or transfer 70 any of its rights or obligations under this Agreement without the prior written consent of each Lender. (b) Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest hereunder and under the other Loan Documents. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Note for all purposes under this Agreement and the other Loan Documents, the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents and such Lender shall retain the sole right to enforce the obligations of the Borrower relating to the Loans and other obligations owing to such Lender and to approve any amendment, modification, or waiver of any provision of this Agreement (other than amendments, modifications, or waivers (i) decreasing the amount of principal of or the rate at which interest is payable on such Loans or Notes, (ii) extending any scheduled principal payment date or date fixed for the payment of interest on such Loans or Notes, (iii) extending its Commitment, (iv) permitting any assignment or transfer of any of the Borrower's rights or obligations under this Agreement) or (v) releasing all or substantially all of the Collateral. The Borrower agrees that if amounts outstanding under this Agreement and the Notes are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement and any Note to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement or any Note; provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 9.7(a) as fully as if it were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of Section 2.14, Section 2.15 and Section 2.16 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it were a Lender; provided that, in the case of Section 2.15, such Participant shall have complied with the requirements of said Section; and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. (c) Any Lender, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time and from time to time may, with the consent of the Administrative Agent (which consent shall not be unreasonably withheld), assign to any Lender or any affiliate or Approved Fund thereof, an additional bank, financial institution, fund or commingled investment vehicle, or other Person (an "Assignee") all or any part of its rights and obligations under this Agreement and the Notes pursuant to an assignment agreement, substantially in the form of Exhibit D (or 71 such other form approved by the Administrative Agent's in its sole discretion) (an "Assignment and Assumption Agreement"), executed by such Assignee, such assigning Lender and, in the case of an Assignee that is not then a Lender or an affiliate or Approved Fund thereof, by the Administrative Agent and delivered to the Administrative Agent for its acceptance and recording in the Register; provided that (i) any such assignment must be in a minimum amount equal to the lesser of (x) $1,000,000 and (y) the aggregate Commitments and outstanding Loans of such Lender then in effect, and (ii) after giving effect to any such assignment, such Lender shall have either (x) sold all its rights and obligations hereunder and under the Notes or (y) retained at least $1,000,000 of the aggregate Commitments and outstanding Loans. Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Assumption Agreement, (1) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Assumption Agreement, have the rights and obligations of a Lender hereunder with a Commitment and Loans as set forth therein and (2) the assigning Lender thereunder, to the extent provided in such Assignment and Assumption Agreement, shall be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto; provided that the provisions of Section 2.14, Section 2.15, Section 2.16 and Section 9.5 shall continue to benefit such assigning Lender to the extent required by such Sections). On or prior to the effective date determined pursuant to such Assignment and Assumption Agreement, (i) appropriate entries shall be made in the accounts of the assigning Lender and the Register evidencing such assignment and releasing the Borrower from any and all obligations to the assigning Lender in respect of the assigned Loan or Loans and (ii) appropriate entries evidencing the assigned Loan or Loans shall be made in the accounts of the Assignee and the Register as required by Section 9.6(d). In the event that any Notes have been issued in respect of the assigned Loan or Loans, such Notes shall be marked "cancelled" and surrendered by the assigning Lender to the Administrative Agent for return to the Borrower. (d) The Administrative Agent shall maintain, at its address referred to in Section 9.2, a copy of each Assignment and Assumption Agreement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time. To the extent permitted by applicable law, the entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower and the Administrative Agent may (and, in the case of any Loan not evidenced by a Note, shall) treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein as the owner thereof for all purposes of this Agreement and the other Loan Documents, notwithstanding notice to the contrary. Any assignment of any Loan or other obligation hereunder not evidenced by a Note shall be effective only upon appropriate entries with respect thereto being made in the Register. The Register shall be available for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior notice. 72 (e) Upon its receipt of an Assignment and Assumption Agreement executed by the assigning Lender and an Assignee (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Administrative Agent ) together with payment by the assigning Lender or by the Assignee to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall promptly accept such Assignment and Assumption Agreement and, on the effective date determined pursuant thereto, shall record the information contained therein in the Register and give notice of such acceptance and recordation to the Borrower. (f) Notwithstanding anything to the contrary contained herein, any Lender (a "Granting Lender") may grant to a special purpose funding vehicle (a "SPC"), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any advance hereunder, (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the applicable Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 9.6(f), any SPC may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and the Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC. This section may not be amended without the written consent of the SPC. (g) The Borrower authorizes the Lenders to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee, any and all financial information in the Lenders' possession concerning the Borrower and its respective Affiliates which has been delivered to the Administrative Agent or the Lenders by or on behalf of the Borrower pursuant to this Agreement or which has been delivered to the Administrative Agent or the Lenders by or on behalf of the Borrower in connection with the Lender's credit evaluation of the Borrower and its respective Affiliates prior to 73 becoming a party to this Agreement; provided that each such Transferee and prospective Transferee agrees in writing to be bound by the provisions of Section 9.8. (h) Nothing herein shall prohibit any Lender from pledging or assigning any Note to any Federal Reserve Bank in accordance with applicable law. In order to facilitate such pledge or assignment, the Borrower hereby agrees that, upon request of any Lender at any time and from time to time on or after the Cash Collateral Release Date, the Borrower shall provide to such Lender, at the Borrower's own expense, a promissory note in substantially the form of Exhibit A-1. 9.7 Adjustments; Setoff(a) . (a) If any Lender (a "Benefited Lender") shall at any time receive any payment of all or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by setoff, pursuant to events or proceedings of the nature referred to in Section 7.1(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Loans, or interest thereon, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Loans, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. (b) Upon the occurrence and during the continuance of an Event of Default, in addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, (without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law), upon any amount becoming due and payable by the Borrower hereunder or under the Notes (whether at the stated maturity, by acceleration or otherwise), to setoff and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application. 9.8 Confidentiality. Each Lender agrees to exercise all reasonable efforts (consistent with its customary methods for keeping information confidential) to keep any information delivered or made available by the Borrower confidential from anyone other than persons employed or retained by such Lender who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans; provided that nothing herein shall prevent any Lender from disclosing such information (a) to any Affiliate of such Lender or to any other Lender, (b) upon the order of any court or 74 administrative agency, (c) upon the request or demand of any regulatory agency or authority having jurisdiction over such Lender, (d) that has been publicly disclosed, (e) in connection with any litigation relating to the Loans, this Agreement or any transaction contemplated hereby to which any Lender or the Administrative Agent may be a party, (f) to the extent reasonably required in connection with the exercise of any remedy hereunder, (g) to such Lender's legal counsel and independent auditors, and (h) to any actual or proposed participant or assignee of all or any part of its Loans hereunder, if such other Person, prior to such disclosure, agrees, in writing, for the benefit of the Borrower to comply with the provisions of this Section 9.8. 9.9 Effectiveness. This Agreement shall become effective on the date when counterparts hereof executed on behalf of the Borrower, the Administrative Agent and each Lender shall have been received by the Administrative Agent and notice thereof shall have been given by the Administrative Agent to the Borrower. 9.10 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with each of the Borrower and the Administrative Agent. 9.11 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 9.12 Integration. This Agreement and the other Loan Documents represent the agreement of the Borrower, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to subject matter hereof or thereof not expressly set forth or referred to herein or in the other Loan Documents. 9.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK. 9.14 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for 75 recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower, as the case may be, at its address set forth in Section 9.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; (d) agrees that nothing contained herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages. 9.15 Acknowledgments. The Borrower hereby acknowledges that: (a) Neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and the Lenders, on the one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of creditor and debtor; and (b) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby between the Administrative Agent, the Lenders and the Borrower. 9.16 Waivers of Jury Trial. