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EXHIBIT 4.4
DANIEL K. NEWELL
EXECUTIVE VICE PRESIDENT-FINANCE
DIRECT: (605) 978-2965
CELL: (954) 629-2123
[NORTHWESTERN CORPORATION LETTERHEAD]
June 28, 2000
CornerStone Propane Partners, L.P.
432 Westridge Drive
Watsonville, CA 95076
Attention: Mr. Keith G. Baxter
President and Chief Financial Officer
Dear Keith:
You have advised NorthWestern Corporation, a Delaware corporation ("NOR"), that
CornerStone Propane, L.P. (the "OLP"), a subsidiary of CornerStone Propane
Partners, L.P. (the "MLP", and collectively with all of its subsidiaries,
"CNO"), desires to amend (the "Amendment") its credit facility, the Refunding
Credit Agreement dated as of November 20, 1998, among the OLP, Bank of America
as Agent, and the Bank Lenders named therein (the "Credit Agreement"). In
connection therewith, you have requested that NOR provide certain credit support
("Credit Support") for the OLP in favor of the Bank Lenders.
You have advised us that the Credit Support is a condition precedent to the
execution of the Amendment by the Bank Lenders. You also have advised us that
the Summary of Terms and Conditions and Indemnification, attached hereto as
EXHIBIT A and EXHIBIT B, respectively, which are incorporated into and made a
part of this Commitment Letter, have been approved by the independent Audit
Committee of the Board of Directors of the MLP's General Partner. I am pleased
to advise you that NOR hereby commits (the "Commitment") that it or one of its
affiliates will provide, subject to the terms and conditions set forth herein,
the Credit Support described in the Summary Terms and Conditions attached hereto
as EXHIBIT A. You understand that our commitment to make the Credit Support
available to CNO is subject expressly to the execution and delivery of
definitive documentation, including without limitation a definitive First
Amendment, Guaranty Agreement, Warrant Agreement, Registration Rights Agreement
and other documentation satisfactory to us and covering the matters expressly
referred to herein and covering such other matters as we may reasonably request
(collectively, the "Definitive Documents") and satisfaction of the other
conditions precedent set out in the Summary of Terms and Conditions.
CNO agrees to pay to NOR (or its designated affiliate) the fees set forth in the
Summary Terms and Conditions, including without limitation, the commitment fee
(the "Commitment Fee") in an amount equal to $3,055,000 (6.50%) of the aggregate
amount of the $47 million in Credit Support. CNO also agrees to pay to NOR a
takedown fee ("Take-Down Fee") in an amount equal to 3% of the actual funds
advanced.
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The Commitment Fee will be earned and payable upon acceptance of this
Commitment. The Takedown Fee will be earned and payable upon the advance of
funds pursuant to the Credit Support.
The Commitment is not assignable by you. Nothing in this Commitment Letter,
expressed or implied, shall give any person, other than the parties hereto, any
benefit or any legal or equitable right, remedy or claim under this Commitment
Letter.
CNO agrees to indemnify and hold NOR (and its affiliates), harmless to the
extent set forth in EXHIBIT B to this Commitment Letter and, upon demand from
time to time, to reimburse NOR (and its affiliates), for all reasonable
out-of-pocket costs, expenses and other payments, including but not limited to
legal fees and disbursements incurred or made in connection with the Commitment,
and the preparation, execution and delivery of the Definitive Documents,
regardless of whether or not the Definitive Documents are executed.
This Commitment Letter, the attached Summary of Terms and Conditions, and terms
of indemnification set forth the entire understanding of the parties as to the
scope of the Commitment and NOR's obligations hereunder. This Commitment will
expire at 5:00 PM pacific time on June 30, 2000, unless accepted prior to such
time. This Commitment will also expire on the termination of the Credit
Agreement.
This Commitment Letter shall be governed by, and construed in accordance with,
the laws of the State of New York as applied to contracts made and performed
within such state, without giving effect to the principles of conflicts of laws
thereof. To the fullest extent permitted by applicable law, each of CNO and NOR
hereby irrevocably submit to the jurisdiction of any New York State court or
Federal court sitting in the Borough of Manhattan in New York City in respect of
any suit, action or proceeding arising out of or relating to the provisions of
the Commitment and irrevocably agree that all claims in respect of any such
suit, action or proceeding may be heard and determined in any such court. Each
of NOR and CNO waive, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceedings brought in any such court, and any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Each of CNO and NOR hereby irrevocably waives, to the
fullest extent permitted by law, any and all right to trial by jury in any legal
proceeding arising out of or relating to the matters set forth herein.