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 76 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. BORROWER: NORTHWESTERN CORPORATION By: /s/ Kipp D. Orme -------------------------------- Name: Kipp D. Orme Title: Vice President and CFO By: /s/ Richard R. Hylland -------------------------------- Name: Richard R. Hylland Title: President and COO ADMINISTRATIVE AGENT: CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH By: /s/ James S. Finch -------------------------------- Name: James S. Finch Title: Managing Director By: /s/ S. William Fox -------------------------------- Name: S. William Fox Title: Vice President Signature Page to the NorthWestern 2002 Credit Agreement LENDER: CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH By: /s/ James S. Finch -------------------------------- Name: James S. Finch Title: Managing Director By: /s/ S. William Fox -------------------------------- Name: S. William Fox Title: Vice President Signature Page to the NorthWestern 2002 Credit Agreement EXHIBIT A-1 TO CREDIT AGREEMENT ------------------- FORM OF TERM NOTE ----------------- $ New York, New York -------------- [__________], 200_ FOR VALUE RECEIVED, the undersigned, NORTHWESTERN CORPORATION, a Delaware corporation, with its principal place of business at 125 South Dakota Avenue, Suite 1100, Sioux Falls, South Dakota 57104-6403 (the "Borrower"), hereby unconditionally promises to pay to the order of ___________________, with a place of business at ______________________________ (the "Lender"), by wire transfer to the account of Credit Suisse First Boston, as Administrative Agent (as defined in the Credit Agreement referred to below), with [ACCOUNT BANK], ABA NO. [o], Account No. [o], Attn: Agency, Reference: [o], or at such other place or places and to such account or accounts as the Administrative Agent, may direct from time to time by notice to the Borrower in accordance with the Credit Agreement (as hereinafter defined), in lawful money of the United States of America and in immediately available funds, the principal amount of the lesser of (a) _______________ DOLLARS ($____________) and (b) the aggregate unpaid principal amount of all Loans (as defined in the Credit Agreement) made by the Lender to the undersigned pursuant to the Credit Agreement, payable, subject to the fourth paragraph hereof, on or before the Maturity Date (as defined in the Credit Agreement). The Borrower hereby unconditionally further agrees to pay interest in like money on the unpaid principal amount hereof from time to time outstanding from the date hereof, and, to the extent permitted by applicable law, on any unpaid interest payable hereon, from the date such interest is due hereunder, at the applicable rates per annum and on the dates specified in Section 2.9 of the Credit Agreement until such principal amount and interest, as applicable, is paid in full (both before and after judgment). The Borrower agrees to pay costs and expenses, including reasonable attorneys' fees, incurred in connection with the interpretation or enforcement of this Term Note in accordance with the Credit Agreement. This Term Note is one of the Term Notes referred to in the Credit Agreement, dated as of December 17, 2002 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"; terms defined therein being used herein as defined therein), among the Borrower, the several banks and other financial institutions parties thereto (including the Lender), and the Administrative Agent, and is entitled to the benefits thereof and of the other Loan Documents referred to therein, and is subject to optional and mandatory prepayment in whole or in part as provided therein. This Term Note is secured as provided in the Loan Documents. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security, the terms and conditions upon which the security interests were granted and the rights of the holder of this Term Note in respect thereof. A-1-1 Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts remaining unpaid on this Term Note shall become, or may be declared to be, immediately due and payable all as provided therein. The Lender may proceed against the Borrower in such manner as it deems desirable in accordance with the Credit Agreement. None of the rights or remedies of the Lender hereunder are to be deemed waived or affected by failure or delay on the part of the Lender to exercise the same. All remedies conferred upon the Lender by this Term Note or any other instrument or agreement or by applicable law, shall be cumulative and none is exclusive, and such remedies may be exercised concurrently or consecutively at the Lender's option. All parties now and hereafter liable with respect to this Term Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand of payment, notice of protest, notice of dishonor and all other notices of any kind. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). NORTHWESTERN CORPORATION By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: A-1-2 EXHIBIT A-2 TO CREDIT AGREEMENT ------------------- FORM OF QFL NOTE ---------------- $ New York, New York -------------- [__________], 200_ FOR VALUE RECEIVED, the undersigned, NORTHWESTERN CORPORATION, a Delaware corporation, with its principal place of business at 125 South Dakota Avenue, Suite 1100, Sioux Falls, South Dakota 57104-6403 (the "Borrower"), hereby unconditionally promises to pay to the order of ___________________, with a place of business at ______________________________ (the "Lender"), by wire transfer to the account of Credit Suisse First Boston, as Administrative Agent (as defined in the Credit Agreement referred to below), with [ACCOUNT BANK], ABA NO. [o], Account No. [o], Attn: Agency, Reference: [o], or at such other place or places and to such account or accounts as the Administrative Agent, may direct from time to time by notice to the Borrower in accordance with the Credit Agreement (as hereinafter defined), in lawful money of the United States of America and in immediately available funds, the principal amount of the lesser of (a) _______________ DOLLARS ($____________) and (b) the aggregate unpaid principal amount of all Loans (as defined in the Credit Agreement) made by the Lender to the undersigned pursuant to the Credit Agreement, payable, subject to the fourth paragraph hereof, on or before the Maturity Date (as defined in the Credit Agreement). The Borrower hereby unconditionally further agrees to pay interest in like money on the unpaid principal amount hereof from time to time outstanding from the date hereof, and, to the extent permitted by applicable law, on any unpaid interest payable hereon, from the date such interest is due hereunder, at the applicable rates per annum and on the dates specified in Section 2.9 of the Credit Agreement until such principal amount and interest, as applicable, is paid in full (both before and after judgment). The Borrower agrees to pay costs and expenses, including reasonable attorneys' fees, incurred in connection with the interpretation or enforcement of this Term Note in accordance with the Credit Agreement. This Term Note is one of the Term Notes referred to in the Credit Agreement, dated as of December 17, 2002 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"; terms defined therein being used herein as defined therein), among the Borrower, the several banks and other financial institutions parties thereto (including the Lender), and the Administrative Agent, and is entitled to the benefits thereof and of the other Loan Documents referred to therein, and is subject to optional and mandatory prepayment in whole or in part as provided therein. This Term Note is secured as provided in the Loan Documents. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the A-2-1 security, the terms and conditions upon which the security interests were granted and the rights of the holder of this Term Note in respect thereof. Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts remaining unpaid on this Term Note shall become, or may be declared to be, immediately due and payable all as provided therein. The Lender may proceed against the Borrower in such manner as it deems desirable in accordance with the Credit Agreement. None of the rights or remedies of the Lender hereunder are to be deemed waived or affected by failure or delay on the part of the Lender to exercise the same. All remedies conferred upon the Lender by this Term Note or any other instrument or agreement or by applicable law, shall be cumulative and none is exclusive, and such remedies may be exercised concurrently or consecutively at the Lender's option. All parties now and hereafter liable with respect to this Term Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand of payment, notice of protest, notice of dishonor and all other notices of any kind. This Term Note is a QFL Note under the Credit Agreement, and as such, ownership of the obligation represented by this Term Note may be transferred only in accordance with Section 2.15 of the Credit Agreement. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). NORTHWESTERN CORPORATION By: -------------------------- Name: Title: By: -------------------------- Name: Title: A-2-2 EXHIBIT B-l TO CREDIT AGREEMENT ------------------- FORM OF NOTICE OF BORROWING --------------------------- Date: Credit Suisse First Boston, as Administrative Agent Eleven Madison Street New York, New York 10010-3629 Attention: Agency Department Manager Re: Credit Agreement dated as of December 17, 2002 among Northwestern Corporation, a Delaware corporation (the "Borrower"), the Lenders from time to time party thereto, and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"). ----------------------------------------------------------------- Pursuant to Section 2.3 of the Credit Agreement, this Notice of Borrowing ("Notice") represents the request of the Borrower to borrow on [ , ] (the "Borrowing Date")1 from the Lenders the principal amount of DOLLARS ($ ) in Loans as [Alternate Base Rate Loans] [Eurodollar Loans]. 1. [$_________ of such Loans will be Eurodollar Loans.] [The initial Interest Period for such Eurodollar Loans is requested to be a [one] [two] [three] or [six] month period.] 2. Proceeds of such Loans are to be wire-transferred in accordance with the following wire instructions: _____________________________ _____________________________ _____________________________ The undersigned hereby certifies that, as of the Borrowing Date, all the applicable conditions contained in Sections 4.1 and 4.2 of the Credit Agreement have been satisfied (or waived pursuant to Section 9.1 of the Credit Agreement). Unless otherwise defined herein, terms defined in the Credit Agreement shall have the same meanings in this Notice. - ----------------- 1 A Notice of Borrowing must be received by the Administrative Agent prior to 10:00 a.m. (New York time) on the requested Borrowing Date. B-1-1 IN WITNESS WHEREOF, the Borrower has caused this Notice to be executed and delivered by an authorized officer this ______ day of ____________, _______. NORTHWESTERN CORPORATION By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: B-1-2 EXHIBIT B-2 TO CREDIT AGREEMENT ------------------- FORM OF NOTICE OF INTEREST RATE CONVERSION ------------------------------------------ Date: Credit Suisse First Boston, as Administrative Agent Eleven Madison Street New York, New York 10010-3629 Attention: Agency Department Manager Re: Credit Agreement dated as of December 17, 2002 among Northwestern Corporation, a Delaware corporation (the "Borrower"), the Lenders from time to time party thereto, and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"). ----------------------------------------------------------------- Ladies and Gentlemen: The Borrower hereby gives notice pursuant to Section 2.7 of the Credit Agreement that it requests a continuation or conversion of Loans outstanding under the Credit Agreement, and in connection therewith sets forth below the terms on which such continuation or conversion is requested to be made; capitalized terms used and not defined herein shall have the meanings provided in the Credit Agreement: The Borrower hereby requests that on _____________, _____:2 (1) $ ___________ of the currently outstanding principal amount of the Loans currently being maintained as [Alternate Base Rate Loans] [[one] [two] [three] [six] month Eurodollar Loans]3, (2) be [converted into] [continued as], (3) [Eurodollar Loans having an Interest Period of [one] [two] [three] [six] months, which Interest Period will expire on __________, ____]4 [Alternate Base Rate Loans]. - -------------------- 2 Conversion of Eurodollar Loans may be made only on the last day of the applicable Interest Period. A Notice of Conversion must be received by the Administrative Agent prior to 10:00 a.m. (New York City time), (x) with respect to Alternate Base Rate Loans, at least three Business Days, and (y) with respect to Eurodollar Loans, at least two Business Days, prior to the date of Borrower's election. 3 Select appropriate option. 4 Insert appropriate interest rate option and, if applicable, number of months (for Eurodollar Loans). B-2-1 [In the event that such Loans are to be converted into, or continued as, Eurodollar Loans, the Borrower hereby certifies in accordance with Section 2.7 of the Credit Agreement that no Default or Event of Default has occurred and is continuing as of the date of this Notice of Interest Rate Conversion.] IN WITNESS WHEREOF, the Borrower has caused this Notice of Interest Rate Conversion to be executed and delivered, and the certification contained herein to be made, by an authorized officer this ______ day of ____________, _______. NORTHWESTERN CORPORATION By: ------------------------------- Name: Title B-2-2 EXHIBIT C TO CREDIT AGREEMENT ------------------- FORM OF CLOSING CERTIFICATE --------------------------- NORTHWESTERN CORPORATION Pursuant to Section 4.1(e) of the Credit Agreement dated as of December 17, 2002 among Northwestern Corporation, a Delaware corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders"), and Credit Suisse First Boston, as administrative agent for the Lenders (the "Credit Agreement"; terms defined therein shall have their defined meanings when used herein), the undersigned hereby certifies that [he or she] is the _____________ of the Borrower and in such capacity further certifies as follows: 1. The representations and warranties of the Borrower set forth in the Credit Agreement and each of the other Loan Documents to which the Borrower is a party, are true and correct in all material respects on and as of the date hereof. 2. The Borrower has received all documents and instruments, including all consents, authorizations and filings, required or advisable under any Requirement of Law or Contractual Obligation of the Borrower in connection with the execution, delivery, performance, validity and enforceability of the Credit Agreement, the Notes and the other Loan Documents except as expressly set forth in each document. I have examined Schedule 3.4b to the Credit Agreement and attached hereto are copies of all consents, authorizations and filings referred to in Schedule 3.4b of the Credit Agreement, which consents, authorizations and filings are in full force and effect as of the date hereof. 3. No Default or Event of Default has occurred and is continuing as of the date hereof or after giving effect to the making of the Loans on the date hereof. 4. There are no liquidation or dissolution proceedings pending or to my knowledge threatened against the Borrower, nor has any other event occurred affecting or threatening the existence of the Borrower. C-1 IN WITNESS WHEREOF, the undersigned has hereunto set his name. ---------------------------- Name: Title: Date: [o], 2002 C-2 EXHIBIT D TO CREDIT AGREEMENT ------------------- FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement (the "Assignment") is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the "Assignee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment as if set forth herein in full. For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, the interest in and to all of the Assignor's rights and obligations under the Credit Agreement and any other documents or instruments delivered pursuant thereto that represents the amount and percentage interest identified below of all of the Assignor's outstanding rights and obligations under the respective facilities identified below (including, to the extent included in any such facilities, [__________]) (the "Assigned Interest"). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment, without representation or warranty by the Assignor. 1. Assignor: ______________________________ 2. Assignee: ______________________________ [and is an Affiliate/Approved Fund(5)] 3. Borrower: NorthWestern Corporation, a Delaware corporation. 4. Administrative Agent: Credit Suisse First Boston, as the administrative agent under the Credit Agreement 5. Credit Agreement: Credit Agreement, dated as of December 17, 2002 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"; terms defined therein being used herein as defined therein), among the Borrower, the several banks and other financial institutions parties thereto (including the Lender), and the Administrative Agent - -------------------- 5 Select as applicable. D-1 6. Assigned Interest: - -------------------------- ----------------------- ---------------------- Aggregate Amount of Amount of Percentage Commitment/Loans Commitment/Loans Assigned of for all Lenders Assigned Commitment/Loans6 - -------------------------- ----------------------- ---------------------- $------------- $------------- ----------% - -------------------------- ----------------------- ---------------------- $------------- $------------- ----------% - -------------------------- ----------------------- ---------------------- [Name of Assignor] Revised Commitment amount: $ ------------------------- ----------------- Revised Commitment Percentage: % ----------------------------- ----------------- Revised Loan amount: $ ------------------- ----------------- Fees Assigned (if any): $ ---------------------- ----------------- [Name of Assignee] New Commitment amount: $ --------------------- ----------------- New Commitment Percentage: % ------------------------- ---------------- New Loan amount: $ --------------- ----------------- Address for Notices for Assignee: - --------------------------------- [Address] Attention: __________________ Telephone: __________________ Telecopy: ___________________ Telephone ___________________ Confirmation:________________ Eurodollar Lending Office: - -------------------------- _____________________________ _____________________________ _____________________________ - -------------------- 6 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. D-2 Domestic Lending Office: _____________________________ _____________________________ _____________________________ Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] The terms set forth in this Assignment are hereby agreed to: ASSIGNOR [NAME OF ASSIGNOR] By:______________________________ Name: Title: ASSIGNEE [NAME OF ASSIGNEE] By:______________________________ Name: Title: D-3 Consented to and Accepted: CREDIT SUISSE FIRST BOSTON, as Administrative Agent By_________________________________ Name: Title: By_________________________________ Name: Title: D-4 ANNEX 1 NORTHWESTERN CORPORATION CREDIT AGREEMENT DATED AS OF DECEMBER 17, 2002 STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION AGREEMENT 1. Representations and Warranties. 1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with any Credit Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document delivered pursuant thereto, other than this Assignment (herein collectively the "Credit Documents"), or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Credit Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Credit Document. 1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Assignee under the Credit Agreement, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 3.1 thereof, as applicable, 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 to purchase the Assigned Interest on the basis of which it has made such analysis and decision, and (v) if it is a Foreign Lender, attached to the Assignment is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on 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 Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender. 2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the D-5 Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. 3. General Provisions. This Assignment shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment. This Assignment shall be governed by, and construed in accordance with, the law of the State of New York. D-6 EX-99 8 ex99-3.txt EX. 99.3: AMEND. NO. 1 TO CREDIT AGMT. AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of January 8, 2003 (this "Amendment"), among NORTHWESTERN CORPORATION, a Delaware corporation (the "Borrower"), the several banks and other financial institutions from time to time party hereto and CREDIT SUISSE FIRST BOSTON, as Administrative Agent (in such capacity the "Administrative Agent"). A. Reference is made to that certain Credit Agreement, dated as of December 17, 2002, among the Borrower, the several banks and other financial institutions from time to time party thereto (each, a "Lender" and, collectively, the "Lenders"), Credit Suisse First Boston, and the Administrative Agent (as the same has been or may be further amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), pursuant to which the Lenders have extended and agreed to extend credit to the Borrower on the terms and subject to the conditions set forth therein. B. The Borrower has requested that the Credit Agreement be amended in accordance with the terms set forth herein. C. Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows: A G R E E M E N T SECTION 1. Definitions. Unless otherwise specifically defined herein, capitalized terms used herein shall have their respective meanings assigned to such terms in the Credit Agreement. SECTION 2. Amendment. Subject to the effectiveness of this Amendment in accordance with Section 4 hereof, the Credit Agreement is hereby amended as follows: (a) Section 1.1 of the Credit Agreement is hereby amended by inserting the following definitions to appear in alphabetical order: `"Amendment No. 1 to Credit Agreement" shall mean Amendment No. 1 to Credit Agreement, dated as of January 8, 2003 among the Borrower, the several banks and other financial institutions from time to time party thereto and Credit Suisse First Boston, as administrative agent.' `"Commitment Fee" shall have the meaning ascribed thereto in Section 2.4(a).' (b) Section 2.1 of the Credit Agreement is hereby amended by replacing the text "in a principal amount not to exceed such Lender's Commitment" with the following text: "in a principal amount equal to such Lender's Commitment". (c) Section 2.3 of the Credit Agreement is hereby amended by replacing clause (2) with the following text: "(2) the aggregate amount to be borrowed (which shall be $390,000,000),". (d) Section 2.4 of the Credit Agreement is hereby deleted in its entirety and replaced with the following in place thereof: "(a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee (each a "Commitment Fee"), which shall accrue at seven and three-quarter percent (7.75%) per annum on the daily amount of the Commitment of such Lender then outstanding during the period from and including January 17, 2003 to but excluding the earlier of the Cash Collateral Release Date and the date on which such Commitments terminate. Accrued Commitment Fees shall be payable on the Cash Collateral Release Date or upon the termination of the Commitments. All Commitment Fees shall be computed on the basis of a 360-day year and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). (b) Administrative Agent Fees. The Borrower agrees to pay to the Administrative Agent, for the account of CSFB or the Administrative Agent, concurrent with signing of this Agreement (or as otherwise specified therein), such fees as agreed to between the Borrower and CSFB. (c) Fees Generally. All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for the benefit of the parties entitled thereto. Fees paid shall not be refundable under any circumstances." (e) Section 2.6(d) of the Credit Agreement is hereby deleted in its entirety and replaced with the following in place thereof: "(d) Mandatory Prepayment or Termination. If the Cash Collateral Release Date has not occurred on or prior to February 10, 2003, then the Loans shall become due and payable in full on February 11, 2003 and the Borrower shall prepay the Loans on such date (or if no Loans are then outstanding, the Commitments (and the Lenders' obligations hereunder to extend any credit) shall terminate in full) and the Borrower shall pay on such date to the Administrative Agent for the account of each Lender a non-refundable termination fee equal to one percent (1%) of such Lenders' Loans (or Commitment, as applicable)." SECTION 3. Representations and Warranties. The Borrower represents and warrants as of the date hereof to each of the Administrative Agent and the Lenders that after giving effect to this Amendment: (a) The representations and warranties set forth in the Credit Agreement are true and correct in all material respects except to the extent such representations and warranties expressly related to an earlier date; (b) The Borrower is in compliance in all material respects with all other terms and provisions contained in the Credit Agreement required to be observed or performed; (c) No Default or Event of Default has occurred and is continuing; (d) The Borrower has the corporate power and authority to execute, deliver and perform this Amendment and has taken all corporate actions necessary to authorize the execution, delivery and performance of this Amendment; (e) This Amendment has been duly executed and delivered on behalf of the Borrower by a duly authorized officer or attorney-in-fact of the Borrower; (f) The execution, delivery and performance of this Amendment will not violate any Requirement of Law or any material contractual obligation binding on the Borrower or any of its Subsidiaries; and (g) No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by the Borrower of this Amendment. The Borrower acknowledges and agrees that the representations and warranties set forth above shall survive the execution and delivery hereof and shall be deemed made in the Credit Agreement for purposes of Section 7.1(b) of the Credit Agreement. SECTION 4. Effectiveness. This Amendment shall become effective on the date the Administrative Agent receives (i) counterparts of this Amendment that, when taken together, bear the signatures of the Borrower and of CSFB, and (ii) payment of all of its reasonable out-of-pocket costs and expenses incurred in connection with this Amendment (including, without limitation, reasonable fees and expenses of its counsel) for which invoices have been submitted to the Borrower. The Administrative Agent shall promptly notify the Borrower and the Lenders of the effective date hereof, and such notice shall be