Please indicate your acceptance of our Commitment and your agreement to the
matters contained in this Commitment Letter and the attached EXHIBIT A and
EXHIBIT B by executing this document and returning it to us prior to the time of
expiration set forth above.
Sincerely,
NorthWestern Corporation
Daniel K. Newell
Executive Vice President - Finance
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Accepted and Agreed to as of June 30, 2000:
CornerStone Propane Partners, L.P.
By: CornerStone Propane, G.P.,
General Partner
By:
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Title:
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EXHIBIT A
SUMMARY OF TERMS AND CONDITIONS
Set forth below is a summary of the terms and conditions of the credit support
that NorthWestern Corporation ("NOR") (or an affiliate) would consider providing
to CornerStone Propane Partners, L.P. ("CNO"), consisting of a guaranty of
certain obligations of CornerStone Propane, L.P. (the "OLP") under the Refunding
Credit Agreement, dated November 20, 1998, among the OLP, Bank of America, as
Agent, and the Lenders party thereto (the "Credit Agreement").
CREDIT GUARANTY:
Borrower: CornerStone Propane, L.P. (the "OLP").
Guarantor: NorthWestern Corporation (or an affiliate) (the
"Guarantor").
Obligations: Advances under the Refunding Credit Agreement, dated
November 20, 1998, among the OLP, Bank of America, as
Agent, and the Lenders party thereto (the "Credit
Agreement").
Guaranteed Amount: Up to $47,000,000 (or such lesser amount as CNO may
request) of Advances under the Credit Agreement.
Subrogation: Guarantor to receive full and customary rights of
subrogation from the Lenders, including, without
limitation, prorata rights in the proceeds of
collateral subject to the Intercreditor and Trust
Agreement, dated as of December 11, 1996, as amended,
among the OLP, the Lenders under the Credit
Agreement, and the holders of OLP Senior Secured
Notes (the "Intercreditor Agreement").
Guaranty Fee: A fee of 6.50% per annum on the total guaranty
commitment, payable in advance.
Guaranty Payments: Upon demand of Credit Agreement Lenders upon payment
default, acceleration of loans or failure to pay at
stated maturity as provided in the form of guaranty.
Terms of Advances: If Guarantor is required to advance funds as payment
under the Guaranty, the following terms and
conditions shall apply:
Due Date: The advances shall be due and payable by the OLP
immediately on demand.
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Interest Rate: Interest on outstanding advances shall be charged
at LIBOR plus a designated spread until the date
of repayment. The spread will initially be 9%. If
the advances are not repaid in full with interest
on or prior to the three month anniversary of the
date of the first advance (the "Advance Date"),
the spread will increase by an additional 100
basis points and shall continue to increase by an
additional 50 basis points at the end of each
subsequent three month period for so long as the
advances remain outstanding.
Interest Payments: Quarterly in arrears.
PIK Feature: Interest payments, at the sole election of
Guarantor, may be paid through the issuance of
MLP Common Units (valued at the closing price on
the date of issue).
ADDITIONAL TERMS AND CONDITIONS:
Take Down Fee: If Guarantor is required to advance funds under the
Guaranty, a take-down fee equal to 3% of the actual
funds advanced shall be charged, payable on date of
funding.
Expenses: Reasonable fees and expenses incurred by Guarantor in
connection with documenting and providing the credit
support described herein, including, without
limitation, the fees and disbursements of counsel and
fees and charges imposed by the bank group, and
related amendment and/or enforcement costs shall be
paid by CNO.
Indemnification: Customary lender indemnification..
Equity Warrants: At the closing, CNO shall issue 5-year warrants to
purchase 325,000 MLP Common Units, immediately
exercisable at an exercise price of $0.10 per unit.
Registration Rights: Demand and piggy-back registration rights on
customary terms for any Common Units received as PIK
interest or upon exercise of equity warrants.
Approvals: All arrangements subject to approval by the NOR Board
of Directors and the independent Audit Committee of
the Board of Directors of CNO GP; approval by CNO GP
Board of revised operating plan and projections;
approval by Guarantor of terms of amendment to Credit
Agreement and related guaranty documentation; third
party consents; and other customary conditions.
Governing Law: New York.