conclusive and binding on all parties hereto. SECTION 5 Miscellaneous. (a) Except as expressly set forth herein, this Amendment shall not, by implication or otherwise, limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Administrative Agent, under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. Upon this Amendment becoming effective as provided herein, the term "Loan Document" as defined in the Credit Agreement shall include, without limitation, this Amendment. (b) As used in the Credit Agreement, the terms "Agreement," "herein," "hereinafter," "hereunder," "hereto," and words of similar import shall mean, from and after the date hereof, the Credit Agreement as amended by this Amendment. (c) Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment. (d) THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. The parties hereto each hereby consents to the non-exclusive jurisdiction of the state and federal courts of the State of New York and irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Amendment. (e) This Amendment may be executed in any number of counterparts, each of which shall be an original but all of which, when taken together, shall constitute but one instrument. Delivery of an executed counterpart of this Amendment by fax will be deemed as effective delivery of an originally executed counterpart. [Signature pages follow] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first written. BORROWER: NORTHWESTERN CORPORATION By: /s/ Eric R. Jacobsen ------------------------------------ Name: Eric R. Jacobsen Title: Senior Vice President, General Counsel & Chief Legal Officer ADMINISTRATIVE AGENT: CREDIT SUISSE FIRST BOSTON By: /s/ James P. Moran ------------------------------------ Name: James P. Moran Title: Director By: /s/ S. William Fox ------------------------------------ Name: S. William Fox Title: Vice President LENDER CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH By: /s/ James P. Moran ------------------------------------ Name: James P. Moran Title: Director By: /s/ S. William Fox ------------------------------------ Name: S. William Fox Title: Vice President Signature Page to Amendment No. 1 to Credit Agreement EX-99 9 ex99-4.txt EX. 99.4: AMEND. NO. 2 TO CREDIT AGMT. AMENDMENT NO. 2 TO CREDIT AGREEMENT AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of February 6, 2003 (this "Amendment"), among NORTHWESTERN CORPORATION, a Delaware corporation (the "Borrower"), the several banks and other financial institutions from time to time party hereto and CREDIT SUISSE FIRST BOSTON, acting through its CAYMAN ISLANDS BRANCH, as Administrative Agent (in such capacity the "Administrative Agent"). A. Reference is made to that certain Credit Agreement, dated as of December 17, 2002, among the Borrower, the several banks and other financial institutions from time to time party thereto (each, a "Lender" and, collectively, the "Lenders"), the Administrative Agent, as amended by Amendment No. 1 dated as of January 8, 2003 (as the same has been or may be further amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), pursuant to which the Lenders have extended and agreed to extend credit to the Borrower on the terms and subject to the conditions set forth therein. B. The Borrower has requested that the Credit Agreement be amended in accordance with the terms set forth herein. C. Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows: A G R E E M E N T SECTION 1. Definitions. Unless otherwise specifically defined herein, capitalized terms used herein shall have their respective meanings assigned to such terms in the Credit Agreement. SECTION 2. Amendment. Subject to the effectiveness of this Amendment in accordance with Section 4 hereof, the Credit Agreement is hereby amended as follows: (a) The definition of "Permitted Liens" set forth in Section 1.1 of the Credit Agreement is amended by (x) renumbering clauses (p) and (q) therein as clauses (q) and (r) respectively, and(y) inserting a new clause (p) as follows: "(p) cash and cash equivalent collateral in an aggregate amount not to exceed $40,000,000 at any time securing reimbursement and other obligations of the type permitted under clause (b) of Section 6.10 (and related fee and expense indemnity obligations);" (b) Section 1.1 of the Credit Agreement is hereby amended by inserting the following definitions to appear in alphabetical order: `"Amendment No. 2 to Credit Agreement" shall mean Amendment No. 2 to Credit Agreement, dated as of February 6, 2003 among the Borrower, the several banks and other financial institutions from time to time party thereto and Credit Suisse First Boston, as administrative agent.' SECTION 3. Representations and Warranties. The Borrower represents and warrants as of the date hereof to each of the Administrative Agent and the Lenders that after giving effect to this Amendment: (a) The representations and warranties set forth in the Credit Agreement are true and correct in all material respects except to the extent such representations and warranties expressly related to an earlier date; (b) The Borrower is in compliance in all material respects with all other terms and provisions contained in the Credit Agreement required to be observed or performed; (c) No Default or Event of Default has occurred and is continuing; (d) The Borrower has the corporate power and authority to execute, deliver and perform this Amendment and has taken all corporate actions necessary to authorize the execution, delivery and performance of this Amendment; (e) This Amendment has been duly executed and delivered on behalf of the Borrower by a duly authorized officer or attorney-in-fact of the Borrower; (f) The execution, delivery and performance of this Amendment will not violate any Requirement of Law or any material contractual obligation binding on the Borrower or any of its Subsidiaries; and (g) No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by the Borrower of this Amendment. The Borrower acknowledges and agrees that the representations and warranties set forth above shall survive the execution and delivery hereof and shall be deemed made in the Credit Agreement for purposes of Section 7.1(b) of the Credit Agreement. SECTION 4. Effectiveness. This Amendment shall become effective on the date the Administrative Agent receives (i) counterparts of this Amendment that, when taken together, bear the signatures of the Borrower, the Required Lenders and the Administrative Agent, and (ii) payment of all of the Administrative Agent's reasonable out-of-pocket costs and expenses incurred in connection with this Amendment (including, without limitation, reasonable fees and expenses of its counsel) for which invoices have been submitted to the Borrower. The Administrative Agent shall promptly notify the Borrower and the Lenders of the effective date hereof, and such notice shall be conclusive and binding on all parties hereto. SECTION 5 Miscellaneous. (a) Except as expressly set forth herein, this Amendment shall not, by implication or otherwise, limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Administrative Agent, under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrower to consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. Upon this Amendment becoming effective as provided herein, the term "Loan Document" as defined in the Credit Agreement shall include, without limitation, this Amendment. (b) As used in the Credit Agreement, the terms "Agreement," "herein," "hereinafter," "hereunder," "hereto," and words of similar import shall mean, from and after the date hereof, the Credit Agreement as amended by this Amendment. (c) Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment. (d) THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. The parties hereto each hereby consents to the non-exclusive jurisdiction of the state and federal courts of the State of New York and irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Amendment. (e) This Amendment may be executed in any number of counterparts, each of which shall be an original but all of which, when taken together, shall constitute but one instrument. Delivery of an executed counterpart of this Amendment by fax will be deemed as effective delivery of an originally executed counterpart. [Signature pages follow] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. BORROWER: NORTHWESTERN CORPORATION By: /s/ Kipp D. Orme ---------------------------------------- Kipp D. Orme Vice President and Chief Financial Officer ADMINISTRATIVE AGENT: CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH By: /s/ S. William Fox ---------------------------------------- Name: S. William Fox Title: Director By: /s/ Brian Caldwell ---------------------------------------- Name: Brian Caldwell Title: Director Signature Page to Amendment No. 2 to Credit Agreement LENDERS: CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH By: /s/ S. William Fox ---------------------------------------- Name: S. William Fox Title: Director By: /s/ Brian Caldwell ---------------------------------------- Name: Brian Caldwell Title: Director FIR TREE RECOVERY MASTER FUND, L.P. By: /s/ Scott Henkin ---------------------------------------- Name: Scott Henkin Title: Authorized Signatory FIR TREE VALUE PARTNERS, LDC By: /s/ Scott Henkin ---------------------------------------- Name: Scott Henkin Title: Authorized Signatory BEAL BANK, S.S.B. By: /s/ W. T. Sauronmeau ---------------------------------------- Name: W. T. Sauronmeau Title: S.V.P. Signature Page to Amendment No. 2 to Credit Agreement AG CAPITAL FUNDING PARTNERS, L.P. By: -------------------------------------- Name: Title: NORTHWOODS CAPITAL II, LIMITED By: -------------------------------------- Name: Title: NORTHWOODS CAPITAL III, LIMITED By: -------------------------------------- Name: Title: NORTHWOODS CAPITAL, LIMITED By: -------------------------------------- Name: Title: Signature Page to Amendment No. 2 to Credit Agreement A3 FUNDING LP By:A3 FUND MANAGEMENT LLC Its: General Partner By: /s/ Alexander J. Oinstein ------------------------------------------- Name: Alexander J. Oinstein Title: Vice President ABLECO FINANCE LLC By: /s/ Alexander J. Oinstein ------------------------------------------- Name: Alexander J. Oinstein Title: Vice President FOOTHILL INCOME TRUST, L.P. By: ------------------------------------------- Name: Title: SILVER OAK CAPITAL, LLC, as Agent for certain Lenders By: ----------------------------------------- Name: Title: Signature Page to Amendment No. 2 to Credit Agreement FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P. By: ----------------------------------------- Name: Title: FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P. By: ----------------------------------------- Name: Title: FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P. By: -------------------------------------- Name: Title: FARALLON CAPITAL PARTNERS, L.P. By: ----------------------------------------- Name: Title: TINICUM PARTNERS, L.P. By: ----------------------------------------- Name: Title: Signature Page to Amendment No. 2 to Credit Agreement HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P. By: ----------------------------------------- Name: Title: HIGHLAND LEGACY LIMITED By: ----------------------------------------- Name: Title: HIGHLAND LOAN FUNDING V LTD. By: ----------------------------------------- Name: Title: PROSPECT STREET HIGH INCOME PORTFOLIO INC. By: ----------------------------------------- Name: Title: Signature Page to Amendment No. 2 to Credit Agreement RESTORATION FUNDING CLO, LTD. By: ----------------------------------------- Name: Title: GALAXY CLO 1999-1, LTD. By: ----------------------------------------- Name: Title: SUNAMERICA LIFE INSURANCE COMPANY By: ----------------------------------------- Name: Title: Signature Page to Amendment No. 2 to Credit Agreement KZH RIVERSIDE LLC By: /s/ Rowena Smith ------------------------------------------- Name: Rowena Smith Title: Authorized Agent KZH SOLEIL LLC By: /s/ Rowena Smith ------------------------------------------- Name: Rowena Smith Title: Authorized Agent KZH SOLEIL-2 LLC By: /s/ Rowena Smith ------------------------------------------- Name: Rowena Smith Title: Authorized Agent KZH CYPRESSTREE-1 LLC By: /s/ Rowena Smith ------------------------------------------- Name: Rowena Smith Title: Authorized Agent KZH ING-2 LLC By: /s/ Rowena Smith ------------------------------------------- Name: Rowena Smith Title: Authorized Agent Signature Page to Amendment No. 2 to Credit Agreement KZH STERLING LLC By: /s/ Rowena Smith ------------------------------------------- Name: Rowena Smith Title: Authorized Agent CENTURION CDO II, LTD. By: ----------------------------------------- Name: Title: CENTURION CDO VI, LTD. By: ------------------------------------------ Name: Title: CENTURION CDO VI, LTD. By: ----------------------------------------- Name: Title: SEQUILS-CENTURION V, LTD. By: ----------------------------------------- Name: Title: Signature Page to Amendment No. 2 to Credit Agreement MARINER LDC By: /s/ Charles R. Howe, II ------------------------------------------- Name: Charles R. Howe, II Title: Director D. E. SHAW LAMINAR PORTFOLIOS, L.L.C., by D. E. Shaw & Co., L.L.C., its managing member By: ----------------------------------------- Name: Title: MARINER OPPORTUNITIES FUND, L.P. By: /s/ Charles R. Howe, II ------------------------------------------- Name: Charles R. Howe, II Title: Director Signature Page to Amendment No. 2 to Credit Agreement EX-99 10 ex99-5.txt EX. 99.5: BOND COLLATERAL AGMT. ================================================================================ BOND COLLATERAL AGREEMENT between NORTHWESTERN CORPORATION and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as Collateral Agent ================================================================= Dated as of February 10, 2003 ================================================================= ================================================================================
TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE I DEFINITIONS.................................................................1 SECTION 1.1 Defined Terms.........................................................1 SECTION 1.2 Additional Terms......................................................1 ARTICLE II COLLATERAL FIRST MORTGAGE BONDS............................................3 SECTION 2.1 Form; Issuance and Delivery...........................................3 SECTION 2.2 Property of Collateral Agent..........................................4 SECTION 2.3 Loans and Collateral First Mortgage Bonds Constitute Same Indebtedness Unless and Until Remedy Exercise Day Occurs; Application of Payments.........................................4 SECTION 2.4 Transfer Provisions and Restrictions..................................5 SECTION 2.5 Registration Rights and Related Matters...............................5 SECTION 2.6 Private Sales.........................................................7 ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.................7 SECTION 3.1 Name and Jurisdiction of Organization.................................7 SECTION 3.2 Collateral First Mortgage Bonds; Related Matters......................7 SECTION 3.3 Other Consents........................................................8 SECTION 3.4 Change of Name, Jurisdiction of Organization or Location of Place of Business........................................................8 SECTION 3.5 Further Assurances....................................................8 SECTION 3.6 Filing; No Further Security Interest..................................9 SECTION 3.7 Filing or Recording of Supplemental Indentures........................9 SECTION 3.8 Delivery of Notices...................................................9 ARTICLE IV RIGHT TO DISPOSE OF COLLATERAL FIRST MORTGAGE BONDS........................9 SECTION 4.1 Right to Dispose of Collateral First Mortgage Bonds...................9 SECTION 4.2 Reservation of Other Rights..........................................10 SECTION 4.3 Subsequent Dispositions..............................................10 ARTICLE V COLLATERAL AGENT AND LENDERS...............................................10 SECTION 5.1 Authority and Duties of Collateral Agent.............................10 SECTION 5.2 Successor Collateral Agent...........................................11 SECTION 5.3 Protections of Collateral Agent......................................11 SECTION 5.4 Applicable Share Certificates........................................11 SECTION 5.5 Private Placement Representations....................................11 ARTICLE VI MISCELLANEOUS.............................................................12 SECTION 6.1 Indemnification, Expenses, Etc.......................................12 SECTION 6.2 Obligations Absolute.................................................13
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TABLE OF CONTENTS ----------------- PAGE ---- SECTION 6.3 Remedies Cumulative; Delay Not Waiver................................13 SECTION 6.4 Termination..........................................................14 SECTION 6.5 Taxes 14 SECTION 6.6 Amendments, Etc......................................................15 SECTION 6.7 Address for Notices..................................................15 SECTION 6.8 Severability.........................................................15 SECTION 6.9 Survival of Provisions...............................................15 SECTION 6.10 Binding Agreement...................................................15 SECTION 6.11 Headings............................................................15 SECTION 6.12 GOVERNING LAW.......................................................15 SECTION 6.13 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION....................16 SECTION 6.14 Third Party Rights..................................................16 SECTION 6.15 Integration.........................................................16 SECTION 6.16 Execution in Counterparts...........................................16 SECTION 6.17 Conflict with Other Documents.......................................16
ii BOND COLLATERAL AGREEMENT, dated as of February 10, 2003 (this "Agreement"), between NORTHWESTERN CORPORATION, a corporation duly organized and validly existing under the laws of the State of Delaware (the "Company"), and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as collateral agent (together with its successors and assigns in such capacity, the "Collateral Agent") for the benefit of the Lenders (as defined below). W I T N E S S E T H: ------------------- WHEREAS, the Company has entered into the Credit Agreement, dated as of December 17, 2002 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), with the financial institutions from time to time parties thereto (each, a "Lender" and, collectively, the "Lenders") and Credit Suisse First Boston, acting through its Cayman Islands Branch, as Administrative Agent for the Lenders (the "Administrative Agent"); WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make Loans to the Company, in accordance with the terms and conditions set forth therein and, pursuant to Article 8 of the Credit Agreement, have designated and appointed Credit Suisse First Boston, acting through its Cayman Islands Branch, as Collateral Agent; and WHEREAS, as conditions to the making of the Loans under the Credit Agreement, the Company is required (i) to issue and deliver to the Collateral Agent, as security for the Obligations, the Collateral First Mortgage Bonds (such terms and all other capitalized terms used in these recitals but not defined in these recitals having the meanings stated or ascribed in Article I hereof), and (ii) to execute and deliver this Agreement. A G R E E M E N T ----------------- NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 Defined Terms. For all purposes of this Agreement, capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement or the Collateral First Mortgage Bonds (or the Supplemental Indentures relating thereto). SECTION 1.2 Additional Terms. In addition, the following terms have the meaning hereafter specified: "Acceleration Day" means the day on which the Loans are accelerated in accordance with the Credit Agreement. "Administrative Agent" has the meaning given in the recitals to this Agreement. "Agreement" has the meaning given in the introductory paragraph to this Agreement. "Collateral Agent" has the meaning given in the introductory paragraph to this Agreement. "Collateral First Mortgage Bonds" means, collectively, the Montana First Mortgage Bonds and the South Dakota First Mortgage Bonds. "Collateral First Mortgage Bondowner Rights" has the meaning given in Section 2.2 of this Agreement. "Company" has the meaning given in the introductory paragraph to this Agreement. "Credit Agreement" has the meaning given in the recitals to this Agreement. "Indentures" means, collectively, the Montana First Mortgage Indenture and the South Dakota First Mortgage Indenture. "Lenders" has the meaning given in the recitals to this Agreement. "Montana First Mortgage Bonds" means the First Mortgage Bonds, Credit Agreement (2002) Series, due 2006, authenticated and delivered under the Montana First Mortgage Indenture. "Montana First Mortgage Indenture" means the Mortgage and Deed of Trust dated as of October 1, 1945 from the Company (as successor thereunder to NorthWestern Energy, L.L.C., in turn successor thereunder to The Montana Power Company) to the trustees named therein, as supplemented and amended, including by the Montana Supplemental Indenture. "Montana Supplemental Indenture" means the Twenty-third Supplemental Indenture, dated as of February 1, 2003, to the Montana First Mortgage Indenture amending and supplementing the same, among other things, to provide for the issuance and terms of the Montana First Mortgage Bonds. "Obligations" means the unpaid principal of and interest on the Loans (including, without limitation, interest accruing after the maturity of the Loans, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to 2 the Company, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and, to the extent permitted by law, interest on interest) payable in accordance with the Credit Agreement (and, if applicable, evidenced by the Notes). "Permitted Sale" has the meaning given in Section 2.5(b) of this Agreement. "Remedy Exercise Day" means the day (on or after the Acceleration Day) on which all (but not less than all) of the Collateral First Mortgage Bonds are transferred by the Collateral Agent to or upon the order of the Lenders in full satisfaction and discharge of the Loans and Obligations pursuant to Section 4.1 hereof. "Securities Act" has the meaning given in Section 2.5(b) of this Agreement. "Security Interest" means the security interest granted or purported to be granted by the Company pursuant to the final sentence of Section 2.2 of this Agreement. "South Dakota First Mortgage Bonds" means the New Mortgage Bonds, Credit Agreement (2002) Series, due 2006, authenticated and delivered under the South Dakota First Mortgage Indenture. "South Dakota First Mortgage Indenture" means the General Mortgage Indenture and Deed of Trust dated as of August 1, 1993 between the Company and The Chase Manhattan Bank (National Association) (JPMorgan Chase Bank, as successor), as trustee, as supplemented and amended, including by the South Dakota Supplemental Indenture. "South Dakota Supplemental Indenture" means the Supplemental Indenture, dated as of February 1, 2003, to the South Dakota First Mortgage Indenture amending and supplementing the same, among other things, to provide for the issuance and terms of the South Dakota First Mortgage Bonds. "Supplemental Indentures" means, collectively, the Montana Supplemental Indenture and the South Dakota Supplemental Indenture. ARTICLE II COLLATERAL FIRST MORTGAGE BONDS SECTION 2.1 Form; Issuance and Delivery. (a) Each Collateral First Mortgage Bond shall be in substantially the form set forth in or attached as an exhibit to the relevant Supplemental Indenture, in each case with such appropriate insertions, 3 omissions, substitutions and other variations as are required or permitted by the relevant Indenture and the Credit Agreement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with applicable law or the terms and provisions of the relevant Indenture. (a) Simultaneously with the execution and delivery of this Agreement, the Company shall issue and deliver the Collateral First Mortgage Bonds to the Collateral Agent for the ratable benefit of the Lenders, as security for the prompt and full payment by the Company of, and to further evidence, the Obligations. The Collateral First Mortgage Bonds shall be registered in the name of the Collateral Agent and shall be held by the Collateral Agent for the ratable benefit of the Lenders. SECTION 2.2 Property of Collateral Agent. Upon issuance and delivery to the Collateral Agent of the Collateral First Mortgage Bonds: (i) the Company shall not be, or be deemed to be, the owner of the Collateral First Mortgage Bonds; (ii) the Company shall not have, and shall not be deemed to have, any right, title or interest in, to or under the Collateral First Mortgage Bonds (other than as the payor and obligor thereunder); (iii) the Collateral Agent (or any transferee in accordance with the terms hereof) shall be and shall have all of the rights and interests of a registered owner of each Collateral First Mortgage Bond under the Indenture relating thereto, including, without limitation, (x) the right to vote, consent or take any other action (including, without limitation, to issue