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EXHIBIT B
INDEMNIFICATION
In consideration of the commitment given by NorthWestern Corporation, a Delaware
Corporation ("NOR"), to CornerStone Propane Partners, L.P. ("CNO" or the
"Indemnifying Party") pursuant to the Commitment Letter between CNO and NOR of
which this Exhibit is a part (such Commitment Letter, together with the Summary
Terms and Conditions attached thereto and this Exhibit, is referred to herein as
the "Commitment"), CNO agrees to indemnify and hold harmless NOR, it affiliates,
and each person, if any, who controls NOR, or any of its affiliates, within the
meaning of the Securities Act of 1933, as amended (the "Act") or the Securities
Exchanges Act of 1934, as amended (a "Controlling Person"), and the respective
partners, agents, employees, officers and directors of NOR, its affiliates, and
any such Controlling Person (each an "Indemnified Party" and collectively, the
"Indemnified Parties" or the "NOR Group"), from and against any and all losses,
claims, damages, liabilities and expenses (including, without limitation and as
incurred, reasonable costs of investigating, preparing or defending any such
claim or action, whether or not NOR Group is a party thereto) arising out of, or
in connection with any activities contemplated by, the Commitment or any other
services rendered in connection therewith, provided that CNO will not be
responsible for any claims, liabilities, losses, damages or expenses that are
determined by final judgment of a court of competent jurisdiction to result
solely from NOR Group's gross negligence, willful misconduct or bad faith. CNO
also agrees that NOR Group shall have no liability (except for breach of
provisions of the Commitment Letter for which this EXHIBIT B is a part) for
claims, liabilities, damages, losses or expenses, including legal fees, incurred
by CNO unless they are determined by final judgment of a court of competent
jurisdiction to result solely from NOR Group's gross negligence, willful
misconduct or bad faith.
In case any action shall be brought against NOR Group with respect to which
indemnity may be sought against CNO under this agreement, NOR Group shall
promptly notify CNO in writing and CNO shall, if requested by NOR, assume the
defense thereof, including the employment of counsel satisfactory to NOR and
payment of all reasonable fees and expenses. The failure to so notify CNO shall
not affect any obligations CNO may have to NOR Group under this Commitment or
otherwise unless CNO is materially adversely affected by such failure. NOR Group
shall have the right to employ separate counsel in such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of NOR Group, unless: (i) CNO has failed to assume the defense and
employ counsel satisfactory to NOR or (ii) the named parties to any such action
(including any impleaded parties) include NOR Group and CNO, and NOR Group shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
CNO, in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Party,
provided, however, that CNO shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be responsible hereunder for the reasonable fees and expenses
of more than one such firm of separate counsel, in additional to any local
counsel, which counsel shall be designated by NOR. CNO shall not be liable for
any settlement of any such action effected without the written consent of CNO
(which shall not be unreasonably withheld) and CNO agrees to indemnify and hold
harmless NOR Group from and against any loss or liability by reasons of
settlement of any action effected with the consent of CNO. In addition, CNO will
not, without the prior written consent of NOR, settle or compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in respect to which indemnification
or contribution may be sought hereunder
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(whether or not NOR is a party thereto) unless such settlement, compromise,
consent or termination includes an express unconditional release of NOR Group
and the other Indemnified Parties, satisfactory in form and substance to NOR,
from all liability arising out of such action, claim, suit or proceeding.
If for any reason the foregoing indemnity is unavailable to an Indemnified Party
or insufficient to hold an Indemnified Party harmless, then in lieu of
indemnifying such Indemnified Party, CNO shall contribute to the amount paid or
payable by such Indemnified Party as a result of such claims, liabilities,
losses, damages, or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by CNO on the one hand and by NOR on the other
from the transaction contemplated by this Commitment or (ii) if the allocation
provided by clause (i) is not permitted under applicable law, in such proportion
as is appropriate to reflect not only the relative benefits received by CNO on
the one hand and NOR on the other, but also the relative fault of CNO and NOR as
well as any other relevant equitable considerations. Notwithstanding the
provisions of this EXHIBIT B, the aggregate contribution of all Indemnified
Parties shall not exceed the amount of fees actually received by NOR pursuant to
the Commitment. It is hereby further agreed that the relative benefits to CNO on
the one hand and NOR on the other with respect to any Transaction shall be
deemed to be in the same proportion as (i) the total value of the transaction
bears to (ii) the fees paid to NOR with respect to such transaction. No
Indemnified Party shall have any liability to CNO or any other person in
connection with the services rendered pursuant to the Commitment except for the
liability for claims, liabilities, losses or damages finally determined by a
court of competent jurisdiction to have resulted from action taken or omitted to
be taken by such Indemnified Party in bad faith or to be due to such Indemnified
Party's willful misconduct, or gross negligence.
The indemnity, contribution and expense reimbursement obligations set forth
herein (i) shall be in addition to any liability CNO may have to any Indemnified
Party at common law or otherwise, (ii) shall survive the termination of the
Commitment and (iii) shall remain operative and in full force and effect
regardless or any investigation made by or on behalf of the NOR or any other
Indemnified Party.