instructions and make requests for action) which may be taken by a registered owner of such Collateral First Mortgage Bond under such Indenture, and (y) the right to collect all amounts payable to such registered owner under such Indenture (all such rights described in this clause (iii) being referred to, collectively, as the "Collateral First Mortgage Bondowner Rights"); and (iv) the Collateral First Mortgage Bonds shall not be considered the property of the Company or the Company's estate in the event the Company becomes the subject of a proceeding or action under any applicable domestic or foreign bankruptcy, insolvency, reorganization or similar law. If, notwithstanding the foregoing, the Company shall be deemed to have any right, title or interest in, to or under any Collateral First Mortgage Bond (other than as the payor and obligor thereunder), the Company hereby pledges such right, title and interest (and all proceeds thereof) to the Collateral Agent for the ratable benefit of the Lenders and hereby grants a security interest in such right, title and interest (and all proceeds thereof) to the Collateral Agent for the ratable benefit of the Lenders, in each case, as security for the Obligations. SECTION 2.3 Loans and Collateral First Mortgage Bonds Constitute Same Indebtedness Unless and Until Remedy Exercise Day Occurs; Application of Payments. At all times prior to the Remedy Exercise Day (and by reason of the terms and provisions of the Collateral First Mortgage Bonds and the Supplemental Indentures, including, without limitation, the principal of and interest on the Collateral First Mortgage Bonds being determined by reference to the principal of and interest on the Loans and the satisfaction of obligations of the Company to make payments of principal of and interest on the Collateral First Mortgage Bonds which results from payments made by the Company of principal of and interest on the Loans), the Loans and the Collateral First Mortgage Bonds shall be and constitute the same indebtedness of the Company and, in respect of all of the Loans and all of the Collateral First Mortgage Bonds, the 4 Company shall not be obligated to make principal payments that exceed $390,000,000 in the aggregate (or to pay interest on a principal amount that exceeds $390,000,000 in the aggregate). If, at any time prior to the Remedy Exercise Day, the Collateral Agent receives payments or other distributions of moneys under an Indenture and, in accordance with such Indenture, such payments or other distributions are to be applied or to be deemed to be applied to the payment or reduction of the principal of or the interest on the Collateral First Mortgage Bonds issued under such Indenture, there shall be deemed to have been paid or reduced an equal amount of the principal of or the interest on the Loans. If (but only if) the Remedy Exercise Day shall have occurred, then, on and as of the Remedy Exercise Day, (i) the Loans and Obligations shall be deemed satisfied and discharged in full in accordance with Section 4.1 hereof (without any further liability on the part of the Company therefor), and (ii) the Collateral First Mortgage Bonds shall constitute separate and independent indebtedness of the Company governed by the terms thereof and of the Indentures (without any further reference to the Credit Agreement). SECTION 2.4 Transfer Provisions and Restrictions. (a) The Loans (as evidenced by the Notes) may be assigned (and thereby transferred) by the Lenders to Assignees subject to and in accordance with Section 9.6 of the Credit Agreement. Following any such assignment to an Assignee, such Assignee (as a Lender) shall be entitled to the benefits afforded by the Collateral First Mortgage Bonds to the Loans so assigned on the terms and subject to the conditions of this Agreement (but shall not be entitled, by virtue solely of such assignment, to the transfer of any portion of the Collateral First Mortgage Bonds to such Assignee). (b) The Collateral Agent hereby expressly acknowledges and agrees to the restrictions on transfer of the Collateral First Mortgage Bonds contained in the Collateral First Mortgage Bonds and the Supplemental Indentures. The Collateral Agent hereby further agrees that, except for (i) any transfer in accordance with such restrictions on transfer, or (ii) in connection with the surrender of the Collateral First Mortgage Bonds pursuant to Section 6.4 hereof, the Collateral Agent shall not sell, assign, transfer, pledge, mortgage or otherwise encumber or dispose of any Collateral First Mortgage Bond or any interest therein; and, subject to such exceptions, the Collateral Agent (or a custodian acting on behalf of the Collateral Agent pursuant to a written agreement apprising such custodian of, and obligating such custodian to observe (to the extent applicable), this Agreement) shall at all times maintain physical possession of the Collateral First Mortgage Bonds until the same are paid or deemed to have been paid or otherwise satisfied and discharged as provided in this Agreement, the Collateral First Mortgage Bonds and/or the Indentures. SECTION 2.5 Registration Rights and Related Matters. (a) The Collateral Agent and the Lenders (or any purchaser from, or other successor to, any Lender with respect to any Collateral First Mortgage Bonds) shall have the right to sell or otherwise dispose of any or all of the Collateral First Mortgage Bonds, so long as (i) any such sale or other disposition occurs on or after the Acceleration Day, and (ii) prior to (or simultaneously with) any such sale or other disposition, the Remedy Exercise Day has occurred (or occurs) and the Loans and the Obligations have been (or are) satisfied and discharged in full in accordance with Section 4.1 hereof (without any further liability on 5 the part of the Company therefor). For the avoidance of doubt, it is expressly stated that (x) on the Remedy Exercise Day, one or more Lenders may become registered owners of the Collateral First Mortgage Bonds (and thereafter such Lender or Lenders may sell or otherwise dispose of such Collateral First Mortgage Bonds), and/or (y) on the Remedy Exercise Day, one or more Persons that are purchasers from the Collateral Agent or one or more Lenders may become registered owners of the Collateral First Mortgage Bonds (thereby obviating the necessity for any subsequent sale of such Collateral First Mortgage Bonds by such Lender or Lenders). (b) If, in connection with any sale or transfer by the Collateral Agent or any Lender (or any purchaser from, or other successor to, any Lender with respect to any Collateral First Mortgage Bonds) that is permitted pursuant to Section 2.5(a) hereof (a "Permitted Sale"), the Collateral Agent or such Lender (or purchaser) requests, by written notice to the Company, that such Collateral First Mortgage Bonds be registered under the Securities Act of 1933, as amended (together with any successor statute thereto, the "Securities Act") (such written request to generally describe such Permitted Sale and the intended method of disposition contemplated for such Permitted Sale), the Company, at the Company's costs and expense, shall as soon as practicable: (I) cause a registration statement with respect to such Collateral First Mortgage Bonds (A) to become effective so as to permit such Permitted Sale in accordance with the intended method of disposition of such Collateral First Mortgage Bonds contemplated by such Permitted Sale, and (B) to remain effective until the earlier of the expiration of two (2) years from the effective date thereof or the disposition of such Collateral First Mortgage Bonds pursuant thereto (referred to in the proviso to this Section 2.5(b) as "to effect registration" or words similar thereto); (II) register or qualify such Collateral First Mortgage Bonds covered by such registration statement under all applicable "blue sky" and other state securities laws and keep such registration or qualification in effect for so long as such registration statement remains in effect; (III) cause such Collateral First Mortgage Bonds covered by such registration statement to be registered with or approved by such other Governmental Authorities having jurisdiction with respect to the Company and/or such Collateral First Mortgage Bonds as may be reasonably necessary to permit such Permitted Sale in accordance with the intended method of disposition of such Collateral First Mortgage Bonds contemplated by such Permitted Sale; (IV) comply with all applicable rules and regulations of the Securities and Exchange Commission relating to or arising out of such registration statement, including, without limitation, qualifying the Indentures under the Trust Indenture Act of 1939, as amended, and to make available to its security holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; and 6 (V) take such other actions as the Collateral Agent or such Lender shall reasonably request in order to expedite or facilitate the disposition of such Collateral First Mortgage Bonds pursuant to and as contemplated by such registration statement; provided, however, that the Company shall not be required to effect any registration pursuant to this Section 2.5 if (i) such registration shall not have been requested or approved by Lenders (or any purchaser from, or other successor to, any Lender with respect to any Collateral First Mortgage Bonds) for whom an aggregate principal amount of at least $95 million of the Collateral First Mortgage Bonds are held or owned, or (ii) more than two (2) years shall have elapsed subsequent to the Remedy Exercise Day. SECTION 2.6 Private Sales. The Company and the Collateral Agent hereby acknowledge and agree that: (a) the Collateral Agent and/or the Lenders (or any purchaser from, or other successor to, any Lender with respect to any Collateral First Mortgage Bonds) may effect any Permitted Sale in a transaction exempt from registration under the Securities Act; (b) such Permitted Sale in such transaction will be deemed to have been made in a commercially reasonable manner; and (c) although such Permitted Sale in such transaction may result in prices and terms less favorable than if such Permitted Sale were a public offering, neither that fact nor any other fact, event or circumstance shall result in (x) the Obligations not being satisfied and discharged in full in accordance with Section 4.1 hereof or the Company being liable for any deficiency between the proceeds of such Permitted Sale and the Obligations previously payable to such Lender, or (y) any claim by the Company against the Collateral Agent or any Lender. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY The Company represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows: SECTION 3.1 Name and Jurisdiction of Organization. The Company's name, within the meaning of Section 9-503(a) of the Uniform Commercial Code as in effect in the State of New York, is NorthWestern Corporation. The Company is a corporation organized solely under the laws of the State of Delaware and no other state or jurisdiction, and, pursuant to applicable law, such State must maintain a public record showing the Company to have been so organized. The Company's organizational identification number in the State of Delaware is 0161208. SECTION 3.2 Collateral First Mortgage Bonds; Related Matters. (a) The Collateral First Mortgage Bonds have been validly authorized, executed, issued, authenticated and delivered to the Collateral Agent and registered in its name as 7 Collateral Agent. All First Mortgage Approvals have been obtained and are in full force and effect. The Supplemental Indentures have been validly authorized, executed and delivered. (b) No consent of any other Person and no authorization, approval, or other action by, or notice to or filing with, any Person or Governmental Authority of any jurisdiction is required (i) for the execution, delivery or performance of this Agreement by the Company, (ii) for the issuance of the Collateral First Mortgage Bonds, (iii) for the exercise by the Collateral Agent of any Collateral First Mortgage Bondowner Right, or (iv) for the exercise by the Collateral Agent or any Lender of any other right, power or remedy provided for in this Agreement or the relevant Indenture other than (x) the First Mortgage Approvals, which have been duly obtained and are in full force and effect, or (y) in the case of a Permitted Sale of the Collateral First Mortgage Bonds as contemplated pursuant to Section 2.5(a) hereof, any Federal or State securities law registrations, qualifications or filings and any other registrations and approvals of other Governmental Authorities in connection therewith as described in Section 2.5(b) hereof. SECTION 3.3 Other Consents. The Company shall promptly obtain such other consents, authorizations, and approvals, and obtain such other actions by, and provide such notices to or make such filings with, any Governmental Authority of any jurisdiction as may be, in the reasonable judgment of the Collateral Agent, necessary after the date of the execution and delivery of this Agreement for the exercise by the Collateral Agent of any Collateral First Mortgage Bondowner Right or, subject to Sections 2.5 and 4.1 hereof, any other right, power or remedy provided for in this Agreement or the relevant Indenture. SECTION 3.4 Change of Name, Jurisdiction of Organization or Location of Place of Business. The Company will not change its name or jurisdiction of organization or the location of its principal place of business or its chief executive office without, in any such case, giving at least thirty (30) days' prior written notice thereof to the Collateral Agent; and, in connection with any such change, the Company will promptly and at its own expense execute and deliver and/or file or record such instruments and documents as the Collateral Agent may reasonably require to protect and/or to maintain its interests hereunder and in the Collateral First Mortgage Bonds. SECTION 3.5 Further Assurances. The Company agrees that from time to time, at the expense of the Company, the Company will promptly execute and deliver and/or file or record all further instruments and documents, provide further information, and take all further action, that may be necessary, or that the Collateral Agent may reasonably request, in order to carry out more effectively the intent and purpose of this Agreement (including, without limitation, to establish, maintain and protect the Security Interest and to enable the Collateral Agent to exercise and enforce its rights, powers and remedies hereunder in accordance with the terms hereof). The Company hereby authorizes the Collateral Agent to file one or more financing or continuation statements, and amendments thereto, relative to the Security Interest without the signature of the Company where permitted by applicable law. The Company shall, promptly upon the reasonable request of the Collateral Agent, provide to the Collateral Agent such 8 information as the Collateral Agent may reasonably request concerning the receipt and application of any payments made under or pursuant to the Collateral First Mortgage Bonds or the Indentures. SECTION 3.6 Filing; No Further Security Interest. The Company has not and will not authorize the filing of any financing statement or other instrument similar in effect covering all or any part of the collateral in which the Security Interest is granted hereunder, except such as have been or may be filed in favor of the Collateral Agent; and the Company has not granted, and will not assign, grant, or convey any other security interest or lien in or hypothecate all or any part of its interest therein. SECTION 3.7 Filing or Recording of Supplemental Indentures. Each Supplemental Indenture shall be duly filed and/or recorded in accordance with the requirements of the relevant Indenture, and all fees or taxes in connection therewith shall be promptly paid by the Company. SECTION 3.8 Delivery of Notices. For so long as the Collateral Agent is the registered owner of all of the Collateral First Mortgage Bonds, the Company covenants to deliver to the Collateral Agent, concurrently with the delivery thereof or promptly after receipt thereof, copies of all notices to the Company or any trustee under the Indentures. ARTICLE IV RIGHT TO DISPOSE OF COLLATERAL FIRST MORTGAGE BONDS SECTION 4.1 Right to Dispose of Collateral First Mortgage Bonds. The Collateral Agent shall have the right, on or after the Acceleration Day, and at the direction of Lenders having Loans representing sixty-six and two-thirds percent (66 2/3%) of all Loans then outstanding (it being understood that such right shall be exercisable by the Collateral Agent in the sole discretion of such Lenders), to transfer to, or upon the order of the Lenders (whether in connection with the sale or other disposition by one or more of the Lenders of the Collateral First Mortgage Bonds or otherwise) all (but not less than all) of the Collateral First Mortgage Bonds in full satisfaction and discharge of the Loans and the Obligations (any other right of the Collateral Agent, as a secured party, under applicable law to sell or otherwise dispose of the Collateral First Mortgage Bonds being expressly waived). Upon such transfer (on or after the Acceleration Day), and without the necessity for any further action or writing on the part of any Person, (i) the Loans, the Notes and the Obligations shall be, and shall be deemed and construed to be, satisfied and discharged in full, and (ii) this Agreement (including the Security Interest and the covenants of the Company hereunder) shall terminate, except as to those provisions that expressly survive termination of this Agreement. 9 SECTION 4.2 Reservation of Other Rights. Nothing contained in Section 4.1 hereof shall, or shall be deemed or construed to, alter, limit or restrict (i) the right of the Collateral Agent (prior to any transfer of the Collateral First Mortgage Bonds on the Remedy Exercise Day) or the right of the Lender or any other Person (on or after such transfer of the Collateral First Mortgage Bonds on the Remedy Exercise Day) to exercise any Collateral First Mortgage Bondowner Rights, (ii) the right of the Collateral Agent or any Lender (or any purchaser from, or other successor to, any Lender with respect to any Collateral First Mortgage Bonds) to cause a Permitted Sale (or, in such connection, to exercise its rights under Section 2.5(b) hereof)), or (iii) the right of the Administrative Agent, the Collateral Agent or any Lender to exercise any other right, power or remedy (other than any right, power or remedy to cause the sale or other disposition of Collateral First Mortgage Bonds (excluding any transfer under Section 5.2 or 6.4 hereof)) that is available to it under the Credit Agreement or any other Loan Document or at law or in equity by reason of the occurrence and continuance of any Event of Default. SECTION 4.3 Subsequent Dispositions. The Company shall not be liable for any deficiency between the amount of the proceeds of any sale or other disposition (or deemed sale or other disposition) of the Collateral First Mortgage Bonds on or after the Remedy Exercise Day and the aggregate amount of the Obligations (and any right of the Collateral Agent or any Lender to any such deficiency is hereby waived). ARTICLE V COLLATERAL AGENT AND LENDERS SECTION 5.1 Authority and Duties of Collateral Agent. The Company acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by it or the exercise or non-exercise by it of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Company, the Collateral Agent shall be conclusively presumed to be acting as an agent for the Lenders with full and valid authority so to act or refrain from acting, and neither the Company nor any Person (including, without limitation, any trustee under either Indenture) shall be under any obligation, or entitlement, to make any inquiry respecting such authority or shall incur any liability for or by reason of not making any inquiry respecting such authority. The powers conferred on the Collateral Agent hereunder or as registered owner of the Collateral First Mortgage Bonds under the Indentures shall not impose any duty upon it to exercise any such powers. Solely as between the Lenders and the Collateral Agent (and subject to the next succeeding sentence), the Collateral Agent shall exercise Collateral First Mortgage Bondowner Rights as shall be reasonably directed by the Required Lenders; provided that unless and until the Collateral Agent shall have received such directions, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking any such action as it shall deem advisable in the best interests of the Lenders. The Collateral Agent shall be fully justified in failing or refusing to take any action or exercising any power under this 10 Agreement or as registered owner of the Collateral First Mortgage Bonds unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action or exercising such power. Except for the exercise of reasonable care (the cost and expense of which shall be for the Company's account payable upon demand) with respect to the custody of the Collateral First Mortgage Bonds in its actual possession, the Collateral Agent shall have no duty as to any first mortgage bonds or other collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any first mortgage bonds or other collateral and no such duties shall be implied as arising hereunder. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral First Mortgage Bonds in its possession if such Collateral First Mortgage Bonds are accorded treatment substantially equal to that which it accords its own property. SECTION 5.2 Successor Collateral Agent. Upon the appointment of any successor Administrative Agent pursuant to and in accordance with Section 8.9 of the Credit Agreement (including, if applicable in accordance therewith, the consent of the Company) and the transfer to such successor Collateral Agent of the Collateral First Mortgage Bonds, such successor Administrative Agent shall succeed to the rights, powers and duties of the Collateral Agent under this Agreement and, other than rights to indemnification and recovery of expenses under Section 6.1, the former Collateral Agent's rights, powers and duties as Collateral Agent under this Agreement shall be terminated, without any other or further act on the part of any Person. SECTION 5.3 Protections of Collateral Agent. With respect to its rights, powers and duties hereunder, the Collateral Agent has all of the exculpations, protections and indemnities as are provided to it in the Credit Agreement. SECTION 5.4 Applicable Share Certificates. The Collateral Agent shall furnish to each of the Corporate Trustee under the Montana First Mortgage Indenture and the Trustee under the South Dakota First Mortgage Indenture (with a copy to the Company) promptly after any change in the Applicable Share (as defined in the Supplemental Indenture forming part of such Indenture), an Applicable Share Certificate (as defined in such Supplemental Indenture), signed by a person purporting to be the Collateral Agent's duly authorized officer, and setting forth the information recited in the Supplemental Indenture forming part of such Indenture to be set forth in an Applicable Share Certificate. SECTION 5.5 Private Placement Representations. Each Lender is deemed, upon the making by such Lender of a Loan, to represent and warrant as follows (it being understood that any such representation or warranty relates to such Lender with respect to itself only): (a) The Collateral Agent is acquiring Collateral First Mortgage Bonds for the account of such Lender and not with a view on the part of such Lender to, or for resale in connection with, any distribution thereof. Each Lender understands that the Collateral 11 First Mortgage Bonds have not been registered under the Securities Act and that specific exemption from the registration provisions of the Securities Act depends upon, among other things, the bona fide nature of the investment intent of the Lenders as described herein. (b) Each Lender is familiar with the business of the Company, has had an opportunity to discuss the Company's business, management and financial affairs with the Company's management and has had the opportunity to obtain such information about the Company's business, management and financial affairs as it has requested. (c) Each Lender has knowledge and experience in financial and business matters relating to an investment in securities of the Company, is capable of evaluating the merits and risks of such an investment, is able to bear the economic risk of such an investment for an indefinite period of time, and is a "qualified institutional buyer" within the meaning of Rule 144A or an "accredited investor" within the meaning of Rule 501(a), in either case, promulgated by the Securities and Exchange Commission under the Securities Act. ARTICLE VI MISCELLANEOUS SECTION 6.1 Indemnification, Expenses, Etc.. (a) The Company agrees that it shall indemnify and defend the Collateral Agent and each of the Lenders, and each of their respective officers, directors, employees, agents, professional advisors and Affiliates (each an "Indemnified Person", and together, "Indemnified Persons"), and hold each of them harmless from and against any and all costs, claims, losses, expenses, and liabilities (including reasonable attorneys' fees and disbursements) arising out of or resulting from this Agreement (including, without limitation, enforcement of this Agreement or any document prepared in connection therewith) or the interests created hereby, except, in the case of any Indemnified Person, to the extent, such claims, losses, expenses or liabilities are determined, pursuant to a judgment by a court of competent jurisdiction that has become final to be the result of such Indemnified Person's gross negligence or willful misconduct. No Indemnified Person shall be liable for any special, indirect, consequential or punitive damages (whether or not the claim therefor is based on contract, tort or duty imposed by law) in connection with, arising out of or in any way related to the transactions contemplated by this Agreement, including, without limitation, any act, omission or event occurring in connection herewith. (b) All reasonable costs, expenses, charges and fees (including reasonable attorneys' fees and disbursements) paid or incurred by the Collateral Agent in connection with: 12 (i) the administration of this Agreement or the exercise of any of the rights, remedies or powers granted to the Collateral Agent or the Lenders hereunder; (ii) the custody of the Collateral First Mortgage Bonds or the exercise on or prior to the Remedy Exercise Day of any Collateral First Mortgage Bondowner Rights; (iii) the perfection, maintenance, protection or enforcement (whether through negotiations, legal proceedings or otherwise and including, without limitation, in connection with any bankruptcy or insolvency proceedings involving the Company) of any of the rights of the Collateral Agent or the Lenders hereunder; or (iv) the failure by the Company to perform or observe any of the provisions hereof, shall be for the account of the Company, and the Company undertakes promptly on demand, and in any case, within five (5) Business Days following such demand, to pay the same or, as the case may be, to reimburse the Collateral Agent and/or its agents, representatives, successors and assigns, as the case may be, for any monies paid by it with interest thereon at the rate of interest most recently announced by the Collateral Agent as its prime rate in effect at its principal office in New York City plus interest calculated at the applicable rate on overdue amounts as set forth in Section 2.9(c) of the Credit Agreement, from the date the same shall have been paid by the Collateral Agent and/or its agents, representatives, successors and assigns until actually paid by the Company. SECTION 6.2 Obligations Absolute. The obligations of the Company under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any renewal, extension, amendment or modification of, or addition or supplement to or deletion from, the Credit Agreement or any other Loan Document or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such instrument or agreement or this Agreement or any exercise or non-exercise of any right, remedy, power or privilege under or in respect of this Agreement or any other Loan Document; or (c) any invalidity, irregularity or unenforceability of all or part of the Obligations. SECTION 6.3 Remedies Cumulative; Delay Not Waiver. (a) Remedies Cumulative. No failure or delay on the part of the Collateral Agent in exercising any right, power or privilege hereunder and no course of dealing between the Company and the Collateral Agent shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other applicable document preclude any other or further exercise thereof or the exercise of any other right, 13 power or privilege hereunder or thereunder. Except as otherwise expressly provided herein, the rights, powers and remedies herein expressly provided, or available at law or in equity, are cumulative and not exclusive of any rights, powers or remedies which the Collateral Agent would otherwise have. No notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. (b) No Waiver; Separate Causes of Action. No delay or omission to exercise any right, power or remedy accruing to the Collateral Agent upon the occurrence of any breach or default of the Company under this Agreement or any other Loan Document shall impair any such right, power or remedy of the Collateral Agent, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any other breach or default under this Agreement or any other Loan Document be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Collateral Agent of any breach or default under this Agreement, or any waiver on the part of the Lenders or of the Collateral Agent of any provision or condition of this Agreement, must be in writing and shall be effective only to the extent in such writing specifically set forth. Each and every default by the Company hereunder shall give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises. SECTION 6.4 Termination. This Agreement (including, without limitation, the Security Interest and the covenants of the Company hereunder) shall terminate on the earlier of (i) the indefeasible payment in full of the Loans and the Obligations or (ii) the Remedy Exercise Day. In connection with the termination of this Agreement, the Collateral Agent, at the request and expense of the Company, shall promptly execute and deliver to the Company, and authorize the filing or recording of, such instruments and documents (including, without limitation, Uniform Commercial Code termination statements and other terminations and releases) as may be reasonably requested by the Company to acknowledge and evidence such termination and the related satisfaction and discharge of the Loans and the Obligations. In addition, if this Agreement terminates upon the indefeasible payment in full of the Obligations (without the occurrence of the Remedy Exercise Day), the Collateral Agent shall surrender each Collateral First Mortgage Bond to the Company (or, if so requested by the Company, to the Corporate Trustee under the Montana First Mortgage Indenture or the Trustee under the South Dakota First Mortgage Indenture) for cancellation. If this Agreement shall be terminated or revoked by operation of law, the Company shall indemnify and save the Collateral Agent and the other Indemnified Persons harmless from any loss which may be suffered or incurred by the Collateral Agent and the other Indemnified Persons in acting hereunder prior to the receipt by the Collateral Agent, its successors of notice of such termination or revocation. SECTION 6.5 Taxes. The Company agrees to pay, and indemnify and hold harmless the Collateral Agent and the Lenders from, any and all present or future stamp, documentary, excise, sales or other taxes or charges, any and all recording and 14 filing fees, and any and all liabilities with respect thereto, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or payment under, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement. SECTION 6.6 Amendments, Etc. This Agreement may be amended only by an instrument in writing signed by each of the parties hereto, in accordance with Section 9.1 of the Credit Agreement. SECTION 6.7 Address for Notices. All notices and other communications hereunder shall be given (in the manner specified in the Credit Agreement) to the parties hereto at the addresses specified under their respective names on the signature pages hereto, or as to any party at such other address as shall be designated by such party in a written notice to each other party. SECTION 6.8 Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever. SECTION 6.9 Survival of Provisions. Sections 2.2 (but only the first sentence thereof), 2.5, 2.6, and 3.5 of this Agreement shall survive the satisfaction and discharge of the Obligations in connection with the Remedy Exercise Day and the related termination of this Agreement. Sections 5.3, 6.1, 6.3, 6.4, 6.5, 6.12 and 6.13 of this Agreement shall survive any payment or cancellation of the Obligations, the occurrence of the Remedy Exercise Day and any termination of this Agreement. SECTION 6.10 Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the Company, the Collateral Agent, the Lenders and their respective successors and permitted assigns. Neither party to this Agreement may assign or transfer any of its rights or obligations hereunder to any other Person without the prior written consent of the other party to this Agreement (except for any transfer by the Collateral Agent to a successor Collateral Agent), and any purported assignment or transfer in violation of this provision shall be void. SECTION 6.11 Headings. The headings of the various articles, sections and paragraphs of this Agreement are for convenience of reference only, do not constitute a part hereof and shall not affect the meaning or construction of any provision hereof. SECTION 6.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK. 15 SECTION 6.13 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. THE COMPANY AGREES THAT ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST THE COMPANY OR WITH RESPECT TO OR ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AS THE COLLATERAL AGENT MAY ELECT. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY MANNER PERMITTED BY APPLICABLE LEGAL REQUIREMENTS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO BRING LEGAL ACTION OR PROCEEDINGS IN ANY OTHER COMPETENT JURISDICTION. THE COMPANY HEREBY WAIVES ANY RIGHT TO STAY OR DISMISS ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS AGREEMENT BROUGHT BEFORE THE FOREGOING COURTS ON THE BASIS OF FORUM NON CONVENIENS. SECTION 6.14 Third Party Rights. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon, or give to any Person, other than the Company, the Collateral Agent and the Lenders, any security, rights, remedies or claims, legal or equitable, under or by reason hereof or any covenant or condition hereof; and this Agreement and the covenants and agreements herein contained are and shall be held to be for the sole and exclusive benefit of the Company, the Collateral Agent and the Lenders. SECTION 6.15 Integration. This Agreement, the Credit Agreement and the other Loan Documents represent the agreement of the Company the Collateral Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Company, the Collateral Agent and the Lenders relative to the subject matter hereof and thereof not expressly set forth or referred to herein, in the Credit Agreement or in the other Loan Documents. SECTION 6.16 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. SECTION 6.17 Conflict with Other Documents. In the event of any conflict or inconsistency between this Agreement (or any provision hereof) and any other 16 agreement now existing or hereafter entered into and relating to the transactions contemplated hereby (other than an amendment hereto), the terms of this Agreement shall in all respects prevail and govern. [Signature page to follow] 17 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their officers thereunto duly authorized as of the date first above written. NORTHWESTERN CORPORATION By: /s/ Kipp D. Orme ---------------------- Name: Kipp D. Orme Title: Vice President and Chief Financial Officer Address for notice: 125 South Dakota Avenue, Suite 1100 Sioux Falls, South Dakota 57104-6403 Attention: Chief Financial Officer Telephone: (605) 978-2908 Telecopier: (605) 978-2910 CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, not in its individual capacity, but solely as Collateral Agent By: /s/ S. William Fox ---------------------- Name: S. William Fox Title: Director By: /s/ Brian Caldwell ---------------------- Name: Brian Caldwell Title: Director Address for notice: Eleven Madison Avenue New York, New York 10010-3629 Attention: Rob Loh Telephone: (212) 538-1690 Telecopier: (212) 325-8304 18 EX-99 11 ex99-6.txt EX. 99.6: PRESS RELEASE, FEB. 6, 2003 EXHIBIT 99.6 [LOGO OMITTED] News Release NYSE: NOR Contacts: Investors/Media: Roger Schrum 605-978-2848 roger.schrum@northwestern.com - -------------------------------------------------------------------------------- NORTHWESTERN'S BOARD OF DIRECTORS DEFERS DIVIDEND DECISION - -------------------------------------------------------------------------------- SIOUX FALLS, S.D. - Feb. 6, 2003 - NorthWestern Corporation (NYSE:NOR) today announced that its board of directors has deferred a decision on the company's common stock dividend as it continues the process of completing the company's fourth quarter and full-year 2002 results. "NorthWestern is clearly focused on reducing debt and improving the company's balance sheet. As such, the board will carefully review the company's financial position in determining future dividend policy," said NorthWestern Chief Executive Officer Gary G. Drook. NorthWestern Corporation is based in Sioux Falls, S.D. NorthWestern's primary businesses include NorthWestern Energy, a provider of electricity, natural gas and related services to customers in Montana, South Dakota and Nebraska; Expanets, the largest mid-market provider of networked communications solutions and services in the United States; and Blue Dot, a leading provider of air conditioning, heating, plumbing and related services. ### -----END PRIVACY-ENHANCED MESSAGE-----